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Commodities Briefing 04.Nov 2008

Posted on 04 November 2008 by VRS |  Email |Print

From Business-standard.com: The commodity cycle hasn’t turned but it’s just a price correction, according to Bart Melek, the global commodity strategist, equity research, BMO Capital Markets, the investment banking arm of Canada-based BMO Financial Group, which is setting up shop in India despite M&As having dried up in this market.

“BMO thinks the commodity cycle continues to be in a bullish configuration though commodity prices have fallen sharply (15-56 per cent from five-year average prices), deepened by the financial crisis. We don’t think it has upset the fundamental demand story,” Melek said….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From IHT: For years, investors known as gold bugs snapped up the metal and socked it away, betting that a colossal economic crisis would one day slam financial markets and send gold prices through the roof.

For many investors, that grim scenario is in full swing, except for one thing: After briefly hitting $1,000 an ounce for the first time in March, gold has fallen into a rut and shows no sign of budging anytime soon….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Guardian: By driving up long-term real interest rates, the forthcoming flood of U.S Treasury borrowing threatens to crowd out the amount of capital for investing in other asset classes, creating a much tougher environment for commodity prices over the next two to three years.

Like many other asset classes, commodity prices have benefited from an influx of funds in recent years driven by three related factors:…. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Globalpensions.com: The global economic slowdown will increase available carbon trading licenses in the European emissions trading scheme (ETS) by almost half, lowering the price of carbon-based exchange traded funds (ETFs) and commodities (ETCs), analyst IDEAcarbon has said.

With European industrial output predicted to fall to 1% over 2008 and decline by 0.7% in 2009, total carbon emissions are also expected to decrease, lowering the shortfall of trading licences by 44% from 206 million tonnes to 115 million tonnes between 2008 and 2012….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Theage.com.au: A record plunge in commodities may signal the US is headed for the longest recession since 1981, just after Ronald Reagan became president and the economy began a 16-month slump.

Industrial raw materials measured by the Journal of Commerce fell at an annual rate of up to 56% last week, the most since 1949 and worse than the declines before every recession since. Crude oil, copper and wheat tumbled more than 50% from records this year as the US economy declined in the third quarter by the most since 2001….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Telegraph: Rio’s share price has fallen 45pc this year as concerns grow that a recession will hurt demand for commodities but Mr Albanese said at a visit to a $1bn (£630m) ilmenite mine project in Madagascar that his company would not be forced into the arms of BHP Billiton, which is targeting a $86bn takeover of the Anglo-Australian group.

Mr Albanese said China was “taking a pause for breath” and there were further signs of the economy slowing down in the fourth quarter following its slowest growth in five years in the three months to the end of September. However, he said it was still realistic to expect growth of 8pc or 9pc from China next year….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Mineweb.com: From 27 October, the Morgan Stanley Capital International dollar index for global equities has rallied by nearly 16%; comparable indices for emerging market stocks have bounced by 28%; global energy stocks are up 26%, and global materials (including mining) stocks have risen 24% from lows.

In just a short period, the world’s top 20 oil and related stocks (currently capitalised at USD 1.9 trillion) and world’s top 20 mining stocks (USD 528 billion) have recaptured nearly USD 500bn in market value….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Forbes.com: Major commodity indexes had one of their worst months on record in October, as commodity prices plummeted in anticipation of a severe global economic downturn. The S&P GSCI index, for example, was down nearly 30 percent in October.

The speed of the declines across the major commodities and equities indexes illustrates the level of pessimism about the economic outlook….. Full Article: Source

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From Reuters: The global economy seems to be heading for a recession and commodity-producing countries will be hit worse than most, Saudi Arabia’s deputy central bank governor Muhammad Al-Jasser said.

“A global recession of some sort seems to be on the way,” he said in a speech at the Bank of Greece in Athens. “Commodity-based countries will be worse off than most others.”…. Full Article: Source

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From Marketwatch.com: Platinum, which is more expensive and more scarce than gold, has seen prices drop 46% so far this year, beating gold as one of the worst performers of the precious metals.

Platinum is often used as a barometer of both economic growth and investment confidence, as it’s widely used by automakers and also held by investors. As turmoil roils the global financial system, platinum has been hit hard as the economy slows and investor confidence weakens. And as the global economy slides further into uncharted territory, platinum prices could move even lower, say analysts….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Business-standard.com: After launching V-797 cotton (popularly known as Kalyan cotton in Gujarat) futures, National Multi-Commodity Exchange of India Ltd (NMCE), one of the leading commexes in India, may start futures contracts in Bt cotton and other varieties of cotton next year.

“We have rolled out V-797 cotton futures at NMCE and based on the success of this contract, we will go for new contracts for Bt cotton and other varieties of cotton,” NMCE managing director, Kailash Gupta said while announcing the launch of V-797 cotton futures at Surendranagar, which is a major grower of Kalyan variety of cotton in Gujarat….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Goldseek.com: In a number of respects, not least being the magnitude of the decline, the closest historical parallel to the equity bear market of 2007-2008 is the equity bear market of 1937-1938. Interestingly, there was also a very sharp downturn in commodity prices during 1937-1938.

Even more interestingly, the 1937-1938 commodity plunge proved to be the first major correction in a secular commodity bull market that lasted until the early 1950s….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Mondovisione.com: ETF Securities Limited (ETFS), the global pioneer in Exchange Traded Commodities (ETCs), has listed Europe’s first Carbon ETC on the London Stock Exchange (LSE) in the dedicated ETC segment.

ETFS Carbon offers investors, for the first time ever in Europe, the opportunity to gain simple and direct exposure to the carbon emissions allowance futures market. ETFS Carbon (LSE Code: CARB) is designed to track the price of carbon emissions allowance futures and offers investors a total return. CARB tracks the ICE ECX EUA Futures Contract traded in London on the ICE Futures Market - currently the most liquid exchange traded contract within the EU Emissions Trading Scheme (”EU ETS”)…… Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Indiatimes.com: The metal market is unlikely to see a robust recovery in the near-term with the real economy under pressure, according to Bart Melek, the global commodity strategist of Canadian financial services firm, BMO Capital Markets.

Mr Melek, who is in the country to explore the mergers and acquisitions opportunities in the Indian mining segment, is also of the view that metals — mainly copper, zinc and nickel — may be at their lowest levels, but the poor demand scenario is likely to keep prices within a lower range….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From WSJ: The turmoil of the past few months has been tough on one of last year’s most promising new investments: exchange-traded notes. ETNs, which are close cousins of exchange-traded funds, have been bleeding investor assets after being hit with a double whammy of credit jitters and declining commodity prices.

Investors yanked about $460 million from the 90 ETNs tracked by fund researcher Morningstar in September, a chunk of their $5.5 billion in overall assets….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From AFP: Oil prices nose-dived Monday as traders digested fresh signs of slowing economies in the European Union and the United States that bode ill for energy demand.

New York’s main contract, light sweet crude for December delivery, dropped 3.90 dollars a barrel from Friday to close at 63.91 dollars. In London, Brent North Sea crude for December delivery tumbled 4.84 dollars to settle at 60.48 dollars per barrel….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Bloomberg: Shanghai copper futures fell after global stockpiles increased to the most in more than 4 1/2-years, raising concerns that demand is declining.

Inventories monitored by the London Metal Exchange jumped 7,275 metric tons to 237,925 tons yesterday, the highest since March 2004. Prices also fell after manufacturing in China and the U.S., the world’s two largest users, contracted last month as faltering economies eroded demand prospects….. Full Article: Source

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From Rttnews.com: The US dollar declined against major Latin American currencies during New York trading on Monday. The US Department of Commerce released its report on construction spending in month of September on Monday.

The report showed that construction spending fell 0.3 percent in September following a revised 0.3 percent increase in August….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From ABC: Livestock producers are calling on the government to recognise the good environmental work they do, saying a new report just focuses on the sector’s emissions.

The report from the environmental and economic think-tank, the Australia Institute, says a carbon levy should be imposed on farming, rather than including agriculture in an emissions trading scheme. It suggests the levy could be introduced by 2010….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Pionline.com: The financial crisis that has blunted growth in CME Group Inc.’s futures business also presents Chief Executive Officer Craig Donohue with the opportunity to seize a market worth up to $400 million a year in new revenue — but he’ll have to outfox a powerful rival, overcome Wall Street distrust of Chicago exchanges and perform a nifty dance step with resurgent regulators.

He’ll also have to be quick. Just last week, New York Federal Reserve officials were in Chicago checking CME’s progress in creating a new fund to guarantee trading in credit-default swaps, the insurancelike contracts that emerged as prime culprits in the credit meltdown….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Resource Investor: The $800 billion bailout, and billions more being pumped less obviously into the global economy, will cure nothing. Americans are clamoring for a savior. No one is willing to believe that the party is over. In the past, someone always came to our rescue.

Like a parent dispelling a childhood nightmare, FDR soothed the masses with the assurance that they had nothing to fear but fear itself. To this day, he is revered for turning a depression into the Great Depression….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Stuff.co.nz: Commodity prices have hit an eighteen month low, down 7.4 percent from September, according to the ANZ Commodity Price Index.

The index has fallen 15 percent since July, with beef recording the biggest fall, down 17.7 percent in October. Aluminum and wool also posted double digit declines in October, down 16 percent and 12.6 percent respectively….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Theglobeandmail.com: Copper closed relatively flat on Monday, rebounding from earlier sharp losses as gains in U.S. equities overshadowed a large build in the red metal’s inventories.

The metal had lost as much as 4 per cent of its value earlier as inventories in London grew to their biggest since March, 2004, fanning pessimism about Chinese demand….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Mediaglobal.org: Kenyan Vice President Kalonzo Musyoka announced this week that Kenya would enhance its technical capacity to profit from the global carbon trading market.

Under the Kyoto Protocol, the Clean Development Mechanism (CDM) gives developed countries the option to invest in projects that reduce greenhouse gas emissions in developing countries in order to meet their own emissions reduction commitments….. Full Article: Source

Posted on 04 November 2008 by VRS |  Email |Print

From Structuredproductsonline.com: Keydata International has launched its Renewable Energy Fund, offering returns generated by the development and operation of a range of small-scale Renewable Energy Power Plants (Repps) across Europe, covering the UK, Germany, Italy, Sweden and Spain.

The fund invests in a portfolio of small scale Repps, each of which produces localised power generation providing enough electricity to the national grid to supply up to 25,000 homes per year….. Full Article: Source

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