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Commodities Briefing 18.Apr 2013

Posted on 18 April 2013 by VRS |  Email |Print

Commodity prices have been falling since September, culminating in a rout over the past two weeks. That is a classic warning for the global economy. It is becoming ever clearer that the roaring boom in global equities since last summer has priced in an economic recovery that does not in fact exist.
The International Monetary Fund has had to nurse down its global growth forecasts yet again. We are still stuck in an old-fashioned trade depression, with pervasive over-capacity in manufacturing plant and a record global savings rate of 25pc of GDP…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

Commodity traders expect the industry to become more transparent amid the rising need for financing and regulatory pressure, even as some merchants remain closely held, company executives said.
Physical commodity traders raised $19.9 billion in equity and debt last year, up from $10.6 billion in 2010 and $1 billion in 2002, according to First Reserve Corp., a private equity energy firm. Senior executives at Cargill Inc., the largest closely held U.S. company, and Trafigura Beheer BV, which buys and sells oil and other commodities, said trading companies’ characteristic secrecy will probably diminish over time as they tap capital markets to grow their businesses…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

Copper is just one of the commodities that has shown major weakness this week, and today it fell to the lowest level since October 2011.
Some worry that this could be bad news for the stock market. After all, the metal is sometimes called “Dr.Copper,” because it is thought to check up on the market’s health. The checkup is not going so well. Do you think copper is delivering a warning about stocks, or should investors not sweat it?………………………………..Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

The sharp drop in gold prices in the past few trading days has overshadowed some general weakness in the commodity sector and coupled with lower-than-expected U.S. inflation data, some market watchers are beginning to talk about the possibility of deflation.
Gold rebounded slightly on Tuesday and Wednesday from the sharp drop in prices on Friday and Monday, but still remains 17% off the high for the year and 28% from the all-time high, based on the June Comex contract’s settlement Tuesday of $1,387.40 an ounce. But other commodity markets are also weaker for the year, including crude oil, down 5%; copper, down 10%; and corn, down 8%, all based on Tuesday’s settlements for the most-active futures contracts…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

The Commodity Futures Trading Commission may be taking a deeper look at the price of gold, after gold futures on Monday suffered their biggest one-day decline since the 1980s. At least that’s the take of Democratic CFTC Commissioner Bart Chilton. Chilton told Bloomberg TV Wednesday that the drop doesn’t necessarily mean “anything nefarious” happened but whenever something like this happens “we got to look at it.”
“When you see such sharp move that is obviously something that raises our concern and we look at the trades and see what is going on,” he said…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

Sales of gold bullion and gold chains are boiling over as Sydney buyers rush to buy at bargain prices of around $1332 an ounce, about $200 cheaper than four days ago and $400 cheaper than when the price peaked two years ago.
Not since the global financial crisis have the phones rung so hot from gold buyers, said Jordan Eliseo, chief economist of the Australian Bullion Company on Pitt Street…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

World gold prices will pick up over time as a global economic recovery gains traction, a senior official of China’s $482-billion sovereign wealth fund said on Wednesday.
Gold has fallen about 18 percent so far this year after an unbroken 12-year string of gains. It rebounded to $1,381.80 an ounce on Wednesday after tumbling to $1,321.35 the previous day…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

Bank of Canada Governor Mark Carney said plunging gold prices this week aren’t necessarily a clear signal about the prospects for the global economy, saying base metals tend to be a better guide.
“You had a curious situation this week where there was an adjustment at a time when there was some surprise in economic data, so I would say that that’s more reflecting the specific market dynamics within that market,” Carney said at a press conference today in Ottawa…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

A survey by of 49 publicly traded companies accounting for 60% of world gold output, which was conducted by New Jersey’s John Tumazos Very Independent Research, estimates that one-third of gold mines have pretax costs of $1,250 to $1,750 per ounce.
“The selloff from $1,900 in September 2011 to nearly $1,350 on April 15th places prices squarely within the costs of the highest one-third of mines,” wrote long-time gold analyst John Tumazos…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

Sanctions-hit Iran considers the “logical” price of crude to be around $100 to $120 a barrel, its oil ministry said on Wednesday, ahead of an OPEC meeting next month. “The logical price for oil is around 100 and 120 dollars a barrel,” ministry spokesman Alireza Nikzad said.
Oil prices were mixed in trade on Wednesday. New York’s main contract, light sweet crude for delivery in May, fell 10 cents to $88.66 a barrel but Brent North Sea crude for June was up 11 cents at $100.20. The Brent contract on Tuesday fell below the $100 mark for the first time since July…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

Iranian Oil Minister Rostam Qasemi says crude prices are unlikely to fall below USD 100 a barrel and that the downward trend has stopped. “We forecast that the price of oil will not fall below USD 100 a barrel,” Qasemi told reporters on Wednesday on the sidelines of an Oil and Gas Show in Tehran.
“…oil prices below USD 100 per barrel is not reasonable and it’s an unreasonable price,” he said. Qasemi added that the Organization of Petroleum Exporting Countries (OPEC) would envisage calling an emergency meeting if prices fall below USD 100…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

The fall in oil prices from this year’s high since mid-February shows that the market is sufficiently supplied, said Maria van der Hoeven, executive director of the International Energy Agency, adding that the slide may help the global economy.
Brent crude sank below $100 a barrel on Tuesday for the first time in nine months after data from China and the United States weakened the outlook for demand. The benchmark has mostly held above $100 a barrel since 2011 on supply worries that started with the civil unrest in Libya and then were boosted by escalating tensions over Iran’s nuclear programme…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

OPEC will probably cut output if Brent prices keep trading below $100 a barrel because that’s less than what many member countries need to balance their budgets, an inter-governmental Arab energy lender said.
Oil prices must average $99 this year for the 12 members of the Organization of Petroleum Exporting Countries to be able to balance their national budgets, said Ali Aissaoui, a senior consultant at the Arab Petroleum Investments Corp., or Apicorp…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

The fall in oil prices from this year’s high since mid-February shows that the market is sufficiently supplied, said Maria van der Hoeven, executive director of the International Energy Agency, adding that the slide may help the global economy.
Brent crude sank below $100 a barrel on Tuesday for the first time in nine months after data from China and the United States weakened the outlook for demand. The benchmark has mostly held above $100 a barrel since 2011 on supply worries that started with the civil unrest in Libya and then were boosted by escalating tensions over Iran’s nuclear programme…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

In February, against all basic economic sense, Indian Finance Minister Palaniappan Chidambaram announced a new tax on commodities futures trading as part of his 2013-14 national budget. Should it pass, the tax would apply to all non-agricultural items, including copper and natural gas.
India’s commodity futures market, just an idea in 2003, has become one of the world’s leading exchanges in precious metals and energy, with a total turnover of 181 trillion rupees ($3.35 trillion) in the 2011-12 fiscal year. Mr. Chidambaram’s transaction tax would cripple the hedging and price discovery functions of this market. It would also cause job losses across India’s commodity trading network—all for little budgetary gain…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

In just a short time of operations, commodity trading floors in Vietnam have been facing continued difficulties with trading volume becoming less and less, with any solution still not in sight.
Earlier, departments and organizations inside and outside the country and the Ministry of Industry and Trade had eagerly taken part in developing commodity trading floors in Vietnam. As a result, the country had many trading floors established, such as Buon Ma Thuot Coffee Exchange Center, Vietnam Commodity Exchange and Sontin Commodity Exchange…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

The collapse of Europe’s latest attempt to breathe life into its moribund carbon trading scheme is a hammer-blow for proponents of a global carbon trading system. So much has gone wrong with Europe’s scheme that a global trading regime may be out of reach for decades, even if the carbon price recovers.
Europe launched its trading system in 2005, and it quickly became the world’s carbon trading hub, for European permits, but also for ones generated in other markets, including the world’s largest issuer of permits, China…………………………………Full Article: Source

Posted on 18 April 2013 by VRS |  Email |Print

With governments failing to promote green energy, top scientists say the drive to keep temperature rise below 2C has stalled. The development of low-carbon energy is progressing too slowly to limit global warming, the International Energy Agency (IEA) said on Wednesday.
With power generation still dominated by coal and governments failing to increase investment in clean energy, top climate scientists have said that the target of keeping the global temperature rise to less than 2C this century is slipping out of reach…………………………………Full Article: Source

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