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Commodities Briefing - Category | Market Moves more

Aluminium costs sink globally

Posted on 12 March 2015 by VRS  |  Email |Print

The surcharge that consumers pay to obtain the metal started falling in Europe in November, spurring US declines in February. The global domino-effect was completed last week, when people involved in the negotiations told Bloomberg News that Japanese buyers will pay less amid a regional oversupply.
The rates are falling from an all-time high as demand for aluminium can’t keep up with record exports from China, the biggest producer of the metal. Aluminium for delivery in three months on the London Metal Exchange dropped 4.8 percent this year as some traders unwound financing deals and warehouse backlogs eased………………………………………..Full Article: Source

Singapore Exchange in early talks for regional rubber bourse

Posted on 12 March 2015 by VRS  |  Email |Print

The Singapore Exchange (SGX) is in preliminary talks to be part of a South-east Asian rubber exchange that would bring together the top three producing nations, industry sources said on Tuesday.
SGX held a meeting late last month with the International Tripartite Rubber Council (ITRC), an industry body comprising Thailand, Indonesia and Malaysia, which together produce 70 per cent of the world’s rubber………………………………………..Full Article: Source

China’s Weak Economy, Dollar Strength Dim Commodities Rebound

Posted on 11 March 2015 by VRS  |  Email |Print

Hopes for a rebound in commodity prices after Asia’s Lunar New Year holiday period have proved short-lived with copper, aluminum, iron ore and gold back near multimonth lows, thanks to a slump in Chinese imports and the dollar’s continuing strength.
“It is a little bit of everything that is clouding the outlook for commodities,” says Helen Lau, Hong Kong-based metals and mining analyst with Argonaut Securities. “It will take more time for prices to rebound and probably the biggest driver on the horizon could be a monetary easing in China,” she added………………………………………..Full Article: Source

Commodities in doldrums waiting for Chinese upswing

Posted on 11 March 2015 by VRS  |  Email |Print

Soft commodities prices will require improved Chinese uptake in order to escape the doldrums, Scotiabank MD for investment banking Elian Terner said.“The story is pretty much China; that’s the elephant in the room,” Terner said. “When China slows down, the commodity markets are all affected whether they are copper, gold, silver, iron-ore, oil and gas etcetera.”
With Chinese gross domestic product growth slipping, the ravenous years of the resource supercycle 2004 to 2011 are on hiatus, while numerous projects conceived during this period are unlikely to be completed until the next upswing………………………………………..Full Article: Source

OPEC is still kicking, but the World Bank thinks the oil cartel’s days could be numbered

Posted on 11 March 2015 by VRS  |  Email |Print

As OPEC ’s refusal to curb oil production contributes to a nine-month plunge in prices, a new paper suggests the cartel’s days may be numbered. OPEC, the Organization of the Petroleum Exporting Countries, has vowed to defend its market share against higher-cost producers such as U.S. shale drillers and companies developing Canada’s oil sands.
Its strategy hinges on the odds that an extended period of low prices will lead other producers to scale back output, enabling the group to reassert its influence. Yet a brief history detailed by the World Bank Group shows how difficult it can be to maintain a commodities cartel in the face of market forces and technological advances………………………………………..Full Article: Source

All is not well on the metals commodities front

Posted on 11 March 2015 by VRS  |  Email |Print

The world of metalliferous mining – for the most part at least – is suffering, and suffering badly. No more China-driven supercycle (at least for the short to medium term). More of a China-driven downcycle seems to be in place as Asia’s biggest economy ceases to grow at its recent pace, and there are suggestions too that the Chinese, who look at these things with a rather longer-term viewpoint than most Western governments and businessmen, may even be actively driving down some commodity prices through destocking and reducing imports.
No matter that this impacts on the country’s own mining operations – there has been something of an ongoing programme anyway to rein in some of that nation’s more inefficient and most-polluting mining operations………………………………………..Full Article: Source

UBS cuts gold price forecast

Posted on 11 March 2015 by VRS  |  Email |Print

Following a precipitous drop in the gold price on Friday, UBS has lowered its price target for the yellow metal, and it isn’t the only firm seeing additional pressure for gold. Although the gold price rose every so slightly during Monday trading hours, it remained around $1,168 per ounce, or 3 percent lower than where it sat prior to the release of the latest round of US jobs data on Friday.
The US released better-than-expected numbers for the month of February, prompting some to believe that the Federal Reserve may raise interest rates sooner than expected. “[G]ood US economic figures led market participants to expect the Fed to raise interest rates, which triggered the gold price slide,” states Commerzbank in a recent note………………………………………..Full Article: Source

OPEC chief: After July, oil market will be back in balance

Posted on 10 March 2015 by VRS  |  Email |Print

The global crude-oil market will return to balance in the second half of this year from an oversupply of 2 million barrels a day that has caused prices to plummet, OPEC Secretary-General Abdalla El-Badri said.
Speaking yesterday at a conference in Manama, Bahrain, El- Badri said demand growth in 2014 was weaker than expected “at just below 1 million barrels a day” and usage will rise by 1.2 million barrels a day this year. Crude has lost half its value since June as U.S. producers pumped oil at the fastest pace since 1983. Prices collapsed after OPEC’s decision on Nov. 27 to maintain production rather than sacrifice market share in the face of a glut………………………………………..Full Article: Source

Badri: OPEC Shouldn’t Cut Output To “Subsidise” Shale

Posted on 10 March 2015 by VRS  |  Email |Print

The Organisation of the Petroleum Exporting Countries Secretary-General said on Sunday that the group’s exporters should not cut output to “subsidise” higher-cost shale, an energy source whose recent growth is blamed by OPEC for weakening oil markets.
Abdullah al-Badri added in remarks to a conference in Bahrain that tight oil, a term he has used for shale, was “not a challenge for us” but the market should now be left to decide which source of petroleum could survive at current prices. Oil prices have sunk to near six year lows in recent months as a result of a large supply glut, due mostly to a sharp rise in U.S. shale production as well as weaker global demand………………………………………..Full Article: Source

4 of the Best Ways to Buy Precious Metals

Posted on 10 March 2015 by VRS  |  Email |Print

In a way, investing in precious metals seems kind of counterintuitive. After all, they generate no profits or dividends. Warren Buffett thinks precious metals aren’t even worth considering. Yet there is still money to be made. For example, in volatile times, gold can be a great safe haven, while other precious metals like silver and platinum serve critical industrial purposes as well.
In fact, some of the world’s best investors like George Soros, David Einhorn and John Paulson have set aside a part of their wealth in these shiny investments………………………………………..Full Article: Source

3 Fear-Resistant Commodities

Posted on 10 March 2015 by VRS  |  Email |Print

On Friday, March 6 the US jobs report hit the wires. Equities were trading higher in premarket as we’d seen a strong selloff in the previous session followed by an equally strong high-volume rally. No one was expecting the massive selloff that was about to hit the stock market when the good jobs numbers were posted.
Later that day after 6 1/2 hours of heavy volume selling in the stock market, the closing bell rang. The big selloff pulled most stocks and commodities into an extremely oversold market condition. Traders were waiting all day for some type of bottom to be put in place so they could reenter a long position and day trade the rebound………………………………………..Full Article: Source

Commodities Bulls Are Their Own Worst Enemy

Posted on 09 March 2015 by VRS  |  Email |Print

What is the biggest obstacle to a commodities rally? Saudi Arabia’s oil policy? China’s lower growth forecast? Try Wall Street. The big problem facing oil, natural gas, iron ore, coal and the like is that years of high prices prompted drillers and diggers to boost supply just in time for demand growth to cool off.
But drillers and diggers don’t like to stop what they do best just because prices have dropped. Better to let the other guy do that to rebalance the market. Keeping going, though, requires access to capital—and that is where Wall Street is the great enabler………………………………………..Full Article: Source

Commodities Routed as China Cuts Growth

Posted on 09 March 2015 by VRS  |  Email |Print

As China’s top economic officials announced a slower economic growth forecast, the commodities markets are bracing for another rout in 2015. Last Thursday at the National People’s Congress, China Premier Li Keqiang lowered the country’s economic growth forecast to “about 7 percent,” confirming a period of “new normal” of sluggish investments, overcapacity, and slowing infrastructure projects.
It’s a harrowing thought for commodity producers. Since the early 2000s, China’s investment in factories, infrastructure, and real estate has largely driven the commodities boom over the last decade. According to data from Australian bank Macquarie, China last year accounted for more than half of the world’s consumption of iron ore, around half of the global demand for aluminum and nickel, and more than 40 percent of the world’s demand for copper and zinc………………………………………..Full Article: Source

As oil prices tank, where did OPEC go wrong?

Posted on 09 March 2015 by VRS  |  Email |Print

The oil price crash that brought 2014 to a close was itself a sort of benediction on Wall Street: It was the nail in the coffin to the so-called “peak oil” debate, in which many experts had argued that oil prices were bound to rise — perhaps forever — as the world’s choicest oil reserves ran dry. Such gloomy forecasts of dire shortage and endlessly spiking prices are as old as the market itself, but they have always proven wildly incorrect.
Today’s glut is only the latest reminder, as U.S. crude for April delivery closed at $59.73 a barrel on Friday after hitting peaks of more than $100 in recent years.In 1998, “Oil shocked” It was a fitting headline for an Economist article describing the state of the oil market. Shock was indeed what the market was experiencing……………………………………….Full Article: Source

OPEC Sec-Gen says oil market should return to balance in H2 2015

Posted on 09 March 2015 by VRS  |  Email |Print

The Organisation of the Petroleum Exporting Countries (OPEC) Secretary-General said on Sunday OPEC and non-OPEC producers should work together to stabilize oil markets, suggesting oversupply could amount to two million barrels per day (bpd).
But Abdullah al-Badri added in remarks to a conference in Bahrain he had no doubt markets would return to balance in the second half of 2015, explaining that he did not believe fundamentals warranted a price drop of the extent markets had seen. “Tremendous opportunity” in oil remained, despite recent market volatility and uncertainties, he said, adding that the industry’s ‎long term outlook remained healthy………………………………………..Full Article: Source

China Plans to Build Its Commodity Hoard in 2015

Posted on 06 March 2015 by VRS  |  Email |Print

China’s government plans to spend more building up its commodity stock piles this year while taming its consumption of coal, part of a raft of policies to clean up highly-polluting industries while taking advantage of weak global resource prices.
The country’s Ministry of Finance said Thursday it would spend 154.6 billion yuan ($24.7 billion) this year to build up its reserves of grains, edible oils and what it termed “other materials.” That is a 33% rise on such spending compared with 2014, when stockpile-spending rose 22%………………………………………..Full Article: Source

World Bank Analyzes Oil Price Plunge

Posted on 06 March 2015 by VRS  |  Email |Print

Rapid expansion of oil supply from unconventional sources, a significant change in OPEC’s policy stance, and weak global demand are driving the recent plunge in oil prices, according to a new paper by the World Bank. These underlying forces are buoyed by a strengthening U.S. dollar and the fact that oil production in the Middle East has not been severely disrupted by ongoing conflict, says the paper, titled “The Great Plunge in Oil Prices: Causes, Consequences, and Policy Responses”.
The paper, authored by John Baffes, Ayhan Kose, Franziska Ohnsorge, and Marc Stocker, presents a comprehensive analysis of the causes and economic and financial consequences of the oil price decline………………………………………..Full Article: Source

Gold recycling to remain low globally in 2015 too

Posted on 06 March 2015 by VRS  |  Email |Print

Gold recycling had hit a seven-year low in 2014 and the World Gold Council expects recycling to remain low in 2015 as well. However, the council hopes the situation to be different in India due to the government’s measures to bring old gold into the formal system.
Between 1995 and 2013, recycled gold had accounted for about a third of total supply of the metal. In 2009, with higher gold prices and the global economy faltering, recycled gold hit a record 1,728 tonnes, accounting for 42 per cent of the total gold supply. However, in 2014 as gold prices fell and the global economy began recovering, gold recycling decreased to the lowest level since 2007 to 1,122 tonnes — accounting for just 26 per cent of total supply, according to World Gold Council………………………………………..Full Article: Source

Saudi Arabia expects oil price to stabilize

Posted on 05 March 2015 by VRS  |  Email |Print

Saudi Arabia’s oil minister said on Wednesday he expected oil prices, which hit a near six-year low in January, to stabilize, signalling cautious optimism about the market outlook. Giving a speech in the German capital, Ali al-Naimi also urged non-OPEC producers to help balance the oil market, saying it was not up to Saudi Arabia to subsidize higher-cost producers and that circumstances required non-OPEC to cooperate.
“Going forward, I hope and expect supply and demand to balance and for prices to stabilise,” Naimi said. “Global economic growth seems more robust.”……………………………………….Full Article: Source

Saudi Oil Minister Denies Price War With U.S. Shale

Posted on 05 March 2015 by VRS  |  Email |Print

Saudi Arabia’s oil minister Ali al-Naimi Wednesday denied his country was waging a price war on U.S. shale producers and reasserted OPEC’s relevance, arguing that its actions have helped crude prices stabilize in recent weeks. “Some speak of OPEC’s ‘war on shale,’ others claim ‘OPEC is dead.’ Theories abound. They are all wrong,” Naimi said.
Naimi, an influential figure in the Organization of the Petroleum Exporting Countries, who often makes terse, sometimes opaque, remarks to reporters, used the speech to issue a lengthy and unusual defense of Saudi oil policy since crude prices began collapsing last summer………………………………………..Full Article: Source

Welcome to the ‘new paradigm’ in crude oil

Posted on 05 March 2015 by VRS  |  Email |Print

The oil market bid farewell to $100 prices for West Texas Intermediate crude back in July, and many years may pass before it sees it again. Analysts at UBS on Wednesday said the market has entered a “new paradigm,” with WTI oil prices remaining “lower for longer.” They expect prices to trade in the $65 to $70 a barrel range “at least over the next several years.”
“The success of U.S. oil shale has been a game changer for the industry,” the analysts, led by Angie Sedita, said. “U.S. oil shales have lowered the cost of the marginal barrel of oil with roughly 60% of the basins economic at $65/bbl oil or lower.”……………………………………….Full Article: Source

Gold market open to wide-ranging OTC trade reform: LBMA

Posted on 05 March 2015 by VRS  |  Email |Print

The London Bullion Market Association (LBMA) believes the gold industry is ready for wholesale reform, including a tailor-made mechanism to report daily turnover and potential clearing following 2014’s shake-up of benchmarks. The transparency of financial markets has been a focus of global regulators after evidence of price manipulation in lending rates between banks with the LIBOR scandal in 2012.
Both gold and silver were included in a list of seven benchmarks that will be regulated by Britain’s watchdog Financial Conduct Authority (FCA) from April. New rules on over-the-counter derivatives are expected in Europe by 2016, while a broader review of UK markets is now evaluating the introduction of mandatory clearing and transaction-reporting obligations for precious metals………………………………………..Full Article: Source

Higher Prices Needed To ‘Reinvigorate’ Commodity Sector - BMO Survey

Posted on 04 March 2015 by VRS  |  Email |Print

The majority of investors and corporate executives agree that higher commodity prices are needed to “reinvigorate” investor interest in the commodity sector, according to a survey of attendees at the BMO Global Metals and Mining Conference.
The conference participants, a mix of corporate executives and investors, were asked a total of 15 questions regarding the commodities sector; in its report, BMO said the answers provided some interesting insight into what the sector faces in the next two years……………………………………….Full Article: Source

Kiwi commodity prices rise in first two months of 2015

Posted on 04 March 2015 by VRS  |  Email |Print

Commodity prices in New Zealand rose 1.8 per cent in February and there was a sharp positive revision for the January reading, according to a tracker compiled by ANZ. Prices rose 1 per cent in January, a big revision from the original reading which stated they fell 0.9 per cent.
Commodity prices have been in decline for much of 2014, according to ANZ’s monthly New Zealand commodity price index. However ANZ sounded a note of caution in its release, entitling the reading for February a “one hit wonder”……………………………………….Full Article: Source

Barrett: Counter OPEC’s power by boosting American crude oil exports

Posted on 04 March 2015 by VRS  |  Email |Print

Drivers can mostly thank the lower cost of gasoline to the highest level of domestic oil production in four decades — over 9 million barrels per day. With American energy production booming and gas prices plummeting, it’s difficult to imagine a return to the shortages that characterized the 1973 Arab oil embargo.
But Saudi Arabia, Kuwait and the rest of the Organization of Petroleum Exporting Countries have recently launched a price war to force Americans back to a dependency on foreign energy. They are being aided by an outdated U.S. policy prohibiting the export of domestic crude oil……………………………………….Full Article: Source

Gold – Selling Pressure Resumes on Support at $1200

Posted on 04 March 2015 by VRS  |  Email |Print

Gold has done well over the last few days to enjoy some support at $1200 and rally higher to a one week high to finish last week, before dropping a little in the last 24 hours and placing its attention firmly back on the support at $1200. For the last month now gold has drifted steadily lower down to a one month low near the key $1200 level before finding solid support at this key level over the last couple of weeks.
Earlier last week gold moved back and forth and teased the $1200 level a little however the demand kicked in and brought it right back above the key $1200 level before moving a little higher to close last week. A few weeks ago it rallied higher after dropping through $1220 before running into some resistance around the key $1240 level……………………………………….Full Article: Source

Why Commodities Are More Than Economic Indicators

Posted on 03 March 2015 by VRS  |  Email |Print

We track the prices of everything from crude oil to milk for clues about the state of the economy. But what could they tell us about the environment? Tune in to any television or radio newscast, and you’ll hear how the stock market is performing today. The New York Times puts market indicators alongside the current temperature at the top of their website. Changes in unemployment or the prices of commodities like oil and milk regularly make headlines.
Environmental historian Dr. Ted Melillo, associate professor at Amherst College, says we need to re-envision what something like the price of oil really means - what it can reveal about not only our economic systems, but also our social, political, and environmental attitudes and practices………………………………………..Full Article: Source

China, Commodities Bust To Force RBA’s Hand

Posted on 03 March 2015 by VRS  |  Email |Print

It would be fair to say when China sneezes, Australia catches a cold. The Reserve Bank of Australia knows this all too well and is why it is likely to pull the trigger on another 25 basis point cut in interest rates to stave off pneumonia.
The pullback in China’s growth to its slowest pace since 1990 was worrying enough for the People’s Bank of China to cut interest rates for a second time in three months on Saturday, and some economists are arguing that RBA Governor Glenn Stevens will follow suit with a second successive rate cut when he convenes the monthly meeting of the central bank’s board in Melbourne on Tuesday………………………………………..Full Article: Source

Gold market ‘is booming’ in Bahrain

Posted on 03 March 2015 by VRS  |  Email |Print

Bahrain’s gold market has been booming over the last two years, according to official figures. The amount of gold jewellery, bars and other items sent for testing at the Gem and Pearl Testing Laboratory of Bahrain (GPTL) more than doubled from 6,000 at the end of 2013 to 13,000 at the end of last year.
Precious Metals and Gemstones Testing Directorate acting director Abeer Al Alawi said the number of items tested was much higher than any of the previous five years. “We maintained an average pace of around 5,000 items tested every year until 2012 and then there was a hike to 6,000 in 2013,” she told the GDN………………………………………..Full Article: Source

Commodities Set to Extend Gains as China’s Rate Cut Spurs Demand

Posted on 02 March 2015 by VRS  |  Email |Print

Commodities including iron ore, oil and copper are set to extend gains on Monday as China’s interest-rate reduction spurs demand from the construction to energy industries. China’s second cut to benchmark rates in three months will fuel gains as investors anticipate that cheaper credit will stimulate demand, Eugen Weinberg, head of commodity research at Commerzbank AG, said.
A Chinese factory gauge reported on Sunday signaled contraction in February. “The market was looking for some time for more easing in China on a back of economy weakness,” Weinberg said. “In a short term, the hopes for more monetary easing and additional stimulus are likely to support the prices.”……………………………………….Full Article: Source

Oil Drops as Gain in Saudi Arabian Output Boosts OPEC Production

Posted on 02 March 2015 by VRS  |  Email |Print

Oil fell after capping its first monthly gain since June as increased production from Saudi Arabia lifted OPEC’s output beyond its collective quota for a ninth month. Futures decreased as much as 1.1 percent in New York. The Organization of Petroleum Exporting Countries pumped 30.6 million barrels a day in February, above the group’s output target of 30 million a day, according to a Bloomberg survey.
U.S. drillers cut the number of rigs in service for a 12th week to the fewest since June 2011, Baker Hughes Inc. data showed. Saudi Arabia led OPEC’s decision in November to maintain the group’s output, exacerbating a global glut that drove oil almost 50 percent lower in 2014………………………………………..Full Article: Source

India’s new gold scheme may hit Qatar market

Posted on 02 March 2015 by VRS  |  Email |Print

India’s new “gold monetisation scheme”, announced by country’s Finance Minister Arun Jaitley in his annual budget speech yesterday, is expected to hit hard Qatar’s gold market, especially the demand for gold bars and coins (bullion, sold in 24 and 22 carats), according to trade sources.
“The scheme will definitely have an impact on Qatar’s bullion market. Many Indian expatriates who used to invest in gold may now prefer to buy gold bonds or gold coins back home,” Azim Abba, Managing Director of Al Sulaiman Jewellery and Watches,said………………………………………..Full Article: Source

IEA Sees Oil-Demand Boost Balancing Market in Echo of Saudi View

Posted on 27 February 2015 by VRS  |  Email |Print

The oil market will rebalance in the next several months as a price collapse boosts consumption and curbs supplies, the International Energy Agency said, a day after Saudi Arabia’s oil minister told reporters demand is rising.
An oil price as low as $45 a barrel is unsustainable, Fatih Birol, the chief economist for the Paris-based adviser to 29 nations, said at a conference in London Thursday. Investment cuts in the U.S., Russia and Brazil will curtail output growth, bringing supply and demand back in line, he said………………………………………..Full Article: Source

Noble overstated commodity values by at least US$3.8 bln: Iceberg Research

Posted on 27 February 2015 by VRS  |  Email |Print

Singapore-listed Noble Group overstated the value of commodities it holds by at least US$3.8 billion, Iceberg Research said in a report on the Asian commodity trading firm’s accounting practices. “Impairing these fair values dramatically impacts Noble’s performance indicators,” the little-known research firm said on its website on Wednesday, its second report this month raising questions about Noble’s books.
Iceberg released its first analysis on Feb 15, to which Noble issued a detailed rebuttal. The company’s shares fell a combined 13 percent in the two trading sessions following the initial report. It has recovered about 1 percent since then………………………………………..Full Article: Source

How Do Commodity Suppliers Go Sustainable?

Posted on 26 February 2015 by VRS  |  Email |Print

Social and environmental responsibilities are rarely at the top of mind when suppliers are racing to the bottom of the price curve. That’s why sustainability is hard to come by in commodity industries. But a small giant in New Zealand is changing all that, at least when it comes to wool.
Dave Maslen is global partnership and sustainability manager at the New Zealand Merino Co. (NZM). In this video interview (after the jump), he shares the story of how Merino brings traceable, sustainably-produced wool to market by working directly with farmers and the value chain………………………………………..Full Article: Source

Nigeria Proposes Cutting Oil Price Benchmark to $52 a Barrel

Posted on 26 February 2015 by VRS  |  Email |Print

Nigeria’s Senate and executive proposed cutting this year’s budgeted oil price benchmark to $52 per barrel from $65 suggested in December, as falling prices erode the income of Africa’s biggest crude producer.
Nigeria’s finance ministry said an agreement had been made with the Senate and most members of the House of Representatives, though the lower chamber has yet to approve. “The proposal is $52 a barrel for 2015 due largely to decline in crude oil prices,” Enyinnaya Abaribe, chairman of the Senate Committee on Information and Media, said……………………………………….Full Article: Source

The end of OPEC

Posted on 26 February 2015 by VRS  |  Email |Print

At first, people thought that OPEC was purposefully keeping prices low (by not reducing supply) in order to smother the emerging shale industry in the crib. With low oil prices, less investment would flow to alternatives to conventional oil, which can be expensive. But, as Bloomberg reports, that might not be the answer. The answer increasingly seems to be that OPEC isn’t raising prices because it can’t raise prices.
The cartel isn’t holding. The smaller OPEC members don’t want to shrink output — which would have to happen to raise prices — because their economies are too unstable and they can’t afford it. Even Saudi Arabia, the most important OPEC member, is in favor of staying the course………………………………………..Full Article: Source

Will a dry spell in Chile curb a global oversupply of copper?

Posted on 26 February 2015 by VRS  |  Email |Print

A raging seven-year drought affecting copper-rich Chile is making miners grow anxious as the dry spell is now affecting the supply of power necessary to sustain their operations, responsible for around a third of global copper output. Companies such as BHP Billiton and Anglo American have recently highlighted the impact of the country’s extreme conditions in their latest financial reports.
Output at BHP’s Escondida, the world’s largest copper mine, dropped 2% percent in the second half of 2014. Water scarcity at Anglos’ Los Bronces — the world’s sixth-largest copper operation— may cost the company as much as 30,000 tonnes of lost production, equivalent to 4% of Anglo’s overall copper output this year, Reuters reports………………………………………..Full Article: Source

Oil market is stabilising, $60 is OK for now - Gulf OPEC delegate

Posted on 25 February 2015 by VRS  |  Email |Print

Oil prices have started to stabilise around current levels of $60 a barrel and demand is showing signs of improving in Asia and other regions, a senior Gulf OPEC delegate said on Tuesday.
The comments indicate that the core Gulf members of the Organization of the Petroleum Exporting Countries are showing no sign of wavering in their strategy to focus on market share rather than cutting output, despite concerns from other members about falling oil revenue………………………………………..Full Article: Source

Aluminium restarts not just a matter of price: Andy Home

Posted on 25 February 2015 by VRS  |  Email |Print

Non-Chinese aluminium production was unchanged in January, according to the latest figures from the International Aluminium Institute (IAI). Producers, it might be inferred, are still holding the line in terms of keeping capacity off-line in the face of low prices and historical stocks overhang.
Their continued discipline is a subject of much market conjecture, although the fear of restarts waxes and wanes with the price. A combination of lower London Metal Exchange (LME) basis price and softer physical premiums, particularly in Europe, has seen the all-in price slide back to just above $2,100 per tonne from over $2,450 as recently as November………………………………………..Full Article: Source

PwC Metals Deals Outlook: buyers and sellers to play a waiting game

Posted on 25 February 2015 by VRS  |  Email |Print

There will be weak momentum in the metals deals market in 2015 according to a new report from PwC. The report, Metals Deals: Forging ahead, predicts that, as in 2014, the lack of convincing, strong and sustainable growth in the global economy will keep metals deals in a low gear, or even stalling in some parts of the world.
Jim Forbes, global metals leader at PwC, said: “With the current level of commodity prices and the downward pressure on economic forecasts, we don’t expect dealmakers to be rushing to the table in 2015. The deal making that will take place is likely to be driven primarily by specific country, industry or company considerations, rather than the global cycle, the direction of which remains uncertain.”……………………………………….Full Article: Source

Commodities explained: China’s new normal

Posted on 24 February 2015 by VRS  |  Email |Print

As the Chinese return from their New Year celebrations, commodities traders and industry executives will be wondering what the year of the sheep holds for the sector. Why is Chinese growth on the minds of commodities traders? China has been the most important factor in commodities demand in the past decade.
The commodities “supercycle” that started in the early 2000s was largely driven by the country as investment in infrastructure, property, and factories producing exports for the globe required increasing imports of raw materials. Beijing’s 2009 stimulus further prolonged the demand, with loose credit encouraging the use of metal as collateral for loans………………………………………..Full Article: Source

Oil’s Plunge Could Help Send Its Price Back Up

Posted on 23 February 2015 by VRS  |  Email |Print

If something is cheaper, people will likely buy more of it. That core principle of economics is proving to be especially true with oil after its recent plunge. Over the past six months, 53% of vehicle purchases in the U.S. were light trucks or sport-utility vehicles, which tend to consume more gas than cars, according to Commerce Department data.
That was the highest share in a decade and up from 51% last June, when oil prices peaked for the year. The Transportation Department estimates Americans drove more than three trillion miles in the 12 months through November, the most since mid-2008 and the biggest annual increase—38 billion miles—in a decade………………………………………..Full Article: Source

Gold Fever Fading as $4 Billion Erased From Funds: Commodities

Posted on 23 February 2015 by VRS  |  Email |Print

Judging by the barometer of hedge-fund interest, there’s less to get excited about in gold these days. Even as Greece battled with its creditors to avoid default and keep the euro zone intact, speculators retreated from the metal used as a haven from economic and political upheaval. Money managers cut their net-long wagers by the most in 15 weeks, U.S. government data show.
The strengthening dollar and record valuations for global equities are diminishing bullion’s appeal as a store of wealth. As the combined market capitalization of stocks thundered through $67 trillion last week and the dollar traded at its highest level in at least a decade, this month’s losses in exchange-traded products backed by gold reached $4 billion………………………………………..Full Article: Source

We like the fundamentals for gold

Posted on 23 February 2015 by VRS  |  Email |Print

Medium to long term, we like the fundamentals for gold. On the supply side, although mine production was up for the sixth consecutive year due to mines that were developed over the last decade, we do not believe there is a large enough pipeline of new projects to satisfy future demand.
This is due to a cost structure that is approaching (or even exceeding) the current spot price. On the demand side, we see continued strength in Asia and throughout the emerging markets, central banks and the investment sector as price goes up — hence a real “push/pull” phenomenon in the years ahead………………………………………..Full Article: Source

Major banks’ commodities revenue up 9 pct in 2014-report

Posted on 20 February 2015 by VRS  |  Email |Print

Commodities revenue at the top 10 investment banks climbed by 9 percent last year, reversing three years of declines, due to increased activity in energy markets as oil went into freefall, a consultancy said on Thursday. Revenue earned by leading banks from commodity trading, selling derivatives to investors and other activities in the sector rose to $4.9 billion from $4.5 billion in 2013, London-based financial industry analytics firm Coalition said.
“Despite significant business downsizing, revenues rose due to increased activity in the energy markets. Meanwhile, metals continued to be impacted by regulatory pressures and weak underlying demand,” Coalition said………………………………………..Full Article: Source

Oil’s Volatility Reflects Debate: Is Worst Over Yet?

Posted on 20 February 2015 by VRS  |  Email |Print

New evidence of surging U.S. oil supplies sent prices on a roller-coaster ride Thursday, reflecting the growing divide among traders over whether an eight-month rout is over. The U.S. Energy Information Administration said oil inventories grew by 7.7 million barrels in the week ended Feb. 13. Analysts said swelling stockpiles are a sign that producers aren’t cutting back on output despite a more than 50% collapse in prices since last summer.
In its report, the EIA said U.S. oil production was on track to reach a 42-year high this month. But traders in the futures market had been bracing for much worse, and many took the data as a cue to buy. On Wednesday, an industry group had estimated a jump of 14.3 million barrels for last week, which would have been a record had it been borne out in the government data……………………………………….Full Article: Source

Oil-Drop Pain Spreads to Saudi Arabia’s Energy Behemoth

Posted on 20 February 2015 by VRS  |  Email |Print

Saudi Arabia’s refusal late last year to rein in oil production helped trigger the price crash that has hurt oil-producing countries and publicly listed energy companies alike. And now even the kingdom’s own oil company is feeling the pain.
As a result, state-owned Saudi Aramco is looking for ways to cut costs everywhere, from pushing contractors for better deals on oil-well services to negotiating discounts on its phone and power bills, according to people familiar with the matter………………………………………..Full Article: Source

Copper Is Shining Bright After Dull Start to the Year

Posted on 20 February 2015 by VRS  |  Email |Print

Copper prices rose to a one-month high on Wednesday, as the possibility of a deal between Greece and its European creditors sparked optimism in metals markets. Copper for March delivery, the most actively traded contract, closed up 1.3% at $2.6145 a pound on the Comex division of the New York Mercantile Exchange. It was the highest settlement since Jan. 13.
Greece will seek an extension to its rescue deal from the rest of the eurozone, officials said, signaling a shift in the standoff between Athens and its creditors. The possibility of an agreement that would keep the EU whole sparked optimism in copper markets, which saw a sharp drop Tuesday………………………………………..Full Article: Source

The oil price: The Saudi project, part two

Posted on 19 February 2015 by VRS  |  Email |Print

Stage one of Saudi Arabia’s plan—or perhaps hope—to restructure the oil market is taking longer than expected. By refusing to rein in production while prices fell, the Saudis permitted a big surplus to grow and served notice on higher-cost rivals (Russia, Venezuela, American shale-oil producers) that they would not prop up other people’s profit margins at the expense of their own market share.
That signal has been weakened by the growing amount of oil in storage, which is absorbing most of the glut. World oil stocks rose about 265m barrels last year and Société Générale, a French bank, reckons they will increase by a further 1.6-1.8m barrels a day (b/d) in the first six months of this year, adding roughly 300m barrels to the total. At the moment, global oil output is exceeding demand by about 2m b/d, so the build-up of stocks is enough to take most of the glut off the market……………………………………….Full Article: Source

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