The commodities supercycle is probably ending this year as China’s economic growth slows and the nation focuses less on infrastructure and urbanization, Citigroup Inc. said.
This year will probably signal “death bells” for the supercycle, or a longer-than-average period of rising prices, Citigroup said in a report dated yesterday, reiterating similar calls made last month and in 2011. The Standard & Poor’s GSCI gauge of 24 raw materials is down 2.1 percent this year, after an almost fourfold advance since the end of 2001……………………………..Full Article: Source

A slower-growing Chinese economy, lack of correlation between equities and commodities, and a stronger U.S. dollar are marking the “end of the commodities supercycle,” said Citi in a research note on Tuesday.
“Citi expects 2013 to be the year in which the death bells ring for the commodity supercycle after its duly noted sunset, ushering in a new decade of opportunities based on how individual commodities will perform against one another and against broader market indicators such as equities or currencies. It will be a period of focus on unique individual commodity cycles and new relations emerging between and among commodities and other asset classes from fixed income to foreign exchange to global equities,” they said……………………………..Full Article: Source

Real estate topped the list of sovereign wealth funds’ investments last year, overtaking commodities and financial services, according to Institutional Investor’s Sovereign Wealth Center.
Properties made up 26 percent of investments by these funds last year, up from 14 percent in 2011, according to the center’s report on investment trends by the funds released today. That’s followed by financial services and commodities, each accounting for 23 percent, down from about 30 percent a year earlier, it said………………………………………..Full Article: Source

Goldman Sachs Group Inc. said that returns from commodities have diverged from developed equity markets amid expectations for rising metal stockpiles and energy supplies, maintaining its neutral outlook on raw materials.
Commodity returns as gauged by the Standard & Poor’s GSCI Enhanced index will be 1.6 percent over 12 months, analysts led by Jeffrey Currie wrote in a report dated yesterday. That compares with an earlier estimate for a 2.5 percent return, according to an April 23 report. Goldman is most bearish on agriculture, forecasting a 13 percent loss over 12 months…………………………………….Full Article: Source

Oil production from the Organization of the Petroleum Exporting Countries rose by 250,000 barrels per day in April from a month earlier to 30.5 million barrels per day, according to a Platts survey of OPEC and oil industry officials and analysts released Monday.
“The Platts estimate of OPEC production is about a million barrels per day more than what the International Energy Agency estimates is the output needed to keep supply and demand in balance,” said John Kingston, Platts global director of news, in a statement………………………………………Full Article: Source

Consumers will sell the least used gold in five years after prices tumbled into a bear market, curbing a source of metal that typically accounts for about one in every three ounces of global supply.
Refiners will handle about 1,550 metric tons of old jewelry and other discarded metal this year, 4 percent less than in 2012 and the least since 2008, Toronto-based TD Securities Inc. estimates. The amount is valued now at $71.4 billion, from $84.5 billion at this year’s peak………………………………………..Full Article: Source

Commodity trading houses are not “too big to fail”, says a report commissioned by the banking industry’s top lobby group, which had hoped it would conclude the opposite.
The Global Financial Markets Association, which commissioned the report from a leading academic on commodity markets, had hoped to use it to persuade watchdogs to regulate their rivals. GFMA members such as Goldman Sachs and JPMorgan Chase compete directly with commodity trading houses in some areas. But the report said that trading companies “pose less systemic risks” than big banks…………………………………..Full Article: Source

Commodity super-cycle that began in 1990’s is far from over and it will continue to be driven by resource intensive urbanisation, industrialisation in emerging countries, according to an analysis by ETF Securities Ltd. It said that analysts have shown a tendency to confuse short term correction in prices denoting end of super cycle while such cycles have to be defined over a larger time frame extending to three to four decades.
ETFS said that the world has seen four major super cycles in the past 160 years with bull cycles ranging from 30-40 years and the immediate two previous super cycles were driven by growth in USA (1870-1913) and post war Japan from 1946-1973…………………………………..Full Article: Source

Investors withdrew a record $9.3 billion from commodity exchange-traded products as gold sales pushed the metal into a bear market, BlackRock Inc (BLK) said. The outflow for commodities in April pushed the total for the first four months this year to $17.8 billion, compared with inflows of $6 billion for the same period last year, BlackRock said in a report dated April 30.
The previous record for commodity sales was $5.2 billion in February. Gold outflows were an all-time high of $8.7 billion last month as the metal slid to a two-year low in London on April 16, two sessions after falling into a bear market………………………………….Full Article: Source

Commodity-based exchange traded products (ETPs) suffered record outflows of $9.3 billion in April, data showed on Thursday, as institutional investors dumped gold holdings.
Leading wealth managers have been switching out of commodities since the start of the year in favour of equities and bonds as they look for yield, a trend which accelerated in April with a major sell-off across the commodities field, led by a collapse in the gold price. Global outflows from commodity ETPs tripled month-on-month, according to Blackrock Inc, the world’s largest asset manager, while redemptions from the precious metals segment quadrupled after gold’s largest spot-price decline in 30 years………………………………….Full Article: Source

OPEC has appointed a Saudi Arabian candidate as its head of research over an Iranian, OPEC delegates told Reuters on Tuesday following a meeting at the organization’s headquarters in Vienna.
Saudi Aramco’s Omar Abdulhamid was appointed as the head of research, the second most senior post at OPEC after the secretary general, replacing Kuwait’s Hasan Qabazard. The other candidate was Iran’s Hojatollah Ghanimifard. Delegates said that Abdulhamid was personally recommended by OPEC Secretary General Abdullah al-Badri………………………………………..Full Article: Source

The US data has improved from last year, Guillaume Menuet of Citi believes that that underlying fundamentals in the US are recovering steadily. However, concerns relating to lack of fiscal deal remain.
“When you look at availability of credit, market matrix, unemployment, everything is pointing towards a recovery gaining momentum in the second half of the year,” he said………………………………………..Full Article: Source

Macquarie Research, a unit of Macquarie Group, said that despite China’s economic growth, apparent demand for metals remained weak, particularly in the US, Europe and South Korea.
“Certainly, industrial production is stuttering rather than accelerating and metal consumers are maintaining minimum working capital — this situation should improve as lead indicators rise. However this process does not seem aggressive enough to drive commodity prices,” it said.The bank cut its 2013 copper price forecast by 5.2 per cent compared with its January forecast, to $US7459 a tonne, and cut its 2014 copper price forecast by 14.7 per cent to $US6550 a tonne………………………………………..Full Article: Source

The spot gold price was holding onto its strong gains last week to hover around the $1,465 an ounce level in European trading on Monday.Gold suffered a $200-plus decline that began on Friday 13 April and accellerated into Monday when the metal dropped to multi-year lows of $1,326 an ounce.
Gold’s recent push higher breached important technical levels and the 50% recovery of recent losses is also a bullish signal for the gold market………………………………………..Full Article: Source

ABN AMRO sees most commodity prices declining further for the remainder of 2013 before strengthening next year on economic recovery-led demand, according to the bank’s Quarterly Commodity Outlook published today.
The improving outlook and sentiment for the US and China will support cyclical commodities, especially base metals, in the near term. Price increases of 5-10% are predicted for aluminium, copper and zinc are predicted in the coming quarter, with nickel expected to strengthen even further………………………………………..Full Article: Source

ABN AMRO has brought forward its forecast of $1,000/ oz to end of 2014 from end of 2015, according to it’s quarterly commodity outlook published.“Silver is expected to fall to $ 20/ oz this quarter,” it added.
ABN AMRO sees most commodity prices declining further for the remainder of 2013 before strengthening next year on economic recovery-led demand.The improving outlook and sentiment for the US and China will support cyclical commodities, especially base metals, in the near term………………………………………..Full Article: Source

Russia plans to invest $1 bln in the extraction of rare earth metals to compete with market leader China which controls around 97% of world production.
State-run Rostekh and the IST group of companies, owned by businessman Aleksandr Nesis, are planning to create a joint venture, Kommersant daily reported, citing sources close to the developments………………………………………..Full Article: Source

Morgan Stanley sounded a bullish note on commodities, even as, in agriculture, regulatory data showed hedge funds curbing negative positioning, with a large cut in bets on falling sugar prices.
Commodities “could see notable performance from here”, and “even outperform”, if sentiment towards the sector, and its fundamentals improve as expected, the bank said, following a sell-off in many raw materials to multi-month lows………………………………………..Full Article: Source

Canada emerged from the financial crisis with hardly a scratch, but it is going to find the global economic recovery a lot more difficult.
The stock market has been suggesting this for the past two years. The S&P/TSX composite index has fallen more than 13 per cent since April, 2011, while benchmark indexes in the United States and Japan have enjoyed double-digit increases and even German and U.K. indexes have shown slight gains………………………………………..Full Article: Source

The macro backdrop remains gold-supportive, and prices may average $1500/oz in the fourth quarter of 2013. Also, for 2013, prices are expected to average $1483/oz, stated London based Barclays in its recent market analysis.
Demand from India and China has responded strongly to lower gold prices but, according to Barclays, given the sizeable cash-negative ETP holdings at current price levels, the near term looks fragile and prices could be exposed to further downside risk………………………………………..Full Article: Source

As if the past two month’s 13% decline in copper prices wasn’t enough to signal waning confidence in the metal, analysts have also started to scale back forecasts. The latest blow to copper came on Monday, when senior metals analyst at Goldman Sachs Max Layton cut the three-, six- and 12 -month forecasts, citing resurfacing Chinese growth concerns, technical factors turning bullish and a broader metals selloff that has added pressure on prices.
The forecasts were lowered to $7,500 per tonnes from $8,000 on a three-month basis, to $8,000 from $9,000 for six months and to $7,000 per tonnes from $8,000 for 12 months………………………………………..Full Article: Source

Investors are reassessing commodities after sharp price falls and years of poor returns, but traders say the long-term outlook is still promising for those with specialized expertise. Global demand for raw materials will continue to increase as the populations of China and other emerging economies consume more, offering support for prices and creating local shortages and price imbalances that can provide attractive margins.
But those margins will be best captured by professionals in the big trading houses and specialists in investment banks or funds, rather than through passive investment funds that just track indexes…………………………………….Full Article: Source

Global investors were less optimistic about the global economy in April as the growth outlook for China deteriorated, weighing on commodity and equity allocations, a closely-watched survey of fund managers showed.
The monthly survey from Bank of America Merrill Lynch, published on Tuesday, showed a net 18 percent of investors underweight commodities, the worst level since January 2009. Fund managers were surveyed before a sharp sell-off in gold and the release of weak Chinese data this week. The index reading shows the difference between overweight and underweight positions…………………………………….Full Article: Source

Commodity supercycle still has about a decade left, while the “mid-cycle pause” may last for 12 more months, according to JPMorgan Chase & Co.
“My view is that commodity supercycle has a decade left in it,” Michael Camacho, chief executive officer of commodities for Europe, Middle East and North Africa, told the FT Global Commodities Summit in Lausanne today. Marginal costs will increase for every commodity in the next 10 years, he said…………………………………….Full Article: Source

Commodity prices are set to fall 2 percent this year from 2012 amid increased supplies of raw materials from crude oil to grains, the International Monetary Fund said.
Energy prices probably will decline almost 3 percent as supply rebounds from outages last year, the Washington-based IMF said today in an online report. Food prices will drop more than 2 percent on increasing world harvests, while metals may climb more than 3 percent on recovering world economies and increasing demand in China, the report showed…………………………………….Full Article: Source

China’s economy will stay commodity-oriented even amid slower growth, according to JPMorgan Chase & Co.
Raw-material markets in the medium term will still be driven by China,Michael Camacho, chief executive officer of commodities for Europe, Middle East and North Africa, told the FT Global Commodities Summit in Lausanne today. The nation will still buy more raw materials, whether its economy grows at 6 percent or 8 percent a year, he said…………………………………….Full Article: Source

Citi Research has called an end to the supercycle for commodities but that shouldn’t come as a surprise given that it warned of a supercycle “sunset” back in March of last year. In a report dated Friday, Citi said it expects 2013 to be year in which “the death bells ring for the commodity supercycle after its duly noted sunset.” A supercycle refers to decades-long price movements.
The commodities sector saw broad losses on Monday, with gold futures logging their biggest one-day drop since the 1980s on Monday, and oil futures finishing at their lowest settlement level of the year………………………………………..Full Article: Source

The price of gold, as well as other commodities, could have farther to fall, Joe Terranova of Virtus Investment Partners said. “The commodities meltdown, I think, is going to continue,” he said. “And I think to figure out exactly if this is a moment where you step in and in essence buy a falling knife, you have to look back toward the past.”
On CNBC’s “Fast Money,” Terranova pointed to a high in gold back in September 2011. “That’s exactly when we had that deficit debacle in Washington, D.C.,” he said. “Gold should’ve gone higher at that point. It did not.”……………………………………….Full Article: Source

The world’s top oil forecasters this week all cut their 2013 oil demand forecasts due to subdued economic growth, with the figures showing increasing similarity in the views of producers and consumers.
The International Energy Agency (IEA) on Thursday trimmed its global oil demand growth estimate, which followed similar moves by the U.S. Energy Information Administration (EIA) and the Organization of the Petroleum Exporting Countries (OPEC). A growing resemblance in the outlook of the IEA, which represents 28 industrialised countries, and producer group OPEC contrasts with past disagreements……………………………………..Full Article: Source

Deutsche Bank has downgraded its gold price forecast for 2013 by 12% to $1,637/oz; this compares with the average 2012 price of $1,669/oz; implying the first down year for gold since 2001. “Our new forecast for 2014 is $1,810/oz, down 5% from our previous estimate.” the Bank said in a report.
Deutsche Bank has meanwhile, upgraded its long-term price forecast for gold to $1,300/oz from $1,025/oz. The Bank has based this new estimate on the economics of gold production, specifically marginal production costs……………………………………..Full Article: Source

The global solar PV market is poised to break through the 100GW of installed capacity mark this year, according to new figures from the International Energy Agency (IEA). The IEA’s Photovoltaic Power System Programme this week published a new report, entitled Snapshot of Global PV in 1992-2012, based on data from 23 countries, including all of the world’s largest solar markets.
It confirmed that there is now at least 89.5GW of solar PV capacity recorded in these core markets, with an estimated 7GW of capacity in place in other markets. It concluded there is at least 96.5GW of capacity installed worldwide, meaning the market almost certainly reached the 100GW milestone during the first quarter of this year………………………………………..Full Article: Source

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The turn in the gold price cycle is accelerating after a 12-year rally as recovery in the US economy gains momentum, according to Goldman Sachs Group, which reduced forecasts for the metal through 2014.
The bank cut its three-month target to $1,530 an ounce from $1,615 and lowered the six- and 12-month predictions to $1,490 and $1,390 from $1,600 and $1,550. Goldman recommended closing a long Comex gold position initiated on October 11, 2010 for a potential gain of $219 an ounce, analysts Damien Courvalin and Jeffrey Currie wrote in a report on Wednesday………………………………………..Full Article: Source

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World oil demand will rise in 2013 and 2014, but moderate recovery in economic growth will keep the gains lower than projected a month earlier, U.S. government forecasters said Tuesday. In 2013, rising consumption in China and in other developing nations is expected to offset weakness in European economies, the Energy Information Administration said.
World oil use is expected to rise by 1 million barrels in 2013 to 90 million barrels a day. That’s some 140,000 barrels a day below the forecast made a month earlier. In 2014, global demand is expected to rise to 1.3 million barrels a day, about 200,000 barrels a day less than the EIA’s March forecast………………………………………..Full Article: Source

Palladium, along with platinum and rhodium, are poised to see big gains by the end of next year, as production for the platinum-group metals continues to drop, according to Capital Economics.
“Falling production due to cost-related closures and potential labor unrest means that the prices of platinum and palladium could still rise by around a fifth by the end of 2014, and rhodium by as much as two-thirds,” said Ross Strachan, commodities economist at Capital Economics………………………………………..Full Article: Source

Hedge funds were again positive in March, and +3.8% in Q1, with nearly 80% of the industry in positive territory for the year. March performance was representative of the trends throughout the first quarter, namely equities exposure led, credit and volatility strategies were positive, but below their 2012 pace, and FX and commodity funds were a drag on the industry’s returns, according to new data from eVestment.
Areas producing the best returns in March and Q1 were directional equity strategies, particularly funds targeting Japan and the country’s loose monetary policy fueled equity market rise. They are off to their best start on record. Emerging markets had a difficult month in March and have fallen after their strong start to 2013. India focused funds have given back over half of 2012’s gains………………………………………..Full Article: Source

Citing the expansionary monetary policy being followed by most Central Banks, Japan’s policy becoming significantly more so following recent announcements, and the Mario Draghi statement yesterday which emphasised the downside risks to the Eurozone economy and implied further extension of the ECB easing programme, Germany’s Commerzbank analysts see gold as being in strong demand in the short to medium term.
The analysts note also that, contrary to some reports, India appears to be seeing high gold demand levels, noting a statement from the former chairman of the All India Gems and Jewellery Trade Federation that Indian gold imports in the March quarter were running at around, or higher than last year’s 228 tonnes and anticipates imports increasing some 30% year on year in the current quarter as wedding season demand kicks in………………………………………..Full Article: Source

Commodity ETPs: In 1Q 2013, as global growth and risk appetite picked up, commodity investors rotated out of gold ETPs and into more cyclical commodity ETPs such as silver, copper, palladium, platinum and broad commodity trackers. Gold ETPs saw $9.2bn of outflows during the quarter as improving US growth data drove up US interest rate expectations, increased speculation that quantitative easing might be ratcheted back and boosted the US dollar.
All of these factors were gold negative and caused tactical ETP investors to pare back their positioning. A similar trend occurred in the futures market where net speculative longs in gold futures fell back to end 2008 levels………………………………………..Full Article: Source

As global growth and risk appetite picked up in the first quarter of 2013, commodity investors rotated out of exchange-traded products (ETPs) linked to gold and into more cyclical commodity ETPs such as silver, copper, palladium, platinum and broad commodity trackers.
As an aside, the term ‘ETP’ encompasses exchange-traded funds (ETFs), exchange-traded notes (ETNs) and exchange-traded commodities (ETCs). The latter, ETCs, are typically the preferred vehicle for commodities investment. Gold ETPs saw $9.2 billion of outflows during the quarter as improving US growth data drove up US interest rate expectations, increased speculation that quantitative easing might be ratcheted back and boosted the US dollar………………………………………..Full Article: Source

Barclays steeply cut its oil price forecasts on Wednesday, becoming the last of the big banks active in commodities to abandon its bullish stance in the face of soaring U.S. oil output and sluggish global demand.
The cut from Barclays, which has for several years predicted an oil rally as demand outpaced supply, came as the bank’s long-serving head of commodities research, Paul Horsnell, left the company, two sources familiar with the development said………………………………………..Full Article: Source

Commodities supercycle is “probably” over and prices are unlikely to match their performance over the past decade, according to UBS AG.
Growth in China is slowing and becoming less commodity- intensive, London-based strategists Stephane Deo and Ramin Nakisa wrote in a report dated yesterday. The bull cycle for commodities and company profits may also be over because cheap supply of labor in China and Eastern Europe has now been absorbed, they wrote………………………………………..Full Article: Source

Prices of metals and oil dropped after the investment bank also downgraded estimates and outlook for the coming year. Commodity markets were lower in early trade Wednesday after Credit Suisse analysts said they are expecting weakness in commodity markets over the next few years.
The analysts slashed their price targets for nearly every commodity for 2013 and 2014 because of both lower demand forecasts and, more so, higher supply forecasts………………………………………..Full Article: Source

Barclays Plc (BARC), until now this year’s most bullish of 44 oil-price forecasters, cut its predictions for Brent and WTI crude, citing fewer supply threats. West Texas Intermediate crude will average $95 a barrel this year, compared with a previous estimate of $108, Barclays said in an e-mailed report.
Brent, the benchmark grade for more than half the world’s oil, will average $112 a barrel, down from $125, the highest of all analyst forecasts compiled by Bloomberg before today. Brent traded at about $108.41 a barrel on the ICE Futures Europe exchange at 4:50 p.m. in London, while WTI was at $95.42 on the New York Mercantile Exchange………………………………………..Full Article: Source

Switzerland is one of the most important commodity trading centres in the world, said the Swiss Federal Council in a release last week announcing the publication of a background report on commodities. This report responds to challenges within the commodities trading industry coming from international competition and from calls for better compliance with international standards and more financial transparency.
Switzerland indeed wants to meet reputation risks, protect its significant role in this industry and remain attractive to commodity companies. The commodities industry in Switzerland includes groups such as Glencore Int’l, Vitol SA, Trafigura Beheer and Cargill and many smaller trading houses. But the country rejected calls for tougher regulation and chose to go for voluntary principles instead………………………………………..Full Article: Source

At a time when U.S. equities are trading near a record and the dollar is having its best start in three years, commodities will finish this quarter little changed from where they were at the end of 2012. The Standard & Poor’s GSCI gauge of 24 raw materials will be at 644 at the end of June, 1.4 percent lower than now, according to the median of nine investor and analyst predictions compiled by Bloomberg.
The index rose 1 percent this year, the worst start since 2009. Gains in arabica coffee, silver and nickel will be offset by declines in cotton, crude and natural gas, analyst forecasts show. Investors had $132 billion tracking commodity indexes at the end of February, Barclays Plc estimates………………………………………..Full Article: Source

The IMF jumps into the climate change debate with a headline-grabbing carbon tax proposal; Dr John Abrahams talks to us about climate change realities; the idea of the self-driving car gains traction; Shell announces $1 billion annual spending plan on Chinese shale; and a sneak preview of this week’s premium offerings…
The International Monetary Fund (IMF) is against government energy subsidies. This certainly shouldn’t come as any surprise for this austerity institution, but its latest report is gaining a decent amount of traction in the media because it’s the first time the IMF has seriously jumped into the climate change theater. It calls for an end to energy subsidies across the board (about $1.9 trillion annually around the world) or for these subsidies to be offset with taxes that could pay for expensive social programs………………………………………..Full Article: Source

After a slow and cautious 2012, mining M&A activity is expected to continue at a moderate and equally cautious pace in 2013 as metal prices stabilise and companies bet on a continued rise in commodity demand from countries such as China, according to the latest Mining Deals report by PwC.
It is also expected that this year, mega-mergers will be placed on the shelf while mining companies seek to prove that they are being prudent with shareholder dollars and are able to realise positive results on significant acquisitions made in the past few years………………………………………..Full Article: Source

The average price of gold is expected to fall in 2013 for the first time in 11 years, as fears of catastrophic market events fade, prompting investors to scale back bullion purchases, commodities research and consultant CPM Group said.
In its report released today, the New York firm said it expects net buying by gold investors to drop for a second consecutive year and weigh on bullion prices, even though gold fabrication and central-bank demand will rise this year. CPM Group did not put a figure on gold’s overall percentage price fall. In 2012, the price of the yellow metal rose six per cent from 2011 to an average around $1,670 an ounce, it said………………………………………..Full Article: Source

HSBC cut its gold forecast for this year and next on Monday after the metal’s weak start to the year, but said ultra-loose monetary policy in the United States and elsewhere meant it remains positive on prices overall. The bank lowered its 2013 gold price forecast to $1,700 per ounce from $1,760 and the 2014 price outlook to $1,720 per ounce from $1,775. It sees the metal trading between $1,525 and $1,825 an ounce this year.
Gold prices are down 4 percent in the year to date, primarily due to investor expectations the Federal Reserve would curb its US quantitative easing (QE) programme, and have fallen for the last five months straight……………………………………….Full Article: Source

Any commodities rebound in the second quarter will be limited by a stronger dollar and accelerating supply in copper and oil, Barclays Plc said.
Investors should be prepared to sell industrial metals if there is a “significant” rise in prices, Kevin Norrish, an analyst at Barclays in London, said in a report dated today. The growth outlook is not strong enough to support commodities the way it has other markets, he said………………………………………..Full Article: Source

Only about a third of commodity price moves are caused by news, reflecting the growing role of high-frequency trading in steering prices, according to a study selected by the International Monetary Fund. The study, co-written by researchers at the United Nations Conference on Trade and Development and ETH Zurich, may spur regulators who blame traders for price volatility.
High frequency trading involves rapid-fire computers which place thousands of bets within the space of a second. “At least 60-70 percent of commodity price changes are now due to self-generated activities rather than novel information,” according to the 56-page study published this week………………………………………..Full Article: Source