Tue, Jun 30, 2015
A A A
Welcome preal121
RSS

Commodities Briefing - Category | Research more

The Real Reason Behind the Oil Price Collapse

Posted on 13 March 2015 by VRS  |  Email |Print

It’s not overproduction in shale fields, and it’s not global economic stagnation. It’s something far more threatening to Big Oil’s business model. Many reasons have been provided for the dramatic plunge in the price of oil to about $60 per barrel (nearly half of what it was a year ago): slowing demand due to global economic stagnation; overproduction at shale fields in the United States;
The decision of the Saudis and other Middle Eastern OPEC producers to maintain output at current levels (presumably to punish higher-cost producers in the U.S. and elsewhere); and the increased value of the dollar relative to other currencies. There is, however, one reason that’s not being discussed, and yet it could be the most important of all: the complete collapse of Big Oil’s production-maximizing business model………………………………………..Full Article: Source

Oil & Gas: PwC’s Annual Global CEO Survey

Posted on 11 March 2015 by VRS  |  Email |Print

The reality facing oil and gas industries has changed dramatically over the last year. The industry is facing over-supply and lower prices – so it’s not surprising that nearly two-thirds of oil and gas CEOs say their companies are facing more threats to growth than they did 3 years ago.
For oil and gas companies, an increasing tax burden, over-regulation and geopolitical uncertainty top the list, followed by government response to fiscal deficit and debt burden and protectionist tendencies of national governments. Taxes are a particular issue for the sector, which also rates an internationally competitive and efficient tax system as the top outcome it would like to see from government………………………………………..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

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

Global Iron Ore Surplus Seen by World Bank Lasting Two Years

Posted on 04 March 2015 by VRS  |  Email |Print

If history is any guide the global glut in iron ore may persist for as long as two years, according to the World Bank, which forecasts that the steel-making raw material will average $75 a metric ton this year.
“From experience from earlier iron ore episodes as well as other metal markets, it takes about one to two years for either excess supplies to get back to normal levels or excess demand to be met by larger supplies,” John Baffes, a senior economist at the lender, said in an e-mail response to questions……………………………………….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

Commodities Bust Leaves Latin America with a Hangover

Posted on 27 February 2015 by VRS  |  Email |Print

Five years ago spirits were soaring across Latin America. The region’s economies were bouncing back with startling speed from the global financial crisis to post their strongest growth rates in more than a decade. Robust Chinese demand for copper, iron ore, oil, soybeans and other commodities was filling government and private sector coffers and lifting millions of people into the ranks of the middle class.
Companies like Brazilian aircraft maker Embraer, Chilean fashion retailer Falabella and Mexican bakery goods manufacturer Grupo Bimbo were extending their reach across the region and around the world. The Economist boldly proclaimed the region to be on the verge of a Latin American decade………………………………………..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

Commodity crash reflects global economic slump

Posted on 25 February 2015 by VRS  |  Email |Print

Global commodity prices have tumbled to levels below the depths of the Great Recession, underscoring the widespread difficulties facing the global economy. While crude oil’s price collapse has been in the spotlight, a wide range of other commodities are suffering as well, including natural gas, coal, iron ore, copper, grain and pulp and paper.
The commodity crash is the result of too little demand for raw goods now in plentiful supply after producers ramped up capacity in recent years in anticipation of steady global growth. But trouble spots are everywhere. Commodity markets have declined during worldwide turbulence as the pace of growth in China continues to slow, Russia grapples with an imploding economy and ruble and Greece struggles through an economic crisis that Europe must solve. ……………………………………….Full Article: Source

The Streets of China Commodity City

Posted on 19 February 2015 by VRS  |  Email |Print

Yiwu International Trade City, also known as China Commodity City, claims to be the world’s largest wholesale market for small commodities. It is located in a vast warehouse in the province of Zhejiang, where tens of thousands of stalls sell everything from artificial flowers to inflatable pools.
In 2014, the photographer Richard John Seymour captured the “streets” of China Commodity City as part of a project with the design studio Unknown Fields Division. Seymour told me that, despite the disorienting aspects of the market, the familiarity of certain items on sale there—a kitchen sponge, a Christmas decoration—served as a reminder that he “had an intimate connection with this place on the other side of the globe.”……………………………………….Full Article: Source

Commodities explained: Oil data watch

Posted on 18 February 2015 by VRS  |  Email |Print

Concerns about a growing oil supply surplus last year prompted Saudi Arabia, the world’s largest exporter, in November to persuade fellow Opec members that cutting production to support oil prices was not in their interest. The Kingdom said a period of lower prices would shave off some US shale production and other high-cost output and protect Saudi Arabia’s (and in theory the cartel’s) market share.
With the oil market focused on the impact of the plunge in oil prices on supply as well as demand, traders are on tenterhooks. Some are even grumbling that they have to hang around on Fridays for the weekly US rig count announcement — a data point that could provide hints about where oil output is heading particularly in a volatile oil market. But what else is on the list of potentially market moving data?……………………………………….Full Article: Source

Did OPEC engineer the oil crisis?

Posted on 17 February 2015 by VRS  |  Email |Print

Richard Fischer, President, Dallas Federal Reserve, on February 11 said that OPEC engineered the drop in oil prices to put US oil producers out of business. However, Fisher is not the only one calling out OPEC for taking aim at US shale. Dan K. Eberhart, CEO of Canary LLC, picked up on this proactive action months ago.
During an interview on CNBC in early December last year, Eberhart said, “what’s shaping up is a battle royale between the US shale producers and OPEC. It’s a case of who’s going to blink first. I think OPEC, by deciding not to change their production quota, is betting on the US.”Eberhart explained that OPEC is applying downward pressure on oil prices by significantly contributing to excess oil supplies during a period of lessened demand………………………………………..Full Article: Source

Gold demand sinks to five-year low in 2014

Posted on 13 February 2015 by VRS  |  Email |Print

Global gold demand slumped to its lowest level in five years in 2014 as bar and coin buying plunged and jewelry purchases cooled, according to the World Gold Council (WGC). Overall demand totaled 3,924 tonnes, down 4 percent on year at its lowest level since 2009, the WGC’s quarterly demand trends report, published on Thursday, showed.
Total bar and coin investment fell 40 percent to 1,064 tonnes as investors, who had made major purchases in 2013 amid a sharp fall in prices, held back from further purchases, the industry group said………………………………………..Full Article: Source

Indian Gold Consumption Fell, But Is Still the Highest in the World

Posted on 13 February 2015 by VRS  |  Email |Print

In the Olympics, India rarely brings home gold medals but when it comes to actual gold, it brings home more than any other country. The World Gold Council said Thursday that the South Asian nation consumed less gold last year than it had in five years but it still bought tons more of the precious metal than any other country.
India has been desperate to wean its citizens of their addiction to gold. It has slapped new restrictions and import taxes on gold to rein in trade imbalances. Overall Indian consumer demand for gold only fell 12% to 842.7 tons last year. That’s the least amount of gold India has bought in one year since 2010, but still more than China or any other nation bought in 2014………………………………………..Full Article: Source

Low oil price won’t spur global growth: Moody’s

Posted on 12 February 2015 by VRS  |  Email |Print

Lower oil prices will be sustained throughout 2015 but don’t expect any boost for the majority of the world’s countries, according to a global growth forecast from Moody’s Investor Service. “Lower oil prices, which we expect to be sustained, would in principle provide a significant boost to global growth,” Marie Diron, senior vice-president of Credit Policy at Moody’s and author of the agency’s “Global Macro Outlook 2015-16″ report published Wednesday.
“However, we are maintaining our G-20 forecast,” she said. “For the G-20 economies, we expect gross domestic product (GDP) growth of just under 3 percent each year in 2015 and 2016, unchanged from 2014 and from our November 2014 Global Macro Outlook,” Diron added………………………………………..Full Article: Source

IEA: New normal for oil as cheap prices fail to ignite demand

Posted on 12 February 2015 by VRS  |  Email |Print

The global oil market is entering a new phase where cheap oil is failing to ignite growth in demand, the International Energy Agency (IEA) says. Demand growth will remain sluggish because of fuel switching, more fuel-efficient cars, reduced oil subsidies and structural changes in the global economy, according to the IEA’s Medium-Term Oil Market Report.
Market dynamics suggest oil demand should increase strongly in response to falling oil prices, which have halved since last summer. But the IEA argues oil markets are entering a “business-as-unusual” phase, where the usual rules of supply and demand have changed………………………………………..Full Article: Source

Citigroup; Oil’s Heading To $20 And Opec’s Days Are Over

Posted on 11 February 2015 by VRS  |  Email |Print

Citigroup is telling us that oil is going to head down to $20 a barrel soon enough. Further, that Opec’s hold over the oil price is now definitively broken. That’s a pair of pretty strong claims and of course we need to take them both with the appropriate amount of salt. But I think the first is possible and the second is likely.
Even though I agree that that second, the days of Opec’s control being over, is the more remarkable claim I do think it is the stronger of the two. The reason for this is two little bits of economics. The first being that monopolies and cartels do indeed exist but in the end they always fall over. If it’s not because of legal action against them, or because of cheating among the cartel’s members, then in the end technological advance will indeed get them………………………………………..Full Article: Source

Oil market rebalancing ‘could take years’: IEA

Posted on 11 February 2015 by VRS  |  Email |Print

The global oil market could be out of balance for years, and it will never be the same because of U.S. shale production, the International Energy Agency said Tuesday.
“A partial rebound in oil prices over the last month following a 60 percent crash since June suggests market participants are seeing light at the end of the tunnel and growing confident that spending cuts by oil companies will lead to a market recovery,” the IEA said in its February oil market report……………………………………….Full Article: Source

US to remain world’s top source of oil supply growth up to 2020: IEA

Posted on 11 February 2015 by VRS  |  Email |Print

The United States will remain the world’s top source of oil supply growth up to 2020, even after the recent collapse in prices, the International Energy Agency said, defying expectations of a more dramatic slowdown in shale growth.
The agency also said in its Medium Term Oil Market report that oil prices, which slid from US$115 a barrel in June to a near six-year low close to US$45 in January, would likely stabilise at levels substantially below the highs of the last three years………………………………………..Full Article: Source

Russia will be biggest loser from oil price fall, warns IEA

Posted on 11 February 2015 by VRS  |  Email |Print

International Energy Agency uses market report to point to biggest potential loser from oil price slump. Russia will be the biggest loser from the current downturn in oil prices as the Organisation of the Petroleum Exporting Countries (Opec) seizes back a bigger share of the world crude market, the world’s top energy watchdog has said.
In its closely-watched medium-term market report the International Energy Agency (IEA) said that Russia’s output of crude would contract by 560,000 barrels per day (bpd) through to 2020. “Russia facing a perfect storm of collapsing prices, international sanctions and currency depreciation, will likely emerge as the industry’s top loser,” said the IEA………………………………………..Full Article: Source

The global economy: Reasons to be cheerful

Posted on 06 February 2015 by VRS  |  Email |Print

The conventional wisdom about the state of the world economy goes something like this: since the start of the 2007-2008 financial crisis, the developed world has struggled to recover, with only the United States able to adjust. Emerging countries have fared better, but they, too, have started to flounder lately. In a bleak economic climate, the argument goes, the only winners have been the wealthy, resulting in skyrocketing inequality.
That scenario sounds entirely right – until, on closer examination, it turns out to be completely wrong. Start with economic growth. According to the International Monetary Fund, during the first decade of this century, annual global growth averaged 3.7%, compared to 3.3% in the 1980s and 1990s. In the last four years, growth has averaged 3.4%………………………………………..Full Article: Source

Citi: The oil (and gas) plunge isn’t over yet

Posted on 05 February 2015 by VRS  |  Email |Print

The oil crash — and cheap gas bonanza — probably isn’t over yet. For a few days, oil was showing real signs of life following last year’s meltdown. Prices spiked above $54 a barrel on Tuesday after oil’s best three-day performance in six years. Drivers may have even noticed a little pop in gas prices. The national average price of gasoline jumped nearly five cents a gallon on Wednesday, according to AAA. The oil bounce also caused stock prices to surge on Tuesday.
But the rebound is already looking like it may be short lived. Oil plummeted nearly 9% on Wednesday to settle at $48.45 a barrel. That’s the commodity’s worst day since November 28 when OPEC rattled the market by deciding to keep production steady………………………………………..Full Article: Source

Global deflation risk deepens as China economy slows

Posted on 03 February 2015 by VRS  |  Email |Print

The risk of global deflation looms large for 2015 as surveys of China’s mammoth manufacturing sector showed excess supply and insufficient demand in January drove down prices and production. While the pulse of activity was livelier in Japan, India and South Korea, they shared a common condition of slowing inflation.
“The slide in global oil prices and inflation has turned out to be even bigger than anticipated,” said David Hensley, an economist at JP Morgan, and central banks from Europe to Canada to India have responded by easing policy. “What is now in the pipeline will help extend the near-term impulse from energy to economic growth into the second half of the year.”……………………………………….Full Article: Source

Standard Bank considers 2015 a tough year for commodities (Video)

Posted on 03 February 2015 by VRS  |  Email |Print

Standard Bank has said it considers 2015 to be a tough year for commodities, favouring precious and base metals over bulk for the next three years. The bank released its 2015 mining outlook ahead of the Indaba taking place in Cape Town next week. CNBC Africa’s Christine Mhundwa caught up with Rajat Kohli, global head of mining and metals at Standard Bank for more.……………………………………….Full Article: Source

Goldman puts end date on commodities slump

Posted on 29 January 2015 by VRS  |  Email |Print

The light at the end of the tunnel for commodities may be but one year away. Goldman Sachs is sceptical that there will be any gains for commodities over the next three months, but is much more optimistic there will be gains over the next 12 months. In the short-term, things could get worse.
“Despite the large declines in commodity prices, we see risks as still skewed to the downside over the near-term,” Goldman Sachs advised. Much is down to oil. The plunge in oil prices will weigh on investment indexes based on commodities in the short-term. Until oil settles or starts to rise, there will be downward pressure in copper and gold markets, according to the bank………………………………………..Full Article: Source

Barclays, Goldman forecast bearish first half for oil prices

Posted on 29 January 2015 by VRS  |  Email |Print

Barclays Plc and Goldman Sachs Group Inc issued even more bearish forecasts for oil prices on Wednesday, predicting no significant recovery in the first half of 2015.
Barclays slashed its 2015 Brent crude oil price forecast to $44 a barrel from $72, while Goldman said it expected prices for West Texas Intermediate crude to trade close to $40 per barrel for most of the first half of 2015………………………………………..Full Article: Source

Goldman Downgrades Commodity Outlook as Energy, Metals Tumble

Posted on 28 January 2015 by VRS  |  Email |Print

Goldman Sachs Group Inc. downgraded its three-month commodity outlook to underweight as mounting global supply gluts sent energy and metals prices tumbling this year. There is a greater risk that raw material prices may drop in the near term than rise, Goldman strategists and analysts including Christian Mueller-Glissmann, Peter Oppenheimer and Jeffrey Currie wrote in a research report.
The Bloomberg Commodity Index of 22 components reached a 12-year low this week, with crude oil, hogs and copper leading losses in 2015. Inventories of grains, metals and energy are rising after a decade-long bull market for commodities spurred miners, drillers and farmers to increase production………………………………………..Full Article: Source

Goldman cuts base metal price forecasts, ups gold

Posted on 27 January 2015 by VRS  |  Email |Print

Goldman Sachs Group Inc on Friday slashed its 2015 price forecasts for several base metals including copper and aluminium while raising its estimate for gold by $62 per ounce. “The primary reason for the changes to our forecasts is cost deflation – driven by a combination of actual and anticipated U.S. dollar strength, cheaper energy and other input costs, and our expectation of an improvement in mining productivity,” Goldman Sachs said.
Weaker-than-expected Chinese and European demand has also contributed to the deflationary environment, it added. Goldman cut its 2015 average copper price forecast to $5,542 per tonne from $6,400, and aluminium to $1,788 per tonne from $2,075………………………………………..Full Article: Source

All of the major commodities may fall in price this year, World Bank says

Posted on 23 January 2015 by VRS  |  Email |Print

This year could mark the rare occurrence when all of the nine major commodity price indexes decline, according to a World Bank forecast released Thursday. The latest report on commodities comes at a time when oil prices have seen a 55% drop over the past seven months, only topped by the 75% drop during the Great Recession, and the 67% drop from November 1985 to March 1986.
John Baffes, senior economist in the World Bank’s development prospects group, says he hasn’t seen a decline in all of the major commodities simultaneously in at least the past 12 years. Though changes in index composition make comparisons difficult, the last time there was the simultaneous decline could have been the Asian financial crisis or the downturn in 1984 and 1985………………………………………..Full Article: Source

Commodities explained: The price-supply disconnect

Posted on 22 January 2015 by VRS  |  Email |Print

The commodities cycle is all about supply and demand responding to prices. To put it very simply, as prices rise companies invest and supply increases. Prices then fall, which leads to production cuts, and eventually demand increases, pushing up the market and the cycle starts all over again.
That is, at least, the theory. In practice the price signal usually takes time to take effect, especially in a market downturn. Although there are signs of oil producers responding to price declines, in some other commodities, such as metals, coal and sugar, the reaction has not been immediate………………………………………..Full Article: Source

IEA economist sees upward pressure on oil prices by year-end

Posted on 22 January 2015 by VRS  |  Email |Print

Oil prices will face upward pressure by the end of the year, the chief economist of the International Energy Agency (IEA) said on Wednesday, as a fall of more than 50 percent in the price of crude since last June is expected to eventually curtail some production.
Fatih Birol of the IEA was appearing on a panel with OPEC Secretary General Abdullah al-Badri at the World Economic Forum in Davos, Switzerland. Badri argued that OPEC oil producers were right not to cut production despite the price fall………………………………………..Full Article: Source

Commodities Are Pulling Chile And Brazil Lower

Posted on 19 January 2015 by VRS  |  Email |Print

For much of the past several months, investors have been keeping a close eye on plunging commodity prices and trying to decipher how lower prices will influence the value of their investments. South America is rich in oil and base metals, commodities that have been particularly hard hit recently, and the region is popular for investors interested emerging markets.
In the article below, we’ll take a look at several key exchange traded funds (ETFs) that are used by traders to track the performance of primary South American markets and see if the bottom is priced in or whether the momentum will continue to send prices lower………………………………………..Full Article: Source

Commodities Explained: Qingdao

Posted on 19 January 2015 by VRS  |  Email |Print

Qingdao is a port city in China famous for its Tsingtao brewery, but the name continues to cast a long shadow over the global metals market. Here’s why. What has happened?
After reports emerged last May alleging a fraud in the city’s warehouses, some of the world’s largest banks have been scrambling to assess the damage. That spurred a flurry of lawsuits, with a judgment due in the first case between Mercuria, a commodities trader based in Switzerland, and Citigroup, this month. Citi argues it is owed more than $270m………………………………………..Full Article: Source

December Sees Further Consolidation in Commodity Markets

Posted on 16 January 2015 by VRS  |  Email |Print

Commodities were lower in December, largely characterized by fundamental factors, according to Credit Suisse Asset Management. The Bloomberg Commodity Index Total Return performance was negative for the month, with 16 out of 22. Index constituents trading lower. Credit Suisse Asset Management observed the following: Energy was the worst performing sector, down 22.06%, led lower by Natural Gas.
Crude oil and petroleum products also declined due to increasing production amid expectations for weaker oil demand growth. Livestock declined 4.84%, led lower by Lean Hogs, as cheaper feed costs allowed farmers to achieve heavier hog weights, which increased pork supply expectations throughout the period. Industrial Metals ended the period 4.34% lower. Weak economic data out of China, including lower-than-expected Industrial Production data for November, heightened demand concerns for base metals. (Press Release)

Commodities explained: Contango

Posted on 16 January 2015 by VRS  |  Email |Print

The oil price plunge over the past several months has spooked the world’s biggest producer countries and energy companies. But those traders who buy and sell physical barrels of oil, such as Vitol and Trafigura, have spotted a moneymaking opportunity. It’s all about “contango”.
When the current price of a commodity, such as oil, is lower than prices for delivery in the future, the market structure in industry jargon is known as “contango”. This means it is attractive for traders to buy oil now at cheaper rates, store it, either on land or at sea, and sell it in time to come for higher prices and make a big profit. They lock in the profits by buying physical oil and selling forward on the futures market………………………………………..Full Article: Source

UBS lower 2015 gold price forecast, others also revised downward

Posted on 16 January 2015 by VRS  |  Email |Print

UBS has downgraded its average gold price forecast for gold largely because of greater downside risks stemming from lower oil prices and the implied absence of an inflation threat, it said. The broker lowered its 2015 gold price forecast to $1,190 from $1,200 – the spot metal price was last at a little-changed $1,228/1,228.70 per ounce.
“While the expected price direction remains the same, the magnitude of our previous price expectations was too aggressive and needed to be revised lower,” it said in a release on Thursday. “Fed [monetary policy] normalisation and dollar strength are considerable hurdles for gold, but reduced market length and the fact that much of the adjustment had already been made in the last couple of years should help limit the force behind a move lower,” it added………………………………………..Full Article: Source

ANZ: Falling Commodity Prices Will Not Help Global Growth

Posted on 15 January 2015 by VRS  |  Email |Print

ANZ’s head of market strategy Richard Yetsenga reckons there is more going on in global commodities than just the dynamics of supply and demand. He says even though there has been a big focus on the interaction of supply and price in the big price crashes of iron ore and crude oil, the broad-based nature of the commodity rout means US dollar liquidity is playing a big part in the falls.
Yetsenga says: While the focus in the past year has largely been on individual commodities — iron ore, coal, oil and increasingly copper — it has become a much broader story than that………………………………………..Full Article: Source

Is a global economic recession coming? Copper price say ‘yes’

Posted on 15 January 2015 by VRS  |  Email |Print

The market for copper, a metal that two years ago was being stolen by thieves looking for big profits, is crashing – the latest in a string of commodities nosedives that have experts worried about the broader implications for the global economy. The copper market crashed overnight to its lowest level since the middle of the financial crisis in 2008, fueling fears that the global economy is slowing more sharply than many experts had anticipated.
Wednesday’s drop is the sixth consecutive decline in copper prices. Currently trading at around $5,560 a ton, the prices are causing significant pain to mining companies like Glencore, whose stock responded to the copper crash by hitting a record low………………………………………..Full Article: Source

Global Economic Prospects to Improve in 2015, But Divergent Trends Pose Downside Risks, Says WB

Posted on 14 January 2015 by VRS  |  Email |Print

Following another disappointing year in 2014, developing countries should see an uptick in growth this year, boosted in part by soft oil prices, a stronger U.S. economy, continued low global interest rates, and receding domestic headwinds in several large emerging markets, says the World Bank Group’s Global Economic Prospects (GEP) report.
After growing by an estimated 2.6 percent in 2014, the global economy is projected to expand by 3 percent this year, 3.3 percent in 2016 and 3.2 percent in 2017 [1], predicts the Bank’s twice-yearly flagship. Developing countries grew by 4.4 percent in 2014 and are expected to edge up to 4.8 percent in 2015, strengthening to 5.3 and 5.4 percent in 2016 and 2017, respectively………………………………………..Full Article: Source

Why Africa is becoming less dependent on commodities

Posted on 12 January 2015 by VRS  |  Email |Print

For decades commodities have shaped Africa’s economic growth. When prices were high, growth was good; when prices dipped, so did the continent. But that is slowly changing. Despite big commodity-price falls this year—oil is down by 50%—the continent will probably grow by 5% in 2015 (and more in the following years). While lots of African currencies lost value in 2014, they have performed much better than during other periods when commodity prices were falling.
Few African countries will fall into recession in 2015—unlike other commodity exporters such as Russia and Venezuela. Why is Africa doing better than many expected? Two reasons stand out. First, the continent’s economic growth is coming from other places. Governments have worked hard to make life easy for investors. Second, many African governments are better at managing the inevitable booms and busts of commodity markets………………………………………..Full Article: Source

Commodities may trade flat in 2015, steady upturn in 2016: SMC Global

Posted on 12 January 2015 by VRS  |  Email |Print

Commodities are expected to trade flat in 2015 but in 2016 it should take slow but steady upturn on expected positive growth in world economy, according to an annual report by SMC Global. In the coming days, deflation is the bigger global risk. Though the latest fall in commodities curb the import bill of many countries, any further growth in economy may assist commodities to build base at current levels, the report said.
IMF has forecast for 2015 global growth to 3.2%. As regards, U.S is expected to rise from 2% GDP growth in 2014 to 3.2% by 2016, while the Eurozone is expected to stabilize at 1% growth in 2015 and 2016. Japan’s GDP is forecast to rise to 1.6% growth by 2016, while India is expected to post a rapid pickup, to 7.7% by 2016………………………………………..Full Article: Source

Soft outlook for commodities in 2015: Analysts

Posted on 12 January 2015 by VRS  |  Email |Print

2015 looks to be a somewhat lacklustre year for commodities - global demand remains weak while an appreciating US dollar makes them more expensive. Palm oil prices are being supported by a supply shock, but analysts said they expect prices to follow in trend with other commodities.
With China’s growth on a moderating trend, global demand for commodities appears to be softening. Analysts said this, coupled with a supply glut - particularly in crude oil - would keep commodity prices low in the near-to-mid term………………………………………..Full Article: Source

Facts and fantasies about commodities

Posted on 09 January 2015 by VRS  |  Email |Print

Commodities were the worst performing asset class for the third year running in 2014. Investors, including some of the world’s largest pension funds, have seen billions of dollars of wealth disappear as a result of investing in commodity index products over the last decade.
So it is essential to understand what went wrong to help prevent a similar problem recurring in future. “Facts and fantasies about commodity futures,” first published in 2004 by Gary Gorton and Geert Rouwenhorst, proved one of the most influential research papers in 21st century finance………………………………………..Full Article: Source

The commodities outlook for 2015

Posted on 08 January 2015 by VRS  |  Email |Print

Gold and palladium seen flat, upside potential in platinum and palladium. It will be another four or five years before commodity prices enter their next cycle and we start seeing an upward trend in prices again, says Cadiz Corporate Solutions Mining Specialist Peter Major.
Last year saw most commodities finish below their January starting price and, with the global economic growth outlook showing minimal upturn, there will be more of the same in 2015. “I don’t see gold going up. I definitely don’t see palladium going up. I think silver, zinc and lead look a bit cheap and copper is neutral to slightly pricy. But everybody is still happy to produce copper at current prices,” says Major………………………………………..Full Article: Source

China’s slowdown will see commodities falling 10pc in 2015

Posted on 05 January 2015 by VRS  |  Email |Print

IHS forecasts another tough year for commodities prices as China misses economic growth targets. If 2014 goes down as an “annus horribilis” for the commodities industry, few pundits are betting that prices will improve significantly over the next 12 months.
Across the board, from industrial metals through to soft commodities and oil, prices have dipped sharply over the last year as a combination of weakening demand growth and excess supply became a common theme across the entire sector………………………………………..Full Article: Source

Lead Outlook 2015: Another Small Deficit Expected

Posted on 05 January 2015 by VRS  |  Email |Print

2014 was a tough year for many metals, but fortunately for lead market participants, the base metal’s 2015 outlook is looking pretty positive. Case in point: the International Lead and Zinc Study Group predicts that demand for refined lead will increase by 2.1 percent in 2015, hitting 11.6 million tonnes, while refined lead output will grow by 2.2 percent, reaching just 11.5 million tonnes.
The organization thus anticipates a 23,000-tonne lead deficit in 2015, just slightly less than the 38,000-tonne deficit it sees coming in 2014. Similarly, a recent Reuters poll shows that analysts believe lead will sell for $2,387 per tonne in 2015 — that’s a year-over-year rise of 11.5 percent………………………………………..Full Article: Source

Commodities will continue to struggle in 2015: Credit Suisse

Posted on 02 January 2015 by VRS  |  Email |Print

Commodities have had a bad run last year and their losing streak could linger on into 2015, Credit Suisse Private Banking said in a report. Commodity prices fell this year and markets are still facing oversupply, commodity strategy analyst Stefan Graber noted.
He said that the oversuppy was due to “excessive” capital expenditure over the past few years. Since demand for commodities does not seem to be picking up, prices will have to fall further until production declines, he said, adding: “As commodity projects have long lead times, this process will take time.”……………………………………….Full Article: Source

Commodities outlook 2015: Economic prospects

Posted on 23 December 2014 by VRS  |  Email |Print

Following a number of years of sluggish performance, the UK economy finally seems to be heading in the right direction. But consumers continue to feel the pinch on spending, and with the European economy still depressed, selling into both domestic and export markets remains challenging, says Richard King, head of Andersons’ business research.
UK GDP growth improved to an estimated 3% in 2014 – and is forecast at 2.6% in 2015. “While this growth is good news, it may prove problematic to agriculture in the form of a stronger pound and bank base rate increases,” says Mr King………………………………………..Full Article: Source

Oil price drop to persist, help global growth: IMF

Posted on 23 December 2014 by VRS  |  Email |Print

The recent drop in oil prices should persist, helping to boost global economic activity by up to 0.7 percentage points next year, two senior IMF economists wrote in a blog on Monday. Brent prices have fallen more than 46 percent since the year’s peak in June of above $115 per barrel, sped up by the November decision of the Organization of Petroleum Exporting Countries (OPEC) not to reduce production.
Saudi Arabia has also convinced its fellow OPEC members it is not in the group’s interest to cut oil output, however far prices may fall, the kingdom’s oil minister said………………………………………..Full Article: Source

Global economy growth likely to be weaker than 2014: QNB

Posted on 23 December 2014 by VRS  |  Email |Print

As 2014 comes to an end, the global economy shows signs of weakness with significant downside risks. Some of these risks are likely to materialise next year, leaving the global economy in worse shape than in 2014, QNB said in its Economic Commentary yesterday. It made five predictions that will expected to shape the global economic outlook for 2015 and beyond.
“Looking back, our expectations for 2014 were for a moderate recovery in the world economy that would enable an orderly exit from US Quantitative Easing (QE) and a resumption of global growth to its pre-crisis levels. The reality turned out to be quite different,” the Economic Commentary said………………………………………..Full Article: Source

banner
banner
June 2015
S M T W T F S
« May    
 123456
78910111213
14151617181920
21222324252627
282930