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Commodities Briefing 05.Feb 2013

Posted on 05 February 2013 by VRS |  Email |Print

Platinum supplies are falling to a 13-year low as mines in South Africa, the world’s biggest producer, close and automobile sales reach new highs. Production will drop 2.7 percent to 5.68 million ounces, the least since 2000, according to Barclays Plc, which raised its 2013 shortage estimate sixfold last month after Johannesburg-based Anglo American Platinum Ltd. (AMS) said it plans to idle shafts.
At the same time, demand from carmakers, the biggest consumer of the metal, will increase 0.5 percent in 2013, Barclays says. Investors are buying platinum at the fastest pace in three years……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Patricia Mohr, Scotiabank’s commodity market specialist, made the case for higher or resilient prices for commodities, including copper, potash and uranium, in the near and longer term.
Mohr noted food prices are high and “this is going to incent farmers to apply a lot of potash next spring, something we expect is going to happen.”…………………………………….Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

The two biggest pension funds in the Netherlands plan to maintain investment in commodities even after their latest quarterly reports showed commodities as their worst performing asset class and a big U.S. fund halved its exposure.
Dutch funds ABP, for state employees, and Pensioenfonds Zorg en Welzijn PFZW for health and medical care workers, along with Californian state pension fund CalPERS, were among a handful of big pension funds that invested in commodity derivatives as an alternative to stocks and bonds in the middle of last decade……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Pierre Andurand, who managed $2 billion at his BlueGold oil hedge fund before it folded last year under heavy losses, is headlining a host of one-time commodity stars looking to make a comeback in a less merciful market.
Andurand began trading on Friday at a new $200 million hedge fund that he plans to expand to $500 million by the end of the first quarter and $1 billion eventually. But the 36-year-old Frenchman who tripled his investors’ money in his first year at BlueGold will have to face more wary investors this time……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

The tight link between commodities and equities is easing as firms become less worried about macro shocks, say analysts. Correlations between commodities and other asset classes are in retreat, argue analysts, as the impact of macroeconomic jitters diminishes and prices become more heavily affected by physical supply and demand.
During the past five years, commodity prices often moved in lockstep with those of other asset classes, especially equities, as investor sentiment shot up and down in response to broader financial woes……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Hedge funds and refiners vied to buy oil futures last month, pushing crude to the highest level since September, as the U.S. added jobs and expanded manufacturing while the government said fuel demand will rebound this year.
Money managers increased net-long positions, or wagers on rising U.S. prices, to a nine-month high of 218,604 in the week ended Jan. 29, according to the Commodity Futures Trading Commission’s Feb. 1 Commitments of Traders report. It was their seventh week of increasing bullish positions, the longest run of gains in records dating back to June 2006……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

With stocks moving higher, silver and platinum are the precious metals that may move the most in the coming months. My firm suggests holding three precious metals (in a physical form) as long-term investments in a “default” precious metals portfolio – gold, silver, and platinum. There are, of course, other viable options, such as palladium, depending on one’s preferences and needs, but these three will suit virtually any precious metals investor.
Gold is — and has always been — the most popular precious metal. It usually attracts the most attention both from investors and the general public and could be viewed as the safest bet……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Fund managers’ ardour for gold is cooling as the threat of a catastrophic event in the world economy recedes and expectations of a gradual economic recovery grow, fuelling demand for other assets.
Gold prices have traded in a broad sideways channel between $1,525 and $1,800 an ounce since falling back from a record $1,920.30 in September 2011, and have repeatedly failed to break back above $1,700 this year……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Size of global precious metals industry is likely to touch $215 bn by 2017 with a compound annual growth rate (CAGR) of 7.5 percent, stated a research report titled ‘Global Precious Metal Industry 2012-2017: Trend, Profit, and Forecast Analysis,’ from Lucintel.
Growing demand from end markets like jewellery, electronics, automotive, and investment are expected to drive the prices of precious metals. Lower availability of ore and regulations imposed by the governments on mining are the major hurdles for world precious metals industry, the report noted……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Copper and zinc demand in United States is expected to witness an up-tick trend in 2013-14 as a result of ongoing recovery in the US housing market. Improvement in the US housing market and recovery in global economy could boost demand for base metals, stated a recent market outlook by London based Barclays.
According to the 2013-14 US housing market outlook, housing starts would average 1mn units in 2013 and 1.2mn in 2014. This robust recovery trend in US construction activity would likely benefit copper and zinc……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Global demand for iron ore is expected to reach 2.6-billion tons in the next seven years, with China poised to remain the biggest consumer of the steel-making ingredient, Diedrik Tas, partner at commodities search firm McKinsey & Co, told attendees at the Mining Indaba in Cape Town on Monday.
Prices were also to remain high, Mr Tas said, but he warned that this would not be due to increased demand, but rather a function of rising operating costs. Iron-ore prices are closely linked to growth in the steel markets. Over the past year, prices have wavered as the slowdown in China’s economic growth led to lower demand for the metal……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Exchange traded funds (ETFs) are uniquely structured investments that track indexes, baskets of assets or commodities. Since the first ETF was launched 20 years ago, the ETF industry has grown into a trillion-dollar business.
This growth is due in part to the relative ease with which ETFs can be bought and sold, the ability to sell short and purchase ETFs on margin and the exposure that ETFs provide to commodities - as asset class that not long ago was impractical for individual investors because of the inconvenience and costs associated with transporting, storing and insuring the various commodities……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

The Japanese economy faced a difficult time in fiscal 2011 following the devastating earthquake and tsunami. To add to this were several explosions that occurred in the Fukushima nuclear power plant. Following the Fukushima disaster, the nuclear industry nearly collapsed and badly impacted the uranium sector.
Demand for uranium decreased soon after the catastrophe as many nuclear plants were shutdown and more projects were delayed. With supply outstripping demand, the price of uranium fell drastically. Subsequent to a slump in the uranium sector, ETFs tracking the sector were beaten down to more than half of its trading prices pre-disaster……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Historically, futures exchanges have been very effective at preventing the failings of individual traders from hurting others. That is one reason why America’s Dodd-Frank law introduced new rules for over-the-counter (OTC) swaps designed to make them more like futures. (“Swap” is a broad term for many types of financial derivatives directly agreed between two parties, including credit default swaps and currency forwards.
The most common is the interest rate swap, which allows people to transform floating-rate debt into fixed-rate debt and vice versa.) In particular, policymakers want greater transparency and central counterparty clearing……………………………………..Full Article: Source

Posted on 05 February 2013 by VRS |  Email |Print

Two developments in the last week are turning the heat up on oil companies: HSBC released an analysis finding oil majors at significant risk from “unburnable” reserves, and a pension fund has agreed to consider divestment from fossil-fuel companies in response to NGO pressure. This signals growing concern among conventional investors that climate change could be creating a “carbon bubble” in equity markets.
Concerns around carbon dioxide emissions are growing as climate science grows ever firmer on CO2’s contribution to climate change. International research bodies – including the International Energy Agency, or IEA – model three possible scenarios for the future in terms of the number of degrees Celsius of average global warming by 2050……………………………………..Full Article: Source

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