Guide to Commodities 2013

The recent fortunes made by investors in rare earth metals and gold are just two shining examples of what an extremely profitable investment class commodities can be. From aluminum and platinum to zinc and silver, oil and gas to cocoa and wheat, this Guide to Commodities from the Economist Intelligence Unit is a comprehensive overview of the forces at work in the world of commodities.

The price volatility of so many commodities over the past decade has underlined their economic importance and how dependent we are on them: the price of gold has soared to new peaks (before tumbling in the last few weeks) as currencies have endured a crisis of confidence, demand from China has pushed metal prices up, instability in the Middle East and North Africa has had its effect on the oil price and food prices have been increasing in parallel with worries about whether there is enough to feed the world. Read the rest of Guide to Commodities 2013 » » »

Commodities tumble on US retail sales news

Commodities tumbled to the lowest since July, led by a plunge in precious metals, as U.S. retail sales fell the most in nine months and consumer sentiment unexpectedly declined.

Gold fell into a bear market, and silver plummeted to the lowest since 2010. Crude oil slumped to a one-month low.

On the London Metal Exchange, a gauge of copper, aluminum, zinc, lead, nickel and tin fell 2.6 percent, the most in a year.

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Why Abundant Oil Hasn’t Cut Gasoline Prices

Without realizing it, U.S. drivers are competing for American-made gasoline with consumers in Latin America and Asia, where demand is rising. “Americans don’t think about their prices being impacted by a global market,” says Morse. “The American public just thinks about the rising price at the pump.”

For the first time since 1995, the U.S. will likely produce more oil than it imports. That’s great for the country’s trade balance, but the benefits of all that cheap domestic crude still haven’t shown up at the one place it matters most: the gas station.

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Commodity Outlook – Forecast 2013

The World bank has just released its latest commodity forecast report which looks at not only historical commodity prices but also forecasts for a wide range of commodity cost drivers in the global economy.

You can access the Worldbank commodity forecast for 2013 – Infographics to get a better understanding of the numbers in the report.

This document should prove useful if you are asked to project future cost trends for either the raw materials you purchase, or the finished goods you are responsible for.

It lists 43 different commodities and what the World bank expects their price points to be in 2013 and the following years. Obviously, the idea here is not to take the exact prices from this report but the evolution in percentage that will help you forecast what the impact will be on your finished goods costs using a Commodity Intelligence solution like ProPurchaser and help in your sourcing and negotiation with suppliers.

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Oversupply Driving Down Raw Materials Costs

So far this year, U.S. oil futures are down 13%, while cotton prices have fallen 19%. Sugar is 20% lower. Copper is off 21% from its February 2011 record.
A glut of raw materials from crude oil to copper to Palm Oil and cotton is driving down prices and dimming the outlook for commodities over the next few months.

Stores of crude in the developed world are forecast to end 2012 at a two-year high, thanks largely to a slowdown in world demand growth and an unexpected surge in production in the U.S. In China, copper stockpiles are at record levels as the country’s slowing economy limits use of the metal. Cotton bales held in warehouses are predicted to reach an all-time high next year.

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US benzene tumbles as end users resist price hikes

US benzene spot prices tumbled swiftly this week after hitting a record $5.35/gal ($1,599.65/mt) DDP US Gulf on Friday, Platts data showed.

On Tuesday, October benzene was assessed at $5.18/gal ($1,548.82/mt) DDP, down 9 cents/gal ($26.91/mt) from Monday, while November benzene was assessed at $4.55/gal ($1,360.45/mt) DDP, down 25 cents/gal ($74.75/mt).

Weakness in the energy complex contributed to the bearish aromatics market.

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Commodities Erase 2012 Gain on Global Economic Woes

Commodities declined, erasing this year’s advance, on speculation that demand for energy, industrial metals and some agricultural products will slump because of the sluggish global economy.

Cotton futures fell the most in 10 weeks, and crude oil dropped to the lowest since mid-July. Gasoline declined for the ninth straight session, the longest slump since at least October 2005. Copper dropped to the lowest since Sept. 7.

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U.S. Oil Boom Falls Short of the Pump

Gasoline prices currently average nearly $4 per gallon nationwide. Rising U.S. crude production may seem like an attractive antidote, but it is proving ineffective on its own at a time when the world’s appetite for energy remains voracious and Middle East tension is a reminder that supplies could be disrupted.

U.S. crude production is expected to rise 12% this year and 8% in 2013, when it will hit the highest level since 1993, according to government figures. The price of West Texas crude, the U.S. benchmark, has fallen 7% this year, held down by rising supplies from new drilling methods.

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Oil Plunges 4% as Part of Broader Commodities Rout

Commodities like copper and crude oil are often seen as a barometer for industrial activity and, as such, the strength of the world economy. The steep price drops in both over the past few months, with oil down around 30% and copper off 15% since March, are sending a worrying signal about the depth of the global economic problems.

Oil prices plunged 4% to below $80, part of a broad selloff in commodities, sending an alarming signal about the health of the global economy.

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Plunging cotton prices cast pall on commodities outlook

The decline has been so sharp that the price of cotton is now at its lowest level since late 2009, when the global economy was still in the early stages of emerging from the frightening financial crisis the year before.

Prices have fallen to about 67 cents (U.S.) a pound in New York, down from a record high of nearly $2.20 a pound in March, 2011. That’s nearly a 70 per cent slide, and makes crude oil‘s recent troubles look comparatively tame.

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