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Commodities Briefing - Archive | November, 2016

The Year the World Felt the Might of China’s Commodity Traders

Posted on 30 November 2016 by VRS  |  Email |Print

The Chinese speculators shaking up global commodity markets are switched-on, flush with cash and probably not getting enough sleep. For the second time this year, trading has exploded on the nation’s exchanges, pushing prices of everything from zinc to coal to multi-year highs and sending authorities scrambling to deflate the bubble before it bursts.
Metals brokers described panic earlier this month as the frenzy spread to markets in London and New York, prompting wild swings in prices that show no signs of abating. While billions of yuan have poured in from herd-like Chinese retail investors who show little regard for market fundamentals, brokers and traders say even more is coming from an expanding army of deep-pocketed hedge funds………………………………………..Full Article: Source

Rabobank Report Projects Better Commodity Prices Ahead?

Posted on 30 November 2016 by VRS  |  Email |Print

A recent Rabobank report projects a rise in global demand should bring a three-year decline in commodity prices to an end. Nebraska Farm Bureau Senior Economist Jay Rempe says that outlook should give hope to farmers and ranchers who have been struggling through the downturn in the farm economy.
He agrees with Rabobank officials that global demand for U.S. commodities is improving, especially for beef and pork as the income and diets of consumers improves around the world. Rempe is hoping the incoming Trump administration will work with ag commodity groups to expand export markets………………………………………..Full Article: Source

Hedge funds favour grains to soft commodities - but will it last?

Posted on 30 November 2016 by VRS  |  Email |Print

Hedge funds, despite lifting bullish bets on cotton to a three-year, favoured grains to soft commodities – so much so that many investors saw scope for fresh selling in the likes of corn.
Managed money, a proxy for speculators, lifted its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 55,896 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows………………………………………..Full Article: Source

Can OPEC still swing global oil prices? We’re about to find out

Posted on 30 November 2016 by VRS  |  Email |Print

Two years ago, global oil prices crashed after the world started pumping out far more crude than anyone needed. That plunge, from $100 per barrel down to $45 per barrel, completely upended the global economy — and cost oil producers like Saudi Arabia billions of dollars in lost revenue.
Now those oil producers have had enough. This Wednesday in Vienna, the Organization of the Petroleum Exporting Countries will try to reach a deal to cut back sharply on oil production in order to raise global prices. (OPEC is a cartel of 14 major oil exporters, including Saudi Arabia, Iran, and Iraq, that account for 40 percent of global production.)……………………………………….Full Article: Source

Here’s Why the Drop in Oil Prices Isn’t Over

Posted on 30 November 2016 by VRS  |  Email |Print

Saudi Arabia, Iran, and Iraq can’t agree how to end a fight for market share. Here we go again. Like a year ago, crude oil futures are tumbling again Tuesday as hopes for a cut in output from the Organization of Petroleum Exporting Countries (OPEC) fade due to entrenched differences between its most important members.
The benchmark contract for U.S. crude was down 3.9% at $45.27 a barrel, after Reuters reported that Iran and Iraq–two countries who are ramping up production after years of politically-induced disruptions–are resisting pressure from Saudi Arabia to rein it in………………………………………..Full Article: Source

Saudi Arabia’s oil problems run far deeper than OPEC

Posted on 30 November 2016 by VRS  |  Email |Print

Saudi Arabia’s problems run far deeper than trying to cobble together a deal with fellow OPEC members to curb crude oil output in order to bolster prices. About two-thirds of Saudi Arabia’s oil exports head to Asia, and the kingdom’s struggles in the region’s two biggest importers, China and India, are symptoms of its wider issues in crude markets.
While Saudi Arabia has been increasing the total volume of crude it ships to China and India, it has steadily been losing market share, something that is likely of deep concern given that much of the current and future growth of oil demand is dependent on these two countries………………………………………..Full Article: Source

Goldman Sees OPEC Meeting Down to the Wire With 30% Odds of Deal

Posted on 30 November 2016 by VRS  |  Email |Print

The oil market is pricing in a 30 percent chance of producers reaching a deal to cut output at OPEC’s meeting in Vienna, according to Goldman Sachs Group Inc. Global benchmark Brent crude may swing $6 a barrel on Wednesday, based on implied volatility for options contracts, analysts including Damien Courvalin and Jeff Currie said in a report Monday.
Futures would rally into the low $50s a barrel and average $55 over the first half of next year if the group agrees to a cut, according to the bank. Failure to reach an accord would mean prices would average $45 a barrel through the summer………………………………………..Full Article: Source

Deal Or No Deal, OPEC Can’t Win In Fight Against American Frackers

Posted on 30 November 2016 by VRS  |  Email |Print

Like celebrating Thanksgiving with a houseful of in-laws, OPEC’s autumn meeting in Vienna brings a combination of joy and dread. Something unexpected usually crops up, but the headlines out of both meetings are about the same year after year:
Iran Argues With Saudis. Grandpa Loses Dentures. Venezuela Pleads For Production Cuts. Three Year Old Has A Meltdown. Bomb Blasts Nigeria Pipeline. Sisters Bicker Over Politics………………………………………..Full Article: Source

Why Gold’s Lost Sheen Should Be Temporary

Posted on 30 November 2016 by VRS  |  Email |Print

Conventional wisdom suggests that a Federal Reserve rate hike next month is bearish for precious metals, particularly gold. This is because gold investors aren’t rewarded with the interest coupon payments as Treasury holders are. Thus, the opportunity cost of owning gold is the potential cash flow of interest payments, or dividends if comparing it to equities.
Accordingly, if bond and note yields are on the rise, there is less incentive to be long gold. Or so says the theory. Nevertheless, there is another school of thought which suggests that higher interest rates generally come with higher inflation. This, of course, is supportive to the precious metals markets………………………………………..Full Article: Source

Here’s Why Gold Could Fall All The Way To $700

Posted on 30 November 2016 by VRS  |  Email |Print

Even though the markets haven’t behaved logically of late, it would have seemed a slam dunk for gold to rise if Donald Trump won. After all, we faced uncertainty around his policies, rising inflation from infrastructure spending, and higher expected growth rates.
But instead, gold has headed back down more sharply. It had its initial rise in the futures market when Trump looked like he was going to win. But since then, it’s reversed course – the opposite of the stock markets. While I’ve been saying for a long time now that gold still has a lot to lose, a new and interesting dynamic has arisen to add more pressure to the downside………………………………………..Full Article: Source

Gold’s Recovery Falters as Fund Investors Keep Selling Assets

Posted on 30 November 2016 by VRS  |  Email |Print

Gold halted its biggest gain in almost a month as investors extended the longest run of sales from bullion-backed funds in a year. Palladium climbed to the highest in almost 18 months.
Holdings in exchange-traded funds backed by gold have fallen for the past 12 days and are heading for the biggest monthly drop in three years. Bullion prices are near a nine-month low as traders are certain that the Federal Reserve will raise U.S. interest rates in December following Donald Trump’s election win………………………………………..Full Article: Source

Zinc rises to highest since 2007

Posted on 30 November 2016 by VRS  |  Email |Print

The rally in metals is showing no signs of slowing down. The Bloomberg Industrial Metals sub-index posted the biggest five-day gain since 2011, as zinc touched a nine-year high. Prices rallied after China’s top economic commission approved a $36 billion plan on new rail links around Beijing, boosting demand for industrial raw materials.
Zinc for delivery in three months rose 2.9 percent to settle at $2 900 a metric ton at 5.50pm on the London Metal Exchange, after touching $2 985, the highest since October 2007………………………………………..Full Article: Source

Japan’s need for aluminum premium futures is limited, says LME chief

Posted on 30 November 2016 by VRS  |  Email |Print

Japan’s need for aluminum premium futures is limited, London Metal Exchange CEO Garry Jones told the LME Tokyo Gala event Tuesday. LME launched four physically settled regional aluminum premium contracts, including Northeast Asia premium contracts for delivery to Japan and South Korea, in November 2015.
“They were launched when the market was high. Premiums have since come down and there is less demand,” Jones said. Chicago Mercantile Exchange launched a cash-settled Japan premium contract, settled against S&P Global Platts CIF Japan spot premium assessment, in December 2015………………………………………..Full Article: Source

Metals Pare Best Rally Since 2012 as China Curbs Speculation

Posted on 30 November 2016 by VRS  |  Email |Print

Industrial metals slumped, paring the biggest monthly rally in four years, on signs that China is taking steps to cool a trading frenzy in commodities. The Shanghai Futures Exchange and Dalian Commodity Exchange have raised margins and fees to ease a trading frenzy that’s fueled aggressive price gains this month, and further measures are expected, according to Citigroup Inc. analysts.
“Chinese investors trigger copper prices back to life, but not back to reality,” Citigroup analysts including David Wilson wrote in an e-mailed note. Prices may fall as China takes steps to “skim speculative froth on industrial commodity markets,” they said………………………………………..Full Article: Source

China, More Than Trump, Fuels Commodity ETF Surge

Posted on 30 November 2016 by VRS  |  Email |Print

It’s no secret that base metals have done well in the month of November. Copper is up 20% month-to-date, its best monthly showing in a decade, according to Bloomberg. Everything from lead to zinc to nickel is up double-digit percentages also.
The PowerShares DB Base Metals Fund (DBB)―which holds futures on copper, aluminum and zinc―now has a gain of more than 33% for the year. These monster moves come despite a surge in the U.S. dollar during November, a factor that normally weighs on commodity prices………………………………………..Full Article: Source

5 Agricultural ETFs Upgraded to Buys

Posted on 30 November 2016 by VRS  |  Email |Print

So far, the year 2016 has been moderate for agricultural commodities with some specific grains like sugar, soybean and coffee seeing a spike in prices while most other still reeling under pressure as evident by the 1.5% year-to-date decline (as of November 25, 2016) in the broader soft commodity ETF PowerShares DB Agriculture ETF DBA.
Even a subdued greenback could not turn the tide for all soft commodity exchange-traded products. While the likelihood of a stronger U.S. dollar in the wake of a Fed rate hike bet can spoil the party for agricultural commodities going forward, cheaper valuation and some grain-specific factors may provide support to a few agricultural ETF/ETN investing………………………………………..Full Article: Source

China Tightens Controls on Overseas Use of Its Currency

Posted on 30 November 2016 by VRS  |  Email |Print

As an exodus of money adds to the pressure on a slowing economy, regulators are trying to put the brakes on overseas use of China’s currency by increasing the scrutiny of certain overseas deals. The decision to restrict overseas use of the renminbi represents a setback in China’s long-term drive to turn the currency into a rival to the dollar and euro in the global marketplace.
Beijing had pursued a greater role for the renminbi as a way to increase its economic influence. Part of the renminbi’s appeal in international finance was that most Chinese companies could borrow and spend it overseas while seldom seeking approval from financial regulators in Beijing………………………………………..Full Article: Source

Top Economists Around the World Assess India’s Currency Curbs

Posted on 30 November 2016 by VRS  |  Email |Print

It has been more than three weeks since the government announced its decision to demonetise old Rs 500 and Rs 1,000 currency notes. There has been a wide-ranging debate on whether the government’s move will indeed succeed in curbing black money hoarding and tax evasion.
Analysts have argued on the short-term and long-term impact of the move. Citizens have stood in queues for hours outside bank branches and Automated Teller Machines (ATMs). Some have praised and supported the move while others have called it a grave inconvenience, especially for India’s middle classes………………………………………..Full Article: Source

New platform cuts electricity bills for reduced carbon emission

Posted on 30 November 2016 by VRS  |  Email |Print

Polluters who have reduced their carbon emissions can now apply for a reduction to their electricity bill, thanks to a new system rolled out by the carbon trade center in Beijing. Electric Carbon Contract, a cooperation project between Beijing Environment Exchange and GP Power Electricity Group, was launched on Tuesday in Beijing.
The system links carbon trading with preferential electricity rates, said Mei Dewen, director of Beijing Environment Exchange. Since 2013, China has tested carbon trading in seven pilot cities, including Beijing. Local governments assign tradable carbon emission allowances to key emitters based on their emissions history………………………………………..Full Article: Source

EU cement giants get €5bn carbon market windfall

Posted on 30 November 2016 by VRS  |  Email |Print

The EU carbon market is supposed to make polluters pay. But generous handouts to industries deemed at risk of losing business abroad are undermining the system, a watchdog has warned. Cement producers reaped a €5 billion windfall from the emissions trading system (ETS) between 2008 and 2015, their annual reports reveal.
Companies like Lafarge, Heidelberg and Cemex profited from selling carbon allowances they received for free, substituting cheaper international offsets and passing through costs to customers………………………………………..Full Article: Source

Global food prices to stay low in 2017: Rabobank report

Posted on 29 November 2016 by VRS  |  Email |Print

High global stock levels expected to keep food prices low during 2017, however, Donald Trump presidency may bring currency uncertainty that will translate into volatile food prices, Rabobank said in its Agri Commodity Market Outlook for 2017 here.
The record-high stock levels are set to keep worldwide food prices low during 2017 even as inflation starts to rise in many developed economies, according to the report from Rabobank, the global food and agribusiness bank. Following the election of Donald Trump as president-elect earlier this month, Rabobank is cautious on the outlook for the US………………………………………..Full Article: Source

China money back into commodities

Posted on 29 November 2016 by VRS  |  Email |Print

In China, money flow is tightly controlled and capital markets are relatively underdeveloped, meaning the economy works like squeezing a balloon. You press it in one place, and it bulges in another. Policy-maker moves to cool one expansion only serve to inflate another.
Now that “gyration of bubbles,” according to Société Générale SA’s chief China economist Wei Yao, has been heating up the commodities market again. Earlier this month, thermal and coking coal futures hit a record high since their debut in 2013 while zinc soared to the highest since 2011. Steel rebar, nickel, tin, iron ore and rubber futures also climbed to multi-year highs………………………………………..Full Article: Source

Goldman Commodities Outlook: Metals & Oil Strength, Gold Suffers

Posted on 29 November 2016 by VRS  |  Email |Print

Commodities analysts at Goldman Sachs raised their outlook for base metals prices on Monday with currencies as a tailwind, but lowered their gold projection and offered a mixed outlook for Australia-based metals producers as the commodities cycle peaks.
The upward revisions included prices for iron ore, hard coking coal, oil & base metals (Aluminum, Cu, Zinc, Pb & Nickel) on 3- 6- and 12-month basis. The Goldman analysts Craig Sainsbury, Meredith Schwarz and Ken Lek see strength in the Australian dollar and U.S. dollar………………………………………..Full Article: Source

Oil and gas mergers and acquisitions are finally making a comeback

Posted on 29 November 2016 by VRS  |  Email |Print

Oil and gas players are finally inking new mergers and acquisitions, after nearly two years of moribund deal activity. Deal-making hit a soft spot following the 2014 oil bust as banks tightened lending to distressed drillers and buyers and sellers remained at odds over the value of energy assets.
Now, climbing crude prices, easing capital markets, and a gold rush in Texas’s prolific Permian basin are thawing a prolonged M&A freeze. Through the first two weeks of November, upstream oil and gas deal-making hit $56.7 billion, compared with $26.8 billion seen in the same period last year………………………………………..Full Article: Source

Get ready for $40 oil if OPEC deal collapses

Posted on 29 November 2016 by VRS  |  Email |Print

It’s time for the oil industry’s favorite guessing game: Will OPEC continue to flood the world with more oil, or will it finally blink and cut production? OPEC reached a preliminary deal to much fanfare in September to cut output for the first time since 2008. That tentative agreement sent crude soaring above $50 a barrel.
But there’s lingering skepticism over whether OPEC can really keep its word at Wednesday’s meeting in Vienna. Internal squabbling among OPEC members — especially Iran, Iraq and Saudi Arabia — has made a concrete agreement difficult to achieve………………………………………..Full Article: Source

Hey Oil Market: Forget About OPEC for a Second

Posted on 29 November 2016 by VRS  |  Email |Print

The oil market’s attention is focused overwhelmingly on figuring out which OPEC member is going to cut what. The bigger question it shouldn’t lose sight of is this: Who will replace China?
Looking back over 50 years, oil demand has gone through three broad phases: pre-1970s industrialization in the OECD countries, retrenchment after the oil shocks, and then renewed growth through 2015. If the International Energy Agency’s latest long-range forecasts are right, then we stand on the edge of another slowdown in demand growth — a big one………………………………………..Full Article: Source

The Oil War Is Over And America Has Won

Posted on 29 November 2016 by VRS  |  Email |Print

Two years ago, Saudi Arabia and the other OPEC nations declared an oil war with America. On November 30h OPEC will meet to admit they have lost that conflict.
At this month’s meeting OPEC will try to decide about the possibility of a global production cut or even a freeze in crude oil production in order to raise prices. The speculation about this conference is the fact that the production increase war failed and OPEC is on the verge of extinction………………………………………..Full Article: Source

Russia, Iran agree to coordinate on oil and gas markets -Kremlin

Posted on 29 November 2016 by VRS  |  Email |Print

Russian President Vladimir Putin and his Iranian counterpart Hassan Rouhani agreed in a telephone call on Monday to coordinate steps on global oil and gas markets, the Kremlin said.
The coordination also included a dialogue between Russia and OPEC member countries, the Kremlin said, adding that both men noted the importance of measures taken through OPEC to reduce output as a key factor in stabilising the world oil market………………………………………..Full Article: Source

Gold price fights back – touches $1,200

Posted on 29 November 2016 by VRS  |  Email |Print

Gold was attempting a comeback of sorts in Asian trading on Monday despite relentless selling by physically-backed gold ETF investors since Donald Trump’s victory in US presidential elections.
Gold for delivery in February reached a session high of $1,200.00 an ounce, up nearly $20 or 1.6% an ounce from Friday’s closing price on the Comex market in New York. Gold is still down 10% or $140 an ounce after an initial surge following Trump’s win. On Friday gold fell to its lowest level since February………………………………………..Full Article: Source

A Note On Gold And India – What Is Driving The Gold Price?

Posted on 29 November 2016 by VRS  |  Email |Print

It is well-known that India’s government wants to coerce its population into “modernizing” its financial behavior and abandoning its traditions. The recent ban on large-denomination banknotes was not only meant to fight corruption.
In fact, as our friend Jayant Bhandari has pointed out, fresh avenues for corruption immediately opened up upon enactment of the ban. It is a nigh apodictic certainty that governments are lying – whether outright or by omission – when they impose such drastic measures. It should be clear how the State operates once one recognizes its true nature and realizes that “we” are definitely not the State………………………………………..Full Article: Source

MKS, Commerzbank: Shanghai Gold Premium Hits Multi-Year High

Posted on 29 November 2016 by VRS  |  Email |Print

The Shanghai Gold Exchange premium soared to multi-year highs overnight, with Commerzbank citing recent news reports that China’s government may restrict the number of import licenses and MKS (Switzerland) S.A. reporting that dollar weakness also boosted the appeal of gold.
“The early-session USD weakness gave gold a boost right from the open, surging through the Friday high leading into the Shanghai session, before taking a further leg higher courtesy of Chinese interest as the SGE premium continued to trade elevated,” MKS says………………………………………..Full Article: Source

What Is Gold Saying About Trump?

Posted on 29 November 2016 by VRS  |  Email |Print

Amidst the larger drama of the election, the financial markets staged their own little drama. When the Dow futures plummeted by hundreds of points as it began to look as though Donald Trump would achieve a surprise victory, some people hastily jumped to the conclusion that financial markets feared a Trump presidency. Not so.
While markets were momentarily spooked by an outcome that they had not anticipated, it didn’t take long for market participants to recalibrate their expectations and surmise, at least temporarily, that economic prospects under a President Trump were favorable………………………………………..Full Article: Source

Is Palladium Going to Be the Precious Metal Winner for 2017?

Posted on 29 November 2016 by VRS  |  Email |Print

Palladium seems to be the winner among precious metals for 2017 so far. As of November 21, 2017, palladium had a whopping rise of 32.5% year-to-date. That figure is far higher than the rises in gold, silver, and platinum. Platinum has the least year-to-date rise so far among the four precious metals.
There’s a lot of noise in the market about the possibility of a deficit in the palladium market. The demand for palladium looks like it’s clearly outpacing the supply. Palladium prices may be clearly reacting to this fundamental calling………………………………………..Full Article: Source

Iron ore price means short-term budget relief, not repair

Posted on 29 November 2016 by VRS  |  Email |Print

A bounce in the iron ore price to near two-year highs may deliver a short-term boost to the federal budget, but economists warn the benefit could be short-lived and only offset slower-than-expected wages and employment growth.
As Scott Morrison prepares the mid-year budget update for ­December 19, iron ore yesterday traded at $US79.20 a tonne, nudging $US80 for only the second time since October 2014. The May budget forecast an iron ore price of $US55 a tonne, up from a previous estimate of $US39, which Labor had said was an “heroic” assumption………………………………………..Full Article: Source

Zinc Prices Hit An 8-Year High: Did You Miss The Rally?

Posted on 29 November 2016 by VRS  |  Email |Print

Remember when Barack Obama defeated republican presidential nominee Senator John McCain? Or Usain Bolt’s first appearance in the Olympic games? Well… that’s how far back you need to go if you want to see zinc prices as high as they are now.
Last week, zinc closed just short of $2,300 per metric ton on the London Metal Exchange, the highest level since early 2008. Zinc is the first industrial metal we can say that about (and possibly not the last one)………………………………………..Full Article: Source

Investors Don’t Take A Holiday When It Comes To ETFs

Posted on 29 November 2016 by VRS  |  Email |Print

The steady stream of new assets to ETFs continued unabated during the holiday-shortened week, with a net of $8.1 billion of inflows after two-consecutive weeks that saw more $20 billion each.
While the first half of the year saw what could be described as a steady drip of new assets at best, the second half of the year has seen a gusher of ETF inflows. As of last Thursday, more than $217 billion in new assets has flowed into U.S.-listed ETFs, bring the industry’s total assets under management to $2.33 trillion………………………………………..Full Article: Source

Commodity ETF Inflows Near 2009 Record (Video)

Posted on 29 November 2016 by VRS  |  Email |Print

Bloomberg Intelligence’s Mike McGlone and Bloomberg’s Abigail Doolittle examine the near-record inflows of commodity ETFs and expectations for the market in 2017. They speak on “Bloomberg Markets.”.………………………………………Full Article: Source

Should You Buy or Sell Oil ETFs Ahead of the OPEC Meet?

Posted on 29 November 2016 by VRS  |  Email |Print

Oil prices have been volatile lately flipping between hope and despair regarding a likely output curb/freeze deal at the formal OPEC meeting in Vienna on November 30. Though Iraq and Iran were reluctant to cut oil output initially, Iraq finally gave its approval.
Investors should note that this is the third time this year that the investing world is looking forward to this deal as oil price has been reeling under acute pressure for long. In the past, such attempts were made in Doha in April and in Algeria in September……………………………………….Full Article: Source

Index Funds, Quants and Hedging

Posted on 29 November 2016 by VRS  |  Email |Print

The consensus that Index Funds Are Good is pretty universal, but also kind of boring. It turns out that the right way to invest is to … do nothing? To do exactly what everyone else does? To just stop paying attention? Indexing is low on action, low on personality, low on fees, low on excitement. It is good for you, but a bit bland.
The Index Funds Are Bad camp, on the other hand, is full of wacky fun. There is, for instance, the view that index funds are illegal because they violate antitrust laws, a view that is so counterintuitive that its proponents insist that they don’t mean it………………………………………..Full Article: Source

Zimbabwe Begins Issuing New Currency

Posted on 29 November 2016 by VRS  |  Email |Print

Zimbabwe is issuing a new currency, known as bond notes, that officially are equal to the U.S. dollar. The government has gone ahead with the plan despite warnings the new currency will fuel hyperinflation and worsen the already ailing economy.
On Monday, there were still long queues at most ATMs in Harare, despite the release of the new bond notes, which are intended, in part, to ease long-running cash shortages. he Reserve Bank of Zimbabwe says the new currency will, among other things, increase the country’s exports………………………………………..Full Article: Source

PM Narendra Modi’s Currency Ban Move ‘Gamble’, Will Set Precedent

Posted on 29 November 2016 by VRS  |  Email |Print

Terming Prime Minister Narendra Modi’s demonetisation move as “very bold”, China’s official media today said it was a “gamble” that would create a precedent irrespective of whether it succeeds or fails and China will draw lessons from its impact on corruption.
“Modi’s move is very bold. We cannot imagine what would happen in China if the country bans its 50 and 100 yuan notes,” said an editorial in the state-run Global Times titled ‘Modi takes a gamble with money reform’. 100 yuan is China’s highest currency note………………………………………..Full Article: Source

New Zealand to Save $31 Billion by Tapping Paris Carbon Markets

Posted on 29 November 2016 by VRS  |  Email |Print

New Zealand is seeking to offset its global warming emissions by investing almost $5 billion in green projects overseas, saving six times that figure to meet its Paris climate commitments.
Climate Minister Paula Bennett sounded out countries willing to sell emission-reduction credits as she met them at the United Nations climate talks in Morocco this month, she said by phone, declining to be specific because the talks were private. The government may be able to buy credits for a price that’s 88 percent cheaper than reducing emissions at home through 2030, an environment ministry research report shows………………………………………..Full Article: Source

California Carbon Emissions story

Posted on 29 November 2016 by VRS  |  Email |Print

Demand for California pollution permits rebounded in the latest carbon auction after plummeting earlier this year, state officials said Tuesday. Still, the permits did not sell out, heightening uncertainty about the program’s future.
About 88 percent of the available credits were purchased at the quarterly auction held last week by California and its trading partner, Quebec, Canada. That’s an improvement from the 35 percent sold in August and 10 percent in May………………………………………..Full Article: Source

Trump Administration to Rev Up Global Growth, Says OECD

Posted on 29 November 2016 by VRS  |  Email |Print

If all goes according to plan, a group of international economic experts believe President-elect Donald Trump’s incoming administration will help the world economy grow faster than anticipated over the next few years.
The Organisation for Economic Cooperation and Development on Monday revised its growth outlook for the U.S. and the world economy as a whole. Thanks in part to expected tax cuts, fiscal policy revisions and infrastructural investments, the group now expects the American economy to grow 2.3 percent in 2017 and 3 percent in 2018………………………………………..Full Article: Source

Doubts shadow the recent commodities rally

Posted on 25 November 2016 by VRS  |  Email |Print

Commodities prices have begun rising from their long slump, providing good news for the embattled shipping trade. But uncertainty and ambiguity in China, whose demand dictates the prices of many resources, are casting doubts over how long the rebound can last.
The main drivers for the recent rise include China’s continued domestic stimulus and the country’s cuts in coal production, along with increased commodity speculation following the election of Donald Trump as the next U.S. president………………………………….Full Article: Source

Speculation and fundamentals drive resources rally

Posted on 25 November 2016 by VRS  |  Email |Print

The extraordinary rally in commodities is being driven both by fundamentals and speculation, but experts are divided as to its sustainability. The last time Fortescue Metals Group shares traded above $6 a share five years ago, iron ore was selling at close to $US120 a tonne, well above the current price of $US75 a tonne. The roaring return for Australian mining stocks has outpaced the recovery of their respective commodities.
Driving investors into the stocks is a heady combination of Chinese fiscal and monetary stimulus supporting demand for steel, optimism that President-elect Donald Trump will push through infrastructure spending quickly, and a return to favour in the value end of the market, in which resources sector sits………………………………….Full Article: Source

As the commodity mega-boom winds down, the mini-boom gathers steam: Russell

Posted on 25 November 2016 by VRS  |  Email |Print

As the once-in-a-lifetime commodity boom winds down, a key concern has been what is going to replace the mega-projects built to feed China’s appetite for natural resources. The huge minerals and energy projects that were both the solution and the demise of the China-inspired commodity super-cycle are unlikely to be repeated any time soon, but developments in Australia show it’s not all doom and gloom.
Australia was one of the biggest beneficiaries of the dramatic rise in China’s demand for commodities, with more than A$400 billion ($300 billion) being spent in the last decade………………………………….Full Article: Source

Could commodities suffer from the Trump effect?

Posted on 25 November 2016 by VRS  |  Email |Print

Trump heading closer to presidency has seen a rally in metal and oil prices, further strengthened by the strong US dollar. However, this has generated scepticism about the markets and whether China’s rally will begin to fade out.
Robin Bhar, base metals strategist at Societe Generale said, “When you have copper going up by $US1000 in barely a week you know there is something wrong. Fundamentals don’t change that fast,” according to the SMH. Copper prices shot up by 25 per cent to $US5445 a tonne within one month, with nickel, zinc, and lead also experiencing rises………………………………….Full Article: Source

Commodities set for an ‘extraordinary bull run’, argue Schroders managers

Posted on 25 November 2016 by VRS  |  Email |Print

Managers at Schroders explain why commodities should outperform in 2017 and give their three resources investors should look at to capitalise on this. Commodities have been a very disappointing area to be invested over the past few years but they could be at the start of another “extraordinary” bull run, according to the team at Schroders.
Gavin Ralston, head of official institutions, said: “Commodities have been a very disappointing place to invest for some time. “The return on the broad commodities indices was negative and that was of course at a time when equities and bonds were giving pretty strong inflation-adjusted returns.”…………………………………Full Article: Source

Natural Gas as a Global Commodity

Posted on 25 November 2016 by VRS  |  Email |Print

The U.S. became a net gas exporter just a few weeks ago, but exports to Canada have actually been falling. Unlike still developing Mexico, Canada doesn’t have huge incremental gas needs, explaining why it’s so critical for Canada’s gas industry to have access to global markets via LNG. Interestingly, while Mexico is overdependent at 60%, natural gas accounts for just 10% of Canada’s power generation.
But, U.S. shale gas will continue to be very competitive into eastern Canada as new pipeline infrastructure gets built, such as the Rover and Nexus routes which will take Marcellus and Utica gas to southern Ontario’s Dawn hub. Both are expected to have completed phases next year………………………………….Full Article: Source

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November 2016
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