Thursday, 1 August 2013

Indian Rupee Slips Back To Near Record Lows

The Indian rupee commenced lower on Wednesday, July 31, 2013 extending previous day decline as dollar firmed up against other currencies in overseas markets ahead of the US Fed concluding its policy meeting and a weak opening in the domestic equity market added further pressure on the domestic currency. Besides, heavy month-end demand for the US currency amid growth concerns also weighed on the local unit. The domestic currency opened weaker by 43 paise at Rs 60.91 to a dollar, edged up to a high of 60.83 before slumping back to a low of 61.21 so far during the day. In the spot currency market, the Indian unit was last seen trading at 61.02, down around 54 paise or 0.89% as compared to previous close at 60.48.Rupee fell below the key psychological level of 60 to the dollar to a three-week low on Tuesday, posting its biggest fall in a month, and wiping out all the gains notched up on central bank's recent liquidity tightening measures as RBI kept interest rates on hold and failed to announce any additional steps to defend the currency.
Domestic benchmark indices slumped in early trade as most Asian stocks fell as investors remained caution ahead of the Federal Reserve's policy decision. Asian shares were flat on Wednesday and the dollar held onto some slight gains as market momentum stalled ahead of the outcome of the U.S. Federal Reserve policy meeting and release of U.S. GDP data. At the time of writing, the S&P BSE Sensex was down 190.13 points or 0.98% to 19.158.21 while the CNX Nifty was down 53.80 points or 0.93% to 5,701.25.
The dollar struggled to extend modest overnight gains early in Asia on Wednesday as investors trod cautiously ahead of the outcome of the Federal Reserve policy review that could see the central bank drive home a dovish message. The euro steady above 1.32 to the dollar. The dollar index was around 81.80 levels. The dollar yen was at 98.

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Technical Comment For The Day: Copper

Copper recovered sharply and tested a one week high on the back of high liquidation of short positions. The open interest has dipped continuously in the last three sessions. The pickup in volumes to 71541 kgs, also justified that the rise in metal. MCX Copper August expiry contract closed at Rs 421.5 per kg, up 2.5%. Further rise of metal towards Rs 425 is highly likely in today's session. Earlier in the month, Copper has managed to test the resistance of Rs 425 but failed to surpass it. On LME, Copper was up by 1.6%, at $ 6920 per tonne. The next support for the contract is at $ 7000 per tonne.
Source by Commodity Insights

Tuesday, 30 July 2013

Maize Futures To Witness Stockiest Selling From Higher Levels

Selling is likely to continue in maize futures in the near term due to steady kharif sowing progress along with weak export demand of maize in international prices. The NCDEX futures settled flat in the last trading.
As per the latest release from Ministry of Agriculture, the total sowing acreage of maize as on 26th July 2013 reported at 71.10 lakh hectares against 57.15 lakh hectares in the same time last year. This is mainly due to strong sowing in Andhra Pradesh, Uttar Pradesh and Rajasthan. The fresh supplies of these states will start from mid-September.
Moreover, weakness in export demand due to low prices of maize in international market will also encourage some selling in futures market. The spot prices of Indian maize are being traded at $20-30 per tonne higher in international market.
The NCDEX September futures declined by almost Rs 2 per quintal in the last trading to close at Rs 1290 per quintal . The NCDEX futures added 11.85 % in open interest indicating fresh short position by traders. Technically, selling is likely to emerge from 1298-1302 levels while supports are likely at 1275-1280 levels in the near term.
Source by Commodity Insights

The resistance of Rs 413 and Rs 414 per kg again proved too stiff for Copper to breach on Tuesday. The metal remained in green but managed to close with minor gains of 0.09% to Rs 411.2 per kg. The prices are likely to remain trading in the same manner as they did on Tuesday. The range of Rs 414 and Rs 409 is active at the moment in Copper. Open interest in the metal was down by 7786 contracts to 25834 contracts on 30 July 2013. However the volumes were up reaching 53437 kgs in the August contract. This indicates that traders tried to settled their respective short positions before the key decisions from US.
Source by Commodity Insights

Monday, 29 July 2013

Gold Slips As Dollar Moves Up Ahead Of Fed

Gold futures are trading lower in the Asia electronic session today as the US dollar moved up from its one-month low against the Japanese yen, as the Federal Reserve prepared to start a two-day monetary-policy meeting.
The ICE dollar index, a gauge of the greenback’s movement against six other major currencies, rose to 81.711, up from 81.663 late Monday in North America. The euro bought $1.3260, little changed from $1.3263, while the British pound fell to $1.5339 from $1.5349.
The ICE dollar index had lost more than 3% since hitting its most recent high on June 9. The pullback was spurred by speculation about when the Fed will begin tapering its bond purchases and by subsequent comments from Fed Chairman Ben Bernanke about interest rates staying low for an extended period.
An ounce of gold on the COMEX division of the New York Mercantile Exchange is trading down $1.3 at $ 1328.3. Yesterday, it rose $7.70, or 0.6%, to settle at $1,329.60 an ounce. The FOMC begins its two-day meeting on Tuesday, with its decision on monetary policy due Wednesday.
September silver futures are trading down 0.049 at $ 19.81 per ounce on Comex. Yesterday, it ended higher by 9 cents, or 0.5%, to $19.86 an ounce.
A packed week of updates for the market includes the first reading of second-quarter gross domestic product in the U.S., manufacturing data from major gold consumer China, and monetary-policy decisions from the European Central Bank and Bank of England.
MCX new benchmark October contract may open today’s session near Rs 27850 levels with support around Rs 27740 levels.
Source by Commodity Insights

Economic Buzz: Japan Industrial Output Falls 3.3 In June

Japan's industrial production took an unexpectedly sharp drop in June, falling a seasonally adjusted 3.3% from May, though manufacturers offered an upbeat outlook for the current month, the Ministry of Economy, Trade and Industry reported Tuesday. A fall in production of transport equipment, including autos, led the decline, followed by electronics and machinery, the ministry said. However, a survey of manufacturers raised their forecast for July's industrial production to a rapid gain of 6.5%, up from 3.3% projected in last month's survey. In May, the survey -- produced by the ministry -- had tipped output to fall 2.4% in June.
Source  by Commodity Insights

Sunday, 28 July 2013

Economic Buzz: Japan's June Annual Retail Sales Rise 1.60%

The Ministry of Economy Trade and Industry said that retail sales rose to a seasonally adjusted annual rate of 1.6% in June, from 0.8% in the preceding month. Analysts had expected retail sales to rise at annual rate of to 1.9% last month.Source by Commodity Insights

Crude Oil Slips On Demand Concerns

Crude oil futures slipped below $95 a barrel in the Asia electronic trades today on demand concerns from China after the official data released over the weekend showing profits at Chinese industrial firms slowed in June.
The Beijing-based National Bureau of Statistics said on Friday, that the net income increased 6.3 percent from a year earlier to 502.4 billion yuan ($82 billion), down from a 15.5 percent pace in May. Profit from main business operations fell 2.3 percent after an 8.8 percent gain the previous month, it said.
Industrial companies’ profits in the first six months of the year rose 11.1 percent to 2.58 trillion yuan, down from a 12.3 percent gain in the January-May period, and sales rose 11.4 percent to 47.8 trillion yuan.
In Asia today, the Hang Seng Index lost 1% and the Hang Seng China Enterprises Index skidded 1.8%. The Shanghai Composite dropped 1.4%, on course for a fourth straight day of losses. The Nikkei Stock Average fell 1.9% to 13,855.41, dropping below the 14,000-point level.
Light sweet crude futures for delivery in September are trading down 28 cents at $ 104.42 per barrel on the New York Mercantile Exchange. On the week, Nymex oil futures fell 3.24%.
In the week ahead, the U.S. is to publish data on gross domestic product and manufacturing activity to further gauge the strength of the U.S. economy. In addition, traders will be eyeing the Fed's monthly policy statement for indications on the future of the central bank's bond-buying program.
MCX August crude oil futures may open today’s session near Rs 6150 levels with support around Rs 6100-070 levels.
Source by Commodity Insights

Thursday, 25 July 2013

Gold Extends Gains In Asia

futures extended gains in the Asia electronic session today, hitting an intraday high of $ 1340.5 per ounce. The metal also got some safe haven support from the losses in the Asian equities.
In Asia, the Japanese stocks tumbled toward a third straight day of losses on the yen’s strength, while Australian and South Korean shares climbed following overnight gains on Wall Street. Japan’s Nikkei Stock Average skidded 2.1%, and China’s Shanghai Composite lost 0.7%, after each also declined in the previous two sessions.
Gold for December delivery is trading up $9.1 at $ 1338.6 an ounce on the COMEX division of New York Mercantile Exchange. The august delivery contract which expired yesterday ended the session up $9.30, or 0.7%, to settle at $1,328.80 an ounce. Prices for the contract had tallied a two-session loss of 1.2%.
In the currencies today, the U.S. dollar came off one-months lows against the euro and the British pound Friday, but the greenback was still in line to post a loss of more than 1% for the week. The euro on Friday traded at $1.3281, down slightly from $1.3290 on Thursday, when it reached its strongest level since June 19. The dollar had advanced to ¥99.29 from ¥99.11 just after Japan’s Finance Ministry said the core consumer price index rose 0.4% from June 2012, though it was unchanged compared with May’s levels.
Investors later Friday will receive the final reading on U.S. consumer sentiment in July, with the survey expected to show a rise to 84 from a preliminary reading of 83.9. Late next week, attention will turn to the U.S. government’s key jobs report for July, with labor-market conditions a major component of the Fed’s assessment of economic recovery.
MCX August gold futures may open today’s session near Rs 27400 levels with resistance near Rs 27470-90 levels and support near Rs 27250 levels.
Source by Commodity Insights

Economic Buzz: Japan Registers Inflation For June

Japan's consumer prices managed to register mild inflation in June compared with a year earlier, data out Friday from the Finance Ministry showed. The core consumer price index, which excludes volatile fresh-food costs, rose 0.4% from June 2012, though it was unchanged compared to May's levels. Meanwhile, July's core CPI for metropolitan Tokyo -- seen as a leading indicator for the nation as a whole -- also scored a price gain, rising 0.3% on an annual basis, though it too was unchanged from the previous month. Overall national CPI including all items rose 0.2% from a year earlier, but was flat from May. The fuel, light and water charges segment led the gains, with a 5.7% annual increase nationally, the ministry said. Japan has been struggling to rid itself of on-and-off deflation that has dragged on the economy for years, with the central bank currently targeting a 2% core CPI gain by 2015.
Source by Commodity Insights

Wednesday, 24 July 2013

Oil Slips On Weak China Manufacturing

futures slipped in tandem with the Asian equities after the China manufacturing activity slowed further in July.
NYMEX light sweet crude oil futures for September delivery are trading down 18 cents at $ 107.05 per barrel in the electronic trading. Yesterday, it ended up 29 cents, or 0.3%, to settle at $107.23 a barrel on the New York Mercantile Exchange.
Most major Asian markets retreated Wednesday after a gauge of Chinese manufacturing dropped to a 11-month low, with Japanese shares falling on a firmer yen and a pullback in the Standard & Poor’s 500 Index.
China’s Shanghai Composite lost 1.3%, extending losses as investors digested preliminary data released by HSBC, showing China’s manufacturing Purchasing Managers’ Index slid to 47.7 in July from a final reading of 48.2 in June.
On Tuesday, a Platts report showed a jump in China’s oil demand. China’s apparent oil demand climbed by 11.7% to average 9.99 million barrels per day according to a Platts analysis of Chinese government data released Tuesday. Apparent demand for oil in June was the highest since February 2011.
The American Petroleum Institute said supplies fell 1.4 million barrels for the week ended July 19. A Platts analyst survey showed a forecast for a 2.6 million-barrel decline. The API reported gasoline stockpiles down roughly 900,000 barrels and distillate supplies down by about 700,000 barrels.
MCX August crude oil futures may open today’s session near Rs 6370 levels with support near Rs 6340 levels.
Source  by Commodity Insights

Economic Buzz: China Manufacturing Gauge Hits 11-Month Low: HSBC

China's manufacturing-sector activity is slowing further in July, with new factory orders deteriorating at a faster pace, according to preliminary data out Wednesday from HSBC and Markit. The so-called flash version of HSBC's Chinese manufacturing Purchasing Managers' Index dropped to 47.7, an 11-month low and down from a final result of 48.2 for June, with any reading below 50 indicating contraction. A separate government version of the June PMI printed at 50.1. The flash PMI -- which includes about 85%-90% of the survey responses that will be used for the final version -- also showed new export orders slowing, albeit at a slower rate than in the previous month.
Source by Commodity Insights

Monday, 22 July 2013

Oil Steady Above $108 On China Move

Crude oil futures are trading steady above $108 an ounce in the Asia electronic session today buoyed by the China move in which it removed the lower limit on interest rates for banks, to help lenders attract more borrowers and spur economic activity.
The move by People's Bank of China, a key step in plans for liberalizing the country's interest rate regime, will remove a floor on lending rates set at 70% of benchmark lending levels set by the central bank. The move will reduce financing costs of domestic companies and improve the allocation of financial resources.
In Asia, Japan’s Nikkei Stock Average was flat at the midday break, while China’s Shanghai Composite slipped 0.3%, and Hong Kong’s Hang Seng Index gave up 0.2%. The performance in Tokyo came after the ruling Liberal Democratic Party’s coalition easily won a majority of the 121 seats contested in the upper house elections over the weekend.
Light sweet crude oil futures for September delivery are trading up 16 cents at $ 108.03 per barrel on the New York Mercantile Exchange. On the week, it advanced 2.1%, the fourth consecutive weekly gain. It has rallied nearly 14% over the past four weeks.
Appetite for riskier assets improved last week after Bernanke said in testimony to Congress that there was no set timeline for the central bank to withdraw its stimulus measures. Bernanke said the central bank could scale back its asset purchases by the end of the year if the economy continues to improve, but added that there was no “preset course.”
Oil prices were also supported after Wednesday’s bullish U.S. inventory report showed that crude oil inventories fell by 6.9 million barrels last week, compared to expectations for a decline of 2 million barrels. Crude supplies in the U.S. are down 27.1 million barrels in three weeks ended July 12, the most in weekly statistics dating back to 1982.
MCX August expiry crude oil futures may open today’s session near Rs 6440 levels with resistance near Rs 6470 levels.
In the week ahead, the U.S. is to publish data on the housing sector and manufacturing to further gauge the strength of the U.S. economy. Market players will also be looking ahead to Wednesday’s data on Chinese manufacturing activity, amid ongoing concerns over the country’s economic outlook.

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China Copper Concentrate Imports Rise In June

China reported a sharp rise in Copper concentrate imports for the month of June. Even on a half yearly basis, imports showed a sharp upswing. The data released from General Administration of Customs showed that China Copper concentrate imports were 673518 tonnes, up 40.23 percent in June, compared to same period last year. The total imports in the month of January-June 2013, was 4463111, up 32 percent.
On LME, benchmark prices were trading at $ 6981 per tonne, shy away from resistance of $ 7000 per tonne. MCX Copper August expiry was trading at Rs 416.6 per kg, up 0.5 percent.
Source by Commodity Insights

Gold Jumps Past $1300 On Dollar's Fall

Gold futures jumped past $1300 an ounce in the Asia electronic session today buoyed by losses in the US dollar. Gold continued to get boost from the comments by Federal Reserve Chairman Ben Bernanke earlier last week which eased concerns over the possibility the central bank will begin to taper its bond-buying program in the near future.
August dated gold futures contract is trading up $22 at $1315.4 an ounce on the Comex division of the New York Mercantile Exchange. On the week, gold prices advanced 0.85%, the second consecutive weekly gain. It may find support near $1255 levels and resistance near $1350-70 levels.
The U.S. dollar pulled lower against the yen on Monday following an election victory seen as empowering Japan’s prime minister to move forward with economic reforms in the world’s third-largest economy.
The dollar traded at ¥100.15, down from ¥100.60 on Friday but off an intraday low of ¥99.50. The ICE dollar index, which measures the greenback against six other major currencies including the yen, fell to 82.474 from 82.633 late Friday in North America.
In the first day of his semi-annual testimony to Congress, Bernanke reiterated that the Fed will continue to maintain its accommodative monetary policy for the foreseeable future. He added that the central bank may taper its USD85-billion-a-month asset-purchase program later this year and halt it around mid-2014.
Bernanke said the pace of purchases could be maintained longer if conditions are less favorable. The precious metal is on track to post a loss of 23% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.
Recently, Silver futures have been unable to pick up hit by the demand concerns. On Friday, Comex silver for September delivery eased up 0.4% to settle the week at $19.46 a troy ounce. Despite Friday’s modest gains, silver future prices lost 2.15% on the week.
Meanwhile, copper for September delivery rose 0.5% on Friday to close the week at $3.146 a pound. The red metal found support on Friday after China’s central bank said it was removing the lower limit on interest rates for banks, to help banks attract more borrowers. China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
MCX August gold may open today’s session near Rs 26770 levels with resistance near Rs 26840-900 levels.
In the week ahead, the U.S. is to publish data on the housing sector and manufacturing to further gauge the strength of the U.S. economy. Any improvement in U.S. economic activity could scale back expectations for further easing, boosting the dollar and weighing on gold.
Source by Commodity Insights

Wednesday, 17 July 2013

Technical Comment For the Day: Gold

MCX Gold settled at Rs 26347 per 10 grams, down Rs 122 per kg. The prices are very close to their 100 day EMA which is at Rs 26338 per 10 grams. The prices tested a high of Rs 26798 per 10 grams, while a low of Rs 26240 per 10 grams was tested. Fibonacci retracements set from Rs 28000, hit on 20 June 2013, show that a 38 percent retracement level is active at Rs 26040 per 10 grams. The volumes in the contract increased as the prices settled down. Total volumes were 33762 kgs on Wednesday, against 24948 a day before. However, International chart patterns suggest that COMEX Gold is well supported at $ 1270 per troy ounce. Gold can garner supports near Rs 26100-26200 per 10 grams.
TRADING STRATEGY: BUY Around Rs 26200-26250, TARGET 26600 SL 26120
Source by Commodity Insights

Gold Flattens Post Bernanke Comment

Gold futures are trading flat near $1278 an ounce in the Asia electronic session after Federal Reserve Chairman Ben Bernanke said there was no set timetable for slowing U.S. monetary stimulus.
Gold for August delivery are trading flat at $ 1277.5 an ounce after dropping $12.90 during Wednesday trade on the Comex division of the New York Mercantile Exchange. The undertone may remain weak today with the dollar appreciating against the single currency.
U.S. stocks ticked higher Wednesday after the Fed chairman said the central bank’s monthly bond purchases weren’t on a “pre-set course” and could be curbed or extended, depending on economic conditions.
Bernanke’s comments Wednesday came under scrutiny for clues as to when the Fed would reduce its bond purchases. Bernanke’s remarks also drove the dollar higher, with a rising U.S. currency weighing on dollar-denominated gold by making it more expensive to holders of euro, yen and other units.
The greenback extended those gains modestly in early Thursday trading, with the ICE dollar index rising to 82.751 from 82.715 late Wednesday.
The Fed chief was due to speak before the Senate later Thursday.
MCX August gold futures may open today’s session near Rs 26400 with resistance near Rs 26460 levels and support near Rs 26350 levels.
Source by Commodity Insights

Tuesday, 16 July 2013

Economic Buzz: U.S. June Industrial Production Up 0.3%

The U.S. Federal Reserve said that U.S industrials production increased 0.3 percent in June after having been unchanged in May. For the second quarter as a whole, industrial production moved up at an annual rate of 0.6 percent. In June, manufacturing production rose 0.3 percent following an increase of 0.2 percent in May. The output at mines advanced 0.8 percent in June, while the output of utilities decreased 0.1 percent. At 99.1 percent of its 2007 average, total industrial production was 2.0 percent above its year-earlier level. The rate of capacity utilization for total industry edged up 0.1 percentage point to 77.8 percent, a rate that was 0.1 percentage point above its level of a year earlier but 2.4 percentage points below its long-run (1972-2012) average.
Source by Commodity Insights

Economic Buzz: U.S Core CPI Eases In June

The Bureau of Labor Statistics said that U.S consumer prices, excluding food and energy costs, rose 0.2% in June, matching expectations. Core consumer prices inched up 0.2% in May. Core CPI increased at annualized rate of 1.6% last month, in line with forecasts and slowing from 1.7% in May.
Source by Commodity Insights

Friday, 12 July 2013

Economic Buzz: Chinese Growth Rate To Slip Under 7% This Year Says Official

China's economic growth rate will likely average 7% this year, Chinese Finance Minister Lou Jiwei said yesterday, according to media reports. This is much below the government's 7.5% target and would mark a slowing from 7.7% growth reported for the first quarter of this year. However, Lou also said the economy would not suffer a hard landing and that the slower growth was necessary for the reforms that the government is undertaking to further open up the economy and move away from dependence on exports. Despite the slowdown of China's economic growth rate, the structural reform is paying off.
Source by Commodity Insights

Technical Comment For The Day: Crude

Rise in supplies forecasted by the International Energy
Agency (IEA) has resulted in formation of topping out pattern in Indian Crude Oil. The prices were galloping earlier in the month due to supply threats from disruption in Suez Canal after crisis in Egypt. The price retreat in Oil internationally will send shock waves in Indian Crude. Crude is expected to move below Rs 6200 in today's trade after it closed at Rs 6283 per barrel on Thursday. Open interest saw a decline towards 42934 contracts an indicator that the long positions were liquidated. RSI is pointing towards further selling in the benchmark contract as it has come down from 84 levels to 65 in a span of five days.
Trading Strategy: SELL CRUDE AT 6300, TP 6200-6170, SL 6320-6330
Source by Commodity Insights

Thursday, 11 July 2013

Commodities Buzz: Nippon And Sumitomo Metal Prove Corrosion Resistance In Super 13Cr Line Pipe

Corrosion resistance of Super 13Cr Line Pipe (S13Cr) was proved in a joint R&D program with Shell a global group of energy and petrochemical companies. The company expects that S13Cr will be more widely used in severe oil and gas transport condition because of the proved performance of the product. NSSMC and Shell have a long term contract called EFA (Enterprise Framework Agreement).
The environments in oil and gas fields have tended to become more severe. For pipes which are used for drilling and transportation of oil and gas, resistance to corrosion is required especially when exposed to fluids containing carbon dioxide, hydrogen sulfide and chlorides. Reasonable prices and stability of supply are also essential.
Source by Commodity Insights

Massive Gains In Gold As Fed Seen Going Easy On Tapering Plans

MCX Gold
futures for August spurt sharply today on ideas that the Fed is in no hurry to cutback on its asset purchases. The metal shot up near $1300 per ounce in Asian trades as the dollar slipped and equities rallied. The yellow metal had consolidated around $1250 per ounce earlier in the week. Gold had eased after a strong US non-farm payrolls data on Friday but has added impressive gains as prices managed to stay above $1200 per ounce. COMEX Gold futures currently trade at $1289.60, up $42.20 per ounce on the day.

Gold futures shot up in tune with the Asian stocks after the US Federal Reserve's policy meeting minutes showed officials were split on the future of the central bank's stimulus program. About half the Fed officials believe the central bank should end its $85 billion-a-month bond-buying program by the end of this year, suggesting the policy makers are divided on the timing of the coming wind-down of the program. Many other participants anticipated that it likely would be appropriate to continue purchases into 2014, the minutes from the June 18-19 meeting said.

Gold jumped after this, which fanned hopes that the easy money measure wouldn't be removed sooner than expected. Gold has benefited from the Fed's stimulus program, as many traders bought the haven asset to protect against perceived risks like higher inflation and a weaker US dollar. Now, these traders worry gold prices will struggle in the absence of the supportive measure.

The US dollar slipped after the FOMC minutes. The currency was supported after the US non-farm payroll comes in much stronger than expected, with 195,000 new jobs created in June. But the situation seems to have turned around as the greenback was sent to a near three week low against the Euro amid a highly volatile trading action in Asia.

The physical demand for gold remains in a decent shape and the recent price destruction is reportedly bringing in good buying from retail investors and central banks in emerging countries. The MCX Gold managed to hold on above Rs 26000 per 10-gram levels in yesterday and sprinted in early moves today. The counter quotes at Rs 261816, up Rs 713 per 10 grams or 2.73% on the day with 4.90% increase in the open interest.

Source by Commodity Insights

Commodities Buzz: Russian Stainless Steel Imports Decline By 17.6 Percent In May

Russia's imports of stainless steel products totaled 17,928 tons in May, decreasing by 17.6% from a month ago, according to data released by the Russia-based SpetsStal Association.
In May, the country's imports of stainless wires dropped by 28%; those of stainless flats fell by 18.5%. Apart from that the imports of stainless ERW pipes declined by 36.8% and stainless longs imports decreased by 8.1%, from April 2013.
Source by Commodity Insights

Tuesday, 9 July 2013

Oyu Tolgoi Has Started Shipping Copper Concentrate To Customers

Oyu Tolgoi has started shipping copper concentrate to customers from its copper and gold mine in Mongolia. The shipping of concentrate is the culmination of a three-year, US$6.2 billion project to build the first phase of one of the world's top five copper mines.
Rio Tinto Copper chief executive Jean-Sebastien Jacques said “It has taken the vision and hard work of thousands of people to get to this point, where we are starting to convert the rich resources beneath the desert into real wealth and opportunity for all stakeholders, including the Mongolian people.
“Oyu Tolgoi starts production at a time when undeveloped quality copper assets are scarce and the outlook for copper continues to be strong. With continued development, Oyu Tolgoi will generate wealth for many decades to come.”
All permits for exporting copper concentrate are in place, together with Oyu Tolgoi Board approvals, and authorities required for continued concentrate sales. Oyu Tolgoi remains committed to maintaining transparency in its operations and managing export revenues consistent with the Investment Agreement.
Source by Commodity Insights

Indian Rupee Recovers Slightly

The Indian rupee recovered above the psychological Rs 60 per dollar mark on Tuesday, July 09, 2013 from its new all time low levels registered yesterday as the US dollar rally slightly eased and positive local shares supported. The domestic currency opened higher by almost 91 paise at Rs 59.70 against the American currency and climbed to a high of 59.65 before dipping back to a low of 60.2525 so far during the day. In the spot currency market, the Indian unit was last seen trading at 60.20, up around 41 paise or 0.68% as compared to previous close at 60.61.
The local unit rebounded following measures by the central bank and the market regulator to curb speculative trading in foreign exchange derivatives. India's regulators toughened rules for derivatives trading in the currency market in a bid to arrest the steep decline of the rupee, which fell to a record low of 61.21 against the dollar on Monday. The rupee fell to a record low in the previous session, intensifying fears about the funding of the current account deficit and sending policy makers scrambling to find quick fix solutions beyond sporadic interventions. Efforts to contain the rupee's slide highlight the vulnerability of a country dependent on capital inflows to fund a current account deficit that hit a record high of 4.8 percent in the fiscal year ended in March.
Domestic shares rallied in early trades today on firm Asian stocks. Asian shares posted gains on Tuesday, tracking a rally in Wall Street shares spurred by strong U.S. job data last week, but investors were nervous over Beijing's new drive to reform credit to restructure the economy.
Meanwhile, the dollar paused in its rally as investors bought beaten-down currencies such as the Australian dollar on Tuesday, though its broad uptrend is seen intact as the market tries to position for when the U.S. Federal Reserve will start to slow its stimulus.
Source by Commodity Insights

Monday, 1 July 2013

Commodities Buzz: Chinese Steelmakers Suffering From Overcapacity

Chinese steelmakers are dealing with a substantial oversupply problem that will likely force them to transform the way they do business. A report posted on the China Iron and Steel Association (CISA)'s on Monday said that a weak economic recovery, low demand, high prices for raw materials and high steel output have caused an oversupply of steel products.
The National Bureau of Statistics has already showed that steel output increased by 11.3 percent year on year to 91.19 million tonnes in May. In the first five months of the year, steel product output rose 10.8 percent year on year to reach 426.16 million tonnes.
Meanwhile, the Complex Steel Price Index (CSPI) released by CISA dropped by 13.35 percent year on year to hit 101.83 by the end of May, down 3.71 percent from that of April.
Source by Commodity Insights

Indian Rupee Off Early Highs

The Indian rupee commenced marginally higher on Tuesday, July 02, 2013 with inflows likely related to Unilever's open offer for Hindustan Unilever, according to market sources, although the gains were short lived. The domestic currency opened up by almost 8 paise at Rs 59.4425 to a dollar and climbed to a high of 59.18 before dipping back to a low of 59.4650 so far during the day. In the spot currency market, the Indian unit was last seen trading at 59.4525, higher by around 7 paise or 0.11% as compared to previous close at 59.52.
Rupee came off near two-week highs to close lower on Monday, ending a two-day winning streak, as corporate inflows and a strong domestic stock market was outweighed by a late surge in dollar demand from oil importers. Still, the rupee has recovered substantially from a record low of 60.76 hit on June 26 as a revival of global risk appetite and rumored inflows related to Unilever's open offer for its Indian unit kept the rupee bid. Investors are also hoping the government would soon announce additional economic reforms centering on opening up more sectors for foreign investments after last week approving a hike in domestic gas prices.
Domestic equities edged lower amid initial volatility as most Asian stocks were in red. Asian stocks were mostly lower on Tuesday, 2 July 2013, as anemic manufacturing data from China raised growth fears. However, Tokyo's Nikkei was seen extending gains after encouraging manufacturing data in Europe and the United States helped cheer a market fretting about a slowing Chinese economy.
The U.S. dollar and yen were both on the back foot as a swathe of global industry data suggested an improvement in growth without being strong enough to risk any reduction in monetary stimulus from the Federal Reserve. The euro was flat above 1.30 to the dollar. The dollar index was just above the 83 mark. Meanwhile, yen remained weak against the dollar. Asian currencies trading mixed.
Source by Commodity Insights

Gold Extends Gains Above $1250

Gold futures are trading higher in the Asia electronic session today, extending its yesterday’s gains of over 2%. Prices surged 2.2% to a session peak of $1,260.61 per ounce yesterday on bargain hunting after the metal tumbled more than $200 in June.
The metal hit a near three-year low of $1,180.71 on Friday and jumped up from that level to near $1260 levels today. Today the metal is trading up $ 1.3 at $ 1257 per ounce on Comex. Yesterday, it settled at $1,255.7 per ounce, up $32 or 2.6%.
A weaker dollar and fresh flow of institutional money on the first day of the quarter also provided support. A slew of data from the euro zone, Japan and United States signalled a continued tentative global recovery, boosting equities, copper and oil prices.
U.S. manufacturing expanded in June, while Japanese and European data pointed to stabilizing economies. The Institute for Supply Management said its index of national factory activity rose to 50.9 in June from 49.0 in May. That was a touch above the expected 50.5 level.
Hedge funds and money managers have also slashed their bullish bets in gold futures and options to their lowest levels in six years, a report by the Commodity Futures Trading Commission showed on Friday.
The low prices of the past few weeks have subdued physical demand for gold in Asia, traditionally the largest buyer of the commodity. Asian consumption of gold had helped limit some of bullion’s losses when prices fell the most in 30 years in April.
MCX August gold futures may open today’s session near Rs 26000 levels with resistance near Rs 26100 levels.
Traders and investors are awaiting U.S. payrolls report for June, due on Friday, for a better indication of how gold and other assets would perform. A strong payrolls reading would likely signal more pressure on the Fed to reduce its stimulus, lifting Treasury yields and the dollar, and depressing gold.
Markets are also watching the European Central Bank’s policy meeting on Thursday, which is likely to emphasize that the euro zone economy is in a different stage of recovery than the United States.
Source by Commodity Insights

Economic Buzz: ISM PMI Says Expansion In U.S Manufacturing Sector In June

Economic activity in the manufacturing sector expanded in June following one month of contraction, and the overall economy grew for the 49th consecutive month, said the nation's supply executives in the latest Manufacturing ISM Report on Business. The PMI registered 50.9 percent, an increase of 1.9 percentage points from May's reading of 49 percent, indicating expansion in the manufacturing sector for the fifth time in the first six months of 2013. The new orders Index increased in June by 3.1 percentage points to 51.9 percent, and the Production Index increased by 4.8 percentage points to 53.4 percent. The Employment Index registered 48.7 percent, a decrease of 1.4 percentage points compared to May's reading of 50.1 percent. Manufacturing employment contracted for the first time since September 2009, when the index registered 47.8 percent. The Prices Index registered 52.5 percent, increasing 3 percentage points from May, indicating that overall raw materials prices increased from last month. Comments from the panel generally indicate slow growth and improving business conditions.
Source by Commodity Insights

Economic Buzz: Global Personal Computer Sales Expected To Have Dropped 12% In June Quarter

The global personal computers (PC) market continued to suffer slow shipment growth in top countries across regions in May, according to the International Data Corporation (IDC) Monthly PC Tracker. April shipment growth had improved slightly from March in Latin America and Europe, Middle East and Africa (EMEA), but May growth has come in slower than April for each of these markets except India and UK.

IDC's quarterly PC forecast from May projected worldwide PC shipment declines of -11.7% in the second quarter of 2013 (2Q13), -4.7% in the third quarter, and -1.6% in the fourth quarter, resulting in total annual growth of -7.8% for 2013. This follows a decline of -13.3% in the first quarter of 2013 and -4.0% for all of 2012. The results for May are behind pace for achieving the projected 2Q13 growth rates, although stronger June results could still make up most if not all of the difference.

The expectation for the second quarter was not all that high, showing only minor improvement from the first quarter. But the May results reflect deteriorating conditions rather than improvement and the market will probably fall short of projections, according to IDC.

IDC's Monthly PC Tracker includes the Western European countries covered in the IDC-Context European Monthly PC Tracker as well as other top markets around the world from the IDC Emerging Markets Monthly PC Tracker. The Monthly PC Tracker expands on IDC's extensive Worldwide Quarterly PC Tracker by providing more frequent market data on the top markets.
Source by Commodity Insights

Commodities Buzz: India Gold And Silver Tariff Value Notified

According to a latest statement dated 29th June, the ministry of finance has notified the tariff value of precious metals in India as follows.

Gold- $401 per 10 grams
Silver- $604 per kilogram
Source by Commodity Insights

Commodities Buzz: China Non Ferrous Metals Output Jumps By 7.5%

The combined output of ten nonferrous metals in China rose 7.5% year on year last month. The pace of growth accelerated from a 6.6% in the same month of 2012, according to the latest statistics released by the National Development and Reform Commission.
In the first five months, the country's ten nonferrous metal output amounted to 16.04 million metric tons, up 10.9% year on year. The growth rate was 5.8 percentage points higher than that in the corresponding period of last year.
The output of aluminum electrolytic rose 8.3% year on year to 8.73 million metric tons in the first five months, after rising 10.5% in the same period of 2012. The output of copper and alumina continued to see faster growth of 14.5% and 10.9%, respectively.
The output of lead and zinc saw an increase of 16.2% and 9.3% year on year in the period, after recording a year on year decline of 5.2% and 7% in the first five months of 2012.
In the first five months, the nonferrous metal industry realized RMB 65.17 billion in profit, reflecting a decline of 7.1% year on year. The profit of the nonferrous metal mining and dressing sector dropped 4.4% year on year to RMB 25.38 billion, while that of the nonferrous metal smelting and processing sector fell 8.8% to RMB 39.79 billion
Source by Commodity Insights

Friday, 28 June 2013

Economic Buzz: UK Annual Nationwide Housing Prices Grow 1.9% In June

On an annual basis UK Nationwide Housing Prices increased 1.9% in June, after rising 1.1% previous month, Nationwide revealed on Friday. This result is almost in line with projections of +2%. Month-over-month Nationwide Housing Prices increased 0.3% in June, following a 0.4% rise in May, as expected.
Source by Commodity Insights

Economic Buzz: Germany Annualized May Retail Sales Up 0.40%

Statistisches Bundesamt Deutschland informed on Friday that German Retail Sales rose 0.8% in May, compared with the 0.1% drop in April and above forecasts of +0.2%. On an annual basis German Retail Sales rose 0.4% in May, after growing 2.7% in April and below expectations of increasing 0.6%.
Source by Commodity Insights

Commodities Buzz: Sugar Crushing Activity Losing Pace In Brazil

Brazilian Sugar industry officials highlighted some worries over the cane output in the country's main producing region and helped provide a floor under the sugar prices. Mills in Brazil's Centre South region, responsible for some 90% of the country's sugar output, produced 1.78m tonnes of sugar in the first half of this month, cane industry group Unica said. The output is easing due to rain delays, and highlighted the growing appeal of turning cane into ethanol instead.
While a 30% jump on output in the first half of June 2012, when crushers suffered severe rain delays, the figure was below the 1.85m tonnes produced in the second half of May, and the 2.07m tonnes produced in the first half of May, the strongest period for manufacturing the sweetener so far in 2013-14.
Besides slowing cane volumes - which came in at 35.1m tonnes, some 5m tonnes less than mills achieved when running at full tilt in the first half of May - the rains also lowered the concentrations of sugars in cane. Sugar levels fell to 125.3 kilogrammes per tonne of cane, from 132.81 kilogrammes per tonne in late May, according to Unica.
New York Benchmark raw sugar futures had slipped to a three-year low of 16.48 cents per pound in the middle of June but have witnessed some bargain buying thereafter. The latest updates from Unica could help it find a floor and pare some of the excessive losses seen in last few moths.
Source by Commodity Insights

Thursday, 27 June 2013

Economic Buzz: German Unemployment Rate Eases In May

According to results of the labour force survey, the number of unemployedamounted to 2.25 million in May 2013. It was down by 106,000 persons or 4.7 % onMay 2012. Compared with April 2013, the number of unemployed decreased by 24,000people or 0.9%. When adjusted for seasonal and irregular effects, the number ofunemployed amounted to 2.27 million. The adjusted unemployment rate was 5.3% against5.40% last month.
Source by Commodity Insights

Commodities Buzz: Mining Giant Cuts Jobs On Falling Coal Prices, Weak Demand Outlook

Glencore Xstrata has unleashed a massive job cuts in its coal mining operations in Australia as falling coal prices, higher costs, oversupply and subdued demand take their toll. The mining giant said today that it was cutting back coal production at its Newlands and Oaky Creek mines, which would lead to a loss of about 450 jobs by the end of the year.

Against a backdrop of lower coal prices, high input costs and the strong Australian dollar, the decision to cut production at the mining operations has been taken to maintain viability in a challenging market, Glencore Xstrata said in a statement. This is a difficult decision, but one that needs to be taken in the current challenging economic conditions,'' Glencore Xstrata said.

A lot of jobs have been lost across the country in past weeks as resource companies respond to weaker commodity prices and high costs.

Australian Thermal coal prices have slipped sharply in last few months and currently linger around $90 per tonne, down around 9% on the year.
Source by Commodity Insights

Indian Copper Opened Lower, China Demand Uncertainty Continues

Copper opened lower on MCX as was expected. The markets continued to remain trading in disparity from its foreign counterpart LME. The LME three month prices were trading at $ 6727 per tonne, up from $ 6715 per tonne. Meanwhile, MCX Copper June contract was seen trading at Rs 407.7 per kg, down 0.27 percent. The rise of Rupee is the cause of decline in Copper.
Indian Rupee was last seen exchanging hands at 60.53 against the Dollar, up from 60.72 on Wednesday. Dollar was at 1.3022 against the Euro.
Excessive credit growth in China has made markets nervous and calls of reassurances from Peoples Bank of China have been taken lightly by the traders. Chinese premier bank said this week that it was providing short term assistance to institutions that were facing cash crisis.
Source by Commodity Insights

Wednesday, 26 June 2013

Economic Buzz: German Consumer Confidence Forecasts Higher For July

German consumers continued to be in an optimistic mood at the onset of  summer.Economic and income expectations increased further, but willingness to buy fellslightly at an extremely high level. Following a value of 6.5 points in June,the overall indicator is forecasting 6.8 points for July. Optimism appears to beunbroken. The income outlook of Germans has improved further from an alreadyhigh level on account of the stable employment situation and good collectivebargaining agreements, which have also benefited economic expectations . Incontrast, willingness to buy dropped slightly this month, but still remained atan extremely good level. The upward trend in the consumer climate is alsoenhanced by the continually falling propensity to save, which has reached arecord low.
Source by Commodity Insights

Oil Slippery Ahead Of EIA Report

Crude oil futures were trading on a slippery note ahead of the Energy Information Administration report to be released later today. The sentiments were also weakened after the strong US data yesterday increased the chances of early windup of the US monetary stimulus program.
Crude for August delivery is trading down 66 cents at $94.65 a barrel on New York Mercantile Exchange. Oil futures finished Tuesday’s regular session higher by 14 cents, or 0.1%, to settle at $95.32 a barrel, after better-than-expected reports on the housing sector. Also, durable-goods orders in May rose 3.6%.
The contract lost ground after the American Petroleum Institute, in its weekly report on U.S. commercial crude-oil inventories, said supplies were unchanged in the week ended June 21. A Platts survey of analysts had forecast a decline of 2 million barrels.
A more widely watched report from the Energy Information Administration is slated for release at 10:30 a.m. U.S. Eastern time. Last week, the EIA reported an unexpected increase of 300,000 barrels in oil stockpiles to 394.1 million barrels. At that level, the EIA said, inventories were above the upper limit of the average range for this time of year.
The U.S. dollar rose against rivals on Tuesday after a string of strong economic data reinforced expectations the Federal Reserve will move to slow its program of asset purchases later this year.
Strength in the US dollar also pressurized oil futures. The ICE dollar index which measures the U.S. unit against six other major currencies, rose to 82.553 from 82.412 late Monday in North America.
MCX July crude oil futures may open today’s session near Rs 5650 levels with support around Rs 5600 levels. The U.S. Commerce Department is due to release its third estimate of gross domestic product for the first quarter today.
Source by Commodity Insights

Gold Gets Hammered On Strong US Data

Gold futures got hammered further in the Asia electronic session today on strong US economic data which strengthened the US dollar and also supported the early tapering of U.S. monetary stimulus measures.
The U.S. dollar rose against rivals on Tuesday after a string of strong economic data reinforced expectations the Federal Reserve will move to slow its program of asset purchases later this year.
Several housing reports flowed in on Tuesday. U.S. home prices rose 2.5% in April, the biggest monthly increase ever, according to S&P/Case-Shiller data. A home-price report by the Federal Housing Finance Agency showed a gain, albeit more modest, of 0.7% in April adjusted for seasonality. New-home sales rose 2.1% in May to an annual rate of 476,000, their highest rate since mid-2008.
Additionally, durable-goods orders increased in May for the second month in a row, rising 3.6% to a seasonally adjusted $231 billion. Consumer confidence in June surged to a reading of 81.4, its highest level in more than five years.
The ICE dollar index which measures the U.S. unit against six other major currencies, rose to 82.553 from 82.412 late Monday in North America. The euro— which makes up more than half of the comparative basket used for the ICE dollar index by weighting — fell to $1.3095 from $1.3122.
Gold for August delivery slipped to as low as $1242.6 an ounce so far in the session today. Yesterday, it ended lower by $2 to close at $1,275.10 an ounce.
MCX Gold futures have however been cushioned by the extra soft Rupee. The August bullion futures may open today’s session near Rs 26200 levels with support around Rs 26000 levels. So far in the month of June the Indian Rupee has tumbled by more than 5% whereas the gold futures have shed just 3%.
Source by Commodity Insights

Tuesday, 25 June 2013

Economic Buzz: Core U.S Durable Good Orders Rise 0.70%

New orders for manufactured durable goods in May increased $8.0 billion or 3.6 percent to $231.0 billion, the U.S. Census Bureau announced today. This increase, up three of the last four months, followed a 3.6 percent April increase. Excluding transportation, new orders increased 0.7 percent, after surging 1.50% in the previous month. Excluding defense, new orders increased 3.5 percent.
Source by Commodity Insights

Monday, 24 June 2013

Bargain Buying Lifts Gold

Gold futures gold a lift in the Asia electronic session today as the investors jumped to buy the commodity after it tumbled another $15 to below $1280 an ounce yesterday following the tightening credit conditions in China.
U.S. and global equities sold off Monday, taking their cue from a sharp drop in Chinese equities following a rise in Chinese money-market rates. The sell off continued in the Asia today on concerns about a Chinese liquidity squeeze which had sparked a global selloff the previous day. Shanghai shares extended losses on worries about the impact from high money-market rates.
The Shanghai Composite Index fell 0.8%, recovering a little after falling more than 1% in the opening minutes. The Shanghai benchmark plunged 5.3% on Monday for its worst finish in nearly four years.
Adding more pressure on gold prices, analysts at Goldman Sachs cut their outlook on the metal for 2013 and 2014, citing growing price risks from a brightening U.S. economic picture. The bank now expects gold to end this year at $1,300 a troy ounce, down 9.4% on its previous forecast. It sees gold ending 2014 at $1,050 an ounce, down 17.3% on its earlier outlook.
"Medium term, we expect that gold prices will decline further given our U.S. economists' forecast for improving economic activity and a less accommodative monetary policy stance," the bank said. "Further, with quantitative easing tapering likely to start soon, perhaps even a bit sooner than previously anticipated, we are fast forwarding on our real rate path."
The price of gold plunged 6.3% in a single session last week after U.S. Federal Reserve Chairman Ben Bernanke said the U.S. central bank could start winding down its $85-billion-a-month bond-buying program later this year.
Gold for August delivery is trading up $1 at $ 1278.1 an ounce in the electronic trades today. Yesterday, fell $14.90, or 1.2%, to close at $1,277.10 an ounce, after having surrendered almost $100 over the course of last week’s trading.
MCX August bullion may open today’s session near Rs 26850 levels with resistance near Rs 26930 levels and support near Rs 26740 levels.
Source by Commodity Insights

Inventories of Copper Are Now At 10 Years High

Copper inventories ticked to 10 year high on Monday reaching 678225 tonnes. This is a cause of worry for the markets which is already carrying the burden of slack Chinese demand. Three-month copper futures turned lower on the London Metal Exchange, with losses in Shanghai shares Tuesday fueling selling, as concerns about China's cash crunch rattle investors.
LME three month prices of Copper were seen at $ 6625 per tonne, compared to $ 6675 per tonne. Indian Copper prices suffered the same fate as its International counterpart. The prices declined to Rs 400.8 per kg, down Rs 8. Supports for the contract are at Rs 395 and 393 per kg.
Last week, COMEX Copper fund managers, Commitment of traders (CoT) report showed heavy rise in short positions while there was minor increase of long positions by hedge fund managers. The total short positions increased by 11209 contracts taking total short contracts number to 55896 contracts against 44687 contracts in the previous week.
In US economic news, the Federal Reserve Bank of Philadelphia said late last week that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.
A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April's total of 4.97 million, far surpassing market calls for a 0.6% increase. Bank Of Japan said that Japan's corporate services price index rose by a seasonally-adjusted 0.3% last month following a -0.3% reading in April.
Source by Commodity Insights

Commodities Buzz: Mining Slowdown To Affect Australian Housing Market

The slowing of the mining boom and public sector cuts in Australia will lead to a dramatic drop in the number of new homes being built in parts of the country, according to a new report. However, localised population increases mean some pockets are set for a building boom, the report also found.

The BIS Shrapnel Regional Building 2013-2015 report identified the Coffs Harbour-Grafton area on the north coast of NSW as the No.1 growth area for new dwellings next year with a forecast increase of 52% for 2013/2014.

Alice Springs will experience the biggest slow-down in new buildings, with annual commencements expected to drop by 43% over the same period. Western Australia's Pilbara and Kimberley region will also slow significantly by 36% and 22% respectively.

Major investment in the Pilbara had driven strong employment and population growth until recently, the report found, however it said this was unsustainable. Building activity in the Pilbara and Kimberley regions is expected to remain high by pre-mining boom standards.

In Victoria, areas hit by recent factory closures such as Geelong and Hume will sustain a drop of a projected 11% each. The Australian Capital Territory (ACT) will see a 32% reduction in new dwellings as public sector jobs are cut, the report said.
Source by Commodity Insights

Copper Goes Down Begging For Mercy From Sellers

LME and MCX prices of Copper have come down begging for some respite as selling pressure mounted after a series of bad data from world markets last week. The rise in ICSG Copper surplus and fall in Chinese imports was already been handled by the markets but the news of money managers sharply increasing their short positions killed all chances of bottom fishing.
After the week ending 11 June 2013 the second week in the row turned out to be in favor of bears. The week ending 18 June 2013 highlighted that the short positions were increased significantly.
COMEX Copper fund managers, Commitment of traders (CoT) report showed heavy rise in short positions while there was minor increase of long positions by hedge fund managers. The total short positions increased by 11209 contracts taking total short contracts number to 55896 contracts against 44687 contracts in the previous week.
CoT report showed that long contracts increased by 914 contracts and were at 26887 contracts from 25973 contracts a week before. Total net short positions therefore moved up by 55 percent to 29009 contracts from 18714 contracts a week before.
LME copper three month prices was trading below $ 6800 per tonne on account of worries on Chinese demand outlook. Most active Copper contract on MCX was trading at Rs 401.2 per kg, down 1.6 percent from last week. Resistance for the contract is at Rs 405 per kg. Downtrend can take copper towards Rs 398 per kg.
Source by Commodity Insights

Friday, 21 June 2013

Commodities Buzz: Fed Taper Unlikely To Affect Crude Oil Prices Significantly Says Russian Minister

The latest announcement by Ben Bernanke, chairman of the US Federal Reserve, about plans to reduce stimulation of the US economy won't significantly affect oil prices, Russia Deputy Economic Development Minister Andrei Klepach has stated, according to media reports. Oil prices will only be affected if the US economy slows down significantly, a scenario that he thinks is unlikely, Klepach stated in a forum. The ministry estimated the average oil price for 2013 at $105 per barrel. The minister said the government would have the final word on the issue of increasing oil supplies to China via the Eastern Siberia-Pacific Ocean pipeline. The agreement foresees the supply of an additional 800,000 tons of oil to China in 2013 and two million tons the next year.
Source by Commodity Insights

Thursday, 20 June 2013

Gold Settles After A Strom

are trading slightly higher in Asia electronic trading today aided by weakness in the US Dollar. Yesterday, it collapsed by more than 6% as investors continued to price in the Federal Reserve’s possible trimming of its monetary stimulus later this year.
After settling Nymex trade at $1,286.20 an ounce — the lowest close since September 2010 — August gold took further damage on news exchange operator CME Group Inc. CME was hiking margin requirements.
The CME, which owns the Nymex’s metals-trading Comex division, said following Thursday’s close that it would hike initial and maintenance margins for gold by 25%, according to reports. The CME's decision came after August gold futures plunged $87.80, or more than 6%, to end at $1,286.20 an ounce on Thursday, the futures' lowest closing level since September 2010. The new margins would come into effect after Friday’s close, CME said.
Gold for August delivery is trading up $3 at $ 1289.2 an ounce on the COMEX division of the New York Mercantile Exchange. The contract had tumbled to as low as $1275.4 an ounce marking its lowest level in 2 ½ years.
By late morning in East Asia, the ICE dollar index had edged down to 81.642 from its 81.823 level late Thursday. The dollar had rallied since the Federal Reserve’s statement late Wednesday, signaling it could slow its asset purchases this year if the economy improves further.
A weaker U.S. currency tends to support gold and other dollar-denominated commodities, as it makes them less expensive for holders of euros, yen and other units.
MCX August gold futures may open today’s session near Rs 27000 with resistance near Rs 27100 levels and support near Rs 26700 levels.
Source by Commodity Insights

Commodities Buzz: CME Raises Initial Margins On Gold Futures By 25%

The CME Group Inc. on Thursday raised the initial margins on trading in gold futures by as much as 25%, according to reports. The CME's decision came after August gold futures plunged $87.80, or more than 6%, to end at $1,286.20 an ounce on Thursday, the futures' lowest closing level since September 2010. The CME Group Inc. on Thursday raised the initial margins on trading in gold futures by as much as 25%, according to reports.
Source by Commodity Insights

Commodities Buzz: UK Wheat Imports Maintain Their Pace

UK wheat imports continue to fascinate the global grain markets. UK, usually a net exporter of wheat, imported 255,785 tonnes of the grain in April, taking total buy-ins to 2.38m tonnes in first ten months of the crop year (July-June), far exceeding outward shipments of less than 609,000 tonnes. Last month, the UK lifted its estimate for wheat imports following poor weather which has boosted demand for the grain, besides cutting yields last year to a 20-year low. The UK farm ministry, Defra, upgraded its forecast for UK wheat imports in 2012-13 by 275,000 tonnes to 2.54m tonnes- marking a rise of 10%.

The upgraded figure is far bigger than exports, which Defra pegged at 800,000 tonnes in its official forecast. The upward estimates also reaffirmed the UK's unusual slip into net imports of wheat. The estimate for feed use, however, was raised, by 229,000 tonnes to 6.69m tonnes, reflecting the lingering impact from the poor weather last year, the UK's second wettest on record, in boosting demand besides lowering yields.

The wet summer/autumn and delayed spring have necessitated an increase in the use of grain for animal feed in place of forage and grazing, Defra noted. The continuation of the poor weather into a cold spring has also prompted by stockpiling, over fears of a late harvest and delayed new-crop supplies. Commercial end-season stocks were seen soaring 29% to 1.94m tonnes as of the end of 2012-13, in part thanks to uncertainty over the approaching 2013 harvest, according to Defra.
Source by Commodity Insights

Economic Buzz: New Zealand Economy Grows Annually 2.50% In Q1

Gross domestic product (GDP) rose 0.3 percent in the March 2013 quarter, with the Canterbury rebuild and the 2013 drought having offsetting effects, Statistics New Zealand said today. This modest growth in economic activity follows a rise of 1.5 percent in the December 2012 quarter. Economic activity for the year ended March 2013 was up 2.5 percent when compared with the March 2012 year.Source by Commodity Insights

Wednesday, 19 June 2013

Copper Crushed Below $ 7000 On Wednesday Trades

Copper crushed below $ 7000 per tonne on Wednesday as the weight of FOMC decision seemed to be taking the toll on the metal. Federal Reserve Chairman Ben Bernanke will be speaking on the plans of monetary stimulus programme. LME metal three month prices of Copper were trading at $ 6998 per tonne when last checked which almost a two month is low for the metal.
Indian Copper futures ended the trading at Rs 410.1 per kg, up 0.16 percent. The prices tested a high of Rs 412.7 per kg and a low of Rs 408.6 per kg. The metal is expected to open lower considering the slowdown in LME and fall in Dollar against the Indian Rupee. INR was trading at 58.73 against the Dollar, up 0.07 percent.
Meanwhile, Central bank in China has said that there will not be any policy loosening. People's Bank of China (PBoC) Tuesday drained 2 billion yuan from the money market despite banks' reported call for cash injection, suggesting regulators are keen to keep liquidity tight amid growing jitters of China's financial risks. The 2-billion 91-day bills, though tiny by amount, were viewed as the central bank's commitment to squeezing out excessive funding.
China manufacturing data is also keenly watched by the traders as that will show the state of affairs in terms of demand for metals. In fundamental news, the possible restart of mining operations at Freeport Indonesia's Grasberg mine could pare the supply disruption premium factored into copper prices
Source by Commodity Insights

Gold In Cautious Mode Ahead Of Fed

Gold futures are trading in a cautious mode today as traders remain uncertainty that how long the central bank will maintain its $85 billion a month in bond purchases.
Investors are closely watching for any comments by the Fed about the future of its program of purchasing $85 billion a month in bonds, which is intended to stoke economic growth. The Fed will conclude its two-day meeting Wednesday and Fed Chairman Ben Bernanke will hold a news conference.
On the data front today, Japan's exports surged in May, as the yen traded at its weakest levels of the year, with the result leading to a smaller-than-expected trade deficit. Japanese exports rose 10.1% from a year earlier, the Finance Ministry reported Wednesday.
Gold for August delivery is trading down $1 at $ 1366 per ounce on Comex Division Of New Yrok Mercantile Exchange.
It dropped $16.20, or 1.2%, to close at $1,366.90 an ounce in Nymex floor trading as Fed officials began a two-day monetary-policy meeting. During the session, gold traded as low as $1,360.20, the lowest level for a most-active futures contract since May 23.
Economic data on Tuesday offered a mixed bag for Fed experts. Housing starts rebounded by a stronger-than-expected 6.8% in May, but consumer price inflation was more subdued than expected, posting a monthly rise of 0.1%.
MCX August gold futures may open today’s session below Rs 28000 with support around Rs 27850 levels and resistance near Rs 27970-90 levels.
Source by Commodity Insights

Economic Buzz: New Zealand's Q1 Current Account Deficit Drops

Statistics New Zealand said that New Zealand's current account balance fell to a seasonally adjusted -NZD 0.66B, from - NZD 3.26B in the preceding quarter. Analysts had expected New Zealand's current account balance to fall - NZD 0.60B in the last quarter.
Source by Commodity Insights

Oil Slips Ahead Of FOMC Outcome

Crude oil futures slipped along with the weak Asian equities on caution ahead of the Federal Reserve’s monetary-policy decision later in the day.
In Asia today, the Nikkei Stock Average outperformed regional markets by a wide margin, finishing the morning trading session 1.3% higher at 13,169.97. Australia’s S&P/ASX 200 gained 0.4%, and Taiwan’s Taiex added 0.2%. On the downside, the Shanghai Composite fell 1.5%, Hong Kong’s Hang Seng Index dropped 0.8%, and South Korea’s Kospi also eased 0.8%.
Crude for July delivery are trading 8 cents at $ 98.39 per barrel on the New York Mercantile Exchange. Yesterday, it added 67 cents, or 0.7%, to settle at $98.44 a barrel as Mideast tensions supported prices and fall in the crude oil supplies.
U.S. crude supplies dropped by 4.3 million barrels for the week ended June 14, the API said. A Platts survey of analysts forecast a 1 million-barrel decline. Gasoline inventories increased by 900,000 barrels, while distillate stockpiles dipped by 600,000 barrels. Analysts were looking for a rise of 1.2 million barrels in gasoline inventories and an increase of 300,000 barrels in distillate supplies.
More closely watched figures from the U.S. Energy Information Administration (EIA) are due Wednesday at 10:30 a.m. Eastern. Also, Bernanke is scheduled to hold a press conference Wednesday after the conclusion of the Fed’s two-day policy meeting, which will start later Tuesday.
Syria is also in focus for energy investors, with the U.S. saying late last week it would increase aid to Syrian rebels who have been fighting against the regime of President Bashar al-Assad in a bloody civil war. U.S. oil futures on Friday surged 1.2% following the development.
MCX July crude oil futures may open today’s session near Rs 5790 levels with support around Rs 5745 levels.
Source by Commodity Insights

Monday, 17 June 2013

Indian Rupee Slips Back Below 58/$ Mark

The Indian rupee plunged once again, breaching the Rs 58 per dollar mark on Tuesday, June 18, 2013 due to renewed dollar demand from importers and appreciation of the US currency overseas. Meanwhile, a weak opening in the domestic stock market also put pressure on the rupee as investors await the outcome of a US Federal Reserve meeting due this week. The domestic currency opened weaker by 36 paise at Rs 58.23 to a dollar, registered an intraday high of 58.22 before slumping back to a low of 58.46 so far during the day. In the spot currency market, the Indian unit was last seen trading at 58.4250, lower by around 56 paise or near 1% as compared to previous close at 57.87.
Rupee fell on Monday as the central bank kept interest rates on hold and on caution ahead of the U.S. Federal Reserve's meeting this week, although a lower-than-expected trade deficit helped to cap the currency's losses. The Reserve Bank of India kept its repo rate steady, warning of upwards risks to inflation and global economic uncertainty, in a decision that had been widely expected. A rate cut benefits the rupee by increasing confidence on the economic outlook and sparks hopes of more foreign inflows. Meanwhile, markets are keenly awaiting US Federal Reserve's meeting on Wednesday where the US central bank will give guidance on its bond buyback programme. Fed action is likely to determine the rupee's further course. If US withdraws its bond buyback programme, rupee may slide further.
Meanwhile, a bout of volatility was witnessed in early trade as key benchmark indices slipped into the negative terrain after opening slightly higher. Asian shares were pressured on Tuesday despite an overnight rise in global markets, with investors awaiting for news of the Fed's plans for its stimulus programme from the two-day monetary meeting starting later in the session. Foreign institutional investors (FIIs) sold Indian shares worth a net Rs 165.09 crore on Monday, 17 June 2013, as per provisional data from the stock exchanges. At the time of writing, the S&P BSE Sensex was down 78.39 points or 0.41% to 19,247.48 while the CNX Nifty was down 23.90 points or 0.41% to 5,826.15.
The U.S. dollar hovered above a two-month low against the yen on Tuesday but uncertainty ahead of the outcome of the U.S. Federal Reserve meeting is likely to cap further gains. The euro stayed above 1.33 to the dollar. The dollar index was sub 81 mark. However, the yen slipped slightly against the dollar.
Source by Commodity Insights

Copper Pares Some Losses, Decisive Move Will Come After Fed Meet

Copper pared some losses by the end of ring trades on LME but still lacked he confidence to end in green. The data from US soothed the nerves and helped in recovery. It is the Federal Reserve meet that is watched more keenly by the speculators. In economic reports, business conditions index rose to 7.84 in June from -1.43 in May, beating consensus forecasts of an increase to zero.
Meanwhile, Dollar remain whopping between losses and gains against the Euro. The greenback ended at 1.3361 per Euro, down 0.11 percent. The clarification from Ben Bernanke on the bond purchases might give some strength to the US Dollar. Rupee remained struggling against the Dollar and settled near all time lows at 57.85 against the Dollar.
One concern that has mitigated in recent times is the supply of Copper. Earlier, it was said that the Grasberg mine of Freeport will hit the supplies. However, restart of Sterlite industries Tuticorin Smelter will address that issue. The smelter was shut down from March 2013 from emission concerns.
Inventories data showed a rise of 11400 tonnes in LME Copper warehouses. Stocks have reached 629475 tonnes. Inventories have gained by more than 90 percent in 2013.
LME Copper three month prices closed at $ 7065 per tonne, down $ 20 per tonne. A decisive move will come in the metal only after Federal Reserve Committee meet. MCX Copper settled at Rs 409.45 per kg, up 0.37 percent. The metal tested a high of Rs 412.2 per kg and a low of Rs 407.1 per kg. Resistance for the contract is at Rs 414 per kg while support is at Rs 408 per kg.
Source by Commodity Insights

Friday, 14 June 2013

Economic Buzz: New Zealand Manufacturing Activity At 9-Year High

New Zealand's manufacturing index rose to 59.2 in May, the highest reading since June 2004, from 55.2 in April. Readings above 50 indicate expansion in activity. Manufacturing activity rose to its highest level in almost nine years in May, results of a survey by BNZ and BusinessNZ showed Friday. Looking at the May results, the value was the highest since the survey began in 2002.
New orders again led the way with its highest result since July 2004. This was followed by production, which was at a similar level to February this year. Employment increased during the month to record its strongest result since November 2007.
Source by Commodity Insights

Copper Tries Go Gain Momentum After Slack Thursday Trades

Copper is trying to gain momentum after a slack Thursday trades that has taken the prices to a six week low. The metal closed at $ 7093 per tonne, down $ 27 per tonne. The prices are trading with gains in Asian trades on Friday at $ 7121 per tonne.
US Dollar was trading higher against the Euro at 1.3346, up 25 pips. Indian Rupee was trading a bit higher after the all time lows brought some bottom fishing in the metal. The Rupee was trading at 57.72, down 0.37 percent.
Indian Copper prices ended at Rs 408.3 per kg, down 0.78 percent. Battery material lead was the most underperforming metal in the pack with prices paring 1.2 percent to close at Rs 120.95 per kg.
Shanghai Copper benchmark prices were still trying to mitigate with losses with prices at 51700 yuan per tonne, down190 yuan per tonne. This is the second straight day when Copper has opened in losses in China after resuming trades.
In economic report, the U.S. Commerce Department said retail sales rose 0.6 percent last month after rising just 0.1% in April. Economists expected an increase of 0.4 percent. Core sales excluding automobiles, gasoline and building materials, rose 0.3 percent in May after 0.2 percent increase in April.
The Labor Department said initial claims for jobless benefits fell by 12000 last week to 334000. The less volatile four-week moving average fell by 7250 to 345250.
Source by Commodity Insights