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Commodities Briefing 06.Mar 2014

Posted on 06 March 2014 by VRS |  Email |Print

The Hong Kong Exchange is moving into commodity trading this year to cater to the changing needs of “China Inc.,” the bourse’s exuberant chief executive Charles Li told analysts and reporters in Hong Kong on March 4. “China’s commodity business needs to internationalize and we’ll be here,” he said, with “new products, new members and new partners,” including potential tie-ups with the mainland’s fast-growing commodity trading platforms.
His announcement is the latest sign that after investing heavily around the world to buy and mine the world’s raw materials, China’s next step is to plan an even bigger role in trading them………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

U.S. equities are flat on Wednesday following Tuesday’s big gains. Mark Newton, chief market technician at Greywolf Equities, told TheStreet’s Debra Borchardt that commodities might be the better place for investors to be.
Newton said he prefers to use the Continuous Commodity Index (CCI) over the Jefferies Commodities Index ETF (CRB), since the latter is too heavily weighted toward energy. The CCI has retraced approximately one-third of 2011’s big move lower and has really started to break out over the past several weeks, he said………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

After three years of weakness, commodity prices are finally showing some life. The new upward move has been reflected in commodity indexes such as the Thomson Reuters/Jefferies CRB commodity index, which provides dynamic representation of broad trends in overall commodity prices.
The two big gainers are coffee and natural gas, which are benefiting from a drought in Brazil and an unusually cold winter, respectively. Apart from the big gains in the agricultural and energy sector, the broad majority of food commodities are also reaching new highs. Precious metals are also showing strength since the start of the year………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Iraq is reclaiming its rank as the world’s fastest-growing oil exporter, cushioning consumers from Libyan supply outages for now and, perhaps, reviving OPEC market share rivalries down the road.
Despite worsening violence due to spillover from the war in Syria, Iraq - already OPEC’s second-largest producer - is likely to post one of the biggest annual output jumps in its history as BP, Exxon Mobil and other companies tap its southern fields, which are untouched by the unrest………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

In a deal that could eventually lead to lower gas prices for Europe, Italian oil and gas giant Eni has renegotiated the terms of a long-term gas supply agreement with Norway’s Statoil and suspended a lawsuit over high gas prices.
The new deal would see Eni pay market prices for gas, rather than inflated prices linked to oil—savings that would eventually make their way to European consumers………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Barrick Gold Corp, the world’s largest gold producer, said prices for the metal could reach US$2,000 an ounce within two or three years. “I think ultimately we are going to see gold go back up and challenge the highest we saw a couple of years ago and certainly push up through US$1,500 an ounce within the next year,” the company’s chief executive Jamie Sokalsky told Bloomberg.
“Within two or three years, I wouldn’t be surprised to see gold back up towards U$2,000.” The Canadian gold producer could do with some good news after last month posting a loss and US$2.8bn write-down for the fourth quarter as it lowered its gold reserves………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

HSBC — the multinational banking and financial services company — in its latest released gold analysis report has stated that physical demand for jewelry, coins and bars from China and other emerging markets will turn out to be the key driver for gold prices in 2014. The report further states that rampant outflows from gold Exchange Traded Funds (ETFs) may stabilize during the year.
According to HSBC, investment demand had fuelled the rally in gold prices during the past decade. But this investment demand has largely dried up and is no longer defining gold price movements. Instead, rising demand for physical gold out of China and other emerging economies has become the key driver of bullion prices in 2014………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Nomura Securities has raised its 2014 gold price forecast to US$1,335/oz this year from the previous US$1,138/oz as the speed of last year’s price decline “brings forward the start of the next cycle.”
Gold appears set to recover “like a phoenix regenerating from its ashes,” RBC analysts wrote in a research note cited by financial magazine Barron’s. Nomura follows UBS and RBC Capital Markets, both of whom recently raised their gold price forecasts. UBS now sees gold averaging US$1,300/oz this year while RBC has set an average of US$1,400/oz………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

China’s net silver imports dropped sharply by 37% year-on-year last year, Citi believes the decline to continue in 2014. The New York based bank also looks for by-product output from mining operations for other metals to drive up silver supply by 2% in 2014.
Citi also looks for silver prices to average $20.40 an ounce level this year. The metal hit a nine-week high of $21.98 in January, with prices buoyed by the uptick in gold, driven by concerns about China, geopolitical turmoil in Ukraine and mixed U.S. economic data………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Kitco News meets with SilverCrest President & COO Eric Fier about the expansion of the company’s Santa Elena mine as well as Sandstorm’s recent bid to buy 10% of SilverCrest’s underground gold. Tune in for our continuous coverage of PDAC. Kitco News, March 5, 2014.……………………………………….Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Nickel prices settled above $15,000 per tonne for the first time since June 2013 during the official session on the London Metal Exchange on Wednesday March 5. The slight easing of tensions in Ukraine helped to bolster all the base metals, while nickel in particular was supported by the triggering of stops and improving fundamentals.
“At the moment, on nickel, there are concerns about concentrates shipments from Indonesia,” a category I trader told Metal Bulletin. “People were talking about China having over a year’s supply, but I think that’s been slightly overdone………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

MetalMiner’s monthly copper price index dropped 1.1 percent for March, while we’re seeing an opposite trend in other commodities markets. The LME 3-month price went down 0.5 percent, from $7,061 to $7,026 per metric ton. Copper seems not capable to reach levels above $7,500 per metric ton as it remains under an overall downtrend.
Copper is an economically sensitive commodity and it serves as a benchmark for the industrial metal sector, which still looks pessimistic. What is especially interesting is that the rest of the commodity groups are finally showing strength since the beginning of the year………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Are Treasuries and copper sending us a message that’s different from what the stock market is telling us? I think so. As stocks continue to hit record highs on a regular basis, Treasury yields have been sinking — an indication that bond prices were climbing. A number of investors were seeking the safe haven of Treasuries, despite the fact that stock prices were soaring. Why?
Although we have seen the demand for Treasuries surge since the beginning of the Crimea crisis, a look at the chart for the ten-year Treasury yield depicts a massive, fully-formed, head-and-shoulders pattern, which would suggest that the decline in Treasury yields has just begun. Also, since the beginning of 2014, Treasury yields have been in a steady downtrend………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

In fact, M&A activity in the Asia Pacific region, now account for 61% of all deal value globally, compared to only 19% in 2011, according to PwC’s new report, ‘Metals Deals: Forging Ahead 2014 outlook and 2013 review’.
Globally, deal numbers fell 30% year on year with volume touching 2009 levels. In value terms, deal sizes fell 24% year on year but the dip was not as sharp as the slide in volumes. In 2013, total deal value in metals space was $34.8billion, significantly higher than $15.1 billion in 2009. Low growth combined with continued global overcapacity in production does not augur well for strong recovery in metals M&A in 2014, the report said………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Index funds became popular over the last four decades because they’re simple, conservative and low cost. A different kind of exchange-traded fund is drawing record cash by promoting better returns with the same stocks.
Known by names such as smart beta and fundamental indexing, they weigh stocks differently — by focusing on dividends or sales, for instance. Supporters are quick to note that some methods, such as eliminating price rankings, result in returns that beat the Standard & Poor’s 500 Index over the last five years. They’re slower to note that fees can be 10 times higher than a traditional ETF………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

The economic backdrop for the consumer staples sector remained more or less weak in 2013 due to a difficult consumer spending environment. Middle-class consumers struggled to cope with rising gas prices, delayed income tax refunds and higher payroll taxes. In addition, difficult operating conditions in Europe and a slowdown in some major emerging countries threatened growth.
Consumer staple companies have been witnessing sluggish growth in the developed markets, due to market saturation, which along with lower disposable incomes and increased competitive activities have added to their woes. As a result, many of them have been looking at faster growing emerging markets………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Gone are the days when uranium stocks and the exchange traded funds are being subjected to second-class treatment. In 2011, in the wake of the nuclear disaster in Fukushima, Japan, such treatment was justified. Not this year.
The Global X Uranium ETF is up 24.4% year-to-date, making it one of the top non-leveraged ETFs this year. On Tuesday, URA surged 4.1% on volume that was five times the daily average. Not surprisingly, URA’s technical outlook is improving in dramatic fashion………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

World largest cotton exporter USA and consumer China have announced fresh farmer support policies ahead of planting season this year. International Cotton Advisory Commitee (ICAC) said that in March harvesting will be underway in the Southern Hemisphere while planting will take place in many countries in the Northern Hemisphere. In 2013/14, world area is estimated at 33.1 mn hectares and is expected to remain fairly stable in 2014/15 at 33 mn ha.
On February 7, 2014, President Obama signed the 2014 U.S. Farm Bill into law. The Direct Payments,Countercyclical Payments and Average Crop Revenue Election (ACRE) programs are repealed for all commodities and, for upland cotton, replaced by the Stacked Income Protection Plan (STAX)………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Virtual currencies have gained traction in the five years since the first bitcoin was created , but it’s less clear if bitcoin itself will be the virtual currency of the future.
“The banking system has come to the realization that digital currency isn’t going away,” said Barry Silbert, chief executive of SecondMarket. His comments came during a panel discussion at the MarketWatch Investing Insights event “Bitcoin: Boom and Bust” late Tuesday in New York………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

An economic expert told MSPs a currency union between an independent Scotland and the rest of the UK would be in the interests of neither, on 5 March 2014. Dr Angus Armstrong from the National Institute of Economic and Social Research told the Economy, Energy and Tourism Committee a formal currency union would be “very difficult indeed” and added UK Chancellor George Osborne had been “entirely rational” to rule it out.
The committee was taking evidence in the first session of the day as part of its inquiry into Scotland’s potential economic future after the referendum. Dr Armstrong said for Scotland to attain the aspirations detailed in the SNP’s White Paper it would require Scotland to have its own currency, to allow it to control all the policy levers………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Carbon Trade Exchange Australia announced the appointment of Baden Wright as chief executive. “As chief executive officer of Australia, Baden will be responsible for driving the overall strategy and business model of Carbon Trade Exchange (CTX). This will include the development and implementation of a global licensing strategy for the CTX Trading Platform,” the company said.
Before joining CTX, Baden was most recently a Managed Services Consultant for brands including Vodafone, Nokia and Landis Gyr, and prior to that Director of Programs for Ausgrid’s Smart Grid Smart City and Managing Director of Sonnet Corporation………………………………………..Full Article: Source

Posted on 06 March 2014 by VRS |  Email |Print

Environmentalists urge rejection of law that will exempt long-haul flights from paying for emissions until 2016. The European Union on Tuesday reached a preliminary deal on a law that will exempt long-haul flights from paying for carbon emissions until 2016, EU sources said.
The deal is a further weakening of the bloc’s stance following immense international pressure and threats of a trade war. The sources said negotiators from the European Parliament, the Commission, the EU executive, and the EU presidency, representing member states, had tentatively agreed that an existing suspension of EU law for intercontinental flights should be extended………………………………………..Full Article: Source

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