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Commodities Briefing 29.Aug 2013

Posted on 29 August 2013 by VRS |  Email |Print

China will do away with licence requirements for imports of some commodities, including refined copper, stainless steel and natural gas, from September 1 as part of broader moves to cut red tape and open up its commodities markets.
Products exempt from the import license requirement also include semi-finished copper products, scrap copper, scrap aluminium, steel, steel products and some agricultural products, according to a statement posted on the Ministry of Commerce website on Tuesday………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

The decade-long commodity-price boom has come to an end, with serious implications for global GDP growth. And, although economic patterns do not reproduce themselves exactly, the end of the upward phase of the commodity super-cycle that the world has experienced since the early 2000’s dims developing countries’ prospects for continued rapid catch-up to advanced-country income levels.
Over the year ending in July, The Economist’s commodity-price index fell by 16.5% in dollar terms (22.4% in euros) with metal prices falling for more than two years since peaking in early 2011. While food prices initially showed greater resilience, they have fallen more sharply than those of other commodities over the past year. Only oil prices remain high (though volatile), no doubt influenced by the complex political events in the Middle East……………………………………….Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

Oil prices surged on Wednesday morning with US crude leaping to a two-year high as investors prepared for a possible western military strike on Syria.
Although Syria is not a major oil producer or transit point, investors fear that western intervention there could spill over into the rest of the region, potentially affecting oil supplies from other producers such as Iraq………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

As the likelihood of an attack by Western powers on Syria continues to roil the oil markets, here are a few numbers that we offer as background: Syrian production: It’s about 50,000 b/d. A few years ago, it was about 350,000 b/d.
Days’ cover: This figure is just for OECD nations, which consist of 34 key countries with market economics. Days’ cover is a statistic published by the International Energy Agency — an arm of the OECD — noting how many days of inventories would cover consumption if supply dropped to zero. In the second quarter of this year, days’ cover held by industry stood at 59 days, which is at the high end of recent estimates………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

Oil prices are spiking on Syria tensions and oil outages across the broader region, but that doesn’t mean gasoline prices will follow suit. U.S. oil prices have soared nearly 8% in the last week alone, touching $112.24 a barrel in overnight trading — their highest level in over two years.
The fear is that Western intervention in Syria over that country’s suspected use of chemical weapons could engulf major oil producing countries in the region such as Iraq or Iran………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

The Organization for Petroleum Exporting Countries (OPEC) in its Annual Statistical Report announced that the volume of Iran’s oil reserves amounted to 154.58bln in 2012, showing an increase of more than 1.8 percent as compared with the figures in the year before.
Venezuela with 297.735bln barrels of crude and Saudi Arabia with 265.85bln barrels precede Iran in the OPEC’ list as the states holding the largest and second largest crude reserves. According to the OPEC report, the world’s crude reserves stood at 1.478211trln in 2012, showing a 0.9 percent increase compared with the preceding year………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

The OPEC announced that Iran has exported over 2.1mln barrels of crude per day on an average basis last year. The value of Iran’s oil export in the said period stood at $101.468, it added. According to oil cartel, Iran was the world’s sixth oil exporter in 2012.
Iran exported 1.839 million barrels of oil per day to Asia, 162,000 barrels to Europe and 101,000 barrels to Africa in 2012, the report said. Earlier this month, Iran’s OPEC Governor Mohammad Ali Khatibi announced that Iran’s crude export has exceeded the figures envisioned in the country’s budget bill………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

Gold prices surged to an all-time high in India on Tuesday as the rupee descended to record lows against the dollar yet again, and safe-haven investment in the yellow metal increased globally.
Gold prices closed at Rs32,585 per 10 gram, up 2.5% from Monday’s levels, according to the Bombay Bullion Association. Prices inched up internationally as well by 1% to $1,421 on worries of rising risk to global growth from expected tapering of quantitative easing in the US starting next month………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

Gold and silver prices rose to their highest levels in several months as the precious metals regained some of their appeal as havens amid the threat of western military action in Syria.
Gold prices touched a fresh three-month high of $1,433.31 a troy ounce while silver hit a four-month high of $25.08, although both metals had given up much of the day’s gains by late afternoon in London………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

It is natural to compare the current precious metals’ bull market with that of the 70s, since there are many similarities between the two. Below is a comparison which illustrates some of the similarities between the two bull markets:
After the peak and correction, the price eventually went higher to a far greater peak, which in the case of the 70s chart was the end of the bull market. Knowingly, or unknowingly, these similarities are probably the reasons why many think that the gold and silver bull markets ended in 2011, with the peaks in that year………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

As gold bullion prices declined in the period from April to June of this year, so did silver prices. And just like gold bullion, the bullish case for the white metal’s prices continues to build.
Demand for the white precious metal is not just robust; it is rising. The chart below compares sales of silver coins at the U.S. Mint in the months of January to July of 2012 and 2013. The demand for the precious metal is strong, having risen by 50% in the first seven months of this year compared to the same period a year ago………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

If you thought you had rare earth element mining all figured out, think again. Dr. Anthony Mariano and his son, Anthony Jr., work as geological consultants to many rare earth companies, and say even they have more to learn. But if you’re looking for a sector that will nurture your inner nerd, rare earth elements may be the play for you.
The buzz of the high-demand years was a result of political or economical implications surrounding REEs, which were largely controlled by China. Investors then became interested in REEs. Now the drop in REE prices has changed the game. At this point, investors are not getting as involved, so companies that were attempting to explore potential deposits can’t. You need a budget for that. But a lot of our technology requires the use of REEs………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

Commodities have shown extreme weakness this year while many other sectors have held up quite well. However, recent trends in the space have been encouraging, as most commodities have rebounded from their lows or are even moving higher.
This is especially true with the industrial metals that have attracted investor interest in the past couple of weeks, leading to huge inflows. China, the major driver of industrial metals, is showing signs of stabilizing with strong trade data leading many to feel more bullish on the space………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

Broad commodities are showing an impressive comeback after a steep fall earlier this year, and have caught enough investor interest of late. This is particularly true given recent moves in the space, as many metals have been rebounding from their lows or moving higher.
In the precious metal world, gold climbed 13% from its June low while silver gained 14% last week, marking the biggest weekly gain in almost five years. Base metals like copper, aluminum, and zinc are also trending upwards……………………………………….Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

In previous three-month periods where gold has lost 24 per cent or more, it has rebounded by an average of 20.7 per cent in the next three months. Gold investors with a high conviction in the asset class were rewarded for their patience this week, following a resurgence in the price of the precious metal.
The commodity first fell sharply in April, when investors began to sell out of it to take advantage of the bull run in equities. The relatively benign level of inflation so far this year also lessened the attractiveness of gold as a hedge………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

The Canadian currency weakened as speculation America and its allies will take military action against Syria boosted the U.S. dollar’s appeal as a haven.
Canada’s dollar rallied earlier versus most major peers as crude oil, the country’s largest export, touched its highest level in more than two years amid bets military operations may disrupt Middle East oil supplies. The loonie, as the currency is called, declined against the greenback before data this week forecast to show the U.S. economy expanded in the second quarter while Canada’s contracted in June………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

If India’s currency were a baseball team it would be a cross between the basement-dwelling Houston Astros and the soon-to-be basement-dwelling New York Mets. Since January the rupee has plunged 20 percent, and in the last three months it’s dropped 13.1 percent, the biggest such decline in nearly 18 years. On Wednesday India’s currency posted its biggest one-day drop ever and now sits at a record low against the dollar.
Inflation is running around 10 percent, the worst of any large economy, and the government now has to pay buyers of its 10-year notes a whopping 8.96 percent interest………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

Brazil’s decision to offer up to $40 billion in currency swaps by year-end has been widely praised as a smart way to stabilize its foreign exchange market. The bold move announced last week, which doubles the amount of outstanding currency swaps in Brazil, has put a lid on the real’s sharp depreciation without burning a single dollar of the country’s foreign reserves.
It also targeted the source of market stress directly: the need for corporate insurance as companies rushed to futures markets to hedge their dollar-denominated debt………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

European Union emission permits advanced to the highest in seven weeks on speculation that crude oil’s surge to a two-year peak may spur demand for carbon allowances. Carbon for December gained as much as 3.7 percent to 4.72 euros ($6.31) a metric ton on London’s ICE Futures Europe exchange. The contract closed up 1.5 percent at 4.61 euros a ton, the highest since July 3.
West Texas Intermediate crude rose as much as 3 percent in electronic trading on the New York Mercantile Exchange, its highest since May 2011, on concern that conflict in Syria may threaten oil supplies from the Middle East………………………………………..Full Article: Source

Posted on 29 August 2013 by VRS |  Email |Print

Have you heard of carbon trading? Where a country or region sets a cap for its emissions, and then uses permit trading to seek out the cheapest cuts. I’m guessing you have. But what about the carbon in trade? The carbon that moves around the world in the form of fossil fuels and finished products. Heard of it?
When we talk about carbon emissions we invariably talk about where emissions occur due to fossil fuel combustion. But carbon moves around a lot. Oil moves from the Middle East to Europe before being used and products purchased in the US are often made in China. These movements have important implications for climate policy………………………………………..Full Article: Source

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