Thu, Feb 11, 2016
A A A
Welcome preal121
RSS

Commodities Briefing - Category | Commodity Crisis more

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

Does Chinese slowdown alter the Indian commodities scene?

Posted on 06 January 2016 by VRS  |  Email |Print

China’s stock market crash on Monday, which sent equity markets across the globe cracking, has turned investor sentiments negative. A slowdown in China is a global worry, particularly for commodities, as the dragon country consumes about half the world’s metals output and is also the second largest market for oil. However, for India, which is a net importer of commodities, lower prices can be a blessing.
In 2014-15, India’s total commodity imports were $448 billion while exports were $310 billion. Of the total imports, about 13.5 per cent, or $60.4 billion, was from China. With a slowdown in China and a slump in commodity prices, mainly metals, Indian steel and iron ore manufacturers may suffer as their realisations take a knock………………………………………..Full Article: Source

2015 was a bloodbath for commodities

Posted on 05 January 2016 by VRS  |  Email |Print

Commodities markets were hit hard last year. A note from S&P Dow Jones Indicies global head of commodities Jodie Gunzberg observed that “2015 will go down in history as one of the worst years ever for commodities.”
The S&P GSCI, a major commodities index, lost 32.9% in 2015, according to the note. Here are some highlights from Gunzberg: 2015 ended the S&P GSCI’s first 3-year consecutive loss in its history, losing a total of 55.6% during this time………………………………………..Full Article: Source

End of China’s commodity boom spells pain for producers with no end in sight

Posted on 04 January 2016 by VRS  |  Email |Print

The rout in commodities prices that has wiped billions from the value of energy and mining companies across the world in the past 12 months will continue in 2016, according to economists, analysts and executives on the front line.
Prices in a range of key industrial commodities plunged in 2015 as China’s factories and appetite for raw materials slowed while supply, especially of oil and iron ore, increased. Bob Dudley, the boss of BP, said the price of oil, which lost 34% in 2015, could continue to fall in the first few months of 2016. “A low point could be in the first quarter,” Dudley has told BBC radio………………………………………..Full Article: Source

Not Even OPEC Can Fix Oil Glut

Posted on 30 December 2015 by VRS  |  Email |Print

Surprisingly strong crude output in the U.S. and Mideast over the past year pushed oil prices to their lowest levels in more than a decade. But for investors trying to determine whether the oil market is close to a bottom, the pace of production elsewhere in the world is a key source of uncertainty.
Producers in Russia, Brazil and Norway pumped more oil in 2015 than the closely watched forecasters International Energy Agency and Energy Information Administration had projected. Meanwhile, oil-field investments made years ago when prices were higher are set to begin producing, even as exploration-and-drilling projects scheduled to bear fruit in the coming decades are being delayed or canceled outright………………………………………..Full Article: Source

The Bear Market In Commodities Enters Year 5

Posted on 29 December 2015 by VRS  |  Email |Print

Now that the end of the year is upon us, reflection on the events of 2015 can help us to prepare for the year ahead. Commodity prices peaked in 2011/2012 and have moved lower since. It is tempting to look for bargains in markets. Investors and traders invariably love to buy markets that have decreased in value.
Commodities are ubiquitous assets. While assets like stocks and bonds are investment vehicles watched by many around the world, almost every person on planet earth consume raw materials. Each day demographics increase demand for raw materials in that population increases on a daily basis. In 1959, the year I was born, there was just shy of 3 billion people on earth. As we move into 2016, more than 7.4 billion people make up the addressable market for many raw materials………………………………………..Full Article: Source

Commodities: No Rebound in Sight

Posted on 28 December 2015 by VRS  |  Email |Print

The commodities malaise of 2015 will continue in the new year. Precious and industrial metals will probably fall further in the first half of 2016, pressured by rising global supply, weak Chinese demand, and an appreciating dollar.
Prices of precious metals dropped more than 11% in 2015, and industrial metals lost more than a quarter of their value, pummeled by the strength of the dollar and concerns of a slowdown in China, the world’s largest consumer of commodities, as global production continues to rise. Investors and analysts expect prices to remain constrained in 2016, given that supply cuts will be required to balance the market and demand growth from China will probably remain sluggish………………………………………..Full Article: Source

After a brutal 2015, what’s on tap for commodities?

Posted on 28 December 2015 by VRS  |  Email |Print

Commodities are suffering from their worst year since 2008. Industrial commodities, in particular, are seeing outsize losses, but it isn’t going to be all gloom and doom for the sector in the new year. Sentiment in the commodities market has been downbeat for the bulk of 2015, with iron ore, platinum. copper and coal among those seeing the biggest losses.
The Bloomberg Commodity Index BCOM, +0.49% a broadly diversified commodity-price index, has fallen more than 26% in 2015. It is headed for its fifth straight losing year and its worst yearly drop since 2008. The index stands around its lowest level since 1999………………………………………..Full Article: Source

No ‘D’ light on horizon as commodities face downturn

Posted on 21 December 2015 by VRS  |  Email |Print

Destocking, divestment and desperation — that’s the outlook for commodities in 2016, says Macquarie Wealth Management. No sign of one other “D” — demand — but plenty of disinflation being shipped out of China. Oh boy.
Then the International Energy Agency piled on the agony with an especially gloomy (and widely reported) outlook for coal, with growth in demand disappearing from everywhere save India. Australia seems to be running out of Plans B, C and D………………………………………..Full Article: Source

Commodities Bust? Love It!

Posted on 21 December 2015 by VRS  |  Email |Print

For those who’ve grown used to a decade in which mining and energy companies bestrode the world, the current malaise in commodities markets can feel like the end times. At the start of 2011, 14 out of 53 companies with market values above $100 billion were in the oil and mining sectors.
That club has since expanded to 69 corporates, but only Exxon Mobil, PetroChina, Chevron, Shell and Total are still members. Back in 2009, both BHP Billiton and Petrobras were worth more than Apple. Now, Tim Cook could theoretically buy both businesses with net cash and still have money left over to pick up Glencore, Newmont, Barrick Gold, Anglo American and most of Goldcorp………………………………………..Full Article: Source

Fed Move Adds to Pressure on Commodities

Posted on 18 December 2015 by VRS  |  Email |Print

As global financial markets from equities to bonds rallied on the back of the U.S. decision to raise interest rates, most commodities bucked the trend after the Federal Reserve compounded their long-term woes.
Rock-bottom rates had helped stoke the commodities boom as investors hunted for yield and companies tapped cheap money to vastly expand production. Now commodities markets are suffering, with the new rate-cycle adding to a multitude of industry-specific problems—a toxic combination of oversupply and tepid demand growth from a slowing Chinese economy………………………………………..Full Article: Source

Commodities rout to continue

Posted on 18 December 2015 by VRS  |  Email |Print

The biggest rout in industrial metals since the financial crisis is set to deepen as mining companies fail to cut production enough to make up for slowing demand, according to Citrine Capital Management.
“We could make fresh multi-year lows across metals in the next six months,” Paul Crone, founder of Citrine, said in an interview this week. New York-based Citrine is one of the few surviving hedge funds investing exclusively in metals, alongside Red Kite Group. Galena Metals Fund, the flagship fund owned by trading house Trafigura Pte, closed last month due to “difficult conditions prevailing on commodities markets”………………………………………..Full Article: Source

Roach Sees Commodity Headwinds as Miners `in Denial’ About China

Posted on 16 December 2015 by VRS  |  Email |Print

Commodities are at risk of extending declines as China’s slowdown hurts demand and the world’s largest user shifts its economic model away from raw materials, according to Stephen Roach, who said some producers haven’t yet faced up to the change.
“The China factor can’t be emphasized enough,” Roach, a senior fellow at Yale University, said in a Bloomberg Television interview in Hong Kong on Tuesday. China “has been the most commodities-intensive story that the world economy has seen in the post-World War Two period. Now China is shifting the model to more of a commodity-light, services-led economy.”……………………………………….Full Article: Source

Commodity price slump of 2015 another reminder to go global

Posted on 14 December 2015 by VRS  |  Email |Print

A worse than expected global commodity price slump has dampened local sharemarket returns, prompting superannuation funds to switch money into international shares and alternative assets. “Lots of investors re-positioned themselves this time last year ahead of an expected continued downturn in iron ore, coal and oil prices but even many of them have been surprised by how hard the sell-off has been,” NAB Asset Management portfolio adviser John Owen said.
“Global equities have significantly outperformed over the past three years and offer more opportunities for diversification away from the local market that is dominated by banks and miners.”……………………………………….Full Article: Source

Don’t mourn the death of the commodities “super-cycle”

Posted on 11 December 2015 by VRS  |  Email |Print

It is hard to recall a time of such conflicting signals from the world economy. Oil and commodity prices are plummeting, promising £1 a litre at the pumps, but forcing crippling retrenchment on resource producing companies and nations.
This might suggest deeply impaired demand, and a world economy that is heading back into recession. In the United States, on the other hand, the Federal Reserve is preparing for its first rise in interest rates since the onset of the financial crisis. Over in America at least, policymakers fear an economy that needs reining in………………………………………..Full Article: Source

Winners and losers as commodities ‘super-cycle’ turns into mirage

Posted on 11 December 2015 by VRS  |  Email |Print

These are tough times for commodity investors and resources companies. The price of Brent crude has dipped below $US40 a barrel for the first time since 2009 and is down by 60 per cent since the middle of last year. The share prices of mining companies fell sharply after news broke that Anglo American had cut its ­dividend.
Commodities are the biggest story of 2015, not only in markets and economics but also in politics and, of course, the environment. Cheaper fossil fuels pose a risk to strategies for mitigating climate change. The collapse in prices is devastating for countries whose export earnings are dominated by commodities and that have squandered the proceeds of a commodities boom or siphoned them to private interests………………………………………..Full Article: Source

Commodities rout more severe than anticipated, not all due to China: BHP

Posted on 11 December 2015 by VRS  |  Email |Print

The extent of the commodities rout that’s pushed raw material prices to 16-year-lows is more severe than anticipated and isn’t chiefly the fault of weaker growth in China, according to the head of the world’s largest mining company.
Some price declines “have been a lot more dramatic than probably we thought they would be at the start of the year,” BHP Billiton chief executive officer Andrew Mackenzie said. “I would say it’s wrong to see a prolonged period of lower prices as entirely a product of China moving more into a services-based economy.”……………………………………….Full Article: Source

Gloomy mood prevails despite calmer commodities

Posted on 10 December 2015 by VRS  |  Email |Print

Commodity prices caught a break from a bruising sell-off on Wednesday, helping to put global equities on a slightly steadier footing after a rough week driven by fears over global demand. The mood was far from euphoric, though, with European markets underperforming and U.S. equity futures edging down.
Traders warned that markets were likely to give up their gains throughout the day and investors were preparing portfolios for year-end rather than making major new reallocations. Economic data offered little to cheer about. China’s consumer inflation picked up but remained under the government’s 2015 price target of 3 percent. The ripple effects of China’s slowdown was evident in Europe, where German imports fell in October and exports also weakened………………………………………..Full Article: Source

Copper, aluminum and steel collapse to crisis levels

Posted on 10 December 2015 by VRS  |  Email |Print

The last time raw materials like copper and oil were this cheap, an economic depression loomed just around the corner. It’s no secret that commodities in general have had a horrendous 2015. A nasty combination of overflowing supply and soft demand has wreaked havoc on the industry.
But prices for everything from crude oil to industrial metals like aluminum, steel, copper, platinum, and palladium have collapsed even further in recent days. Crude oil crumbled below $37 a barrel on Tuesday for the first time since February 2009………………………………………..Full Article: Source

Commodities rout deepens as Chinese trade data signal weaker demand

Posted on 09 December 2015 by VRS  |  Email |Print

The accelerating rout in commodity prices has piled pressure on energy and resources shares in Asia Pacific amid more signs of slowing demand from China. Although oil prices pushed back on Tuesday from seven-year lows, stock markets around the region felt the pain from uncertainty about global growth and the likely rise in US interest rates later this month.
The Nikkei index in Japan was down almost 1% on Tuesday and the Shanghai Composite and Hang Seng indices were down more 0.9% and 1.6% respectively. In resource-rich Australia, the ASX/S&P200 benchmark had a volaltile day but bears had the upper hand by the afternoon with the index off 0.91% at the close with the big oil and gas and mining companies bearing the brunt………………………………………..Full Article: Source

Global stocks drop on commodities rout

Posted on 09 December 2015 by VRS  |  Email |Print

The global commodities rout throttled world stock markets Tuesday, with mining companies retreating on news of massive layoffs at mining giant Anglo American and oil prices hitting fresh multi-year lows.
A global sell-off began in Asia following weak Chinese trade data and deepened after Anglo American unveiled what it billed as a “radical” restructuring in response to weak commodity prices. Equity markets in Paris, London and Frankfurt lost between 1.4 and 2.0 percent, while the broad-based S&P 500 in the US shed 0.7 percent. In foreign exchange activity, the euro edged higher against the dollar………………………………………..Full Article: Source

Investors brace for more losses as commodities crunched

Posted on 09 December 2015 by VRS  |  Email |Print

BHP shares have dropped below $17 each and South32 under $1 for the first time after commodities were crunched again overnight and mining giant Anglo American cancelled its dividend.
Brent oil dipped below $US40 a barrel for the first time since early 2009, before recovering, while iron ore continued its descent, with the Qingdao benchmark shedding another US41¢, or 1.1 per cent, to $US38.65 a tonne. On the London Stock Exchange, investors dumped Rio Tinto, driving the price of its shares down 8.4 per cent, while BHP Billiton dropped a further 5.5 per cent………………………………………..Full Article: Source

Fear grips market as oil leads commodity crash

Posted on 09 December 2015 by VRS  |  Email |Print

Oil prices have buckled following the breakdown of Opec talks last week, but Chinese commodity demand is actually picking up. Brent crude prices have crashed below $40 a barrel for the first time since the depths of the global financial crisis as Opec floods the market to drive out rivals, with a parallel drama unfolding across the gamut of industrial metals.
The Bloomberg commodity index has fallen to within a whisker of lows last seen in 1998 and has now dropped by two-thirds from its peak, wiping out the entire gains of the resource supercycle. What China giveth, China taketh away………………………………………..Full Article: Source

The Commodity Prices Nightmare of 2015

Posted on 04 December 2015 by VRS  |  Email |Print

We’ve mostly heard about the decline in energy during 2015. After all, oil and natural gas are two of the most actively traded commodities on the market and are down 33.4% and 38.5% this year as of Dec. 3. But the decline in oil and natural gas is just the tip of the iceberg. In fact, the entire commodity complex is in much worse shape than the individual energy sector.
According to Jodie Gunzberg, global head of commodities at S&P Dow Jones Indices, “worst year rank” represents how each commodity’s 2015 performance compares to other years. For example, aluminum’s worst year rank of 2 means 2015 has been the second-worst year ever for aluminum prices. Cotton prices, on the other hand, are having their 23rd-worst year………………………………………..Full Article: Source

Crash in Commodities Just Started

Posted on 03 December 2015 by VRS  |  Email |Print

It certainly hasn’t been a good year for commodity investors. Unfortunately if you’re a resource punter, it won’t get any easier any time soon. Resource Speculator readers are well prepared for what lays ahead. After I turned bearish on commodities in November 2014, I’ve been preparing them for the ongoing destruction all year.
They know we’re not at the bottom. Yet, they understand when commodities should see a turnaround. They also know why. It comes down to a mix of base metal supply cuts, maximum pessimism and rising geopolitical conflict………………………………………..Full Article: Source

Commodities Hit 1970 Lows

Posted on 02 December 2015 by VRS  |  Email |Print

As commodities continue to get pounded, U.S. manufacturing, led by the struggling energy sector, has been pushed into a recession, reflected in the Institute of Supply Management’s new manufacturing index results. At 48.6, it’s a sizable miss versus Wall Street expectations, and is the lowest reading since June 2009.
Jodie Gunzberg, global head of commodities at S&P Dow Jones Indices, notes that the S&P GSCI (formerly known as the S&P Goldman Sachs commodity Index) has rarely seen a November with such a bad commodity performance, with as many as 21 out of 24 commodities in a severe downtrend. Just three commodities, sugar, cotton and cocoa, are on track to be positive in November. Commodities have had their fifth worst November on record since 1970, only behind 1997, 1998, 2008 and 2014, Gunzberg says………………………………………..Full Article: Source

More commodity price uncertainty ahead in 2016, Citi forecast says

Posted on 01 December 2015 by VRS  |  Email |Print

Next year promises to be transitional for the routed commodities market, with “W-shaped” price adjustments lying in wait in 2016, Citi’s annual commodities outlook says. Subtitled Down but not out – On the road to modest recovery, the study said it was difficult to say whether key commodity prices had reached their bottom or whether there was more downside to come.
“As many commodities trade close to production cost levels, it’s tempting to look for a bottom,” the outlook said. “That looks fine for a number of sectors, but should not work across the complex,” Citi’s global commodities team wrote in the paper………………………………………..Full Article: Source

Commodities’ November nightmare

Posted on 01 December 2015 by VRS  |  Email |Print

Goldman Sachs created the GSCI commodity index back in 1991, with the intention of getting asset managers to use it as a benchmark for commodity investment, but also as an improved way of measuring inflation. Specifically, the index was pitched as a better measure than that being provided by Commodity Research Bureau’s (CRB) futures index, because it included a mix of products that Goldman said better reflected real inflation.
In support of the countercyclical diversification case, back-tested returns from 1970-1990 showed the GSCI was negatively correlated with the S&P 500 and government bonds, meaning a basket of GSCI commodities could improve annual returns for investors………………………………………..Full Article: Source

Get set for a commodity crunch

Posted on 30 November 2015 by VRS  |  Email |Print

Markets are betting that China’s currency is headed for another fall with commodity markets likely to suffer collateral damage. The International Monetary Fund board meets today to consider whether to include the yuan in the basket of currencies that makes up the fund’s benchmark currency called Special Drawing Rights.
It is expected to award it the status that the People’s Bank of China has been seeking, symbolising China’s emer­gence as a global financial power. The PBOC vice-governor Yi Gang commented last week that the currency would remain stable after its inclusion in the IMF basket, implying that the central bank is prepared to intervene to make sure that is the case………………………………………..Full Article: Source

Rio Tinto And Vale Killed The Commodities Supercycle, Not China Or The Fed

Posted on 30 November 2015 by VRS  |  Email |Print

That the commodities supercycle is over is obvious: we can see that just by looking at the falling values of pretty much all of the commodities. However, there’s a number of implications of this being bandied about which are wrong. It’s not, for example, slowing growth in China which has killed it, nor will it be the Federal Reserve raising interest rates which gives it the final death blow.
It’s much more accurate to say that the producing companies, like say Rio Tinto or Vale in iron ore, which have killed off the cycle. And as a result of that we can’t quite say that falling commodity prices are symptoms of the global economy about to fall over into depression………………………………………..Full Article: Source

Maximum pain for commodities. Are we there yet?

Posted on 27 November 2015 by VRS  |  Email |Print

The dominant theme of commodity markets in recent months, in virtually every article or conversation at events, has been how much lower can prices possibly go. The answer is simple, they will stop falling when the point of maximum pain is reached.
With the prices of many commodities at multi-year lows and the broad Bloomberg Commodity Index close to its weakest in more than 16 years, many commodity producers, investors and traders are becoming desperate for any positive signs. But any bottoming of prices, or indeed the start of a rally, requires more than desperation, it needs fundamental re-alignment of the existing supply-demand balances………………………………………..Full Article: Source

China’s march from commodities to cosmetics and karaoke

Posted on 27 November 2015 by VRS  |  Email |Print

There has been great concern regarding the slowdown of growth in China and its impact on commodity demand and, therefore, commodity prices. Crude oil’s price gyrations tend to get the most attention, but China’s share of global oil consumption is about 12%, which is significant but less than that of the United States.
One could argue that Chinese demand patterns likely have played an even greater part in influencing prices of many other commodities where China holds an even larger share of global consumption. China’s share of global grain consumption was around 22% in 20142 and its share of global metal consumption tripled from 13% in 2000 to 47% in 2014………………………………………..Full Article: Source

Commodities Slump Defies Miners’ Cuts

Posted on 27 November 2015 by VRS  |  Email |Print

For commodities, the first cuts weren’t the deepest. If anything, they have proved feeble. Prices for copper and zinc continued to fall after announced production cuts by miners. Glencore in September said it would close two African copper mines, removing about 400,000 metric tons of copper annually from the market.
That came after cuts from others like Freeport-McMoRan. Glencore followed that with October’s plans to cut a third of its annual zinc production, or 500,000 tons. The moves prompted short-term rallies, only for them to dissipate within days………………………………………..Full Article: Source

If China killed the commodities boom, the Fed is about to bury it

Posted on 26 November 2015 by VRS  |  Email |Print

For commodities, it’s like the 21st century never happened. The last time commodity investor returns were this low, Apple’s best-selling product was a desktop computer, and you could pay for it with francs and deutsche marks.
Bloomberg’s Commodity Index tracking the performance of 22 natural resources has plunged two-thirds from its peak, to the lowest level since 1999. That shows it’s back to square one for the so-called commodity super cycle — a hunger for coal, oil and metals from Chinese manufacturers that powered a bull market for about a decade until 2011………………………………………..Full Article: Source

banner
February 2016
S M T W T F S
« Jan    
 123456
78910111213
14151617181920
21222324252627
2829