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Commodities Briefing 29.Oct 2010

Posted on 29 October 2010 by VRS |  Email |Print

From Washingtonpost.com: For many Americans the phrase “rare earth” calls to mind nothing more consequential than the 1970s band responsible for such hits as “Get Ready” and “I Just Want to Celebrate.” But lately China has been teaching the United States, and the world, a new definition.
Rare-earth metals are 17 elements vital to high-tech products ranging from the Toyota Prius to the cellphone to the American military’s precision-guided munitions. The People’s Republic controls 97 percent of the world’s supply. And Beijing suddenly has slashed exports, causing near-panic in Japanese industry and exposing the United States’ own vulnerability……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Commodityonline.com: Japanese companies, which use the rare earths metals in hi-tech products, worry that Beijing is already using its power to squeeze supplies as a political tool in diplomatic disputes with Tokyo, something China denies.
Japanese companies are in full panic mode. As far as they are concerned, this is a red-alert situation. China, as other producers have given up environmentally destructive mining of rare earths, now supplies 97 per cent of the world’s demand for the metals, whose magnetic, luminescent and other qualities make them essential for clean energy, computers and electronics……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Telegraph: China will not use its dominance of vital rare earth metals as a “bargaining tool” against other nations, the country’s industry ministry said on Thursday, as international discontent over China’s alleged hoarding of the metals continues to deepen.
China controls 97pc of the world’s rare earth metals supply and has faced mounting criticism in recent months after announcing it was slashing export quotas for rare earth metals by more than 40pc in 2010 compared with a year earlier……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Resourceinvestor.com: Value buyers are again looking at the relatively small palladium market and seeing the opportunity of further price gains. The fact that palladium remains well below its nominal high of nearly 10 years ago ($1,110.50/oz on a closing weekly basis seen on 26/01/10) is enticing hedge funds and investors.
Royal Bank of Scotland Plc said in a report today that platinum supplies may exceed demand through 2014 while palladium’s shortage will drive “significant price gains out to 2014.”………………………………………Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Ibtimes.com: In the wake of Commodity Futures Trading Commission member Bart Chilton’s?announcement that the group had found fraud in the silver futures market, a pair of traders have filed suits against two investment banks, alleging that they helped conspire to suppress the price of silver.
The suit filed by commodity traders Peter Laskaris and Brian Beatty alleges that, while controlling over half of the total short positions - bets that the price of an asset will fall - HSBC?and JPMorgan Chase worked together to let each other know about major trades and placed “spoof” orders.?………………………………………Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Mineweb.co.za: As the price of silver backs off from its recent high of $25, it offers investors another amazing opportunity to buy the precious metal. In the past month silver has bounced back to prices not seen since the 1980’s, and even though the price of silver has had a spectacular move since the end of July - surging from $17.50 an ounce to almost $25.50/oz… a move of 45%, the price is still terribly undervalued.
There have not been any significant changes in any of the known supply/demand dynamics that have caused this run up in the price, but the price is being driven by surging investor demand as investors shy away from paper assets and turn to commodities……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Hardassetsinvestor.com: Sometimes you just have to deal with limitations. For example, with interest rates as low as they are, you’re not likely to make big bucks off your deposit account. But the trade-off is, of course, the certainty of getting your principal back. So you accept a limited reward for a limited risk.
Bearish investors now seek a similar trade-off in the oil market as they consider put spreads……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Petroleum-economist.com: If $80/b oil is a threat to the US economy, as some analysts claim, then prepare for a rocky few months. The world’s dominant producers are in no mood to soften the market, even as it threatens to breach $85/b.
Opec’s decision to roll over existing oil-output quotas was no surprise, but it still reinforced the prevailing sentiment. Ali al-Naimi, Saudi Arabia’s oil minister, said the group was “comfortable” with prices, despite their heady level at almost $10/b more than Opec’s price target……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From UPI: Oil politics have changed dramatically with the rise of major producers and exporters outside OPEC, increasing the risk of violence among nations that export or consume large quantities of crude oil, a new study said.
“Seizing Power: The Grab for Global Oil Wealth — How Oil Volatility May Lead to Violence Among Oil Powers,” by Robert Slater, argued volatility and uncertainty of global supplies of crude oil was a recipe for conflict……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Resourceinvestor.com: Shares of Van Eck Global’s new Market Vectors Rare Earth/Strategic Metals ETF declined in their first day of trading Thursday along with other rare earth stocks as The New York Times rained on the parade by reporting that Chinese government had suddenly ended an unacknowledged halt of rare earth shipments to Japan, the United States and Europe.
Trading of the new REMX exchange traded fund on the NYSE Arca started trading at $20.50 and fell as low as $19.51 before ending the day at $19.55 per share. Volume of trading totaled almost 2.2 million shares……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From WSJ: CME Group Inc. reported a 21% rise in third-quarter earnings, lifted by rising volume of derivatives contracts linked to commodities, interest rates and indexes that helped offset a modest charge for recent “phantom trades.”
Executives of the world’s biggest futures-exchange operator forecast a potential $40 million in revenue for new trading services set to launch in 2012 and said that new ventures targeting off-exchange business are gaining traction………………………………………Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Indiatimes.com: Key emerging economies running trade surpluses must “begin in earnest” to allow their currencies to appreciate to help rebalance global demand , the International Monetary Fund urged on Thursday.
The IMF said in a surveillance note to G20 leading economies that trade imbalances would not correct themselves and required policies to smooth the distortions creating large surpluses in some countries and big deficits in others……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Dow Jones: Government and central bank responses to steep currency appreciation across the developing world are not seen weighing on the credit ratings of emerging-market sovereigns in the near term, but there could be longer-term implications, Moody’s Investors Service said in a report Thursday.
The ratings agency said it is watching for any “impact on economic growth, fiscal, and debt dynamics over the medium to long term.”………………………………………Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Bloomberg: The dollar traded near a 15-year low against the yen on prospects that the Federal Reserve will take more credit-easing steps to keep borrowing costs low, reducing the allure of U.S. assets.
The U.S. currency headed for a monthly decline versus 12 of its 16 major counterparts after the New York Fed asked dealers for projections of asset purchases over the next six months……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Yonhap: Foreign exchange rate volatility is expected to ease following a recent agreement by the Group of 20 leading economies to avoid competitive currency devaluation, South Korea’s top central banker said Friday.
Finance ministers and central bank governors from the G-20 agreed during the weekend to refrain from competitively weakening their currencies and to move toward a market-determined foreign exchange rate system……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Theglobeandmail.com: Global investment patterns have favoured emerging markets and commodity-producing nations for some time now, putting a fresh spotlight on the long tradition of the carry trade.
The carry trade is one of several tactics employed by professional investors betting on foreign currencies. Traders borrow funds in countries with low interest rates and put the money into higher-yielding assets abroad, betting that their gains won’t get erased by a sudden change in exchange rates……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Petroleum-economist.com: The failure of US climate-change measures to pass through Congress this year leaves the near-term prospects for creation of a global carbon market in doubt, despite efforts elsewhere in the world.
The EU already has a functioning emissions-trading system (ETS), but until the US moves towards establishing its own cap-and-trade mechanism, there seems little hope of a global market materialising……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Dow Jones: Carbon market will likely remain dominated by European players in the next decade, as development of cap-and-trade systems elsewhere in the world is expected to be slow, an analyst said Thursday.
Europeans will still be almost the sole players, as the development of trading schemes in other areas “has been a huge disappointment,” said Trevor Sikorski, director of Carbon Markets and Environmental Products Research for Barclays Capital……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Err.ee: European climate change officials have rapped Estonia and other new member states for heavy trading of their carbon credits, saying that the practice is at cross-purposes to the spirit of Kyoto and other environmental accords.
Estonia began trading its allowances as part of an effort to raise money to balance the state budget during the recession. In 2010-2011 it is expected to sell a total of about 141 million euros worth of the so-called Assigned Amount Units (AAU)……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Reuters: The South African rand and government bonds rallied on Thursday, still buoyed by the Finance Minister’s budget speech on Wednesday and after tame producer price inflation raised the chances of an interest rate cut next month.
The resource-heavy local bourse ended nearly 1 percent higher, led by miners on stronger commodity prices……………………………………….Full Article: Source

Posted on 29 October 2010 by VRS |  Email |Print

From Tycoonresearch.com: Active traders love hot markets with plenty of volatility and volume that generate frequent trading opportunities. And the action in commodities has been fast and furious, leading the headline news regularly.
Long term investors should think about getting some exposure in commodities as well. A balanced, diversified portfolio is the key to wealth preservation, and a natural hedge to broad-based market volatility. Having significant exposure to the Earth’s precious resources over the long term makes perfect sense……………………………………….Full Article: Source

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