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Major mining assets change hands after commodity rout

Posted on 26 July 2016 by VRS  |  Email |Print

Large mining companies are selling off prized assets after the prolonged global commodities markets rout left some with high levels of debt. Anglo American, Glencore and Freeport have been at the forefront of those companies trying to sell, but BHP Billiton and Rio Tinto have also been seeking to rationalise their assets while signalling an interest in acquisitions.
Slower growth in China triggered the slide in the prices of raw materials, and Chinese companies are the main potential buyers of assets on sale, aiming to secure natural resources as the economy expands. China Molybdenum Co, for example, snapped up two assets in less than a fortnight………………………………………..Full Article: Source

Global Trouble From Low Commodity Prices (Video)

Posted on 19 July 2016 by VRS  |  Email |Print

Carl Weinberg, chief economist at High Frequency Economics, talks about the global economic consequences of low commodity prices, currency wars, and interest rate disparities. He speaks on “Bloomberg Surveillance.” .………………………………………Full Article: Source

Commodities are crushing it in 2016: Here’s why

Posted on 01 July 2016 by VRS  |  Email |Print

Halfway through the year, commodities are enjoying a broad advance and are on track to break a five-year streak of annual losses. Analysts said the climb is likely to continue through the end of the year, but some don’t expect the second-half rally to be quite as impressive as the gains seen over the last six months.
Upside moves this year have been led by sugar SBV6, -3.14% and lean hogs with futures prices for crude and gold also rebounding sharply after big declines over the past two years or more. Cattle and coal meanwhile, are among the biggest decliners………………………………………..Full Article: Source

Japan’s Komatsu Warns Brexit Vote Could Delay Commodity Rebound

Posted on 28 June 2016 by VRS  |  Email |Print

The U.K.’s vote to leave the European Union could delay a recovery in commodity prices, while the yen’s response to the Brexit decision, soaring to within sight of 99 to the dollar, was an overreaction, according to Komatsu Ltd.’s chief financial officer.
The Tokyo-based maker of construction equipment, the world’s largest after Caterpillar Inc. of the U.S., is particularly sensitive to commodity prices and the Japanese currency as more than three-quarters of its sales are made overseas, including the equipment used to dig up and transport metals, coal and other minerals………………………………………..Full Article: Source

Is the worst now over for commodity prices?

Posted on 31 May 2016 by VRS  |  Email |Print

The last couple of years have been truly horrific for investors in a number of resources companies. Profits have tumbled, share prices have plunged and investor sentiment towards mining and oil and gas companies in particular has weakened significantly.
However, in recent months the outlook for a number of commodities has improved dramatically. For example, since the turn of the year gold has risen by around 18% while the price of oil is now almost 80% higher than it was earlier in the year. For many investors, such figures may mean that commodities as a whole are worth investing in. But in reality, it depends on which commodity is being discussed. In other words, some commodities may perform well, while others see their prices come under pressure………………………………………..Full Article: Source

Why the commodity slump could be a good thing for Africa

Posted on 31 May 2016 by VRS  |  Email |Print

There is an urgent need for diversification of Africa’s economies and while it is having an immediate negative effect, the recent commodities slump is beginning to drive change. For example, some investors in Nigeria who have historically thrown their lot behind the oil and gas industries are now looking to buy large tracts of agricultural land in a bid to mitigate the effects of the slump in the commodities sector.
After many years in the wilderness, the agricultural sector is fast emerging as one of the most attractive investment opportunities on the continent – and a sector where innovation and supportive policies can be harnessed to drive growth and jobs, so sorely needed across the continent since the Chinese and global economic slowdowns knocked commodity export opportunities………………………………………..Full Article: Source

Chinese commodities fall on oversupply concerns

Posted on 20 May 2016 by VRS  |  Email |Print

Most Chinese commodities futures fell on Thursday, amid cautious sentiment caused by a supply glut for some industrial metals and a possible U.S. interest rate hike. Some traders are concerned that China’s own interest rate easing cycle could be over, limiting the prospects for the world’s No. 2 economy and prompting investors to become bearish on commodities amid concerns on demand recovery.
Chinese steel and iron ore futures dropped by more than 2 percent, as demand is faltering seasonally. However, steel mills are still picking up production because of rising prices earlier this year, worsening a supply glut that led to accusations China is dumping low-price steel onto global markets………………………………………..Full Article: Source

China’s commodities meltdown could rock the markets

Posted on 13 May 2016 by VRS  |  Email |Print

For the moment, the following is the shock NOT heard ’round the world … at least not yet. Rampant speculation in China’s commodities markets could very well be the next “black swan” event that rocks global markets and possibly the global economy.
Though very little attention has been paid to this recent action, speculative excesses in China’s commodity markets have taken traders and investors on a wild ride, which may likely soon spill over to the rest of the world………………………………………..Full Article: Source

Commodity Rout Hits Home as South Africa Has Record Output Drop

Posted on 13 May 2016 by VRS  |  Email |Print

South Africa’s mining production fell the most since at least 1980 after the country’s biggest gold and platinum mines halted unprofitable output. Production declined 18 percent in March from a year earlier, accelerating February’s revised contraction of 8.3 percent, Statistics South Africa spokesman Juan-Pierre Terblanche said by phone Thursday.
Expectations were for a drop of 12 percent, according to a Bloomberg survey of eight analysts. “This is a radical structural shift for South Africa”, said Mike Schussler, chief economist at economists.co.za………………………………………..Full Article: Source

Commodities fall back to earth on China worries

Posted on 10 May 2016 by VRS  |  Email |Print

Commodities from copper to iron ore fell sharply on Monday, as a speculative rally lost steam over fresh worries about economic growth in China, the world’s biggest consumer of raw materials.
A burst in speculative trading that drove up commodity prices over the past month has led to increased production and a build-up of inventory in the country, the world’s largest consumer of commodities. Traders are now growing concerned that real demand is not there to support prices………………………………………..Full Article: Source

China’s commodities lose more froth as economic worries underpin curbs

Posted on 06 May 2016 by VRS  |  Email |Print

Chinese steel and iron ore futures fell sharply for a third straight day and other commodities also slid on Thursday, giving up more froth after Chinese exchanges slapped curbs to quell speculation that spurred a buying frenzy last month.
Mixed signals on China’s economic health have also weighed on sentiment, breaking earlier perceptions that the world’s second-largest economy had stabilized. Trading volumes have tapered off from record highs hit in April after China’s securities regulator told commodity exchanges in Shanghai, Dalian and Zhengzhou to rein in speculation following rapid price gains in everything from steel to cotton………………………………………..Full Article: Source

China’s Commodities Bubble

Posted on 04 May 2016 by VRS  |  Email |Print

Irrational exuberance in China’s commodities markets used to be a curiosity. Every few years the price of mung beans or garlic would spike by a few hundred percent, but few outside the country paid much attention. Now that Chinese speculators are moving the global price of key commodities, it’s no joking matter.
The price of iron ore has increased by 50% since the beginning of the year, driven largely by trading on the Dalian Commodity Exchange. On March 7 it increased by 20%, the largest one-day move ever. Yet analysts believe there is an oversupply of iron ore so the market can’t clear at the current price………………………………………..Full Article: Source

Get Ready for China’s Commodities Crash

Posted on 02 May 2016 by VRS  |  Email |Print

China’s commodities rally has extended beyond its futures market into equities. But now the government is putting on the brakes—and investors could be hit hard.China’s commodity futures markets are looking like its stock markets a year ago, when hordes of investors bet huge sums, setting the stage for a painful crash.
Money started to pile into metals futures in March, after China’s rubber stamp National People’s Congress expanded the country’s fiscal deficit to pump up growth, and approved reforms to reduce overcapacity in the steel and coal industries. Trading momentum got a further boost after China’s real estate market showed green shoots in the form of home-price increases in lower-tier cities………………………………………..Full Article: Source

How to avoid the commodities curse

Posted on 29 April 2016 by VRS  |  Email |Print

Papua New Guinea lays out the challenges in stark and basic terms following slump in prices. If you want evidence of the “commodities curse”, look no further than Port Moresby, the raggle-taggle capital of Papua New Guinea.
Of course, the curse is not Papua New Guinea’s problem alone – the global collapse in prices of so many key commodities is creating wrenching challenges in economies ranging from Venezuela, Peru and Brazil to Mozambique, Indonesia and Russia – but Papua New Guinea lays out the challenges in stark and basic terms………………………………………..Full Article: Source

Commodity price slump makes recycling uneconomical

Posted on 18 April 2016 by VRS  |  Email |Print

Collapsed global commodity prices for metals, paper and crude oil mean the materials households and businesses dutifully place on curb sides are increasingly not worth the cost of collecting.
Everything from used plastic milk bottles to pizza cardboard and even the family car cannot be converted into raw materials at a price low enough to compete with the worldwide flood of cheap iron ore, oil and other commodities, says the Australian Council of Recycling, the $14 billion industry’s peak body………………………………………..Full Article: Source

South America Suffers From End of Commodities Boom

Posted on 13 April 2016 by VRS  |  Email |Print

World Bank foresees second year of economic contraction in Latin America and the Caribbean. The economies of Latin America and the Caribbean will likely contract for a second consecutive year, dragged down by South American countries that rely heavily on commodities and are more exposed to the slowdown in China, the World Bank said Tuesday.
In its semiannual report on the region, the World Bank said it expects output to shrink 0.9% from 2015 as the region enters its fifth year of economic slowdown………………………………………..Full Article: Source

World’s poorest countries rocked by commodity slump and strong dollar

Posted on 11 April 2016 by VRS  |  Email |Print

Jubilee Debt Campaign warns that developing countries are struggling to make debt payments as revenues deteriorate. The collapse in global commodity prices and a stronger US dollar have depleted the public coffers of some of the world’s poorest countries and will leave them as much as $61bn (£43bn) worse off this year, a report has warned.
The Jubilee Debt Campaign said that countries that relied on exports of commodities such as metals and oil had seen government revenues hit by a global markets rout last year that knocked the prices of crude oil, iron ore, copper and other raw materials to multi-year lows………………………………………..Full Article: Source

The commodities slump won’t undermine Australia’s banks

Posted on 29 March 2016 by VRS  |  Email |Print

Australians hate a tall poppy, which means the country’s richly valued banks are liable to get cut down at the first hint of bad news. So when Australia & New Zealand Banking Group admitted last week that it would have to take higher bad-debt charges due to the slump in commodity prices the shares fell as much as 6 per cent, the biggest drop in more than seven months.
Overvalued banks, rising defaults, troubled mining companies: What’s not to dislike about that picture? Sadly for the dwindling band still shorting the country’s big four banks, there’s little evidence such problems will pose more than a temporary speed-bump to their earnings. ……………………………………….Full Article: Source

Commodity, currency slump hit economies

Posted on 24 March 2016 by VRS  |  Email |Print

Slumping commodity prices have taken African currencies down with them, exposing the fundamental economic frailties of the world’s poorest continent by driving up inflation in countries that import most of their manufactured goods.
Regional economies are in no position to use their weakening currencies to their trade advantage because they have few exports beyond their natural resources. The hardship for households has been compounded by rising prices for food - one commodity that has defied the price fall due to drought in southern Africa………………………………………..Full Article: Source

Commodity Crisis Eats into Global Capex

Posted on 18 March 2016 by VRS  |  Email |Print

The global slump in commodity prices that has seen the benchmark Goldman Sachs Commodity index slump by around 50% over the past 20 months, has already claimed victims in the form of jobs and dividend cuts, profit warnings and credit rating downgrades.
Now Standard & Poor’s says it’s also eaten into capital expenditure plans, and is likely to keep doing so for the next couple of years at least. In a report Thursday it put figures on just how deep that could go. According to a survey by the ratings agency, global capital expenditure by companies across all sectors fell 10% in 2015………………………………………..Full Article: Source

Commodity and currency slump expose frailties of African economies

Posted on 16 March 2016 by VRS  |  Email |Print

Slumping commodity prices have taken African currencies down with them, exposing the fundamental economic frailties of the world’s poorest continent by driving up inflation in countries that import most of their manufactured goods.
Regional economies are in no position to use their weakening currencies to their trade advantage because they have few exports beyond their natural resources. The hardship for households has been compounded by rising prices for food - one commodity that has defied the price fall due to drought in southern Africa……………………………………….Full Article: Source

Low commodity prices drive 2016 defaults, oilfields to shut

Posted on 10 March 2016 by VRS  |  Email |Print

Commodity prices at multi-year lows drove a rise in defaults early this year, and the oil sector could see still more unprofitable fields shut, industry analysts said on Wednesday. Debt defaults in the commodity sectors rose in the first two months of 2016 from the same period a year ago, credit ratings agency Moody’s said.
“Of the 18 defaults since the start of the year, half have been in commodity sectors,” said Sharon Ou, a Moody’s vice president and senior credit officer, in an e-mailed statement late on Tuesday………………………………………..Full Article: Source

Commodity slump to further weaken economies

Posted on 04 March 2016 by VRS  |  Email |Print

The persistent slump in commodity prices and a strong US dollar will have adverse effects on the growth prospects for most Southern African economies thereby reducing export competitiveness in those countries, an expert has said.Zimbabwe, along with most economies in the region, rely heavily on mineral exports but lower demand from the Chinese market as well as the appreciation of the United States dollar has had significant impact on revenue from these minerals.
The greenback has been enjoying its fastest rise in 40 years this year as it is strengthening dramatically against all the world’s other major currencies………………………………………..Full Article: Source

This chart suggests Chinese demand for commodities will remain weak in 2016

Posted on 29 February 2016 by VRS  |  Email |Print

Last week we brought you the news that new home prices in the southern Chinese city of Shenzhen soared by more than 50% in the 12 months to January, a figure that put the likes of New York, London and Sydney to shame in terms of annual rates of growth.
However, while prices are ripping higher in Shenzhen, along with other major Chinese centres such as Shanghai and Beijing, the gains elsewhere in the country are nowhere near as strong, doing little to lift sentiment towards the outlook for construction, commodity demand or a broader housing market recovery in China in the period ahead………………………………………..Full Article: Source

China Tries to Tackle Its Commodities Crisis

Posted on 26 February 2016 by VRS  |  Email |Print

China has had an overcapacity problem in its aluminum, chemical, cement, and steel industries for years. Now it’s reaching crisis levels. “The situation has gone so dramatically bad that action has to happen very soon,” said Jörg Wuttke, president of the European Union Chamber of Commerce in China, at a press conference in Beijing on Feb. 22, where a chamber report on excess capacity was released.
That report’s conclusion: “The Chinese government’s current role in the economy is part of the problem,” while overcapacity has become “an impediment to the party’s reform agenda.” Many of the unneeded mills, smelters, and plants were built or expanded after China’s policymakers unleashed cheap credit during the global financial crisis in 2009………………………………………..Full Article: Source

Crash in commodity prices takes a toll on Canada’s corporate giants

Posted on 25 February 2016 by VRS  |  Email |Print

Two of Canada’s largest companies clarified Wednesday exactly how much the ongoing crash in crude oil prices has cut into their bottom lines. Royal Bank of Canada missed expectations for first quarter profit as a result of more provisions being set aside for potentially bad loans to oil and gas producers.
Encana, meanwhile, actually beat quarterly expectations despite reporting a net loss of more than $600-million along with plans to cut its dividend by nearly four fifths and its workforce by 20 percent; equating to several hundred layoffs. “There is no question that persistently low oil prices are tough for our clients in affected regions,” RBC chief executive Dave McKay said……………………………………….Full Article: Source

The Collapse in Commodities Continues (Video)

Posted on 23 February 2016 by VRS  |  Email |Print

On “Single Best Chart,” Bloomberg’s Tom Keene looks at the collapse in commodities. Economic Cycle Research Institute’s Lakshman Achuthan and New York University’s Brad Hintz also weigh in on “Bloomberg Surveillance.”.………………………………………Full Article: Source

Commodity slump weighing on Canadian and global economies

Posted on 18 February 2016 by VRS  |  Email |Print

The ongoing decline in commodity prices has hit Canada’s economy hard, depressing incomes, and triggering layoffs and capital spending cuts. The U.S.-dollar prices of most internationally traded commodity products have slipped, hammering hundreds of resource companies (and their suppliers), and hurting business and consumer confidence across swaths of the country.
And it’s important to realize that the commodity carnage isn’t restricted to oil. It’s also affecting natural gas, coal, base metals, potash, various industrial raw materials, and some segments of the agri-food sector. Lumber prices have also beaten a hasty retreat in recent months………………………………………..Full Article: Source

Commodities rout fails to slow urban explosion in Africa

Posted on 17 February 2016 by VRS  |  Email |Print

Africa’s biggest economies have been hammered by the collapse in commodity prices over the past 18 months but there are still investment bright spots to be found. In cities such as Lagos, Nairobi, Accra, Kinshasa and Johannesburg, growth remains robust and investors are prospering in the retail, financial services, technology and construction sectors.
This means investors can now readjust their strategy for Africa. Instead of taking a view on the continent as a whole, or choosing one country over another, they can seize opportunities city by city. Sub-Saharan Africa is urbanising faster than anywhere else in the world and city dwellers have more money to spend………………………………………..Full Article: Source

Commodities: The Bottom Is Looking Mighty Ugly

Posted on 17 February 2016 by VRS  |  Email |Print

The commodity bear is not hibernating. Prices are above 2000 levels with divergence. Contagion from raw material markets - the dollar ain’t helping. Stocks and currencies are watching raw material prices. China returns from holiday - uh oh.
Last week was an odd one in the commodity sector. While the bear market continues to cause low prices in the energy and industrial commodity sector, precious metals exploded higher. Divergence is the name of the game in the wild markets of 2016. Volatility tends to create divergence in terms of historical price relationships between assets………………………………………..Full Article: Source

How Australia Is Weathering the Commodities Rout

Posted on 15 February 2016 by VRS  |  Email |Print

As Australia’s economy has slowed alongside the commodities rout, one surprising consensus is emerging: It isn’t nearly as bad as it should be. Other big resource exporters like Brazil and Canada have been slammed far worse by the falling commodities trade over the past year and a half that was sparked by China’s deceleration.
Australia, in contrast, seems already to have passed its nadir and is set to recover over the next two years, the government and many economists say. “The economy is continuing to grow at a modest pace, in the face of considerable adjustment challenges,” Glenn Stevens, governor of the Reserve Bank of Australia, told parliament on Friday………………………………………..Full Article: Source

Russian trade hit by sanctions and commodity crisis

Posted on 15 February 2016 by VRS  |  Email |Print

Russia’s trade with the EU’s eastern states fell by almost a third in 2015, as sanctions over Crimea and the economic impact of plummeting commodity prices further unravel the fraying links between Moscow and its former Soviet bloc allies.
Exports to Russia from the six countries for which full data are available were worth €5.9bn less in 2015 than 2014. Sales of goods from Lithuania, Latvia, Estonia, Poland, the Czech Republic and Bulgaria declined an average of 30 per cent last year, with similar falls in the first 11 months of the year in Slovakia and Hungary………………………………………..Full Article: Source

Commodities won’t save Australia from recession

Posted on 12 February 2016 by VRS  |  Email |Print

The chief executive of the Australian Securities Exchange is warning that Australia needs to confront structural economic reforms to make a successful transition from the once-in-a-century mining boom.
Elmer Funke Kupper said that, with the mining boom over, Australia will no longer be “saved by nature” and that even with 23 years of unbroken economic growth, no-one should be complacent. Funke Kupper is not forecasting a recession but he told the ABC’s AM program that reforms are critical for Australia to remain competitive in the post-boom world………………………………………..Full Article: Source

UK production slumps as commodities take a hammering

Posted on 11 February 2016 by VRS  |  Email |Print

UK production slumped dramatically in December as resource companies took a hammering from the global commodity price crash. Overall production dropped 1.1% over the period, far outstripping expectations of a 0.1% decline. While manufacturing was little changed, mining and quarrying output led the index lower, down 4%.
A relatively mild winter also took a toll on energy generation, with output falling 5.4% month-on-month. Looking ahead, energy supply output should spring back, but the shake-out of excess production in the oil sector has further to run, noted Samuel Tombs of Pantheon Macroeconomics………………………………………..Full Article: Source

Low commodity prices strain Nigeria and Angola’s economic confidence

Posted on 11 February 2016 by VRS  |  Email |Print

Many African economies are feeling the pressure of low commodity prices as shown by the YPO’s Global Pulse world ranking. According to the survey, economic confidence shows the region at its lowest in six years.
According to the YPO Economic confidence, Africa plunged in the final quarter of 2015, falling to its lowest level in six years, and below that of every other region in the world. Carl Bates, a YPO member, says economic confidence was an indicator of where the region was going in the short to medium term………………………………………..Full Article: Source

Commodities Crash Washes Up In Korea

Posted on 03 February 2016 by VRS  |  Email |Print

Two of Korea’s biggest companies, Samsung and Posco, are feeling the pain of the commodities-price crash which has devastated the mining and oil industries. Samsung, a broadly diversified industrial business, has been hit by a loss associated with building an iron ore mine in Australia.
Posco, a steel maker, from being an investor in the same mine. The project causing problems for the Korean corporate giants is Roy Hill, a mine controlled by one of Australia’s richest people, Gina Rinehart………………………………………..Full Article: Source

Commodities: The fall and beyond…

Posted on 01 February 2016 by VRS  |  Email |Print

Commodities are at the vortex of the ongoing turmoil in the global financial markets. Stung by the strong dollar and worries over slowing Chinese appetite, commodity prices have plummeted and investors’ losses have piled up in the last few years. The world is now into its sixth year of a bear market in commodities. Will 2016 see the dust settle down?
To answer this question, we need to understand the events that led to the current meltdown. It was the greed to make the most of a bull market in commodities that led to the creation of excessive supply in many metals in the early 2000s. Then, with a slowdown in China and rest of the world, the demand-supply mismatch in commodities increased………………………………………..Full Article: Source

Commodities Junk Faces More Pain Amid Contagion Threat, UBS Says

Posted on 28 January 2016 by VRS  |  Email |Print

A prolonged slump in oil prices promises more pain for commodities-related debt and threatens to spread to other parts of the leveraged-finance market, according to UBS Group AG. Energy bonds have borne the brunt of crude’s plunge to a 12-year low, falling 10 percent this year after a 24 percent drop last year.
With no end in sight to the oil slump, the market may not be adequately pricing in defaults or compensating investors for mark-to-market and liquidity risks for lower-rated junk companies, UBS strategists led by Matthew Mish wrote in a note Wednesday………………………………………..Full Article: Source

Canada needs five years to adjust to commodities rout: central bank

Posted on 21 January 2016 by VRS  |  Email |Print

Canada will adjust to lower commodity prices in three phases over the next five years, with the impact of lower incomes to be felt more strongly later on and economic growth by 2020 being 2 percent lower than it otherwise would have been, according to staff at the Bank of Canada.
Restructuring in the resource sector is the dominant factor in the first phase as collapsing profits prompt firms to curtail business investment and employment, a staff analytical note said. That restructuring phase should peak in the middle of this year, then stay roughly constant. The impact of lower incomes will start to hurt domestic consumption, while the lower Canadian dollar will boost non-commodity exports………………………………………..Full Article: Source

Commodities Crash Boosts China’s New Silk Road

Posted on 21 January 2016 by VRS  |  Email |Print

While commodities producers grapple with the lowest prices in more than a decade, the slump could prove a blessing for President Xi Jinping’s signature initiative to build an intercontinental web of infrastructure and trade links with China at the center.
The New Silk Road program announced by Xi more than two years ago is finally gathering steam just as the prices of oil, steel, concrete and other building materials sink. That’s making it easier for China to sell its ambitious vision to build roads, railways, pipelines and ports from Xian to Athens, diversifying the country’s trade options and exporting the excess industrial capacity that’s dragging down its own economy………………………………………..Full Article: Source

The Case for Raw Commodity Sector Bottoming in 2016

Posted on 19 January 2016 by VRS  |  Email |Print

Let’s take a look at a few longer-term charts of key markets and indexes, which are presently providing some technical clues the major “bust” cycle in the raw commodity sector will likely run its course in 2016.
Goldman Sachs Commodity Index: The GSCI monthly chart shows the index price this month dropped below the 2009 low and hit a 12-year low. The raw commodity sector is presently experiencing its second-largest bust cycle dating back at least 40 years—second only to the big downdraft seen in 2008 and 2009………………………………………..Full Article: Source

Why the commodities crunch could hurt stability in Latin America

Posted on 15 January 2016 by VRS  |  Email |Print

Much of Latin America has seen an unusually long period of relative political stability since the early 2000s. With the exception of Cuba, democratically elected governments seem embedded throughout the region.
The political rules of the game largely seem to be followed. Indeed, the international outcry following the 2009 coup that removed Honduras’ president, Manuel Zelaya, served to reinforce how much Latin American politics had changed since the 1970s, when military dictatorships were the dominant form of government………………………………………..Full Article: Source

The Commodity Crisis Worsens; Barclays Lowers Forecasts As Bears Dig In

Posted on 12 January 2016 by VRS  |  Email |Print

Blame the strong dollar. Barclays Capital has gone totally bearish on commodities and that does not bode well for commodity producer nations like Russia, and Brazil, let alone commodity producing parts of the United States like oil and gas drillers, and even some American farmers.
Recent price declines for major commodities are now greater than in any crisis of the past 30 years and speculative short selling positioning is greater than it was in the depths of the 2008-09 financial crisis, Barclays Capital analysts led by Kevin Norrish noted on Monday………………………………………..Full Article: Source

Commodities behind 2016’s big political risks

Posted on 12 January 2016 by VRS  |  Email |Print

The slump in oil prices is frightening stock traders, but the impact on geopolitical stability may prove to be more alarming this year. Low commodity prices could exacerbate tensions and conflict in the Middle East, increase public protest in Latin America, and worsen industrial action in Africa’s resource-rich countries, Verisk Maplecroft, a global political risk consultancy, warned in a 2016 outlook report.
“Verisk Maplecroft highlights low commodity prices as one of the primary drivers of political risk for investors in major producing countries across Africa and Latin America, while the increasing international threat posed by the Islamic State and rising tensions between Iran and Saudi Arabia, are flagged among the foremost geopolitical risk multipliers,” the consultancy said in the report………………………………………..Full Article: Source

Commodity prices slip anew after worst year since financial crisis

Posted on 11 January 2016 by VRS  |  Email |Print

The commodities hangover after an end to China’s once-voracious appetite for metals, crops and fuels may be here for a while. Iron ore last traded down 1.2 per cent and crude oil is trading at $US33 a barrel.
Still, Chile is expanding its largest open-pit copper mine to dig up 1.7 billion tons of minerals, even as metal prices plummet, India is building railroad lines that crisscross the country to connect underused coal mines with growing urban populations, and here in Australian producers are boosting natural gas production by roughly 150 per cent in the next four years as energy companies are building export terminals to serve dwindling demand………………………………………..Full Article: Source

When Will the Commodities Bloodbath End?

Posted on 11 January 2016 by VRS  |  Email |Print

It was a bloodbath for commodities in 2015. Brent crude oil fell 45.7% for the year, the most out of any commodity. From its high of US$127.07 per barrel, Brent’s been smashed by more than 70% in the past 18 months. It’s now trading at US$33.55 per barrel.
Other big losers were nickel (down 42.6%), heating oil (down 41.4%), and gas oil (down 40.2%). Copper lost a quarter of its value, declining for a third straight year. It’s the longest slump for the base metal since 1998. Among other base metals, zinc was down 25% and aluminium fell 18% for the year. Even gold languished at multi-year lows, down about 10%. It was unable to attract buyers………………………………………..Full Article: Source

Commodities Rout Forces Resource Firms to Cut Further

Posted on 08 January 2016 by VRS  |  Email |Print

Mining, oil companies must search for new savings as hopes of a commodity-price rebound fizzle on weak Chinese demand. Resource companies are facing renewed pressure to cut spending and investor payouts after a deepening commodities rout erased billions of dollars in shareholder value on Thursday.
Oil and mining companies that expanded rapidly over the past decade when commodity prices soared have already slashed tens of thousands of jobs and mothballed billions of dollars of projects. Now they must search for new savings as their long-held hopes of rebounding commodity prices fizzle on weak Chinese demand………………………………………..Full Article: Source

Chart Of The Year: Scooping Commodities At The Bottom

Posted on 08 January 2016 by VRS  |  Email |Print

Global financial markets have opened the year with selling and elevated fear. And it’s been led, again, by China. This brings back very fresh memories of August of last year, when a Chinese devaluation set off confusion in markets, sharp selling in Chinese stocks, which spilled over to global markets.
This actually plays in perfectly to what we expect to be the biggest theme of the year for markets – a surprisingly aggressive action from China to stimulate their economy and, in turn, fuel the global economy and a recovery in commodities. The behavior in Chinese stocks and the Chinese currency in the past few days underpin that investment thesis, and likely put policymakers in China in position (under pressure) to act sooner rather than later………………………………………..Full Article: Source

‘Commodity catastrophe’ looks set to continue in 2016

Posted on 08 January 2016 by VRS  |  Email |Print

Early days of 2016 seem to be echoing those of last year, and with further negative data coming out of China there could still be plenty of pain in commodities, particularly in the energy and metals complexes.
The statistics are ugly: the benchmark index S&P GSCI ended 2015 with the first three-year consecutive loss in its history, a total of 55.6%; in December, the S&P GSCI Total Return recorded a new maximum drawdown of 80.5% from its peak in July 2008 and posted its fourth biggest annual loss in history since 1970 at 32.9%………………………………………..Full Article: Source

Why Commodities Crashed in 2015

Posted on 07 January 2016 by VRS  |  Email |Print

Commodities have already had a tough 2015 – but earlier this week, prices for everything, from crude oil to industrial metals such as iron ore and copper, plummeted even further. The sector is contending with the lowest prices since the financial crisis, perhaps even this century. Here is a brief guide to what is happening, how each of the main commodities are faring, and why it matters for global growth.
How bad is this crunch?: Earlier this week, crude oil dipped below $40 a barrel for the first time since 2009. The situation was so dire that the Bloomberg Commodity Index, which covers a wide range of natural resources, dropped to its lowest level since June 1999. After two days of freefall, prices have plateaued, with the oil price managing a brief recovery………………………………………..Full Article: Source

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