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Commodities Briefing 04.Mar 2015

Posted on 04 March 2015 by VRS |  Email |Print

The majority of investors and corporate executives agree that higher commodity prices are needed to “reinvigorate” investor interest in the commodity sector, according to a survey of attendees at the BMO Global Metals and Mining Conference.
The conference participants, a mix of corporate executives and investors, were asked a total of 15 questions regarding the commodities sector; in its report, BMO said the answers provided some interesting insight into what the sector faces in the next two years……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

The plunge in oil prices has strained the balance sheets of drillers and reduced costs for airlines. One way that companies manage the risks from commodities market swings is through hedging. So what is hedging exactly?
No silly gardening jokes please. Hedging involves locking in a price to buy or sell a commodity in the future. It is a form of insurance against adverse moves in markets notorious for them. Hedging is also employed in currencies, interest rates and stock indices, but it originated in grain markets……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Commodity prices in New Zealand rose 1.8 per cent in February and there was a sharp positive revision for the January reading, according to a tracker compiled by ANZ. Prices rose 1 per cent in January, a big revision from the original reading which stated they fell 0.9 per cent.
Commodity prices have been in decline for much of 2014, according to ANZ’s monthly New Zealand commodity price index. However ANZ sounded a note of caution in its release, entitling the reading for February a “one hit wonder”……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Saudi Arabia, the world’s largest crude exporter, increased the pricing terms for Arab Light sold to Asia by the most in three years as demand improved. State-owned Saudi Arabian Oil Co. said Tuesday it will sell cargoes of Arab Light in April at 90 cents a barrel below Asia’s regional benchmark. That narrows the discount by $1.40 from March, the biggest price increase since January 2012, according to data compiled by Bloomberg. The company also raised prices it offers to refiners in the U.S.
“We expected an increase, but the degree of increase is on the higher side of expectations,” Eugene Lindell, a senior analyst at JBC Energy GmbH in Vienna, said Tuesday by phone. “The Asian market is a little bit stronger compared to the last months,” and Aramco’s adjustments reflect that strength……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Oil prices would probably need to rise to about $75 to $85 a barrel from around $60 currently for Tullow Oil and Africa Oil to go ahead with their Kenyan project, the chief executive of Africa Oil said.
CEO Keith Hill told the Reuters Africa Investment Summit he was confident that crude prices would recover to around those levels long before a final investment decision, due by the end of 2016, is made. “We still need oil prices to recover probably above today’s levels to pull the trigger on the project sanction,” he said. “I am quite confident that oil prices will recover by the end of the year.”………………………………………Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Drivers can mostly thank the lower cost of gasoline to the highest level of domestic oil production in four decades — over 9 million barrels per day. With American energy production booming and gas prices plummeting, it’s difficult to imagine a return to the shortages that characterized the 1973 Arab oil embargo.
But Saudi Arabia, Kuwait and the rest of the Organization of Petroleum Exporting Countries have recently launched a price war to force Americans back to a dependency on foreign energy. They are being aided by an outdated U.S. policy prohibiting the export of domestic crude oil……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

India’s decision to maintain an import duty on gold surprised investors, dealing a fresh blow to a metal that has been hit hard this year by a strengthening U.S. dollar and a series of policy shifts around the globe. Gold for April delivery, the most actively traded contract, sank $4.90, or 0.4%, to $1,208.20 a troy ounce on the Comex division of the New York Mercantile Exchange.
Investors had been hoping India would reduce the duty, likely boosting demand for gold from the world’s largest consumer. The decision adds to broad crosscurrents for gold, which tends to appreciate at times of economic uncertainty but does less well in more placid periods because it offers buyers no periodic payments, or yield……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Gold has done well over the last few days to enjoy some support at $1200 and rally higher to a one week high to finish last week, before dropping a little in the last 24 hours and placing its attention firmly back on the support at $1200. For the last month now gold has drifted steadily lower down to a one month low near the key $1200 level before finding solid support at this key level over the last couple of weeks.
Earlier last week gold moved back and forth and teased the $1200 level a little however the demand kicked in and brought it right back above the key $1200 level before moving a little higher to close last week. A few weeks ago it rallied higher after dropping through $1220 before running into some resistance around the key $1240 level……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Gold investing sentiment jumped in February, writes Adrian Ash at BullionVault, surging from a half-decade low to the strongest level since Spring 2013. That’s according to our new Gold Investor Index today. It tracks the number of buyers vs. sellers on BullionVault, the low-cost gold and silver market online. Used by 55,000 people worldwide, it saw $1.2 billion of metal (£740m, €920m) exchanged in 2014.
And last month, BullionVault’s Gold Investor Index jumped from 50.5 to read 54.5 as the number of people starting or adding to their gold holdings rose, but the number of sellers sank by two-thirds. A reading of 50.0 would signal a perfect balance of net buyers and net sellers across the month. The Gold Investor Index peaked at 71.7 in September 2011……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

The prevailing silver price volatility and surging stock market has investors asking, ” Is silver a good investment right now?” Silver prices have ranged from $15.785 an ounce to $18.31 in 2015. This is the norm for silver. Last year it was as high as $21.965 and low as $15.315.
The current price of silver is around $16.20 an ounce. It’s up about 3.4% on the year, but has been up as high as 16.7%. It can be hard as an investor to stomach that kind of volatility. But even with all these violent price swings, the reasons that make silver a good investment still hold true. ………………………………………Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Additional platinum metal sourced from recycling is one of the major reasons why the platinum market remains weak and this source of metal is being actively promoted by customers as an alternative to primary supply from South Africa.
That’s according to Royal Bafokeng Platinum (RBPlat) CEO, Steve Phiri, who told financial media and analysts during a presentation of the company’s financial results for 2014 in Sandton today that “… this is a worrying development”. Phiri added: “Secondary platinum from recycling is being viewed as a substitute for primary supply from South Africa because we are no longer seen as a reliable and sustainable supplier of the metal for various reasons including labour issues and regulatory issues……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

The price of iron ore has extended its recent losses in overnight trade, yielding ground for the sixth session out of the last seven. At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US62.30 a tonne, down 0.8 per cent from its previous close of $US62.80 a tonne.
The commodity is now less than 2 per cent above the five-and-a-half-year low of $US61.10 a tonne set in February and in danger of an imminent move below $US60. Should it breach that barrier it will be the first time since 2009. Investors are still coming to grips with the likely impact of the latest rate cut from the People’s Bank of China, but the longer traders think about the move, the more sceptical they seem to become……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

If history is any guide the global glut in iron ore may persist for as long as two years, according to the World Bank, which forecasts that the steel-making raw material will average $75 a metric ton this year.
“From experience from earlier iron ore episodes as well as other metal markets, it takes about one to two years for either excess supplies to get back to normal levels or excess demand to be met by larger supplies,” John Baffes, a senior economist at the lender, said in an e-mail response to questions……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Qatar’s aluminium industry remained resilient to the global economic downturn and dwindling oil prices. The total annual production of aluminium in Qatar is continuously growing and expected to touch 640,000 tonnes in 2015, which is 9.4 percent higher than the installed capacity of Qatalum plant (585,000 tonnes), a senior official of Qatalum said.
“We were not affected by oil crisis, and our production level is still increasing. The annual production in 2014 reached 612,000 tonnes, about five percent higher than the full capacity,” said Tom Petter Johansen (pictured), CEO of Qatalum……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Exchange-traded funds (ETFs) offer the best of both worlds—the benefits of diversification and money management like a mutual fund, and the liquidity and tick-by-tick real-time trading like a stock. Other benefits include lower transaction charges for ETF trading, tax-efficient structures, and a variety of sectors/asset classes/focused investment schemes suitable to the needs of both traders and investors.
Thanks to these features, ETFs have become hugely popular in last decade. With each passing month, new ETF offerings get introduced into the market. However, not all available ETFs fit the short-term trading criteria of high liquidity, cost efficiency, and price transparency……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

The first Bitcoin ETF for “ordinary” investors to buy is almost here… The Bitcoin Investment Trust got approval last week from the Financial Industry Regulatory Authority (FINRA) to sell its shares on the OTC Markets. It should start trading within the next couple of weeks. It is currently listed on the OTC Markets “pink sheets” under a temporary symbol, BTCV, but will have a permanent ticker of OTCMKTS: GBTC.
The fund gives investors a way to invest in Bitcoin without going to the trouble of buying Bitcoin and worrying about having a secure place to store it. It marks another step forward in Bitcoin’s long march to mass adoption……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Denmark’s central bank bought a record amount of foreign currency last month in a bid to protect the krone’s peg to the euro, underscoring the fallout from the European Central Bank’s efforts to boost economic growth.
The Nationalbanken’s net purchases of foreign exchange amounted to 168.7 billion Danish kroner ($25.32 billion) in February, equal to about 9% of the Nordic country’s gross domestic product. The scale of the intervention was a record for Denmark’s central bank, which also made significant net purchases of foreign currency the previous month……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

The Australian dollar led currencies of commodity-producing countries higher after the nation’s central bank refrained from a second interest-rate cut in as many months. Canada’s dollar rose the most in two weeks after a report showed fourth-quarter gross domestic product grew more than forecast, as policy makers prepared to meet Wednesday.
The Aussie gained versus most major peers after the Reserve Bank of Australia unexpectedly left the cash rate at a record-low 2.25 percent. New Zealand’s dollar rose, while Russia’s ruble led emerging-market currencies higher……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Nineteen countries, including Germany, Britain and France, have so far handed out a total of around 500 million free European Union carbon permits to industry to cover their 2015 emissions, European Commission data showed on Tuesday.
The Commission said on its website it will publish another update on March 17 on the number of permits allocated. The increased supply could hit an already oversupplied carbon market and could exert downward pressure on prices which were trading at around 6.80 euros a tonne on Tuesday……………………………………….Full Article: Source

Posted on 04 March 2015 by VRS |  Email |Print

Despite claims that increasing the price of carbon in the EU could harm businesses, a new study suggests that this is not the case. According to the paper, even a ten-fold increase in the carbon price is likely to have an “extremely limited” impact on exports and imports.
The researchers, from the Grantham Research Institute on Climate Change and the London School of Economics, analysed 62 business and industry sectors in 42 countries over a 15-year period, using data that covers 80% of global merchandise trade……………………………………….Full Article: Source

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