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Commodities Briefing 10.Dec 2008

Posted on 10 December 2008 by VRS |  Email |Print

From FT: Global oil demand will collapse next year and commodities will not return to the highs they reached this summer in the foreseeable future, two authoritative reports said yesterday as they forecast a long, painful worldwide recession.

The stark conclusions came as the World Bank’s chief economist predicted that the world faced “the worst recession since the Great Depression”. The US energy department said global oil demand would drop this year and next - the first two consecutive years’ fall in 30 years….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Reuters: Tropical forests and coal plants may get money to curb greenhouse gases under a United Nations-led carbon market from 2013 if climate negotiators meeting in Poland can defuse criticism of the present scheme.

Senior officials from about 190 countries have been meeting in the western Polish city of Poznan for talks, which began on December 1 and will end on Friday, to push for agreement on a new climate treaty, including rules for an expanded carbon offset market, by the end of next year….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Forbes: Every so often, a new investment product manages to tap into not just one trend, but two. Product survival often depends on whether the trends have staying power.

Enter commodity-oriented exchange-traded funds, which began to emerge with the growing popularity of ETFs and the climb in commodity prices earlier this year. The products give investors a new way to profit from rising commodity prices and invest in companies that deal in such staples as oil, steel, and corn….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Timesonline.co.uk: After the credit crisis and the capital crisis, a downturn in world trade looks like being the next shoe to drop — and it could well be the factor that tips the world from a recession to a depression.

Two pieces of evidence point to such an alarming outcome, of which the more important comes from China, where the explosive growth in exports of recent years looks to have dropped away suddenly. …. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Guardian: For most of the 150 years since organised commodity futures were introduced in Chicago and London in the mid-nineteenth century, the length of the forward curve and the concentration of liquidity and trading volumes were shaped by the operational needs of physical market users.

Most trading activity was driven by commodity producers, consumers and merchants using the market to hedge unsold inventories and work-in-progress against short-term price fluctuations….. Full Article: Source

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From Marketwatch.com: The euro will celebrate its 10th anniversary next month, defying doubters as it ends the decade second only to the U.S. dollar in importance and influence after a nascence marked by modest growth and difficult economic adjustments.

The euro isn’t the first European crack at a unified currency, but it is the boldest. Launched in January 1999, the economic and monetary union now encompasses an area that includes 320 million people and 15 countries, ranging from economic powerhouses France and Germany to Cyprus and Malta….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Econ.worldbank.org: A new World Bank report, Global Economic Prospects 2009, examines the impact of the financial crisis on GDP growth across the world, noting a marked slowdown everywhere, including in formerly resilient developing countries.

Subtitled Commodities at the Crossroads, the report finds that future demand and supply of key commodities like oil and food can be balanced given the right policies in the energy and agriculture sectors….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From People.com.cn: The negotiation between China and the three iron ore giants, namely BHP Billiton, Rio Tinto and Vale, is set to bring down the iron ore price from its 2008 peak, but China’s goal of an 82 percent price cut would be a mission impossible, analysts said.

China is asking for a price cut of up to 82 percent, as “the steel prices have fallen to the 1994 level”, Shan Shanghua, secretary-general of China Iron and Steel Association, was quoted as saying by Securities Daily yesterday….. Full Article: Source

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From Indexuniverse.com: ETF assets are down and a number of funds have been closed. At the same time, the ETF industry has shown tremendous strength, gaining market share on a relative basis and maintaining positive inflows throughout the market downturn.

It’s hard to overstate how impressive that last statistic is: ETFs have enjoyed positive net cash flow in September, October and November … cumulatively the worst bear market in a generation….. Full Article: Source

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From Chicagotribune.com: An upstart rival to the CME Group filed with federal regulators Tuesday for approval to operate as a futures exchange.

The Commodity Futures Trading Commission has 90 days to review the application from ELX, which plans to offer interest rate contracts on its electronic platform that would compete against the U.S. Treasury futures traded through the CME Group….. Full Article: Source

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From Theaustralian.news.com.au: Australia’s earnings from exports of mineral and energy products jumped 22 per cent to $42.57 billion in the third quarter of 2008.
The figure was also 63 per cent higher than the year-earlier period, the Australian Bureau of Agricultural and Resource Economics reported today.

But Abare’s executive director Phillip Glyde said a recent collapse in commodity prices hasn’t been captured in the data as the majority of commodity price falls have occurred since mid September….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

Nodal Exchange, the first electronic commodities exchange for forward locational (nodal) electric power trading, announced today that Nexant, Inc. has tested and validated the Nodal Exchange auction engine.

Nodal Exchange provides participants in the North American power markets the opportunity to more effectively manage their basis and credit risk through the use
of cleared cash-settled nodal power contracts….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From FT: As equities suffered their worst ever monthly losses in many markets in October, trading volumes in exchange traded funds reached a record high as investors sitting on large cash balances moved to ETFs.

A report from Barclays Global Investors said average daily trading volume had increased by 125 per cent to $136bn (£93bn, €107bn) in the year to date (to October 30)….. Full Article: Source

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From Fointelligence.com: The Tokyo Commodity Exchange will make an initial public offering by 2013, a spokesperson has told Futures and Options Intelligence.

Mitsuhiro Onosato, a member of the executive office in charge of sales, marketing and public relations, said on Tuesday December 9 that the main reason for the exchange’s demutualisation…. Full Article: Source

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From Commodityonline.com: In these times of economic meltdown, it is good news for Asia and bad tidings for the United States in gold futures business. Asia has overtaken the United States in futures trading in gold, the hottest traded commodity in the world.

According to a report from Futures Industry magazine, gold futures trading in Asia has now two active hubs: Mumbai in India and Shanghai in China. …. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Techtarget.com: Despite the recent turmoil in the financial markets, the New York Stock Exchange (NYSE) is on track to roll out its Universal Trading Platform in Europe late this year.

The platform will create a single market exchange for equities, cash, derivatives and other commodities for the U.S., Europe and, potentially, other regions…… Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Reuters: Gold futures ended slightly higher on Tuesday as weaker stock markets bolstered bullion’s appeal as an alternative investment.

“The gold market has been moving sideways, waiting for further development in the financial markets. As the stock market shows signs of prosperity, gold buyers will become more aggressive in returning,” said George Nickas, commodity broker at FC Stone….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Timesonline.co.uk: Targets for 20 per cent of Europe’s energy to come from renewable sources by 2020 were agreed after EU countries decided to reduce the role of biofuels over concerns about the impact of growing crops for fuel in developing countries.

In concessions to smooth the deal EU states that cannot afford to meet their own individual renewable energy targets will be able to outsource some of their efforts by sponsoring green projects in other countries or buying credits from those countries that have exceeded the goal. …. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Guardian: Global oil demand will contract this year and next as worldwide GDP growth slows, marking the first time consumption has contracted for two consecutive years since the early 1980s, according to the U.S. government.

World oil consumption is projected to fall by 50,000 barrels per day in 2008 and 450,000 barrels per day next year, the U.S. Energy Information Administration said in its monthly forecast released on Tuesday….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Chron.com: When crude hit unprecedented highs last summer, consumers reacted by driving less and conserving energy. Then prices began an equally dramatic fall to levels not seen since 2004, exacerbated by the growing global recession.

However, increasing delays in new production projects could create an energy crunch and choke off an economic recovery when demand rebounds, said Richard Jones, deputy executive director of the International Energy Agency, at a presentation at Rice University’s James A. Baker III Institute for Public Policy….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From IHT: The European Union started with the most high-minded of ecological goals: to create a market that would encourage companies to reduce greenhouse gases by making them pay for each ton emitted into the atmosphere.

Four years later, the carbon trading system has created a multibillion-euro windfall for some of the continent’s biggest polluters, with little or no noticeable benefit to the environment so far….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Business-standard.com: The Financial Technologies India (FTIL) group has inked a deal to acquire 60 per cent stake in Botswana-based Bourse Africa. The latter has been licensed by the Botswana government to set-up a spot and/or derivative multi-asset exchange for trading in commodities, currencies, bonds and diamonds.

The remaining equity in Bourse Africa will be held by other African financial institutions, banks, global multi-lateral developmental ventures, exchanges and other strategic investors….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From sternopportunity.com: European Union Allowances (EUAs) are today the best gauge of carbon prices. With futures contracts openly traded in several exchanges, and with liquidity at levels that provide ample trading activity, EUAs are a clear indication of the cost of emitting carbon into the atmosphere.

The increase in liquidity has allowed for the identification of price drivers that provide interesting analytical possibilities. In fact, as carbon trading activity in Europe - and elsewhere in the near future - increases, EUA future contract prices will find a higher correlation with other commodity contract prices that highly influence the possibility of more or less emissions….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Fointelligence.com: Futures and Options on Russian Trading System (Forts), the derivatives arm of Moscow’s RTS stock exchange, has bucked the global trend of slumping trading volumes in November.

Although cash equity trading on RTS fell 21% in November from October’s figure, activity on Forts was up 1.11% to 13.12m contracts….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From BBC: The World Bank has forecast a significant decline in global economic growth in 2009 for both developed and emerging countries.

In a report assessing economic prospects, the Bank has predicted that the world’s annual economic growth will slow to 0.9%, from 2.5% this year. …. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Reuters: The Australian government has endorsed a carbon emissions reduction target of 10 percent by 2020, following the introduction of a carbon trading scheme in 2010, the Australian Financial Review paper said on Wednesday.

A more ambitious 25 percent reduction target would be kept open as a possibility if the international community agrees to ambitious targets at a United Nations summit in Copenhagen at the end of 2009, the paper said without citing sources….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Bloomberg: Wheat fell, erasing earlier gains, as a stronger dollar threatens to erode demand for supplies from the U.S., the world’s biggest exporter.

The dollar gained as much as 1.1 percent today against a basket of six currencies and 17 percent since July, making U.S. exports more expensive for overseas buyers….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From CNNMoney.com: The U.S. dollar was mixed against major currencies Tuesday, as stocks declined and investors awaited details of a proposed bailout of the auto industry.

The euro fell to $1.2931 in New York trading from $1.2936 late Monday. Britain’s pound slid versus the dollar to $1.4783 from $1.4904….. Full Article: Source

Posted on 10 December 2008 by VRS |  Email |Print

From Bloomberg: Cotton prices fell for the fifth time in seven sessions amid concern the slumping economy may curb worldwide demand for raw materials.

The global economic slowdown and the credit crunch are affecting the ocean shipping industry, causing the Baltic Dry Index, a measure of freight costs for dry-bulk commodities, to slump 94 percent from its peak on May 20….. Full Article: Source
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Posted on 10 December 2008 by VRS |  Email |Print

From AP: Gold prices closed moderately higher Tuesday, but other commodities prices fell as investors bet on a sharp drop in demand for raw materials in the coming months. Signs of difficulties at several big companies underscored investors’ fear of a prolonged recession.

Late Monday, FedEx Corp. cut its forecast for fiscal 2009 earnings and capital spending. Meanwhile, electronics maker Sony Corp. said it is slashing 8,000 jobs, or 4 percent of its global work force, in an effort to cut costs by $1.1 billion a year….. Full Article: Source

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