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Commodities Briefing 15.Mar 2011

Posted on 15 March 2011 by VRS |  Email |Print

From Independent: Global commodities markets were plunged into chaos as traders across the world struggled with the economic implications of the devastating Japanese earthquake and tsunami.
Against a backdrop of a six per cent fall in the Nikkei index and the Bank of Japan’s launch of a 15 trillion yen (£114bn) quantitative easing programme, commodities prices from copper to corn softened over concerns at the impact of the devastation……………………………………….Full Article: Source

Posted on 15 March 2011 by VRS |  Email |Print

From Agrimoney.com: Japan’s disaster may have a significant impact on grain prices. But not in a way that is not immediately apparent. Sure, it is likely that the disaster will, for a while, continue to add to the negative pressure already weighing on agricultural commodities.
The country is, after all, one of the world’s biggest (and perhaps the biggest) food importers, relying on bought-in products for 60% by calories of what its citizens eat, according to the US Department of Agriculture……………………………………….Full Article: Source

Posted on 15 March 2011 by VRS |  Email |Print

From Theglobeandmail.com: Japan’s devastating earthquake and tsunami barely caused a ripple in North American equity markets. In fact, stocks rose in anticipation of all the lucrative reconstruction activity that will follow in the wake of the cleanup. But the same could not be said for grain prices.
Wheat, corn, soybean and rice futures all plunged, as the bad news from Japan piled on top of a revised forecast from the U.S. Department of Agriculture calling for bigger harvests and higher global stockpiles than previously expected……………………………………….Full Article: Source

Posted on 15 March 2011 by VRS |  Email |Print

From Ibtimes.com: Commodity bulls believe we are in early stages of a bullish ‘supercycle’ for commodities that may last several decades. Before this cycle, commodities prices stagnated for many years.
Global economic growth and demand for commodities was limited due to the “ongoing economic challenges in the West, a slowdown in Japan, the collapse of the Soviet Union, debt and currency crises in Latin America, and the relatively small [economic] size of China and India,” stated Standard Chartered in a note……………………………………….Full Article: Source

Posted on 15 March 2011 by VRS |  Email |Print

From Bangkokpost.com: A commodity price bubble is growing and could lead to an Asian price crisis for the next 3-5 years, say economists at TMB Bank. Two factors underpin the rise in commodities prices, said Dr Benjarong Suwankiri, a TMB vice-president. The first is the spate of natural disasters that have curbed supplies and pushed up prices since last year’s third quarter.
The second is the imbalance of liquidity between developed and emerging countries. High liquidity in developed countries is out of sync with their sluggish economic recovery. As a result, funds have flowed into emerging economies and a lot of that money has gone into speculating on commodities……………………………………….Full Article: Source

Posted on 15 March 2011 by VRS |  Email |Print

From Ndtv.com: Despite Japan’s crisis, India and China and some other energy-ravenous countries say they plan to keep using their nuclear power plants and building new ones. The Japanese disaster has led some energy officials in the United States and in advanced European nations to think twice about nuclear expansion.
And if a huge release of radiation worsens the crisis, even big developing nations might reconsider their ambitious plans. But for now, while acknowledging the need for safety, they say their unmet energy needs give them little choice but to continue investing in nuclear power………………………………………Full Article: Source

Posted on 15 March 2011 by VRS |  Email |Print

From Usatoday.com: As concerns mount over nuclear power safety in the aftermath of Japan’s massive earthquake, a new report says other energy sources not derived from fossil fuels are expanding and will likely double market share within a decade.
Global revenue for solar photovoltaics (PV), wind power and biofuels jumped 35% last year, compared with 2009, growing from $139.1 billion to $188.1 billion, according to the 10th annual report Monday by Clean Edge Inc., a U.S.-based research and advisory firm……………………………………….Full Article: Source

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From Chinapost.com.tw: Qatar’s Energy Minister Mohammed Saleh al-Sada said on Sunday that the world oil market was “comfortable” despite the conflict that has slashed output in producer country Libya.
“OPEC does not see the need for a meeting at the moment,” Sada, whose gas-rich country Libya belongs to OPEC, told journalists when asked if the cartel needed an extraordinary session……………………………………….Full Article: Source

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From Ninemsn.com.au: The devastating earthquake and tsunami in Japan will temporarily take pressure off of tightening global oil supplies, as the world’s third-largest oil consumer works to rebuild its shaken economy, energy analysts said Monday.
But the disaster won’t curb its energy appetite for long. Analysts say Japan will likely boost imports of diesel, natural gas and other refined fuels in coming weeks……………………………………….Full Article: Source

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From Theaureport.com: Well, you can’t eat gold either. But at least gold is easier to carry around, says precious metals pundit Bob Moriarty. Moriarty lays out his forecast for the U.S. government (ousted), banks (collapsed) and why he still has significant stakes in precious metal equities despite his doomsday predictions.
When people are hungry, they start riots. The riots in Egypt were directly related to the cost of food. The riots in Wisconsin are being framed as union versus anti-union. But it is really about people being afraid they won’t be able to feed their families……………………………………….Full Article: Source

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From Mineweb.co.za: South Africa’s gold production fell 6.4 percent in 2010, an industry body said on Monday, moving the country further away from its former status as the world’s largest producer. Gold output fell to 191,833.7 kilograms in 2010, the Chamber of Mines said in a quarterly statement.
“Our mines are getting deeper and deeper, we cannot compete with other countries like Russia which can produce gold at a lower cost than what we can,” said Abri du Plessis, chief investment officer at Gryphon Asset Management……………………………………….Full Article: Source

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From Indiatimes.com: Silver, which rose at more than twice the rate of gold last year, continues to outperform its more lustrous peer, and in the process, has narrowed its gap with gold, or the gold-silver ratio. The ratio, which was 80 a year ago, has since halved and experts feel it could come down further, implying one may be better off buying silver than gold.
In the calendar year to date, silver has yielded a 17% return compared with gold which has gained a meagre one-fifth of 1% since January……………………………………….Full Article: Source

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From Mineweb.co.za: Analysts at RBC Capital Markets believe that the current sell-off in platinum stocks - about 10% over the past week alone - offers a “second bite at the cherry with two of the ‘juiciest’ cherries looking like Aquarius Platinum and North American Palladium at present”.
RBCCM says the issues driving the sell-off “are essentially related to a belief that world economic growth is again taking a beating with rising sovereign risk in Europe and ongoing political instability in the Middle East having an unnerving impact on the price of oil and just to top it off, a large earthquake in Japan”……………………………………….Full Article: Source

Posted on 15 March 2011 by VRS |  Email |Print

From Mineweb.co.za: It feels callous writing about such an awful tragedy in terms metals markets, but sadly there is perhaps a call for a quick review of Japan’s typical position in terms of normal demand levels.
This piece is not designed to take a view on the prospects for longer-term increased demand in terms of reconstruction, not to try and quantify how demand may contract in the short-term as some of Japan’s industries have to struggle to contain their losses or temporary shut-downs; it is aimed more at giving a snapshot of Japan’s market share in different sectors……………………………………….Full Article: Source

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From Reuters: Aluminum has become the in-vogue defensive play amid the broader sell-off across the LME metals markets. This is partly due to the fact that there was less speculative premium built into the light metal than, say, copper.
It also reflects the unwinding and reversal of previous long copper/short Aluminum trading strategies, a trend that appreciably accelerated last week……………………………………….Full Article: Source

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From Resourceinvestor.com: Chinese domestic demand growth for the rare-earth-permanent-magnet (REPM) metals neodymium (Nd) and dysprosium (Dy) over the next five years, will be strongly influenced and perhaps determined by, the emphasis on industrial policy announced in the new Chinese economic development Five-Year Plan.
Before we discuss the specific section of the new Five-Year Plan that influences rare-earth-metals demand growth, we first need to understand that China’s industrial economy is centrally planned and rigorously controlled in detail, by the China State Council……………………………………….Full Article: Source

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From Ibtimes.com: Regular readers of this weekly report will appreciate that it summarises activity in the spot uranium market from the week before as noted by industry consultant TradeTech, and notes the indicative price for the week set by TradeTech.
While this week’s report will briefly summarise last week’s activity, let us be clear all reported transactions occurred in blissful ignorance of what was about to happen……………………………………….Full Article: Source

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From Advisorone.com: In the two years since the stock market sank to a dozen-year low in March 2009, the prices for many types of metal – precious and industrial – skyrocketed. Copper, often considered to be the most economically sensitive metal due to its use in housing and appliances, began to rally two months before the stock market finally hit bottom, even though exchange inventories were still rising.
Investors now have a wide range of funds to choose from that offer exposure to precious and industrial metals, including both commodity funds that own physical metal and equity funds that own shares in metal producers……………………………………….Full Article: Source

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From Business-standard.com: Asian hedge funds added $20 billion to their assets in 2010, backed by positive returns and accelerated flows in the second half of the year as investors returned to bet on the fast growing region.
Assets under hedge funds focused on the region rose to $152.3 billion in 2010, up from $132.2 billion a year earlier, a survey by fund tracker AsiaHedge released on Tuesday showed……………………………………….Full Article: Source

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From AP: Cuba’s central bank is devaluing the country’s two types of peso by about 8 percent in relation to the dollar and other foreign currencies, hoping the move will spur exports and local production as the government seeks to overhaul a moribund economy.
The announcement published in state newspapers on Monday says the hard-currency peso used mostly by tourists and foreign companies on the island will now be worth $1, down from $1.08. Each hard-currency peso is still worth 24 of the standard pesos with which most Cubans are paid in an unusual two-tiered currency system……………………………………….Full Article: Source

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From Bloomberg: Canada’s dollar weakened against most its major counterparts as commodities fell on concern factories in Japan will shut down following the country’s strongest earthquake.
The Canadian currency, called the loonie for the image of the aquatic bird on the C$1 coin, also slipped as Canadian industrial companies’ use of their production capacity rose less than forecast……………………………………….Full Article: Source

Posted on 15 March 2011 by VRS |  Email |Print

From Bloomberg: California, which is seeking to build a regional carbon market for the U.S. West and parts of Canada, may start its cap-and-trade program next year even if other jurisdictions aren’t ready, a state official said.
“We could do the program on our own, but we’d rather not,” California Air Resources Board Chairman Mary Nichols told reporters today after speaking at an International Emissions Trading Association conference in Washington……………………………………….Full Article: Source

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