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Commodities Briefing 22.Jan 2009

Lower OPEC output won't boost prices:Deutsche Bank
World needs investment of $45 trillion by 2050 in alternative energy
Gold is the biggest investment avenue in India
Predictions of slump in demand hits oil companies
BNP eyes active strategy in volatile commodity mkts
China commodities report: Grains and softs
KBC slashes structured commodity finance team
Follow the money back into commodities
Morgan Stanley, UBS raise gold price forecasts
India: Gold imports dip 47%
RBC gives a positive outlook for gold and silver
Gold is shifting from West to East – along with the balance of power
Warm bullion, hot stocks
Swelling stockpiles send metals prices down
Aluminium, nickel to lag once base metals recover
Slump in demand for new vehicles pushing base metal prices lower
Iron ore prices may fall 50% on China slowdown, Rinehart says
Price of CO2 permits falls to new low in Europe
2008 carbon market valued at Euro 90bln
EU climate cash windfall for industry in downturn
UAE commits to 7% green energy
Jim Rogers: 'Sell any sterling you might have. It's finished'
Japan says watching currencies, mum on intervention
Pound slumps ever closer to parity with the dollar
LSE wants to collaborate with Indian stock exchanges
India: Tug-of-war over energy futures control intensifies
Fourth currency exchange in India gets regulator approval
Currency ETF trends and a flawed monetary system
Coffee: Grounds for concern?
Cocoa extends gain in London on slump in Pound, Ivorian supply
Changes to BHP Billiton's nickel business, 6,000 job cuts announced
Crude oil rises as dollar retreats, spurring commodity buying
Gold prices dip, other commodities rise
RTS forges technology partnership with First Insight

Posted on 22 January 2009 by VRS |  Email |Print

From Reuters: Early indications that OPEC members are complying with the deepest ever oil-supply cuts may not stop oil prices from falling further, a top energy analyst said.

“It’s going to be difficult,” said Adam Sieminski, chief energy economist for Deutsche Bank. OPEC’s previous efforts to cut output to stabilize prices have had limited effect….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Zawya.com: The world needs investments of up to $45 trillion by 2050 in alternative energy to balance hydrocarbons and renewables in its overall energy mix, the global head of asset management for Deutsche Bank.

“Governments need to stimulate investment in clean energy through long-term policy initiatives,” Kevin Parker said during a panel discussion at the second edition of the World Future Energy Summit in Abu Dhabi….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Commodityonline.com: During these days of economic meltdown and volatile movements on stocks and commodities markets, what is the best avenue of investment? For the Indian investors, the biggest investment route is indeed gold, says a new survey. Most Indians prefer to put their money in the yellow metal.

In fact, even though the ING Investor Dashboard Sentiment Index for India painted a gloomy picture for the country, it has some silver lining as far as gold is concerned….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Timesonline.co.uk: Motorists in Britain might be grumbling as petrol prices begin to nudge up again, but analysts have some good news for them: the slump in oil demand this year is likely to be bigger than expected.

That is bad news for the oil companies, of course, and HSBC is predicting that cashflows at Shell, for one, will be negative for the next two years. As a result, its shares slid 44p to £16.11….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Guardian: Commodities markets are not yet out of the woods after plummeting in the second half of 2008, but BNP Paribas will keep active investment strategies to ride out volatile market conditions this year, a senior official said.

“In 2009, we foresee some good news but also bad news affecting commodities prices differently,” said Frederic Hervouet, BNP’s co-global head of commodity investor derivatives, who is based in Singapore….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Grainnet.com: China’s domestic grain output increased 3.5 million tons year-on-year, or 0.7 percent, to 501.5 million tons, in 2007, the fourth consecutive year of grain production growth.

These persistent growth figures are impressive, especially if grain loss of about 11 million tons for 2007 is taken into consideration….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Tradefinancemagazine.com: Trade Finance learns that Belgian bank KBC slashed its structured commodity finance team by nearly two thirds last week in a bid to conserve capital for the bank’s core functions.

Belgian bank KBC slashed its structured commodity team by nearly two thirds last week in a bid to conserve capital for the bank’s core functions….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Seekingalpha.com: While this week may be a shortened trading week there will be plenty of movement as the economy braces itself for a new regime, seeing that the 44th President, Barrack Obama was inducted Tuesday.

The economic outlook remains bad, cash is still king, though we do expect money on the sidelines to find its way into the equities and commodities over the ensuing weeks….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Reuters: Morgan Stanley and UBS raised their gold price forecasts on Wednesday, citing safe-haven demand for bullion amid turmoil in the banking sector and a gloomy outlook for the economy.

U.S. bank Morgan Stanley raised its 2009 gold price forecast to $900 an ounce from $750 previously, and its 2010 price view to $1,000 from $825….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Business-standard.com: Gold imports in India for 2008 dipped by almost 47 per cent to 402 tonnes, an economist said. “High prices have been the culprit this year as gold imports in India for 2008 dipped by almost 47 per cent to 402 tonnes.

The December 2008 gold imports stood at only 3 tonnes versus the 16 tonnes in December 2007,” National Commodities Exchange of India (NCDEX) economist Manasee S Gokhale said in a report here….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Mineweb.com: RBC Capital says it expects significant upside in gold in 2009 and it expects both gold and silver to perform well in early 2010 as “inflation expectations increase with prospects of global economic recovery”.

The investment bank said in its Global Mining 2009 Investment Strategy and Outlook report it expected gold to perform well this year, particularly in the first quarter….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Moneyweek.com: Twice a day – at 10:30AM and 3PM - the price of gold is set on the London market by the five members of the London Gold Pool (HSBC, SocGen, Deutsche Bank, Scotia-Mocata and Barclays). This is known as the London fix and it’s used as the benchmark to price gold, gold products and derivatives in markets around the world.

I’ve been looking at some charts and an astonishing pattern has become apparent. It’s a pattern which, if you’d traded it methodically, would have earned you 1% a week over a period of 24 years. That compounds to a staggering 24,720,000%!…. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Mineweb.net: As global equity and credit markets continue to squirm along through a stubbornly sticky quagmire, listed gold stocks continue to dominate the front line of recovery in no small way. The MSCI Barra Dollar Index for global equities - of all kinds - currently trades some 55% off its highs, seen in October 2007.

A large count of listed gold stocks - 236 around the world - have also fallen by around 55% from highs, measured on a fully weighted average basis….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From FT: Base metals tumbled across the board on Wednesday, as swelling stockpiles exposed the severity of the contraction in global demand and overshadowed fresh production cuts.

Aluminium fell to the lowest level in almost six years after stocks in London Metal Exchange warehouses jumped to within sight of the record high in June 1994….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Guardian: Aluminium and nickel are expected to struggle under the weight of high inventories, and even when a recovery finally kicks in, perhaps later this year, prices will be slower to pick up than other industrial metals.

Faced with the bleak prospects of a sharp global economic downturn, producers and downstream users of these two metals may be keener than most to consolidate to try to ride out the storm….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Canadianbusiness.com: As automakers around the world cut production in response to a sharp drop in demand for new vehicles, miners are being pinched too.

The auto industry accounts for 11 per cent of global copper consumption, 16 per cent of global nickel consumption, 22 per cent of global aluminum consumption and 23 per cent of global zinc consumption, according to a Desjardins Securities report….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Bloomberg: Iron ore contract prices may fall as much as 50 percent this year amid a slowdown in China, the world’s biggest consumer of the raw material, according to Australia’s richest woman and mining magnate Gina Rinehart.

“We’re hearing 30 percent, 40 percent, 50 percent discounts to last year’s contract price,” Rinehart, who controls closely held Hancock Prospecting Pty, said in an interview with Bloomberg Television. That compares with the average forecast of a 30 percent cut in a Bloomberg survey of 11 analysts last week….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From IHT: The price of permits to emit carbon dioxide hit a new low this week in Europe, exacerbating concerns that efforts to make energy systems greener were falling victim to the global economic slowdown.

The price of permits has fallen by nearly 70 percent since reaching a high of €32.90 in April 2006 as companies produce less and pollute less, according to James Ash, head of European emissions at Spectron Environmental, a brokerage company in London….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Edie.net: The global carbon market grew substantially in 2008, despite the downturn in other global commodity markets - and the EU’s trading scheme was responsible for most of this activity.

According to analysts Point Carbon, nearly 5bn tonnes of CO2 equivalent changed hands across the world during the course of the year - an increase of 83% on the activity in 2007….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Guardian: European factories are cashing in on an unexpected benefit from wilting output, selling surplus carbon emissions permits worth about 1 billion euros ($1.29 billion) to raise funds on the carbon market.

A recession in Europe will dent industrial output this year and this will sap energy demand and carbon emissions, leading to a surplus of permits among big polluters including steel and cement makers….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Building.co.uk: Leading oil-producing nation pledges to meet new renewable power target by 2020. The nation with the world’s fifth-largest oil reserves yesterday committed to sourcing 7% of its energy from renewables by 2020. The UAE is understood to be examining solar, wind and geothermal to get to its target.

The Middle East holds 8% of the world’s oil reserves but has broken the OPEC deadlock on renewables….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Independent.co.uk: Fresh concerns about the British economy and fears for the stability of the UK’s financial system pushed sterling to new record lows against the dollar, euro and yen yesterday.

One of the world’s leading investors voiced the markets’ concerns. Jim Rogers, of the Singapore-based Rogers Holdings and co-founder of the Quantum fund with George Soros, told Bloomberg Television: “I would urge you to sell any sterling you might have. It’s finished. I hate to say it, but I would not put any money in the UK.”…. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Reuters: Japan’s top currency bureaucrat said on Thursday that he was monitoring foreign exchange markets but declined to comment on whether Tokyo would intervene to rein in the yen, which hit a 13-year high against the dollar.

“I am watching market moves closely,” Naoyuki Shinohara, vice minister for international affairs, said. Asked about the possibility of Japanese authorities intervening in markets to stem the yen’s surge, he said: “No comment on intervention.”…. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Guardian: Sterling slumped to its lowest level against the dollar for nearly a quarter of a century today on persistent fears about the health of Britain’s banks and worries that the cost of bailing them out could be a millstone round the economy’s neck for many years to come.

The pound fell as low as $1.362 during a hectic trading day, pressured also by bad public finance figures and a speech by Bank of England governor Mervyn King on Tuesday night that indicated that further action would be needed to prevent the economy melting down….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Business-standard.com: The London Stock Exchange (LSE) is pulling out all the stops to invite Indian companies to raise capital. Martin Graham, head of equity markets, LSE, said that the disclosure norms in the Alternative Investment Market (AIM) are as stringent as those followed by LSE.

Graham is responsible for more than half of the combined revenues of the London Stock Exchange and the Borsa Italiana….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Business-standard.com: The tussle for control over and regulating the futures trading in electricity has intensified between the energy and commodity market regulators. The newly launched Power Exchange India Ltd (PXIL) - promoted by the National Stock Exchange and NCDEX - wants it to be regulated only by the Central Electricity Regulatory Commission (CERC).

But the commodity market regulator, Forward Market Commission (FMC) has contended that it alone has jurisdiction over futures trading….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Indiatimes.com: In what could be construed as a move to add more depth to the nascent currency futures market, Sebi has approved a fourth exchange,
promoted by a clutch of public and private sector banks, to commence trading in rupee-dollar futures.

United Stock Exchange of India, expected to come on line in February, is the fourth currency futures bourse after National Stock Exchange, MCX-SX, promoted jointly by commodity bourse MCX along with Financial Technologies, and BSE, which received Sebi’s in-principle approval to offer rupee-dollar trading in the latter half of 2008….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Marketoracle.co.uk: Surely, at some point in time, some group of wise men somewhere will finally get together and realize that, during an era of excessive speculation, a monetary order where half the world’s money floats freely and a good portion of the rest is rigidly fixed to the U.S. dollar is not an optimal system.

The other massive problems of the global economy notwithstanding, how could those in the business of doing international business possibly develop a reasonable business plan when they’re not sure if one currency or another is going to be up or down 20 or 30 percent over the next half-year….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: Don’t let coffee’s year-end sluggishness lead you to believe there’s nothing going on. Stagnation, says the International Coffee Organization (ICO) “is linked more to movements in the exchange rates of the U.S. dollar than to market fundamentals.”

Fundamentals, in fact, are lining up for a bull move. More importantly, active traders are starting to believe in coffee’s upside….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Bloomberg: Cocoa rose to the highest since at least 1989 in London as the pound slumped and exports fell from Ivory Coast, the world’s biggest producer of the beans.

Sterling sank to a record against the yen and the weakest since 1985 versus the dollar on concern recession will deepen in the U.K. Declines by the pound reduce the cost of buying London- traded cocoa for holders of other currencies….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Commodities-now.com: BHP Billiton today announced that it will immediately commence the safe ramp down and indefinite suspension of the Ravensthorpe Nickel Operation (Australia).

As a consequence, Yabulu (Australia) will cease processing mixed nickel cobalt hydroxide product from Ravensthorpe and will revert to processing ore only. The Group plans to complete a future options study for Yabulu during the first half of calendar year 2009. …. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From Bloomberg: Crude oil rose as the U.S. currency retreated from its highest in six weeks against the euro, spurring investor demand for dollar-priced commodities.

Oil earlier declined on forecasts a U.S. Energy Department report will probably show that crude stockpiles, 10 percent above their five-year average, increased for the 15th time in the past 17 weeks. U.S. inventories probably rose 1.5 million barrels last week, according to the median of analyst estimates in a Bloomberg News survey….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

From AP: A wavering dollar sent gold prices falling slightly Wednesday even though a pair of analysts raised their forecasts for the metal. Energy and agriculture futures were buoyed by gains on Wall Street.

Analysts at Morgan Stanley and UBS said Wednesday they expect gold prices to trade higher in 2009, benefiting from some safe-haven buying as well as long-term concerns about inflation….. Full Article: Source

Posted on 22 January 2009 by VRS |  Email |Print

Algorithmic Trading of Commodities Incorporating Weather Fundamentals and Technical Indicators. RTS Realtime Systems Group (RTS), a trading solutions
provider, announced a new technology partnership with First Insight, the fastest provider of weather information to the trading and financial markets.

The recently launched alliance enables commodity traders employing algorithmic trading to feed digitized real-time data on weather-related news, government weather
forecasts and technical indicators into their automated or semiautomated trading strategies and execution.

Source: www.rtsgroup.net

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