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 » » »

Historical Nickel Price Tumbling, Takes Monthly Stainless Index Down

The Stainless MMI® took a rather large blow in May, falling 6 points from 91 to 85, primarily on the back of falling nickel prices, falling 304 prices in China as well as 304 China scrap prices.

A nickel glut has forced down the price by nearly about 50 percent since 2011, according to a recent Reuters report.

via Historical Nickel Price Tumbling, Takes Monthly Stainless Index Down | MetalMiner

Base metals caught up in the turmoil

Industrial metals prices trading on the London Metal Exchange were shaken this week by an unexpected slowdown in Chinese growth, followed by gloomy indicators in the United States, which cast doubt on global growth strength.

Like oil and gold, base metals were taken Monday in a huge selloff movement affecting all commodities: speculative investors were rushing to withdraw from the market.

“The week started quietly in Asian trade … until China published macroeconomic statistics that totally reversed the trend“, said Edward Meir, analyst at broker INTL FCStone.

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Copper: biggest weekly drop since 2011

After a decade during which large copper companies have struggled to follow a demand driven by Chinese consumption, new projects are finally coming to life. Unfortunately, this increase in supply meets a slowdown in demand.

Benchmark three-month copper was down more than 2 percent at $6,909.50 a tonne from $7,088 at the close on Thursday. It hit a 1-1/2 year low of $6,800 during the last session, and is on track for its biggest weekly fall since late 2011.

A selloff in gold futures, which posted a record two-day slide earlier this week, has percolated into the copper market, traders and analysts said. Copper is often traded as part of a wider commodities basket such as an index-linked fund, and investors wishing to limit losses on one component of the basket must sell the entire group.

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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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Nickel: World Surplus

The International Nickel Study Group predicts an increase in the supply of nickel next year leading to a surplus of 70,000 tonnes. Several projects are either already planned or going live shortly.

This is the case with Koniambo in New Caledonia which will start commercial production at the beginning of January,  or the refinery project between Taganito Mitsui & Co and Sumitomo Metal Mining in the Philippines, despite a Japanese nickel market with an excess of 15,000 tons over three quarters.

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Metals up on ECB and Fed news

Metal prices on the London Metal Exchange have significantly increased last week, boosted by measures from the European Central Bank (ECB), infrastructure spending in China and hopes to see U.S. Federal Reserve (Fed) do more.

The week started with a new stronger than expected decrease of the manufacturing activityin the USA and in China, the largest consumer of metals in the world.

These indicators have put metal prices under pressure Monday and Tuesday, but this decline did not last long, because these statistics also enhanced the likelihood of support measures by the central bank of China and the U.S.

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Indonesia: more mining export permits issued

As we were mentioning in Aluminum: China is running out of bauxite, in May, Indonesia asked all mining companies to either build their own processing capabilities locally or partner with companies able to do so, knowing that by 2014, exports of raw minerals, including bauxite, would be forbidden. Indonesia‘s goal is to derive more revenue from its mining sector.

As of late June, only 13 firms had been approved which triggered panic buying by customers in Japan and China.

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Commodity Index Extends Slide to Lowest Since October

“We’re getting very weak data going into June and the markets don’t like it. Economies are slowing and demand will fall.”
Commodities extended their decline, falling to the lowest level in almost eight months, after U.S. employers created fewer jobs than economists estimated and Chinese manufacturing slowed.

Crude oil for July delivery fell $3.30, or 3.8 percent, to $83.23 a barrel on the New York Mercantile Exchange, the lowest settlement since Oct. 7. Prices fell 17 percent in May, the biggest slide since December 2008.

Brent oil for July settlement slipped $3.44, or 3.4 percent, to $98.43 a barrel on the ICE Futures Europe exchange in London. It was the lowest close since Jan. 27, 2011. Brent is down 8.3 percent this year.

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Nickel Slump Seen Ending as China Faces Ore Import Curbs

Nickel fell 12 percent this year on prospects for the biggest surplus since 2009. Morgan Stanley now predicts the glut will peak in 2012 and Barclays says prices should rally toward the end of the year on strengthening demand from stainless-steel makers, the biggest consumers.

The rebound may not happen until then as China runs down record ore stockpiles accumulated in anticipation of the Indonesian ban.

After slumping more than any other industrial metal, analysts and traders say the worst may be over for nickel as restrictions on shipments from Indonesia, the biggest producer, diminish a worldwide glut.

via Nickel Slump Seen Ending as China Faces Ore Import Curbs – Bloomberg.