Fri, Dec 19, 2014
A A A
Welcome preal121
RSS
Commodities Briefing 04.Sep 2014

Posted on 04 September 2014 by VRS |  Email |Print

The hottest trade of the past two months has been a surprising one: Going long the U.S. dollar against other currencies. And the recent dollar strength appears to have had a profoundly negative impact on commodity prices.
Since the end of June, the U.S. Dollar Index (which compares the dollar to a basket of other currencies) has risen 3.5 percent, bringing the index to a 52-week high. And while the weakness in the widely watched euro has certainly contributed to the move, the dollar has also shown considerable strength against currencies like the British pound, the Canadian dollar and the Japanese yen………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

The risks associated with investing in commodities have ‘diminished’ in recent months, according to Evy Hambro, manager of the £900 million BlackRock World Mining investment trust. Hambro commented, ‘The mining sector has significantly lagged the general equity market in recent years. However, a number of the downside risks for this sector have reduced, albeit not disappeared.
‘The industry has made good progress in refocusing its strategy: operating costs have been aggressively targeted and investment in projects reassessed. Many commodities are trading close to or below their marginal cost of production, implying that price downside should be limited, in the absence of a collapse in demand.’……………………………………….Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Ivan Glasenberg, ceo of Glencore, said the supercycle is far from over, but added that oversupply in certain commodities is killing the bull sentiment for these commodities.
Demand is “better than ever”, he added during a press briefing in Johannesburg. “Why would the supercycle be over? We have a great supercycle………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Crude oil trader Andrew John Hall made nearly $98 million in bonuses in 2008 but his oil fund lost 8.3% last year in a wrong-footed bet on price rises. He remains convinced on prices rises and believes prices will rise to as much as $150 a barrel in five years or less, according to a great Bloomberg profile that’s essential reading for oil traders.
Investing ever-larger sums of his own money, he’s buying contracts for so-called long-dated oil, to be delivered as far out as 2019, according to interviews with two dozen current and former employees and advisers who are familiar with Hall’s trading but aren’t authorized to speak on the record………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Oil discoveries have fallen off a cliff. 2013 was one of the world’s lowest years on record for proven oil discoveries. For companies to scour the globe for new reserves, they need the price of oil to be significantly higher than it is today.
It is becoming increasingly more expensive to find and produce oil each year. Moving forward, I expect prices to occasionally spike towards $200 as the oil discovery cliff catches up to consumption growth………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Africa’s energy industry could see a major boost in the coming years, a fresh study by PriceWaterhouseCoopers has suggested. Mozambique and Tanzania were highlighted as the countries with the most potential.
A study released by PriceWaterhouseCoopers (PwC) on Wednesday concluded that Africa had the potential to experience a major mid-term energy boom. The survey forecast demand for oil on the continent would “rise significantly” over the next two decades, driven by larger populations, urbanization and the emergence of a wealthier middle class………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Opec missed the fracking bandwagon according to this article that includes quotes from a secret letter written by Prince Al-Waleed Bin Talal, a high-ranking member of the Saudi royal family, that drew attention to the threat posed by non-Opec unconventional resource production growth.
“In addition to the many discoveries of oil and gas in the U.S., Canada and Australia,” the prince wrote, “there are also great discoveries of shale gas, which will lead to a reduction of consumption of our oil.” It does not appear conditions exist in Opec nations that would facilitate similar levels of shale development seen in North America………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

The International Energy Agency (IEA) says overall investment in renewable energy will continue to grow through 2020, but at a slower rate than it has in recent years.
The report says funding for clean energy reached a peak of $280 billion in 2011 and was still a generous $250 billion in 2013. But that is expected to decline to an average of $230 billion a year at least until 2020. Part of the reason is the continuing cost of technology and resistance by governments around the world to pass laws that make such investments more attractive………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Deep cost cuts have helped to restore profits at gold miners pummeled by a one-third slide in bullion prices in the past three years, but the fix may only be short term and could be setting the industry up for even more long-term pain.
The all-in cost of producing an ounce of gold dropped by 23 percent to $1,331 an ounce in the year to end-March, according to data from Citigroup. The data, published on Aug. 13, covers miners producing about half of the world’s gold………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

A report titled “M&A and Capital Raising in Mining and Metals, 1H 2014″ from Ernest and Young (EY) says that mining and metals deal values in H1/2014 are “down 69% year-on-year, to $16.7 billion ($16.7B), from $53.8B, with deal volumes down 34% over the same period.” Why aren’t more mergers and acquisitions (M&A) happening in the precious metals space?
The first reason is that there are some big egos in the mining sector and some mining companies would prefer to go it alone or at least be in charge. But if both companies want to be in charge, someone is going to lose out. Ego is a big factor. Third is asset quality. Miners looking at other companies believe that their own assets are of superior quality and those of targeted companies are poor. Generally, asset quality is not high. Number four is transaction costs. It costs a lot of money to make a transaction, especially for small companies with limited cash………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

From 2008 through 2011, Gold was a hotly debated subject within financial circles as we acclimated to the idea that the Fed could double and triple its balance sheet and somehow not debase the dollar. On the one hand there were gold bugs who said that gold was the only true form of money based on the precedent of thousands of years of economic history.
On the other side there was the intelligentsia, which argued that gold was a “barbaric relic” utilized by uncivilized people and that its value was purely psychological. At first, gold bugs had the advantage in the debate — between 2008 and 2011 gold’s price rose by 150%. But since then, the price has fallen by 35% from its peak. Indeed, as gold prices collapsed and stocks soared, the gold debate has seemingly faded from the discourse………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

A stronger dollar and U.S. economic data are being blamed for dismal performance of the price of gold over the past day. The spot gold price dropped some 1.6 percent to around $1,265 an ounce mid-day yesterday and has since muddled along, mostly between $1,265 and $1,270. The latest drop adds to a string of downsteps for gold since early July when the price of gold was looking up. In late May and early June gold surged from similar levels in the mid $1,200s to the mid-$1,300s in early July, when its latest decline began.
Generally analyst commentary pointed to U.S. economic data as driving the down the price of gold Tuesday. “The metal continued its decline further, to a low of 1262.00/1263.00 – a level last seen in mid-June, as it broke through a key technical support level on a day that also saw crude oil prices tumble and the dollar index touch a 13-month high after U.S. manufacturing data surpassed expectations and supported speculations that the U.S. Fed would raise interest rates earlier than anticipated.”……………………………………….Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Uranium is poised to enter a bull market amid tightening supply as producers shut mines and delay projects, more than three years after the Fukushima nuclear disaster in Japan sent prices lower.
The atomic fuel has advanced as much as 18 percent from a May 20 low of $28 a pound, according to data from Ux Consulting Co. in Roswell, Georgia, which provides research on the nuclear industry. Prices closed 0.5 percent higher at $32.65 yesterday and have averaged $31.80 in 2014………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

BHP Billiton and Rio Tinto could earn as much $US800 million between them for at least three years when they unlock a “secret” 200,000 tonnes of copper at their Escondida copper mine in Chile, Deutsche Bank says.
Deutsche mining analyst Paul Young says Rio and BHP are likely to tell the market in the next six months they have scrapped their plan to tear down one of the two operating plants at Escondida, called Los Colorados. The mining giants had planned to dismantle the plant when a third big plant, the $US3.8 billion concentrator OGP1, was brought online at the mine in the March quarter next year………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Concern about slowing demand in China has pushed the price of iron ore, a key steelmaking ingredient, to its lowest level in two years. A huge increase in supply from the big three global producers – BHP Billiton, Rio Tinto and Vale which all depend heavily on iron ore for their profitability – has weighed on the raw material this year. The price has fallen by more than 35 per cent.
But the recent sell-off, which has seen the price of benchmark Australian ore fall from almost $100 in early July to $85.70 a tonne on Wednesday, has been driven by fears about China, the world’s biggest consumer of seaborne iron ore………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

The broad commodity space has regained momentum this year with most of the items performing exceptionally well on a combination of supply constraints and rising demand. However, the gains seem limited in the agricultural space including softs - a group that includes products such as coffee, cocoa, sugar and cotton.
While coffee and cocoa are seeing huge gains, sugar and cotton are crumbling from a year-to-date look. The major culprit for the weakness in these two soft commodities is the broad oversupply trend resulting from accelerated crop plantations and rising stockpiles………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Don’t let the August performance of silver ETFs fool you – there’s a big buy signal for silver flashing right now. At first glance, silver investment activity in August would have you believe that bearish sentiment is pervading the sector.
The premier silver ETF, iShares Silver Trust (NYSE Arca: SLV), which is backed by physical bullion held in the vaults of JPMorgan Chase & Co. (NYSE:JPM) in New York and London, fell $0.87, or 4.4% to $18.71. A close alternative, the ETFS Physical Silver Shares (NYSE: SIVR) dropped $0.97, or 4.8% to $19.19………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

In a recent Opalesque Radio interview with Sona Blessing, Nicolas Clavel, founder and chief investment officer of Scipion Capital, an investment manager specialising in self-liquidating short-term Commodity Trade Finance (CTF) with a focus on Africa, elaborates on the commodity trade finance opportunities, the hurdles and their ability to deliver consistent risk-adjusted returns.
From a sector perspective, the commodity trade finance fund focuses on minerals and agricultural commodities produced in Africa, which then tend to be shipped to destinations such as (mainly) China and Europe. The fund also finances the import of commodities into Africa, which is in sync with the continent’s growth and lack of available supplies for high in demand inputs such as cement and diesel………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

After posting three straight years of losses that thinned the ranks of hedge funds specialising in currencies, the foreign-exchange market is showing signs of rebounding.
Parker Global Strategies’ index of leading currency funds climbed 0.9 per cent in August, the most since January 2013 and trimmed losses in 2014 to 2.2 per cent. That followed a 0.3 per cent rise in July, the first two consecutive advances since October, as diverging policies among central banks create wider price swings for investors to exploit………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

South Korea has confirmed it will exempt car-markers from its emissions trading scheme, which is set to launch at the start of next year, Reuters reports. According to the news service, Finance Minister Choi Kyung-hwan said the so-called smog tax – which has already been postponed by more than two years – would be too challenging for industry if it was launched at the same time as the ETS.
The government says it will delay the tax until the end of 2020, with Reuters citing pressure from domestic and US car-makers………………………………………..Full Article: Source

Posted on 04 September 2014 by VRS |  Email |Print

Both industry and environmental groups have criticized the government’s latest road map for emissions reduction. The government said Tuesday that it would begin its carbon emissions trading scheme from next year as planned, but would delay the incentive system for low-emission cars by a few years.
Under the government’s emissions reduction scheme, the low-carbon vehicle incentive system, which had initially been slated to go into effect in January 2015, will be put on hold until 2020, apparently to ease the burden on Korean carmakers………………………………………..Full Article: Source

See more articles in the archive

banner
banner
December 2014
S M T W T F S
« Nov    
 123456
78910111213
14151617181920
21222324252627
28293031