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Commodities Briefing 12.Feb 2013

Posted on 12 February 2013 by VRS |  Email |Print

If the global economy recovers, commodity prices will head north. If it doesn’t, equities will head south. Commodity prices and equities have seen more or less co-ordinated moves in the last five years. In recent months, however, that relation has broken down. Both the MSCI World index and the MSCI Asia-Pacific ex-Japan index have moved sharply higher, while commodity prices, as shown by the Reuters CRB index, have remained almost stagnant.
What could be behind this? Could it be worries about China? But Chinese equities too have moved up in the last six months and the fundamentals are looking up, with the HSBC China PMI data showing output increasing for the past five months………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Commodity trading houses pouring millions of dollars into buying physical assets risk shifting capital away from their core business and driving out top talent, according to a study by advisory firm Deloitte Switzerland. Following the model of Swiss commodities giant Glencore , many independent trading houses have sought to snap up assets such as oil refineries and aluminium smelters.
Last year, Geneva’s Vitol and Gunvor bought refineries from insolvent oil refiner Petroplus while Trafigura said in February its subsidiary Puma acquired a network of fuel service stations in Australia………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Goldman Sachs Group Inc. forecast precious metals and livestock will lead a 1.1 percent gain in commodities in 12 months, saying it will wait for physical markets to confirm recovery before raising individual estimates.
The advance in the Standard & Poor’s GSCI Enhanced Commodity Index will include a 2 percent gain in energy, with precious metals to climb 5 percent and livestock to advance 4.5 percent, the bank said. Agriculture will be down 3.5 percent and industrial metals will fall 1 percent………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

The traders’ role in energy and commodities trading is changing rapidly, while physical trading has entered a new era of sophistication and scale. In a newly released and first-time study, Deloitte in Switzerland, the business advisory firm, has analysed the current issues and trends of one of the most important global and Swiss trading sectors.
Changing global economic conditions are giving rise to exciting new opportunities – and challenges – in energy and commodities trading. International trading houses are, whether in oil, metals or soft commodities, extending their reach and scope. In the study entitled “Trading Up – A look at some current issues facing energy and commodities traders“, Deloitte Switzerland presents its view on current issues and challenges facing energy and commodity trading………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Our momentum monitor has been turning red over the last week indicating that some of the strong positive momentum that we witnessed during January has run out of steam with the need for profit taking and a fresh focus taking center stage.
The metals sector remains mixed with silver now seeing negative momentum following a run up since January 10. Gold has been stuck between its 200-day and 55-day moving averages for the past nine days with momentum suffering as a consequence………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Oil companies that buy Saudi Arabian crude have not requested extra supply and sources in the kingdom say production policy is unchanged - indicating steady output despite a jump in prices to US$118 a barrel. Sources at oil companies in Europe, China and Japan told Reuters they have not asked to buy more crude for March, and also that Saudi state oil company Saudi Aramco has not offered extra barrels.
Industry sources in Saudi Arabia say the kingdom’s production policy is unchanged: the supply response will be driven by demand not price. If consuming countries do not order more oil, then Riyadh will not raise output………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Oil companies that buy Saudi Arabian crude have not requested extra supply and sources in the kingdom say production policy is unchanged - indicating steady output despite a jump in prices to US$118 a barrel. Sources at oil companies in Europe, China and Japan told Reuters they have not asked to buy more crude for March, and also that Saudi state oil company Saudi Aramco has not offered extra barrels.
Industry sources in Saudi Arabia say the kingdom’s production policy is unchanged: the supply response will be driven by demand not price. If consuming countries do not order more oil, then Riyadh will not raise output………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Majid al-Moneef withdrew his candidacy for the post of OPEC secretary-general after he was promoted within Saudi Arabia’s Supreme Economic Council, a Persian Gulf official with direct knowledge of the matter said.
Al-Moneef, who formerly served as Saudi Arabia’s governor to the Organization of Petroleum Exporting Countries and as a senior economic adviser to Oil Minister Ali al-Naimi, had been vying for the producer group’s top administrative position against candidates from Iran and Iraq. ……………………………………….Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

A relative slowdown in new wind turbine construction in China was offset by increases in the US, Germany, India and the UK. Wind power expanded by almost 20% in 2012 around the world to reach a new peak of 282 gigawatts (GW) of total installed capacity, while solar power reached more than 100GW, having more than doubled in two years.
More than 45GW of new wind turbines arrived in 2012, with China and the US leading the way with 13GW each, while Germany, India and the UK were next with about 2GW apiece………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

When Vladimir Putin says the US is endangering the global economy by abusing its dollar monopoly, he’s not just talking. He’s betting on it.
Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 tonne of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

U.S. dollar gold prices fell to a one-week low Monday morning in London, dropping to $1,660 per ounce, as dealers in Asia reported quiet trading, with China celebrating the Lunar New Year holiday.
“We are neutral [on gold] until the current consolidation resolves itself,” says the latest technical analysis report from bullion bank Scotia Mocatta. Silver fell to $31.27 an ounce — its lowest level in nearly two weeks — while stocks were broadly flat and commodities edged lower as the Dollar strengthened………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Speculators returned as buyers in all precious and base metals futures and options traded on the Comex division of the New York Mercantile Exchange and the Nymex, according to U.S. government data, spurred in part by a rise in prices.
For the week ended Feb. 5, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report pushed their net-long positions in the platinum group metals to even higher highs. Funds also bolstered their net-long positions in copper on hopes of a strong economic outlook. There were increases in speculators’ net-long positions in gold and silver, although the gains were relatively modest in silver………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

The combination of better than expected U.S. durable goods data and the head of China’s sovereign wealth fund stating that China’s economy grew by almost 8% last quarter may offer some opportunities in the copper market.
Although these global economic indicators gave some hope about growth and demand in the world’s largest economy, the uneasiness about the growth of supply has kept copper prices relatively in check due to concerns that larges quantities of supply could enter the market in 2013………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Exchange traded funds (ETFs) are becoming increasingly popular as investors seek more products that they can trade quickly and cheaply. ETFs aim to replicate a fund structure but also trade on an exchange.
“It looks like a fund but trades like a share,” says Hector McNeil, co-founder of Boost ETP. “They are very democratic. They allow any investor access to usually difficult-to-trade-on markets, currencies or asset classes at wholesale prices.”……………………………………….Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

ETFs, despite two decades of product history, remain an emerging investment category with a large growth trajectory. That is the rough consensus of five of the largest ETF asset managers speaking at IndexUniverse’s InsideETFs Conference in Hollywood, Fla.
“The opportunities are so much larger than the challenges,” said Mark Wiedman, global head of iShares BlackRock. Wiedman saw the greatest growth potential in the areas of fixed income and non-U.S. equities markets………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

NYSE Euronext (NYX) which acquired 4.79% stake in the Multi Commodity Exchange (MCX) in June 2008, may exit India’s largest commodity exchange. The exit by the world’s leading and most diverse financial market group will give over 100% profit in less than three years on its investment in MCX.
Since the investment was made prior to the exchange’s IPO, the deal if takes place will only be announced after completion of one year of the IPO which may happen in around second week of March………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

India’s newest stock exchange, the MCX Stock Exchange, started trading shares Monday with thin volumes, taking up a steep challenge to build liquidity and win market share against the dominant National Stock Exchange and the smaller and older exchange, BSE.
As of late Monday morning, the value of shares traded on the MCX-SX, as the new exchange is known, was 1.5 million rupees, or about $28,000, according to data on its Web site. That compared with trading volumes of 34.3 billion rupees on the NSE. Financial industry players said time would tell whether the new exchange could make inroads in India………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Group of 20 member nations must avoid beggar-thy-neighbor currency policies and the richest advanced economies need to stick to their long-standing rule to let market forces set their exchange rates, a senior U.S. official said on Monday.
Treasury Undersecretary Lael Brainard, the top U.S. official for international economic affairs, said fiscal and monetary policies should be aimed at achieving domestic objectives, as opposed to targeting a weaker currency to bolster exports………………………………………..Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Europe will struggle to convince the rest of the world that carbon trading is the best way to tackle climate change if a plan to revive the price of the region’s permits fails, said the Centre for European Policy Studies.
The European Commission’s proposal to fix a glut of carbon allowances by restricting issuance must be approved, or market- based systems won’t be attractive to United Nations negotiators working on a new global climate-protection pact, Andrei Marcu, a Brussels-based adviser at CEPS, said……………………………………….Full Article: Source

Posted on 12 February 2013 by VRS |  Email |Print

Failure by the EU to fix its carbon market could further derail a plan to help poor countries fight climate change, as low CO2 prices cut revenue from EU government permit sales while deterring other nations from launching similar markets, U.N. negotiators and observers said.
This year, delegates from more than 190 nations will meet at least four times to discuss how to scale up climate finance from current levels of about $10 billion annually to meet a 2009 pledge to provide $100 billion a year by the end of the decade………………………………………..Full Article: Source

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