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Commodities Briefing 15.Aug 2013

Posted on 15 August 2013 by VRS |  Email |Print

China’s days as the world’s Happy Meal economy are over. They’re not interested in making your shoes. They’re interested in making the lithium batteries that power your Prius. It’s not that China doesn’t want to make widgets. They still do, and they still will. Where else on Earth can you find half a billion people looking for work?
But the old export driven China is moving inward towards a more consumer oriented society. Every China investor knows this. As China rebalances its economy, there will be growing pains. Not only will there be growing pains for the Chinese economy, but also for commodities exporters like Brazil and South Africa………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

At a recent annual retreat of elite Wall Street money managers, the hosts reported on how well last year’s attendees predicted various economic measures. Forecasting is notoriously difficult, and nobody guessed how high stock prices would be today. But the most interesting miss was that the group was way too low on oil prices. Should we be surprised?
Oil prices are hard to forecast because they are highly sensitive to shocks in both global demand and supply. Forty years ago, historic disruptions to global oil supplies destabilized the world economy for a decade………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

The U.S. is the most fully developed petroleum transport nation – we have crude oil, natural gas, gasoline, and diesel and jet fuel in transit 24/7/365 – mostly in pipelines. Lives lost are rare and environmental damage while awful at leak locations is a tiny amount of the total product moved.
The horrible truth, and one might pray for the souls lost last month in Quebec, is train transport is far more dangerous. The Quebec train disaster killed at least 38 people, and counting. No pipeline failure has ever come close to this level of human death and suffering………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

The recent reforms that President Enrique Peña Nieto plans to introduce to Mexico’s energy sector, has the potential to boost the country’s oil output to 1980 levels, whilst at the same time reducing US dependence on OPEC, and creating more stability in the global market.
Mexico was the first country in the world to take full control of its oil industry, and one of the major parts of the new reforms will see state-owned Pemex’s monopoly reversed, allowing, for the first time in more than 50 years, foreign companies to invest in exploration and production ventures in the country………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

One of Wikileaks’ most celebrated revelations, in 2011, was a confidential mail from a US diplomat in KSA (Kingdom of Saudi Arabia) stating that he had been convinced by a Saudi oil expert named Sadad al-Husseini using data from as far back as 2005 that the nation’s oil reserves are overstated by nearly 40%. The diplomat was certain that KSA could not “keep a lid on oil prices”.
To be sure, there was no need to consult Wikileaks or the State Dept to hear that – for at least a decade Matthew Simmons, author of books including Twilight in the Desert: The Coming Saudi Oil Shock published in 2005 has worked the theme of Saudi exaggeration or lying about its oil reserves………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

Crude oil is far from being one homogenous substance. Its physical characteristics differ depending on where in the world it’s pulled out of the ground, and those variations determine its usage and price.
The Energy Information Administration (EIA) puts it succinctly: “not all crude is created equal.” Some has a lot of sulphur, and it’s called sour. Oil with less sulphur is called sweet. Crudes also vary in how dense they are. Sweet, light crude is the most valuable type of oil. Sour, heavy oil fetches the lowest prices. Here’s why:……………………………………….Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

Gold’s swift fall has ravaged hopes and livelihoods around the world – from the 1 million miners in Ghana who scour in the dirt, to thousands of executives and geologists at mining exploration firms that are running out of cash in Vancouver.
Gone too are jobs for auditors, bankers and analysts in the finance capitals of Toronto and London. Investors who bet big and lost are shifting assets elsewhere and scaling back retirement plans………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

The third increase in import taxes on gold this year by India, the world’s biggest user, is set to boost smuggling ahead of the festival and wedding seasons as official imports halt on central bank curbs, a trade group said.
Gold premiums in India have jumped to a record after banks and traders suspended imports since the Reserve Bank of India made it mandatory on July 22 for shippers to set aside 20 percent of shipments for re-export as jewelry and the increase in tariff to 10 percent from 8 percent will further crimp supplies, said Haresh Soni, New Delhi-based chairman of the All India Gems & Jewellery Trade Federation………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

On Tuesday, August 13, Indian silver rose 5.3 percent to finish as the day’s biggest mover. US silver rose 4.2 percent. One of the day’s biggest movers was Japanese silver which rose 3.5 percent. After a 1.8 percent increase, Chinese silver finished the day higher too. Indian gold bullion saw its price rise 1.8 percent.
The price of US gold bullion increased 1.7 percent. Japanese gold bullion gained 1.3 percent. Chinese gold bullion finished the day up 0.5 percent. Japanese platinum bar prices inched up 1.3 percent. Following two days of rising prices, the price of US platinum bar dropped 0.4 percent. The price of Chinese platinum bar finished the market day up 0.3 percent per gram………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

All the signs are that silver’s long correction is now over and that it is beginning a major uptrend. The Commercials have cleared out most of their short positions, for a massive profit of course, meaning that the slate is wiped clean for the game to start over anew.
Public opinion and sentiment towards silver remains rotten, which is exactly what you expect to see at a major low, with the investing public at large, having been duly “educated” by the mainstream media, harboring a negative attitude to silver and if anything inclined to short it………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

According to Reuters, Fed stimulus has helped fuel the S&P’s gain of nearly 19% in 2013. The Fed is seen as moving toward reducing its $85 billion in monthly bond purchases, causing some investors to take a step back from stocks.
The S&P 500 index dipped on Monday, extending losses from Wall Street’s worst week since June last week. Yesterday, the Standard & Poor’s 500 Index was down 0.12% and closed at 1,689.47 level. And what has happened with silver in the recent days?……………………………………….Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

Platinum and palladium prices are likely to gain in the coming months as South African supply fall again due to widespread labor disputes and strike action, problems with the national electricity infrastructure and surging energy costs.
These significant challenges have created numerous disruptions to the mining industry in South Africa and greatly reduced domestic precious metal production in 2012 and this has continued in 2013. Geological constraints and declining ore grades may also be leading to reduced production………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

Even as global resource stocks have had a stellar run-up in the recent weeks, driven by signs of stabilization in China’s economy, cheap valuations and short covering, questions are building over the sustainability of this trend.
Shares of large-cap mining companies such as Australia-listed BHP Billiton and Rio Tinto and U.K.-listed Vedanta have rallied between 11 percent and 14 percent since mid-July………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

Thanks to a recent bout of commodity strength, mining stocks have been surging higher lately. Most investors have been focused in on gold mining securities though, as these have taken the lion’s share of interest as of late.
This is for good reason too, as gold mining ETFs like GDX have seen double digit percentage increases over the past week, while others, like the junior gold miners ETF ( GDXJ ) , have surged by over 20% in the past week alone. Given these kinds of moves, it is easy to see why investors have been so focused on the now-surging space in recent trading……………………………………….Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

Clean energy companies have rebounded in 2013 and the sector is climbing higher with President Obama’s “Climate Change Action Plan” in focus. The latest IEA report supplies data that supports a further run-up in clean energy exchange traded funds.
“The International Energy Agency’s (IEA) new policies imply that 57% of power capacity added during 2013-2030 will be from clean renewable resources (including large hydro). In fact, BNEF (Bloomberg New Energy Finance) estimates that wind and solar will take up the largest share of new power capacity added in terms of GW by 2030, accounting for 30% and 24%, respectively,” Zacks Equity Research wrote………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

The California Public Employees’ Retirement System, the largest U.S. pension fund, reported the value of its commodity holdings climbed 1 percent in June from the previous month.
The fund held $1.207 billion in commodities as of June 30, the most-recent data available, or 0.5 percent of the total assets listed at $257.876 billion, according to a monthly report posted on the fund’s website for next week’s investment committee meeting. That’s up from $1.195 billion on May 31, or 0.5 percent of total assets of $261.643 billion, a separate report showed………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

The spectacular fall in the rupee has been grabbing market attention in recent months, but the focus could soon shift to the Indonesian rupiah, which Credit Agricole warns could suffer the same fate as the embattled Indian currency.
Dariusz Kowalczyk, senior Asia ex-Japan strategist at Credit Agricole, said Indonesia’s slowing growth and rising inflation, which exceeds India’s, as well as an increasing current account deficit and low foreign exchange reserves, are starting to resemble the problems faced by India’s economy………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

Trend in the futures of soybean on India’s NCDEX is looking positive for the intra-day and further upside is expected in the near term as well. A bounce back is in the offing, according to analysts.
Investors are advised to buy on dips. “Support for the commodity is seen at 2980 while resistance at 3070 level. Buy around 3020 with stop loss of 2980 for the target of 3070,” said Milan Shah, Research Analyst with Commodity Online………………………………………..Full Article: Source

Posted on 15 August 2013 by VRS |  Email |Print

Carbon trading via brokers including ICAP and GFI Group plunged to its lowest since at least January 2011 as banks scaled back buying and selling amid tighter regulation and a record glut of permits.
The volume of EU allowances handled by six members of the London Energy Brokers’ Association dropped 61 per cent in July to 84.1 million metric tons from a year earlier, according to an Aug. 8 report by the lobby group. Trading in Certified Emission Reductions, the United Nations-regulated offsets, plunged 81 per cent. Activity on ICE Futures Europe in London, the biggest exchange for carbon contracts, slid 19 per cent in the month………………………………………..Full Article: Source

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