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Commodities Briefing 12.Mar 2009

Investors continue to bet on commodities
China commodity trade swings to extremes on stocks
China hit by recession, trade data shows
China hit raises fear of great recession
Regulators welcome move to strengthen oversight of commodity futures
World Bank says global economy to shrink 1-2 percent
Japan commodity fund value falls to new low in Feb
U.S. energy secy worried OPEC may hurt the economy
OPEC to focus on compliance, not cut output
Oil rebounds towards $43 after bearish oil data
Norway Oil Fund shrank 23% last year on stock plunge
Australia: Coal's $4bln up in smoke
Wind energy and solar power - 40% by 2050?
Greenpeace energy report projects cheap, clean power -- and more jobs
Sweden unveils 'ambitious' clean energy strategy
Obama can only make CO2 cuts "step-by-step": Pachauri
Sovereign wealth fund official recommends gold, wary on dollar and sterling
Gold finds support - Downside target hit at $900.00
Newmont CEO sees gold in range to $1,200
Low interest rate is bullish for gold
Has gold bullion found its limits?
Metals roundup: Gold indecisive, noble metals slow
Botswana’s diamonds lose their shine
Utilities ETF draws large bullish option trade
Deutsche Bank launches first hedge fund ETF
Deutsche Börse Commodities: Xetra-Gold enters the Austrian market
Global futures and options volume rises 13.7%, but credit crisis damages liquidity in the core markets
Dow Jones Indexes and South Asian Federation of Exchanges to launch Indexes
Future trading in Indian agriculture
Kazakh leader calls for single global currency
Dollar slips against most major currencies
Approaching bottom? Decline in commodities space slows despite worsening economic news

Posted on 12 March 2009 by VRS |  Email |Print

From Thehindubusinessline.com: Admittedly, there are serious concerns about the global economy and its effect on commodity markets and prices. From record levels during early 2008, prices of major commodity groups covering energy, metals, polymers and agriculture have collapsed over the last six months. Would commodities be able to retain investor interest in this uncertain scenario?

Despite the recent challenging times across all asset classes, investors remain positive about commodities over the long-term, according to a survey Barclays Capital undertook recently….. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From Reuters: China imported more copper and iron ore than ever before in February but crude oil imports stagnated, as inventory balancing clouded the view of real raw material demand from the world’s third-largest economy.

China’s rapid economic growth drove a huge commodities boom that crashed late last year when demand for its exports slowed, leaving stockpiles of unwanted raw materials and forcing heavy industry to slash production….. Full Article: Source

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From Guardian: Copper settled at a one-week low on Wednesday as demand uncertainties mounted from data showing a larger-than-expected contraction in China’s trade surplus, while analysts questioned the sustainability of a fall in inventories.
Copper for May delivery on the New York Mercantile Exchange’s COMEX division ended down 5.90 cents at $1.6255 a lb, its lowest level on a closing basis since March 3,….. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From Watoday.com.au: The “great recession” is hitting China harder than expected, threatening to prolong the bust in the commodities sector and worsen the domestic downturn.

Chinese exports fell almost 26 per cent last month, a far cry from the small increase that had been expected, as a collapse in global demand hit Australia’s second-largest trade recipient….. Full Article: Source

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From Investorsoffshore.com: Regulators in the United Kingdom and the United States have welcomed proposals published by the International Organization of Securities Commissions’ (IOSCO’s) Technical Committee recommending improved supervision of the commodity futures markets and better global cooperation towards this end.

The proposals were developed by the IOSCO Task Force on Commodity Future Markets, currently co-chaired by the US Commodities and Futures Trading Commission (CFTC) and the UK Financial Services Authority (FSA)….. Full Article: Source

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From Reuters: The global economy is on track for its worst recession since the 1930s with output likely to shrink by 1-2 percent this year, World Bank President Robert Zoellick said.

Central and eastern European countries were particularly vulnerable, he said, urging rich nations to do more to fill the financing gap left by an exodus of capital from the developing world….. Full Article: Source

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From Reuters: The face value of funds sold by commodity brokerages in Japan fell 1.9 percent in February from the previous month to a record low 20.6 billion yen ($209 million), industry data showed on Wednesday.

It was the 18th consecutive month of decline and reflects an increase in alternatives for investing in commodities….. Full Article: Source

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From Reuters: U.S. Energy Secretary Steven Chu said on Wednesday he will speak to OPEC ministers before their meeting this weekend and warn them as they consider another oil production cut that high crude prices will harm the fragile world economy.

OPEC members meet in Vienna on Sunday to discuss whether to lower oil output, which analysts believe will put upward pressure on world crude prices and U.S. gasoline costs….. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From Pennnet.com: Analysts at the Centre for Global Energy Studies (CGES), London, said in Mar. 11 research note that although oil prices are far from the $75/bbl that Saudi Arabia’s King Abdullah suggested was a ‘fair’ price prior to the Cairo meeting last November, the Organization of Petroleum Exporting Countries will not cut further its output target when it meets Mar. 15.

Instead, the organization will focus on compliance with the 4.2 million b/d of cuts to which it agreed last year, CGES said. Those cuts so far have stabilized oil at about 40/bbl, and full compliance should be enough to set oil prices on a gently rising path….. Full Article: Source

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From Livemint.com: Oil rebounded towards $43 a barrel on Thursday after a 10% fall in the past two sessions on bearish data for the US and China, the world’s two largest oil consumers, and ahead of Opec’s meeting this weekend.
Adding further gloom, Japan’s economy posted its sharpest contraction since the oil crisis of 1974 in the final three months of last year, revised government data showed, and economists saw little signs of an early rebound….. Full Article: Source

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From Bloomberg: Norway’s sovereign wealth fund, the world’s third largest, lost a record 633 billion kroner ($90.5 billion) last year, wiping out gains since the fund started investing the country’s oil revenue 12 years ago.

The Government Pension Fund - Global’s investments fell 23 percent in 2008 as measured by a basket of foreign currencies, Norway’s central bank said today in a report. The fund, worth 2.28 trillion kroner, lost 41 percent on stocks and 0.5 percent on bonds….. Full Article: Source

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From Theage.com.au: Thermal coal price settlements will punch a $4 billion hole in Australia’s export revenue in 2009-10. But it could have been worse, with the $US70 ($A109) a tonne benchmark settlement in the key Japanese market as much as $US10 a tonne better than recent spot market prices.

The 44 per cent price reduction in contract prices from last year’s $US125 to $US70 a tonne was in line with market expectations, given the slowdown and the reduction in energy consumption….. Full Article: Source

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From Energymatters.com.au: The International Scientific Congress on Climate Change is currently taking place in Copenhagen. The congress has received almost 1,600 scientific contributions from researchers from more than 70 countries, including Australia.

Among the submissions and presentations is research from the Helsinki University of Technology’s Advanced Energy Systems that states renewable energy technologies like wind and solar power could supply 40 percent of the world’s electricity by 2050….. Full Article: Source

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From Latimes.com: An environmentalist-sponsored report claims that by 2050, the United States could sever ties with coal and nuclear power, draw nearly all its electricity from renewable sources and cut its greenhouse gas emissions by more than 80% –- all with existing technology and with a net gain of 14 million jobs to the domestic economy.

The report, commissioned by Greenpeace and the European Renewable Energy Council and conducted by Germany’s equivalent of NASA, was released this morning at a press briefing in Washington….. Full Article: Source

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From AFP: Sweden’s government on Wednesday presented what it described as Europe’s “most ambitious” strategy to improve energy efficiency and cut greenhouse gas emissions.

“As the first industrialised country, we are presenting a concrete plan towards becoming independent of fossil fuels and reducing emissions to a level that the climate requires,” Environment Minister Andreas Carlgren said….. Full Article: Source

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From Commodities-now.com: Barack Obama faces a “revolution” if the US makes big CO2 cuts, the UN’s top climate scientist said. Rajendra Pachauri, head of the Intergovernmental Panel on Climate Change (IPCC), said domestic politics in the US would ensure that the US president would find it impossible to announce far-reaching targets on cutting emissions.

According to a report in the UK’s Guardian newspaper, Pachauri told a gathering of climate scientists in Copenhagen: “He [Obama] is not going to say by 2020 I’m going to reduce emissions by 30 per cent. He’ll have a revolution on his hands. He has to do it step by step.”…. Full Article: Source
A SQUARE’s recent webinar on carbon-led investing - with voice-over (which non-A SQUARE subscribers can purchase individually) can be accessed here:
http://www.opalesque.com/asquare/509/Webinar_Carbon_Led_Investing.html

Posted on 12 March 2009 by VRS |  Email |Print

From Mineweb.com: An official from the Government of Singapore Investment Corp. (GIC) said he expects more weakness in financial markets in the next 12-18 months, and recommended investors hold gold and other safe assets such as government bonds.

GIC, one of the world’s largest sovereign funds with an estimated $200 billion-plus in assets, has invested aggressively in troubled global lenders, picking up multi-billion dollar stakes in Citigroup and UBS in late 2007 and early 2008….. Full Article: Source

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From Insidefutures.com: Gold has found support at our stated downside target of $900.00 - see video below from February 25th. On the break below $970.00 I felt that gold would correct to the $905-$885 level as a technical correction off the recent test of $1000+/oz.

We suggested a hedge of any long positions during that correction. The yellow metal has experienced the correction in reaction to the dip in physical investment demand….. Full Article: Source

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From Commodityonline.com: The chief executive of Newmont Mining Corp, the world’s second largest gold producer, told Reuters on Wednesday he expected the company’s Boddington Mine in Australia to add production at a rate of a million ounces per year some time next year.

Richard O’Brien, Newmont’s CEO, also told the Reuters Global Mining and Steel Summit in New York that he forecast gold will trade in a range between $900 and $1,200 per ounce over the next few years, supported by lower industry output and inflation concerns….. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From Commodityonline.com: Precious metals suffered large liquidation yesterday as equity markets rebounded. The FTSE gained more than 4%, and the S&P put on 6.3%. The Dow posted a 5.8% gain.

Base metals and crude oil received strong support as risk aversion eased dramatically….. Full Article: Source

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From Mineweb.com: Fairly dramatic news on Tuesday, mainly out of the US, triggered a rally in stocks and at the same time a sell off of gold and silver bullion, and increases just about everywhere else in the commodities complex, not least crude oil.

Perceptibly positive trading conditions news from Dow Jones Industrial Average member Citigroup took pride of place; the stock price rallied by 38% on the day, and continued its upward path on Wednesday. …. Full Article: Source

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From Resourceinvestor.com: Gold bounces around $900 while the market ponders hedge fund activity and what will last longer: stimulus packages or the recession.

Bullion prices continued to orbit around the $900 mark, however, they were seen spending the bulk of the midweek session above that level. …. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From FT: As if life was not hard enough for the people of Jwaneng in southern Botswana, now they are going to have to do without their cobbler.

As recent word spread that the world’s richest diamond mine would be mothballed after a collapse in global demand, the lone artisan who tends the shoes of the 15,000 in the mining settlement was resigned to hanging up his pliers….. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From Reuters: For the second time in nearly a week, a large bullish options trade was implemented in an exchange-traded fund tracking the performance of utility companies.

A very large investor on Wednesday turned up in the Utilities Select Sector SPDR fund XLU.P or XLU and snapped up nearly 100,000 call options, conveying the right to buy the fund’s shares at $26 apiece by September expiration….. Full Article: Source

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From Professionalpensions.com: Deutsche Bank has launched the world’s first hedge fund index-linked exchange-traded fund.

The new ETF, which is linked to the db Hedge Fund Index, a proprietary Deutsche Bank index, provides liquid, exchange tradable access to the hedge fund asset class….. Full Article: Source

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From Mondovisione.com: The physically-backed bond Xetra-Gold, issued by Deutsche Börse Commodities GmbH, has been admitted for sale in Austria with immediate effect. Xetra-Gold was successfully launched in Germany in December 2007, and has also been available in Luxembourg since November 2008.

The Xetra-Gold bond combines the advantages of physical gold and exchange-traded securities. Each bond represents the option for delivery of one gram of gold and can be bought or sold via the Xetra trading platform. …. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From Mondovisione.com: Futures and options trading during 2008 hit 17.7 billion contracts, according to data from 69 exchanges worldwide that were tracked by the Futures Industry Association. Total volume grew by 13.7 percent from 2007, a strong pace of growth but down from the 30.9 percent surge in trading during 2007, according to the FIA survey.

The FIA data cover all types of exchange-traded derivatives including futures, options on futures and options on securities. The data also include contracts traded in over-the-counter markets that are brought to exchanges for clearing. …. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From Mondovisione.com: Dow Jones Indexes, a leading global index provider, and the South Asian Federation of Exchanges (SAFE) today launched the Dow Jones SAFE 100 Index and the Dow Jones SAFE Pakistan Index. This is the first time indexes are created to measure the performance of blue-chip companies in five of the eight member states of SAFE.

The five member states included in the Dow Jones SAFE 100 Index are: India, Bangladesh, Mauritius, Pakistan and Sri Lanka. The Dow Jones SAFE Indexes are designed to underlie index-linked investment products such as funds, exchange-traded funds, structured products, futures and options….. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From Mynews.in: Agricultural commodity futures are market based instruments for managing risks and orderly establishment of efficient agricultural markets. These are used to hedge commodity price risks.
They also serve as a low cost, highly efficient and transparent mechanism for discovery of prices in the future by providing a forum for exchange of information about supply and demand commodities. …. Full Article: Source

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From Forbes: Kazakhstan’s president called Wednesday for the creation of a single global currency as a potential solution for the current financial turmoil.

Discussions on a currency operating under the aegis of the United Nations should be discussed at the upcoming Group of 20 meeting in London, Nursultan Nazarbayev said - without detailing how this proposal might resolve the crisis….. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

From IHT: The dollar weakened against most major currencies Wednesday as markets remained deeply troubled by the ongoing problems in the banking industry and the world economy, illustrated by a sharp fall in Chinese exports in February.

The 16-nation euro jumped to $1.2803 in late New York trading from the $1.2637 late Tuesday, while the British pound rose to $1.3848 from $1.3723….. Full Article: Source

Posted on 12 March 2009 by VRS |  Email |Print

February represented the eighth straight month of losses in the Commodities space, however the pace of decline seems to have slowed dramatically. Coupled with potential unexpected inflation, some predict commodities could be poised for a turnaround.

Despite a continuation of lower prices across the Commodities markets during February (the Dow Jones AIG Commodity Index finished down 4.43%), the pace of decline seems to have slowed considerably. …. Full Press Release: Source

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