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Commodities Briefing 03.Dec 2008

Posted on 03 December 2008 by VRS |  Email |Print

From Hardassetsinvestor.com: Investors in commodity futures - and that includes all the people who own commodity futures ETFs - are in a world of hurt. It’s bad enough that spot commodity prices are crashing. Oil is down nearly $100 from its highs, and copper and other commodities are down 50% or more.

But commodity investors have lived through falling commodity prices before and come out more or less OK. In the 1980s, for instance, the S&P GSCI Spot Commodity Index delivered -1.37% annualized returns for the entire decade. But investors in the S&P GSCI Total Return Index actually earned 10.67% annualized returns….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Thisismoney.co.uk: Research today suggested investment banks will slash pay for traders in metals, oil and other commodities by as much as 75% as prices have plummetted.

Oil traders’ profits held up longer than most others’ in the City as the Chinese economy kept sucking up materials and energy to fuel its boom….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From NBR: The November ANZ Commodity Price Index shows another month of weakness for international commodity prices, with the value of New Zealand’s exports sliding 7.2% on top of last month’s 7.4% drop.

It is the fourth month in a row prices have dropped, adding up to a 21% cumulative fall in the index since July. While lamb and kiwifruit managed slight price rises from the previous month of 4.3% and 0.3% respectively, eight other commodities sank and three were unchanged from October….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Bloomberg: Global mining companies’ profits may plunge 60 percent next year because raw-materials prices will be under pressure for at least six more months, according to UBS AG.

Prices for bulk materials such as coal and iron ore may drop 40 percent compared with this year, while most commodities may fall from current spot prices, London-based UBS analysts Daniel Brebner and James Luke said today in a note to clients….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Building.co.uk: Government committee says renewable power and energy efficiency can keep costs below 1% of GDP. The UK must cut carbon emissions by more than one-third by 2020, the committee that advises the government on global warming has urged.

The Committee on Climate Change, chaired by Adair Turner, said that greenhouse gas emissions should be reduced by at least 34% in the next 11 years, in a report out yesterday….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Telegraph: The price of key industrial metals has fallen further over the last four months than occurred during the worst years of Great Depression between 1929 and 1933, according to research by Barclays Capital.

Kevin Norrish, the bank’s commodities strategist, said the average fall in the price of copper, lead, and zinc has been roughly 60pc since the peak in July this year. All three metals were traded on the London Metal Exchange in the inter-war years so it is possible to make a comparison….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Marketsmediaonline.com: Trading volumes sank significantly in November at the world’s top derivatives exchanges. CME Group, which earlier this year took over the New York Mercantile Exchange, on Tuesday announced that November volume averaged 10.5 million contracts per day, down 29 percent from November 2007, assuming combined CME Group/NYMEX volumes.

Total monthly volume exceeded 199 million contracts, 79 percent of which was traded electronically. On a combined basis, CME Group year-to-date volume through November averaged 13.4 million contracts per day, up 7 percent from the same period in 2007….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Petroleumworld.com: OPEC president Chakib Khelil said Tuesday the level of global oil inventories should be reduced by four days to stabilise the price of crude.

Khelil, who is Algeria’s energy minister, said the forward demand cover for oil should be lowered from 56 days to 52 days, the average over the past five years. The reduction would have to be done progressively, he added….. Full Article: Source

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From Financialexpress.com: A task force formed by the Forward Markets Commission (FMC) to strengthen regional commodity exchanges has favoured the upgradation of such exchanges to Indian bourses on a selective basis.

The ‘national’ status would be accorded only to exchanges that meet parameters like enhanced net worth, demutualisation, proper warehousing and delivery facilities, increased investment for improvement of infrastructure and enrolment of new members….. Full Article: Source

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From Mineweb.com: Leave aside for a few minutes crashed out stock markets - the MSCI Barra dollar world equities index is now 50% off its highs - and consider how uranium stocks are performing like something of a bear market darling.

Where the world’s top 100 mining stocks have surrendered an average of 73% in market value, uranium stocks are down 68%….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Business-standard.com: Turnover on the country’s three national futures exchanges declined 3.5 per cent in November this year because of the falling global commodity prices. This is the first ever decline in turnover this year and perhaps since the commencement of trading in 2003.

The three national commodity exchanges, including the Multi-Commodity Exchange (MCX), the National Commodity and Derivatives Exchange (NCDEX) and the National Multi-Commodity Exchange (NMCE), constitute over 95 per cent of the value of trade in futures market in India….. Full Article: Source

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From BBC: Ethiopia, Africa’s largest coffee producer, has started trading the crop on a national commodity exchange.

In a move aimed at both increasing quality and the amount farmers get paid for their beans, coffee is being traded on the Ethiopian Commodity Exchange….. Full Article: Source

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From Structuredproductsonline.com: The Stock Exchange of Thailand (Set) aims to introduce an exchange-traded fund (ETF), derivative warrants, gold futures and an Islamic fund in 2009, as well as boost retail and institutional investor numbers. Set also intends on being listed by 2011, as part of its five-year organisational development plan.

As of 2009, the exchange and its subsidiaries will be divided into two groups, with one focusing on exchange functions, and the other on capital market development….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Indexuniverse.com: According to the latest Industry Review from Barclays Global Investors (BGI), European ETF assets totalled US$126 billion at the end of October, invested in 587 funds. Data for the first nine months of 2008 showed net cash inflows into ETFs of $54 billion, compared with an outflow of $302 billion from mutual funds.

In US dollar terms and to end-October, European ETF assets under management have fallen by 2% this year, much less than the 47% decline of the MSCI Europe index….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Mineweb.com: A decidedly bearish view on what happens next with respect to the copper price from a specialist analyst who predicted a major decline in the copper price here almost exactly one year ago.

To serious students of the copper market, the 60% fall in the copper price since early July was no surprise. What was surprising was how long the price had defied gravity and the real situation….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Khaleejtimes.com: The prices of food and other commodities are expected to drop within the next three weeks, following complains from consumers, Dr. Faisal Abdulgader, manager of the Corporate Social Responsibility section at the Jeddah Chamber of Commerce and Industry (JCCI), assured this.

Dr. Abdulgader was responding to complaints by a cross-section of consumers who claimed that prices has shot up despite the fact that oil has lost its value by one third….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Commodityonline.com: In India, direct commodity investment has not been a major part of the investors’ pool. In recent times, however, commodity – linked assets have increased the number of available commodity – based products.

Empirical studies have shown that investment in commodities results in significant diversification benefits….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Guardian: Prices of precious metals platinum, palladium and silver, which have significant industrial uses, are expected to slump next year as demand sags in line with economic growth, a Reuters survey showed.

However, gold should fare better than the industrial precious metals as investors buy bullion as a haven from risk, especially if the dollar recovery loses traction. A poll of a dozen analysts showed 2009 gold forecasts down just 9 percent….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Telegraph: The UK has been accused of hypocrisy for its efforts to have aviation removed from European renewable energy targets while calling for tougher international measures on climate change.

The EU is due to decide on a new energy directive on Wednesday to produce 20 per cent of power, including fuel and electricity, from renewables by 2020. At the same time more than 190 countries have gathered for a UN Climate Change Conference in Poznan, Poland to decide an international deal on climate change…. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Resourceinvestor.com: The Xstrata-Merafe Chrome Venture, the world’s biggest producer of ferrochrome, is temporarily closing more furnaces to bring its total suspension of production to 52% of capacity in response to weakening prices, it said yesterday.

Merafe’s shares dropped 12% to a two-year low of 67c on the JSE after the announcement, while Xstrata, which is a bigger and more diversified group, shed 5% on the London Stock Exchange to 882p….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Commodities-now.com: The Committee on Climate Change (CCC) today urged the Government to commit unilaterally to reducing emissions of all greenhouse gases (GHGs) in the UK by at least 34% in 2020 relative to 1990 levels (21% relative to 2005).

This should be increased to 42% relative to 1990 (31% relative to 2005) once a global deal to reduce emissions is achieved. The CCC says meeting these targets is necessary to contain the threat of climate change. Building a low-carbon economy, the CCC’s first report sets out the analysis underpinning these recommendations and the proposed level of the first three carbon budgets covering the periods 2008-12, 2013-17 and 2018-22….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From WSJ: If President Barack Obama wants to stop the descent toward dangerous global climate change, and avoid the trade anarchy that current approaches to this problem will invite, he should take Al Gore’s proposal for a carbon tax and make it global.

A tax on CO2 emissions — not a cap-and-trade system — offers the best prospect of meaningfully engaging China and the U.S., while avoiding the prospect of unhinged environmental protectionism….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Thestreet.com: While the major market averages languished in November, precious metals soared. The trend is evident in the list of the month’s best-performing open-end stock mutual funds.

Nine of the 10 top-performing open-end stock mutual funds — as calculated by TheStreet.com Ratings from Oct. 31 to Nov. 28 — focused on precious metals investments….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Bloomberg: Mongolia, sitting on what Rio Tinto Group has said is the world’s largest undeveloped copper-gold resource, is considering faster approval for investments after commodity prices plunged, President Nambaryn Enkhbayar said.

Government and lawmakers are discussing the possibility of reviewing projects individually rather than waiting for changes to its laws, Enkhbayar said …. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Mineweb.com: Gold and silver bullion peaked out (in dollar terms) in March this year, around the height of the Bear Stearns crisis on Wall Street.

On 15 July crude oil peaked out at close to USD 150 a barrel, and, just two months later, Lehman Bros. went bust on Wall Street. The Baltic dry shipping index, one of the world’s leading economic indicators, peaked out six months ago and is now 94% down….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Menareport.com: The European Commission and Egypt signed today in Brussels a Memorandum of Understanding to enhance EU-Egypt energy cooperation.

The areas covered by the Memorandum are, among others, energy market reforms and convergence of Egypt’s energy market with that of the EU, promotion of renewable energy and energy efficiency, development of energy networks as well as technological and industrial cooperation….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Bloomberg: Argentina’s peso fell for a 15th day, its longest losing streak since the government abandoned a one- to-one peg with the dollar in 2002, as the central bank seeks to smooth out a slide sparked by a tumble in commodity exports.

The peso dropped 0.4 percent to 3.3950 per dollar at 5:16 p.m. in New York, from 3.3825 yesterday. The currency is down 2.9 percent since it began to drop on Nov. 12 and has dropped no more than 0.7 percent in a day over that time. …. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From FT: Base metals continued to retreat on Tuesday in spite of reports that the Chinese government was about to embark on a massive buying spree to build up strategic stocks and provide support for local producers.

The provincial governments of both Guangxi and Yunnan have indicated that they want to build up stocks of base metals and China’s State Reserve Bureau is also expected to intervene in the market….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Xinhuanet.com: The dollar rose against the pound but dipped against the euro on Tuesday as Wall Street rebounded and investors waited for expected rate cuts from Europe later this week.

U.S. stocks jumped higher on Tuesday after a volatile session. The Dow Jones industrials rose 270 points, regaining more than a third of Monday’s loss. High-yielding currencies were helped as rising stocks boosted risk appetite in foreign exchange trading….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Guardian: A gloomy outlook for global economic growth and demand reinforced by rising stocks hit aluminium and copper prices on Tuesday ahead of U.S. car sales data expected to further dent sentiment.

Copper for three-month delivery on the London Metal Exchange touched a 1-week low of $3,475 a tonne and officially closed at $3,555 from $3,590 on Monday….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From AP: Gold prices rose modestly Tuesday, buoyed by an advance on Wall Street and a weakening dollar. Other commodities prices, however, were mostly lower as investors again grappled with concerns that a prolonged economic downturn will slice into demand.

Both the commodities and equities markets have been marked by extreme volatility in recent months as investors try to wade through a deluge of bleak economic news….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From Bloomberg: Natural rubber futures climbed from a five-year low, as rising oil prices increased the cost to make rival synthetic products and the yen’s drop against the dollar raised the appeal of the contracts.

Prices in Tokyo gained as much as 2.1 percent after earlier falling to the lowest since July 2003 on data showing the worst U.S. auto sales in 26 years. Crude oil in New York rebounded from a three-year low and the yen retreated from a five-week high against the dollar….. Full Article: Source

Posted on 03 December 2008 by VRS |  Email |Print

From FT: Oil prices sank to their lowest level in three-and-a-half years, accumulating more than a $100 drop in less than five months, amid fresh concerns on Tuesday that the Opec oil cartel may not reduce its production level as much as it has promised.

The fall to Tuesday’s low of $46.82 a barrel from July’s record high of $147.27 has prompted a dramatic drop in wholesale costs for oil products such as petrol and heating oil. In New York, wholesale gasoline prices on Tuesday hit an intraday low just above the psychological $1-a-gallon level. …. Full Article: Source

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