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Commodities Briefing 15.Mar 2013

Posted on 15 March 2013 by VRS |  Email |Print

Investment bank Goldman Sachs grabbed the top spot for commodities trading revenue in 2012 in a year when lower market volatility and tighter regulation crimped trading profits. The research report released on Thursday by London-based industry analytics firm Coalition showed Goldman’s commodity revenue beat JPMorgan Chase and Morgan Stanley , which ranked No. 2 and No. 3 in 2012.
Bank of America Merrill Lynch and Barclays were the two strongest performers in generating commodities revenue year-on-year in 2012, Coalition said. The report highlights how global investment banks fared in a particularly difficult year as clients’ trading activity in commodities shrank on increasing concerns of regulation and capital requirement following the collapse of MF Global………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

In a week that Singapore was hosting two big commodities conferences – one for mining and one for grain trading – over in Geneva, industry executives, government officials and academics gathered for what almost felt like a morale boosting session.
Organised by the Geneva Trading and Shipping Association, which represents the city’s commodity trading companies, and the University of Geneva, the forum, headlined “Relevance of the commodity trading hubs and sustainable factors of success”, looked at Switzerland’s history as a trading hub stretching back to the mid-19th century, as well as its strengths, challenges and the regulatory climate………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Dambisa Moyo, international economist and best-selling author, on why the “commodity super-cycle” is not over. The commodity super-cycle – in which commodity prices reach ever-higher highs, and fall only to higher lows – is not over. Despite the euphoria around shale gas – indeed, despite weak global growth – commodity prices have risen by as much as 150% in the aftermath of the financial crisis. In the medium term, this trend will continue to pose an inflation risk and undermine living standards worldwide.
For starters, there is the convergence argument. As China grows, its increasing size, wealth, and urbanization will continue to stoke demand for energy, grains, minerals, and other resources………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

For Latin America, it is no longer certain that commodities are a short-term blessing and a long-term curse. Natural resource-rich Latin America has been struggling to cope with commodity cycles and price volatility almost forever – but now, countries in the region seem better equipped to deal with volatility.
China’s voracious appetite has pushed prices up in recent years, although it has also highlighted the region’s dependency on commodities, especially in South America. Some statistics are telling: commodities account for 74% of the sub region’s total exports, according to a recent report issued by HSBC; 74% of imports, meanwhile, are made up of manufactured goods………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

The Organization of Petroleum Exporting Countries will increase shipments this month as refineries in Europe and the U.S. resume operations after maintenance, according to Oil Movements.
The group that supplies about 40 percent of the world’s oil will bolster crude shipments by 300,000 barrels a day, or 1.3 percent, to 23.75 million barrels a day in the four weeks to March 30, the researcher said today in an e-mailed report. The figures exclude Angola and Ecuador………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

OPEC’s output may rise in the second quarter to meet increasing demand from refiners, indicating prices will increase as spare production capacity is reduced, Morgan Stanley said.
Output by the Organization of Petroleum Exporting Countries could rise by 850,000 barrels a day from April to June, the bank said in the report published today. The group will pump more as refineries come out of maintenance and utilities in Saudi Arabia and Japan use more crude and fuel oil for electricity generation, said Morgan Stanley………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

The International Energy Agency marked the passing of Venezuela’s President Hugo Chavez by adding its voice to a wealth of editorials pointing to a neglected oil industry which has sapped the country’s output and capacity.
In its latest monthly oil market report, the IEA warns of a “further degradation” of the state oil company PDVSA should Chavez’s policies live on under his hand-picked successor Nicolas Maduro. The IEA also predicted that the country’s net capacity will increase less than 8% over the next five years………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Researchers say rich metals deposits locked in the seabed 5km below the surface have huge industrial potential, but environmentalists warn against rushing to mine deep ocean trenches.
A British company has announced a major new project to mine the floor of the Pacific Ocean. The UK arm of Lockheed Martin will be extracting rocks rich in gold, copper and other minerals four thousand metres below the surface, in an area twice the size of Wales. It’s controversial with environmental groups expressing concern that sensitive marine life will be destroyed………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Higher demand from China, the biggest copper user, may help to absorb surplus metal this year as the market shifts to oversupply, according to a mining studies group in Chile, the world’s largest producer.
Copper supply will outpace demand by between 100,000 and 200,000 metric tons in 2013, Juan Carlos Guajardo, executive director of the Center for Copper & Mining Studies, said in a telephone interview from Santiago today. The copper market is bracing for a first surplus in four years on increased output from new and existing mines, the International Copper Study Group estimates………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Gold dropped below $1,580 per ounce Thursday morning, while gold in Sterling and Euros fell back below £1,060 and €1,225 an ounce respectively, extending losses from a day earlier that following stronger-than-expected US retail sales data.
Like gold, silver drifted lower this morning, dipping below $28.60 an ounce, while other commodities were broadly flat and European stock markets ticked higher. U.S., U.K. and German government bond prices fell, while the U.S. Dollar Index, which measures the Dollar’s strength against a basket of other currencies, rose to its highest level since August………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Industry’s widening use of silver is expected to average more than 483 million ounces (Moz.) from 2012 to 2014, a level 53 percent greater than the average annual industrial fabrication demand of 313.4 Moz from 1992-2001.
Speaking last week at the annual Prospectors & Developers Association of Canada convention in Toronto, Michael DiRienzo, Executive Director of the Silver Institute, said that demand for silver is broadening in many directions………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Silver has been trading sideways so far in 2013, but what will the rest of the year bring? Will 2013 be the year silver prices break out or crash and burn? What is a sustainable silver price for mining companies and where will the metal come from to supply the next generation of industrial and investment demand?
Most important, how can investors make money off this volatile sector? These were the burning questions The Gold Report took to analysts, money managers and heads of silver mining companies. The answers may surprise you. In an impromptu poll at The Prospectors & Developers Association of Canada Convention (PDAC) in 2012, attendees were decidedly positive as they cited increased demand for silver from sources such as electronics, solar panels and medical uses, in addition to use as an investment vehicle………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

The Los Angeles Fire and Police Pension System, with about $15.7 billion in assets, is allocating about $785 million for commodities, its first investment in the asset class.
The fund will allocate 5 percent of its money over a two- year period for investments including commodity-related futures, stocks and private equity, Tom Lopez, the fund’s chief investment officer, said in a telephone interview from Los Angeles. The private-equity portion is already being invested, he said………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Commodities are once again on the rise this month as fear over Chinese growth is waning and the U.S. is now exhibiting a pretty robust recovery. As a result, most commodity ETFs and ETNs tracking the broad market have added some solid returns in the first half of March trading.
This trend is expected to continue, according to a recent report from Goldman Sachs ( GS ). The analysts at Goldman Sachs believe that the broad commodity markets - as represented by the S&P GSCI Enhanced Commodity Index - will advance 3% over the next 12 months………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Commodity exchange market is expected to start operations in Tanzania in June, next year, officials told the ‘Daily News’ in Dar es Salaam on Wednesday.
The Capital Market and Securities Authority (CMSA) Chief Executive Officer, Ms Nasama Massinda, said that a special committee headed by the Permanent Secretary in the Prime Minister’s Office has been set up to fast-track the matter. “The committee will monitor the roadmap for the creation of the commodity market and speed up the process,” Ms Massinda said………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

They tend to have high volatility as their supply can easily be affected by the weather or news that deals with their extraction or transportation. Traditionally, commodities have been one of the most volatile assets in the financial markets.
Copper: As an input for several key industries, copper is a high demand commodity by the industrialized nations around the world. When major economies like China and Europe begin to experience increased manufacturing capacity, the prices of copper will also rise in tandem. Therefore, look for reports relating to GDP’s growths and Purchasing Managers’ Indexes (PMI) to identify opportunities in this commodity………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

The South Korean won was the top decliner among emerging-market currencies Thursday, dragged down by continued geopolitical tensions and after the country’s central bank kept rates on hold.
Heightened rhetoric from North Korea in recent weeks has left investors on edge about South Korean assets, particularly the won. A rise in tensions between the two Koreas on Thursday focused on an island that the North attacked in 2010, as the South’s prime minister visited the island and North Korean media reported that leader Kim Jong Eun had directed a live-artillery drill close to it. Earlier this week, North Korea “declared invalid” the Korean War armistice………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Carbon prices shot up by as much as 20 per cent after a whisker-thin vote in the European Parliament in favour of propping up the world’s biggest emissions trading scheme.
The 292-289 vote on Thursday proved a brief piece of welcome news for the ailing EU market, which has suffered a disastrous meltdown over the past year thanks to the weak economy and a glut in the supply of carbon allowances………………………………….Full Article: Source

Posted on 15 March 2013 by VRS |  Email |Print

Right now, the carbon markets of the future are under construction in all corners of the world. China is determined to pursue low-carbon development and is embracing the market as the most efficient way to do so. Wang Shu, the deputy director of China’s National Development and Reform Commission, told us this week that he sees the “magic of the market” as the most efficient way to drive China’s green growth.
Five Chinese cities and two provinces are piloting emissions trading systems with the goal of building a national carbon market. Chile is exploring an emissions trading system and focusing on energy efficiency and renewable energy. Mexico is developing market-based mechanisms in energy efficiency that could cut its emissions by as much as 30 percent by 2020. Costa Rica is aiming for a carbon-neutral economy by 2021………………………………….Full Article: Source

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