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Commodities Briefing - Category | Trading more

Turkish ferrous scrap import prices slide on lower indications

Posted on 22 May 2015 by VRS  |  Email |Print

Platts’ daily assessment of Turkish ferrous premium heavy melting scrap I/II (80:20) imports slipped $2/mt to $286.50/mt CFR Thursday on lower indications and a cheaper deal. A US East Coast-origin cargo was heard sold Wednesday comprising 25,000 mt of HMS I/II (80:20) at $285/mt CFR and 15,000 mt of shred at $290/mt CFR.
The seller had the option to load some of the material in Puerto Rico, which sell-side sources said lowered the value of the cargo somewhat. Platts partially factored the cargo into its assessment, and normalized it to $287-$288/mt CFR, taking into account the Puerto Rican-origin scrap — the methodology specifies 80:20 of premium USEC origin or equivalent………………………………………..Full Article: Source

Where Are Oil Prices and the Ruble Going Next?

Posted on 21 May 2015 by VRS  |  Email |Print

The strong rally in the oil price over the past four months has confounded most forecasters. Instead of continuing the late 2014 slide to test the 2009 low of $42 per barrel, the price of Brent came close to $45 on Jan. 13 before starting a steady climb, which brought it close to $68 late last week.
That price rally, which has been replicated in Russia’s Urals contract, is a big part of the reason why the ruble has rallied strongly since early February and why there is so much optimism that Russia’s economy has weathered the economic crisis relatively unscathed. It is also the main reason why the RDXUSD, the index of Russian equities traded on international bourses, is one of the best in the world so far in 2015 with a gain of 34 percent………………………………………..Full Article: Source

Saudi Arabia, OPEC partners turn down Chinese requests for extra oil

Posted on 21 May 2015 by VRS  |  Email |Print

Saudi Arabia and its main Middle East OPEC partners are turning down Chinese requests for extra oil as they hold back fuel for their own refineries just as demand from the world’s biggest crude importer hits new records.
While the Saudi and other refusals for additional crude supplies may not be part of a new pricing strategy, the rejections to their biggest client help explain a 40 percent rise in oil prices this year as Chinese importers have had to seek more oil from other suppliers in what analysts say is still an oversupplied market………………………………………..Full Article: Source

Chinese Gold Standard Would Need a Rate 50 Times Bullion’s Price

Posted on 21 May 2015 by VRS  |  Email |Print

A move to a gold standard in China would require an exchange rate of as much as $64,000 an ounce, 50 times bullion’s price now, according to Bloomberg Intelligence. A traditional gold standard, in which the precious metal backs the currency, is basically impossible at current prices due to the amount of metal needed and there’s no evidence the sixth-biggest bullion holder will adopt one, Bloomberg Intelligence said in reports published Wednesday.
Any attempt probably would involve new technologies and depend on the ratio of what is backed, it said. Chinese policy makers are trying to establish the yuan as a reserve currency, and backing it with gold would help attract foreign capital inflows, the Bloomberg research unit wrote………………………………………..Full Article: Source

Palladium Gains From Environmental Rules

Posted on 20 May 2015 by VRS  |  Email |Print

Among precious metals, palladium has rarely shone brightest for investors. Yet in recent weeks, the metal, used mostly in catalytic converters for cars, has been commanding more attention than gold, silver and platinum, its more glamorous counterparts.
Analysts expect solid auto sales in China and the U.S., together with tighter environmental standards, to keep growth in demand for palladium strong enough to potentially outpace increases in supplies. The market was in deficit last year, and there could be shortfalls this year, in 2016 and in 2017, analysts at Australia & New Zealand Banking Group Ltd. predict………………………………………..Full Article: Source

Islamic commodity trading getting a boost

Posted on 20 May 2015 by VRS  |  Email |Print

Islamic commodity trading has become more popular in the financial world as of late because an accord seems to have been reached among scholars whether such commodity trading, which is conventionally done through futures contracts and not through the exchange of physical commodities, is permissible as per Islamic law.
So far, Islamic commodity trading has been done mostly by commodity murabaha whereby an institution agrees to purchase goods from a counterparty which promises to buy it back with an agreed mark-up at a later date………………………………………..Full Article: Source

Saudi oil exports hit highest in a decade

Posted on 19 May 2015 by VRS  |  Email |Print

Saudi Arabia wasn’t bluffing. The Kingdom increased its oil exports to the highest level since 2005 in March, official data from the Joint Organisations Data Initiative (JODI) showed, as Opec’s most powerful member made good on its promise to try to take back market share from other producers, reports David Sheppard, deputy commodities editor.
Its oil exports were 7.89 million barrels a day in March, a 10 per cent increase on the same month last year, despite rising domestic demand. This was the highest since November 2005 when it reached 7.96m b/d………………………………………..Full Article: Source

Gold Trapped in Summer Doldrums Usually Means Volatile Wake Up

Posted on 19 May 2015 by VRS  |  Email |Print

For gold traders, summer has come early. Just don’t book your trip to the beach yet. Prices have seesawed for the past two months, leaving the metal trapped in the tightest trading range in two years, according to data compiled by Bloomberg through the end of last week. That’s historically a sign of more volatility to come.
When similar periods of calm blanketed the market, the metal swung 3.3 percent on average in the five days after breaking out of the band, almost twice the usual weekly change. Gold moved around $1,200 an ounce as bullish catalysts, such as signs of faster inflation, were offset by speculation the Federal Reserve will soon raise interest rates. While the weaker dollar usually draws buyers to gold, there’s also less demand for haven assets with equities near all-time highs………………………………………..Full Article: Source

Traders warn on gold liquidity

Posted on 19 May 2015 by VRS  |  Email |Print

A few years ago London’s precious metals traders would arrive at their desks to find the phones flashing. On the other end of the line were rival banks looking to buy and sell gold. Today, the trading floors are a lot quieter.
Not only is most trading screen-based but there has been a decline in bank-to-bank activity — the anchor of the over-the-counter (OTC) bullion market — as many institutions have scaled back or exited commodities. This has made the gold market more frenetic and pushed up the costs of hedging and doing larger trades, according to market participants………………………………………..Full Article: Source

Rethinking Commodity Trade Finance

Posted on 18 May 2015 by VRS  |  Email |Print

Is traditional commodity finance dying? Has the slack been taken up or is the commodity finance market underfunded? Are producers and traders getting the right products at the right prices? These are just some of the question we would like you to help us answer in our 2015 Commodity Finance Survey.
Trade finance – and commodity trade finance in particular, which involves lending to and servicing commodity producers, processors and traders – remains pivotal to the workings of a globalised and growing world economy, and to international development. The WTO says world trade will double in the next 15 years and the global population will be in excess of 9 billion by 2050, even though the growth rate of international trade has dropped drastically compared to the years before the global financial crisis………………………………………..Full Article: Source

India’s gold demand could rise in second quarter, says WGC

Posted on 15 May 2015 by VRS  |  Email |Print

Gold demand in India, the world’s second-largest consumer of the metal after China, is likely to increase in the April-June quarter, from the first quarter. Demand will get a boost from strong buying during a major festival, lower prices and robust economic growth, according to the World Gold Council (WGC).
Second-quarter gold demand numbers for India, expected to be released by mid-August, will likely show an improvement over the first-quarter, when China was the top consumer, overtaking India by nearly 100 tonnes, the WGC said…………………………………..Full Article: Source

Chinese gov’t allows commodity trading

Posted on 15 May 2015 by VRS  |  Email |Print

China has more than tripled the number of central government-owned firms allowed to trade commodities derivatives overseas without regulator approval. The move will give China more clout in global markets for metals, energy and agricultural products.
One hundred more large government-backed Chinese companies will be permitted to trade in international futures, swaps and options markets, according to three sources with direct knowledge of the changes. It marks the biggest expansion of the list in nearly 10 years…………………………………..Full Article: Source

Global Debt Now $200 Trillion!

Posted on 15 May 2015 by VRS  |  Email |Print

Global debt is now in the region of $200 trillion. The McKinsey Global Institute recently published a report highlighting the bloated, unsustainable levels of debt that have been accumulated globally and the huge risks when interest rates begin to rise again.
McKinsey concluded that total global debt was $199 trillion and the little covered report was released in February – 3 months ago – meaning that the figure is likely over $200 trillion. With a global population of 7.3 billion this works out out at over $27,200 of debt for every man, woman and child alive in the world today. Almost 29% of that debt – $57 trillion – has been accumulated in the relative short period since the financial crisis erupted in 2007 – just 8 years…………………………………..Full Article: Source

Opec revises up oil demand and cuts US supply forecast

Posted on 13 May 2015 by VRS  |  Email |Print

Oil cartel has upgraded its demand forecast on stronger European growth as US drillers struggle. The Organisation of the Petroleum Exporting Countries (Opec) has revised up its forecast for world oil demand this year on higher consumption in Europe’s biggest economies and cut its estimate for the growth in US supply.
The group of 12 major oil producers now expects demand for crude to increase by 1.18m barrels per day (bpd) of crude to 92.5m bpd in 2015. Opec’s latest closely watched market report said: “The upward movement of European oil demand during the second half of 2014 has continued and been enhanced during the first three months of 2015………………………………………..Full Article: Source

Oil settles under $60 as traders fret about Iran

Posted on 08 May 2015 by VRS  |  Email |Print

Oil futures settled back under $60 a barrel on Thursday, with traders increasingly worried about how much oil Iran can add to the global market should sanctions be lifted as part of a deal with world powers over its nuclear program.
June crude fell $1.99, or 3.3%, to settle at $58.94 a barrel on the New York Mercantile Exchange. Prices had settled near $61 Wednesday at their highest level of the year. Brent crude for June delivery on London’s ICE Futures exchange settled lower by $2.23, or 3.3%, lower at $65.54 a barrel………………………………………..Full Article: Source

China magnesium: Spot export trades remain lackluster, offers steady

Posted on 08 May 2015 by VRS  |  Email |Print

Spot export trades for Chinese magnesium ingot on a FOB basis remained lackluster on the dearth of overseas buying interest, while offers continued to hold steady, industry sources said Thursday. Platts kept its weekly magnesium ingot (minimum 99.8%) price assessment steady at $2,180-$2,230/mt FOB China Thursday, unchanged from the previous weeks as bids and offers were heard within the range.
The Chinese magnesium die-cast alloy price assessment was also maintained at $2,460-2,530/mt FOB China, unchanged from last week. “I am not hearing any movement in both the domestic and export offers after the implementation of the minimum domestic offer of Yuan 13,000/mt ($2,095/mt) in Shaanxi,” said a North China-based analyst, who heard steady offers at Yuan 13,000-Yuan 13,300/mt ex-works and $2,200-$2,250/mt FOB China………………………………………..Full Article: Source

What Commodity Momentum Tells Us About Equities

Posted on 08 May 2015 by VRS  |  Email |Print

It is fact that equity prices prosper when commodity prices are relatively stable. Normally, it is the instability of commodities on the upside that disturbs equities, such as that experienced between 1973 and 1974. However, downside volatility in the commodity pits can be even more devastating. Just consider the sharp drop in both markets in the second half of 2008, 1921 or even the 1930/32 experience.
That said, we can use long-term trends in commodity momentum to signal favorable long-term environments for equities. This chart, for instance, features our secular commodity momentum indicator. It is calculated by dividing a 60-month by a 360-month MA of commodity prices………………………………………..Full Article: Source

China allows more state firms to trade global commodities derivatives

Posted on 07 May 2015 by VRS  |  Email |Print

China has more than tripled the number of central government owned firms permitted to trade overseas commodities derivatives without approval from the state assets regulator, said three sources with direct knowledge of the matter.
The move will see roughly 100 additional large government-backed Chinese companies boost trading in global commodities derivatives markets such as futures, swaps and options, marking a significant step after years of strict controls in this area………………………………………..Full Article: Source

Pain is not over for commodities yet warns Kames Capital

Posted on 07 May 2015 by VRS  |  Email |Print

Investors should not be lulled into increasing their commodity exposure because of discounted valuations across commodities markets, with major headwinds poised to further disrupt returns this year, Kames Capital has warned. Kames’ chief investment officer Stephen Jones says while prices in some major commodity markets appeared to be showing signs of stabilisation, the fundamentals remained unfavourable for the sector.
“Now though, it would appear that both oil and copper have found something of a floor, and investors appear only too keen to buy into this, judging by inflows into ETFs. However, we remain sceptical. When you look through short-term factors for commodities, for example unrest in the Middle East and its impact on oil, analysis inevitably reverts back to supply and demand dynamics to dictate the price………………………………………..Full Article: Source

Shackles off commodity derivatives trade

Posted on 07 May 2015 by VRS  |  Email |Print

China has more than tripled the number of central government-owned firms that are allowed to trade commodities derivatives overseas without needing the approval of regulators. The move will give the nation more clout in global markets for metals, energy and agricultural products.
About 100 more large government- backed firms are set to be permitted to trade in international futures, swaps and options markets the biggest expansion of the list in nearly 10 years. “This is one more step toward capital account opening,” said Grace Tam, a markets strategist at JPMorgan Asset Management in Hong Kong………………………………………..Full Article: Source

Fate of commodities is linked to dollar

Posted on 06 May 2015 by VRS  |  Email |Print

Amonth or so ago we highlighted a research note from Barclays that showed how investors were continuing to retreat from commodities. Long-term readers will not be surprised to learn that looks to have marked a turn of fortune for the sector. The Continuous Commodity Index is an equally weighted measure of 17 commodity futures, including energy, base metal and agricultural benchmarks, along with precious metals, too.
As such, it is a useful gauge of sentiment towards the broad asset class. The CCI hit a five-year low in March but has trundled higher of late, forming what chartists might consider a solid looking base………………………………………..Full Article: Source

More oil on tap for OPEC member Angola

Posted on 06 May 2015 by VRS  |  Email |Print

Italian energy company Eni announced Tuesday it was ahead of the curve with what its partners described as a breakthrough operation offshore Angola. Eni holds a 20 percent stake in a section of the Kizomba project off the coast of Angola. The Italian company said production there has started ahead of schedule.
Kizomba is part of the country’s Kakocha, Bavuca and Mondo South fields. “The project develops approximately 190 million barrels of oil with peak production currently estimated at 70,000 barrels of oil per day,” the Italian company said in a statement………………………………………..Full Article: Source

EU commodity trading firms face capital punishment

Posted on 06 May 2015 by VRS  |  Email |Print

Imposing CRD IV capital rules on trading houses, utilities and oil majors carries huge costs and makes no sense. The notion of imposing capital requirements on firms that trade commodities has been advocated by some financial regulators in recent years. It has also been loudly cheered by banks, which argue non-bank commodity traders enjoy an unfair competitive advantage from not having to set aside regulatory capital against their assets.
Since the entry into force of Europe’s Mifid II legislation in July last year, this abstract debate has become very real indeed. Mifid II both removes and narrows exemptions to financial market rules that many commodity trading firms previously benefited from. That means such firms may be forced to comply with CRD IV – the European Union version of Basel III bank capital rules………………………………………..Full Article: Source

Biggest commodity price fall since 2008 in April, led by dairy

Posted on 04 May 2015 by VRS  |  Email |Print

New Zealand commodity prices had their biggest decline since the height of the global financial crisis in 2008, led by falling dairy product prices. The ANZ Commodity Price Index fell 7.4 percent in April, the biggest decline since October 2008, when it fell by the same amount. The latest decline has reversed most of the gains seen since the start of the year, with prices 15 percent lower than a year ago.
Dairy product prices led declines, down 15 percent to be a third lower than a year ago, on weaker milk powder and butter prices. Fonterra Cooperative Group, the world’s biggest dairy exporter, last week cut its forecast payout to farmers for the current season to $4.50 per kilogram of milk solids from $4.70/kgMS, blaming volatile global commodity prices and an over-supply in international markets………………………………………..Full Article: Source

These risks threaten the recent commodity surge

Posted on 04 May 2015 by VRS  |  Email |Print

The recent resurgence in certain commodities such as oil, copper and zinc must feel pretty good to investors — especially those in Canada — who have been hit hard by the slump in natural resources in recent years. But it may be better if investors hold off getting excited for now. The rebound could very well have legs, but it could just as easily fizzle in the days and months ahead, say analysts.
“After a dismal finish to 2014, dominated by the collapse in oil prices, sentiment towards commodities is turning more positive again,” said Julien Jessop, analyst at Capital Economics, in a note to clients………………………………………..Full Article: Source

Gold Speculators Net Bullish Positions Virtually Unchanged Last Week

Posted on 04 May 2015 by VRS  |  Email |Print

Gold speculator and large futures trader positions were virtually unchanged last week as gold bullish bets hovered above +100,000 net contracts for a second week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday.
The non-commercial futures contracts of Comex gold futures, traded by large speculators and hedge funds, totaled a net position of +101,257 contracts in the data reported through April 28th. This was a weekly change of just +12 contracts from the previous week’s total of +101,245 net contracts that was registered on April 21st………………………………………..Full Article: Source

Gujarat imports 80% of gold from Switzerland

Posted on 04 May 2015 by VRS  |  Email |Print

The largest gold reserves, easier procedures and least chances of duplication or adulteration have made Switzerland the favourite source of gold imports by bullion traders in Gujarat. In 2014-15, over 80% of the 152 metric tonnes (MT) of gold imported through Gujarat was from Switzerland followed by UAE, South Africa and Australia.
Industry insiders say the share of Switzerland in overall gold imports in Gujarat has risen from 45% in 2012 to more than 80% in 2015. According to industry sources, of 22 MT of gold worth Rs 5,190 crore imported in March 2015 in Gujarat, around 19 MT, worth Rs 4,450 crore, was from Switzerland alone. Imports from UAE, South Africa, Australia and Turkey stood at 1,450 kg, 740 kg, 600 kg and 350 kg respectively………………………………………..Full Article: Source

Can hedge funds turn the tide in 2015?

Posted on 29 April 2015 by VRS  |  Email |Print

According to Preqin, hedge funds have started this year with a bullet. The Preqin All-Strategies Hedge Fund benchmark posted a 2.49% return in February, the highest monthly return since January 2013. The performance is timely given that hedge fund performance was a concern in 2014. The challenge, and opportunity, still remains for hedge funds to continue the uptick in Q1 as equity markets look to be buoyant and commodity markets remain turbulent.
According to the latest HFR Market Microstructure Industry Report, new hedge fund launches were down last year (in numerical terms, down 20 on the 1,060 funds launched in 2013). While launches have trended in a narrow range in recent years, they remain well below the peak of 2,073 funds launched in 2005, though nearly double the local trough of 659 launches in 2008. This is now the third consecutive year of decline, while fund liquidations saw their first drop since 2010………………………………………..Full Article: Source

Bullish Traders Are Turning To Rare Earth Metals

Posted on 24 April 2015 by VRS  |  Email |Print

This past week many momentum traders have turned their attention to a niche corner of the commodity markets – rare earth metals. Companies that explore and or process rare metals are of specific interest to traders because of strong moves in a couple of the sector’s key players. Based on their respective chart patterns, active traders will likely add these stocks to their watch lists because they could be setting up for a continued move higher.
Molycorp, Inc. (MCP) is one of the most popular rare earth players available in the public markets and it is a favorite amongst many who are interested in the sector. Recently, the company announced that it will supply rare earth metals for use in Siemens AG’s (SIEGY) wind turbine generators over the next 10 years. This news could be enough of a catalyst to continue to send prices higher over the coming weeks and months…………………………………..Full Article: Source

World’s commodity trading houses have their sights set on Iran thaw

Posted on 23 April 2015 by VRS  |  Email |Print

The world’s largest commodity trading houses are first in line to profit from the much expected return of Iran to global markets as Tehran and Washington enter into the final three months of nuclear talks. While the global oil industry has been seen as the biggest beneficiary of a thaw, commodities’ traders including Cargill, Glencore, Vitol, Trafigura and Louis Dreyfus Commodities have a long history in Iran, helping to export its oil and import daily basics like gasoline, wheat and rice.
The US and European sanctions, designed to stop oil and gas trading, are also limiting the traders’ ability to sell food commodities, because of banking and shipping restrictions. With a population of almost 80 million and the prospect of strong economic growth once sanctions are lifted, Iran offers one of the world’s biggest trading opportunities……………………………………Full Article: Source

Strong demand to rebalance oil market by early 2016

Posted on 23 April 2015 by VRS  |  Email |Print

Global oil demand is set to rise by 1 million or even 1.5 million barrels per day (bpd) in 2015, according to a range of forecasters. Coupled with a fall in shale output in the second half of the year, as the decline in the US rig count takes effect, that should be enough to bring the oil market near to balance by early 2016.
Worldwide consumption will increase by a little over 1 million bpd in 2015, according to forecasts published this month by both the International Energy Agency and the US Energy Information Administration (EIA). Ian Taylor,CEO of Vitol, the world’s largest oil trader, has also predicted demand will grow by around 1 million bpd, at a conference hosted by the Financial Times……………………………………Full Article: Source

World’s Biggest Oil Trader Sees $50 Floor for Crude Prices

Posted on 22 April 2015 by VRS  |  Email |Print

Vitol Group, the world’s biggest independent oil trader, said crude prices won’t drop below $50 a barrel for sustained periods because that’s a level some producers need in order to invest in new supply. Gunvor Group said a rout is over.
“We still subscribe to the likelihood that over time prices still have to go back up again because you still need to invest,” Vitol’s Chief Executive Officer Ian Taylor said in an interview at the FT Commodities Global Summit in Lausanne, Switzerland on Tuesday. “People won’t invest unless they can make the upstream business work and it’s not just U.S. shale, at $50 a barrel it doesn’t work.”………………………………….Full Article: Source

Sluggish Oil Demand Emerges As A Potent Factor In The Peak Oil Debate

Posted on 21 April 2015 by VRS  |  Email |Print

Peak oil isn’t what it used to be. That’s not simply because the theory of global oil supply peaking has been postponed courtesy of the U.S. production rebound, it is also because a second meaning to the expression is making a return, and that’s peak demand. A fresh glimpse of demand for oil peaking came last week in the release of the April edition of Oil Market Report by the International Energy Agency.
While most interest was in oil supply, a natural focus given the glut which has depressed the price of oil, there was a more important factor in the report and that was the modest demand growth forecast from the agency…………………………………..Full Article: Source

Asia set to muscle out Europe in gold trading

Posted on 16 April 2015 by VRS  |  Email |Print

Asia can surpass Europe as the centre of gold trading, Intercontinental Exchange’s John Ho told delegates at the Dubai Precious Metals Conference, with Dubai potentially integral to this shift. “People believe that the Asian time has come, that trading in Asia is now and it needs to happen in an Asian time zone,” he said. “Europe is over, Asia is now.”
Ho, director of Asia Pacific at ICE, was speaking ahead of the exchange’s launch of a Singapore-based, physically settled kilobar gold futures contract. Although Dubai can become part of this key movement of gold from West to East given its strategic location between Europe and Asia, any hub requires trust before it can succeed, he warned………………………………………..Full Article: Source

China commodities imports resume after holiday but demand weak

Posted on 14 April 2015 by VRS  |  Email |Print

China’s commodities imports generally rose in March on a month earlier as shipments resumed after the Lunar New Year holiday, but analysts pointed to still weak demand for goods ranging from iron ore to coal and soybeans. Overall trade data showed China’s total exports shrank 15 percent in a surprise drop that will exacerbate concerns about the slackening Chinese economy.
The world’s top buyer of iron ore imported 80.51 million tonnes of the steelmaking ingredient in March, up 18.5 percent from the previous month as producers flooded the market and prices fell. First quarter shipments rose 2 percent but the pace of growth was down from 19 percent a year earlier………………………………………..Full Article: Source

Why prefer commodities over commodity manufacturers

Posted on 14 April 2015 by VRS  |  Email |Print

Owning commodities allow investors to take exposure to the commodity he has a view on. Investing in shares of commodity manufacturing companies lead to exposure to many factors such as broader equity market sentiment, company fundamentals.
Investors often face the difficult choice – to buy gold or a gold miner, or to buy aluminum or aluminum manufacturing companies. Put simply, they have to make the difficult choice between a commodity and the commodity manufacturer. The decision requires a detailed look at both the investment options………………………………………..Full Article: Source

5 myths about currency manipulation and exchange rates

Posted on 14 April 2015 by VRS  |  Email |Print

Most observers overestimate the importance of currency policy. This month, the International Monetary Fund (IMF) may name China’s yuan as one of its reserve currencies. Also this month, Congress could vote on whether to give Trade Promotion Authority (TPA) to President Obama. Then another vote looms on the Trans-Pacific Partnership (TPP).
In these instances and others, currency manipulation will be treated as vital despite the fact that it is not particularly important to the United States. Dispelling myths about exchange rates makes this clearer………………………………………..Full Article: Source

Commodity giants’ Singapore trading hubs under fire in tax probes

Posted on 13 April 2015 by VRS  |  Email |Print

The Singapore trading hubs of the world’s largest commodity companies are coming under scrutiny from the governments of some resource-producing countries who say they suspect they are using units in the Southeast Asian financial centre to avoid tax.
Some of the world’s largest oil, mining and soft commodity companies book billions of dollars of revenue in the tiny island state every year, where tax rates can be very low, which is perfectly legal unless they deliberately underprice group transactions so as to shift profit there from units in other countries………………………………………..Full Article: Source

India: Commodity trade needs strong regulator

Posted on 13 April 2015 by VRS  |  Email |Print

The new regulator – SEBI or Warehouse Development and Regulatory Authority – should understand the aspiration of the market: National Bulk Handling Corpn chief. The merger of Forward Markets Commission and SEBI should throw up better business opportunity for commodity exchange and brighten the prospects of warehouses. Post-National Spot Exchange crisis, regulations on warehouses have been tightened and Sebi is expected to play a crucial role.
Anil Choudhary, Managing Director & CEO, National Bulk Handling Corporation: “We are regulated by the Forward Markets Commission and Warehouse Development and Regulatory Authority. SEBI should not look at commodity trading as just a financial asset class. It can play a far bigger and effective role. Futures exchange can give price signals to farmers six months in advance and help them decide what to grow. The futures market needs participation of financial sector, foreign institutional investors and mutual funds.”……………………………………….Full Article: Source

The curious case of the cash-rate currency trades

Posted on 13 April 2015 by VRS  |  Email |Print

One could almost hear the groans from Martin Place a few seconds before the 2.30pm on Tuesday when the Australian dollar jumped ahead of the Reserve Bank’s atomically precise interest rate decision.
The mysterious trades in the Australian dollar around the RBA’s rates decisions were already a national curiosity and the subject of a two-month-long investigation by the Australian Securities Commission. So when it happened again, the plot thickened – to the frustration of the central bank’s staff………………………………………..Full Article: Source

Commodity trading in Switzerland

Posted on 10 April 2015 by VRS  |  Email |Print

Representatives from the Swiss Government, individual trading companies and transparency advocates will discuss the current lack of publicly available information about commodity trading in Switzerland at UNCTAD’s sixth annual Global Commodities Forum at the Palais des Nations in Geneva on 13–14 April 2015.
The Forum continues a debate, begun at the 2014 event, on the need for improved transparency in the commodity trading sector – with Switzerland as its focus this year. The current dearth of information complicates governments’ responsibility to formulate policies that are effective as well as feasible to implement, and a lack of transparency represents a growing and significant reputational risk to firms, and their home and host governments………………………………………..Full Article: Source

Currency Hedging? Individual Investors Shouldn’t Bother

Posted on 09 April 2015 by VRS  |  Email |Print

As it has been so frequently noted in the financial press, last year the U.S. dollar appreciated significantly against most foreign currencies, including the widely quoted benchmark euro. For investors with a portion of their portfolio in unhedged international stocks, this caused some short-term pain.
For illustrative purposes, let’s expand the discussion beyond the euro to examine a broader basket of foreign currencies against which to assess the U.S. dollar’s movement relative to foreign currencies. Going back to 1998 with MSCI data, you can observe wide swings–in both directions–on an annual basis………………………………………..Full Article: Source

Government forms panel for Sebi-FMC merger

Posted on 08 April 2015 by VRS  |  Email |Print

The government has set up a committee to oversee the merger between commodities market regulator Forwards Market Commission (FMC) and the Securities and Exchange Board of India (Sebi).
The committee is headed by Ajay Tyagi, additional secretary, finance ministry and has representatives from both the regulators and the ministry. It met last month for the first time to sort out various issues involved in the merger process………………………………………..Full Article: Source

Gold attracts buyers on tepid economic data

Posted on 07 April 2015 by VRS  |  Email |Print

Gold prices shot higher on Monday, supported by Friday’s surprisingly weak jobs report. June gold GCM5, -0.52% rose $17.70, or 1.5%, to settle at $1,218.60 an ounce. May silver SIK5, -1.55% added 41 cents, or 2.5%, to $17.11 an ounce.
Major markets were closed on Friday as the U.S. reported a far smaller increase in jobs in March than analysts had expected. On Monday, the Institute for Supply Management said its nonmanufacturing index fell to 56.5% in March from 56.9% in February, indicating the service sector grew at a slower pace………………………………………..Full Article: Source

Commodities Explained: Metals trading in China

Posted on 07 April 2015 by VRS  |  Email |Print

Once already this year traders in London have been dragged out of bed at 1am when copper plunged in Shanghai. That could happen more often and to more drowsy Londoners as SHFE adds two new contracts — nickel and tin — that were long the preserve of the London Metal Exchange only.
Metals volumes on the SHFE, which was launched in 1999, have been increasing over the past few years. Last week’s launch of the new contracts takes its offerings in industrial metals to six, equal to those traded on the LME, the world’s largest centre of metals trading. The LME was bought by Hong Kong Exchanges and Clearing for £1.4bn in 2012………………………………………..Full Article: Source

U.S. Oil Imports From OPEC Have Plunged to a 28-Year Low

Posted on 02 April 2015 by VRS  |  Email |Print

America is the world’s biggest oil customer, and OPEC is losing its business—fast. U.S. imports of oil and petroleum products from OPEC have fallen to a 28-year low, according to data from the Energy Information Administration. The U.S. is pumping more of its own oil, and relying less on OPEC imports than any time since April 1987.
In the past six years, U.S. production has increased dramatically, catching global markets off-guard and contributing to the crash in oil prices. Last year, the U.S. surpassed Saudi Arabia to become the world’s biggest oil producer………………………………………..Full Article: Source

Commodities are going lower—here’s my play: Trader

Posted on 02 April 2015 by VRS  |  Email |Print

A strong dollar sent global commodity prices plunging in the past year. And one currency trader is setting himself up to profit from further declines. “We expect the uptrend in the U.S. dollar to continue,” said TradingAnalysis.com founder Todd Gordon on Wednesday’s “Trading Nation.” The dollar has already surged more than 22 percent in the last 52 weeks.
So, in order to play for further upside in the greenback, and downside in commodities, Gordon looked to the land Down Under: Australia. Specifically Gordon targeted, the FXA, the Australian dollar ETF, which is down more than 17 percent in the past 12 months………………………………………..Full Article: Source

Commodities traders’ alarm over Europe’s stricter regulations

Posted on 01 April 2015 by VRS  |  Email |Print

If you thought US plans to cap speculative activity in commodities were broad, then take a glance at what’s unfolding on the other side of the Atlantic.Policy makers in Europe want to place position limits, or caps, on the number of contracts speculators may control, on around 1,900 commodity derivatives (and securities priced off commodities), according to calculations by the UK’s Financial Conduct Authority.
To put that figure in perspective, the US Commodity Futures Trading Commission position limit plan extends to just 28 contracts………………………………………..Full Article: Source

Basic Materials: China Will Keep a Lid on Most Commodities

Posted on 01 April 2015 by VRS  |  Email |Print

Looser credit conditions or fiscal stimulus may temporarily boost China’s demand for coal, copper, and iron ore, but the bounce would be fleeting. Mined commodity prices are unlikely to recover from recent lows, as China’s structural economic transition diminishes the main source of global demand growth.
Falling input costs and global overcapacity have reshaped the global steel industry: Prices will be lower for longer. Weak crop prices and low farmer incomes are a significant headwind for fertilizer and seed companies, but we don’t expect the breeze will be too strong………………………………………..Full Article: Source

Is This the Bottom for Commodities?

Posted on 25 March 2015 by VRS  |  Email |Print

All the overnight action was in the currency markets. The Fed’s decision to delay interest rates rises is having a major impact on the flow of global capital. The Aussie dollar had a massive session, finishing at 78.95 US cents.
As I explained last week, traders got caught out by the Fed’s ultra-mega dovishness. They had positioned for the start of US interest rate ‘normalisation’…then the Fed wavered. As a result, the US dollar is now in correction mode as these bets are unwound. The Aussie dollar, commodity currencies and commodities more generally are all beneficiaries of this current unwind. The question is, how long will it run?……………………………………….Full Article: Source

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