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How Commodity Prices Could End the Year Where They Started

Posted on 22 March 2016 by VRS  |  Email |Print

Commodities have flummoxed investors by swinging wildly in recent months, but prices could end the year right back where they began if global growth and the dollar stabilize, according to the Federal Reserve Bank of New York.
The Dow Jones Commodity Index is now up 3.4% this year, though it’s down 17.5% over the past 12 months. Commodity prices have also been influential in the movement of other assets, with many looking at the connection between stocks and oil………………………………………..Full Article: Source

Is now the time for commodity fans to use leveraged products?

Posted on 22 March 2016 by VRS  |  Email |Print

Increasing numbers of investors are being tempted to dip their toe into the energy markets – and oil specifically – following the dramatic decline in commodity prices over the past 18 months.
Crude oil and natural gas prices more than halved as fears over slowing global growth, climbing inventories and a lack of intervention from oil cartel Opec have combined to push energy down to multi-year lows. With prices now at levels not seen since the early 2000s, investors have been increasing their exposure, in particular to oil which is one of the most accessible commodities………………………………………..Full Article: Source

Are all commodities heading higher?

Posted on 21 March 2016 by VRS  |  Email |Print

A massive run-up in several groups of raw materials has traders, speculators, and the producers of commodities wondering if our U.S. economy has finally turned the corner. Instead of focusing on fears of deflation, the focus has shifted to the opposite investment debacle – how to adjust and invest as prices rise.
The value of gold, the world’s benchmark for inflation, is up a whopping $200 per ounce since mid-December with the rise in silver and copper not far behind. Crude oil, the foundation of most of the Western world’s economies, bottomed around $26 per barrel in January and exploded over 50 percent in value as of Friday at $40………………………………………..Full Article: Source

Kenya moves away from commodities

Posted on 21 March 2016 by VRS  |  Email |Print

Africa is the most commodity-dependent continent on earth, but in the East African Community, Kenya is the least dependent. Africa’s economies increasingly need to create a hospitable environment for companies in the manufacturing and services sectors, Michael Armstrong, the Regional Director, Institute of Chartered Accountants in England and Wales (ICAEW) for Middle East, Africa and South Asia said last week.
He said this will drive growth, as the old models of growth driven by exports of raw materials are out-dated. Within the East Africa Region, Kenya’s economy should expand by around 6% during the 2017 to 2020 period thanks to its relatively diversified economy and comparatively low commodity dependence bonding well with the country’s economic growth outlook………………………………………..Full Article: Source

OPEC’s Futile Freeze

Posted on 21 March 2016 by VRS  |  Email |Print

Next month’s gathering of oil ministers from OPEC and non-member countries is fixating traders. But the real re-balancing in the market is already underway — and much of it is taking the form of involuntary production cuts from OPEC members.
Speculation that the meeting in Doha will lead to a production freeze has been a boon for oil, helping to drive a 40% rise in Brent since the idea was first mooted just over a month ago, to more than $42 a barrel………………………………………..Full Article: Source

Commerzbank, HSBC: Silver Starting To Outperform Gold

Posted on 21 March 2016 by VRS  |  Email |Print

Silver has been outperforming gold lately, causing a decline in the gold-silver ratio, say HSBC and Commerzbank. This ratio measures how many ounces of silver it takes to buy an ounce of gold. Early Friday, Comex May silver hit a high of $16.17 an ounce that was its most muscular level since October.
Silver has been helped lately by dollar weakness and improvement in industrial base metals, Commerzbank says. “Because silver has noticeably outperformed gold of late, the gold-silver ratio has decreased from almost 84 at the end of last month to a good 78, its lowest level since early February,” Commerzbank says in an early-Friday research note. As of a late-Thursday HSBC report, the ratio was at 79. “We think it may narrow further, implying that silver will gain on gold,” HSBC says………………………………………..Full Article: Source

The Shine Is Off Diamonds and Gold

Posted on 21 March 2016 by VRS  |  Email |Print

The adage that a diamond can be a best friend has lost some sparkle in recent years. Dampened by dollar appreciation, an increase in stocks of rough stones and weakened consumer demand, the global diamond market has hit headlines of late, thanks to tumbling prices.
In fact, the average, inflation-adjusted price of top-quality stones has weakened by as much as 80 percent in the past 30 years, according to the Rappaport Index, an industry benchmark, suggesting that the free fall in a material once considered a timeless store of value has been in effect for some time. The prospects for gold, also long considered a haven for investors, are not glittering either………………………………………..Full Article: Source

Fed stance shifts gold target

Posted on 21 March 2016 by VRS  |  Email |Print

So far this year, gold has been the frontrunner in the rally by precious metals. It has also performed in line with our beginning-of-the-year forecasts. The first upside target for gold for the year at $1,155/ounce and the second at $1,200 have been hit, though more quickly than expected.
Gold has (year-to-date) delivered 19 per cent returns while silver is up 16 per cent. Oil prices, which were at $37/barrel when we wrote the 2016 outlook for gold, slipped to $26/barrel by February and are now at $40/barrel, up 8 per cent. The US dollar index has dropped 4 per cent to 94.8. So where is the metal headed?……………………………………….Full Article: Source

The blockbuster bullion bull, will it last?

Posted on 18 March 2016 by VRS  |  Email |Print

According to many chart analysts, the rally in gold prices this year may be the start of a prolonged uptrend for the metal, which is already up nearly 20 percent in 2016. Wednesday’s decision by the Federal Reserve to reduce its forecast for a multiple rate increases sent the U.S. dollar tumbling and lit a fire under gold because of its perceived “store of value” property.
“Investors have lost confidence in central bank ability to assure stability of currencies and economies,” futures trader, market analyst and author Jake Bernstein told CNBC Pro. “Gold is still seen as the quintessential safe haven.”……………………………………….Full Article: Source

Cash out, commodities up: global fundie survey

Posted on 17 March 2016 by VRS  |  Email |Print

Fund managers are finally spending their cash hoardings, according to Morgan Stanley’s global fund manager survey for March - with commodities a favourite target. The survey was taken between March 4 and March 10, when global markets were rallying, risk was back in favour, and commodities had seemingly bottomed.
The top ten survey takeaways, as judged by Morgan Stanley, were: Cash holdings fell from 5.6 per cent in February - the highest figure since November 2001 - to 5.1 per cent. The allocation to commodities went from net 29 per cent underweight to net 13 per cent underweight - the biggest month-on-month jump since records began in 2006. The current figure, a nine-month high, is still 0.6 standard deviations below the long-term average………………………………………..Full Article: Source

Managers make record increase to commodity allocations

Posted on 17 March 2016 by VRS  |  Email |Print

Fund managers made their largest month-on-month increase in commodities allocations on record in March, the Bank of America Merrill Lynch fund manager survey shows. Allocations to commodities have jumped to a nine-month high, rising to a net 13 per cent underweight from a net 29 per cent underweight last month.
The rise is the biggest month-on-month jump on record since 2006, the survey finds. Allocations to real estate also jumped to a net 11 per cent overweight from a net 1 per cent overweight in February………………………………………..Full Article: Source

Australia: Commodities boom to bust: are we there yet?

Posted on 17 March 2016 by VRS  |  Email |Print

The end could be in sight for the crash in commodities, but there is still the potential for downside to mining capital expenditure (capex) and more jobs losses to come. Up to 40,000 jobs might still go in the shakeout that has been a drag on incomes, spending and employment for several years, said Commonwealth Bank (CBA) chief economist Michael Blythe in a note.
The boom-bust commodity story is central to understanding the Australian economy over the past decade, the “boom” ending with commodity prices at record highs in 2011 and mining capex at 150-year highs in 2012………………………………………..Full Article: Source

Investors’ take bullish bets on commodities to record highs

Posted on 16 March 2016 by VRS  |  Email |Print

After some relative calm seen in the price of oil, fund managers are putting some of their money back to work in commodities, new data on Tuesday showed. Global investors added to their allocation of commodities this month, according to a survey carried out by Bank of America Merrill Lynch, which said the jump in exposure to commodities in March was the largest ever on record.
This comes after investors hoarded money in cash at the start of the year amid one of the worst starts to the year on record for equities. While many managers are still technically “underweight” on the commodity benchmarks, bullishness on the sector has dramatically improved in the last month as oil prices have climbed closer to $40 per barrel and iron ore prices have soared………………………………………..Full Article: Source

Demand Shows More Pain Ahead for Commodities (Video)

Posted on 16 March 2016 by VRS  |  Email |Print

Paras Anand, head of European equities at Fidelity, discusses the impact of currency and demand on commodities producers and where he sees opportunities in the sector. He speaks on “Bloomberg Surveillance.”.………………………………………Full Article: Source

Commodities rally ‘overdone’ – Barclays

Posted on 15 March 2016 by VRS  |  Email |Print

The sharp rally in oil prices may be have come “too far, too fast,” analysts at Barclays have warned. Oil prices have surged by around 40 per cent in just a few weeks, as investors have taken a more bullish stance on the global economy and the supply dynamic for the market after a torrid start of the year.
“While there are grounds to believe markets may have bottomed, to us the scale of recent price gains looks overdone,”analysts at Barclays said. The analysts noted that some of the automatic balancing that would have come from very low oil prices may dissipate as US and Brent crude oil prices hover around the $40 a barrel mark………………………………………..Full Article: Source

OPEC trims 2016 outlook for its oil

Posted on 15 March 2016 by VRS  |  Email |Print

OPEC expects lower demand for its oil in 2016 than it previously forecast. The oil cartel’s crude demand forecast was revised down by 100,000 barrels per day for the full-year, slightly lower than its estimate last month, according to a report released Monday.
“In 2016, demand for OPEC crude is expected to stand at 31.5 million barrels per day, 0.1 mb/d, lower than last month, and representing an increase of 1.8 mb/d over the previous year.”……………………………………….Full Article: Source

Is Palladium starting to play catch-up?

Posted on 15 March 2016 by VRS  |  Email |Print

Palladium, the worst performing precious metal this year, has started to play catch-up to its peers. This after acting more as an industrial metal and following overall market trends instead of trends in precious metals.
The metal fell more than 17% to a five-year low of around $470/oz in early January, when data showed that Chinese car sales increased at the slowest pace in three years. The main use of palladium in China, the biggest consumer of the metal, is in the fabrication of autocatalytic converters which reduce harmful emissions………………………………………..Full Article: Source

Here’s why commodity prices are rallying… and why the rally may continue

Posted on 14 March 2016 by VRS  |  Email |Print

Iron ore saw its biggest one-day jump in value ever last week, reports Bloomberg. The price soared by a stunning 19% at one point. It’s partly down to hopes that China might be up for more “stimulus”. But there’s also an increasingly convincing case to be made that we’ve seen the worst of the commodities bear market.
And that’s going to create some interesting dilemmas for the world’s central bankers… Goldman Sachs reckons that the iron ore rebound won’t last. And certainly, after you see these sorts of rapid rebounds, you tend to get some sort of pullback………………………………………..Full Article: Source

Oil Price Rise Could Be Its Own Undoing

Posted on 14 March 2016 by VRS  |  Email |Print

The slide in oil prices has paused after crude fell more than 70% from its 2014 peak. Now the question is whether the recent rise itself could spark another downward spiral.
U.S. oil prices are up more than 45% from a 13-year low in February, boosted by talks among Saudi Arabia, Russia and other major producers about capping their output. A temporary reduction in global crude supply following outages in Nigeria and Iraq also helped buoy the market………………………………………..Full Article: Source

Which way are world commodities headed?

Posted on 11 March 2016 by VRS  |  Email |Print

It’s the best of times in commodities markets, it’s the worst of times in commodities markets. Iron ore jumped by the most on record on Monday, while Brent crude broke through $40 a barrel for the first time in three months. Market prices are prone to speculation, momentum trading and short squeezes, all of which could explain some of the movement in iron ore and oil.
Here are five indicators worth watching for a clearer picture on where commodities are headed, reports. A benchmark for rates to charter the ships that carry iron ore, coal, and grain, the index is currently at particularly depressed levels thanks to a global glut of cargo capacity. As it tracks real prices being paid to book ships, there’s no speculative element here………………………………………..Full Article: Source

Don’t believe the recession hype – or this commodities boom

Posted on 11 March 2016 by VRS  |  Email |Print

All in all, this is an odd moment for an outburst of high spirits: not from me — I’m as phlegmatic as ever — but from commodity investors. The price of a barrel of oil has rallied from $27 to $40 after talks between Saudi Arabia and Russia about restricting supply; one pundit called that ‘meaningless theatre’ but others expect a climb back to $50.
In a similar mood, copper prices have risen by almost a fifth — reflecting producer cutbacks combined with a belief that the Chinese downturn in demand might not be so severe as was first feared. Likewise iron ore, which surged so fast at the beginning of this week that one analyst called it ‘berserk’, while the biggest player in global steel, the Indian tycoon Lakshmi Mittal, declared that ‘things should continue to improve’………………………………………..Full Article: Source

Commodities looking for equilibrium

Posted on 10 March 2016 by VRS  |  Email |Print

A sentiment-driven commodities rally is in a base-forming stage and “looking for some sort of equilibrium price”. While prices can go lower from here in the short term, due to producers hedging in futures or profit taking, revising of the previous lows seen a few months earlier might be a distant thing, analysts believe.
On Tuesday, international metals prices, along with share prices of these companies, saw a big fall; these stabilised on Wednesday. Brent crude oil is back to $40 a barrel and copper stabilised at $4,880 a tonne. Nickel fell sharply on Tuesday and rose on Wednesday by three per cemt. Gold, however, remained low………………………………………..Full Article: Source

Don’t let the rally fool you: Commodity companies are headed for a massive debt cliff

Posted on 10 March 2016 by VRS  |  Email |Print

If you think commodity producers are out of the woods as markets rally, here’s a reality check: many are still grappling to contain debt. Another year of belt-tightening hasn’t kept pace with an earnings slump after prices collapsed. One gauge of leverage among mining, energy and agriculture companies continued to rise in the fourth quarter and is more than double year-earlier levels.
While raw materials have rebounded in the past month, they are still well below levels of even two years ago — 28 per cent in the case of copper and 64 per cent for crude………………………………………..Full Article: Source

China Is Now In Control Of Global Silver Prices

Posted on 10 March 2016 by VRS  |  Email |Print

China has been an unofficial price-setter for most metals over the past decade. And this week, the country became an official participant in setting prices for one of the world’s most important precious metals markets.
That’s the London Bullion Market silver price. Where one of China’s largest banks just became a member of an elite group of players that controls fluctuations in this key metal. CME Group, which runs the process for price setting of silver in London, said Sunday that China Construction Bank will officially join as a member of the silver price process………………………………………..Full Article: Source

Rout in global steel prices puts brakes on platinum recycling

Posted on 10 March 2016 by VRS  |  Email |Print

Recycling rates for autocatalyst metals platinum and palladium, have been driven lower in the past year not only by a price slide in the metals themselves, but also by a crash in the value of another raw material - steel.
With steel prices forecast to remain under heavy pressure this year in the face of over-supply and tepid demand, that could limit an expected rebound in the rate at which platinum group metals are recovered from catalysts. Recycling slowed last year as more scrapped cars were stockpiled by recyclers awaiting better prices, and as fewer cars, which use platinum in their autocatalysts, were scrapped………………………………………..Full Article: Source

Reasons to be cautious over commodity optimism

Posted on 09 March 2016 by VRS  |  Email |Print

The stunning rally in iron ore and mining stocks has turned commodity pessimism into a bout of optimism overnight. But there are still reasons for caution before relegating low commodity prices to history.
The increase in Chinese steel prices has driven a record 19 per cent rise in iron ore prices this week. But analysts see few signs that steel demand will pick up soon in the world’s largest consumer of the metal………………………………………..Full Article: Source

Here’s why commodity prices are rallying

Posted on 09 March 2016 by VRS  |  Email |Print

Iron ore saw its biggest one-day jump in value ever yesterday, reports Bloomberg. The price soared by a stunning 19% at one point. It’s partly down to hopes that China might be up for more “stimulus”.
But there’s also an increasingly convincing case to be made that we’ve seen the worst of the commodities bear market. And that’s going to create some interesting dilemmas for the world’s central bankers………………………………………….Full Article: Source

How far can the commodities rally go?

Posted on 09 March 2016 by VRS  |  Email |Print

As is the trend these days, where the miners go, the FTSE 100 is sure to follow. So, unsurprisingly, profit-taking in the commodities sector is the main reason why London’s blue-chip index is nursing losses Tuesday. With many miners having surged by 50% or more since mid-January, investors are rightly wondering how far the rally has to run.
The timing and breadth of the upturn certainly caught many investors off guard. Anglo American was the proverbial falling knife until January, since when its share price is up more than 160%. Glencore, once everyone’s favourite dog to kick, is up 126% in the past seven weeks………………………………………..Full Article: Source

Two signs that oil prices may have bottomed

Posted on 09 March 2016 by VRS  |  Email |Print

Oil prices may have finally hit a bottom, Jodie Gunzberg, global head of commodities and real assets at S&P Dow Jones Indices, said Tuesday. “There’s two things … that show us that it could have bottomed,” Gunzberg said.
“The energy stocks are outperforming the energy bonds by the most since October, and that shows a lot of optimism in the market. The other one is we saw a historically big runup in oil of 15 percent in three days last month. That has an additional 20 percent return.” Crude prices have been under pressure all year amid an oversupplied oil market and global growth concerns………………………………………..Full Article: Source

Why gold could rally by 50 per cent over the next two years

Posted on 09 March 2016 by VRS  |  Email |Print

Global investment advisory firm CrossBorderCapital explains why gold bullion is its high conviction trade this year and why it expects the commodity’s price to soar over the course of this year and 2017. The price of gold bullion is likely to soar over the course of this year and next year, according to the latest liquidity report from CrossBorderCapital, who expect the precious metal to reach $2,000 in 2017.
The investment advisory firm believes that the changing mix in global liquidity fuelled by monetary policy will continue to weaken paper money and therefore lead to strong gold prices………………………………………..Full Article: Source

Commodities Rebound Hinges on China’s Real Estate Market

Posted on 08 March 2016 by VRS  |  Email |Print

Iron ore prices soared the most ever Monday after China voiced willingness to stimulate the economy. The commodities rebound is being driven by speculation that investments in China’s housing market is recovering, Hao Hong, chief China strategist at Bocom International Holdings Co. in Hong Kong said in a report.
That means Chinese real-estate investments should also register a bounce when figures for January and February are released this month. Hong is not so sure: While housing inventories in bigger cities have fallen, it will “take years to clear” backlogs in smaller towns that account for 60 percent of China’s property investments, he said………………………………………..Full Article: Source

Why 2016’s gold rush is already running out of steam

Posted on 08 March 2016 by VRS  |  Email |Print

Gold has been hailed as the “new black” in 2016. But after the precious metal’s best start to a year since 1980, signs are emerging that a newfound love for base metals could overrun the gold rush, says Citigroup.
Gold is up almost 20% this year so far, easily outperforming copper and aluminum as well as other asset classes, including equities. That’s largely because concerns over a serious economic slowdown in China and plummeting oil prices triggered a flight to safety away from riskier choices………………………………………..Full Article: Source

The Commodities Rally Isn’t Built to Last

Posted on 07 March 2016 by VRS  |  Email |Print

It’s clear now that U.S. markets, in their swift early-2016 downdraft, were too worried about the risks of a recession. Friday’s jobs number helped put most lingering doubts to rest. Now, the opposite question is on the table. Are the markets, especially recently buoyant commodities and emerging markets, correctly predicting a ​global economic rebound that would undo the damage from last year?
Friday’s U.S. trade data say these markets are wrong and that the global economy is weak at best. The U.S. trade deficit grew 2.2% on the back of lower imports and exports, with shipments declining for nearly everything except for cars………………………………………..Full Article: Source

A rally in commodities may be a sign that Wall Street hit a bottom

Posted on 07 March 2016 by VRS  |  Email |Print

Have we hit a bottom yet? Wall Street appears to think that a march higher in the commodities sector may be signaling that the worst is over for the market — at least in the near term.
For many investors, plunging commodity prices have been a sign that all isn’t well in the world. Falling commodity prices, specifically crude-oil prices can serve as a sign that global growth is in a state of retrenchment. In the case of oil, many believe it is simply a matter of an unrelenting glut………………………………………..Full Article: Source

Will Russia End Up Controlling 73% of Global Oil Supply?

Posted on 07 March 2016 by VRS  |  Email |Print

Russia has played a master stroke in the current oil crisis by taking the lead in forming a new cartel, but it’s a move that could spell geopolitical disaster. The meeting between Russia, Qatar, Saudi Arabia and Venezuela on 16 February 2016 was the first step. During the next meeting in mid-March, which is with a larger group of participants, if Russia manages to build a consensus—however small—it will further strengthen its leadership position.
Until the current oil crisis, Saudi Arabia called the crude oil price shots; however, its clout has been weakening in the aftermath of the massive price drop with the emergence of US shale. The smaller OPEC nations have been calling for a production cut to support prices, but the last OPEC meeting in December 2015 ended without any agreement………………………………………..Full Article: Source

Saudi’s OPEC Love-In Has Limits

Posted on 07 March 2016 by VRS  |  Email |Print

Why is Saudi Arabia even prepared to discuss supply restraint?A second meeting has been pencilled in by the kingdom, Russia, Venezuela, Qatar and an unspecified group of oil producers (OPEC and non-OPEC) to talk again about the proposed output freeze, according to Nigerian petroleum minister Emmanuel Kachikwu.
But no-one should read this as a sudden outbreak of altruism in Riyadh.Non-OPEC producers Mexico and Oman might hope to get an invitation to the meeting, and they’ve both joined in with supporting prices in the past. When the group does get together, though, one big market participant certainly won’t be there: the U.S. shale industry………………………………………..Full Article: Source

China’s Commodities Trade Thrives as Uncertainty Spurs Wagers

Posted on 03 March 2016 by VRS  |  Email |Print

Economic uncertainty is a boon for China’s commodities trade, lifting volumes and expanding the nation’s sway over global markets for raw materials even as its own demand slows, according to two veteran metals brokers who share more than 50 years experience in the industry.
“Volatility is going to remain in the market this year and that is going to increase turnover,” said John Browning, managing partner at BANDS Financial Ltd., the brokerage he founded with Chinese business partner Tiger Shi last year………………………………………..Full Article: Source

US recovery involves short-term pain and long-term gain for commodities

Posted on 01 March 2016 by VRS  |  Email |Print

The US economic recovery placed pressure on metals prices as investors continued to unwind commodities-based positions taken during the resource supercycle, according to Export Development Canada VP and chief economist Peter Hall.
It had not been an orderly event, particularly for commodities-focussed nations that experienced pain on the lower prices caused, he told an audience at a recent meeting of the Canadian Institute of Mining’s Management and Economic Society in Toronto………………………………………..Full Article: Source

The Gold Price: How Much Higher Can it Rise?

Posted on 01 March 2016 by VRS  |  Email |Print

Gold has had a barnstorming start to the year, rising 17% since January 1st to its peak of around $1,260. The dynamic behind the rise in prices has been a heightened risk aversion and panic over… well, just about everything really.
Without fear to drive demand, gold suffers from the cost disadvantage of storage and finance costs but without the corresponding income stream of dividends. With Japan becoming the latest country to offer negative interest rates, investors sitting on cash are figuring out the sums on gold carry costs………………………………………..Full Article: Source

USDA: 2016 to be another bad year for farm commodities

Posted on 26 February 2016 by VRS  |  Email |Print

Commodity prices will not recover this year, the federal government said Thursday in a forecast that will be a blow to producers hoping for a rebound in the slumping farm economy.
The U.S. Department of Agriculture said producers should expect slumping farm income, modest declines in land values and cash rents and a less-than-favorable trade environment. Even so, the USDA declared that the financial health of the agriculture sector is strong because producers took advantage of record harvests and high prices in past seasons to strengthen their bottom line………………………………………..Full Article: Source

Big price drops for commodities over last 12 months

Posted on 26 February 2016 by VRS  |  Email |Print

The European market has proven more resilient to price declines for commodities than the global market. The latest report from the European Commission makes for grim reading, with prices for all major commodities, including grains, meat and dairy, suffering big drops in price over the last 12 months.
However, while the data shows significant declines for most commodities on the global market, European prices are still down, but have been more insulated. Grains: For 2015, the world market price of all cereal grains in December was down significantly year-on-year. Soft wheat prices were back almost 27%, while maize and barley prices took a hit of 8% and 17% respectively………………………………………..Full Article: Source

Amid Commodities Gloom, a Few Bright Spots Emerge

Posted on 24 February 2016 by VRS  |  Email |Print

Commodities have been an unloved asset class for a while, but some have had a pretty good year so far. Not that you’d know it from listening to those who produce or trade the world’s metals. On Tuesday, mining giant BHP Billiton announced a $5.67 billion first-half loss and said it would slash its dividend, arguing that the current period “of weaker prices and higher volatility will be prolonged.”
Singapore-listed trader Noble Group Ltd. meanwhile cut its long-term forecast for coal prices, blaming weaker growth in China and the broad trend away from using coal as an energy source. The company also issued a profit warning, saying it expects to report a net loss for the fourth quarter………………………………………..Full Article: Source

Why the Recent Rally in Commodities Will Come to an End

Posted on 24 February 2016 by VRS  |  Email |Print

Despite the upbeat view of some analysts and industry insiders who have predicted a strong rebound in commodities over the course of 2016, the outlook remains gloomy. This is because industry fundamentals and recent economic data indicates that demand will remain soft and that sharply weak commodity prices are here for some time to come.
Now what? Over the last two decades the primary driver of growing commodity prices was China’s insatiable demand for raw materials as it rapidly modernized and developed. This triggered a massive construction boom as the promise of a better life and higher wages sparked one of the greatest waves of rural-to-urban migrations ever witnessed………………………………………..Full Article: Source

The Collapse in Commodities Continues (Video)

Posted on 23 February 2016 by VRS  |  Email |Print

On “Single Best Chart,” Bloomberg’s Tom Keene looks at the collapse in commodities. Economic Cycle Research Institute’s Lakshman Achuthan and New York University’s Brad Hintz also weigh in on “Bloomberg Surveillance.”.………………………………………Full Article: Source

Opec has failed to stop US shale revolution admits energy watchdog

Posted on 23 February 2016 by VRS  |  Email |Print

‘This cycle is very nasty. It sets the seed for a very high price in the future,’ said Opec’s secretary-general. The current crash in oil prices is sowing the seeds of a powerful rebound and a potential supply crunch by the end of the decade, but the prize may go to the US shale industry rather Opec, the world’s energy watchdog has predicted.
America’s shale oil producers and Canada’s oil sands will come roaring back from late 2017 onwards once the current brutal purge is over, a cycle it described as the “rise, fall and rise again” of the fracking industry. “Anybody who believes the US revolution has stalled should think again. We have been very surprised at how resilient it is,” said Neil Atkinson, head of oil markets at the International Energy Agency………………………………………..Full Article: Source

Gold Lining On The Commodity-Price Collapse

Posted on 23 February 2016 by VRS  |  Email |Print

There is a perfect storm blowing through the Australian gold-mining industry, but it’s not doing any damage, because it’s a storm which has triggered soaring share prices and a modern-day gold rush.
A recovery in the U.S. dollar gold price is one factor driving interest in the metal, but it’s not the major force in the Australian gold sector. Two other events have helped some miners more than double their share prices over the past year………………………………………..Full Article: Source

4 Reasons Why Copper Is Due For A Rally

Posted on 23 February 2016 by VRS  |  Email |Print

The copper bear. Reason one - Other commodity action. Reason two - Technicals. Reason three - Seasonal trends. Reason four - Interest rates and China. So far, in 2016, COMEX active month March copper futures have traded in a range between $1.9355 and $2.1380 per pound.
Copper, the red metal that is often a barometer for the global economic condition, has been quiet when compared to other commodities. While copper did trade down to the lowest level since April 2009 on January 19, it has spent most of the time above the $2 level recently………………………………………..Full Article: Source

Commodity Slump Puts Dry-Bulk Shipping on Hold

Posted on 22 February 2016 by VRS  |  Email |Print

Idled ships are dotting coastlines world-wide as increasingly desperate companies that ship iron ore, coal and other bulk commodities try to weather the industry’s worst downturn in decades.
The parked vessels are a stark sign of how crumbling Chinese demand for commodities is pummeling the global shipping industry. The freight rates shipping lines can charge to transport raw materials are at record lows, and several operators have filed for bankruptcy protection or folded outright, brokers say………………………………………..Full Article: Source

Commodities’ well-travelled road to nowhere. Cutting output: Russell

Posted on 19 February 2016 by VRS  |  Email |Print

Live and don’t learn. That should be the motto of commodity producers whoattempt to push prices higher by trying a variety of methods torestrict supply. While the call by major producers including Saudi Arabia andRussia to freeze crude oil output at current levels is theheadline of the week, it’s merely the latest in a long line ofattempts to arrest sliding commodity prices.
In recent years various governments, producer bodies andeven companies have tried to influence commodity markets intheir favour, mostly with only very limited success. Thailand tried to push Asian rice prices higher in 2011 byrestricting supply in the mistaken belief that this would allowthe government to pay for a generous subsidy scheme for farmers………………………………………..Full Article: Source

Global growth not to pick up on Commodity price slump, China:Moody’s

Posted on 19 February 2016 by VRS  |  Email |Print

Global growth will fail to pick up steam over the next two years as the slowdown in China, lower commodity prices and tighter financing conditions in some countries weigh on the economy, Moody’s Investors Service said in a quarterly report.
The downside risks to Moody’s forecasts for G20 GDP growth of 2.6% in 2016 and 2.9% in 2017 have increased since the rating agency’s last Global Macro Outlook in November. Furthermore, G20 policymakers in some countries have limited fiscal and monetary policy space to boost growth or mitigate these risks………………………………………..Full Article: Source

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