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Commodities Briefing 14.Nov 2012

Posted on 14 November 2012 by VRS |  Email |Print

One factor contributing to a drop in producer prices is the weakness and fall of their input prices. Two months ago it seemed like commodity prices in China ended their eight-month slump and showed signs of bottoming out. But now we’re more than a week into November, and commodity prices are still muddling along on the low end. Once again confusing markets, investors and end users on where prices may go from here.
The latest reading of China’s only domestic coal price measure, the Bohai-Rim Steam-Coal Price Index shows that the price of steam-coal stood at 643 yuan ($103) per ton. That’s a slight uptick of 17 yuan from its lowest point, but still dropping by a quarter versus the same time last year……………………………………….Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

OPEC’s secretary-general said he was not worried about the oil market outlook for 2013, as the exporter group pumps a million barrels per day more than its official output target without weakening prices.
“I am not really worried. I’m looking forward to 2013. It will be, I hope, a comfortable year for OPEC and for the oil price,” Abdullah al-Badri said. OPEC is pumping 1 million bpd more than its output ceiling of 30 million bpd, he said, and according to OPEC forecasts, demand for the group’s oil will decline in 2013 to an average of 29.72 million bpd as nonmember countries expand supply………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

The head of OPEC warned Tuesday that its members’ spending plans could be undermined by an energy watchdog’s forecast that the U.S. will leapfrog Saudi Arabia in terms of oil production.
On Monday, the International Energy Agency, which represents key oil consumers, predicted the U.S. will overtake Saudi Arabia as the world’s largest oil producer by 2020 thanks to a shale output boom………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

The International Energy Agency Tuesday cut its forecast for oil demand in the last quarter of this year and said the state of the global economy will limit consumption expansion in 2013.
In its monthly market report, the Paris-based energy watchdog for 28 industrialised nations including Ireland, downgraded its forecast for global oil demand by 290,000 barrels a day to 90.1m barrels a day as a result of economic weakness in Europe and the fallout from recent Hurricane Sandy in the US………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

For those still puzzled over stubbornly supra-$100/barrel oil prices, the International Energy Agency’s latest monthly report Tuesday provided a wealth of fresh bearish data set to further baffle oil market watchers.
The report, which came a day after the IEA’s headline-grabbing annual World Energy Outlook, supports a gloomy outlook for global oil markets with further cuts to its headline demand forecasts due to concern over the health of the global economy………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

India’s gold demand is expected to recover next year, largely due to an expected increase in jewellery purchases after a difficult 2012 during which sales dropped due to higher import taxes and a weak rupee, industry officials said on Tuesday.
An increase in auspicious days for weddings in 2013 - a key factor driving gold jewellery purchases in the world’s top gold consumer - will help boost demand by 25 percent on the year, said Shekhar Bhandari, executive vice president of treasury at Mumbai-based Kotak Mahindra Bank……………………………………….Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

The gold industry is cautiously optimistic about the coming year after a lacklustre 2012, according to the consensus of bankers, traders and investors gathered in Hong Kong at the industry’s largest annual meeting.
More than 700 delegates attending the London Bullion Market Association conference this week predicted the price of gold would rise to $1,849 a troy ounce by the time of the next year’s conference in September 2013, according to Bloomberg………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

Gold discovery rates are decreasing even as exploration spending in the industry reached a record $8 billion last year, according to Jamie Sokalsky, chief executive officer of Barrick Gold Corp., the world’s largest producer.
There were three discoveries last year, compared with 11 in 1991, and none of those can be described as “supergiant,” or holding more than 20 million ounces, Sokalsky said at a conference in Hong Kong. Breakeven costs were rising, he said today, predicting gold’s bull market shows no signs of ending………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

Gold will probably rally to a record above $2,000 an ounce next year as central banks ramp up stimulus to sustain the recovery, according to Raymond Key, London-based global head of metals trading at Deutsche Bank AG.
“We’ll take out $2,000, we’ll go higher,” Key said in an interview in Hong Kong, where he attended the London Bullion Market Association’s annual conference. “That’s on the view that they’ll continue to print money.”……………………………………….Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

Gold prices have got boost after the US election results and having found good support, stabilizing above $1700 levels, the yellow metal may climb to importance resistance level of $1800 again, according to Ole S Hansen, Head, Strategy at Saxo Bank.
Having reached not breached important support levels below US $1670, traders have begun to rebuild speculative longs which has been reduced by one-quarter during the previous weeks………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

According to legendary investor Jim Rogers, the precious metals crowd has nothing to worry about now that Obama has been reelected. The billionaire co-founder of the Quantum fund with George Soros is telling the market to expect more of what we’ve seen in the past four years. The loose monetary policy , further quantitative easing and weak dollar will support the upward trend in gold and silver, according to Rogers.
“Investors should prepare for rising prices and more expansionary monetary policy now that President Barack Obama has won reelection. “If Obama wins, it’s going to be more inflation , more money printing, more debt, more spending,” Rogers recently told CNBC. The investor also said he plans to sell federal debt and purchase more gold and silver………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

A recent rally in steel prices in China, the world’s top steel market, is facing headwinds despite falling inventories, as overcapacity will continue to bite into margins, the China Iron & Steel Association (CISA) said on Wednesday.
Total inventories of five main steel products including hot-rolled coil and rebar in 26 major markets fell 2.8 percent from the end of October to 12.08 million tonnes on Nov.9, CISA said in a statement on its website………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

Source’s assets under management (AUM) have grown by 33% in the year to date, which means the company must be doing something right. One of the fastest-growing exchange-traded product (ETP) providers in Europe, Source stands out by offering innovative products in conjunction with its partners.
“We are up $2.4 billion in assets this year,” says Michael John Lytle, the London-based managing director of Source. In the first half of the year, the firm notched up the second-highest European ETP net new asset inflows, and it has captured 17% of net new assets invested in European ETPs this year, says Lytle………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

Briefly, the vast majority of commodities markets follow a normal futures curve, wherein the prices for contracts of a commodity further out are more expensive than the contracts closer to expiration.
That is, in February of a given year, the price for March widgets would be cheaper than the price for July widgets. (People usually call this situation “contango”; and while that’s not technically correct, it’s not worth getting into the semantic distinction in this article, other than to acknowledge that people are going to be using that word to describe a normal futures curve.) Most commodities ETFs work by holding the front month contract of a given commodity, then selling that contract shortly before expiration and replacing it with the next month in the futures chain………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

Exchange traded funds have provided the average retail investor, advisors and institutions with the opportunity to efficiently and cheaply access many different asset classes and sectors in one easy-to-use investment vehicle.
In a recent webcast by Street One Financial and FA Magazine, some redeeming qualities of the ETF trading vehicle were highlighted. Tax Efficiency. The tax structure of the ETF is more efficient than the mutual fund, with the exception of certain asset classes, such as commodities or currencies. Additionally, ETFs have historically come with limited or no capital gains distributions………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

Barclays set itself apart from the commodities crowd once again this year, impressing clients with its range of solutions and providing innovative answers to the investment and hedging challenges faced by strategists and fund managers.
This year’s innovations from Barclays included its first option on the spread between aluminium and the cost of energy used for production, which was a bespoke solution created for a European aluminium smelter. Launched in February 2012, the trade worked by allowing the client to lock in the ratio of its power costs relative to aluminium revenue for the first year, by buying physical power and selling a swap on aluminium………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

This strategist says there are more positive trends out there than investors realize. If the post-election markets have been marked by one feeling, it’s dread. Investors are worried about the fiscal cliff, they’re jittery about the euro zone, and China’s uncertain growth prospects are unsettling.
Not surprisingly, safe haven currencies like the dollar and the yen are riding high as investors shy away from risk-sensitive assets………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

A penny won’t buy you much these days but it will go a lot further than a Vietnamese dong. This has the dubious distinction of the worst rate of exchange against sterling of any currency – you need about 33,000 dong to buy just £1. Here are the world’s 10 least valuable currencies, as compiled by forexcurrency.us.
Next is the Indonesian rupiah, which has an exchange rate of about 15,300 against the pound………………………………………..Full Article: Source

Posted on 14 November 2012 by VRS |  Email |Print

South Korea asked its largest emitters to make cutbacks at home before giving them credit for overseas spending to reduce greenhouse gases, and it will begin charging for about 3 percent of pollution allowances in 2018.
The nation won’t allow so-called global carbon offsets until after 2020, according to an e-mailed statement today from the prime minister’s office and other government agencies. South Korea agreed in May to start a cap-and-trade system in 2015 to rein in the fastest-growing emissions in the developed world………………………………………..Full Article: Source

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