"The best place to be is in commodities"

[drillinto]

Fed Mulls Limits on Physical Commodity Trading by Wall Street Banks
January 14, 2014
Source >>> Reuters

The U.S. Federal Reserve on Tuesday took a first formal step toward limiting the role of Wall Street banks in physical commodities markets, asking for public input on whether such activity endangers financial markets and whether additional capital requirements are necessary.

The Fed board voted 6-0 to seek comment through an "advance notice of proposed rulemaking".

"The Board is considering whether additional restrictions would help ensure that physical commodities activities authorized for financial holding companies are conducted in a safe and sound manner and do not pose a threat of financial stability," the Fed said in a release.

The Fed said it is asking for comment about the financial risks that physical commodity activities could pose, the potential conflicts of interest for banks, and the risks and benefits of additional capital requirements or other restrictions.

The Fed is seeking comments through March 15.

 

[drillinto]

15 Jan 2014

>>>>> Are Commodities Due for Rally ? <<<<<

http://online.barrons.com/article/S...79322563407214566.html?mod=googlenews_barrons
*****

 

[drillinto]

January 15, 2014

"BP Energy Outlook 2035" Shows Global Energy Demand Growth Slowing,
Despite Increases Driven by Emerging Economies

http://www.bp.com/en/global/corporate/press/press-releases/energy-outlook-2035.html

 

[drillinto]

January 14, 2014

Australia and China to lead global fracking market race

Australia is primed to become the next big play in the booming frac market, with China and Argentina close behind, as global nations with estimated reserves of 1.7 trillion barrels of oil equivalent seek to emulate the United States’ pioneering, and astonishing success in tapping shale gas and tight oil.

Source >>> www.luxresearchinc.com
*****

 

[drillinto]

Vancouver Resource Investment Conference 2014

The Vancouver Resource Investment Conference is the world's largest investment conference dedicated on resource exploration and the largest of all annual trade shows held in Vancouver, Canada. Hear from investment thought leaders and wealth influencers. Speak one-on-one with executive members from companies covering every corner of the mineral exploration sector along with metals dealers, oil & gas, renewable energy, media and financial services companies. This is a must-see for investors and stakeholders in the global mining industry.

http://cambridgehouse.com/event/vancouver-resource-investment-conference-2014

 

[drillinto]

That Was The Week That Was … In Australia
>>>>> 19 January 2014
>>>>> by Our Man in Oz


Minews. Good morning Australia. Your market seems to have had a good week.

Oz. It was quite strong, thanks largely to three factors. There was the Indonesian nickel fiasco which lifted all nickel stocks. There was Rio Tinto’s very encouraging fourth quarter production report; and there was also a significant change of opinion about the outlook for mining from the big U.S. investment bank, Citigroup, which has flipped from being a bear to being a bull.

Minews. Citi’s change of heart is certainly encouraging, but seems to be mainly restricted to the top end of the industry.

Oz. The recovery has to start somewhere and it is usually the big miners which attract investors with smaller stocks enjoying a later trickle-down effect.

The rise of Rio Tinto and BHP Billiton can be clearly seen in the metals and mining index which put on 4.6 per cent, easily outstripping the all ordinaries which was absolutely flat -zero movement. The gold index also had a reasonable week, rising by 1.6 per cent.

Last week’s trading was also noticeable for renewed strength in the mid-tier gold sector, aided by a modest recovery in the gold price and quite a few eye catching moves by stocks we know well and some we rarely hear about.
...

Source >>>>> www.minesite.com

 

[drillinto]

20 Jan 2014

Metals Prices Tick Up, As Supply And Demand Factors Turn Positive
>>>>>>>>>>>>>>>>>>>>>>> by Rob Davies <<<<<<<<<<<<<<<

The polar vortex and its associated record low temperatures in the US might be painful for its inhabitants, but it’s not done the lead market any harm.

The main use of lead is in car batteries and those than can recall O-Level physics will know battery performance drops sharply as the temperature drops.

The performance drop also coincides with the extra demand for power as the battery struggles to start cold engines in thick oil, setting up the perfect environment for battery failure.

Add to that the closure of Doe Run’s lead smelter in Herculaneum, Missouri, which has taken 130,000 tonnes of capacity out of the market, and the reasons for the 2.7 per cent jump in the lead price to US$2,175 a tonne last week become readily understandable.

Once you get positive news about one metal it often triggers a similar response in the other metals.

That partly explains the 1.8 per cent rise in the LME Index to 3,181 over the week, although there were other constructive factors also at work.

Alcoa closed its Massena aluminium smelter, taking out 84,000 tonnes of capacity. Although not much in the context of a 5,484,375 tonne inventory overhang it is nevertheless a positive step in tightening up the market and doubtless contributed to the 2.9 per cent increase in the price of aluminium to US$1,755 a tonne.

There was also news that Ford is substituting aluminium for steel in its top selling F150 pick to serve as a timely reminder that aluminium is still a growth market.

The change will take 700 pounds off the two and half tonne truck and improve fuel consumption.

On annual sales of 650,000 it might only impact steel consumption by 227,500 tonnes but it will make a bigger difference to the aluminium industry.

Randall Scheps of Alcoa expects North American auto sector aluminium demand to grow by one million tonnes by 2025.

And good news on the demand side of the industry is being matched by supporting news flow from the supply side.

Although it may not please geologists and drilling companies the 30 per cent fall in exploration budgets worldwide last year is a clear demonstration that the industry is cutting back on spending.

That will impact additional supply in years to come and help keep the market tight. Rio Tinto’s exploration spend in 2012 was US$948 million, down from US$1,970 million, while BHP Billiton is believed to have halved its allocation from US$2,450 million. Given the cost squeeze on the industry that trend is likely to continue.

Fortunately the big miners are supported by the still-buoyant iron ore market.

Bloomberg estimates that 98.5 per cent of the industry is profitable at the current price of US$130 a tonne for 62% Fe content.

Even at the 2014 consensus forecast price of US$119 a tonne it says only two per cent will be making losses.

Coincidentally Rio Tinto announced last week that its global iron ore production increased five per cent in 2013 to 266 million tonnes.

At an estimated cash production cost of just over US$40 a tonne Rio will be very happy with that, even if Vale does remain the lowest cost producer.

Source >>>>>>>>>>>>>>>>>>>>>> www.minesite.com

 

[drillinto]

India to boost raw sugar exports

But higher supplies of raw sugar from India, the world's biggest consumer and second-largest producer of the sweetener, will put further pressure on global prices, which are currently hovering at a 3-1/2-year low.


Source >> Reuters | Jan. 2014 |

 

[drillinto]

Cotto, Cotton, Cotton

Stung by local cotton prices, Chinese yarn makers go global
By Dominique Patton and Lewa Pardomuan | 15 Jan 14


Source >> http://www.reuters.com/article/2014/01/14/cotton-china-idUSL3N0JS0PS20140114
*****

 

[drillinto]

The Baltic Dry Index (BDI) is showing a 220% improvement from 2013 opening levels
By Frik Els | Dec 11, 2013

http://www.mining.com/what-hard-landing-chinese-bulk-trade-barometer-surges-to-3-year-high-84796/
(Pay attention to the map showing the three main maritime routes from Australia to China)

 

[drillinto]

UNCTAD: Review of Maritime Transport 2013

Background
Maritime transport is the backbone of international trade and the global economy. Around 80 per cent of global trade by volume and over 70 per cent of global trade by value are carried by sea and are handled by ports worldwide. These shares are even higher in the case of most developing countries.

http://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=668

 

[drillinto]

>>>>> Oil, Oil, Oil <<<<<

Global oil demand will rise more quickly than previously forecast this year as economic growth in industrialized countries accelerates, according to the International Energy Agency(IEA).

It predicts consumption of crude will increase by 1.3 million barrels per day this year to a total of 92.5 million barrels per day, up from 91.2 million last year and 90 million in 2012.

Source >>>>> http://www.iea.org/

 

[drillinto]

>>> Gas, Gas, Gas <<<

EU Shies Away From Shale Gas Legislation

Britain scored a victory Wednesday, when the European Commission shied away from earlier plans to put forward legislation on the exploration of shale gas.

The European Union's executive issued only guidelines for the technology after strong pressure from Britain and Poland, which are keen to forge ahead with the controversial technique of hydraulic fracturing, or 'fracking,' used to tap shale gas reserves.

The International Association of Oil & Gas Producers, which represents the world's largest oil and gas companies, welcomed the lack of legislation, saying enough safeguards were already in place.
...

Sources >>> Vanessa Mock, WSJ | Jan. 22, 2014 | http://www.ogp.org.uk/

 

[drillinto]

>>>>> Platinum <<<<<

23 January 2014

Economic impact of South Africa platinum mine strike


The largest union in South Africa's platinum sector has called a strike over pay, the biggest since the 2012 Marikana massacre in which 34 workers were shot dead by police.

The AMCU trade union says 70,000 of its members at the three top platinum producers are walking out indefinitely in the row over pay.

South Africa holds about 80% of the world's known platinum reserves - and the dispute is expected to cripple the global industry.

Source >> Lerato Mbele (BBC) reports from Johannesburg/RSA.
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[drillinto]

>>>>> Natural Gas <<<<<


http://www.bespokeinvest.com/thinkbig/2014/1/24/natural-gas-soars.html

 

[drillinto]

>>>>> 25 Jan 2014

That Was The Week That Was ... In Australia
by Our Man in Oz


Minews. Good morning Australia, investors in your gold sector seem to have had a good week.

Oz. There was a golden edge to an otherwise weak market, brightened for U.K. followers of events in Australia by a win for England in the cricket.

Minews. Cause for a double celebration, though the big fall on the New York market after you closed might point to a rough week ahead.

Oz. Perhaps, but there should be more mileage in the gold stocks because the price of the metal kept climbing as investors switched to a “risk-off” setting which meant the Australian dollar continued its overdue fall which has now stretched to 17 per cent against the U.S. currency over the past 12-months.

Minews. Which should be making a significant contribution to your domestic gold price.

Oz. The twin effects of gold up and dollar down has lifted the local price above A$1,460 an ounce which is being reflected in gold stocks with strong domestic exposure.
...

Source >> www.minesite.com
*****

 

[drillinto]

>>>>>>>> July 2013

Staff Papers of the Dallas FED

How Bad Was It?
The Costs and Consequences
of the 2007–09 Financial Crisis

by Tyler Atkinson, David Luttrell
and Harvey Rosenblum

Source >>> http://dallasfed.org/assets/documents/research/staff/staff1301.pdf

 

[drillinto]

>>>>> 26 Jan 2014

Emerging Market Currencies Take A Tumble, With The Notable Exception Of China
>>>>> by Rob Davies

If the price of gold is a measure of trust in the world economy, then confidence dropped sharply on Friday after a week in which nerves had become increasingly frayed.

A closing price of US$1,267 an ounce might only show a gain of 1.3 per cent over the week but is almost six per cent above recent lows.

The proximate reason for the moves was the sudden 13 per cent devaluation of the Argentine peso as its central bank ran out of ammunition to keep defending it.

Argentina though was not the only emerging market to face assaults on its currency.

Turkey, Brazil, Mexico, South Africa and Russia were among a number of recent market favourites that saw their currencies decline.

Although the moves reached a crescendo on Friday the trend had been underway for some time. In 2013 emerging markets currencies as a group declined 9.9 per cent.

These developments affect the mining industry in two key ways.

One is to reduce the cost of production for companies lucky, or maybe unlucky, enough to have mines in those countries.

The second impact is to increase metal prices in local terms. That doesn’t help manufacturing, but it does make hoarders feel good as they see sharp price increases in local currency.

It will take some time before the net effect of these developments becomes apparent to the metal industry but the 2.4 per cent decline in the LME index to 3,105 indicates that, in the short term at least, these are viewed as negative developments.

The contrast with gold is striking and is a good illustration of how the dynamics affecting the metals differ so much.

Even more surprising is that these wobbles come during a week when the IMF actually slightly increased its forecast for global growth in 2014 to 3.7 per cent from 3.6 per cent.

The IMF also thinks that growth at the end of 2013 was stronger than it had expected. That certainly helps to explain why copper inventories have now fallen for 20 consecutive weeks. The LME inventory now stands at only 326,975 tonnes.

The magnitude of the change in economic forecasts is modest but the direction is encouraging. Quite why the two events should be connected, if indeed they are, is harder to explain.

One view is that as economies in the developed world strengthen, especially the US, it encourages funds to flow in the same direction. Indeed, over time there is a strong correlation of dollar strength with global economic activity.

This outflow from emerging markets will expose weaker countries whose underlying problems have been masked until recently by capital inflows.

The countries under pressure last week are not significant metal and commodity consumers and are, on balance, net exporters, so weaker exchange rates are beneficial. This effect will act to constrain metal prices as it encourages production.

But China is in a different category and was not part of the rout. There are though increasing concerns in its banking sector over the credit risk of some of the country’s coal mines.

Whether China has sufficient capital, and resolve, to fix these problems remains to be seen, but it is one more thing to worry about.

Source >>>>> www.minesite.com
*****

 

[drillinto]

Year of the Wood Horse: Soft Commodities Should do Well

CLSA Feng Shui Index 2014 - Year of the Wood Horse
Tired stock horse fit for the glue factory? Or fiery Mustang Seng set to giddy-up up up?

Hong Kong - 22 January 2014 - CLSA, Asia’s leading independent brokerage and investment group, today launches its 20th annual CLSA Feng Shui Index – a tongue-in-cheek financial forecast for the coming Year of the Wood Horse, with a focus on the Hang Seng Index, key market sectors, world leaders and celebrities, and each of the 12 Chinese zodiac signs. All based on little more than a whisper of wind (feng) and a babble of water (shui).

How do we see the bourse under the influence of the Horse? We conclude that this Pony is un toro in toto - pure bull from teeth to tail. Its fortune chart may not be the best balanced, but it is full of Fire - the intrinsic element that’s widely regarded as the driver of investor sentiment.

This is especially so for the Hang Seng Index, as Fire is also its “lucky element”. We uncovered so many unexpected connections, coincidences and links between the HSI and this Wood Horse that we discern a definite Casablanca connection - ‘the beginning of a beautiful friendship’. And one that should be very rewarding. Our “pure bull” forecast sees the index hit 28,105.

Positive, powerful and race-paced - there’s much to like about the Horse. It’s also well positioned: At No.7 in the zodiac, the Horse kicks off the second half of the 12-year cycle. Traditionally, the vital force or energy known as qi is considered to be spent or stale half-way through a cycle - the Horse heralds the arrival of the so-called second wind - a burst of invigorating fresh qi.

Once again, this year’s CLSA Feng Shui Index features a month-by-month guide to the HSI, the outlook for key sectors, four-sphere forecasts for each zodiac sign, our popular Hong Kong property guide, and fates of some famous faces – the likes of US Fed chair apparent Janet Yellen, Japan’s Shinzo Abe, Alibaba’s Jack Ma Yun and futbol capital Rio de Janeiro.

Our Sector-selector Element Detector suggests we’ll see the best performances from businesses associated with Wood (retail, soft commodities, plantations . . . plantations?) and also Fire (the likes of internet, tech, telecoms, some oil & gas and power suppliers).

Among the zodiac signs, the Horse favours Tigers, Sheep (Goats) and Dogs. Those that may be in for a more challenging ride are Rats, Cows and Rabbits. But then pluck beats luck every time. Kung hei fat choi! And may the Horse be with you.


Source >>> https://www.clsa.com/about-clsa/med...ng-shui-index-2014-year-of-the-wood-horse.php

 

[drillinto]

>>>>> Jan 28th 2014

Wait, We Need MORE Oil ? What Happened ?
>>>>> by Tyler Crowe

You know who has had a pretty frustrating job lately? People who make projections for oil demand and supplies. Just when we thought that the U.S. was on track to steadily decrease its total oil consumption, recent data from the International Energy Agency basically threw that projection into the rubbish.

So what exactly does this mean for the U.S.? Are we headed back to our gas-guzzling ways, or is this just one of those statistical aberrations that happen from time to time? Let's take a look at the numbers and see what it could mean.
...

Source >>>>> http://www.dailyfinance.com/2014/01/28/wait-were-going-to-need-more-oil-what-happened/
*****