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Commodities Briefing 14.Oct 2008

Posted on 14 October 2008 by VRS |  Email |Print

The latest analysis by New Carbon Finance indicates that the world’s carbon markets grew by 81% over the first nine months of this year to reach $87bn by the end of Q3. By the end of 2008 the market will have broken the $100bln mark to reach $116bln. This growth is expected to continue to 2012 by when it should reach $550bln.

If the US introduces a federal cap and trade scheme we expect the market to turn over $3 trillion per year by 2020. According to New Carbon Finance, the total volume of carbon emissions transacted is expected to grow by 31% from 3.0Gt in 2007 to 3.9Gt in 2008. However, the total value of carbon emissions transacted is projected to increase by 80% from $64lbn in 2007 to $116bln in 2008, as a result of consistently high prices of European Union Allowances (EUAs) and CDM credits or Certified Emission Reductions (CERs) achieved during 2008 compared to 2007. EUAs averaged around $34/t in the first three quarters of 2008……Full Press Release: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Reuters: Islamic banks have been barely bruised by the global credit crisis so far, but the worst is yet to come as falling property and commodity prices and slowing economies start to hit the sector.

As the global economy buckles, credit lines tighten and consumer confidence crumbles, Islamic institutions — which manage an estimated $1 trillion worldwide — will not escape the pain that is plaguing conventional lenders in the West…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From FT: The financial crisis is shaking up the commodities market. But while the focus so far has been on falling prices, the critical impact is centred in the market’s plumbing: the over-the-counter deals, where companies, investors and banks trade in private, bilateral contracts.

The crisis is generating a double problem. The collapse of banks such as Lehman Brothers has elevated counterparty risk as market participants fear that the other side of their deals could default on its obligations…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Washingtonpost.com: Commodities prices shot up Monday as U.S. and European governments intensified their efforts to revive the global banking sector — prodding investors to put some of their money back into financial markets.

Crude oil, copper, silver and agriculture commodities traded sharply higher, drawing momentum from a massive, record-breaking rally on Wall Street. The Dow Jones industrial average soared 936 points, the biggest one-day point gain ever and the biggest percentage gain since 1933…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Theaustralian.news.com.au: Oil futures rose overnight for the first session in four, interpreting stock market optimism as a good sign for petroleum demand.

Light, sweet crude for November delivery settled up $US3.49, or 4.5 per cent, at $US81.19 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures exchange settled $US3.37 higher at $US77.46 a barrel. Oil climbed as the Dow Jones Industrial Average made its largest one-day intraday point gain ever. The blue-chip indicator was recently up 700 points on European governments’ commitment to bank recapitalization and prospects for similar moves from the U.S. Treasury….. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From IHT: The global financial panic and the economic slowdown have put at least a temporary end to the commodity bull market of the last seven years, sending prices tumbling for many of the raw ingredients of the world economy.

Since the spring and early summer, when prices for many commodities peaked amid fears of permanent shortage, wheat and corn — two cereals at the base of the human food chain — have dropped more than 40 percent. Oil has dropped 44 percent. Important metals like aluminum, copper, nickel and platinum have declined by a third or more…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Mineweb.com: The dollar copper metal price has collapsed from record peaks seen only three months ago; the world’s biggest listed copper miner’s price is down 66%.

The prices of listed resources stocks of all kinds started falling in and around May this year. This held for most listed copper miners as well, but for some months, the prices of listed copper miners fell disproportionately more than the underlying dollar copper price, which, indeed, peaked in July…… Full Article: Source

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From Menareport.com: Algerian President Abdelaziz Bouteflika has warned of economic and social disaster in case of heavy decline in oil prices. He made this comment in a speech addressed to officials at Tlemcen University.

Bouteflika has explained to the audience that Algeria is living a comfortable situation following the oil prices parade, yet, “any drop would certainly drive us to a plight, which would require rolling up sleeves,” he added…… Full Article: Source

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From Carbonnews.co.nz: Energy-intensive industries are set to receive a huge cash boost from the European Commission as part of a controversial move to protect Europe’s industrial sector from world recession.

Within weeks the EU is to debate whether to allow European industrial giants tens of millions of pounds off carbon allowances they have to buy as part of the Emission Trading Scheme….. Full Article: Source

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From Chinapost.com.tw: Soybean imports by China, the world’s biggest buyer, jumped to the highest since 2004 last month as importers bought supplies before import tariffs increased. The country shipped in 4.1 million metric tons.

That’s 8 percent more than August and the highest since at least 2004, Bloomberg data shows. China’s tax on imported soybeans was restored to 3 percent from 1 percent at the start of this month after a temporary cut expired, according to the state-owned China National Grain and Oils Information Center…… Full Article: Source

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From Guardian: Commodities rebounded Monday from their biggest ever weekly loss as more nations showed resolve in saving their banks, but analysts said the rally looked suspect with the credit crisis far from over.

Leading the chorus of doubt was Goldman Sachs, a Wall Street powerhouse that was at the epicenter of an explosive six-year bull run in commodities that fizzled out this July. Goldman, which once put a high of $200 for a barrel of crude oil by 2010, said the market could fall to as low as $50 if the economic crisis deepened….. Full Article: Source

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From Theaustralian.news.com.au: Gold futures closed lower overnight as the market extended heavy losses seen on Friday. US equities gained sharply Monday, and players were seen exiting “safe-haven” gold positions amid the bounce in stocks. Equities were still hanging onto their gains at the gold-pit session close.

December gold futures on the Comex division of the New York Mercantile Exchange got as high as $US875.00 an ounce overnight. But the early rally in stocks triggered selling in the gold market, and the December contract spent the day under water, settling with a loss of $US16.50 to $US842.50 an ounce. December gold did trim losses and ended the day off its lows….. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Thepeninsulaqatar.com: Trying to address the commodity market, this week and next, could be largely like reading a macro analyses from any one number of analysts and strategists.

The overriding story remains lower commodity prices as the main feature that has paved the way forward for the recent year’s general commodity rally - namely: higher future consumption with diminishing inventories - now appears to have reversed by the same albeit not quite the same rate of the equity markets…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Mineweb.com: As most commodity prices have continued to plunge, and commodity stocks have fallen even faster, could we be nearing, or at, the bottom? If so there are bargains to be had out there.

The market has moved beyond logic to serious panic as evidenced by not only the enormous declines in commodity stocks, but in stocks in general. Blue chips have fallen alongside those with less illustrious antecedents. Only gold seems to be bucking this trend and here price movements have been volatile - up $50 one moment, down $50 the next…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Reuters: U.S. copper futures closed almost 8 percent up Monday, in line with the broad rebound in commodities and equities, as investors cheered rescue plans for banks from governments around the world.

News that Chile’s Escondida, the world’s biggest copper mine, had declared a force majeure last week after a mill shutdown also boosted investor confidence in the red metal. Copper for December delivery HGZ8 finished up 16.80 cents, or 7.83 percent, at $2.3125 a lb on the New York Mercantile Exchange’s COMEX division….. Full Article: Source

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From Commodities-now.com: Commodity prices are a key component driving the American economy. But have such prices lately been the result of supply and demand or of excessive speculation?

Juxtaposing the positions provides an enlightening look at some of the factors that are controlling energy prices. Today’s economy is fragile and concerns abound over whether recession is looming, creating weaker demand for most products and services that include oil and natural gas. With fewer buyers, prices fall. This scenario, in fact, has been occurring as commodity prices have been dropping…… Full Article: Source

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From Bloomberg: Environment ministers from 40 nations met today in Warsaw to lay the groundwork for new climate-change regulations that may raise costs for polluting industries such as power generation and transportation.

Attempts to reach an agreement on limits for carbon-dioxide emissions at United Nations-sponsored talks in December face their biggest hurdle in the credit crisis that’s pushing the world economy toward recession, said Astrid Klug, Germany’s deputy environment minister…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Theglobeandmail.com: The meltdown in the Canadian dollar last week had been some time coming and it coincides with the rise in fear, if not panic, among stock market investors. But look through the rubble and there just might be some positives.

“The loonie is playing big-time catch up,” said Andrew Busch, the global foreign exchange strategist for Bank of Montreal’s investment arm. “Even with the good employment numbers coming out of Canada this is a complete selloff of all commodity-type currencies.”….. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Ninemsn.com.au: Platinum jumped more than 4 percent on Tuesday to track firmer gold, with gains in Tokyo futures offering extra incentives for speculators to buy the metal mainly used in autocatalysts.

Platinum was trading at $1,018.50 ounce, up $40.00 from New York’s notional close. Platinum was well below a record high of $2,290 struck in March. Gold was up almost 2 percent to track rising oil prices, while the most active platinum contract on Tokyo futures rose 140 yen per gram as speculators returned to the market after a long weekend holiday….. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Myiris.com: As per a report published by Karvy Comtrade, the Crude oil prices rose from a 13-month low as governments in the U.S., Europe and Asia pledged to avert a collapse in the financial system while turmoil in credit markets threatens to stall the global economy.

Oil gained for the first time in four days after the 15 nations using the euro agreed to shore up their banks, and Richard W. Fisher, president of the Dallas Fed bank, said the U.S. Federal Reserve will do everything necessary to stabilize financial markets…… Full Article: Source

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From Indiatimes.com: Reliance Money, the retail brokerage arm of Reliance Capital, is buying15% stake in Hong Kong Mercantile Exchange (HKMEx). This would be the first time an Indian firm is buying stake in an overseas exchange. The deal comes at a time when the global financial markets are in a state of flux.

ET had first reported that Reliance Money was close to picking up a substantial minority stake in HKMEx, in its edition dated September 6. As reported earlier, HKMEx was keen to sell up to 26% stake to Reliance Money….. Full Article: Source

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From Reuters: Thomson Reuters on Monday launched a web-based, interactive community that brings comprehensive information, research, analysis and professional networking tools to the global base metals marketplace.

Thomson Reuters Metals Insider went live at www.communities.thomsonreuters.com/basemetals with a community of approximately 6,700 professionals. Metals Insider is aimed at equipping the global base metals marketplace with the tools to gather in-depth information and collaborate with industry peers….. Full Article: Source

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From Guardian: Europe’s scrap metals business will shrink this year as the global economy slows and some consumers may buy recycling firms in an effort to secure supplies, the head of European federation of scrap dealers says.

Robert Voss, President of Eurometrec, told Reuters in an interview the scrap business would inevitably suffer because most non-ferrous scrap metals go into the construction, automotive, power and transport industry. All of these industries had been hit hard by the economic downturn in the wake of the global financial crisis that started last year in the United States subprime market….. Full Article: Source

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From IHT: As oil prices zoomed toward an unheard of $147 a barrel this summer, it seemed every analyst prediction that oil would approach $200 was a self-fulfilling prophecy, until suddenly it was not.

Instead of $200, oil is now $80. Instead of going up, the U.S. has seen the greatest destruction in demand since the oil-shocked 1970s. Drivers have dramatically cut down on driving since November…… Full Article: Source

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From Reuters.com: ETF Securities said on Monday the amount of metal it holds to back its gold and silver exchange traded commodities rose last week, but the holdings of its platinum and palladium-backed ETCs declined.

Bullion has benefited from its appeal as a haven from risk as the financial markets descended into turmoil in recent weeks. The same chaos has dented interest in the platinum group metals, however, which are primarily industrial…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Mathaba.net: The export of non-oil commodities increased in term of weight and value in the first half of current Iranian year (starting on March 21). According to statistics released by Customs Administration, dlrs 3.58 billion worth of non-oil commodities excluding oil derivatives, were exported abroad during the said period.

Meanwhile, the figure stood at dlrs 3.26 billion during the same period the previous year….. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Financialexpress.com: Notwithstanding the government’s ban on futures trading on eight commodities and the turmoil in stock markets, Indian commodity exchanges continued their dazzling run. The turnover of 22 commodities exchanges across the country recorded a robust growth of more than 47% during the first half of 2008-09.

According to data released by commodity market regulator, Forward Markets Commission (FMC) on Monday, during September 15-30, the total turnover of three national commodity exchanges and 19 regional exchanges in the country doubled ….. Full Article: Source

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From Businessspectator.com.au: Copper prices bounced more than seven per cent as a global effort to recapitalise banks sparked a broad recovery in equity and commodity markets and led investors back into industrial metals.

News from last week that Chile’s Escondida, the world’s biggest copper mine, had declared a force majeure on some deliveries following a mill closure also helped copper prices. “The Escondida news is very, very bullish,” said Dan Smith, analyst at London’s Standard Chartered. “On its own, it accounts for eight per cent of global supply.” …. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Neurope.eu: This week, the German Minister for Environment, Sigmar Gabriel, was quoted saying the money burnt at financial markets must not be taken away from CARITAS or climate protection. While at first sight everyone might nod his head over this statement, it somehow reveals two interesting things.

First, even politicians from the environmental wing must finally admit: the so-called “climate protection measures” cost money, in fact, a hell lot of money. Second, it reveals the ignorance of these politicians towards some very basic economic facts. The money the government and industry might spend for protecting the environment does not appear out of nowhere. It is earned by real work of real people in real companies…. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From FT: Commodities prices reboun­ded strongly, with oil nudging back above $80 a barrel, after the world’s leading industrialized nations pledged to do everything in their power to support the financial system and the global economy.

The price increases came after raw materials suffered large losses last week as traders bet the global economy was heading into a recession. However, analysts said the rebound could be short-lived amid concerns about slowing demand…… Full Article: Source

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