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Commodities Briefing 14.Nov 2008

Posted on 14 November 2008 by VRS |  Email |Print

From Reportonbusiness.com: The record plunge in commodity prices over the past four months has already flayed Canada’s dollar and equity markets, and now the “hammer” is about to fall on the so far largely unscathed “real” economy, BMO Nesbitt Burns Inc. warned Thursday.

“We have been calling for a Canadian recession since early October and would note that many Canadian results are still being flattered by the vapours of the first-half rocket ride in resource prices,” Douglas Porter, the firm’s deputy chief economist, said in a weekly commentary for clients…… Full Article: Source

Posted on 14 November 2008 by VRS |  Email |Print

From Bloomberg: Energy, base metals and industrial materials will stay under “broad-based pressure” as world economic growth slows, said Stephen Roach, chairman of Morgan Stanley Asia Ltd.

“The supply-demand balance, which was viewed as a permanent justification for higher highs in the super cycle of commodities, has unraveled,” he said…… Full Article: Source

Posted on 14 November 2008 by VRS |  Email |Print

From Guardian: China’s 4 trillion yuan ($586 billion) stimulus package will benefit the country’s poor, but it will not rescue global commodity markets, J.P. Morgan chief China economist Frank Gong said on Thursday.

The road, railway and airport projects at the core of the plan will boost demand for labour and concrete far more than for industrial metals or energy, Gong said…… Full Article: Source

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From Xinhuanet.com: The International Energy Agency (IEA) on Thursday cut its global oil demand forecasts for this year and next year as major economies hit by a financial crisis are slipping into recession.

In its latest monthly report, the Paris-based agency lowered its forecasts for global oil demand to 86.2 million barrels per day (bpd) this year and 86.5 million bpd in 2009, compared with 86.5 million bpd and 87.2 million bpd for 2008 and 2009 in its previous report…… Full Article: Source

Posted on 14 November 2008 by VRS |  Email |Print

From Advancedtrading.com: In the short-term, the overall de-leveraging of the global economy will cut back the use of all derivatives products by investment banks and hedge funds.

Recent market events have shocked the country and brought the subject of derivatives trading into the mainstream, and the current credit crunch and recent company consolidations have had an adverse effect on the trading volume of interest rate futures globally…… Full Article: Source

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From Canada.com: Falling oil prices will lead to future supply shocks, and in turn even higher prices, the International Energy Agency said in its global energy outlook. But the prospect of energy shortages in the not-too-distant future did nothing to ease the upheaval on world oil markets.

Oi lprices continued to fall in New York, closing at $56.16 US a barrel, down$3.17 on the day. Crude prices are now down almost two-thirds from their summer peak of about $147…… Full Article: Source

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From Bloomberg: Gold fell on speculation yesterday’s rally was overdone as declining commodity prices and gains in the dollar this month may reduce the precious metal’s appeal as a hedge against inflation.

Gold jumped 3.4 percent yesterday after U.S. stocks rallied 6 percent in the final hour. Still, the dollar has advanced 1.1 percent against a basket of six major currencies this month, after rising for the past four, and the Reuters/Jefferies CRB Index of 19 raw materials yesterday touched a five-year low…… Full Article: Source

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From AFP: Eastern European leaders gather in the Azerbaijani capital Baku on Friday for a summit aimed at promoting energy supply routes from the Caspian region to Europe that bypass Russia.

Leaders of the Baltic nations, Azerbaijan, Georgia, Poland, and Ukraine will be joined by Turkish President Abdullah Gul for the first time to discuss joint energy projects, including proposed oil and gas pipelines…… Full Article: Source

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From Indexuniverse.com: Claymore Investments, the Canadian asset management arm of U.S. exchange-traded fund provider Claymore Securities, is joining the ranks of the green-minded asset managers by launching a global sustainability ETF.

The ETF launch, scheduled for some time in the next two weeks, coincides with the creation by KLD Indexes and Jantzi Research of the Global Environment 60 Index (GE60), to be published by FTSE and used by Claymore for the new ETF…… Full Article: Source

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From Hardassetsinvestor.com: Why are Jim Rogers, and so many others (including Kevin Kerr in this week’s podcast), hot for sugar? It’s a matter of history. If you look back (way back), sugar is relatively cheap right now. In 1980, the average price for London refined sugar was a whopping 32.30 cents a pound.

In October of that year, it hit an average of 42.30 cents per pound. That is a far cry from sugar’s October 2008’s average price of 15.07 cents a pound…… Full Article: Source

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From Theage.com.au: The recycling industry has warned it could become a perverse victim of emissions trading, with plants that help cut Australia’s carbon footprint risk being forced to close and hundreds of jobs lost.

Industry body the Australian Council of Recyclers says that while some recycling companies will have to bear the full cost of buying greenhouse permits and higher electricity costs, big emitters using virgin materials will qualify for free permits…… Full Article: Source

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From Mondovisione.com: European Commodity Clearing AG (ECC) will assume clearing and settlement of the natural gas trades concluded on the French Powernext SA. Powernext announced the launch of French spot and derivatives trading in natural gas for 26 November 2008.

Currently, European Commodity Clearing AG provides clearing for all transactions con-cluded on the European Energy Exchange (EEX) and the Dutch derivatives exchange ENDEX European Energy Derivatives Exchange…… Full Article: Source

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From Etaiwannews.com: Gold prices plunged Wednesday as investors, fearful that a prolonged economic downturn will result in a sharp drop in demand for basic materials, continued their exodus from commodities. Investors have fled both commodities and stocks amid a worsening global economic crisis.

“The amount of money leaving the (commodities) niche has been significant,” said Jon Nadler, senior analyst at Kitco Bullion Dealers Montreal. “The crisis that has been unfolding and the contagion that has spread globally has basically shown most of the fund participants in the commodities niche that the exit door was the quickest solution.”….. Full Article: Source

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From Huliq.com: NYSE Euronext (NYX) and Dalian Commodity Exchange (DCE) today signed a Memorandum of Understanding (MOU) to develop the futures and options markets in the two countries, and internationally.

The agreement was designed to explore opportunities for extending the global reach of both exchanges. The MOU will enable the two exchanges to explore opportunities for information sharing, exchanging employees, and working together on IT solutions and product design in the global marketplace…… Full Article: Source

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From Fool.com: The fundamental outlook for global commodities strengthened considerably over the weekend, though, as China announced a domestic investment initiative many times greater in adjusted scale than even the Marshall Plan, which so transformed Europe after World War II.

With a two-year, $586 billion economic stimulus package that will develop housing, rural, and transportation infrastructure (among a total of 10 programs), China has effectively pledged to the world a baseline level of demand for a range of raw materials and related products…… Full Article: Source

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From Dailymirror.lk: Sri Lanka’s first indigenous commodity exchange has been established by Ceylinco Consolidated one of Sri Lanka’s large conglomerates which has a substantial stake in all major of fields of business activities such as property development, insurance, banking, financial services, health, leisure, information technology and diamond cutting and jewellery.

Among Asian countries, Sri Lanka has been one of the few countries that did not have a commodity exchange, until Ceylinco Commodity Exchange Ltd was formed this year…… Full Article: Source

Posted on 14 November 2008 by VRS |  Email |Print

From Canadian Press: Statistics Canada says the seven-year-old boom in commodity prices had a large impact on key sectors of Canada’s economy, buttressing export earnings and profits.

The agency says companies substantially increased fixed investment in the resource sector before the recent world financial crisis put a damper on commodity prices. Resources were the leading factor in lifting the stock market to record heights, while attracting direct foreign investment flows into Canada…… Full Article: Source

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From Cattlenetwork.com: The value of commodity derivatives traded outside exchanges rose 56% in the first half of the year as the price of their underlying assets soared to new heights.

The Bank for International Settlements, a body that promotes cooperation among central banks, Thursday reported the value of over-the-counter commodity contracts outstanding in June 2008 was $13.23 trillion, up from $8.46 trillion in December 2007…… Full Article: Source

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From Morningstar.co.uk: Exchange-traded funds (ETFs) offer investors a viable alternative to index tracking funds. ETFs and index funds are similar in that they both mirror the performance of various sector and stockmarket indices such as the Dow Jones Industrial Average, the FTSE 100 or the S&P 500.

Yet an ETF is an investment product that combines the characteristics of open-ended funds and shares. It is – like a fund – a basket of bonds or shares. But it tends to act more like a share…… Full Article: Source

Posted on 14 November 2008 by VRS |  Email |Print

From Theedgedaily.com/: Local stock exchange operator Bursa Malaysia Bhd has signed an agreement with the Korean Exchange (KRX) to set up Commodity Murabahah House (CMH) for a syariah-compliant international spot commodity-trading platform.

In a statement yesterday, Bursa Malaysia chief executive officer Datuk Yusli Mohamed Yusoff said the establishment of CMH would enable the exchange to bring forth Islamic capital market and its offering to a global front…… Full Article: Source

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From ABC: Another Tasmanian industry has expressed concern at the Federal Government’s proposed emissions trading scheme. Cement Australia, based at Railton, says as a high emissions polluter the company would get some transitional funding from the government.

The company’s sustainability manager, Stuart Ritchie, says the big unknown is the price of carbon as a trading mechanism. Mr Ritchie says the Federal Government’s green paper points to an initial allocation of 90 per cent of total carbon liability coming through an allocation of permits…… Full Article: Source

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From Commodities-now.com: The metals opened on an up note on Wednesday, but prices then came under pressure with copper and aluminium reaching fresh lows, while the others held their heads above water, but by the close all metals were above the October lows.

Given the weakness in the Dow and oil and the strength in the dollar yesterday afternoon it is surprising that the metals did not come under further downward pressure. The fact they didn’t does suggest some good scale down buying interest is around…… Full Article: Source

Posted on 14 November 2008 by VRS |  Email |Print

From Xinhuanet.com: The U.S. dollar rose against the pound but fell against the euro Thursday on weak economic data and rising U.S. stocks. The U.S. Labor Department reported Thursday that jobless claims last week increased by 32,000 to a seasonally adjusted 516,000, the highest level after the Sept. 11 terrorist attacks.

The jobless data was much higher than expected and the first time it topped 500,000 in the current slowdown. It is the latest sign that times are getting tougher. A reading above 400,000 is considered a sign of recession…… Full Article: Source

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From Bloomberg: Coffee prices fell from a four-week high amid concern the slumping economy will erode consumer demand. Cocoa rose. First-time claims for U.S. unemployment benefits rose last week to the highest level since 2001, when the economy was last in a recession, the Labor Department said today.

Payroll losses at companies from Citigroup Inc. to Circuit City Stores Inc. mean jobless claims will probably rise further, squeezing consumer spending and threatening a protracted downturn, economists said…… Full Article: Source

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From Theglobeandmail.com: Copper recovered on Thursday from levels unseen since 2005 as a weaker U.S. dollar and Chinese production cuts offset demand concerns after data showed China’s industrial output fell in October.

Copper for December delivery ended down 3.15 cents (U.S.) at $1.6240 a pound on the New York Mercantile Exchange’s Comex division, but up from an overnight low of $1.58 – the lowest level for a second-position contract on a continuation basis since mid-July 2005…… Full Article: Source

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From FT: Crude oil prices on Thursday briefly fell below the $55 a barrel level for the first time in 22 months, after the International Energy Agency warned of significantly weaker demand in 2008 and 2009 due to the global economic downturn.

The combination of lower oil prices and weaker demand prompted fresh calls among member of the Organisation of the Petroleum Exporting Countries for a production cut…… Full Article: Source

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From Mineweb.com: While reduced valuations of gold stocks may present what look to be great opportunities, mining majors and mid-sized companies seem to be putting M&A on hold for the time being because of price volatility.

Small gold firms hit by the credit crisis and weak gold prices are keen for mergers with bigger rivals, but consolidation will likely have to wait until volatile share prices stabilise, company officials said on Thursday…… Full Article: Source

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From IHT: Commodities were mixed Thursday as some investors cautiously waded back into the market in search of bargains after a huge rally on Wall Street.

Gold and other precious metals prices fell, but rebounded in electronic trading after-hours. Energy and agriculture futures mostly rose…… Full Article: Source

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