| While markets started the year range-bound, a surging dollar, weak economic data from Europe and the US – plus supply exceeding China demand – saw volatility return by the middle half of 2014 in a number of key commodities. Iron ore saw prices fall by 41% to reach a five-year low in mid-September, while protectionist moves by the Indonesian government requiring nickel to be smelted locally initially drove a spike in prices but this eventually reversed as Chinese firms offloaded supply into the global market, driving September prices 20% below their May high.
For banks, the global retreat from the commodities market continued. Credit Suisse closed down its commodities arm – a move that was felt particularly in Singapore, given the firm's market-making role on the Singapore Exchange's iron ore swap contract. The diminishing role of the global banks has been particularly felt in the oil derivative markets as the oil majors play an increasingly important role...............................................Full Article: Source
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