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Commodities Briefing - Category | Trading more

China commodities rally on hopes of measures to counter Brexit

Posted on 29 June 2016 by VRS  |  Email |Print

Commodity futures in China from steel to soymeal rallied on Tuesday, as investors bet on countries bringing in measures to counter the shock to markets and economies from Britain’s vote to leave the European Union.
Chinese steel futures jumped for a second day, while the rally spread to other commodities. “I think there is a fresh wave of speculation,” said Yang Zhijiang, an analyst at China Merchant Futures. China’s commodities markets had recently calmed after a roller-coaster ride started in April, when soaring prices and volumes prompted exchanges to curb speculative activity………………………………………..Full Article: Source

Brexit fallout, global commodity markets may remain volatile

Posted on 29 June 2016 by VRS  |  Email |Print

“Brexit”, the word continued to keep global markets involved and horrified from the past few days and when reality happened it spooked the financial world in a massive way. Britain is the first state to leave the 28-nation European Union since its foundation.
Now, the billion dollar question is that are the markets overreacting. Will it continue to impact on the trade behaviour? If so,… how long? As per estimates, $2.08 trillion has been wiped off from the global equity markets after Britain voted to leave the European Union………………………………………..Full Article: Source

Goodbye to OPEC?

Posted on 28 June 2016 by VRS  |  Email |Print

Should the 169th OPEC meeting held earlier this month be its last? As former British Prime Minister Winston Churchill said, “To improve is to change; to be perfect is to change often.”
For Saudi Arabia and the remaining Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar and United Arab Emirates), which together account for around 40 percent of the world’s oil reserves and the lion’s share of OPEC’s collective output, their future oil strategy should be an exclusively GCC affair, away from the stress and dysfunction of OPEC………………………………………..Full Article: Source

Gold wins from Brexit. But other commodities lose

Posted on 27 June 2016 by VRS  |  Email |Print

Gold prices soar, but many commodities will suffer from the ripple effects of the referendum. Goldbugs are natural Brexiteers; intensely suspicious of large bureaucracies like the European Union and avid conspiracy theorists when it comes to the power of global “elites”. They had double reason to celebrate on June 24th, when Britain’s decision to leave the EU sent gold prices soaring.
But the rise of the yellow metal is also a symptom of the fear that Brexit is unleashing on the global economy. Hence other commodities that are more dependent upon global demand, such as oil, fell sharply. After a huge rally since their trough earlier this year, the commodities markets were vulnerable to a shock. Hedge funds and other money managers had built up big bets on rising prices………………………………………..Full Article: Source

Commodities Players Are Set Up for Market-Crushing Gains

Posted on 24 June 2016 by VRS  |  Email |Print

The resource sector’s devastating five-year bear market saw the Bloomberg Commodity Index drop 60% from its 2011 peak. Naturally, that crushed the world’s dominant resource producers; the top 40 companies saw their market caps shrink by $27 billion in 2015 alone.
All along, these producers have had to clean house, slash spending, reduce headcount, and rationalize every last cent they did spend as production crashed. It was the law of the jungle in action, survival of the fittest. Plenty of producers went straight out of business. It wasn’t easy to watch, and it was even tougher to invest in………………………………………..Full Article: Source

Donald Trump has commodity traders nervous, could impact ag commodities, says analyst

Posted on 22 June 2016 by VRS  |  Email |Print

The controversial rhetoric of presumptive republican nominee Donald Trump has commodity traders nervous, according to one analyst. Pete Johnson, of marketing news publication Cotton Compass believes a Trump presidency could have a negative impact on the price of Australian agricultural commodities like beef, grain and fibre.
Mr Johnson, a market analyst, said Trump had so far shown himself to be hard to predict, which could put pressure on the US dollar and in turn, the international commodity market………………………………………..Full Article: Source

Switzerland gold exports jump 20% to 177.3 mt in May, highest this year

Posted on 22 June 2016 by VRS  |  Email |Print

Gold exports from Switzerland totaled 177.3 mt in May, up 20% from 147.8 mt reported in April, and the highest level since December, Swiss federal customs data showed Tuesday. The figure is 69% higher than 105.1 mt reported a year earlier.
Exports to China were 36% higher on the month at 19 mt in May, while exports to Hong Kong were 2.5-times as large at 24 mt. Exports to the US were also up on the month, to 18.9 mt in May, from just 2.3 mt in April………………………………………..Full Article: Source

Indian regulator Sebi plans checklist to approve listing for commodities futures trade

Posted on 21 June 2016 by VRS  |  Email |Print

Capital markets regulator Sebi plans to have a 13-point checklist to approve the listing and delisting of commodities from futures trading, two persons aware of the development told ET. The rules were slated to be discussed by Sebi with the commodity derivatives advisory committee (CDAC) sub-group on new products and participants on Monday.
Sebi will seek the feedback of CDAC before finalising the checklist. “The structured note will consider the objective and subjective parameters of the checklist before finalising it,” said one of the persons. “The objective part will comprise issues of liquidity, production statistics, shelf life, etc. The subjective part will examine issues of political sensitivity of the commodity, whether it’s widely dispersed, internationally traded, susceptibility to cartelisation, etc,” he added………………………………………..Full Article: Source

Baltic index continues to fall on lower capesize demand

Posted on 21 June 2016 by VRS  |  Email |Print

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, continued its fall Monday on weaker demand for capesize vessels. The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels, was down 5 points, or 0.85 percent, at 582 points.
The capesize index fell 30 points, or 3.24 percent, to 897 points. Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, were down $218 to $6,315. The panamax index was flat at 546 points………………………………………..Full Article: Source

Commodities focus on looming Brexit vote

Posted on 20 June 2016 by VRS  |  Email |Print

Market activity has increasingly been dictated or distracted by the uncertainty surrounding the UK referendum vote on June 23. Opinion polls indicating rising support for the Leave camp sent investors looking for cover with stocks falling and bonds rising.
This was followed on Wednesday by a distinctively dovish statement following the latest Federal Open Market Committee meeting. The FOMC lowered its projection of its own interest rate path with six members now only seeing one rate hike in 2016………………………………………..Full Article: Source

U.S. derivatives regulator rethinks algorithmic trading proposal

Posted on 17 June 2016 by VRS  |  Email |Print

The U.S. derivatives regulator is rethinking parts of its proposal to regulate automated trading and looking into whether the rule could affect too many people, it said on Thursday. The Commodity Futures Trading Commission, announcing it had reopened the public comment period on the rule through June 26, also said it is considering who should mitigate the risks of algorithmic trades and how the rule would apply when traders purchase their algorithms and systems.
It said it asked how to define “source code” and what software and hardware should be included within the term “Algorithmic Trading system.”……………………………………….Full Article: Source

Currency Traders Flee Euro, Pound as Brexit Fear Fuels Haven Bid

Posted on 17 June 2016 by VRS  |  Email |Print

Currency traders in the $5.3-trillion-a-day market abandoned the euro and pound and piled into the dollar and yen, seeking safety before the U.K. votes on whether to leave the European Union.
The 19-nation euro dropped 2.8 percent against the yen, its worst day since 2010, as investors looked for refuge before the British referendum on June 23. The flight to haven currencies, including the yen, dollar and Swiss franc, follows decisions by the Bank of Japan to refrain from adding any stimulus and the Federal Reserve leaving interest rates unchanged Wednesday………………………………………..Full Article: Source

Demand for dry bulk commodities

Posted on 15 June 2016 by VRS  |  Email |Print

When it comes to the dry bulk market, shipowners these days are looking for news in any shape or form they can find them. However, as the discussion over the market’s future prospects is being dominated by the obvious tonnage oversupply, things could very well start to show modest signs of improvement in the demand-side of the market as well.
Dry bulk ship owner Golden Ocean said in its latest quarterly report that “China’s official GDP growth slowed to 6.7 per cent in the first quarter of 2016. In the new five year plan announced in China in March the target for annual GDP growth during the next five years was set to 6.5 per cent………………………………………..Full Article: Source

Bullish gold and agricultural bets rise as oil wavers

Posted on 14 June 2016 by VRS  |  Email |Print

Investors’ appetite for gold and agricultural commodities helped lift overall bets on rising commodity prices by 20 per cent last week even as speculators soured their expectations for an oil price that has almost rebounded since January.
“Aggressive buying of natural gas, gold, corn, wheat, and sugar more than offset the fact that the number of commodities being sold outnumbered those being bought,” said Ole Hansen, head of commodity strategy at Saxo Bank………………………………………..Full Article: Source

Gold and silver buying hits three-year high

Posted on 08 June 2016 by VRS  |  Email |Print

Overall trading activity in May - private investors either starting to invest in the precious metals or adding to their existing holdings - represented the highest since spring 2013. That was when both global stockmarkets and bond markets fell out of form as America’s Federal Reserve moved to unwind quantitative easing. The market reaction at that time was described as the ‘taper tantrum’.
There are two drivers behind the buying spree. The first is the fact that during the month of May both the gold price and the silver price dipped, falling 7% and 10% respectively. Investors took advantage of these falls to buy gold and silver at cheaper prices………………………………………..Full Article: Source

OPEC Skips Output Limit, Finds Unity in Oil Price Optimism

Posted on 03 June 2016 by VRS  |  Email |Print

OPEC will stick to its policy of unfettered production after members rejected a proposal to adopt a new output ceiling, but ministers were united in their optimism that global oil markets are improving.
While crude prices dipped briefly after Thursday’s meeting, there was little of the rancor that punctuated last December’s gathering. The more harmonious atmosphere meant the group was able to appoint a new secretary-general — Nigeria’s Mohammed Barkindo — something it hadn’t been able to agree on since 2012………………………………………..Full Article: Source

Currency Trader, Police Thyself

Posted on 03 June 2016 by VRS  |  Email |Print

Last week, a working group at the Bank of International Settlements issued a new code of conduct governing global currency trading, a response to the most recent price-fixing scandal in the foreign-exchange markets.
The document contains non-binding “principles” that are entirely voluntary — general guidelines for good behavior. Cynics could be forgiven for dismissing this as an empty gesture that lacks the coercive rules and punishments required to make global standards stick………………………………………..Full Article: Source

Has the bull market for commodities begun?

Posted on 02 June 2016 by VRS  |  Email |Print

The bear market for commodities is over and it is time for investors to focus on this asset class again, according to a commodities analyst. Goeff Blanning, head of commodities at Schroders Asset Management thinks that a new bull market for commodities has begun.
“Following five years of devastatingly poor returns in the market, sentiment towards commodities is at rock bottom, but it’s starting to turn following the surge in the prices of a wide variety of products since the beginning of the year,” he said, adding that the biggest price gains, in percentage terms, occur at the beginning of a bull market………………………………………..Full Article: Source

Oil Price Forecasts Get More Bullish as Oversupply Concerns Ease

Posted on 01 June 2016 by VRS  |  Email |Print

Analysts are again raising their oil-price forecasts, in a reflection of falling concerns over the glut in crude supply. That helps relieve the pressure on members of the Organization of the Petroleum Exporting Countries—who are set to meet on Thursday—following months of fervent debate over production levels within the cartel.
Investment banks surveyed by The Wall Street Journal raised their price forecast for the third consecutive month in May, predicting that Brent crude, the international benchmark, would average $43 a barrel in 2016. That is up $2 from April’s survey………………………………………..Full Article: Source

Deutsche Bank Woes Infect Currency Trading as Former No. 1 Sinks

Posted on 25 May 2016 by VRS  |  Email |Print

A tough week for Deutsche Bank AG just got worse. The German lender’s share of the $5.3 trillion-a-day currency market tumbled to 7.9 percent, down from 14.5 percent a year earlier, according to a Euromoney Institutional Investor Plc survey.
The bank is the world’s fourth-largest currency trader by market share, sliding from second place in Euromoney’s 2015 ranking after holding the top position from 2005 to 2013. That’s the second blow for Deutsche Bank in as many days, after Moody’s Investors Service on Monday cut the lender’s credit rating to two grades above junk………………………………………..Full Article: Source

Commodities on the rise?

Posted on 24 May 2016 by VRS  |  Email |Print

Are commodities finally on the rise after years of being in the doldrums? We would all agree that prices in the grocery store continue to rise on many things, but commodity tracking indexes show quite a different story.
The most common method of tracking commodity prices is the CRB commodity index, a commodities future price index which presently tracks 19 common commodities, which include aluminum, cocoa, coffee, copper, corn, cotton, crude oil, gold, heating oil, lean hogs, live cattle, natural gas, nickel, orange juice, silver, soybeans, sugar, unleaded gas and wheat………………………………………..Full Article: Source

Chinese commodities fall on oversupply concerns

Posted on 20 May 2016 by VRS  |  Email |Print

Most Chinese commodities futures fell on Thursday, amid cautious sentiment caused by a supply glut for some industrial metals and a possible U.S. interest rate hike. Some traders are concerned that China’s own interest rate easing cycle could be over, limiting the prospects for the world’s No. 2 economy and prompting investors to become bearish on commodities amid concerns on demand recovery.
Chinese steel and iron ore futures dropped by more than 2 percent, as demand is faltering seasonally. However, steel mills are still picking up production because of rising prices earlier this year, worsening a supply glut that led to accusations China is dumping low-price steel onto global markets………………………………………..Full Article: Source

Where Oil Production Is Set To Soar… And It’s Not OPEC

Posted on 19 May 2016 by VRS  |  Email |Print

Oil prices have been on the rise lately and the market appears to be heading very quickly toward rebalancing, which is very positive for long-oriented investors in this space. While this is all true, however, one area will make any such oil recovery harder than it otherwise would be.
This is the Gulf of Mexico, which is the one place for U.S. production where low prices have not caused output to crash………………………………………..Full Article: Source

EU ministers approve final commodity price benchmark rules

Posted on 18 May 2016 by VRS  |  Email |Print

EU ministers Tuesday approved the final text of EU rules that will govern all benchmarks used to price financial instruments, including commodity price benchmarks, on behalf of the EU Council. The rules will apply to commodity price benchmarks produced by price reporting agencies such as S&P Global Platts.
This was the last formal approval needed, after the European Parliament approved on April 28 a text already agreed informally with the council and the European Commission. The next step is for the text to be translated into all the EU’s official languages and published in the EU’s Official Journal, becoming binding a day later………………………………………..Full Article: Source

Commodities bounce back—sustainable rally or just a false dawn?

Posted on 17 May 2016 by VRS  |  Email |Print

An uptick in prices across a range of commodities in 2016 may have been welcomed by miners and traders, but one CEO has told CNBC that he’s not getting carried away just yet. “They always say ‘a swallow doesn’t make a summer’,” Ben Magara, the CEO of London-listed platinum miner Lonmin said.
“We have seen dollar prices improve from a low in January to where they are now so the trend is quite encouraging … we have seen that rand low price in November and it continues on that upward trend. Indeed, it’s early days a swallow doesn’t make a summer but it’s very helpful.”……………………………………….Full Article: Source

Non-OPEC countries expected to reduce oil supply

Posted on 16 May 2016 by VRS  |  Email |Print

Non-OPEC countries are expected to reduce oil supply by 0.74 million barrels per day and bring it to 56.4 million barrels per day in 2016 as compared to 57.14 million barrels a day in 2015, according to OPEC’s monthly report on the oil market.
The oil supply by those countries will reach 56.06 million barrels per day in the second quarter of 2016, 56.04 million barrels per day in the third quarter, and 56.55 million barrels per day in the fourth quarter of 2016. The world oil supply rose by 0.02 million barrels per day in April and stood at 95.34 million barrels per day, according to the OPEC report………………………………………..Full Article: Source

Iraq overtakes Saudi Arabia as biggest oil exporter to India in April

Posted on 13 May 2016 by VRS  |  Email |Print

Iraq overtook Saudi Arabia as the top crude exporter to India in April for the first time since December, according to data compiled by Reuters, as the two biggest OPEC producers fight for market share in Asia’s fastest growing oil market.
Saudi Arabia also lost its top spot in China, Asia’s biggest oil consumer, last month when Russia overtook the world’s biggest crude exporter due to strong purchases by Chinese independent refineries. Overall, April oil imports by India rose 6 percent from March and are up 9.9 percent in the first four months from a year ago………………………………………..Full Article: Source

Bulk shipping falters as commodities stumble

Posted on 13 May 2016 by VRS  |  Email |Print

Higher iron ore inventories at Chinese ports could well weigh on demand in the coming days and reflect in the index performance. The Baltic Dry Index (BDI) has been notoriously volatile this year. After touching an all-time low of 290 points on 10 February, the index shot up to 715 on 27 April. But, since then, it has declined 17% till 10 May.
What gives? For one, the drop to the lowest level in the index, which tracks transport costs on international trade routes for dry bulk commodities such as coal and iron ore, was overdone. Two, the Chinese stimulus held out hopes of higher demand for commodities, especially steel and iron ore………………………………………..Full Article: Source

China: Commodities trading: Trading account applications up 30%

Posted on 12 May 2016 by VRS  |  Email |Print

Many retail investors in China are trying to get into the commodities market as a rebound in prices continues. And, not too surprisingly, brokerage firms in China are enjoying a jump in account applications.
One needs to complete a web-based video verification as part of the application to open a commodity futures trading account. It’s a process that more and more people are lining up for as they seek to get into the game. Futures brokers say their systems are a bit overloaded with new applications and only one in five people can get through right now………………………………………..Full Article: Source

Japan’s Biggest Traders See No Commodities Recovery in Sight

Posted on 11 May 2016 by VRS  |  Email |Print

Japan’s top trading houses see no recovery on the horizon for the commodities crash that forced some of the first-ever annual losses by the champions of the nation’s economy, accelerating their shift away from energy and raw materials.
The country’s five biggest traders all expect further declines in oil, which has already slumped about 60 percent over the past two years. Mitsubishi Corp. sees prices sliding 19 percent in the current fiscal year, while rival Mitsui & Co. sees a 15 percent decline. Itochu Corp. sees Brent, the global benchmark, slumping almost 29 percent………………………………………..Full Article: Source

China: Commodities imports drop

Posted on 09 May 2016 by VRS  |  Email |Print

China’s imports of commodities fell in April from the previous month as domestic demand weakened, data released yesterday by the General Administration of Customs showed.
Copper imports fell 20.5 percent month on month while those of steel, coal and iron ore dropped 13.4, 4.57 and 2.7 percent respectively. Copper imports fell as China accounted for 78 percent of the global supply and domestic demand eased………………………………………..Full Article: Source

China’s commodities trading frenzy fades

Posted on 06 May 2016 by VRS  |  Email |Print

The fever that’s gripped Chinese commodity markets is easing. Speculators who traded 1.7 trillion yuan ($336-billion) futures in a single day last month have retreated as fast as they advanced. Trading volumes across the country’s three biggest exchanges are more than half of what they were at their peak on April 22 and back to levels similar to a year ago, according to data compiled by Bloomberg.
The amount of money changing hands on a daily basis has shrunk to $114-billion (U.S.). The slowdown marks a return toward normality after a frenzy that drew comparisons with the credit-driven stock market rally last year that preceded a $5-trillion rout………………………………………..Full Article: Source

Oil Market at Crossroads as Big Rally Masks Risks Lurking Ahead

Posted on 06 May 2016 by VRS  |  Email |Print

If the oil market needed a theme song for now, it might turn to the one where Taylor Swift nervously sings: “Are we out of the woods yet?” A slump in U.S. production, unexpected cuts in output from Nigeria to Colombia and rising gasoline demand have helped drive a major rally since mid-February. As investors boost their bullish bets, analysts from UBS Group AG to Morgan Stanley and Goldman Sachs Group Inc. see pitfalls ahead.
The global crude glut has spread to diesel and will threaten gasoline after the peak summer driving season. Unplanned outages may be resolved in coming months, boosting supplies as Iran seeks to regain market share and Saudi Arabia defends its turf………………………………………..Full Article: Source

World’s first diamond trading exchange going live from today

Posted on 05 May 2016 by VRS  |  Email |Print

The Singapore Diamond Investment Exchange (SDiX), the world’s first and only commodity exchange trading in physically settled diamonds, is going live from Thursday. This could change the way diamonds are traded.
At present, trading is done after viewing diamonds and usually one on one. Once the exchange picks up, it will be portal-based and with transparent pricing. This could also bring investors into diamonds………………………………………..Full Article: Source

China’s commodity trading curbs are working, at least for now: Russell

Posted on 03 May 2016 by VRS  |  Email |Print

It’s sometimes tempting to take a Western view of China and conclude that Beijing’s attempts to limit speculation in commodity futures in order to prevent price bubbles are ill-advised and ultimately doomed to failure.
It’s likely that market participants schooled in the Western ethos of light-touch regulation will baulk at China’s latest attempt to force the market, in this case for commodities, to behave in the fashion deemed appropriate by the authorities………………………………………..Full Article: Source

Agricultural Commodities Egged On by China’s Futures Frenzy

Posted on 03 May 2016 by VRS  |  Email |Print

The recent fevered commodities trading in China hasn’t been limited to iron ore. Investors have piled into futures for everything from wheat and cotton to eggs and asphalt. As with industrial metals, analysts reckon much of the interest is coming from speculative investors who have been turned off to China’s stock markets by tighter rules over trading.
“Chinese speculators didn’t want to buy into the equity market with all the curbs, so they jumped into the commodity markets and it seems they’ve done so in massive style,” said Michael Coleman, managing director at RCMA Asset Management Pte………………………………………..Full Article: Source

Cotton Trades in China Hit Highest in Five Years, Enough to Make Jeans for Billions

Posted on 03 May 2016 by VRS  |  Email |Print

The volume of cotton traded in a single day on the Zhengzhou Commodity Exchange last week reached the equivalent of 41 million bales, enough to produce about 9 million pairs of jeans or at least one for every person on the planet, according to a Bloomberg report.
The report said that prices rose almost 19 percent in four days before the trading spike on Friday, April 22, while it registered its lowest price in February. Commodity exchanges have boosted margins and fees or warned investors as trade volumes in Chinese commodity markets soared, which reminded traders of the equities rally last year……………………………………….Full Article: Source

Beijing’s controls on speculative commodities trading are likely to increase

Posted on 02 May 2016 by VRS  |  Email |Print

Investors will be looking at Beijing’s efforts to rein in the latest outburst of speculative trading in Chinese commodity markets with a mixture of trepidation and dread. That’s because the surge in speculative trading in China’s commodity futures exchanges, and the vertiginous rise in prices, is worryingly reminiscent of the Chinese share market before the bubble burst in the middle of last year.
In the past month, Chinese retail investors and fund managers have flocked to the country’s commodity futures markets. On many days, trading in some commodity future contracts, such as iron ore, has been so large that it has topped the country’s annual imports………………………………………..Full Article: Source

Oil could trade above $60 in 2017: report

Posted on 02 May 2016 by VRS  |  Email |Print

Oil supply growth by Opec countries will not match the output declines being experienced by non-Opec producers and this could lead to higher crude prices next year, says a report. To balance the oil market by 2020, US oil and gas capex will have to increase by at least 50 per cent, leading oil prices to trade above the current forward strip and into a $55-70 per barrel range, said the report by Bank of America Merrill Lynch (BofAML) titled “Global Energy Weekly: The oil supply cliffhanger”.
There is still a large set of drilled but uncompleted shale wells that could come on stream over the next few months and US companies are expected to play a role in stabilizing non-Opec supplies, it explained………………………………………..Full Article: Source

Chinese Commodity Speculators Drop Out After $261 Billion Binge

Posted on 29 April 2016 by VRS  |  Email |Print

The speculators that traded $261 billion in Chinese commodities in a single day last week are retreating as regulators prepare to step up control of the market.
The value of futures traded across China’s three biggest commodity exchanges has shrunk 42 percent since investors spent 1.7 trillion yuan last Thursday on everything from steel bars to eggs. The amount that changed hands was on a par with the entire U.S. equities market on the same day………………………………………..Full Article: Source

Who are gold traders?

Posted on 29 April 2016 by VRS  |  Email |Print

The Commitments of Traders Report is one of the most important publications on the gold market. It is usually published every Friday at 15:30 Eastern time by the Commodity Futures Trading Commission (CFTC) to provide market participants “a breakdown of each Tuesday’s open interest for markets in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC.”
Unfortunately the readers don’t get a full picture because of a three day lag between a report and the actual positioning of traders (though the report is issued on Friday, it contains Tuesday’s data). The open interest, analyzed in the report, is the total number of futures contracts not yet liquidated by an offsetting transaction or fulfilled by delivery………………………………………..Full Article: Source

How Shanghai trading is changing the physical nickel market

Posted on 29 April 2016 by VRS  |  Email |Print

Everyone’s talking about Chinese speculators. This year has seen an unprecedented surge of trading volumes and open interest in Chinese markets as institutional and retail investors pour money into commodities.
Both the Shanghai Futures Exchange (ShFE) and the Dalian Exchange are upping margin requirements and transaction fees to try and calm overheating contracts such as steel rebar and iron ore. The stampede appears to have been halted with both prices and trading activity losing some of their recent froth. But the current trading frenzy shouldn’t distract from the growing global influence of China’s domestic commodity exchanges………………………………………..Full Article: Source

Steel Speculation Obscures Signals About Chinese Economy

Posted on 27 April 2016 by VRS  |  Email |Print

Investors searching for clues about China’s economy have looked to commodities like iron ore and rebar as a sign of industrial health. Now, speculation in the market is obscuring those signals, some say.
Trading of iron ore futures on the Dalian exchange is up fivefold from a year ago, according to Goldman Sachs Group Inc. Volumes during two days in the past month surpassed the amount of iron ore actually imported by China last year, the bank’s analysts say………………………………………..Full Article: Source

Chinese commodity curbs hit iron and steel futures

Posted on 27 April 2016 by VRS  |  Email |Print

China’s heavily traded iron ore and steel futures slid Tuesday after curbs aimed to cut speculation came into effect. The most active iron ore contract on the Dalian Commodity Exchange closed down 6 per cent at 450.5 yuan a tonne, while steel rebar futures dropped 3.8 per cent to close at 2,554 yuan a tonne.
A wave of money has entered China’s commodities markets this month, on improved demand in the steel industry and expectations that China’s government would boost property and infrastructure construction………………………………………..Full Article: Source

China’s commodities rebound: it’s for real

Posted on 26 April 2016 by VRS  |  Email |Print

Recent signs of a revival in Chinese demand for commodities such as iron ore have been met with scepticism. But there may be stronger grounds for optimism than many think, according to analysis by FT Confidential Research, a unit of the Financial Times.
Behind the argument against a recovery in China’s demand is the idea that the structure of its economy has changed to one that uses substantially smaller amounts of commodities. Proponents of this view argue that the economy is shifting from one driven by fixed-asset investment and industrial output, to less commodity-intensive areas such as consumer spending and services………………………………………..Full Article: Source

Morgan Stanley Says China Commodity Jump Stuns World Markets

Posted on 26 April 2016 by VRS  |  Email |Print

The recent spike in speculative trading in commodities in China has stunned global markets, according to Morgan Stanley, which cited a jump in local activity for steel, iron ore and cotton as well as eggs and garlic. “Now China’s speculators engage commodities,” analysts including Tom Price and Joel Crane said in an e-mailed note on Monday. “China’s latest speculative spike has stunned global markets.”
Trading in China of commodity derivatives including steel rebar surged last week after data showing a rise in credit in the world’s top commodity user spurred speculation that prices may extend gains as demand improved………………………………………..Full Article: Source

China clamps down on commodities frenzy

Posted on 26 April 2016 by VRS  |  Email |Print

China moved to clamp down on excessive speculation in commodities on Monday after weeks of frenzied trading boosted prices and ignited fears of another bubble in its domestic markets. Activity on China’s largest commodity exchanges has surged in recent days with turnover in key steel contracts exceeding the combined volume of the Shanghai and Shenzhen stock exchanges on one day last week.
Investors around the world have zeroed in on the latest trading binge as the prices of many commodities have risen sharply, with iron ore gaining almost a third in just two weeks………………………………………..Full Article: Source

Bullish Sentiment On Commodities Remains Tentative

Posted on 25 April 2016 by VRS  |  Email |Print

The commodity squeeze higher continues as nearly all sectors are seeing better pricing despite the continued oversupply and less than stellar global economic performance. The shift seems to be driven by the crude oil recovery following the failed attempt at a unilateral production freeze at the beginning of last week.
That bearish news was brushed aside almost immediately, as the market spent the majority of the week trading higher on some sketchy fundamentals. The strike in Kuwait that reduced production has already ended, and any future hope for a production agreement at the June OPEC meeting appears to be empty speculation as the key players continue to threaten production increases………………………………………..Full Article: Source

Citigroup’s commodity trading gross profit rises 50%

Posted on 25 April 2016 by VRS  |  Email |Print

Citigroup has reaped the benefits of investing in its commodities business as rivals pull back, cementing its position as one of the leading investment banks that generate hundreds of millions of dollars from trading raw materials.
Citi generated $850m in gross profit from commodities trading last year, up by about 50 per cent compared to 2014, according to three people familiar with the situation, on the back of volatile markets and the oil price rout………………………………………..Full Article: Source

Commodities Make a Comeback as Bad Weather Meets Chinese Demand

Posted on 22 April 2016 by VRS  |  Email |Print

Commodities are roaring back. Soybeans are approaching a bull market on bad weather in South America, and silver crossed that threshold earlier this week. Iron ore jumped above $70 a metric ton and copper is near a one-month high on signs of improving Chinese demand. A Vietnam drought boosted coffee prices. Oil is trading near levels not seen in five months.
Put it all together, the Bloomberg Commodity Index is up 15 percent since Jan. 20 and heading for a third week of gains. The gauge, which tracks returns for 22 raw materials, slipped 0.2 percent on Thursday as oil, coffee and nickel retreated………………………………………..Full Article: Source

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