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Commodities Briefing - Category | Trading more

Increase in Iran oil storage to increase export flexibility

Posted on 12 September 2014 by VRS  |  Email |Print

A substantial increase in Iranian oil storage capacity will give the sanctions-hit country more flexibility to export crude, the International Energy Agency (IEA) said on Thursday.
The United States and the European Union have imposed sanctions on the Islamic Republic over its nuclear programme, preventing it from reaching production capacity. Limited storage capacity has forced it to keep crude on National Iranian Tanker Co (NITC)-controlled tankers at sea………………………………………..Full Article: Source

China to export more steel

Posted on 11 September 2014 by VRS  |  Email |Print

“The mills in China have been consistently overproducing. The major reason for this is the strong profitability of the industry – the price of both the ingredients (iron ore, coal, freight, fluxes etc.) and the finished steel has decreased, but the costs of producing a ton of steel fell more, so the profit margins have actually improved.
“For overproduction, steel is either stockpiled or it is exported. A quick look at the inventory numbers (nominal or seasonally adjusted) reveals that steel has actually been drawn out of stockpiles, not added. Hence we are left with the export option………………………………………..Full Article: Source

EU pushes for urgent energy deal in U.S. trade pact

Posted on 10 September 2014 by VRS  |  Email |Print

The United States should commit to exporting oil and natural gas to Europe under a transatlantic trade deal in light of the European Union’s geopolitical situation, the EU trade commissioner said on Tuesday.
Tension between Russia and the West over the future of Ukraine is spurring the European Union to renew efforts to end decades of dependence on Russian gas. One solution would be greater access to abundant U.S. resources………………………………………..Full Article: Source

China commodity imports flashing warning signs: Russell

Posted on 09 September 2014 by VRS  |  Email |Print

If you were trying to distil China’s commodity imports for August into a single word, that word may be cautious. Crude oil imports rose 6 percent from a month earlier, but China was a net fuel exporter for a fourth month this year, meaning that some of the additional crude imports were shipped out as refined products.
In assessing the state of Chinese oil demand, the impact of the trade in refined products is becoming increasingly important, as the trend is now clearly toward rising net exports, particularly of diesel………………………………………..Full Article: Source

China’s Copper Imports Slow Due to Probe

Posted on 09 September 2014 by VRS  |  Email |Print

China’s commodity imports in August mostly softened, led by a 12% decline in the volume of copper shipments from a year earlier due to the fallout from a government probe into metal financing at Chinese ports. Copper imports fell to 340,000 metric tons, according to customs data Monday.
Chinese authorities earlier this year launched investigations into alleged fraud involving aluminum and copper stocks used as collateral for loans in China. Commodity-backed financing has fueled imports of copper in recent years, but this appears to be ebbing due to the investigations………………………………………..Full Article: Source

Commodity trading: End-to-end game

Posted on 05 September 2014 by VRS  |  Email |Print

Banks, harried by regulators and short of capital, are fleeing the commodities business. Deutsche Bank, Morgan Stanley and UBS either shuttered or shrank their commodities operations last year; this year Barclays, Credit Suisse and JPMorgan Chase have scaled back. But even as they retreat, commodity-trading houses, most of which began life as simple middlemen, are getting ever more deeply involved in the extraction, shipping and refining of raw materials.
The buyer of JPMorgan Chase’s physical commodities unit, for instance, was Mercuria, a ten-year-old firm based in Switzerland that started out trading oil but now owns (or has joint ventures with) oil-exploration companies, oil-terminal and pipeline operators, coal and iron-ore mines and biofuel refineries………………………………………..Full Article: Source

Commodity Trade Finance: uncovering the Opportunities in Africa

Posted on 04 September 2014 by VRS  |  Email |Print

In a recent Opalesque Radio interview with Sona Blessing, Nicolas Clavel, founder and chief investment officer of Scipion Capital, an investment manager specialising in self-liquidating short-term Commodity Trade Finance (CTF) with a focus on Africa, elaborates on the commodity trade finance opportunities, the hurdles and their ability to deliver consistent risk-adjusted returns.
From a sector perspective, the commodity trade finance fund focuses on minerals and agricultural commodities produced in Africa, which then tend to be shipped to destinations such as (mainly) China and Europe. The fund also finances the import of commodities into Africa, which is in sync with the continent’s growth and lack of available supplies for high in demand inputs such as cement and diesel………………………………………..Full Article: Source

Commodities trading the latest move by Shanghai to talk up free trade zone

Posted on 29 August 2014 by VRS  |  Email |Print

Commodities exchanges the latest idea for city’s free trade zone, and part of its plan to establish itself as a hub for international commerce. In the latest attempt to raise the profile of its Hong Kong-style free port, Shanghai has unveiled ambitious plans to create a clutch of international commodity trading platforms in its free-trade zone (FTZ).
According to an action plan to develop the city into a centre for international commerce, major commodities including iron ore, cotton and copper will be traded on the internationalised markets inside the 28.8 sq km FTZ by 2015. The announcement follows long-heralded plans to establish international boards for crude oil futures and gold trading in the zone………………………………………..Full Article: Source

China to Let Foreign Investors Trade in Shenzhen Carbon Market

Posted on 25 August 2014 by VRS  |  Email |Print

China, the world’s biggest emitter of greenhouse gases, said it will allow foreigners to trade carbon permits in Shenzhen, making it the nation’s first emissions exchange to welcome outside investors. The Shenzhen exchange has yet to set the date or finalize other entry procedures for foreign investors. The State Administration of Foreign Exchange has allowed foreign participation in principal, according to a statement today on the website of the China Emissions Exchange.
The southern city of Shenzhen near Hong Kong started carbon trading last year as the first of seven pilot programs in China. The exchanges, constituting the world’s biggest emissions trading system after Europe, may be a precursor to a nationwide system………………………………………..Full Article: Source

ICAP launches Singapore coal derivatives trading

Posted on 22 August 2014 by VRS  |  Email |Print

ICAP, the world’s largest interdealer broker, has opened a coal derivatives trading desk in Singapore in a move that highlights the growing importance of the Asian city-state as a commodities trading hub amid robust Chinese demand for coal. It is another sign of London-based ICAP’s ambitions to tap increasing demand in Asia for hedging of physical purchases of commodities.
In May the company launched an electronic trading platform for iron ore swaps in Singapore, in part to capture demand from Chinese traders………………………………………..Full Article: Source

Commodities: You don’t need to know them to trade them

Posted on 21 August 2014 by VRS  |  Email |Print

While there are more opportunities to trade commodities these days, investors remain reluctant to jump on board, citing a lack of understanding about what they are as a key reason. Commodities include products such as gold, silver, oil, wheat, sugar, cattle and pork bellies. OANDA senior technical analyst Stuart McPhee says he finds retail investors aren’t generally interested in trading commodities.
“Anecdotally, when you talk about trading something like sugar or wheat, people say they don’t understand it and wouldn’t know how to trade it. Our trading activity reflects this.” This is despite there being more ways to trade them, he says………………………………………..Full Article: Source

BHP Billiton plans mining’s biggest spin-off as commodity boom falters

Posted on 20 August 2014 by VRS  |  Email |Print

BHP Billiton Ltd. announced what’s poised to be the biggest spin-off in the mining industry, separating aluminium, coal and silver assets to create a company valued at about $15 billion after it begins trading next year. The new unit will operate in five countries from Australia to South Africa, the Melbourne-based producer said on Tuesday in a statement, while announcing a 10% jump in full-year profit to $13.4 billion.
BHP’s London-listed shares fell the most in 14 months. A decision to skip a widely anticipated share purchase will disappoint investors, who had expected a $3 billion buyback, Citigroup Inc. said………………………………………..Full Article: Source

Commodity trading in India on the rise as investors return

Posted on 20 August 2014 by VRS  |  Email |Print

A year after a US$920 million payment default at a spot commodities bourse cut trading from gold to soya beans futures, jolting India’s biggest brokerages, investors are returning as newer regulations buoy confidence.
The volume of commodities traded on the Multi Commodity Exchange Ltd, India’s biggest commodity bourse, has rebounded from a five-year low after the regulator tightened warehousing and shareholding norms in response to the payment crisis that unravelled at the National Spot Exchange Ltd (NSEL). Volumes on the National Commodity & Derivatives Exchange of India Ltd, the second largest bourse, have recovered from a 10-year low………………………………………..Full Article: Source

5 Commodities Setups to Play

Posted on 20 August 2014 by VRS  |  Email |Print

Stocks made big gains yesterday, the big NASDAQ Composite in particular making new multiyear highs as buyers charged into equities to start the week. But one corner of the market has quietly been outperforming the rest — and no, it’s not technology. I’m talking about the “commodity stocks,” basic materials sector names with outsized exposure to the commodity markets. Typically, commodity-centric names tend to have low correlations with the rest of the broad market, but not in 2014. Instead, materials names are just magnifying the S&P 500’s gains this year.
So far, the S&P has managed to climb 7.19% higher since the start of the calendar year — but the basic materials sector has basically done double, climbing 14.34% over that same stretch. Even better, there are still some big trading opportunities in materials right now………………………………………..Full Article: Source

After the Boom–Commodity Prices and Economic Growth in Latin America and the Caribbean

Posted on 15 August 2014 by VRS  |  Email |Print

After skyrocketing over the past decade, commodity prices have remained stable or eased somewhat since mid-2011—and most projections suggest they are not likely to resume the upward trend observed in the last decade. This paper analyzes what this turn in the commodity price cycle may imply for output growth in Latin America and the Caribbean.
The analysis suggests that growth in the years ahead for the average commodity exporter in the region could be significantly lower than during the commodity boom, even if commodity prices were to remain stable at their current still-high levels. Slower-than-expected growth in China represents a key downside risk. The results caution against trying to offset the current economic slowdown with demand-side stimulus and underscore the need for ambitious structural reforms to secure strong growth over the medium term………………………………………..Full Article: Source

Free exchange: Aid to the rescue

Posted on 15 August 2014 by VRS  |  Email |Print

Fifty years ago the first United Nations Conference on Trade and Development launched a debate about how much money rich countries should give to poor ones to reduce poverty and bolster growth. In the end, the UN settled on a figure of 0.7% of national income—a target subsequently reaffirmed by endless international powwows.
Although few countries have met it, aid spending in real terms has nonetheless increased steadily ever since, to $134.8 billion in 2013. Yet economists are still arguing about how much the aid helps—if it helps at all………………………………………..Full Article: Source

Commodity Price Volatility: What Should Distributors Do?

Posted on 14 August 2014 by VRS  |  Email |Print

Dealers in commodities, or in parts that use a significant amount of a commodity with large price fluctuations, have significant business challenges. In previous articles I’ve written about the nature and impacts of commodity price volatility: This article will cover the two challenges of dealers: pricing and working capital.
The owner of a gas station has the same pricing challenge as a copper and brass distributor or a cocoa wholesaler: how to set selling prices when your buying prices change frequently. To understand the right way to set prices, it’s easiest to understand the wrong way: pricing based on historic cost. Let’s say that the gas station owner marks up the price of gas by 50 cents, so when he buys for $3.50, he sells for $4.00………………………………………..Full Article: Source

Escalating geopolitical discord lifts commodities

Posted on 12 August 2014 by VRS  |  Email |Print

After hitting a sixth month low at the end of July, the broad based Bloomberg Commodity Index (formerly known as DJ-UBS) managed a small comeback this week. Multiple geopolitical worries halted the slide in crude oil and gave precious metals a lift while industrial metals took stock following disappointing economic data from China and Europe.
The agriculture sector was higher as the grain sector returned from the abyss, thereby helping to offset losses in soft commodities, not least coffee and sugar, while livestock fell for a third week……………………………………Full Article: Source

China’s mixed commodities imports data shows demand revival absent

Posted on 11 August 2014 by VRS  |  Email |Print

China’s imports of iron ore and soybeans maintained their upward trajectory in July but shipments of crude oil, copper and coal dropped, underscoring the relatively sluggish domestic demand in the world’s second-biggest economy. Copper shipments fell 2.9 percent compared to June, coal imports dropped 8.1 percent and crude oil imports slid 1.1 percent to their lowest daily rate since March, but July deliveries of iron ore surged 10.7 percent and soybeans rose 17 percent on the month, customs data showed on Friday.
The rise in imports of both iron ore and soybean, however, was attributed by analysts to opportunistic buying on favourable price moves, with subdued domestic demand seen potentially driving a surge in the stockpiles of both the commodities……………………………………..Full Article: Source

Russia bans agricultural products from EU, USA, Australia, Norway, Canada

Posted on 08 August 2014 by VRS  |  Email |Print

Russian PM Dmitry Medvedev has signed a decree on the full ban for imports of beef, pork, poultry meat, fish, cheese, milk, vegetables and fruit from Australia, Canada, the EU, the US and Norway. The ban will last a year, starting August 7.
The Prime Minister also said Russia has stopped transit flights by Ukrainian airlines to such destinations as Georgia, Azerbaijan, Armenia and Turkey, adding that the country was considering a ban of transit flights for European and US Airlines to the Asia-Pacific region………………………………………..Full Article: Source

Russia to ban all U.S. agricultural imports

Posted on 07 August 2014 by VRS  |  Email |Print

Retaliating for U.S. sanctions over Ukraine, Russia will ban or limit all American agricultural products for up to a year, a Kremlin official said Wednesday. All fruits and vegetables from the European Union will also be locked out, the country’s agricultural and veterinary watchdog told RIA Novosti. Produce from Canada and Japan will also be blocked.
The complete list of banned products, to be announced Thursday, will be “very substantial,” said Alexey Alekseenko, an assistant to the head of the Federal Service for Veterinary and Phytosanitary Surveillance………………………………………..Full Article: Source

Africa: Commodities: The Trade Challenge

Posted on 06 August 2014 by VRS  |  Email |Print

With new rules and new markets, African companies are fighting for a bigger stake in the continent’s resource bonanza. At the same time, multinational traders like Glencore are targeting Africa as they seek to control commodity value chains.
For a couple of days in mid-June, as the rest of the world settled down to watch the World Cup, Chad made a rare foray into the global news headlines. Idris Déby Itno, its dapper deal-making president who had paid a call a month earlier at the Elysée Palace to see France’s President François Hollande, announced that Chad’s capital, N’Djamena, was going to be headquarters for the regional campaign against jihadists in Nigeria, Mali and beyond………………………………………..Full Article: Source

Middle East supply fears send oil prices higher

Posted on 06 August 2014 by VRS  |  Email |Print

Oil prices rose in Asia Tuesday on fresh fears of supply disruptions in the Middle East, analysts said. US benchmark West Texas Intermediate (WTI) for September delivery rose 10 cents to $98.39, while Brent crude for September gained 15 cents to $105.56 in afternoon trade.
“We haven’t seen signs so far that the ongoing conflicts in the Middle East could cause disruptions, but those concerns are still there at the back of investors’ minds,” Desmond Chua, market analyst at CMC Markets in Singapore, said. WTI on Monday snapped a five-day losing streak to gain 41 cents in New York trade following continued violence in crude producer Libya, where at least 22 more people died in Tripoli over the weekend………………………………………..Full Article: Source

India: Forward trades in commodity markets to begin this month

Posted on 04 August 2014 by VRS  |  Email |Print

India’s commodity markets will see the debut of forward contracts later this month, a move termed as an attempt to create a national agricultural market. The National Commodity & Derivatives Exchange Ltd (NCDEX) will launch forward contracts based on two commodities—sugar and maize— by the third week of August after receiving a go-ahead from the commodity market regulator.
Commodity market participants say that the introduction of forward contracts could be a game-changer, as it reduces counter-party risk and keeps out speculators, besides creating a central platform for forward trading in agricultural commodities………………………………………..Full Article: Source

Commodity finance being done by Trading Houses

Posted on 30 July 2014 by VRS  |  Email |Print

A story recently in Reuters talked about how the biggest trading houses are filling the traditional banks (and mostly European banks role) of funding traders. This got particular attention, especially in light of the Obama administrations sanctions on Rosneft and other big Russian commodity producers.
If you look at the big trading houses, do they really want to take over the role of banks (who have access to historically cheap deposits?). Or is it really a question of providing these large trading houses with huge credit lines to further provide upstream finance to their smaller counterparties?……………………………………….Full Article: Source

Commodities Trading At Banks: Going, Going, Gone?

Posted on 29 July 2014 by VRS  |  Email |Print

While on a visit to the commodities unit of a major investment bank in New York roughly seven years ago, one was enveloped by a sense of exuberance on the trading floor. No less than three executives claimed their institution was among the “few banks” with separate units dealing in paper crude oil barrels, as well as loading and dispatching the physical stuff on to tankers somewhere off a foreign shipping terminal.
Given that the global financial crisis hadn’t taken hold and the year was 2007, such a claim could well be classified as the market overstatement of the decade then. In actual fact, most major banks were trading derivatives, futures, options and physical commodities at the time. Fast forward to the second half of 2014, and it is a different scenario altogether………………………………………..Full Article: Source

EIA: OPEC’s 2013 oil export revenues fall 7%

Posted on 29 July 2014 by VRS  |  Email |Print

According to recent estimates from the US Energy Information Administration, members of the Organization of the Petroleum Exporting Countries, excluding Iran, earned about $826 billion in net oil export revenues in 2013, a 7% decrease from 2012 earnings. But this was still the second-largest earnings totals during 1975-2013—the timespan of how long EIA has tracked OPEC oil revenues.
For each country, EIA derived net oil exports based on its oil production and consumption estimates from the latest edition of the EIA’s Short-Term Energy Outlook. For countries that export several different crude varieties, EIA assumes that the proportion of total net oil exports represented by each variety is equal to the proportion of the total domestic production represented by that variety………………………………………..Full Article: Source

Halt in Iraqi oil, Egyptian gas supplies continues

Posted on 28 July 2014 by VRS  |  Email |Print

Imports of natural gas from Egypt and crude oil from Iraq have been at a standstill since the beginning of this year, according to Energy Minister Mohammad Hamed. “Oil from Iraq is still completely halted due to the deteriorating security conditions there,” the minister told The Jordan Times in a recent interview.
The Kingdom used to import around 10,000 barrels of crude oil per day from Iraq. Jordan has resorted to importing crude oil from the Saudi Arabian oil company, Aramco, he said………………………………………..Full Article: Source

Energy supplier to the world

Posted on 25 July 2014 by VRS  |  Email |Print

Traders booked the most tankers in eight months to ship diesel and heating oil to Europe from the U.S. Gulf, where refining is surging as a consequence of America’s rising crude production.
Oil companies either booked or plan to charter 16 tankers to transport cargoes on the route for loading during the next two weeks, according to the survey of six people involved in the trade yesterday. That compares with nine last week and is the highest count since Nov. 6………………………………………..Full Article: Source

China gold demand falls by a fifth, but output rises

Posted on 25 July 2014 by VRS  |  Email |Print

China’s gold demand fell by nearly a fifth in the first half of 2014 from a year ago as consumer interest in bullion bars and coins waned.
Soaring purchases by retail customers in 2013 helped China overtake India as the world largest gold consumer for the first time. That buying “frenzy”, as the metals consultancy Thomson Reuters GFMS described it, was largely driven by the 28 per cent fall in the gold price last year………………………………………..Full Article: Source

Credit Suisse heads for exit on commodities trading

Posted on 23 July 2014 by VRS  |  Email |Print

When is an investment bank committed to a business? Until it’s not! That oft-quoted adage could be heard in the City of London on Tuesday morning after Credit Suisse joined the ranks of investment banks exiting commodities trading. The bank announced that it was winding down its derivative-focused commodities unit to focus on more profitable businesses such as structured products and credit.
Like its peers, Credit Suisse blamed tighter regulation and lower profitability due to stable prices for oil and other commodities for the decision, revealed after the bank announced its biggest quarterly loss since the collapse of Lehman Brothers………………………………………..Full Article: Source

Swiss Commodities Traders Go Big on African Oil

Posted on 22 July 2014 by VRS  |  Email |Print

Swiss commodities traders are buying significant volumes of Africa’s oil in opaque and lightly-regulated deals, according to a new report that spotlights their commanding position in the continent’s energy markets.
Traders such as Glencore PLC and privately-owned Trafigura Beheer B.V. spent $55 billion buying a quarter of the oil produced by Africa’s top 10 suppliers between 2011 and 2013, according to the report by a trio of nongovernmental organizations, the Berne Declaration, the Natural Resource Governance Institute and Swissaid………………………………………..Full Article: Source

Commodities: Water should be traded on financial markets to avoid global crisis

Posted on 21 July 2014 by VRS  |  Email |Print

Markets can play an important role in providing future water security. Britain, as the rest of the world, is facing a water crisis, leading some experts to predict that by the end of the decade H2O will be traded on financial markets like other finite commodities such as crude oil, or iron ore.
Although the Environment Agency says the past six months have been the wettest on record, summer hosepipe bans remain a possibility, partly because of historic inconsistencies in infrastructure investment. However, changing weather patterns and rising demand for water resources spell a potentially more nightmarish scenario within the next 20 years………………………………………..Full Article: Source

Morgan Stanley rebuilds in commodities trading

Posted on 21 July 2014 by VRS  |  Email |Print

After more than a year of scaling back in commodities, Morgan Stanley is ready to expand. The Wall Street bank plans to hire about a dozen traders, sales staff and other professionals in the United States. It’s building up commodities trading and financing businesses that can profit despite tougher regulations, people familiar with the matter told Reuters.
“The moves that we’ve made are in large part because we looked at these businesses through a new capital lens,” said one executive involved in the business’s strategy who spoke on the condition of anonymity. “That’s just the reality of life on Wall Street these days.”……………………………………….Full Article: Source

Commodity traders and asset ownership

Posted on 17 July 2014 by VRS  |  Email |Print

As trading has become more competitive and markets more transparent, big commodity traders have responded by sinking billion of dollars into refineries, power plants, ports and other assets.
It is a narrative that has taken up many column inches over the past couple of years and there is more than a kernel of truth to it. Some energy and metals traders have indeed become more asset heavy through targeted acquisitions. Vitol, for example, recently acquired Royal Dutch Shell’s Australian refinery and petrol station assets for $2.6bn, while Mercuria is set to buy the physical commodities business of JPMorgan Chase………………………………………..Full Article: Source

Saudi Kingdom’s oil exports hit 1.38bn barrels in 6 months

Posted on 17 July 2014 by VRS  |  Email |Print

Saudi Arabia exported nearly 1.38 billion barrels of oil in the first six months of the current year (2014) that yielded SR565 billion, an economic expert was quoted by the local media. Local consumption is projected to hit 395 million barrels, or 22 percent of the total production, during the same period, Fahad bin Jumaa told Al-Riyadh Arabic daily.
The figures come at a time when OPEC (Organization of Petroleum Exporting Countries) is poised to shrink its share of the global market for the third consecutive year by 2015 for a number of reasons, including boom of shale oil in the United States despite acceleration of global demand on oil, he said………………………………………..Full Article: Source

Why trading houses are partnering with private equity firms

Posted on 17 July 2014 by VRS  |  Email |Print

Asian commodity trader Noble Group and private equity firm EIG Global Energy Partners this week announced a joint venture, Harbour Energy, that will seek to buy operating companies world-wide in the oil and gas exploration and production, gathering, processing and transmission sectors.
The deal is part of a larger effort by Noble to focus on its trading business while relying on partners to handle production of physical commodities. Singapore-listed Noble has formed two other joint ventures over the last year to deal with production of commodities in the agriculture and mining sectors. In both cases, it teamed with buyout shops………………………………………..Full Article: Source

Yellen Testimony Described As Mostly Neutral For Gold; Prices Decline Anyway

Posted on 16 July 2014 by VRS  |  Email |Print

Traders and analysts are characterizing Federal Reserve Chair Janet Yellen’s congressional testimony Tuesday as largely neutral for the gold market.
About an hour into her testimony, prices suddenly slipped below $1,300 an ounce for the first time since June 19. But most observers said they did not feel that the Fed chief had suddenly sounded more hawkish – other than suggesting rates could rise sooner than expected if the labor market keeps improving rapidly………………………………………..Full Article: Source

China copper trading hit by commodity financing crackdown

Posted on 16 July 2014 by VRS  |  Email |Print

A Chinese commodity trading house is accused of securing multiple bank loans against a single stockpile of copper and aluminium, causing ructions in copper prices and a dip in trading volumes.
The discovery of a financing practice by a Chinese trading firm using the same metals inventory as collateral to secure multiple bank loans has caused copper prices to plummet, yet futures traders have profited from the price dislocations………………………………………..Full Article: Source

Copper fluctuates after China trade data

Posted on 11 July 2014 by VRS  |  Email |Print

Copper futures swung between small gains and losses on Thursday, after data showed that China’s exports rose less than expected in June. On the Comex division of the New York Mercantile Exchange, copper for September delivery tacked on 0.1%, or 0.4 cents, to trade at $3.252 a pound during European morning hours. Prices held in a narrow range between $3.245 and $3.257 a pound.
Copper prices ended Wednesday’s session down 0.28%, or 0.9 cents, to settle at $3.248 a pound. Futures were likely to find support at $3.237 a pound, the low from July 7 and resistance at $3.294 a pound, the high from July 8………………………………………..Full Article: Source

Big Commodity Traders Gain Clout

Posted on 10 July 2014 by VRS  |  Email |Print

A handful of giant commodity traders such as Netherlands-based Trafigura Beheer BV and Vitol Group are increasingly taking a central role in global commodity markets. These once-obscure firms aren’t just betting on prices or arranging product shipments. They are taking on oil companies, miners and major Wall Street banks by sinking billions of dollars into refineries, power plants, ports and other assets.
The four biggest traders—Vitol, Glencore, Cargill Inc. and Trafigura—each boast annual revenue of more than $100 billion, putting them in the ranks of household names such as Apple Inc. and Chevron Corp………………………………………..Full Article: Source

Gold industry resistant to price benchmark replacement - WGC

Posted on 08 July 2014 by VRS  |  Email |Print

Gold producers and consumers are resistant to a wholesale redesign of the existing price setting benchmark known as the “fix” despite increasing regulatory glare, a discussion held by the World Gold Council found on Monday.
The debate hosted by the gold mining industry group was attended by 34 delegates from investment funds, refiners, exchanges, and other industry bodies. The four banks that currently set the globally used gold benchmark twice a day via a conference call - Barclays Plc , HSBC, Bank of Nova Scotia and Societe Generale - were not present, but the WGC said it had had meetings with them separately……………………………………..Full Article: Source

Don’t waste time fixing gold fix, it’s obsolete

Posted on 08 July 2014 by VRS  |  Email |Print

With 24-hour electronic trading, the 100-year-old gold fix has become an anachronism. Does the system of fixing the daily price of gold in London really need fixing, or should it be allowed to fade into the annals of history?
Traders and market participants will gather today in London to debate the question which has hung over the City’s precious metals market ever since it emerged earlier this year that major abuses of the 100-year-old process known as the “London gold fix” had taken place……………………………………..Full Article: Source

Commodities Obsolete in Models Yielding to Fed, ECB

Posted on 07 July 2014 by VRS  |  Email |Print

Commodities are getting a demotion from foreign-exchange strategists. Banks from JPMorgan Chase & Co. to Citigroup Inc. are reducing the weighting given to exports in their currency forecasting models as policy makers tighten their grip on financial markets.
Traditional commodity currencies, such as those of Canada, Australia, New Zealand and Norway, have become decoupled from exports by the most in as much as 13 years. “The breakdown in correlations has been significant,” Niall O’Connor, an analyst at JPMorgan in New York who specializes in tracking trends in trading patterns, said. “It’s central-bank talk that’s really become the catalyst for price action.”……………………………………….Full Article: Source

Gold Option Trade: Will Gold Continue To Consolidate?

Posted on 07 July 2014 by VRS  |  Email |Print

Until recently, the world has forgotten about Gold and gold futures prices it would seem. A few years ago, all we heard about was gold and Silver futures making new highs on the back of the Federal Reserve’s constant money printing schemes. However, after a dramatic selloff in the world of precious metals it became very quiet.
Gold prices have been in a giant basing or consolidation pattern for more than one year. As can clearly be seen below, gold futures prices have traded in a range between roughly 1,175 and 1,430 since June of 2013………………………………………..Full Article: Source

Commodity traders: Keeping track

Posted on 04 July 2014 by VRS  |  Email |Print

Commodity traders make good villains. They are rich because they are secretive, well informed and ruthless. The beans, metals and grains that they trade affect every part of modern life. Consumers can blame them for high prices, farmers and miners for low ones. Politicians worry that they distort and rig the markets they operate in.
Outsiders know surprisingly little about this world, and Kate Kelly, a reporter with CNBC, has done a good job of shedding light on some of the personalities who dominate it. Her book, “The Secret Club that Runs the World”, starts with a “cast of characters” including the well known—Mick Davis of Xstrata and his nemesis, Ivan Glasenberg of Glencore—and others less famous, such as Pierre Andurand of BlueGold Capital Management, who appears to have been a principal source for the book. ……………………………………….Full Article: Source

Gold bullion imports in India hit 13-month high

Posted on 02 July 2014 by VRS  |  Email |Print

Gold bullion imports by the India’s northern state of Gujarat touched its highest levels in thirteen months during June, primarily on account of recent relaxations in gold import norms by the new government.
Per trade figures released June 30, the total gold imports during the month of June totaled 14.33 metric tonnes (MT). This is the first time in the past year that the monthly gold imports have touched double digits. Gold imports surged by 74% compared to 8.74 MT in June last year………………………………………..Full Article: Source

Commodities traders await BNP Paribas fall-out

Posted on 01 July 2014 by VRS  |  Email |Print

The nearly $9 billion (CHF8 billion) fine imposed on French bank BNP Paribas could have a major impact on the Geneva commodities sector, according to one expert. The violations arose mainly from the bank’s Geneva-based trade finance unit that has greased the wheels of the explosive growth of commodities trading in the region.
Trade finance is a specialist banking service that provides credit to traders. The funding is vital for plugging the financial gap between traders buying a commodity in one part of the world and receiving payment once the goods have been successfully shipped to another country………………………………………..Full Article: Source

Is Africa the victim of Swiss commodities trading?

Posted on 01 July 2014 by VRS  |  Email |Print

Are mispricing and the opacity of commodities trading in Switzerland contributing to Africa’s underdevelopment? The world’s poorest continent remains heavily dependent on natural resources and so is extremely vulnerable to manipulations in the price of the commodities it extracts and exports, with very real consequences for its economies.
Switzerland is a global hub for trade in commodities, and so exerts a significant influence on Africa’s development. But critics say the way commodities are traded through the country is shrouded in opacity and this ultimately deprives developing regions such as Africa of revenue………………………………………..Full Article: Source

Best Ways To Trade Gold And Silver

Posted on 27 June 2014 by VRS  |  Email |Print

The Reuters/Jefferies CRB Index, which tracks a diverse group of commodities, has been in an uptrend since the start of the year, lead largely by the strong performance in the energy sector. Gold and silver are now following suit, with a sharp rally higher starting in July. Here are four stock and ETF plays you can use to take part.
Relative to the January 2014 low at $114.46, the recent June low was much higher at $119.42 in the SPDR Gold Trust Shares ETF (GLD), indicating accumulation. The subsequent rally through resistance in the $126 to $127 region signals a broader upside move could be underway………………………………………..Full Article: Source

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