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Commodities Briefing - Category | Trading more

Commodities Drop With a Dull Thud

Posted on 26 June 2015 by VRS  |  Email |Print

July looms but the dog days for commodities markets have arrived already. Investors in the likes of copper, oil, and grains are used to having a little action in their lives: a war here, a hurricane there. But while the world remains a dangerous place, commodities markets aren’t really feeling it.
Of the major raw materials, only crude oil and gasoline have registered gains so far this year. Everything else is down, underperforming the S&P 500. Even oil’s rally has lost momentum since April and merely reflects a little recovery from last year’s washout: Look back over one year and, like all major commodities, it is in negative territory………………………………………..Full Article: Source

OPEC petroleum exports fall below $1 trillion in 2014 on oil slump

Posted on 26 June 2015 by VRS  |  Email |Print

The value of OPEC members’ petroleum exports fell below $1 trillion in 2014 for the first time since 2010, according to its annual statistical report, illustrating the impact of last year’s slump in oil prices on the producer group.
The data includes some refined fuel and light oil condensate as well as crude oil. Exports from the Organization of the Petroleum Exporting Countries fell in value to $964.6 billion last year from $1.10 trillion in 2013, according to OPEC’s Annual Statistical Bulletin 2015 issued on Wednesday………………………………………..Full Article: Source

Oil Tankers Are Filling Up and Raking It In

Posted on 26 June 2015 by VRS  |  Email |Print

The oil-tanker market is heating up, a development some analysts say is a warning flare that signals further price declines for crude. The Baltic Dirty Tanker Index, which tracks the rates to hire oil tankers plying 16 routes, has shot up 25% this month, as global oil output continues to grow. The index is now at its highest level since January 2014.
But an increasing number of these oil cargoes have nowhere to go. Oil producers and traders are rushing to lease tankers while they scramble to find buyers, effectively turning these ships into floating storage facilities. The oil-supply glut has worsened since the Organization of the Petroleum Exporting Countries earlier this month decided to maintain crude-output levels………………………………………..Full Article: Source

Sugar Exports From India Seen Doubling as Bumper Crop Looms

Posted on 26 June 2015 by VRS  |  Email |Print

Sugar exports from India may double as farmers prepare to harvest the third-biggest crop ever, extending the country’s surplus for a sixth year. Shipments will be 2 million metric tons in the 12 months starting Oct. 1, according to the median of six estimates from refiners, brokers and analysts compiled by Bloomberg. That compares with 700,000 tons to 800,000 tons this year, the Indian Sugar Mills Association says.
Production will be 27.25 million tons from a record 28.4 million tons this year, estimates from eight survey participants show. The glut in the world’s second-largest producer threatens to extend a 35 percent slump in New York futures in the past year. The decline in prices to the lowest since 2009 has forced the government to subsidize exports and waive interest on bank loans to processors. Stockpiles of 10 million tons will add to supplies and exceed demand of 25.5 million tons, the mills say. That may force producers to ship as much as possible………………………………………..Full Article: Source

Are gold imports really the bugbear they’re made out to be?

Posted on 25 June 2015 by VRS  |  Email |Print

Gold imports are looked upon by the authorities with fear and loathing. The insatiable appetite of the Indian buyer for the yellow metal has long been talked about, but is it really a very big problem at this point in time? Indian gold imports (in tonnes) increased at a compound annual growth rate (CAGR) of 1.3% between 2004-05 and 2014-15—from 770.5 tonnes in 2004-05 to 879 tonnes in 2014-15.
True, measures have been put in place to reduce imports, but a CAGR of 1.3% is hardly worth worrying about, is it? What, then was the problem? Gold imports were higher in 2011-12, bloating the country’s current account deficit, but circumstances were different at the time—gold had been enjoying a bull run, while inflation had spooked Indian savers, leading them to view the metal as a safe refuge………………………………………..Full Article: Source

Bank of China Joins London Gold Auction, Promises Boon for Domestic Market

Posted on 25 June 2015 by VRS  |  Email |Print

The Bank of China’s inclusion in the ICE Benchmark Administration (IBA) London Bullion Market Association (LBMA) Gold Price this week will positively, albeit gradually, affect the Chinese gold market, experts told Sputnik on Wednesday.
“The market participants’ diversification and internationalization will rationalize the gold costs. This will also promote the development of China’s gold market,” Beijing Gold Exchange Center chief gold analyst Zhang Lei said. ……………………………………….Full Article: Source

LBMA to start reporting OTC gold trade soon

Posted on 25 June 2015 by VRS  |  Email |Print

The London Bullion Market Association (LBMA) could soon take steps to report trades of the over-the-counter gold market, but the prospect of higher costs makes an exchange-traded model unattractive to participants for now, its chief executive said.
The LBMA had commissioned consultancy EY, formerly known as Ernst & Young, to review the London gold market and recommend further developments including the possibility of creating an exchange for gold trading in the city………………………………………..Full Article: Source

Iran has better chance to be a global supplier of gas than oil: expert

Posted on 23 June 2015 by VRS  |  Email |Print

Sara Bazoobandi, a lecturer in international political economy at Regent’s University London, says Iran has a better chance to become a “global gas supplier than oil” by developing its infrastructure. “With developing the infrastructure the country will stand a much better chance to be a global supplier of gas than oil,” Bazoobandi said.
Bazoobandi also says as many other goods the price of oil is “determined by the supply and demand” and “as long as the global production remains unchanged at the current level, the prices will not have dramatic changes.”……………………………………….Full Article: Source

Will Chinese Investors Rotate to Gold?

Posted on 23 June 2015 by VRS  |  Email |Print

Gold traders are the most bullish in a month on the prospect of slower U.S. interest rate increases. Gold saw a second weekly advance after efforts to secure a Greek bailout faltered and the Federal Reserve signaled a more dovish stance on interest rate increases. Shanghai Gold Exchange withdrawal volume in the week to June 12 came in at a strong 46.2 metric tonnes.
The Bank of China will become the first Chinese bank to join the auction process that sets gold prices in the London market. The bank, along with seven other lenders, will start participating in the twice-daily electronic auction. The addition of a Chinese bank is another sign that China is increasing its influence in gold and currency markets worldwide………………………………………..Full Article: Source

Japan: Traders boost ‘nonresources’ businesses as commodities businesses falter

Posted on 22 June 2015 by VRS  |  Email |Print

Major Japanese trading houses are beefing up “nonresources” operations, such as food, to make up for falling profitability at mainstay operations caused by the plunge in crude oil prices, iron ore and other commodities.
“We will unite” to enhance nonresources operations, Mitsui & Co. President Tatsuo Yasunaga said at a general shareholders meeting Friday. Earlier this month, Mitsui said that it had established a joint venture in Tokyo with major Italian food retailer Eataly Distribuzione SRL and Japanese restaurant operator Kichiri & Co………………………………………..Full Article: Source

Oil market buzzes in the wake of big options trades

Posted on 22 June 2015 by VRS  |  Email |Print

The oil market is buzzing with intrigue over two derivatives deals last week that bore the signature of a large producer guarding against a price collapse. A public database showed purchases of put options that pay out if crude falls below $53 a barrel in 2016. “Everybody was talking about it,” said Sean Ryan, co-head of oil options at ICAP, the broker.
Put options, common in commodity markets, give their owners the right to sell something at a given price by a future date. These two deals raised eyebrows because they were consistent with past transactions associated with Mexico’s programme for hedging its oil exports, the largest of its kind in commodity markets………………………………………..Full Article: Source

Where The Price Of Oil Is Heading Next

Posted on 22 June 2015 by VRS  |  Email |Print

Last month, OPEC held its 167th meeting in Vienna, Austria. The two main takeaways? One: The oil cartel will maintain production at 30 million barrels per day (bpd), with unofficial numbers above that.
Two: Saudi Arabia’s price war against U.S. shale producers will continue. By resolving to preserve its already high production ceiling, OPEC is keeping prices low and putting the squeeze on all non-OPEC output… Especially companies working in shale, where costs are significantly higher………………………………………..Full Article: Source

Commodities delivering, more or less, as advertised

Posted on 19 June 2015 by VRS  |  Email |Print

The great commodities gold rush of the last decade may not have paid off exactly as investors hoped, but some evidence indicates the asset class is performing more or less as advertised. Commodities, commonly accessed by investing in exchange-traded commodities futures contracts, gained hugely in popularity in the first part of the last decade, as investors sought access to an asset class they thought would give them equity-like returns, diversification and a decent risk profile.
Many investors also bet that the rise in living standard in China and other rapidly developing countries would drive demand and help returns. But a disappointing run of results, especially during and after the financial crisis let some of the air out of the balloon………………………………………..Full Article: Source

Spot Gold Rising but Safe-Haven Buying is Absent

Posted on 19 June 2015 by VRS  |  Email |Print

Spot gold prices are moving higher, trading up 1.4% at $1,202.43/oz, as news the Fed will not raise interests rates this month continues to weigh on the U.S. dollar. However, the market has yet to get into the mood for safe-haven buying, despite further difficulties in talks between Greece and its eurozone creditors.
“We haven’t seen a great deal [of safe-haven buying] so far,” says Jonathan Butler, a precious metals strategist at Mitsubishi. The fact that on a number of occasions the European Central Bank and the troika “have simply kicked the can down the road regarding Greece’s debt” has made traders cautious as “it could well happen again,” he says………………………………………..Full Article: Source

Asian ferrosilicon spot prices steady amid thin trade

Posted on 19 June 2015 by VRS  |  Email |Print

Spot prices of 75%-Si ferrosilicon in Asia held steady this week amid thin trade, industry sources said Thursday. Platts assessed the Chinese spot price for 75%-Si ferrosilicon at $1,210-$1,250/mt FOB China Thursday, unchanged from the previous week, while the Japanese spot import price was kept steady at $1,160-$1,220/mt CIF Japan Thursday.
Chinese producers said supply in the domestic market remained tight on production stoppages in the country, providing some support to the domestic price, while overseas buying interest stayed weak, exerting pressure on export offers………………………………………..Full Article: Source

The commodities supercycle’s not dead, it has evolved - Barings

Posted on 18 June 2015 by VRS  |  Email |Print

With Chinese GDP growth moderating and demand for many commodities still lacklustre, it is understandable that the commodities supercyle’s obituary continues to be written. But, there are those that see it less as a death and more like a pupation, with the commodities complex in the midst of a transformation from a coal and iron ore driven caterpillar to a zinc and aluminium winged butterfly.
The Barings commodities team is one of those, pointing out in a note yesterday that the sharp falls in the prices of commodities like iron ore, thermal coal and oil, have prompted many observers to conclude that the cause for the falls (and, indeed the death of the supercycle) lies with China’s faltering economic activity………………………………………..Full Article: Source

OPEC Export Revenue Below $1 Trillion Lowest Since 2010

Posted on 18 June 2015 by VRS  |  Email |Print

According to the report, released on Tuesday, the value of the 12-member organization’s combined petroleum exports dropped from $1.1 trillion in 2013 to $993.3 billion in 2014, the year when oil prices plummeted to less half their prior value.
OPEC upheld its production quota of 30 million barrels per day at its meeting in Vienna on June 5. The group surpassed its self-imposed limits for the past 11 months, according to analysis conducted by Bloomberg………………………………………..Full Article: Source

El Niño’s Pacific typhoon link threatens energy and shipping

Posted on 17 June 2015 by VRS  |  Email |Print

A strong El Niño phenomenon this year is expected to increase the number of cyclones and typhoons in the Pacific and Indian oceans, leading to disruptions in energy and shipping markets.
The climatic event tends to dampen hurricane activity in the Atlantic, reducing the risk to US oil markets serviced by refineries in the Gulf of Mexico. However, the hurricane season in the Pacific is likely to affect crude oil and product supply chains, according to commodity brokers Marex Spectron………………………………………..Full Article: Source

OPEC 2014 Exports Below $1 Trillion; First Time Since 2010

Posted on 17 June 2015 by VRS  |  Email |Print

The value of OPEC members’ petroleum exports fell below $1 trillion in 2014 for the first time since 2010, according to its annual report, demonstrating the toll last year’s oil-price collapse took on the group.
Exports from the Organization of the Petroleum Exporting Countries fell in value to $993.3 billion last year, from $1.112 trillion in 2013, the report said, as oil prices fell below $60 a barrel at the end of 2014 from highs above $114 last summer………………………………………..Full Article: Source

Iran’s 40 million barrels stored at sea hangs over oil market

Posted on 17 June 2015 by VRS  |  Email |Print

Iran is storing as much as 40 million barrels of oil on supertankers at sea as it prepares for a sales drive if a nuclear deal can be sealed. Iran and six world powers are seeking to overcome remaining differences with a looming self-imposed June 30 deadline to reach a deal over Tehran’s disputed nuclear programme.
In the meantime, Iran has been parking oil off its coast, mainly on tankers belonging to its national carrier NITC. “The first thing they will try and do is offload quite a lot of that storage. (Oil Minister Bijan) Zanganeh has already warned Opec: make room for us. In other words, we are going to sell this oil at any price,” said Mehdi Varzi, a former official at the state-run National Iranian Oil Co………………………………………..Full Article: Source

China Joins Century-Old Gold Fix as Sway in Commodities Spreads

Posted on 17 June 2015 by VRS  |  Email |Print

A Chinese bank will help set prices in London’s $20 billion gold market for the first time ever as the nation strengthens its influence in the world’s financial system. Bank of China Ltd. will join lenders including Goldman Sachs Group, Inc. and Barclays Plc. that run the twice-daily auction system for pricing gold, according to a statement from the London Bullion Market Association on Tuesday.
The process, which dates back to 1919, sets a benchmark level for gold that’s used by mining companies, refiners and hedge funds. China, the world’s second-largest economy, is expanding its presence in gold and currency markets worldwide as the country seeks to make the yuan a viable competitor to the dollar………………………………………..Full Article: Source

Platts Survey: OPEC Pumps 31.11 Million Barrels of Crude Oil Per Day in May

Posted on 16 June 2015 by VRS  |  Email |Print

Oil production from the Organization of the Petroleum Exporting Countries (OPEC) totaled 31.11 million barrels per day (b/d) in May, up 180,000 b/d from April and the group’s highest monthly volume since October 2012, according to the latest Platts survey of OPEC and oil industry officials and analysts. “OPEC’s communique after the June 5 meeting mentioned that members had been urged to adhere to its production ceiling,” said Margaret McQuaile, senior correspondent for Platts, a leading global provider of energy and commodities information.
“That’s something of a tall order, given that there are no quotas and that the 30 million b/d ceiling is supposed to cover production from Iraq, which hasn’t been part of OPEC’s production management system for years. With market share now pretty much the main theme – for the bigger players, at least – it seems likely that, for the time being, the only cuts in output will be involuntary ones.” (Press Release)

Gold Trades Little Changed as Platinum Sags to 6-Year Low

Posted on 16 June 2015 by VRS  |  Email |Print

The platinum market is the latest victim in the Greece debt turmoil. Prices tumbled to a six-year low on Monday. The white metal is mainly used in pollution-control devices for cars, and Europe accounts for about a quarter of global demand. With talks on securing a bailout deal for Greece in deadlock, it’s increasing concern that auto demand in the region will drop.
Platinum has slumped 10 percent this year, the biggest loss among the major precious metals. Investors cut holdings in exchange-traded funds backed by the metal in three of the past four weeks. Vehicle sales in Europe declined 24 percent in April, the third decline in 2015, the latest figures show………………………………………..Full Article: Source

Citi faces headwinds in commodity trade finance, presses on with expansion

Posted on 16 June 2015 by VRS  |  Email |Print

Citigroup Inc and rivals in the commodity trade finance sector are facing headwinds of weak oil prices, sanctions on Russia and stiff competition, which have pressured fees. The U.S. bank, which launched its business in the sector three years ago, has shifted attention from China, where fees are weak, to Africa and Latin America, said Kris van Broekhoven, global head of commodity trade finance.
“It’s still a tough environment,” he told Reuters. “China is not an easy market. It’s very competitive and pricing is low. We want growth, but not at any cost.”……………………………………….Full Article: Source

Iran third leading OPEC producer in May: report

Posted on 15 June 2015 by VRS  |  Email |Print

Iran was the third leading producer within the Organization of Petroleum Exporting Countries in May, outpacing the United Arab Emirates, OPEC said in its Monthly Oil Market Report. Iran produced 2.845 million barrels of oil per day in May, the report said, ranking Iran behind Saudi Arabia and Iraq at third place.

The UAE produced 2.83 million barrels of oil per day in May. Saudi Arabia and Iraq were the two leading producers, with 10.107 million barrels per day and 3.8 million barrels per day output, respectively. According to the report, total OPEC crude oil production averaged 30.98 million barrels per day in May, an increase of 24 thousand barrels per day over the previous month………………………………………..Full Article: Source

India: Forward contracts in commodities find few takers

Posted on 10 June 2015 by VRS  |  Email |Print

Forward contracts in commodities launched in September 2014 to reduce speculative activity in the commodity market and draw genuine investors to the exchange platform have found few takers. Market participants blame it on structural issues in the product as it does not offer full trade guarantee and zero counter-party default risk, two essentials for any product traded on the exchange platform.
The fraud at the National Spot Exchange Ltd (NSEL) too has made entities wary of trading in any product where the bourse does not guarantee the trade, market participants say. According to the Forward Contracts (Regulation) Act, 1952, which regulates commodity trading in India, a “forward contract” is a contract for the actual delivery of goods unlike futures contract, wherein the buyer can opt for the contract to be settled in cash………………………………………..Full Article: Source

China Now World’s Largest Oil Importer; Effect on Global Market

Posted on 09 June 2015 by VRS  |  Email |Print

Although data opacity makes objective analysis difficult, market observers reported in April that China has surpassed the United States as the world’s largest oil importer. This statistical inflection point needs context to understand global consumption trends.
While oil bulls are anxious about China’s reduced crude growth appetite, fundamental shifts in Chinese currency and domestic consumption strategies point to long-term growth in Chinese hydrocarbon consumption generally………………………………………..Full Article: Source

Commodity futures traders making cautious bets through ’spread contract’

Posted on 09 June 2015 by VRS  |  Email |Print

Amid fears of poor monsoon and depletion of old stocks, a few wealthy investors have begun taking cautious bets in commodity futures like castorseed, jeera and coriander through a relatively new product to benefit from price volatility on farm bourse NCDEX.
Called a spread contract, the product lets a trader lock in a spread or price difference between a near and mid-month futures contract.If she believes the spread would widen, she simply buys the spread and if it’s expected to narrow, she sells the spread.Once the spread widens she offsets the position -sells and captures the difference………………………………………..Full Article: Source

China Steels Itself Against Trade Complaints

Posted on 05 June 2015 by VRS  |  Email |Print

China’s government urged its steel industry, the largest in the world, to launch lawsuits to defend businesses against a rising tide of international trade complaints, including those from the U.S., its commerce ministry said.
“We encourage Chinese steelmakers and related businesses to actively participate in countersuits, and protect their legitimate interests according to World Trade Organization rules,” the ministry said this week. The ministry’s stance comes as rising Chinese steel exports run into resistance from competitors at the destinations of its shipments………………………………………..Full Article: Source

Turkey Gold Imports Slide to 10-Month Low as Local Prices Surge

Posted on 03 June 2015 by VRS  |  Email |Print

Turkey’s highest gold price in more than three years is cutting appetite for the metal in the fourth-biggest buyer. The country imported 1.65 metric tons of bullion in May, 21 percent less than a month earlier and the least since July, the Istanbul Gold Exchange’s website showed on Tuesday. Turkish first-quarter consumer demand for bullion slid 42 percent from a year earlier, according to World Gold Council data.
Local prices rallied 21 percent in the past year as the lira weakened against the dollar. The currency’s slump is the second-biggest in emerging markets this year on concern government gridlock will prevent legislation needed to bolster the economy. Turkey will hold national elections on June 7 and polls suggest a coalition government will be elected………………………………………..Full Article: Source

Iron Ore Trading in China Climbs to Record as Price Advances

Posted on 03 June 2015 by VRS  |  Email |Print

Trading of iron ore derivatives on China’s Dalian Commodity Exchange climbed to a record last month as prices increased. Volume jumped 33 percent in May from a month earlier to 24.86 million contracts, or 2.49 billion metric tons, according to bourse data. The previous all-time high was set in April. Compared with a year earlier the volume more than tripled.
Iron ore prices advanced in May as port stockpiles in China contracted. The world’s biggest consumer of metals and energy is seeking to expand its role in setting benchmark raw-material prices. A priority for the Dalian bourse this year is boosting the influence of its prices on global trade, according to Chen Wei, head of industrial commodities………………………………………..Full Article: Source

U.S. shale and OPEC, the altered balance of power

Posted on 02 June 2015 by VRS  |  Email |Print

Two landmark events this month will underscore the extent to which the oil market’s balance of power has been transformed by the shale revolution. In Washington, Congress will begin considering legislation to permit the export of crude oil from the United States, reversing a four decade ban put in place after the first oil crisis in 1973/74.
In Vienna, the Organization of the Petroleum Exporting Countries (OPEC) is expected to roll over its crude production target of 30 million barrels per day (bpd) even though prices have fallen more than 40 percent over the last 12 months. Rather than reduce production to boost prices, Saudi Arabia and the other OPEC members are prepared to continue pumping to defend market share and maximise revenue………………………………..Full Article: Source

‘Cautious optimism’ abounds in Asia commodities: Russell

Posted on 01 June 2015 by VRS  |  Email |Print

There appears to be an outbreak of “cautious optimism” in the Asian commodities sector. It was easy to lose track of the number of times the phrase popped up in presentations and conversations at four major commodities conferences in the region in the past two weeks.
However, defining what people meant by being cautiously optimistic was somewhat more challenging, although the common thread was a view that the worst is over for commodity prices, and the sector is once again worth looking at from an investment perspective. Of course, it’s easy to dismiss participants at the SGX Iron Ore Forum and the Asia Mining Congress in Singapore, the Asia Oil & Gas Conference in Kuala Lumpur and the LME Week Asia in Hong Kong as talking their books, or at least to their hopes………………………………….Full Article: Source

3 ETFs for Investing in Agriculture

Posted on 01 June 2015 by VRS  |  Email |Print

Changing diets across the globe are pushing up demand for soft commodities such as corn, wheat and soybeans. There are logistical problems with trading directly in the underlying commodity. The fund itself can’t very well store a thousand tons of grain and trade this on a day-to-day basis. So in order to gain the underlying exposure, the fund trades in the highly liquid futures market and they roll these to maintain exposure through time.
Currently the most popular is the ETF Securities Agriculture ETC (AIGA) product, with a total holding cost of 99 basis points, which still comes well under many of the item managed alternatives………………………………….Full Article: Source

State Commodity Traders Grow to Take on Glencore, Cargill

Posted on 01 June 2015 by VRS  |  Email |Print

When Azerbaijan’s Socar Trading SA took over the storied commodity trader Phibro LLC this year, it put a stamp on a new trend: the emergence of giant state enterprises to buy and sell natural resources. Azerbaijan is not alone: Saudi Arabia, China, Oman, Thailand and Russia are also building or expanding government-owned firms to procure and market commodities directly, bypassing the traditional oil and grain traders such as Glencore Plc, Cargill Inc., Vitol Group BV and Trafigura Beheer BV.
“Countries want to secure the offtake of their production or they want to secure supplies,” Socar Trading Chief Executive Officer Arzu Azimov said in an interview. “There is a trend of national companies building trading arms.”…………………………………Full Article: Source

Turn out the lights as commodity spending boom ends

Posted on 28 May 2015 by VRS  |  Email |Print

Australia, one of the engine rooms of the decade-long global commodity boom, is forecasting a staggering 90 per cent plunge in spending on projects, calling time on its biggest resources bonanza since the 1850s gold rush. After a collapse in prices from oil to iron ore, the value of the nation’s approved and financed mining and energy projects is forecast fall to about $15 billion in 2017, from $226 billion at the end of April.
Planned iron ore projects worth at least $10 billion have been canceled since October, according to the Department of Industry and Science. Billionaire Gina Rinehart’s Roy Hill — due to ship later this year — is Australia’s last remaining mining project being developed worth $5 billion or more…………………………………….Full Article: Source

Aluminum market eyes SHFE, LME arbitrage as support for premiums

Posted on 27 May 2015 by VRS  |  Email |Print

Some traders in Asia are closely monitoring the spread between Shanghai Futures Exchange and London Metal Exchange aluminum contract prices, as a wider spread may see more of the metal head to China. Front-month SHFE June aluminum traded at Yuan 13,150-Yuan 13,160 ($2,152-$2,153)/mt Tuesday, while the most recent LME settlement on May 22 was $1,726/mt.
Platts assessed spot Chinese import premium for Western grade aluminum at $150-$200/mt Monday. On the basis of LME at $1,726/mt, the $175/mt import premium, port handling charges of Yuan 100/mt and China’s value added tax of 17%, the Chinese import price is equivalent to Yuan 13,689/mt — higher than the traded level for SHFE June aluminum contract, Platts calculation shows…………………………………..Full Article: Source

Westpac eyes China, India for commodities trade growth

Posted on 25 May 2015 by VRS  |  Email |Print

A recent entrant in Asia’s commodities markets, Australia’s Westpac Banking Corp is ramping up to take advantage of a commodities “supercycle” that it says has at least another 30 years to run. While some global banks have exited commodities due to more stringent regulations, Westpac is setting itself to support a deeper push into the region by its corporate customers, a senior executive told Reuters.
“The commodity cycle is still in the supercycle phase. The urbanization of Asia has not stopped - all we’re getting at the minute is a correction,” said Paul Gardner, the bank’s Singapore-based Global Head of Structured Commodity Finance………………………………………..Full Article: Source

Hong Kong’s bold, but uncertain pitch for China commodity trade

Posted on 25 May 2015 by VRS  |  Email |Print

Imagine a world where global investors can access Chinese commodities markets through established global exchanges and Chinese investors can trade through their local bourses. It’s more than just an attractive proposition, it’s the great hope for finally integrating the world’s largest commodity producer, consumer and importer with the rest of the world.
It’s also the prize being sought by Charles Li, the chief executive of Hong Kong Exchanges and Clearing (HKEx), which bought the venerable London Metal Exchange (LME). But there is a long way to travel before the dream becomes a reality, and there is always the danger that the market will have moved on by the time HKEx manages to pull something together………………………………………..Full Article: Source

Turkish ferrous scrap import prices slide on lower indications

Posted on 22 May 2015 by VRS  |  Email |Print

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

Where Are Oil Prices and the Ruble Going Next?

Posted on 21 May 2015 by VRS  |  Email |Print

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

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

Posted on 21 May 2015 by VRS  |  Email |Print

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

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

Posted on 21 May 2015 by VRS  |  Email |Print

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

Palladium Gains From Environmental Rules

Posted on 20 May 2015 by VRS  |  Email |Print

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

Islamic commodity trading getting a boost

Posted on 20 May 2015 by VRS  |  Email |Print

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

Saudi oil exports hit highest in a decade

Posted on 19 May 2015 by VRS  |  Email |Print

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

Gold Trapped in Summer Doldrums Usually Means Volatile Wake Up

Posted on 19 May 2015 by VRS  |  Email |Print

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

Traders warn on gold liquidity

Posted on 19 May 2015 by VRS  |  Email |Print

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

Rethinking Commodity Trade Finance

Posted on 18 May 2015 by VRS  |  Email |Print

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

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

Posted on 15 May 2015 by VRS  |  Email |Print

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

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