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Six collapsing commodities

Posted on 28 July 2015 by VRS  |  Email |Print

Commodity prices from gold to oil and aluminium to iron ore are tumbling – here are the big fallers. Just when investors thought it might be time for a summer lull, financial markets have shifted their focus from the eurozone and its Greek woes to tumbling commodity prices.
A combination of factors have knocked gold, crude oil and industrial metals such as copper in recent days. What commodities are on the move and what are they used for? Primarily used in jewellery and as a financial instrument, such as in the form of bars in central bank vaults, gold is also in demand from electronics companies and for medical uses such as dentistry………………………………………..Full Article: Source

Deutsche Bank: Just because all commodities are falling doesn’t mean there’s one driver

Posted on 27 July 2015 by VRS  |  Email |Print

Gold, copper, corn, wheat, iron ore. The list of commodities that have been falling and under pressure over recent weeks and months grows. It would be easy to think there is something they all have in common. A stronger US dollar, rising US interest rates, slowing Chinese growth?
Unlike Tolstoyan families, all unhappy commodities are alike whereas each happy one is happy in its own way. This time last year, with prices still strong, the average correlation among eight diverse commodities had fallen to a decade low of 10 per cent. Since then, amid a slump afflicting everything from gold and oil to copper and sugar, the correlation has increased to 20 per cent. Yet even though the overall CRB commodities index is approaching 2009 lows, the correlation is only half the level back then………………………………………..Full Article: Source

Oil Heading for Fall as Diesel’s Engine Sputters

Posted on 27 July 2015 by VRS  |  Email |Print

If you want to understand why oil is back below $50 a barrel and likely headed much lower once summer ends, start with PetroChina’s stock prices. Mainland-listed shares in China’s national oil champion are up 27% so far this year, while their Hong Kong-listed equivalents are down 9%.
The former have, of course, been juiced by Beijing’s desperate measures to prop up the mainland stock market. The latter are more reflective of what is really happening with oil supply and demand. China is showing signs of strain. While official gross-domestic-product data continue to helpfully meet Beijing’s targets, other numbers—and the stock-market panic— point downward………………………………………..Full Article: Source

Signals from gold prices

Posted on 27 July 2015 by VRS  |  Email |Print

The yellow metal dominated the world market scene all of last week. Gold slumped to a five-year low, slipping to an intra-day low-point of $1,072.30 by Friday. A late rally that day, however, pushed prices back to around $1,100 an ounce. At best, it helped pare losses from last Monday when the price slid to its lowest since March 2009, to $1,088.05 an ounce.
The Comex gold futures for August still ended their fifth consecutive week in negative territory. Though the rally suggests that there could be an improvement in market sentiment, the bearish undertone persists among retail investors. At the moment, everyone in the international marketplace is wary of gold. Indeed, price movement is set for an uncertain phase, at least in the near-term………………………………………..Full Article: Source

Here’s why gold is doomed

Posted on 27 July 2015 by VRS  |  Email |Print

A little less than four years ago, the world looked like it was about to end and gold hit an all-time high of $1,895 an ounce. The United States had manufactured a debt crisis, and Europe hadn’t been able to manufacture a solution to its actual debt crisis, so panicky investors sought safety in the same place they had for 5,000 years: a shiny rock.
The only problem, as you might have noticed, is that the world did not, in fact, end. It’s still here, so gold prices aren’t. The yellow metal has fallen 42 per cent from its peak and 8 per cent in just the last month, despite the fact that the Federal Reserve has printed more than $1.5 trillion in this time. That, after all, is what gold aficionados said would make its price go to the moon, if not infinity and beyond. So what’s happened? Well, exactly what economists said would happen………………………………………..Full Article: Source

Commodities slump: Is there trouble ahead for the global economy?

Posted on 24 July 2015 by VRS  |  Email |Print

There’s gobs of money chasing assets these days but there’s no “bubble” in commodities, which are tanking. It’s not just gold, which gets a lot of headlines; nearly all major global industrial commodities are back to 2009 levels — including coal, gas, oil, iron ore and copper. Agricultural commodities such as wheat, coffee and sugar have also fallen on hard times.
The dollar’s rally has certainly been a factor in the price action, with the greenback advancing versus other major currencies amid speculation the Fed will start raising rates sometime this year. The other big story is China, which reported better-than-expected second-quarter growth of 7% last week, a development that notably didn’t change the downward trend for commodity prices………………………………………..Full Article: Source

Investors dump commodities for the second half

Posted on 24 July 2015 by VRS  |  Email |Print

Oil and metal prices have faced a beating this year, with fresh data showing investors have been offloading commodities in the last quarter on fears that interest rate hikes later in the year will toss up even more market volatility.
Data from UBS shows investors dumped holdings in global energy Exchange Traded Funds (ETFs) by some 50 percent in the last three months, as the market prepares for a U.S. Federal Reserve rate rise later in the year………………………………………..Full Article: Source

China’s rising commodity exports changing nature of trade: Russell

Posted on 24 July 2015 by VRS  |  Email |Print

The world is used to seeing China as an importer of raw materials and an exporter of manufactured goods, but a change is occurring that has global implications for commodities. While China is still the world’s biggest importer of commodities, the nature of its exports are changing.
The big growth in exports this year has been in semi-finished products, most of which fit into the broad definition of commodities. While not raw materials, these include steel, aluminium products and refined fuels. What is happening in China is that as the country has overbuilt capacity in heavy industries, it is now being forced by economics to seek export markets for intermediate commodities that had previously been consumed at home………………………………………..Full Article: Source

Another grim year for commodities as global supplies rise: World Bank

Posted on 23 July 2015 by VRS  |  Email |Print

The outlook for commodities remains grim for this year, except that oil will fall a bit less than previously forecast, the World Bank said. Average prices for fuels such as crude, natural gas and coal will tumble 39 per cent from 2014, while those for materials like metals and fertilisers will fall about 12 per cent, the Washington-based lender said in its quarterly “Commodity Markets Outlook” released Wednesday.
“All main commodity price indices are expected to decline in 2015, mainly due to abundant supplies, and in the case of industrial commodities, weak demand,” the bank said in the report. Commodities are trading at their lowest in 12 years following a decade-long bull market fuelled by growth in developing nations such as China and India. The bank said that metals and coal consumption in particular may slow in China as the nation shifts to a more services-oriented economy and enacts policies to curb pollution………………………………………..Full Article: Source

Gold isn’t even close to being the biggest loser among commodities

Posted on 23 July 2015 by VRS  |  Email |Print

Gold’s collapse to five-year lows is dominating headlines, but it has been a rough year so far for commodities in general. Expectations the Federal Reserve will move later this year to raise rates, potentially leading to more strength for the U.S. dollar, gets much of the blame.
Most commodities are priced in dollars, making them more expensive to users of other currencies as the greenback strengthens. The ICE dollar index a measure of the U.S. unit against a basket of six major rivals is up by around 7.8% year-to-date………………………………………..Full Article: Source

As Commodities Tumble, Asia-Pacific Economies Grasp for Growth

Posted on 22 July 2015 by VRS  |  Email |Print

The swift decline of prices for commodities from crude oil to coal exposes how some Asia-Pacific economies reliant on those exports have struggled to find new sources of growth. The Federal Reserve’s plans to raise interest rates later this year, coupled with a resurgent U.S. dollar, sparked the current rout in commodities prices.
Yet China’s slowing demand had started the trend as early as 2012. Since then, policy makers from Australia to Indonesia have called for plans to develop new sectors of their economies. The latest tumble highlights the shortcomings of those overhauls, analysts say. The problem is that new industries haven’t yet filled the hole left by commodities-driven growth, said Paul Dales, chief economist for Australia and New Zealand at Capital Economics, a research firm………………………………………..Full Article: Source

What’s behind the falling prices of oil, gold and copper

Posted on 22 July 2015 by VRS  |  Email |Print

There’s a firesale on raw materials like copper, aluminum, gold and oil, raising concerns about the health of the global economy. The CRB raw industrials spot price index is now at its lowest level since November 2009. The Bloomberg Commodities Index touched levels unseen since June 2002.
What’s going on? “It’s a yellow flag for the global economy. I don’t think it’s a heads up that we’re headed for disaster, but I do think it tells us something,” said David Kelly, chief global strategist at JPMorgan Funds. Why are these commodities tanking? First, there simply isn’t enough demand………………………………………..Full Article: Source

Investors Flee Commodities

Posted on 21 July 2015 by VRS  |  Email |Print

Prices of raw materials tumble, underscoring an aversion to commodity investments as the Fed prepares to raise rates. The prices of raw materials from oil and gold to copper, cotton and sugar tumbled, underscoring an increasing aversion to commodity investments as the Federal Reserve prepares to raise interest rates for the first time in nearly a decade.
U.S. oil prices dipped below $50 a barrel on Monday during intraday trading for the first time since April, while gold slid 2.2% to its lowest level in five years. The drops extend a retreat from the commodity sector that has picked up speed in recent months. Hedge funds and other investors are holding more bearish than bullish wagers on gold for the first time on record going back to 2006, according to data released Friday by the Commodity Futures Trading Commission. Investors cut their bullish bets on oil to the lowest level since March………………………………………..Full Article: Source

Commodities crash could turn Australia into a new Greece

Posted on 20 July 2015 by VRS  |  Email |Print

The commodities boom made Australia the lucky country but rising debt and a slump in Chinese demand for resources signal tough times ahead Down Under. Last month Gina Rinehart, Australia’s richest woman and matriarch of Perth’s Hancock mining dynasty delivered an unwelcome shock to her workers in Western Australia: accept a possible 10pc pay cut or face the risk of future redundancies.
Ms Rinehart, whose family have accumulated vast wealth from iron ore mining, has seen her fortune dwindle since commodity prices began their inexorable slide last year. The Australian mining mogul has seen her estimated wealth collapse to around $11bn (£7bn) from a fortune that was thought to be worth around $30bn just three years ago………………………………………..Full Article: Source

The return of Iranian oil might cause more tensions in OPEC

Posted on 20 July 2015 by VRS  |  Email |Print

The return of oil from Iran following the landmark nuclear energy deal with world powers could create fresh tensions within OPEC but may reinforce the cartel’s output strategy, analysts say. Tehran and major powers — Britain, China, France, Germany, Russia and the United States — clinched a historic agreement in Vienna on Tuesday aimed at ensuring Iran does not obtain a nuclear bomb, and which paves the way for the removal of sanctions and the gradual return of Iranian oil to the global market next year.
The accord puts strict limits on Iran’s nuclear activities for at least a decade. In return, sanctions that have slashed the oil exports of OPEC’s fifth-largest producer will be lifted and billions of dollars in frozen assets unblocked………………………………………..Full Article: Source

History Shows Iran Could Surprise the Oil Market

Posted on 20 July 2015 by VRS  |  Email |Print

Iran could restore oil production halted by sanctions faster than anyone anticipates if the history of previous shutdowns is any guide. The consensus among analysts and traders is that Tehran needs at least a year after sanctions are lifted to raise output to the level prevailing before restrictions were imposed in 2012.
Similar pessimistic assessments for supply disruptions at OPEC members Libya and Venezuela were confounded by quicker-than-expected recoveries, according to data compiled by Bloomberg. Here’s Venezuelan oil production before and after a strike at state oil company Petroleos de Venezuela SA that started in late 2002:……………………………………….Full Article: Source

Global Economic Turbulence Rattles Commodity Prices

Posted on 17 July 2015 by VRS  |  Email |Print

The influx of global economic crises has had a bearish impact on numerous commodities, including energy, ferrous metals, and even precious metals. Supply and demand economics over the long-term have contributed to the problem, with rising energy production and long-term slowing of demand in China.
There are a few bright spots that traders may want to consider, including wheat, canola, and possibly ethanol, as well as precious metal mining equities. There has been no shortage of bad news for the global economy over the past couple of months — this precariousness has taken a toll on many economically-sensitive commodities………………………………………..Full Article: Source

Iran’s oil return a game changer for OPEC, but not for now

Posted on 16 July 2015 by VRS  |  Email |Print

OPEC is likely to keep oil output steady and defend its market share this year after Tehran’s nuclear deal with major powers, since a full return of Iranian crude to the market will not be swift, Gulf OPEC delegates said. But 2016 will be a tough year for the producer group when international sanctions on Iran are expected to ease, allowing it to boost oil production and exports.
Tehran’s determination to reclaim its position as OPEC’s second largest producer after it clinched the deal on Tuesday will cause new rivalries within the group. But Saudi Arabia and its Gulf OPEC allies are betting that higher demand next year may help the market absorb extra volume………………………………………..Full Article: Source

Commodity market rout shows how Chinese growth determines prices

Posted on 14 July 2015 by VRS  |  Email |Print

The recent global rout in commodity markets re-emphasised the relationship between Chinese growth and commodity prices. It is a well-known fact that China is the largest importer and consumer of many commodities, but its commodity traders are also among the most leveraged.
The Chinese manufacturing boom started a couple of decades ago serving the needs of the western world for cheaper manufacturing. But over the last decade much of its growth has been supported by the rise in domestic consumption driven by the vast middle-class on the back of rising incomes and asset prices………………………………………..Full Article: Source

Oil price has further to fall, says IEA

Posted on 13 July 2015 by VRS  |  Email |Print

Oil prices are set to come under further pressure from easing global demand and an expanding glut of crude while a rebalancing of the markets may last well into next year, the International Energy Agency has said. The IEA said it expected global demand growth to slow next year to 1.2m per day (bpd) from 1.4m this year - far less than needed to balance stubbornly growing non-OPEC and OPEC supply.
“The bottom of the market may still be ahead,” the IEA said in its monthly report. “The rebalancing that began when oil markets set off on an initial 60pc price drop a year ago has yet to run its course. Recent developments suggest that the process will extend well into 2016………………………………………..Full Article: Source

Global agri-commodities’ price plunges to six-year low in June

Posted on 10 July 2015 by VRS  |  Email |Print

Global agri commodities’ prices declined to nearly six-year low in June 2015 due to bumper output of all products in value chain. Forecast for yet another year of better-than-expected production this year despite continuing apprehension over El Niño pulled commodities’ prices down.
Data compiled by the Food and Agricultural Organisation (FAO) of the United Nations, showed prices of global agri commodities fell by 0.9% in June. Weighed in terms of index known as FAO’s Food Price Index (FPI), prices of agri commodities stood at 165.1 points, a decline of 21% from a year ago and at its lowest level since September 2009………………………………………..Full Article: Source

No Gold Rush as Greece and China Troubles Roil Markets

Posted on 10 July 2015 by VRS  |  Email |Print

Market mayhem is normally a buy signal for one asset: gold. But this time around the precious metal is the dog that hasn’t barked. The commodity surged to a record high in 2011 amid rising anxiety over the eurozone’s unfolding debt crisis, as mass protests against austerity policies hit the streets of Athens.
This year, faced with more turmoil from a deteriorating situation in Greece, investors haven’t yet rushed to gold. Nor have concerns about China’s economy and its plunging stock market yet caused the sort of panic gold-buying seen in past years………………………………………..Full Article: Source

Commodities continue to see volatility, China scare persists

Posted on 09 July 2015 by VRS  |  Email |Print

The global commodity market witnessed sharp volatility on Wednesday after tumbling in early trade due to concerns that a persistent slide in China’s stock market may have broader damaging impact on other markets as well.
Earlier in the day, the Bloomberg Commodity Index, which tracks the prices of 22 commodities (from oil to natural gas), dropped as much as 0.8% to 96.8069, its lowest level on a closing basis since late 2001 and slightly over an intraday low of 96.258 on March 18………………………………………..Full Article: Source

Commodity Slump Goes From Bad to Worse Amid China, Greece Spasms

Posted on 08 July 2015 by VRS  |  Email |Print

Commodities are going from bad to worse. Raw materials were already among the year’s worst-performing asset classes. Now they’re bearing the brunt of economic spasms from China to Greece. “Some markets looked fragile anyway,” said Kevin Norrish, director of commodities research at Barclays Plc.
The past two days wiped 4.2 percent off the Bloomberg Commodities Index, which tracks 22 raw materials. It was the biggest such decline since September 2011. Here’s how that breaks down and why: Oil has the biggest footprint in broad-based commodity indexes………………………………………..Full Article: Source

The Commodity Rout Cannot Be Ignored

Posted on 08 July 2015 by VRS  |  Email |Print

If you didn’t know any better and you just looked at the commodities markets, you could easily presume that we could be going into a worldwide recession led by Greece. Think about it. You have copper in total breakdown mode. Copper still matters. It isn’t some made-up metal, it’s for real. You have Alcoa (AA) plummeting.
We will hear from it tomorrow, and I like it longer term, because it is transforming itself into a higher value-added metals company, not just an aluminum company. Tomorrow, though, we will not hear glowing things about aluminum. We know that the oil collapse is vicious, the worst we have seen during this moment, a free-fall as if many longs are caught and are forced to liquidate………………………………………..Full Article: Source

India: Base Metal Industry to Grow 8-10% Annually: Moody’s

Posted on 08 July 2015 by VRS  |  Email |Print

India’s base metals industry is expected to grow by 8-10 per cent annually over the next three years on the back of increased demand from the power, construction and automotive sectors, rating agency Moody’s said on Tuesday. “We expect India’s consumption of base metals to increase by 8-10 per cent annually over the next three years, driven primarily by demand from three sectors, power, construction and automotive,” Moody’s vice president-senior credit officer Alan Greene said here.
“Our projections reflect domestic GDP growth - forecast at 7.5 per cent in fiscal year 2016 and 7.6 per cent in fiscal 2017 - and the government’s efforts to boost infrastructure spending,” he added………………………………………..Full Article: Source

Commodities Skid on China’s Stock Rout

Posted on 07 July 2015 by VRS  |  Email |Print

Commodities suffered their worst rout in seven months as a steep selloff in China’s stock market magnified investor fears about weaker demand from one of the world’s largest consumers of raw materials.
The S&P GSCI, an index that tracks a diversified basket of commodities, fell 4.9% to 412.51 Monday. This was its steepest drop since November and its lowest level since April. The losses come amid a swift downdraft in Chinese stocks, which have lost more than one-quarter of their value since touching a record high in June and gave up 72% of all their gains made this year………………………………………..Full Article: Source

Commodities fall saves China’s blushes

Posted on 06 July 2015 by VRS  |  Email |Print

China’s economy would have grown at less than 6 per cent in the first quarter of the year were it not for the collapse in global commodity prices, according to data reviewed by the Financial Times. The latest evidence of a Chinese economic slowdown, which comes amid sharp falls in the country’s equity markets, will add to growing doubts over whether Beijing can achieve its 7 per cent growth target for the year.
At its first-quarter briefing in April, China’s National Bureau of Statistics (NBS) reported that gross domestic product had risen 7 per cent, but did not provide a breakdown of the figure into its three components — consumption, investment and net exports………………………………………..Full Article: Source

How would the possible Grexit hit commodities?

Posted on 06 July 2015 by VRS  |  Email |Print

The Greek government’s decision to hold a referendum on the latest creditor package shocked the bond and equity markets. Should there be similar fundamental or financial shocks for commodity prices? From a fundamental perspective, no. Greece as an economy contributes 0.4% of global GDP and its largest impact on the commodity markets – shipping – is unlikely to see disruptions as a result of the referendum.
The financial, or theoretical, perspective is different. We believe the fear of contagion and impact on currency markets will be felt most acutely in gold, crude oil and the base metals. For gold, the rush to a safe, tangible commodity has an obvious appeal………………………………………..Full Article: Source

The real reason gold has been falling

Posted on 03 July 2015 by VRS  |  Email |Print

There is too much bullishness among gold market timers, and that’s why the yellow metal has failed to respond to the macroeconomic factors that otherwise should have caused it to rally. Imagine being told a month ago how the Greek debt crisis would unfold over the next few weeks. If you knew then that the country would default on its debt, you probably would have forecast that gold would rally.
That’s because bullion is a safe haven in times of geopolitical and economic crisis, and Greece’s default threatens the economic stability of the entire eurozone. Another reason you’d have been bullish is that gold is an inflation hedge, and it would have been a good bet that, if Greece did default, the European Central Bank would flood the eurozone with monetary stimulus in an effort to keep the Greek crisis from spreading………………………………………..Full Article: Source

Global slump in agri commodities to persist: report

Posted on 02 July 2015 by VRS  |  Email |Print

A major factor driving lower food prices globally is lower oil prices that is pushing down energy and fertilizer costs, the report said, adding, this will remove incentives for production of bio-fuels. Better crop yields and a slower growth in global demand will lead to a gradual decline in real prices of major crops over the next decade, said the Agricultural Outlook 2015-2024 released on Wednesday.
However, crop prices are likely to remain at levels above those in the early 2000s, observed the report released by the Organisation for Economic Cooperation and Development (OECD) and UN’s Food and Agriculture Organization (FAO)………………………………………..Full Article: Source

Commodities Break Their Ties

Posted on 02 July 2015 by VRS  |  Email |Print

Tumbling oil prices and a historic rally in the U.S. dollar had commodity markets marching in lock step for months, but they broke ranks in the second quarter. Oil prices, which touched six-year lows in March, gained 24.9% in the second quarter on expectations of slowing supplies and higher demand.
Meanwhile, the dollar pulled back from 12-year highs as investors pushed back their forecasts for higher interest rates in the U.S. “This has helped commodities become independent and dispersed once again,” said Michael Haigh, global head of commodities research at Société Générale………………………………………..Full Article: Source

Greece is in crisis—why no love for gold?

Posted on 02 July 2015 by VRS  |  Email |Print

People tend to flock to gold as a safe-haven investment during a crisis. So, why not in the case of Greece? There is no reason for gold to get any love now because this is a political crisis, not a currency crisis. The primary reason you buy the “barbarous relic” that is gold is fear of a global currency crisis.
In Greece, citizens and investors are not concerned about having a currency to use; the only unknown is which currency they will adopt or create. Currently, the Greek citizens have a currency, the euro, but using it is next to impossible with the banks closed………………………………………..Full Article: Source

Greece default: Why isn’t gold budging?

Posted on 02 July 2015 by VRS  |  Email |Print

Gold’s stubborn non-reaction to Greece’s default on its crucial 1.5 billion euro repayment ($1.7 billion) to the International Monetary Fund (IMF) couldn’t be more disappointing to bullion bugs. The yellow metal reversed slight gains to trade around 0.3 percent lower at $1,169 on Wednesday, despite heightened uncertainty around the fate of the heavily-indebted nation.
So, why isn’t the yellow metal catching a safe-haven bid? Here’s what commodities analysts are chalking it up to, in their own words: First off, investors expect the Greek crisis will be contained. Victor Thianpiruiyam, commodity strategist at ANZ: “The market seems a little more confident with the situation now. There seem to be reassurances from euro zone officials that the contagion risk from Greece will be relatively small if any at all………………………………………..Full Article: Source

Why an Iran deal could mean lower oil prices

Posted on 01 July 2015 by VRS  |  Email |Print

A final accord to curtail Tehran’s nuclear ambitions could lead to a glut of Iranian oil hitting an already “oversupplied market,” which would serve to pressure prices, oil expert John Kilduff said Tuesday, as negotiators in Vienna face a deadline that’s expected to be extended.
Returning to the talks after consultations at home, Iran ’s chief diplomat insisted Tuesday he has a mandate to finalize a nuclear agreement, despite increased signs of backtracking. “Right now the happy talks is flowing … that things are looking good for a deal,” said Kilduff, founding partner of Again Capital, an alternative investment manager specializing energy and metals………………………………………..Full Article: Source

Silver About to Turn More Volatile

Posted on 01 July 2015 by VRS  |  Email |Print

Silver has moved sideways for about nine months, after it moved sideways from a slightly higher level for about 14 months. Boring! The big events in the past 5 years have been: August 2010: Silver began a huge move from under $18 to nearly $50. April 2011: Silver hit a 30 year high just under $50.00.
May 2011: Silver crashed to about $34. HFT left fingerprints at the scene. January 2013: Silver dropped below $30. April 2013: President Obama met with a group of influential bankers in the White House. The price of silver crashed the next day and by June silver had dropped to about $19. (If it happens in politics, it was planned…) November 2014 & March 2015: Silver made a double-bottom at about $15. Few noticed………………………………………..Full Article: Source

El Niño set to disrupt key commodities in 2015

Posted on 30 June 2015 by VRS  |  Email |Print

El Niño 2015 is underway and set to hit wheat, coffee and sugar cane production leading to volatile prices, warns a Rabobank report. With buffer stocks for these commodities at ‘comfortable levels’, some of the impact of a particularly strong El Niño would be buffered - but not completely shielded from fundamental and speculative influences. This also held for soy oil and palm oil, the report said.
While ‘meaningful’ climate disruptions had yet to be observed, Rabobank warned that key drivers of the phenomenon – such as a rise in sea surface temperatures – would intensify from September to November. The National Oceanic and Atmospheric Administration(NOAA) has predicted a strong event for 2015………………………………………..Full Article: Source

Water: The Next Tradable Commodity?

Posted on 30 June 2015 by VRS  |  Email |Print

Water will one day be soon traded as a commodity. Setup in 2003 as an unmanaged benchmark, the Palisades Water Index is tracked by many water indexes and ETFs. As the popular rhyme goes: “Water, water everywhere, but not a drop to drink” tweet.
Public perception has begun to change regarding water no longer being an infinite resource as we previously thought. Despite it covering 68% of the surface of the planet, the amount that actually serves a purpose for humans is only a mere 0.3%. With what some perceive as an “epidemic” expanding globally, experts predict that the only sustainable way in managing water is to trade it on a futures exchange, similar to other natural commodities such as oil and gold………………………………………..Full Article: Source

One of Indonesia’s Richest Men Is Bullish on Commodity Processing

Posted on 29 June 2015 by VRS  |  Email |Print

As the head of one of Indonesia’s largest investment companies, Peter Sondakh knows to follow market trends. It’s the reason he took up smoking cigars last year, he says, beneath the whir of air purifiers in his office. It’s also, he says, partly why he’s selling off stakes in his palm oil plantation – Indonesia’s third largest – in the hope of moving toward processing, refining and trading at a time when slumping commodity prices and weakened demand for raw materials from China have dented the economy.
“I pride myself in adding value,” said Mr. Sondakh, whose PT Rajawali Corp. is one of Indonesia’s biggest conglomerates with investments in mining, property, plantations and media. “Added value products will have more profit.”……………………………………….Full Article: Source

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

Boom in once-scarce ‘rare earth’ metals ends in US miner’s bust

Posted on 26 June 2015 by VRS  |  Email |Print

A slump in the prices of obscure metals used in advanced electronics claimed its highest-profile victim on Thursday when the biggest non-Chinese producer of rare earths sought bankruptcy protection. The petition by Molycorp, based in Colorado, marks a sharp turnround for a company whose shares reached a peak in 2011 of $79, giving it a market capitalisation of more than $6bn.
The company’s decline since then has tracked the plummeting value of metals such as Lanthanum, Praseodymium and Ytterbium as the Chinese government’s failed efforts to corner the market made the metals far easier to source than before………………………………………..Full Article: Source

South Africa’s Rhodium Mining Boom Sends Prices Tumbling 35%

Posted on 24 June 2015 by VRS  |  Email |Print

The end of labor strikes in South Africa’s mining industry is increasing rhodium production at the fastest pace in two decades and cutting prices. The metal, used to control toxic emissions from cars, dropped 35 percent since August to a 18-month low of $955 an ounce, according to data from Johnson Matthey Plc. South Africa may boost output by 25 percent this year after three years of declines, according to the London-based firm, which makes about a third of the world’s catalytic converters.
“Rhodium is looking very bearish,” David Jollie, head of research at Mitsui & Co. Precious Metals Inc., said by phone from London on Monday. “Buyers are taking the view that if they wait, prices will come to them.”……………………………………….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

‘Umpteenth’ Greek Summit Sees Gold Prices Fall

Posted on 23 June 2015 by VRS  |  Email |Print

Gold Prices erased two-thirds of last week’s 1.5% jump against a rising US Dollar on Monday, dropping back from $1200 per ounce as Eurozone stock markets held strong gains amid hopes of a quick deal at the latest emergency summit on Greece’s debt crisis.
Five years after the first such summit, “We are approaching an absolutely decisive moment,” French radio was told by the European Union’s economic affairs commissioner Pierre Moscovici today. Greece’s proposals “go in the right direction [and make] a good basis for an agreement,” he said………………………………………..Full Article: Source

Rising U.S. Oil Demand in 2015 - and Beyond

Posted on 22 June 2015 by VRS  |  Email |Print

The constant writing on the oil market today largely focuses on mounting global supply. That’s perfectly understandable: shale oil productivity has increased 50% over the past five years, U.S. crude output is up 90% since 2008, and OPEC infighting on how to deal with the U.S. shale oil revolution is interesting discussion to say the least.
But, oil demand is now becoming more of a focus, as rising global use remains a steady drumbeat. For the U.S., the largest oil consumer in the world at nearly double 2nd place China, demand for the week of June 12 hit 20 million b/d, an 8% increase year-over-year. Overall, U.S. oil demand has seesawed between 18.5 and 20.5 million b/d for years………………………………………..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

How Big Oil Was Saved From the Oil Price Crash

Posted on 19 June 2015 by VRS  |  Email |Print

Low oil prices have been less of a drag on the big integrated oil companies than it has for smaller producers. Diversified portfolios have allowed the largest oil companies to weather the storm better than their smaller competitors.
To be sure, Big Oil has not gotten off lightly. In fact, some of the largest megaprojects that are only undertaken by the oil majors appear to be huge financial burdens. Having spent billions of dollars on extraordinarily large and complex projects — ultra-deepwater, LNG, large oil sands projects — the costs are a colossal weight around the necks of the oil majors. The oil industry has scrapped an estimated $200 billion in future offshore and LNG projects as the industry backs away from the massive costs………………………………………..Full Article: Source

Gold and Silver Price Forecast for the Second Half of 2015

Posted on 18 June 2015 by VRS  |  Email |Print

Investors considering gold or silver as an investment or hedge need a good handle on the factors driving their prices. That’s where supply, demand, trend, and sentiment data come in. With global economic and market factors painting no clear picture about the near-term prospects for many investments, many of you might be considering whether it makes sense to add gold or silver to your portfolios.
Jewelry was down slightly by 3% at 600.8 metric tons, but has remained above its five-year average of 570.3 metric tons. Chinese jewelry demand was down 23 metric tons, but India compensated by climbing 27 metric tons. In China’s case, it seems a combination of slower GDP growth and strong stock markets combined to dent demand. In the case of India, jewelry demand popped 22% year over year, due mainly to unusually weak buying in Q1 2014………………………………………..Full Article: Source

Speculating on commodities can add diversity to your portfolio

Posted on 17 June 2015 by VRS  |  Email |Print

Anyone with an equity fund that tracks the S&P 500 has something close to 10 per cent of their investment in commodities companies, such as oil and gas producers or the miners of metals and minerals. For anyone who owns the FTSE 100, the figure is more than 20 per cent, largely because BP and Shell dominate the UK stock market.
Yet an increasing number of financial advisers suggest that investors should also carve out an additional piece of their portfolio to invest directly in commodities………………………………………..Full Article: Source

China, India are ‘changing the nature’ of gold bullion markets

Posted on 17 June 2015 by VRS  |  Email |Print

There is a shake-up in the gold market—and emerging markets like China and India are to blame. Emerging-market demand is ‘changing the nature of the bullion market,” HSBC analysts, led by James Steel, said in a note on Tuesday. Investment demand was the primary driver of gold until recently, but “price-sensitive EM demand is an increasingly important driver of gold prices, they said.
EM buyers and sellers “largely define” the range for gold—with prices near $1,100 an ounce attracting buyers, but prices near $1,300 causing buyers to “shy away from purchases,” the HSBC analysts said. Gold futures GCQ5, -0.06% settled at $1,180.90 on Tuesday………………………………………..Full Article: Source

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