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Commodities Briefing - Archive | May, 2012

Global carbon market value rises to record $176 bln

Posted on 31 May 2012 by VRS  |  Email |Print

Carbon market trading rose 11 percent to a record value of $176 billion in 2011 as an increase in secondary trading volumes offset lower prices and slowing economies, the World Bank said on Wednesday.
Companies and governments are turning to emissions trading as a tool for fighting climate change, with the European Union by far the most active since its cap-and-trade scheme began in 2005………………………………………..Full Article: Source

Are commodities at risk of de-financialization? Kemp

Posted on 31 May 2012 by VRS  |  Email |Print

Unless returns on commodity futures and options start to pick up soon, institutional investors may sour on the asset class and scale back or terminate their exposure to it, ending a decade-long trend that has seen increasing financial involvement in commodity derivatives.
The first five months of 2012 have brought more disappointment for pension funds and other investors with a long position in a diversified basket of commodity futures………………………………………..Full Article: Source

Sun to set on commodities super-cycle: Morgan Stanley

Posted on 31 May 2012 by VRS  |  Email |Print

The massive commodities boom of the past decade is at its tail end given the slowdown in one of the largest consumers, China, says Ruchir Sharma, Head of Emerging Markets at Morgan Stanley Investment Management.
“China`s growth is downshifting to a lower plain, its very commodity-intensive phase of growth is coming to an end. This to me marks a big decade of increase in commodity prices coming to an end,” Sharma told CNBC………………………………………..Full Article: Source

A less-super commodities supercycle

Posted on 31 May 2012 by VRS  |  Email |Print

Higher, further, faster. For the past 10 years that has been the mantra in global commodities. But the boom in demand that has propelled prices of raw materials from oil and copper to iron ore and bananas to record highs is showing signs of exhaustion.
Amid concerns over slowing Chinese demand and the strength of the US recovery, investors are asking if the “supercycle” has run its course………………………………………..Full Article: Source

Prices for most commodities fall on questions about demand as Europe’s economic woes linger

Posted on 31 May 2012 by VRS  |  Email |Print

Europe’s financial troubles have cast a pall across the commodities market, which trades basic materials that are used in everything from housing and vehicles to food.
Most commodities prices fell Wednesday after a fresh wave of poor economic news from Europe lent more weight to fears that the region’s slowdown will hurt future demand around the world………………………………………..Full Article: Source

Commodities sink as market-wide risk appetite unravels anew

Posted on 31 May 2012 by VRS  |  Email |Print

Commodity prices are trading sharply lower as risk aversion grips financial markets. Sentiment-sensitive crude oil and copper prices are following stocks lower while gold and silver face de-facto selling pressure as haven flows boost the US Dollar.
The dour mood began to take shape in Asiaafter ratings agency Egan Jones downgraded Spain while state-run media outlet Xinhua reported that China was not planning an aggressive round of stimulus to combat this year’s growth slowdown………………………………………..Full Article: Source

Oil hits 7-month low as risk aversion sweeps markets

Posted on 31 May 2012 by VRS  |  Email |Print

Oil dropped more than 3 percent on Wednesday to the lowest level in seven months as fears about the euro zone crisis sparked an erosion in risk appetite across markets.
Prices for U.S. benchmark West Texas Intermediate crude futures headed toward their biggest monthly drop since the financial crisis of 2008, breaking below a key technical level as investors headed to perceived safe havens………………………………………..Full Article: Source

OPEC’s continued overproduction may destabilize oil markets -Iran

Posted on 31 May 2012 by VRS  |  Email |Print

OPEC’s overproduction has negatively impacted oil prices and could destabilize markets going forward, Iran’s representative with the group said Wednesday.
Coming ahead of a crucial June 14 meeting of the Organization of Petroleum Exporting Countries, the remarks suggest mounting concerns among some producers over whether it may end up pumping too much for its own good………………………………………..Full Article: Source

Iran urges OPEC members to avoid unilateral measures

Posted on 31 May 2012 by VRS  |  Email |Print

Iranian OPEC Governor Mohammad Ali Khatibi has called on the member states of the intergovernmental organization to demonstrate commitment to the collectively-made decisions of the body.
Khatibi said that attempts by certain OPEC members, particularly Saudi Arabia, to increase their oil production capacity could create volatility in the global markets and probably greatly reduce oil prices, given the doubts about the world economic recovery and its impact on the global oil demand in the coming months………………………………………..Full Article: Source

More candidates emerge for top OPEC post

Posted on 31 May 2012 by VRS  |  Email |Print

Two more countries are likely to field candidates for OPEC’s next secretary general, OPEC sources said on Wednesday, widening a competition within the oil producer cartel for its top administrative post.
Ecuador, OPEC’s smallest producer, has nominated a potential successor to current OPEC Secretary General Abdullah al-Badri, whose term ends at the end of 2012, a source said. Iran, its second-largest producer, is expected to do so………………………………………..Full Article: Source

Energy reforms risk becoming ‘expensive and inefficient’, IEA warns

Posted on 31 May 2012 by VRS  |  Email |Print

Government plans to reform the energy sector risk becoming “expensive and ineffective”, the International Energy Agency (IEA) warned.
In its review of UK energy policy, published on Wednesday, the IEA also warned that the Green Deal efficiency scheme could be hindered by mistrust of the Big Six suppliers………………………………………..Full Article: Source

China invests heavily in clean energy - But is it too little, too late?

Posted on 31 May 2012 by VRS  |  Email |Print

How much will it cost to turn back the clock on China’s ecological destruction? After years of promoting fast-paced, state-led economic growth, which has disproportionately benefited the country’s massive steel, coal, and oil companies, the government is now moving to spend more on cutting emissions and supporting renewable energy.
China’s Ministry of Finance said last week that the central government will spend 170 billion yuan, or almost $27 billion, this year on improving energy efficiency and building renewable-energy infrastructure………………………………………..Full Article: Source

Gold: It’s just a metal, folks

Posted on 31 May 2012 by VRS  |  Email |Print

Despite its recent pullback, gold’s bull run, which began more than a decade ago, has rewarded those who owned it through the financial crisis. For investors willing to put up with intermittent declines — some of them substantial — gold has lived up to its billing as a “safe haven” asset.
Will it continue to live up to that reputation? Perhaps not, as recent evidence suggests that it has been relegated to the ranks of its grubby commodity peers. If you own gold on the expectation that it is an effective hedge for the rest of your portfolio, now is the time to re-evaluate that premise………………………………………..Full Article: Source

Gold reserves getting bigger role in new economic order

Posted on 31 May 2012 by VRS  |  Email |Print

Gold prices may have fallen out of bed over the past four months. But gold as a currency is gaining ground as gold reserves are increasingly being allocated a more important role in the coming new economic order.
Under a $3.5 billion stabilization plan being promoted in Germany as the European Redemption Pact, the heavily indebted euro-zone states would use hard assets such as their gold and currency reserves to back a new type of euro bond………………………………………..Full Article: Source

Gold poised for worst monthly run in 13 years

Posted on 31 May 2012 by VRS  |  Email |Print

Gold is poised for the worst run of monthly losses in almost 13 years as concern that Europe’s fiscal crisis is escalating drove investors to seek the dollar as a haven over the precious metal.
Spot gold was little changed at $1,562.63 an ounce at 10:31 a.m. in Singapore, after climbing 0.5 percent yesterday. Bullion is 6.1 percent lower in May for its biggest drop this year as the dollar rallied 5.4 percent against a six-currency basket including the euro………………………………………..Full Article: Source

Gold may be ending its 11- year uptrend in 2012

Posted on 31 May 2012 by VRS  |  Email |Print

Gold prices continue to remain depressed on Eurozone crisis, falling demand in Indian markets due to weak Rupee and increase in import duty on the yellow metal. After a 11 year bull run is gold preparing for a major set back in 2012? The following facts suggests so:
-Data from the U.S. Commodity Futures Trading Commission showed that in the week ended May 22, speculators cut net bullish bets on U.S. gold to the lowest level since December 2008 as the rise in short positions outpaced the uptick in longs………………………………………..Full Article: Source

Bullion below $1,550 as ‘bulls misjudged the dollar’

Posted on 31 May 2012 by VRS  |  Email |Print

The US dollar gold price fell further on Wednesday morning, trading at one-week lows beneath $1,550 per ounce as world stock markets dropped and the euro hit a fresh two-year low amid fresh debt woes in the 17-nation currency union.
The European Commission in Brussels accused Spain – where unemployment is now above 25% – of not doing enough to meet its deficit-reduction targets………………………………………..Full Article: Source

Hot copper shorts burning China commodity firms

Posted on 31 May 2012 by VRS  |  Email |Print

China has long been the world’s largest consumer and a net importer of copper, which makes exporting large quantities of the metal seem counter-intuitive.
Yet Jiangxi Copper International Trading Co. Ltd. announced in May that it would join hands with other domestic traders and smelters and begin exporting refined copper, shipping it to transaction warehouses designated by the London Metal Exchange (LME)………………………………………..Full Article: Source

Nickel slump seen ending as China faces ore import curbs

Posted on 31 May 2012 by VRS  |  Email |Print

After slumping more than any other industrial metal, analysts and traders say the worst may be over for nickel as restrictions on shipments from Indonesia, the biggest producer, diminish a worldwide glut.
Indonesia banned some ore exports from May 6 and imposed a 20 percent tax on the remainder to spur the development of its refining industry………………………………………..Full Article: Source

Mining booms, busts & bargains

Posted on 31 May 2012 by VRS  |  Email |Print

The S&P/ASX 200 Materials Index comprises a wide range of commodity-related manufacturing industries, including companies that manufacture chemicals, construction materials, glass, paper, forest products and related packaging products as well as metals, minerals and mining companies. It forms the basis of the basic materials stocks in my coverage universe.
Until mid-March this index was widely outperforming the broader S&P/ASX 200 Index and the world’s most-watched index, the S&P 500, year to date………………………………………..Full Article: Source

Shanghai ready to realise its destiny as top commodity trading platform

Posted on 31 May 2012 by VRS  |  Email |Print

Shanghai’s futures exchange is another step closer to what is no doubt its intended role as the globe’s premier commodity trading platform.
Now it plans to get in on crude oil trading by the end of the year as part of a longer-term plan to have these Chinese contracts getting equal pegging with existing contracts such as Brent crude futures………………………………………..Full Article: Source

MCX biggest gainer on debut among IPOs in 2012‎

Posted on 31 May 2012 by VRS  |  Email |Print

With its shares skyrocketing 26 per cent on debut trade, country’s largest commodity bourse MCX remains the most successful initial public offering so far this year amid turbulent market conditions.
Out of the five companies that entered the stock market in 2012, just two — MCX and education services firm MT Educare — managed to close with gains on the first day of trading. ……………………………………….Full Article: Source

Tokyo Grain Exchange to dissolve at shareholders’ meeting, switch bourses

Posted on 31 May 2012 by VRS  |  Email |Print

The operator of the Tokyo Grain Exchange, the nation’s second-largest commodity bourse, will seek its dissolution at a shareholders’ meeting next March due to shrinking volumes.
Under the plan, corn, soybean, sugar and adzuki bean contracts will be transferred in February to the Tokyo Commodity Exchange, Japan’s leading raw materials bourse, while the Kansai Commodities Exchange in Osaka will start handling rice futures, Tokyo Grain Exchange Inc. President Yoshiaki Watanabe told reporters after a board meeting………………………………………..Full Article: Source

Asian currencies weaken most since September on Europe, China

Posted on 31 May 2012 by VRS  |  Email |Print

Asian currencies were poised for the biggest monthly loss since September as China’s economy slowed and a banking crisis in Spain curbed appetite for emerging- market assets.
The Bloomberg-JPMorgan Asia Dollar Index lost 2.7 percent since April 30 as global funds pulled $7.8 billion from South Korean, Taiwanese and Indonesian stocks, exchange data show………………………………………..Full Article: Source

US refrains from branding China a currency manipulator

Posted on 31 May 2012 by VRS  |  Email |Print

The Obama administration on Friday rejected calls within Congress to brand China a currency manipulator, but said its “significantly undervalued” currency was a key brake on global growth.
The US Treasury Department said China had not met the standards for manipulation of the yuan, also known as the renminbi, to gain an unfair competitive trade advantage. Such a distinction could pave the way for retaliatory sanctions………………………………………..Full Article: Source

Global CO2 emissions hit record in 2011 led by China: IEA

Posted on 31 May 2012 by VRS  |  Email |Print

China spurred a jump in global carbon dioxide (CO2) emissions to their highest ever recorded level in 2011, offsetting falls in the United States and Europe, the International Energy Agency (IEA) said on Thursday.
CO2 emissions rose by 3.2 % last year to 31.6 billion tonnes, preliminary estimates from the Paris-based IEA showed………………………………………..Full Article: Source

Bilateral carbon trade surged last year, World Bank says

Posted on 31 May 2012 by VRS  |  Email |Print

The value of bilateral carbon trading surged 15 percent last year after thefts of European Union emission allowances suspended prompt trading on exchanges, the World Bank said.
EU greenhouse-gas trades that didn’t involve exchanges or brokers surged to $17.3 billion, the bank said today in its yearly report on CO2 markets………………………………………..Full Article: Source

Commodities prices turn lower after dollar spikes

Posted on 30 May 2012 by VRS  |  Email |Print

A sharp upturn in the value of the dollar sent prices for oil, gold and other commodities sharply lower. The dollar’s spike against the euro came at midmorning Tuesday after Egan Jones, a small credit ratings agency, cut its rating on Spanish government debt.
Even though the agency isn’t as well-known as Moody’s or Standard & Poor’s, the report was enough to rekindle worries that Spain’s financial troubles could deepen………………………………………..Full Article: Source

Hedge funds bet wrong on wheat, right on copper

Posted on 30 May 2012 by VRS  |  Email |Print

Sean McGillivrayHedge funds and other money managers betting on a continued rally in U.S. wheat from dry weather bought close to $2 billion (1.3 billion pounds) worth of contracts in the grain over a week before the market’s tumble three days ago, trade data on Friday showed.
In copper, fund managers dumped nearly $670 million worth of long positions just before the metal suffered its sharpest price drop in over a week, the data from the Commodity Futures Trading Commission showed………………………………………..Full Article: Source

Commodities aim higher as risky assets find support

Posted on 30 May 2012 by VRS  |  Email |Print

Commodity prices are yielding mixed results in European trade as traders wait for guidance from the US economic data set to establish near-term direction cues. May’s US Consumer Confidence reading and the Dallas Fed Manufacturing Activity gauge are on tap, with expectations pointing to improvements on both fronts.
Broadly speaking, data collected by Citigroup suggests US economic data has stabilized relative to expectations in May after three months of deterioration. This lays the foundation for stronger outcomes to buoy hopes that a firming (albeit unevenly so) recovery in North America can help offset weakness in Europe and Asia………………………………………..Full Article: Source

OPEC output hits new high in May - Reuters survey

Posted on 30 May 2012 by VRS  |  Email |Print

OPEC output in May has hit its highest since 2008 as Saudi Arabia maintained high production rates despite a drop in prices and Iranian shipments did not fall substantially further ahead of an EU embargo, a Reuters survey found on Tuesday.
Supply from the 12-member Organization of the Petroleum Exporting Countries has averaged 31.80 million barrels per day (bpd), up from 31.75 million bpd in April, the survey of sources at oil companies, OPEC officials and analysts found………………………………………..Full Article: Source

Saudi boosts OPEC output despite price drop

Posted on 30 May 2012 by VRS  |  Email |Print

OPEC oil output in May has hit its highest since 2008 as Saudi Arabia kept rates high despite a drop in prices and Iranian shipments did not fall much further ahead of an EU embargo, a Reuters survey found on Tuesday.
The increase in supplies by Saudi Arabia has helped to cushion the impact of Western measures against Iran’s nuclear programme. Still, with Iraq unable to sustain an increase in exports and Libyan output falling, analysts say further rises in OPEC supply will be harder to achieve………………………………………..Full Article: Source

IEA says global gas demand could rise more than 50pct by 2035

Posted on 30 May 2012 by VRS  |  Email |Print

World demand for natural gas could rise more than 50% by 2035, from 2010, the International Energy Agency said Tuesday, but only if a significant portion of the vast global resources of shale gas, tight gas and coalbed methane can be developed profitably and in an environmentally acceptable way.
The IEA said the surge in North American production of unconventional gas, thanks to technology advances, held out the prospect of further output increases in the US and Canada and “the emergence of a large-scale unconventional gas industry in other parts of the world, where sizeable resources are known to exist.”……………………………………….Full Article: Source

‘Golden age of gas’ threatens renewable energy, IEA warns

Posted on 30 May 2012 by VRS  |  Email |Print

Agency says tripling output by 2035 from unconventional gas sources such as shale gas could end support for renewables.
A “golden age of gas” spurred by a tripling of shale gas from fracking and other sources of unconventional gas by 2035 will stop renewable energy in its tracks if governments don’t take action, the International Energy Agency has warned………………………………………..Full Article: Source

Gas rebranded as green energy by EU

Posted on 30 May 2012 by VRS  |  Email |Print

Victory for gas lobby as aims of €80bn EU renewable energy programme altered to channel money to ‘low-carbon’ fossil fuel.
Energy from gas power stations has been rebranded as a green, low-carbon source of power by a €80bn European Union programme, in a triumph of the deep-pocketed fossil fuel industry lobby over renewable forms of power………………………………………..Full Article: Source

Gold to hit $4,000/oz, silver to $100 by 2017: Ross Norman

Posted on 30 May 2012 by VRS  |  Email |Print

Gold prices to reach $3,000-4,000 per ounce range within five years, said Ross Norman at the inaugural Dubai Multi Commodities Centre Precious Metals Conference.
One of the most articulate analysts in the market Ross Norman maintains that “there is no sign of a bubble and that gold ought to be trading for $6,500 if adjusted for inflation, though $3,000-4,000 is his target within five years.”……………………………………….Full Article: Source

Gold investors rush for the exits

Posted on 30 May 2012 by VRS  |  Email |Print

Gold’s status as a safe haven is looking shaky. Investors often have rushed to gold during flare-ups in the European crisis. But as they weigh Greece’s future in the euro zone and fret about Spain’s credit-market woes, fewer investors are seeking out the precious metal.
Prices are down 7% this month, and fell 1.3% Tuesday to settle at $1,548.60 per troy ounce, leaving gold down 1.1% for the year. Bullion hasn’t been in negative territory this late in the year since 2008, when investors were liquidating assets and scrambling for refuge………………………………………..Full Article: Source

Gold poised for worst run since 1999

Posted on 30 May 2012 by VRS  |  Email |Print

Gold is seen declining for the first time in three days in London on speculation Europe’s debt crisis will drive investors to the dollar, curbing demand for the metal as an alternative asset.
The dollar traded near a 22-month high versus the euro today as concern Europe’s turmoil is hurting economic growth boosted demand for the greenback. Gold imports by India may fall as much as 51 percent this month as a weaker rupee and higher duties increase prices, the Bombay Bullion Association said………………………………………..Full Article: Source

Gold may trade in USD 1,525-1,600 range for few weeks: IIFL

Posted on 30 May 2012 by VRS  |  Email |Print

IIFL has come out with its report on Gold. According to the research firm, prices are expected to trade in the range of US$1,525 to US$1,600 for couple of weeks.
International gold prices remained under pressure this month, with the yellow metal losing 5% in US dollar terms on a mom basis. Volatility is simply the name of the game, with gold prices trading in the US$150 wild range during May………………………………………..Full Article: Source

Japanese pension fund buys gold

Posted on 30 May 2012 by VRS  |  Email |Print

A Japanese pension fund, Okayama Metal & Machinery, is going to place 1.5% of its total assets ($500 million) in gold bullion-backed exchange-traded funds (ETFs).
According to Michael Lombardi, lead contributor to Profit Confidential, this is the first time the fund has bought gold bullion in its history………………………………………..Full Article: Source

China’s ICBC wants to be major bullion market maker

Posted on 30 May 2012 by VRS  |  Email |Print

Industrial and Commercial Bank of China Ltd is seeking membership of overseas exchanges and aims to become a major global bullion market maker, a senior executive said.
The world’s biggest bank by market value, ICBC is the top player by volume on China’s gold and futures exchanges, but its participation in foreign markets is limited to over-the-counter trading, which reached a total $90 billion last year………………………………………..Full Article: Source

Gold products from exchanges fail to attract retail investors

Posted on 30 May 2012 by VRS  |  Email |Print

Witnessing investor interest in gold, the commodity exchanges had launched futures contracts in smaller denominations. But, the contracts have not been able to grab the attention of the retail investor as they find gold exchange-traded funds (ETFs) and e-gold a better avenues.
The Multi Commodity Exchange (MCX), a leading platform for gold futures trading in India, had launched an 8 gm gold guinea in 2008 and 1 gm gold petal in 2011. This was mainly to ensure more retail participation………………………………………..Full Article: Source

Is the next big thing 1,700 tonnes of gold purchases?

Posted on 30 May 2012 by VRS  |  Email |Print

Forgive the hyperbole in the headline but we wanted to get your attention as something quite profound is happening that could propel gold to record new highs. Yes, potentially the biggest thing since the birth of the gold ETF and the liberalization of the Chinese gold market in 2003.
A decade on and we have grounds for saying that gold may well see a significant leg higher – the big new thing in gold. I’ll explain………………………………………….Full Article: Source

Nickel ore costs could push nickel pig iron up, Barclays says

Posted on 30 May 2012 by VRS  |  Email |Print

Production costs for Chinese nickel pig iron (NPI) could rise in the second half of the year as an export tax on nickel ore from Indonesia kicks in, according to an analyst.
Alongside a possible improvement in stainless steel demand and subsequently higher NPI utilization rates of around 80 percent, this could push nickel prices back up toward $20,000 per tonne, according to Snowdon………………………………………..Full Article: Source

Long-term fundamentals of the copper market

Posted on 30 May 2012 by VRS  |  Email |Print

Recent angst among analysts, pundits, mavens, gurus, savants, wizards, and other assorted talking heads has China plummeting toward a “hard landing”. These views in combination with the on-going and never-ending worry over the euro, the currency without a country, have weighed heavily on the entire resource market since the first of May.
Oil, gold, and copper, the world’s benchmark energy and metal commodities, have shed roughly 10% of their unit values this month………………………………………..Full Article: Source

Singapore’s GlobalORE to launch iron ore trading platform Wednesday

Posted on 30 May 2012 by VRS  |  Email |Print

Singapore-based GlobalORE will launch its physical iron ore trading platform Wednesday as efforts to set up a price benchmark gather momentum.
GlobalORE will operate trading windows on weekdays between 3 p.m. and 4 p.m. Singapore and China time, and its office will actively assist members who trade during this time period, the company said on its website Tuesday, without elaborating………………………………………..Full Article: Source

China should not be allowed to buy the LME

Posted on 30 May 2012 by VRS  |  Email |Print

For 135 years, the London Metal Exchange has been at the heart of world industry, setting prices for metals from aluminium to zinc.
Its role in global commodity trading is a key piece of market infrastructure for buyers and sellers and consequently one of the reasons for London’s pre-eminence as a trading hub………………………………………..Full Article: Source

Ghana prepares to launch commodity exchange

Posted on 30 May 2012 by VRS  |  Email |Print

Ghana has overhauled its grain warehousing system as it gets set to become the sixth African country to open its own commodities exchange.
The Ghana Grains Council announced that it will launch a warehouse receipt system in August, as part of the development of a commodity exchange………………………………………..Full Article: Source

Japan’s Marubeni buys US grain giant Gavilon for $3.6 bln

Posted on 30 May 2012 by VRS  |  Email |Print

Japanese trading house Marubeni Corp. said Tuesday it has agreed to buy US grain giant Gavilon LLC for about $3.6 billion in the largest cross-border move by a Japanese company this year.
By acquiring the US firm, Marubeni “will achieve a total dealing amount of more than 55 million tonnes worldwide and further strengthen its competitiveness of grain trade,” it said in a statement………………………………………..Full Article: Source

Currency deal ushers in a new era

Posted on 30 May 2012 by VRS  |  Email |Print

Direct trading of yuan and yen will boost ties between China and Japan. China and Japan will start direct trading of their currencies on Friday in a move to boost trade ties between Asia’s two biggest economies.
This will be the first time that China has allowed a major currency, apart from the US dollar, to trade directly with the yuan. Direct trading of the currencies means that the two countries will not be using the dollar as an intermediary in setting exchange rates………………………………………..Full Article: Source

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