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Commodities Briefing 23.Oct 2008

Posted on 23 October 2008 by VRS |  Email |Print

From WSJ: Nasdaq OMX Group Inc. is joining the push by financial exchanges into trading emissions contracts designed to reduce the global output of greenhouse gases.

It will use businesses acquired from Nord Pool, the Norwegian power exchange, to create a new Nasdaq OMX Commodities unit. The launch of an energy-trading platform comes amid increasing interest in emissions contracts, with both U.S. presidential candidates supporting the cap-and-trade system implemented in the European Union and elsewhere….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Bloomberg: Commodity prices tumbled to a four- year low, led by declines in oil, copper and grains, on increased speculation a global economic slowdown will reduce demand for raw materials.

The Reuters/Jefferies CRB Index of 19 raw materials plunged as much as 3.3 percent to 269.48, the lowest since Sept. 8, 2004. Before today, the gauge had lost 41 percent since reaching a record in July as the credit crunch choked worldwide growth….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From FT: Gold’s popularity among investors has soared over the past year as the credit crunch has rocked financial markets.

The US Mint has sold all of its stock of some popular gold coins, sales of gold bars have risen strongly and gold exchange traded funds have seen record inflows as investors looked for a safe haven from the turmoil affecting credit and equity markets….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Independent : The American securities clearing house Depository Trust & Clearing Corporation (DTCC) and its European rival LCH.Clearnet have agreed to combine to create the world’s biggest clearing house in an effort to cut trading costs.

Under the terms of the deal, expected to close in the second quarter of next year, DTCC will buy LCH for as much as €739m (£583m), or €10 per share, giving LCH shareholders 34 per cent of the combined entity….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Forbes: While the credit markets are showing some signs of thawing, the world economy’s shaky outlook is sending the prices of raw materials and energy sources sharply lower.

“This is just another stage of the credit crisis,” said Birinyi Associates analyst Cleveland Rueckert. “Now we’re seeing the effects in world economies of the trickle down effect of the last year and a half.”…. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Investorsoffshore.com: The Investment Management Association (IMA) has warned that the European Commission’s rush to reform accounting standards in the light of the financial crisis risks causing increased uncertainty for the investment community regarding financial accounts.

“What is important to users is transparency, and comparability and consistency in financial reports. But seeking to make changes by the end of October, as the Commission proposes, runs the risk that this will not be maintained and such changes could result in unhelpful reporting….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Mineweb.com: Western Australia (WA), now a major focal point for global nickel supply with its high grade sulphide mines and more recent nickel-cobalt laterite open cuts, is reeling with the sudden recession for base metals with the outlook most sobering for the now high cost nickel laterite mining and refining projects.

The annual Paydirt Australian Nickel Conference opened in Perth today with more questions than answers for this sector with few speakers offering any panaceas for a return to a healthy nickel price until at least well into next year….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Marketwatch.com: Concerns that the global economy will slide into recession rattled commodities markets Wednesday, spurring the repatriation of dollars and fueling a further unwinding in the price of everything from crude oil to gold and copper.

“Money is probably being pulled from most all investments, including commodities,” said Darin Newsom, a senior analyst at commodities information provider DTN. But “the weakness in commodities is due in large part to the strength of the U.S. dollar and continued concerns over world economics.”…. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Businessweek.com: Gold prices collapsed Wednesday, plunging to a 13-month low as a stronger dollar and growing fears of a global recession spurred investors to yank money out of commodities.

A barrage of worrisome corporate earnings has deepened investors’ pessimism about the direction of the economy, prompting them to shift funds into less risky assets like government bonds. At the same time, a sharply stronger dollar is feeding selling of commodities bought as a hedge against inflation and weakness in the U.S. currency….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Financialpost.com: The Canadian dollar plunged another US2.69 cents Wednesday, the victim of a global commodities crash that is leaving an ever-widening trail of destruction in its wake.

While the credit crisis has left the global banking system teetering and the stock market crash has crushed investor portfolios, the slide in commodity prices is having even more far-reaching effects on everything from currencies, to government balance sheets, to geopolitics….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Climatechangecorp.com: The fledgling climate-change sector faces its first economic recession. David Metcalfe from research firm Verdantix predicts that some firms will hit the wall, but others will emerge stronger that ever.

The low-carbon sector is unlikely to escape the ripple effects of the financial crisis and the ensuing recession, but the analysis of Verdantix suggests that it is not very close to the epicentre of the meltdown and will rebound strongly in 2010….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Chicagotribune.com: Chicago-based brokerage PFGBest.com announced plans Wednesday to launch a $100 million commodity investment fund, with plans to set up an additional three to four funds in the next 18 months.

The new fund, which will have multiple strategies and commodity trading advisers, joins an existing commodity fund in PFGBest.com’s Peregrine Asset Management subsidiary. The move comes amid a turbulent stock market that has seen dramatic drops….. Full Article: Source

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From Stockhouse.com: A number of commodities have broken down through key support levels this morning. Most notably, copper, which is widely viewed as the most sensitive commodity to global economic conditions, fell through $2/lb.

This suggests that significant concerns remain over the health of the global economy. Next potential support levels for copper appear near $1.70/lb and then $1.50/lb. Crude oil, meanwhile, broke down through $70/bbl and into a previous support zone between $62 and $68/bbl….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Reuters: NCDEX Spot Exchange Ltd (NSEL) has signed an agreement with Maharashtra State Warehousing Corporation (MSWC), and National Collateral Management Services Ltd (NCMSL) to develop high quality warehousing infrastructure in Maharashtra.

NSEL, MSWC, and NCMSL would jointly modernise the operations of mandis under the World Bank-assisted Multi State Agricultural Competitiveness Project (MACP), it said in a statement….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Independent: Commodity stocks slumped to fresh lows last night after recessionary fears took root across the London market, sending the FTSE 100 down towards the 4,000-point mark.

The Kazakh mining company Kazakhmys was the worst off, falling 15.49 per cent or 47.25p to 257.25p, after the Bank of England Governor, Mervyn King, said it was likely that Britain was heading into a recession….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From CNN: Are emerging markets a bargain right now? The instinct is right, as developing-country indexes have taken a serious thumping this year. Year-to-date, Argentina’s main index is down 51%. China’s is down 63%. Russia is down 68%.

Overall, the MSCI Emerging Markets index is down 52% year-to-date, versus *just* a 34% drop for the S&P 500. The result is that emerging markets are cheap by several metrics: a 10.1 trailing price-times-earnings ratio, or a 20% discount to developed markets, according to a recent Merrill Lynch report….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Theglobeandmail.com: The threat of a deeper recession triggered by the global financial crisis has pushed oil prices to a low not seen for 16 months, destabilizing the economics of new energy projects around the world.

Crude prices fell $5.43 (U.S.) to $66.75 a barrel yesterday — the lowest price since June 13, 2007 — after the U.S. Energy Information Administration said its oil reserves rose by 3.2 million barrels last week, well above industry expectations. The higher stock figures indicate slumping demand in the U.S., the world’s largest oil consumer….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Business-standard.com: Asian currencies fell against the greenback, led by South Korea’s won and Indonesia’s rupiah, on concern that a deepening global economic slump would curb demand for the region’s equities and exports.

The won, Asia’s worst performer this year with a 32 per cent loss, slumped as global funds cut holdings of local stocks. All of the 10 most-active Asian currencies outside Japan dropped as shares tumbled across the region, extending a global stocks rout that has wiped out more than $10 trillion of market value worldwide in the past month….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

A debate on whether to hold on to an ambitious EU timetable meant to cut greenhouse gas emissions at a time of economic turmoil is splitting the continent.

Most governments within the 27-nation bloc insist on going ahead with a December timetable for EU legislation aiming to slash emissions in Europe by 20 percent by 2020….. Full Press Release: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Metalmarkets.org.uk: Metals prices dropped Wednesday as the dollar strengthened to make metals more expensive for investors buying in other currencies and as worries about the erosion of demand continued.

December copper was down 14 cents to $1.87 per pound in New York while three-month copper dropped $340 to $4,160 per tonne in London as inventories in London Metal Exchange warehouses added 1,850 tonnes on the session….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Bloomberg: The Australian dollar, headed for the worst year since a currency peg ended in 1983, may drop a further 25 percent through March as a slowing global economy saps demand for the country’s raw materials, according to CBA Europe Ltd.

The currency, which slid 17 percent in the third quarter, may trade as low as 50.45 U.S. cents, the weakest since Dec. 21, 2001, according to Divyang Shah, chief strategist in London at CBA Europe, a unit of Commonwealth Bank of Australia….. Full Article: Source &sid=a9KoXk92AhVs&refer=commodities

Posted on 23 October 2008 by VRS |  Email |Print

From Marketwatch.com: Members of the Organization of the Petroleum Exporting Countries saw fit to schedule an “extraordinary” meeting this Friday after seeing oil prices drop more than 50% in three months.

That constitutes an emergency to them, just like the weakening global economy is to the rest of us. “It’s about a snowball running downhill, and turning into an avalanche,” said Anthony Sabino, a professor of law at St. John’s University, whose legal practice includes oil and gas law….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Commodities-now.com: Trading software that can recognize and allocate market risk is crucial to avoiding a debacle similar to that in subprime mortgage derivatives, says TradeCapture’s Rana Basu.

In the current financial market upheaval, major investment banks that were among the most sophisticated users of risk management methodologies and systems still succumbed to the trading risk posed by derivative structures….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Reuters: China’s steel industry will seek a unified iron ore price from Brazilian, Australian and Indian iron ore miners in the 2009 pricing negotiations, the head of the Chinese industry body said on Thursday.

“We are seeking one price for iron ore imports from Australia, Brazil and India,” Shan Shanghua, Secretary General of the China Iron and Steel Association, told reporters at a conference in Qingdao….. Full Article: Source

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From Investorsoffshore.com: Hong Kong’s gold futures market will provide a deep liquidity pool in the Asian time zone to facilitate price discovery and risk management, Hong Kong Exchanges and Clearing Limited chairman Ronald Arculli says.

Speaking at the gold futures launch ceremony on Wednesday, Arculli noted that it was an ideal time for the launch due to the rising public interest in the commodity and its greater price volatility….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Freeinternetpress.com: Time is running out. If the European Union is unable to resolve internal differences over its ambitious emissions reductions plan, then global climate talks could suffer, say experts. The world needs European leadership.

The vision is an admirable one. Last spring, the European Union announced ambitious new goals to radically cut CO2 emissions across the entire 27-nation bloc….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Marketwatch.com: The European Commission voiced strong opposition to the idea of an Opec-style group of gas producers after world gas powers Russia, Iran and Qatar moved to strengthen co-operation.

The European Union executive said no such group had been announced and it would expect to be notified of any move to create such an arrangement, which could prompt theEU to revise its energy policy….. Full Article: Source

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From Environmentalleader.com: Japanese Prime Minister Taro Aso’s government recently approved a voluntary carbon-trading trial. Unlike the cap-and-trade system now used in Europe, where governments impose a mandatory ceiling and companies must buy carbon credits for additional emissions, Japan is allowing companies to set their own emission-reduction targets.

Participants in the trial can buy carbon credits from companies that emit less than their limit. They can also buy and sell U.N.-certified emission credits….. Full Article: Source

Posted on 23 October 2008 by VRS |  Email |Print

From Mineweb.com: Speculators often take advantage of silver’s volatility to gear up their gold exposure when looking for a move in the sector. Is such a move underway again? Silver is a notoriously wayward metal.

If there is one thing that is consistent about it, however, it is the fact that it is regularly more volatile than gold; as a result it will often be the leader when it comes to changes in investment or speculative patterns as market players look to play up their expectations for price performance. ….. Full Article: Source

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