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Commodities Briefing 13.Oct 2011

Posted on 13 October 2011 by VRS |  Email |Print

The Baltic Exchange’s main sea freight index , which tracks rates to ship dry commodities, rose to its highest in over ten months on Wednesday helped by buoyant cargo demand.
Brokers said growing vessel supply, which was outpacing commodity demand, was set to cap dry bulk freight rate gains in the coming months with economic uncertainty adding to headwinds……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

K. Geert RouwenhorstCommodities are moving more in lock-step with one another and with the stock market, prompting some advisers to look elsewhere for diversifiers.
The correlation between commodities and stocks more broadly has been slowly creeping up over the last five to 10 years, but more so in the last three, said K. Geert Rouwenhorst, a professor of finance and deputy director at the Yale School of Management’s International Center for Finance……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

Estimates for crude oil demand in 2011 and 2012 were once again downgraded by the world’s largest oil cartel, the Organization of Petroleum Producing Countries (OPEC).
In their latest oil market report, OPEC lowered its forecasts for the global economy and the U.S., while they expect softness in 2012 oil demand to outpace the slowdown in supplies, putting further pressure on prices……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

The International Energy Agency cut its global oil demand growth projection on Wednesday while the U.S. government increased its outlook for 2012, making it the most bullish forecaster as the economy heads into an uncertain year.
The U.S. Energy Information Administration’s outlook for oil demand growth next year was much stronger than the Paris-based IEA’s projection and the forecast issued by the Organization of the Petroleum Exporting Countries on Tuesday……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

OPEC members pumped less crude oil in September as Saudi Arabia cut its production from August’s 30-year high and Nigeria’s output was hindered by sabotage attacks, the International Energy Agency said.
Daily supply from the Organization of Petroleum Exporting Countries’ 12 members fell to 30.15 million barrels a day in September from 30.17 million in August, the Paris-based IEA said today in its monthly oil market report……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

Oil prices fell slightly Wednesday after a group of energy experts cut its forecast for global crude demand.
The International Energy Agency joined OPEC in trimming its demand forecasts for this year and 2012. The Paris-based IEA still expects world demand to hit a record this year, but more slowly than previously expected. The IEA’s outlook followed a similar one from the Organization of Petroleum Exporting Countries on Tuesday……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

The record rains that flooded Australia and led to surging coking coal prices last year are brewing again.
The chances of above-average rainfall in parts of Northern Queensland in the rest of the year are 65 percent to 70 percent, Australia’s Bureau of Meteorology said Sept. 19. One contributor is the returning La Nina weather event that cooling ocean temperatures and stronger trade winds are indicating may return this quarter……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

“Commodities are suffering as a function of faltering global growth demands” or “commodities are falling because the dollar has gotten stronger,” for instance. Neither of these answers are actually correct in any verifiable way but the process of analysis and the ensuing debates seem generally useful, at least to those inclined to fundamental analysis.
In contrast, technical strategists (read: chart guys) like Rich Ross of Auerbach Grayson, try to avoid this rhetoric and focus on patterns……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

Gold appears to have entered a new phase, acting as a hybrid, sometimes sympathizing with risk assets and other times acting like a safe haven, UBS’ Edel Tully explains. While this makes it incredibly difficult to trade the yellow metal, the gold strategist remains bullish.
After falling about $20 on Tuesday in response to a stronger dollar, gold recovered its footing on Tuesday, hitting $1,693.90 an ounce, its highest level in two weeks……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

Gold prices are expected to scale record highs next year as the asset’s bullish fundamentals trump the current macroeconomic uncertainty that led to a recent selloff in the precious metal, says a commodities fund manager.
The slump in gold last month has resulted in a “wash-out” of speculators in favour of more stable long-term buyers like exchange-traded funds and central banks, said Diego Parilla, chief investment officer of new Singapore-based commodities hedge fund NARECO Advisors……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

Some gold-mining stocks currently have upside potential of 40% and more, says UBS Sub-Saharan Africa market head Marco Spichiger, who expects the gold price to trend back towards $2 000/oz and $2 200/oz levels within six months.
Spichiger, who is conducting a series of gold-investment workshops in South Africa together with UBS executives Nina Reinhart and Martin Bieri, tells Mining Weekly Online that the upside potential of some gold stocks are expected to be realised in the next 12 to 18 months……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

Gold market is not a bubble but having the potential to move higher to $10,000 an ounce, according to Nick Barisheff, leading commentator on finance and markets and President and CEO of Bullion Management Group, Inc. His upcoming book, ‘$10,000 Gold- Why it will get there sooner than you may expect’ is based on this bullish premise for the yellow metal.
Barisheff points out that there are two fundamental ways of looking at gold: The western view sees it as just a wealth-gaining asset while the eastern view subscribed to by India, China and Middle East is that the yellow metal is a wealth-preserving asset that serves the purpose of money……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

The price of gold is expected to average USD 1,770 per ounce in the fourth quarter, Thomson Reuters GFMS said on Wednesday, adding that official net purchases of gold were seen rising to 500 tonnes in 2011, from its prior estimate of 336 tonnes.
Thomson Reuters GFMS global head of metals analytics Philip Klapwijk said the consultancy’s base scenario until 2013 was for the gold price to peak next year and then trend lower……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

Maktari, the so-called ‘Gold Hand’, the international gold trader who some believe can control the price of gold, has today forecasted gold to reach US$2,200 per ounce by the end of 2011.
In a commentary emailed to BI-ME, Maktari said: “At the start of the year, many analysts, including myself, predicted gold would reach up to US$1,600 an ounce before the end of the year, given the dire global economic situation and the yellow metal’s appeal as a safe haven. But as the months rolled on, most analysts had to revise their outlook upward, and more so since the beginning of August and the downgrade of US debt.”………………………………………Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

The recent global stock market sell-off has not spared the PGM markets. During the August-September period, from peak to trough, Gold fell 15% while platinum, the rarer precious metal, fell 22%. Year-to-date to 10 October, gold rose 18% while Platinum fell 14%. At $1,537 per troy ounce, platinum bought only 0.91 ounce of gold today, the lowest level since at least 1987, according to Blomberg.
What has caused the different dynamics of platinum and gold? Platinum, unlike gold, has important commercial use with over 50% of demand coming from auto catalysts and 20% from jewellery demand……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

The 28 percent plunge in zinc that drove the metal into a bear market may be ending as record demand from steelmakers erodes stockpiles and the price slump spurs producers to curb output.
About 50 percent of zinc is used to rust-proof steel and production of the alloy reached an all-time high of 31.7 million metric tons in the second quarter, according to Macquarie Group Ltd. Global stockpiles monitored by exchanges in London and Shanghai are the lowest since April……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

China has for the first time revealed the estimated size of its copper inventories, shedding light on one of the commodity market’s biggest mysteries.
Chinese copper inventories stood at 1.9 million tons at the end of 2010, more than the US consumes in a year, according to estimates by the state-backed China Non-Ferrous Metals Industry Association. The estimate is significantly higher than the 1.0-1.5 million tons range that foreign executives have assumed in the past……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

The World Steel Association (Worldsteel) today released its October 2011 Short Range Outlook (SRO) for 2011 and 2012. Worldsteel forecasts that apparent steel use will increase by 6.5% to 1,398 mmt in 2011, following growth of 15.1% in 2010. In 2012, it is forecast that world steel demand will grow further by 5.4%.
The Worldsteel Economics Committee met 7-8 September 2011 in Istanbul……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

United States Commodity Funds, the company behind the ultra-popular natural gas (UNG) and crude oil (USO) products, has laid the groundwork for another unique exchange-traded commodity product. In a recent SEC filing, USCF outlined some details for a proposed Asian Commodity Basket Fund, which would include exposure to commodities deemed to maintain “systemic importance to Asian economies, including the three major Asian economies of China, Japan and India.”
The filing noted that the proposed fund may also include futures contracts that trade on an Asian domiciled futures exchange……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

Exchanges from Brazil, Russia, India, Hong Kong and South Africa unveiled a product-sharing agreement aimed at leveraging interest in their emerging markets.
Starting in the first half of next year, seven exchanges from the five markets—with a combined market capitalization of $9.02 trillion—will cross-list stock indexes from each of the exchanges. The exchanges are Brazil’s BM&F Bovespa, Hong Kong Stock Exchanges & Clearing Ltd., Russia’s Micex and RTS, the Johannesburg Stock Exchange, and India’s BSE Ltd. and the National Stock Exchange of India……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

Agricultural commodities and stocks have become darlings of the investment world. Everybody seems to think that agriculture is a great business. Whether you read Jim Rogers or watch CNBC, everybody seems to wax lyrical about the future of agriculture.
In this context, agricultural commodities and stocks have become go-go and mo-mo favorites of hedge funds and traders……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

European Union carbon prices are being hurt by a lack of clarity as to how the bloc’s emissions trading system will operate after 2012, a report said.
Current undervaluation of carbon-dioxide permits is linked to uncertainty about the “exact market operation rules” for the next trading period running to 2020, according to research conducted by academics from the University of Paris-Ouest and published by the CDC Climat. CDC is a climate-protection unit of Caisse des Depots et Consignations, the French state-owned bank……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

The European market for carbon has slumped far below the Australian government’s carbon tax price of $23 a tonne as distressed companies in Britain and Greece cash in permits while investors wait for the outcome of next month’s climate summit in South Africa.
The carbon price in Europe has fallen to about E10 ($13.70) a tonne during the past week, its lowest level since the depths of the financial crisis in February 2009……………………………………….Full Article: Source

Posted on 13 October 2011 by VRS |  Email |Print

The Australian government’s goal of implementing a carbon tax passed its toughest test today as the lower house of Parliament overwhelmingly approved a package of bills that institutes a phased-in carbon tax, to be followed by a carbon-trading system.
The 18 bills now go to the Senate, where the law is all but assured of passage in mid-November……………………………………….Full Article: Source

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