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Commodities Briefing 26.Jun 2014

Posted on 26 June 2014 by VRS |  Email |Print

A warehouse fraud at China’s third-largest port has forced banks and trading houses to consider new controls in the country’s massive commodity financing business, which traders say could lead to drying up of credit for all but large firms and state-owned companies.
China’s commodities trading is dominated by the large and state-owned companies but there are thousands of small firms in the market. Faced with tougher bank requirements for financing, they could sell down stockpiles, squeezing demand for metals and other raw materials such as rubber in the world’s biggest consumer of commodities………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

Love ‘em or hate ‘em, the world of hedge funds is only getting bigger. The industry saw assets surpass $3 trillion in May for the first time ever. That’s according to hedge fund database, eVestment, which notes the new record exceeds the asset peak from 2008.
It’s been a particularly strong year for hedge funds. In May alone, $22 billion of new capital was added bringing year-to-date flows to $93.3 billion. That’s the strongest start to a year since 2007………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

Oil markets have staged only a muted reaction to the bloody insurgency gripping OPEC’s number two producer Iraq, but analysts warn any disruption to supplies could push prices to record peaks. The offensive led by extremists that has swept through the north of the country and is now threatening to rip Iraq apart has sent prices to nine-month highs but they remain $30 below the peaks hit in 2008.
“This contrasts with the period of civil war in Libya in early 2011 that halted production. Back then, oil prices, volatility and skew all reacted far more aggressively,” said BNP Paribas analysts Harry Tchilinguirian and Gareth Lewis-Davies………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

Rising oil production in the US and slowing oil demand growth in the rest of the world were expected to bring Brent oil prices below $100 a barrel, but supply disruptions in the Middle East and North Africa have kept them from happening.
Now that ISIS is holding substantial territory in Iraq, Raymond James analysts have increased their estimates for 2014 and 2015, but they also warn that there is a huge range of possible prices depending on how Mideast conflicts and US politics play out………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

We’ve the news that the US is to allow some crude oil exports for the first time since the ban on them was set in place in the 1970s. This is good news as it removes an economic inefficiency (and removing economic inefficiencies is always good news) but it’s not going to make all that much difference to the nation as a whole.
It’s really all a fight between the independent crude producers and the independent refiners. They, obviously, care about how this goes, crude exports or no crude exports, but it makes very little difference to the rest of us………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

For decades now, the U.S. has essentially had to accept the oil prices set by world markets. Starting in 1973 with the OPEC-driven oil shock, the major producers have been foreign countries. If the U.S. wanted the oil, we had to pay the price. But are things starting to change?
U.S. moves toward allowing exports: Federal policy currently prohibits the export of oil, but today we saw the first crack in that wall: two companies have reportedly received permission to export a specific type of unrefined oil. Although the rulings haven’t been officially announced, and the Commerce Department says there’s been “no change in policy on crude oil exports,” the implications are clear………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

The world has saved $3.5 trillion over the last 30 years by maintaining emergency oil stocks to offset supply shocks and curb price surges, the West’s energy watchdog said on Wednesday. The International Energy Agency (IEA) said in a report that emergency oil stocks held by member and non-member states have acted as an ” insurance” against oil supply disruptions.
Spiralling violence in key oil producer Iraq in recent weeks has pushed global oil prices to nine-month highs, reviving speculation of a release of strategic stocks in case of severe supply disruptions………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

China and Singapore are vying to provide feasible gold price benchmarks in Asia, as calls grow in the top consuming region for more localized pricing of the precious metal at a time when the global benchmark is under regulatory scrutiny.
Singapore said at an industry conference on Wednesday it would launch a physical gold contract on an exchange to create a transparent form of pricing. China, at the same conference, said it wanted to have a bigger influence on the global gold market and would like to have its own price ‘fix’………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

I’m afraid ten years of gold investing has given me a bit of a personality disorder. On the one hand I’m a gold bug loon – one of those nutcases you hide from at parties when they collar you and say: “buy gold, buy gold, our monetary system is doomed!”, and then harangue you with a load of statistics about US national debt.
But on the other, I’m a total cynic. Every time gold rallies, I just don’t believe it. False golden dawn after false golden dawn has turned me into a total non-believer. But you’d have to be living a rather secluded existence not to have heard that gold has had quite a run this month………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

British bank HSBC has cut its average silver price forecast for 2014 from $20.80 an ounce to $19.50 an ounce, saying a rise in supply will cap rallies. HSBC forecasts silver prices to trade in a $17 to $22 range this year.
In addition to lowering its 2014 average price forecast to $19.50, it also reduced its 2015 price forecast to $19.25 from $20.25, but left its 2016 forecast at $21.50 and its longer-term forecasts unchanged at $25………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

Despite some truly frightening conflicts in the Middle East and Ukraine, despite signs of inflation in the United States, and despite promises to “print” from both the Japanese and European central banks, the price of gold has barely managed to climb above $1,300 an ounce.
In fact, gold was the worst-performing asset class in 2013 — down 24.8 percent. Yet gold is still the best-performing asset of this century!……………………………………….Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

According to research released Tuesday by UBS, the silver demand for solar sector has started showing early signs of recovery. The trend is likely to continue in the future. The rising demand from the solar sector will drive silver’s growth over the next five years, noted Edel Tully, a strategist for the leading Swiss financial services company.
UBS forecasts the global solar demand to double over the next five year period. The solar demand is expected to grow by 22% during this year to 45 GW of new installed solar capacity. The solar demand is expected to grow to 84 GW of new installed capacity by 2018………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

Copper advanced for a ninth straight session in New York, capping the longest rally since 2005, amid signs of tightening supply. Inventories monitored by exchanges in London, Shanghai and New York fell for the 10th trading day in a row, and are at the lowest since October 2008.
Copper also rose after the dollar slid, as a report showing the U.S. economy shrank more in the first quarter than economists estimated boosted demand for alternative assets………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

Exchange-traded funds (ETFs) have become extremely popular with investors and with good reason – they track a wide range of assets, generally have lower management fees than do mutual funds, and are usually very liquid.
But all ETFs are not created equal, and deciding which ones to avoid in an extremely crowded field can be as important an investment decision as deciding in which ones to invest. Here are six attributes that reduce the investment appeal of ETFs:……………………………………….Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

The idea of an active exchange-traded fund (ETF) has been around for no less than six years now, with the first one being launched back in 2008. It is only over recent months, however, that the investment product has attracted significant interest from investors as a cheaper alternative to actively-managed mutual funds. After all, it combines the flexibility and cost-effectiveness of an ETF with the higher returns that you would normally associate with a fund that has a good manager.
Active ETFs form a negligible part of the country’s mutual fund and ETF industry – less than 0.1% of the $13.9 trillion market at the end of 2013. But the steadily increasing demand for them has prompted the world’s largest asset managers to explore the offering seriously………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

Brazil’s real climbed to a one-month high and led gains among major currencies after the central bank said it will extend daily intervention for at least another six months as part of an effort to curb inflation.
The real rose 0.8 percent to 2.2078 per U.S. dollar at the close of trade in Sao Paulo, the strongest since May 21. The rally was the biggest among the 31 most-traded currencies tracked by Bloomberg………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

Indonesia’s rupiah is headed south, fuelled by rising oil prices, and is nearing the 2008 lows once again. The USD/IDR is currently trading a little below the record 12,500 mark touched in 2008, but the currency situation now is not as grave as it was during the 2008 crisis, at least for corporate investors.
At the 2008 trough of 12,503, the rupiah was about 25% weaker from its end-2007 level. And the JSE composite, Indonesia’s benchmark stock index, had fallen nearly 35% during the same period………………………………………..Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

Clive Palmer has said his party will support the abolition of the carbon tax but not that of the renewable energy target and the Clean Energy Finance Corporation, and he wants an emissions trading scheme, which he announced with former US Vice President Al Gore by his side.
Australian politics has witnessed many strange events, but fewer as gob-smacking as the alliance revealed late this afternoon between maverick politician Clive Palmer and former United States Vice President Al Gore. The billionaire MP and the world’s most famous campaigner against global warming have joined forces to turn Tony Abbott’s climate policy upside down. ……………………………………….Full Article: Source

Posted on 26 June 2014 by VRS |  Email |Print

The federal government has plans to abolish the carbon tax from July first onward and replace it with an emissions trading scheme (ETS). Both programs are aimed at tackling pollution by putting the onus on companies that produce carbon dioxide, but they go about it in very different ways. So what’s the difference between the carbon tax and ETS?
The carbon tax was launched on July 1, 2012 by the Labor government to tackle the problem of pollution. Companies in Australia that emit over 25,000 tonnes of carbon dioxide are currently charged $25.40 per tonne emitted, payable to the Australian government………………………………………..Full Article: Source

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