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Commodities Briefing - Category | Trading more

China’s small commodity traders at risk if banks tighten financing

Posted on 26 June 2014 by VRS  |  Email |Print

A warehouse fraud at China’s third-largest port has forced banks and trading houses to consider new controls in the country’s massive commodity financing business, which traders say could lead to drying up of credit for all but large firms and state-owned companies.
China’s commodities trading is dominated by the large and state-owned companies but there are thousands of small firms in the market. Faced with tougher bank requirements for financing, they could sell down stockpiles, squeezing demand for metals and other raw materials such as rubber in the world’s biggest consumer of commodities………………………………………..Full Article: Source

The US To Allow Crude Oil Exports; Not That It Will Make Much Difference

Posted on 26 June 2014 by VRS  |  Email |Print

We’ve the news that the US is to allow some crude oil exports for the first time since the ban on them was set in place in the 1970s. This is good news as it removes an economic inefficiency (and removing economic inefficiencies is always good news) but it’s not going to make all that much difference to the nation as a whole.
It’s really all a fight between the independent crude producers and the independent refiners. They, obviously, care about how this goes, crude exports or no crude exports, but it makes very little difference to the rest of us………………………………………..Full Article: Source

NCX To Launch E-Trading System

Posted on 25 June 2014 by VRS  |  Email |Print

The Nigeria Commodity Exchange has revealed plans to inaugurate an electronic warehouse receipt system on July 10, 2014. The Managing Director of the Exchange, Mr. Yusuf Abdurrahman, said this in Lagos on Monday in company with the MD and Chief Executive Officer, Bank of Agriculture, Dr. Mohammed Santuraki; and the MD/CEO, Stanbic IBTC Bank, Mrs. Shola David-Borha.
The NCX, previously called Abuja Commodities and Securities Exchange, is collaborating with both banks, the Central Securities Clearing System Plc and the Federation of Agricultural Commodity Association of Nigeria on the project. Stanbic IBTC is the settlement bank………………………………………..Full Article: Source

Commodities Are Finally Rebounding — Here’s How To Profit

Posted on 20 June 2014 by VRS  |  Email |Print

Those who loaded up on gold, oil and other commodities a few years ago in anticipation of raging inflation related to quantitative easing are likely very disappointed. As most investors probably know, commodities have trailed stocks pitifully in recent years. The Dow Jones-UBS Commodity Index (DJ-UBSCI), which tracks a group of 20 commodities, fell 6.5% a year for the past three years, while the S&P 500 gained 17.6% annually during the same period.
But one of the nice things about investing is just about everyone gets a chance to be right if they wait long enough… and commodities investors may finally be having their day………………………………………..Full Article: Source

Do Commodity Traders Really Run The World?

Posted on 20 June 2014 by VRS  |  Email |Print

It was May 5, 2011, Osama Bin Laden had just been captured and killed, and general instability in the Middle East was on the uptick. Surface logic might dictate a spike in oil prices, and BlueGold Capital Management co-founder Pierre Andurand had an $8 billion dollar oil position that was set to soar in value assuming a rise in the price of crude.
The problem for Andurand, as Kelly reported, was that oil prices were declining sharply, so much so that the London-based Frenchman instructed his traders to sell out of their bullish position. As he put it amid a bloody day for his fund, “Sell a few hundred million worth! See how the market takes it.”……………………………………….Full Article: Source

CFTC rules risk hedging commodities – experts

Posted on 20 June 2014 by VRS  |  Email |Print

A panel of commodities traders have warned the CFTC it could hurt end users. Commodities experts have rallied against a plan by the US derivatives watchdog to limit speculative positions on commodities, arguing the rules would harm legitimate end users who use the products to hedge.
The US Commodity Futures Trading Commission (CFTC) hosted a public roundtable on Thursday comprising all five members of the agency, including the new chairman Timothy Massad. But experts at the roundtable argued that the commission does not understand the complexity of physical commodity hedging, and called for a hedging exemption for corporates and end-users to allow them to manage their risk effectively, free from unnecessary regulation………………………………………..Full Article: Source

City of London boosted by China currency trading move

Posted on 19 June 2014 by VRS  |  Email |Print

London will be the base for the first clearing bank outside Asia for the Chinese currency, supporting Britain’s push to be the leading western centre for offshore renminbi trading. People’s Bank of China (PBC), the country’s central bank, has appointed China Construction Bank as the UK’s first clearing bank for renminbi.
China, the world’s second-biggest economy, is promoting the use of its currency in international trade and is expected to further liberalise the renminbi in the next few years. London is competing with New York, Paris and other financial centres to be the top offshore renminbi centre outside Asia…………………………………..Full Article: Source

Things to know before you start trading in commodities

Posted on 18 June 2014 by VRS  |  Email |Print

Last decade there emerged a new avenue for retail investors and traders to participate: this was the new modified electronic platform of commodity derivatives. For those who want to diversify their portfolios beyond shares, bonds and real estate, commodities emerged as an alternative tool and one of the best option across the globe.
Till some years ago, this wouldn’t have made sense. For retail investors, they could have done very little to actually invest in commodities beyond gold and silver however the emergence of state of the art technology and methodologies it became possible to think beyond traditional asset class and invest or manage the risk in various other commodities like chana, oilseeds, crude oil and copper etc. in the futures market………………………………………..Full Article: Source

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Bankers Focus on Trading Firm in Search for Metals Used as Collateral

Posted on 11 June 2014 by VRS  |  Email |Print

Bankers in China are focusing on the actions of a commodities-trading firm as they scramble to find metals they believed were backing loans but which appear to have been used as collateral multiple times.
The operator of Qingdao port, on China’s eastern coast, said this week Chinese authorities were investigating an alleged fraud involving metals stored at the port and used as collateral to obtain multiple bank loans………………………………………..Full Article: Source

Commodity shipping demand to surge

Posted on 11 June 2014 by VRS  |  Email |Print

Demand for ships to haul iron ore, coal and other cargoes poised to surge this year, outpacing expansion in the fleet of vessels that can transport the commodities, according to ACM Shipping Group, a shipbroker. Demand for ships to haul dry-bulk goods will jump 12 per cent this year while the supply of vessels expands 4.7 per cent, ACM said in a report on Monday.
Fleet utilisation will jump 7.3 per cent, the most in more than five years, and by a further 8.1 per cent next year, it estimates. Demand is strengthening because falling prices for iron ore are driving up shipments to China from countries including Brazil and Australia, ACM said………………………………………..Full Article: Source

Expect spot gold prices to trade negative

Posted on 10 June 2014 by VRS  |  Email |Print

Spot gold prices are expected to trade on the negative note on the back of strength in DX and expectations among the market participants that the US Federal Reserve may continue reducing its stimulus package at same pace, says Sushil Finance.
A spot gold price decreased by 0.08 percent on Friday’s trading session on the back of positive job data from US indicating improvement in labor market. Further, strength in DX and expectations among the market participants that the US Federal Reserve may continue reducing its stimulus package at same pace added downside pressure on the prices………………………………………..Full Article: Source

Demand for gold rising in S’pore, say dealers

Posted on 10 June 2014 by VRS  |  Email |Print

Bullion dealers said that demand for precious metals like investment-grade gold and silver is rising in Singapore — this is due to the recent weakness in prices as well as tax-exemption in Singapore. Precious metals investors overseas are also looking more to Singapore as a haven to store their hoard.
According to retailer BullionStar, demand has roughly doubled in the first half of this year compared to the same period in 2013. Singapore aims to have a “gold-standard” environment for buying, selling and storing investment-grade precious metals — typically gold or silver products of close to 100 per cent purity………………………………………..Full Article: Source

Gold fix under scrutiny as regulators probe archaic system

Posted on 10 June 2014 by VRS  |  Email |Print

The cozy little world of gold trading is getting less comfortable. A handful of bankers in London currently set the world standard for gold prices, a practice that started in 1919 and is widely used by governments, miners and brokers to buy and sell the precious metal and its financial derivatives. But regulatory probes have shone an unwanted spotlight on the benchmark known as the London gold fix, and prompted calls for change.
The five banks that set the standard - Barclays, Bank of Nova Scotia, Société Générale, Deutsche Bank and HSBC - have been hit by multiple lawsuits from investors alleging they colluded to rig the price for their own benefit. Deutsche Bank, which gave up its seat on the gold-ixing panel, said the lawsuits had no merit. Barclays, SocGen and HSBC had no comment, and Scotiabank could not be reached………………………………………..Full Article: Source

China’s commodities imports fall in May on high stocks, tighter credit

Posted on 09 June 2014 by VRS  |  Email |Print

China’s imports of major commodities fell in May from the previous month, official customs data showed on Sunday, as companies scaled back on orders after robust shipments in the previous months caused a supply overhang.
Falling product prices on the back of sluggish demand have led loss-making companies, especially steel mills and crushers, to reduce orders, while increased scrutiny on commodities financing and tighter credit also weighed on import demand………………………………………..Full Article: Source

Asset-backed trading becoming the norm in commodity market

Posted on 05 June 2014 by VRS  |  Email |Print

From the middle of the last decade, large banks world-wide got involved in business far removed from their traditional lending activity – trading in physical commodities. Currently, these banks are retreating from this activity. The shift is empowering commodity trading houses to consolidate their control over supply chains for food, oil and metals.
Commodity traders are rapidly expanding from the traditional intermediary business model of buying and selling, where margins are very thin, to “asset-backed trading models”, where they are investing in production, processing, and logistics………………………………………..Full Article: Source

Barclays gold fixing ‘could be the tip of the iceberg’

Posted on 05 June 2014 by VRS  |  Email |Print

Attempts by traders to move benchmarks to protect digital derivatives contracts - as was seen in Barclays’ recent fine by the FCA - could be a routine occurrence, industry insiders have warned.
Last month, Barclays was fined £26m for failing to adequately manage conflicts of interest as well as systems and controls failings, after a former trader placed orders to influence the London Gold Fixing and avoid paying out on a digital exotic options contract on the price of the yellow metal………………………………………..Full Article: Source

China Mulls Offshore Yuan Gold Trade in Free Trade Zone

Posted on 05 June 2014 by VRS  |  Email |Print

China, the world’s largest bullion consumer and producer, is considering allowing the use of offshore yuan in gold trading in the Shanghai free-trade zone.
The Shanghai Gold Exchange, the country’s biggest physical bourse for the metal, is proposing to let holders of offshore yuan accounts trade the three contracts it will offer, including bullion of 99.99 percent purity, according to a draft of the plan obtained by Bloomberg News………………………………………..Full Article: Source

U.S. 2014 agricultural exports near record $150 billion

Posted on 30 May 2014 by VRS  |  Email |Print

U.S. agricultural exports for fiscal 2014 will reach a record $149.5 billion, the Department of Agriculture said on Thursday, higher than its earlier forecast of $142.6 billion and up 6 percent on the year.
The forecast for the U.S. agricultural trade surplus in fiscal 2014 is up $6.3 billion from the February estimate to $39 billion, its second highest ever. The fiscal year started on Oct. 1 and will end on Sept. 30………………………………………..Full Article: Source

Scotiabank Q2 commodity trading revenue boosted by precious metals

Posted on 28 May 2014 by VRS  |  Email |Print

Bank of Nova Scotia, one of the world’s biggest bullion banks, on Tuesday reported its best quarterly trading revenue from commodities in over a year due to improving precious metals markets even as scrutiny of global bullion pricing intensifies.
In its second quarter to end-March, Canada’s third-largest bank said trading revenue from commodities hit C$98 million, up 9 percent from the prior quarter and highest since the first quarter to end-December 2012, according to a filing………………………………………..Full Article: Source

India: Banks can wait to trade in commodity futures

Posted on 27 May 2014 by VRS  |  Email |Print

At a time when the Government is keen to fight inflation, readying to reform the commodity market and reduce the role of speculative capital, it is incongruous that a Finance Ministry panel should recommend that commercial banks and foreign institutional investors should be allowed to enter the commodities futures market. Currently, banks, mutual funds and FIIs are not allowed to trade commodity futures; and the market is none the worse for it.
Way back in 2006, the Gupta Committee report released by Reserve Bank of India argued in favour of allowing banks, MFs and FIIs to trade commodity futures. The policymakers kept the recommendation on hold, and for good reasons………………………………………..Full Article: Source

China’s aluminium, alumina imports show unexpected surge in April

Posted on 23 May 2014 by VRS  |  Email |Print

China’s aluminium imports were unexpectedly high in April at 35,199 tonnes, with some market participants attributing the figure to financing demand for the light metal.
The imports were up 150.9% year-on-year, the latest customs data showed. “The shipments were more than expected, as high premiums for imports have choked demand,” a trader said. The April imports were 14.7% lower than the previous month but above market expectations. Premiums for imported aluminium ingots have stayed around $370 per tonne in the past few months, resulting in large losses for Chinese importers……………………………………..Full Article: Source

Why there is no perfect strategy for hedging in commodity markets

Posted on 22 May 2014 by VRS  |  Email |Print

Inventories for storable commodities have always played a crucial role in price formation. It acts as a buffer that helps absorb shocks to demand and supply affecting spot prices. However, there is a possibility of a stock-out implying that the basis can surge in times of shortages. In case of importable commodities, such situations are sometimes created by squeezing the supply lines for a time period.
On the other hand, larger processors of soyabean, mustard and maize hold commodities to reduce costs of adjusting production over time and also to reduce marketing costs by facilitating production and delivery scheduling and avoiding stock outs………………………………………Full Article: Source

China, Russia sign historic gas deal

Posted on 22 May 2014 by VRS  |  Email |Print

China signed a long-awaited deal for Russian natural gas Wednesday, giving China a new energy source and Russia a diplomatic boost in the face of sanctions and condemnation for its aggressive actions in Ukraine.
Announced after meetings between Chinese President Xi Jinping and Russian President Vladimir Putin at an Asia security conference, the 30-year deal is worth an estimated $400 billion, according to comments in Russian media by Gazprom chief executive Alexei Miller………………………………………Full Article: Source

India’s central bank allows private agencies to import gold

Posted on 22 May 2014 by VRS  |  Email |Print

India’s central bank eased tough gold import rules on Wednesday by allowing seven more private agencies to ship the precious metal, a move that industry officials say could augment supplies and reduce premiums in the peak wedding season.
Gold imports by India, the world’s No. 2 bullion consumer after China, could quickly rise from current levels, according to the officials. This would help global prices, which slumped 28 percent last year, partly due to India’s import curbs………………………………………Full Article: Source

Senators fret over high-frequency commodity trades

Posted on 15 May 2014 by VRS  |  Email |Print

Senators are fearful that high-frequency traders are getting an unfair advantage and endangering the stability of the U.S. futures market, the financial exchange for trades of commodities like corn and gold. But industry experts warn against rushing to impose new regulations.
“These markets have changed dramatically over the years – for a 21st century market, we need a 21st century regulator,” said Sen. Debbie Stabenow, D-Mich., who called a hearing of the Senate Agriculture Committee she chairs to consider the issue………………………………………..Full Article: Source

Silver Fix Gone; Is Gold Next? - Jeff Christian

Posted on 15 May 2014 by VRS  |  Email |Print

Following Wednesday’s news that the London silver fix is set for the chopping block in August, the question now is, could gold be next? CPM’s Jeff Christian says “it’s a possibility.”
However, before looking at the London gold fix, Christian said, in an interview with Kitco News’s Daniela Cambone, regulators and organizations like the London Metals Exchange, London Bullion Market Association will have to scramble to fill the potential void in the silver market………………………………………..Full Article: Source

Curtain to Fall on London’s Historic Silver Benchmark

Posted on 15 May 2014 by VRS  |  Email |Print

After 117 years, London’s silver fix will be set for the last time on Aug. 14. The demise of the fix, which is being scrutinized by regulators as part of a broader probe of financial benchmarks, leaves jewelers, miners and investors in need of a new way to price the metal for the first time since 1897.
“We will need to find a substitute,” said Lenic Rodriguez, chief executive of Canadian silver miner Aurcana Corp.”The silver price is very speculative and volatile so for accounting and planning purposes, the benchmark is good.”……………………………………….Full Article: Source

El Nino a looming wild card for commodities

Posted on 14 May 2014 by VRS  |  Email |Print

Commodity traders are placing their bets on El Nino. The periodic weather phenomenon leads to torrential rain in South America and droughts in Asia and Africa, and may provide a needed boost for commodities after last year’s slump in prices.
Weather forecasters around the world are predicting that a shift in climate patterns could occur this summer, with some warning of the strongest El Nino in more than a decade………………………………………..Full Article: Source

China’s slack April commodities output foreshadows weak import demand

Posted on 14 May 2014 by VRS  |  Email |Print

China’s crude oil runs, oil demand and total base metals production unexpectedly fell in April from the preceding month, with slackening power generation also fanning concerns that the world’s second-largest economy is not yet on a stable footing.
Although record-high daily crude steel output was a bright spark in April’s output figures, slowing real estate investments and falling property sales are set to drag on the steel sector in the coming months, analysts said………………………………………..Full Article: Source

Impact of Algo trading on commodity exchanges

Posted on 14 May 2014 by VRS  |  Email |Print

High Frequency Trading (HFT), through systematic computer based algorithms by gauging market movements and eventually acting upon pre-defined protocols, has become a popular mode commodity derivatives trading.
Such techniques initially introduced in fixed income, currency, and equity markets are now increasingly being applied to trading in bullion, energy, and the agricultural commodities. HFT has contributed to a surge in the number of trades in NYMEX crude from under 1 million in 2005 to almost 42 million in 2011, and in CBOT corn from 133,000 to 10.7 million………………………………………..Full Article: Source

China Extends Commodity Buying Tear

Posted on 09 May 2014 by VRS  |  Email |Print

China extended its buying spree for major industrial commodities in April, signaling that its decelerating economy still needs huge amounts of inputs to fuel growth.
China is the largest buyer of many commodities, from nickel to iron ore, and its slowing economic growth has pushed global prices down. But China’s economy is still growing fast – around 7.5% annually – and it appears that Chinese buyers have been bargain hunting for commodities and energy………………………………………..Full Article: Source

The importance of storage rates in commodity trade

Posted on 08 May 2014 by VRS  |  Email |Print

Commodity futures market convergence is the process where prices in the spot and futures markets come together or converge at futures market expiration. Convergence occurs at the expiry date of every futures contract because of arbitrage. If spot prices remain below futures prices, a market participant could buy in the spot market and sell in the futures market and make a risk-free profit.
Similarly, if the spot price is above the futures price, a market participant can buy in the futures market, take delivery and sell in the spot market and earn a risk free-profit………………………………………..Full Article: Source

Iran’s oil exports fall in April, closer to Western limits

Posted on 02 May 2014 by VRS  |  Email |Print

Iran’s oil exports fell in April for a second month, according to sources who track tanker movements, moving closer to levels allowed by November’s interim deal on curbing Tehran’s nuclear programme.
The decline may reflect seasonally lower crude oil demand and U.S. pressure on some customers take less. Signs of higher Iranian sales since late 2013 have led to concern in Washington that a softening of sanctions has given Tehran’s economy a boost………………………………………..Full Article: Source

India: MoF proposes single clearing platform for commodity exchange trades

Posted on 02 May 2014 by VRS  |  Email |Print

The ministry of finance is working out a roadmap to substantially bring down the transaction cost of trading on the commodity exchanges . According to official sources, in line with the banking system, there is need for common clearing system of the commodity trades. This commonality of clearing of transactions will require a common platform where multiple trades across exchanges can be settled.
In the process, the traders can cut down the transaction cost by becoming the member of a single platform for clearing of trades. At present, a trader will have to pay fees for becoming a member of separate clearing platform floated by different commodity exchanges. This entails heavy cost, multiplicity of trades, cross margining etc………………………………………..Full Article: Source

Some banks haven’t given up on trading commodities. And that’s a good thing.

Posted on 30 April 2014 by VRS  |  Email |Print

As expected, the recent by some of the largest energy trading banks has created a temporary dearth of capability, and sometimes liquidity, in the international commodity markets. Born a child of the Financial Crisis and the BP Deepwater Horizon oil spill, and later ensconced into law through Dodd-Frank, the Volker Rule and other international regulations, the anti-bank sentiment amongst policymakers has driven many of the largest players into various stages of transition toward smaller footprints.
The likes of JP Morgan, Morgan Stanley, Barclays, Deutsche Bank and Bank America – to name a few – are staring at the exit signs for some or all of their business. This is not good………………………………………..Full Article: Source

Financial intermediation and shadow banking through commodities

Posted on 29 April 2014 by VRS  |  Email |Print

Commodity trading firms are not systemically risky because they do not engage in the sort of maturity transformation that banks do. They also tend mostly to operate on a hedged basis, via “basis trade” exposure.
Short-term assets meanwhile are funded with short-term debt while long-term assets are funded with long-term debt, meaning the institutions are not heavily leveraged at all, though balance sheets are exposed to liquidity or rollover risk………………………………………..Full Article: Source

China gold imports drop as local discount curbs shipments

Posted on 29 April 2014 by VRS  |  Email |Print

China’s gold imports from Hong Kong dropped in March as local prices fell below the international benchmark in London for the first time in more than a year.
Net imports totaled 80.6 metric tons last month, compared with 111.4 tons in February and a record 130 tons a year earlier, according to calculations by Bloomberg News based on data from the Hong Kong Census and Statistics Department……………………………………….Full Article: Source

Trafigura says commodity traders don’t pose same risk as banks

Posted on 28 April 2014 by VRS  |  Email |Print

Commodity trading firms probably don’t pose systemic risks to the global economy as the companies draw increased scrutiny and banks step back from raw materials, Trafigura Beheer BV said in a report.
Trading houses, such as Amsterdam-based Trafigura, are smaller than banks and have less debt, according to the study, written by Craig Pirrong, a finance professor at the University of Houston. The firms use financial derivatives mostly to hedge their physical activities, rather than to speculate on price swings, Pirrong said in the report……………………………………….Full Article: Source

U.S. prosecutors cross Atlantic to question UK currency trades

Posted on 28 April 2014 by VRS  |  Email |Print

Criminal prosecutors from the U.S. Department of Justice have gone to London to interview individuals in connection with an investigation into traders’ alleged rigging of foreign exchange rates, a person familiar with the matter said.
The DOJ has conducted joint interviews of UK-based currency traders with the United Kingdom’s Financial Conduct Authority in London, the person said………………………………………..Full Article: Source

Banks and commodity trading: Sell signals

Posted on 25 April 2014 by VRS  |  Email |Print

Thin margins, tough regulations and worries about reputation make trading commodities look like a source of worries not profits for nervous bank bosses. Barclays, one of the biggest in the business, is the latest to head for the exit. This week it announced it would give up most of its metal, crop and energy trading.
Barclays is following JPMorgan Chase, which last month sold its physical commodities division to Mercuria, a private trading firm based in Switzerland, and South Africa’s Standard Bank, which sold its commodities unit in London to Industrial and Commercial Bank of China in January………………………………………..Full Article: Source

Iran’s crude oil, gas condensate exports hit $41.6bln: oil minister

Posted on 24 April 2014 by VRS  |  Email |Print

Iran exported $41.6 billion worth of crude oil and gas condensate in the past Iranian calendar year, which ended on March 20, Oil Minister Bijan Namdar Zanganeh said on Wednesday. Iran’s crude oil was sold at $104 per barrel on the average in the international market, the Mehr News Agency reported.
On March 12, Zanganeh said Iran’s crude oil output is forecast to increase by about 200,000 barrels per day to 4 million barrels per day, and its daily natural gas output is forecast to increase by about 100 million cubic meters per day to 400 million cubic meters per day in the current Iranian calendar year 1393, which began on March 21………………………………………..Full Article: Source

Netherlands may become natural gas importer by 2025, IEA says

Posted on 23 April 2014 by VRS  |  Email |Print

The Netherlands, Europe’s second-largest gas exporter, may become an importer by 2025 as output falls from its Groningen province and progress in unconventional sources stalls, the International Energy Agency said.
“It is time to re-assess its energy security and to look at different cost-effective pathways to guide the transition,” Maria van der Hoeven, executive director of the Paris-based adviser to 28 nations, said in the agency’s review of Dutch energy policy………………………………………..Full Article: Source

India more than doubles Iran oil imports

Posted on 23 April 2014 by VRS  |  Email |Print

India more than doubled its crude oil imports from Iran last month from a year ago as sanctions have eased on Tehran, official data show. The figures released on Tuesday indicated that India imported 387,000 barrels per day (bpd) of oil from Iran in March.
The statistics also showed that crude shipments from Iran in the first quarter of 2014 rose about 43 percent from the same period last year. India imported around 358,000 bpd of Iranian crude in the first quarter of this year………………………………………..Full Article: Source

Malaysia seeks to attract Western commodity traders as new hub

Posted on 17 April 2014 by VRS  |  Email |Print

A number of Western commodity companies are setting up new trading desks in Malaysia as the southeast Asian country introduces incentives in a bid to attract business away from the main regional trading hub Singapore.
Commodity houses Mercuria and Cargill have already set small desks in Kuala Lumpur, two sources said, and others are also studying the possibility………………………………………..Full Article: Source

FMC mulls centre-specific commodity forward trades

Posted on 17 April 2014 by VRS  |  Email |Print

The Forward Markets Commission (FMC) is considering permitting bourses to offer centre-specific, short-term forward trades in highly traded farm products as the regulator aims to increase delivery in the Rs 101- lakh crore commodity futures market, which is dominated by speculation and hedging.
Termed a “game changer” by Ramesh Abhishek, chairman, FMC, these contracts will allow traders to buy commodities like chana, rapeseed mustard, castorseed, etc, on commodity exchanges,where currently they can’t do so. This, Abhishek feels, could increase delivery by physical market traders on the six national bourses, which posted volumes ofRs 101-lakh crore in the fiscal year through March………………………………………..Full Article: Source

Banks tussle to join next generation of commodity dealers

Posted on 16 April 2014 by VRS  |  Email |Print

Facing low volatility, a lack of trading opportunities and compliance headaches, major global investment banks are pulling back from commodities. But at the same time, a number of smaller and regional players are actively seeking to increase their involvement.
A sinking feeling has pervaded Wall Street recently. During the past few years, commodity revenues have been falling at major global investment banks. Industry titans such as Deutsche Bank, JP Morgan and Morgan Stanley have decided to quit large parts of the commodities market, or leave it altogether………………………………………..Full Article: Source

Iran’s oil exports continue to surge despite sanctions cap: IEA report

Posted on 16 April 2014 by VRS  |  Email |Print

Irans global crude oil exports have far-exceeded the one-million barrel-per-day cap set by the West. The Israeli paper referred to a recent IEA report as saying that Irans global oil exports in February made the highest record since June 2012.
The IEA’s monthly report revised February’s global crude imports from Iran upwards by 240,000 barrels per day to 1.65 million barrels per day, the highest since June 2012………………………………………..Full Article: Source

EU promises ’strictest’ curbs on high-frequency trading

Posted on 15 April 2014 by VRS  |  Email |Print

Michel Barnier says new rules will stop market abuse through high-speed trading. The EU’s financial chief has promised some of the toughest curbs on controversial use of high-frequency trading highlighted by author Michael Lewis in Flash Boys.
The restrictions are part of EU market reforms that will be voted on by the European Parliament on Tuesday. Michel Barnier, the EU financial services commissioner, said on Monday: “With these rules the EU is putting in place one of the strictest set of regulations for high-frequency trading (HFT) in the world………………………………………..Full Article: Source

Global commodity traders get deal fever

Posted on 14 April 2014 by VRS  |  Email |Print

Big changes are under way among global energy and food commodity traders, with a flurry of first-quarter acquisitions and leadership moves that cover Asian, European and North American companies.
Last month, Swiss firm Mercuria Energy stepped closer to joining Vitol, GlencoreXstrata and Trafigura at the top of the independent energy and metals trading hierarchy, following its $US3.5 billion purchase of US investment bank JP Morgan’s physical commodity operation………………………………………..Full Article: Source

India: Commodity trading hours set to get a ‘break’

Posted on 14 April 2014 by VRS  |  Email |Print

Commodity derivative trading hours, on platforms such as MCX and NCDEX, may soon go in for a break. “We are planning to allow an hour or half-an-hour break for commodity trading as the trading hours are long,” Ramesh Abhishek, Chairman, Forward Markets Commission (FMC), told Business Line. FMC regulates futures trading in commodities.
Currently, commodity trading on various exchanges can be done between 10 a.m. and 11.30 p.m. However, for stock spot and futures trading, the timing is 9.15 a.m. to 3.30 p.m. with 15 minutes extra time before the start of trade for the pre-trading session………………………………………..Full Article: Source

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