Commodities - General News 03 (Jul 14 - Apr 18)

Re: Commodities - General News 03 (Jul 14 - Dec 17)

Postby winston » Fri Jul 07, 2017 7:57 am

This may be a sign of the bottom in commodities

by Dr. Steve Sjuggerud

Goldman Sachs is the leading commodities firm among Wall Street banks. It generated $3.4 billion in revenues from commodities in just one year (2009). But after years of falling commodity prices, Goldman’s revenues in commodities have plummeted. Last year, the company’s commodity revenues were just $1.1 billion.


According to Bloomberg, a slew of financial-services firms – Morgan Stanley, JPMorgan Chase, Barclays, and Deutsche Bank – have all either cut back or exited commodities trading in recent years.


Source: True Wealth

http://thecrux.com/massive-buy-signal-g ... mmodities/
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Re: Commodities - General News 03 (Jul 14 - Dec 17)

Postby winston » Tue Jul 25, 2017 10:51 am

3 Charts That Suggest Bears Are Taking Aim at Commodities

by Casey Murphy

Source: Investopedia

https://finance.yahoo.com/m/43f8fddc-e7 ... bears.html
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Re: Commodities - General News 03 (Jul 14 - Dec 17)

Postby winston » Thu Aug 03, 2017 8:45 am

Rick Rule: We’re in the ‘first inning’ of a new commodity bull market

by Ben Morris

“The bear market we just went through was a Lollapalooza.

My suggestion is that we’re in the first inning of a nine-inning game for most commodities, and maybe the third inning of a nine-inning game with regards to gold.”


Source: Daily Wealth Trader

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Re: Commodities - General News 03 (Jul 14 - Dec 17)

Postby winston » Thu Aug 03, 2017 8:59 am

not vested

Standard Chartered eyes New York energy trading, bucks Wall St trend -sources

By Catherine Ngai and Florence Tan

NEW YORK/SINGAPORE, Aug 2 (Reuters) - Standard Chartered is planning to launch an energy trading business in New York, two sources familiar with the matter said, in what appears to be the first major bank move into the sector in the United States after years of retreat on Wall Street due to cutbacks and stricter regulation.

The British bank has hired Matthew Hastings, a former oil options trader at PetroChina International America in Houston, as its new head of energy trading in London, according to the sources this week. He will replace Cyril Youinou, a former Lehman Brothers trader, they added.

The sources declined to be named because the matter is not public.

Standard Chartered has also tapped Hugo Picca, former head of Europe-Middle East-Africa energy trading and global exotics at Credit Suisse, to trade oil options, the sources said.

A spokesman for Standard Chartered in New York declined to comment on the expansion plans.

In June, Standard Chartered Americas Chief Executive Torry Berntsen told Reuters the bank was aiming to expand its U.S. presence. [nL3N1JA1K6]

The bank already trades energy contracts in London and Singapore, while also catering to corporate clients like oil and gas producers looking to lock in future production.

Banks have been retreating from commodities trading as profits declined under tougher regulations with the passage of the U.S. Dodd-Frank legislation in 2010.

In 2013, Deutsche Bank AG pulled the plug on its global commodities trading business, following RBS Sempra, which left in 2010.

Late last year, Barclays Plc became the latest bank to exit energy trading to invest those resources elsewhere, while others, like Morgan Stanley and JPMorgan, have also scaled back. [nL1N1DW2N8]

Earlier this month, Goldman Sachs reported its worst quarter in commodities in more than 18 years of publicly reporting earnings, as sources indicated that its business, too, would undergo a shakeup. [nL3N1K945Z]

Source: Reuters

https://sg.uobkayhian.com/page/SLQG_New ... D=30123356
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Re: Commodities - General News 03 (Jul 14 - Dec 17)

Postby winston » Mon Aug 14, 2017 5:35 am

Xi reforms may be making their mark as China’s industrial belt starts to benefit from rising prices

Rising profits for coal and metal producers fuel debate among economists about whether country’s economy is entering a new cycle

Unlicensed mines have been closed and coal prices in China nearly doubled in the last 20 months.


The price of steel rebars, a product mainly used in construction sites, has rise to over 4,200 yuan (US$630) per tonne – the price was below 2,000 yuan at the end of 2015.


China’s state steel plants have become money-making machines again with combined profits of 12.6 billion yuan in the first half of 2017 – a 427 per cent increase compared with the previous year, according to the China Iron and Steel Industry Association.


The price of aluminium, which is used in vehicles, home appliances and door frames, has gained 60 per cent as well in the last 20 months, as provincial governments across the country were pushed by Beijing to close down plants without sufficient licensing from the central government.


Since he took power in 2012, Xi’s prescribed remedies to cure the illness in China’s economy can be summarised as reducing excessive capacity, lowering corporate debt, cutting the property inventory and slashing operational costs for businesses under the “supply-side reform” umbrella


Source: SCMP

http://www.scmp.com/news/china/economy/ ... elt-starts
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Re: Commodities - General News 03 (Jul 14 - Dec 17)

Postby winston » Sun Aug 27, 2017 6:13 am

Chart of the day: Bull run over for commodities?

The mainland’s raw material stocks, the best-performing sector over the past three months, are showing signs of cooling on jitters that policymakers will move further to rein in the binge on the commodity market.

The gauge has fallen 3.9 per cent from this year’s high registered on August 9 after jumping as much as 31 per cent since June.

With commodity prices surging this year, the Shanghai Futures Exchange responded by raising the costs of trading steel rebar contracts and imposing a cap on the daily transaction number of new contracts this month, while the Dalian Commodity Exchange tightened the margin requirement for coking coal futures.

Meanwhile, the China Iron and Steel Association said this week that steel prices were unlikely to rise “significantly”, given an expected increase in supply.

According to Shenwan Hongyuan Securities, surging raw material prices will crimp profit at domestic manufacturers and undermine the country’s efforts to develop high-end manufacturing. Steel rebar prices have advanced 40 per cent this year in Shanghai and coking coal has jumped 37 per cent in Dalian.

Source: SCMP

http://www.scmp.com/business/commoditie ... ommodities
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Re: Commodities - General News 03 (Jul 14 - Dec 17)

Postby winston » Wed Sep 06, 2017 1:42 pm

The bull market that nobody’s noticed…

by Porter Stansberry

Buy only the highest-quality names – like Franco-Nevada (FNV) for gold, Freeport-McMoRan for copper, and Glencore for base metals.

Don’t forget to add some of the new critical commodities, too, like lithium. (SQM is the big producer.)

The only commodity I’d make sure to avoid right now is oil. There’s just too big of a glut as U.S. production and reserves continues to increase at historic rates.


Source: Stansberry Digest

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Risks Out There 04 (Aug 15 - Mar 17)

Postby behappyalways » Sun Sep 10, 2017 8:57 pm

Created destruction

Making sense of capacity cuts in China

Investors have been cheered by sweeping cutbacks. They should look more closely

STOCKMARKETS have been on a tear over the past 18 months. Shares are, on average, up by a third globally. Commodities have rallied. And the optimism has infected corporate treasurers, who, for the first time in five years, are spending more on new buildings and equipment.

Plenty of factors have fed into the upturn, from Europe’s recovery to early hopes for the Trump presidency. But its origins date back to a commitment by China to demolish steel mills and shut coal mines.

On the face of it, that is an unlikely spark for a change in sentiment. Normally, growth comes from the investment in new facilities, not the closure of those in use. In fact, China’s case is a rare one.

By taking on extreme overcapacity, its cutbacks have provided a boost, for itself and for the global economy. The risk, however, is that the way the country is going about the cuts both disguises old flaws and creates new ones.

China needs lots of material to build all its homes, trains and tunnels. Even so, it produces more than it can use. It accounts for roughly half of global production of steel, coal, aluminium, glass and cement. By one oft-cited gauge, China’s unused steel capacity equals the total annual output of the next four biggest producers (Japan, India, America and Russia) combined.

As the excesses piled up in China over the years, they weighed on global prices, depressing profits for all. However, unlike their international rivals, Chinese firms could carry on expanding, confident of state support.

Then, in early 2016, China unveiled plans to cut its steel and coal capacity by at least 10% over five years, reducing potential global supply by 5%. The government’s theory was that it could turn the vicious industrial cycle into a virtuous one. With less production, prices would rise, leading to higher profits and, ultimately, a healthier economy.

There were plenty of doubts about China’s ability to follow through; after all, pledges to cut capacity had featured in officials’ plans since the early 2000s, and over-investment had continued unabated.

But the idea that things might be different this time has gradually caught on (see article). Coal and steel prices have soared, as have profits in those industries. That set off a dramatic shift in market sentiment about China. Convinced that Xi Jinping, China’s president, has the will and ability to impose capacity cuts, investors have shed their fears that damaging deflation might be China’s next export.

The yuan has appreciated; nominal growth is just shy of a five-year high. Economic policymakers in Beijing have regained some of their standing, which had been dented by a stockmarket crash and a ham-fisted currency devaluation in 2015. Global markets are reassured by the steady hand of Chinese central planners.

That confidence may be misplaced. Investors are overlooking two shortcomings in China’s approach. The first is the nature of top-down diktats about supply, which lack flexibility and therefore tend to generate volatile outcomes. China wanted to puff up prices. But the surge that it has caused has gone well beyond what it intended, raising concerns that high prices will lead once more to surplus capacity.

Local officials, still hungry for growth, have dusted off their plans for big new coal mines. Officials have started to warn about a speculative bubble in the steel market. In Chinese ports stocks of iron ore, a vital ingredient in steelmaking, are near record highs.

The second problem is that enforced production cuts are not a genuine solution to overcapacity. That firms listen to the government in China should never have been in doubt; the problem is that they still do not pay sufficient heed to the market.

In many cases the cuts are not all they appear. In the coal industry, for instance, officials last year simply decreed that mines should operate for just 276 days—a limit that they unwound this year.

More fundamentally, China has done little to tackle the underlying causes of overcapacity. The banking system continues to direct cheap capital at favoured projects and companies. State-owned firms can still be reckless in their investments, safe in the knowledge that they can always be bailed out.

And the government’s policy of earmarking bits of the economy for development sets off mad rushes into them. Even as China is fighting to rein in excess capacity in heavy industry, it is laying the groundwork for the same affliction in new fields such as robotics and advanced manufacturing.

China has done more to turn around its industrial sector than many expected, to the benefit of its own economy and the wider world. Investors are right to conclude that its planners are powerful. Even so, a tendency towards overcapacity still lurks, and Chinese officials are still fallible.


Source: The Economist
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Re: Commodities - General News 03 (Jul 14 - Dec 17)

Postby winston » Thu Sep 21, 2017 12:06 pm

vested DBB (Aluminum, Zinc & Copper)

Demand for these metals could send prices 300% higher

by Nick Rokke

Industrial metals have been in a downtrend for nine years.

Since 2008, the Bloomberg Industrial Metals Index has dropped 75%.


Our friends over at Sprott say the supply of zinc has decreased 10% over the last five years.

The International Lead and Zinc Study Group expects zinc demand to increase 3%.


Source: Palm Beach Daily

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Re: Commodities - General News 03 (Jul 14 - Dec 17)

Postby winston » Tue Sep 26, 2017 6:52 pm

China's 'Unprecedented' Anti-Pollution Drive to Rattle Metals

Morgan Stanley says wider economic activity may be affected
Goldman Sachs warns that iron ore prices may extend declines

Include disruptions to ports, rail and road, as well as closing steel and aluminum plants in key hubs


Aluminum will average $2,094 a metric ton in the fourth quarter and $1,984 a ton next year, Morgan Stanley said, lifting its earlier forecasts by 9 percent and 5 percent respectively.

The bank also raised its estimates for copper, nickel and zinc, and picked palladium as the most promising commodity for its demand prospects.


Source: Bloomberg

https://www.bloomberg.com/news/articles ... tle-metals
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