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Commodities Briefing 11.Feb 2009

Posted on 11 February 2009 by VRS |  Email |Print

From Stratfor.com: A number of commodities that serve as global economic indicators appear to have stabilized in the past two months. However, not all indicators are positive, and it is too early to tell whether an economic recovery is on the horizon.

As the financial crisis and the global recession caused demand for commodities to wane in the second half of 2008, the prices of raw materials declined dramatically. But during the last two months, commodity markets have seemingly paused to take stock of the world….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Moneycontrol.com: Christian Goldsmith of Fortis Investments s positive on China and India economies. He is bullish on commodities but bearish on metals. He feels increased exposure to gold acts as a hedge against the economic slowdown.

Within Asia, we see a slightly different picture where the companies, the supplies of those commodities to China given the stimulus package in the focus of infrastructure. Those can look more attractive than perhaps those who are selling to companies elsewhere in the world. …. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Mineweb.com: We are still in a commodities bull market, the current difficult phase for commodities will pass, says director of commodities research at Barclays Capital, Kevin Norrish.

“The bull has been thrown with cold water and it is gasping for its breath, but it won’t be too long before fundamentals return,” he said at the opening of the Mining Indaba in Cape Town today….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Bloomberg: Commodity prices, down 62 percent from last year’s record, have probably bottomed as mining companies cut production and stockpiles decrease, said Colin Barnett, premier of Western Australia state.

“There’s some evidence that volume is starting to increase again and prices are starting to edge up,” Barnett, 58, said….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Reuters: The U.S. government’s top energy forecasting agency on Tuesday lowered its estimate for world oil demand in 2009 by 400,000 barrels per day, citing the slower global economy.

With major economies languishing in recession, the Energy Information Administration predicted world oil demand for 2009 would fall by 1.17 million bpd from last year to 84.70 million bpd. That would be down from peak demand of 85.9 million bpd in 2007….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Easybourse.com: After rising by a record level to nearly $1 trillion last year, OPEC oil export revenues are expected to plunge by a record 58.6% this year to the lowest level since 2004, the U.S. Energy Information Administration said Tuesday.

The precipitous decline comes as OPEC has pledged deep cuts in production, but so far has failed to arrest a slide in prices and a massive building of global stockpiles….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Reuters: Oil climbed towards $38 a barrel on Wednesday, paring some of overnight’s 5 percent losses, after the industry group American Petroleum Institute’s weekly inventory data showed crude stockpiles had fallen unexpectedly.

But a downward revision by the U.S. government on its oil demand forecasts and doubts over the effectiveness of the U.S. government’s bank rescue plan capped oil’s gains….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Reuters: Can algae save the world again? The microscopic green plants cleaned up the earth’s atmosphere millions of years ago and scientists hope they can do it now by helping remove greenhouse gases and create new oil reserves.

In the distant past, algae helped turn the earth’s then inhospitable atmosphere into one that could support modern life through photosynthesis, which plants use to turn carbon dioxide and sunlight into sugars and oxygen….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Commodities-now.com: The eastern US needs to invest $80 billion in new voltage lines to up its share of wind power. The money would pay for the estimated 15,000 miles of new, extra high-voltage lines needed if the region is going to produce 20 per cent of its electricity from wind power by 2025.

According to a new study by Joint Coordinated System Plan (JCSP ‘08), a coalition of transmission owners and operators in the eastern US, an additional $1.1 trillion in total generation capital costs will also be required to meet the goal….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Mineweb.com: India’s silver futures may tread higher this month tracking a bounce in base-metals complex and supported by a positive bias in gold, but weak demand for the industrial metal could limit the upside, analysts said.

“The trend looks convincingly strong at the current levels, but a close above the 20,600 (rupees) is a necessity to provide further upside momentum,” said Pradeep Unni, a senior research analyst with Dubai-based Richcomm Global Services….. Full Article: Source
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Posted on 11 February 2009 by VRS |  Email |Print

From Mineweb.com: Japanese retail investors are stepping up their online gold investment in a trend that is unlikely to be reversed, an executive at a top online commodity trading firm said on Tuesday.

As the country’s retail investors catch up with global trends of asset diversification, they are hunting for alternative investments to enhance returns, and the trend is spreading outwards from the rich to engulf ordinary people….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Todaysfinancialnews.com: Gold bugs are finally getting the fuel they need to get the price of their precious metal out of the rut it has fallen into. With the Treasury’s latest banking-industry bailout going over like flatulence at a funeral, more and more investors are turning to the safety of gold. It has been the one asset class Washington has not been able to grossly manipulate… so far.

As I write, the price of an ounce of gold is trading for $914 an ounce, $21 higher than yesterday’s final price. …. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Theaureport.com: Gold has history on its side. It is a proven way to preserve one’s wealth over time. It acts like an insurance and it is highly unlikely mankind’s behavior during the last 6,000 years is going to change anytime soon. Some things never change.

Two of those things are human nature and gold’s capacity to preserve one’s purchasing power….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Reuters: Bullish copper investors see signs that China’s 4 trillion yuan stimulus package is bearing fruit in surging imports of the red metal, but a full-fledged global demand recovery may prove elusive.

Chinese refined copper imports grew to 211,527 metric tons in December, the highest level ever. Looking ahead to January, analysts expect levels to remain near December’s record level….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Themoscowtimes.com: The Federal Anti-Monopoly Service will not approve the creation of a state-owned metals monopoly, Alexei Ulyanov, the head of the service’s industry control department, said Tuesday.

The service may approve, however, a two-way merger between Norilsk Nickel and Metalloinvest while imposing strict restrictions on their joint activities, Ulyanov said at the CIS Metals Summit, organized by the Adam Smith Institute….. Full Article: Source

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From Bloomberg: Platinum futures jumped to the highest in almost four months on demand for the metal as a store of value. Palladium also climbed.

The precious metals, including gold and silver, rallied this year as global equities fell amid a recession. …. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Xinhua: The dollar fell against the yen but rose against the euro and the pound on Tuesday as investors seek safety after the U.S. government announced a new financial rescue plan.

U.S. Treasury Secretary Timothy Geithner outlined the new plan for stabilizing the financial system on Tuesday. In his speech, Geithner announced some key programs such as further injections of public capital into the banking system….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Investorschronicle.co.uk: World trade has collapsed. Industrial production in, and exports from, Asian countries such as Korea, Taiwan and Japan have fallen by mind-boggling amounts, causing sharp slide in currencies like the Won and the Taiwanese dollar.

This in turn has made Chinese exports more expensive in relative terms. At the same time, officials in the incoming US administration have protested that the Chinese currency, the yuan, is being deliberately manipulated….. Full Article: Source

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From Telegraph: The Zimbabwe dollar is dead, one of the world’s leading experts on hyperinflation said today. The comments came as the Morgan Tsvangirai appointed Tendai Biti, one of his party’s highest ranking officials, to be the country’s new finance minister in a government of national unity.

Professor Steve Hanke, a senior fellow of the Cato Institute in Washington, has been involved with the governments and currency reforms of a dozen different countries around the world, and in 2007 developed a hyperinflation index for Zimbabwe….. Full Article: Source

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From Cctv.com: China’s central bank has signed a bilateral currency swap agreement with its Malaysian counterpart. This is the bank’s third currency swap agreement in two months.

The arrangement will allow the two banks to swap 80 billion yuan, or 40 billion Ringgit over three years, and could be extended. The People’s Bank of China said the deal aimed to promote bilateral trade and investment, and boost the economic development of the two countries….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Hardassetsinvestor.com: Oil-tracking exchange-traded products are prime examples. The returns obtained from purchasing inverse oil products have been largely influenced by recent shifts in the crude oil price structure from contango to backwardation and back.

Contango markets are unloved by holders of long index funds and notes because of the negative yield – negative $5 in this case – that must be absorbed when a roll from an expiring nearby contract to a forward month is dictated….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From WSJ: Storm-tossed investors are finding hope at sea. The Baltic Exchange’s Baltic Dry Index, which measures the cost of shipping raw materials and is widely considered a leading economic indicator, has bounced 174% from a 22-year low last December. The rebound is the latest hint of a slight easing of the global recession.

Shipping costs probably have seen their bottom for the cycle. But the Baltic Dry can send false economic signals, having done so at least twice in the past two years….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Forbes.com: Exchange operator IntercontinentalExchange Inc. said Tuesday its fourth-quarter profit fell 24 percent due to costs tied to an investment in an Indian exchange and expenses related to a previous acquisition.

ICE also said it is also planning to cut between 5 percent and 7 percent of its staff during the first quarter. It had 795 employees at the end of 2008….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From WSJ: Gustavo Grobocopatel is called “the Soybean King” here because he oversees a farming empire the size of Luxembourg. Nowadays, that distinction brings more grief than glory.

Soybean prices have plunged about 40% since last July amid a global commodities crash. For Argentine growers, the pain has been especially acute. Leftist President Cristina Kirchner, who once disparaged soybeans as “practically a weed,” taxes them heavily and maintains a heavy hand in the economy….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Reedconstructiondata.com: The construction materials price index dropped 7.8% from September to December and is expected to decline, albeit more slowly, through the winter as worldwide commodity demand continues to shrink.

Commodity prices fell in January again for metals, lumber and some energy based products because construction activity and manufacturing production are now declining in most major countries and commodity inventories are well above normal levels….. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Bloomberg: Wheat fell as the dollar’s rally and a global economic slump curb demand for grain from the U.S, the biggest exporter.

U.S. shippers will send 1 billion bushels (27.2 million metric tons) overseas in the year ending May 31, down from 1.26 billion bushels the prior year, the Department of Agriculture said today in a report. …. Full Article: Source

Posted on 11 February 2009 by VRS |  Email |Print

From Forbes.com: Prices of oil, copper and key commodities other than gold fell Tuesday as investors showed dismay at the U.S. government’s enlarged economic bailout plan, which many thought was inadequate.

But gold rose, closing above the key bullish level of $900 an ounce as investors bought the precious metal as a safe haven in a time of distress….. Full Article: Source

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