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Commodities Briefing 24.Nov 2011

Posted on 24 November 2011 by VRS |  Email |Print

Colin HeritageU.S. banks are expanding fast in commodities trade finance as the dominant players, French banks, retreat, bankers told Reuters, with traders saying they feared it still would not be enough to save some small oil, coal and metals players from credit problems.
“The French banks are actively selling loan exposure as dollar liquidity in Europe has shrunk. So naturally U.S. banks are benefitting most. I personally bought into a few large and good trade finance loans,” said an executive at a major U.S. bank specialising in energy………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

Jim RogersIn a climate that has forced investors to look for more unusual places to put their money, many have gone into precious metals, especially gold, which hit multiple record highs this year, prompting some analysts to say it was overcrowded.
But famous investor Jim Rogers reiterated on Wednesday his view that investors will benefit from owning commodities whether the global economy improves or not………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

Jim Rogers, CEO & Chairman of Rogers Holdings told CNBC on Wednesday that the recent decline in commodity prices have little to do with fundamentals, or concerns about the strength of the global recovery, and everything to do with the collapse of brokerage firm MF Global (MF).
According to Rogers, the sell-off is “artificial.” “With MF Global going bankrupt [MF Global declared bankruptcy nearly 4 weeks ago] – which was a gigantic commodities firm – there was a lot of artificial forced liquidation of commodities. People have to sell whether they like it or not. It’s artificial selling right now,” Rogers said………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

With the notable exception of gold, most commodities have been in decline for a good portion of the year. And now that the U.S. dollar is once again on the move higher, even gold has succumbed to selling pressures lately.
It is hard to argue for inflation under such a scenario. With the major commodities indexes threatening to break down below respective bull-market trendlines, this asset class is now at a serious crossroads with significant economic implications………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

As we believe that the European debt crisis will linger in the next six to nine months, adversely impacting China’s growth, which is crucial towards demands of commodities. This is why we downgraded our forecasts on metal prices.
As most commodities have a high correlation with oil prices, we believe that tin prices would remain unexciting, in line with world economic outlook. However, we expect recovery in the middle of 2012, as Indonesia’s smelters will continue their export ban until tin prices recover to around the US$23,000 level………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

China’s oil consumption by 2015 will be “significantly” higher than International Energy Agency forecasts, surging 35 percent from this year, as economic expansion spurs fuel demand, Barclays Capital said.
The world’s biggest energy user may need 13.6 million barrels a day of fuel, versus an IEA estimate of 10.5 million, based on growth in China’s energy demand versus income levels in the past decade, Miswin Mahesh, London-based analyst at the bank, wrote in a report……………………………………….Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

OPEC will likely decide to cut oil output at its Dec. 14 meeting in Vienna as global oil demand is expected to decline next year, Iraq’s oil minister said on Tuesday, a view in line with fellow member Iran but one which runs counter to mainstream expectations.
Industry observers say a cut in output is unlikely to find support among the Gulf Arab OPEC members while oil prices remain well above $100 a barrel………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

The International Energy Agency (IEA) on Wednesday called for more efforts to expand the practice of deploying renewable energy, to face energy security and climate change challenges.
Countries must focus more on deploying renewable energy in a bid to realize sustainable development and growth, “especially given the world’s increasing appetite for energy and the need to meet this demand more efficiently and with low-carbon energy sources,” Maria van der Hoeven, IEA Executive Director said……………………………………….Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

Metals prices fell Wednesday on worries that economic growth could slow because of Europe’s debt problems. Prices for industrial metals are closely tied to economic growth. Metals like copper and palladium are used as raw materials to make everything from automobiles to home computers.
Worries about an economic slowdown grew Wednesday when an auction of German debt didn’t draw enough bids to sell all of the 10-year notes being offered………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

Gold eased below the $1,700 mark on Wednesday as investors moved to the dollar on euro-zone concerns, but futures recovered from their earlier losses as some traders viewed the declines as a good opportunity to buy.
The most actively traded gold contract, for December delivery, fell $6.50, or 0.4%, to settle at $1,695.90 a troy ounce on the Comex division of the New York Mercantile Exchange………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

The US government’s announcement Monday that it’s bi-partisan, deficit reduction “Super” committee had failed to meet its target of $1.2 trillion in deficit cuts helped push confidence in Washington and stocks in the US lower.
This move is understandable given the pre-existing concerns about the country’s ability to repay its debt as well as the poor state of the debt situation in Europe………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

Barclays’ forecasts for precious metals in 2012 include gold, $2,000 an ounce; silver, $35; platinum, $1,835; and palladium, $860. Barclays’ 2012 forecasts for the base metals include aluminum, $2,544 a metric ton; copper, $10,075; lead, $2,506; nickel, $21,125; tin, $28,000; and zinc, $2,300.
According to Barclays Capital, base metals prices would plummet as dramatically as they did after the financial crisis of 2008, even if the economic-growth outlook worsens, that is because there are important differences between then and now………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

While many investors have been distracted by the goings on in Europe, China has been making a dent in the global gold market by making it easier for investors to buy and invest in the yellow metal.
The goal: To dominate the global gold market and carve out a new role for its currency, the yuan………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

With Gold being a part of the forex reserves at just a mere7.9%, India should target buying more gold in the future, a Reserve bank of India (RBI) working paper advises. The ‘optimum level of gold’ as a part of the reserve however a difficult question to answer.
In the wake of the global economic crisis and economic uncertainty, central bank demand for gold has gone up. As such, India should not consider itself an exception. After the 200 tonne Gold purchase from the IMF in 2009, India has not added any significant quantity of gold into its reserves. But, the economic climate calls for further additions to the India’s gold reserves, even in small quantities………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

The proposal for stamp duty exemption for trading in commodity derivatives has suddenly found many supporters. The Forward Markets Commission (FMC), under the ministry of consumer affairs (MCA), has strongly recommended to the ministry of finance that futures trading in commodities should be exempted from stamp duty completely.
“We have written to the finance ministry to fully exempt commodity futures trading from all types of stamp duty,” said a senior FMC official………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

The Reserve Bank of India (RBI) on Wednesday announced a slew of measures to arrest the decline of the rupee, which has lost 14 per cent of its value this year and is the worst performer among Asian currencies. The regulator has also stepped up its surveillance with banks to keep a check on speculative activity by market participants.
The central bank has relaxed external commercial borrowing norms by raising the ceiling for interest rate the Indian corporate sector pays to raise overseas funds………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

Financial markets are “very volatile” as nations vie to keep their currencies cheap and maintain exports, said William Rhodes, a senior adviser at Citigroup Inc.
“In a sense we are somewhat in a currency war because everyone wants to protect their currencies in the sense of revaluing too much because that cuts into their trade,” said on Bloomberg Television’s “Surveillance Midday” with Tom Keene………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

The slide in European Union carbon permits to their lowest level since 2009 is underlining how the region’s sovereign-debt crisis is hurting economic production.
Prices for the December 2011 contract sank 7.3 percent yesterday, taking their decline this year to 41 percent. European manufacturing shrank this month, London-based Markit Economics said……………………………………….Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

Odin Knudsen, the JPMorgan Chase & Co. (JPM) managing director for environmental markets, resigned last month as the largest U.S. lender scaled back its climate-related practice.
Knudsen, 68, left the New York-based lender by mutual agreement after it became apparent the U.S. was not going to join a global system to trade carbon emissions, undermining the bank’s business plans, he said in a Nov. 21 phone interview. JPMorgan spokesman Brian Marchiony declined to comment………………………………………..Full Article: Source

Posted on 24 November 2011 by VRS |  Email |Print

Shrinking cocoa harvests in West Africa, the largest producing region, are diminishing a glut of beans just as sales of chocolate confectionery exceed $100 billion for the first time ever.
Global supply will decline 7.7 percent in the year to September, shrinking the surplus to 32,000 metric tons, from 434,000 tons a year earlier, according to Marex Spectron Group Ltd., which trades the beans in New York and London………………………………………..Full Article: Source

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