Commodities - General News 04 (May 18 - Dec 25)

[behappyalways]

Commodities Soar After China Eases Quarantine Rules
https://www.zerohedge.com/commodities/c ... tine-rules

[winston]

Goldman says commodities will gain 43% in 2023 as supply shortages bite

by Paul Wallace

The top 15 commodity-focused hedge funds have increased their assets by 50% this year to US$20.7 billion.

The bank forecasts that Brent crude will climb to US$105 a barrel in the final quarter of 2023, up from US$82 today.

It sees copper jumping to US$10,050 a ton from around US$8,400 and Asian benchmark liquefied natural gas rising from US$33 per million British thermal units to US$53.10.

Source: Bloomberg

https://www.theedgemarkets.com/article/ ... tages-bite

[winston]

Traders’ $129 Billion Commodities Exodus Marks a Historic Shift

by Devika Krishna Kumar and Isis Almeida

Russia’s invasion of Ukraine and worries about a global recession turned commodities—notoriously fickle assets buffeted by variables like the weather and man-made disasters—into dangerous gambles.

Commodities also ended 2020 and 2021 with outflows.


Devika Krishna Kumar and Isis Almeida
Thu, December 22, 2022 at 10:00 PM GMT+8
(Bloomberg) -- In just one year, investors’ bullish exuberance for commodities has turned into a spectacular retreat.

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It’s one of the biggest shifts in sentiment in history for raw materials. This time around, wild price swings have helped spur a rush for the exits that’s taken $129 billion out of the global market — a record for any annual period up to mid-December, according to JPMorgan Chase & Co. The latest exodus comes after money poured into commodities in the first two months of this year.

Demand for everything from oil to industrial metals boomed earlier this year as the world emerged from pandemic lockdowns and investors sought a hedge against inflation. But Russia’s invasion of Ukraine and worries about a global recession turned commodities—notoriously fickle assets buffeted by variables like the weather and man-made disasters—into dangerous gambles. Commodities also ended 2020 and 2021 with outflows.

It’s a catch-22 situation: The bigger the price moves, the more money is pulled out and the riskier commodities become. Clearing houses are boosting collateral requirements to protect against defaults, while higher interest rates are raising borrowing costs, making it more expensive to trade. The liquidity crunch threatens to disrupt already stressed supply chains, fuel inflation and trigger bankruptcies and bailouts. That’s already happening in Europe, where extreme spikes in the cost of energy have driven Germany, France and the UK to nationalize struggling utilities, while food-growers in the Netherlands fear being forced out of business. In the US, regulators have been urged to investigate whether speculators are contributing to dramatic price fluctuations.

“The biggest issue for both investors and commercial participants in the market has been the macro outlook. With the rising rates we have seen, commodity returns have to rise to cover the soaring cost of getting involved,” said Tracey Allen, agricultural commodities strategist at JPMorgan. “When we have had such immense volatility, managing margins becomes a lot more costly.”

Today, the number of active contracts in US crude futures is near the lowest since 2014. Open interest in the primary European natural gas market, which has faced among the most extreme price spikes of any commodity, is hovering near the lowest in about four years.

Most traders now put on much smaller positions as the risk of ending up on the wrong side of the bet rises.

Meanwhile, some traders have pivoted from the futures market to the options market, which typically requires lower collateral.

Source: Bloomberg

https://finance.yahoo.com/news/traders- ... 15495.html

[winston]

The Commodities Boom Will Continue in 2023

Despite the economic slowdown, prices are expected to stay high for everything from oil to copper to wheat.

by Javiar Blas

From its peak in June, the Bloomberg Commodity Spot Index has fallen about 20%.

Oil has fallen from a peak of more than $125 a barrel in early 2022 to about $80 a barrel by the end of the year — but the price remains well above the bottom set in December 2008 of little more than $35 a barrel.

The commodity boom will only end when capital expenditure in new projects picks up significantly. But that won’t happen in 2023.

Source: Bloomberg

https://www.bloomberg.com/opinion/artic ... ify%20wall

[behappyalways]

Visualizing The Scale Of Global Fossil Fuel Production
https://www.zerohedge.com/energy/visual ... production

[winston]

Commodity trader Trafigura Group is facing more than half a billion dollars in losses after discovering metal cargoes it bought didn’t contain the nickel they were supposed to.

Source: Bloomberg

[behappyalways]

Visualizing The EV Mineral Shortage
https://www.zerohedge.com/technology/vi ... l-shortage

[behappyalways]

剛果擁24兆美元礦藏 3C產品難避金屬原料染血｜FOCUS午間新聞 20230301@tvbsfocus
https://m.youtube.com/watch?v=tPhSRzpH7M4

[behappyalways]

Global Food Prices Slide For Eleventh Month And Could Soon Show Up In Supermarket Savings
https://www.zerohedge.com/commodities/g ... et-savings

[winston]

Metals feel chill as Beijing shies away from major stimulus

Commodities from iron ore to copper fell after China set a cautious economic growth target of about 5% for the year and didn’t announce any major new stimulus.

The goal unveiled at the National People’s Congress was below what most economists had been expecting, giving Beijing more room for maneuver after it missed last year’s target by a wide margin.

The absence of a landmark announcement to boost real estate and infrastructure is damping enthusiasm among metals investors.

Source: Bloomberg

https://www.theedgemarkets.com/node/657900