Metalico Inc. (AMEX:MEA), Olympic Steel Inc. (Nasdaq:ZEUS), Steel Dynamics Inc. (Nasdaq:STLD) all soared with the broader commodity sector Thursday, as the fact the Federal Reserve was going to inflate again via its quantitative easing strategy pushed up the price of commodities in anticipation of the inevitable inflation to come.
Commodity prices increasing included aluminum, gold, silver and oil. Gold prices soared record levels again, reaching toward the $1,400 an ounce level. Silver moved past the $26 level, and is probably going to continue moving up.
The steel industry could go through seasons of swings as currencies respond to the drop in value of the U.S. dollar, which will affect margins because of the wide swings in currency value and the battle by some against the Chinese renminbi, which they'll be forced to take defensive measures against.
Because of market factors, and the overall economic health of the steel industry in general, it probably won't partake in the surge in commodity prices and demand as other raw materials will surely do.
Metalico Inc. closed at $4.54 Thursday, rising $0.17, or 3.39 percent. Olympic Steel Inc surged to close at $24.03, gaining $1.59, or 7.09 percent. Steel Dynamics Inc. was up to $15.73 at the end of the trading session, gaining $0.49, or 3.22 percent.
Showing posts with label Commodity Prices Going Up. Show all posts
Showing posts with label Commodity Prices Going Up. Show all posts
Friday, November 5, 2010
ArcelorMittal (NYSE:MT), Carpenter Technology (NYSE:CRS), US Steel (NYSE:X) Soar on Collasping US Dollar, QE2
ArcelorMittal (NYSE:MT), Carpenter Technology (NYSE:CRS), US Steel (NYSE:X) all moved up with the broader commodity sector Thursday, as the announcement that the Federal Reserve was going to inflate again via its quantitative easing strategy pushed up the price of commodities in anticipation of the inevitable inflation to come.
Commodity prices rising included oil prices, gold, silver and aluminum. Gold prices reached record levels again, straining toward the $1,400 an ounce level. Silver broke the $26 level, and seems poised to continue moving up.
The steel industry could go through a period of uncertainty as currencies respond to the fall in value of the U.S. dollar, which will affect margins because of the fluctuations and the battle by some against the Chinese renminbi, which they'll have to attempt to protect themselves against.
ArcelorMittal closed at $47.33 Thursday, rising $1.66, or 3.63 percent. Carpenter Technology surged to close at $35.51, gaining $0.96, or 2.78 percent. US Steel was up to $47.33 at the end of the trading session, gaining $1.66, or 3.63 percent.
Commodity prices rising included oil prices, gold, silver and aluminum. Gold prices reached record levels again, straining toward the $1,400 an ounce level. Silver broke the $26 level, and seems poised to continue moving up.
The steel industry could go through a period of uncertainty as currencies respond to the fall in value of the U.S. dollar, which will affect margins because of the fluctuations and the battle by some against the Chinese renminbi, which they'll have to attempt to protect themselves against.
ArcelorMittal closed at $47.33 Thursday, rising $1.66, or 3.63 percent. Carpenter Technology surged to close at $35.51, gaining $0.96, or 2.78 percent. US Steel was up to $47.33 at the end of the trading session, gaining $1.66, or 3.63 percent.
Schnitzer Steel (NASDAQ:SCHN), Steel Dynamics (NASDAQ:STLD), POSCO (NYSE:PKX) Soar on QE2, Collapsing US Dollar
Schnitzer Steel Industries (NASDAQ:SCHN), Steel Dynamics (NASDAQ:STLD),
POSCO (NYSE:PKX) all moved up with the broader commodity sector Thursday, as the announcement that the Federal Reserve was going to inflate again via its quantitative easing strategy pushed up the price of commodities in anticipation of the inevitable inflation to come.
Commodity prices going up included oil prices, gold, silver and aluminum. Gold prices reached record levels again, straining toward the $1,400 an ounce level. Silver surged past the $26 level, and seems poised to continue moving up.
The steel industry could go through a period of uncertainty as currencies respond to the fall in value of the U.S. dollar, which will affect margins because of the fluctuations in currency value and the battle by some against the Chinese renminbi, which they'll have to attempt to take defensive measures against.
Schnitzer Steel Industries closed at $53.15 Thursday, rising $1.02, or 1.96 percent. Steel Dynamics surged to close at $15.73, gaining $0.49, or 3.22 percent. POSCO was up to $108.38 at the end of the trading session, gaining $3.72, or 3.55 percent.
POSCO (NYSE:PKX) all moved up with the broader commodity sector Thursday, as the announcement that the Federal Reserve was going to inflate again via its quantitative easing strategy pushed up the price of commodities in anticipation of the inevitable inflation to come.
Commodity prices going up included oil prices, gold, silver and aluminum. Gold prices reached record levels again, straining toward the $1,400 an ounce level. Silver surged past the $26 level, and seems poised to continue moving up.
The steel industry could go through a period of uncertainty as currencies respond to the fall in value of the U.S. dollar, which will affect margins because of the fluctuations in currency value and the battle by some against the Chinese renminbi, which they'll have to attempt to take defensive measures against.
Schnitzer Steel Industries closed at $53.15 Thursday, rising $1.02, or 1.96 percent. Steel Dynamics surged to close at $15.73, gaining $0.49, or 3.22 percent. POSCO was up to $108.38 at the end of the trading session, gaining $3.72, or 3.55 percent.
Alcoa (NYSE:AA), Century (NASDAQ:CENX), Kaiser (NASDAQ:KALU), Noranda (NYSE:NOR) Soar on Fed QE
Alcoa Inc. (NYSE:AA), Century Aluminum Company (NASDAQ:CENX), Kaiser Aluminum Corp. (NASDAQ:KALU), Noranda Aluminum Holding Corporation (NYSE:NOR) soared on the inflationary steps taken by the Federal Reserve, which will dilute the U.S. dollar even more via its $600 billion quantitative easing fiasco.
Commodities, which are denominated, for the most part, in U.S. dollars, will benefit strongly from this, and aluminum companies mentioned above, and others, will partake in that benefit.
Aluminum prices rose to their highest level since April, reaching about $2,450 a ton.
Higher commodity prices, in whatever segment they're in, can overcome a lot of resistance and operational problems, and that is the case with aluminum and aluminum producers, who are poised to move up in share price based on the expected and ongoing rise in aluminum prices.
Commodities, which are denominated, for the most part, in U.S. dollars, will benefit strongly from this, and aluminum companies mentioned above, and others, will partake in that benefit.
Aluminum prices rose to their highest level since April, reaching about $2,450 a ton.
Higher commodity prices, in whatever segment they're in, can overcome a lot of resistance and operational problems, and that is the case with aluminum and aluminum producers, who are poised to move up in share price based on the expected and ongoing rise in aluminum prices.
Thursday, October 28, 2010
Bank of America (NYSE:BAC) Sees $1 Trillion QE, Goldman (NYSE:GS) - $2 Trillion
What's a trillion here or there for the Federal Reserve, which is drunk on printing money, and depending on who's right - such as Bank of America (NYSE:BAC), which sees them printing $1 trillion, and Goldman Sachs, which sees them printing $2 trillion - the fallout will even crush American more during the long term, as the company teeters on the precipice of insolvency.
Goldman and Bank of America see the Fed buying up government debt incrementally in order to keep the huge amount from being digested immediately by ordinary Americans. Both expect a $500 billion plan to be initiated immediately after the meetings held on November 2 and November 3.
This will push up the price of gold and other commodities, which will cause inflation to rise, as far as commodities used for industrial purposes. Some agricultural commodities will continue to rise as well, or at least maintain support at fairly high levels.
Goldman and Bank of America see the Fed buying up government debt incrementally in order to keep the huge amount from being digested immediately by ordinary Americans. Both expect a $500 billion plan to be initiated immediately after the meetings held on November 2 and November 3.
This will push up the price of gold and other commodities, which will cause inflation to rise, as far as commodities used for industrial purposes. Some agricultural commodities will continue to rise as well, or at least maintain support at fairly high levels.
Friday, October 8, 2010
Bank Of America (NYSE:BAC): Commodity Prices Will Benefit from Quantitative Easing
Although Commodity Surge doesn't support the inflationary practices of the Federal Reserve and other central banks (they call it quantitative easing now), Bank of America (NYSE:BAC) is correct in saying it will help support the price of commodities when it is again introduced into the economy.
The financial giant said in a report titled "The Liquidity Supernova," that they see quantitative easing adding 15 percent annually to copper, oil and precious metals.
As far as commodities go, the good news is they don't need the misguided actions of the Federal Reserve to go up in price, as demand from emerging markets guarantees many commodities would move up whether or not interference comes from the Federal Reserve or other central banks around the world.
This is one of the reasons why inflationary actions from the central banks will do no good. Demand is driving the commodities market, and other sectors, no matter how much money they throw at them, aren't going to be affected in any way, as the hundreds of billions in stimulus has already revealed to us. Trillions when you include the entire world.
So while throwing money into the market could offer support for commodity prices, they in fact don't need it, and when you consider the long-term consequences and need to pay back these outrageous sums of money, it isn't worth any short-term benefit from it, even if it does come.
Bank of America sees that even if commodity prices find support from inflationary actions of the Federal Reserve, the broader economy may not benefit at all. I would say it won't benefit at all, and we, our children, and our grandchildren will be stuck with the unethical bill to pay.
The financial giant said in a report titled "The Liquidity Supernova," that they see quantitative easing adding 15 percent annually to copper, oil and precious metals.
As far as commodities go, the good news is they don't need the misguided actions of the Federal Reserve to go up in price, as demand from emerging markets guarantees many commodities would move up whether or not interference comes from the Federal Reserve or other central banks around the world.
This is one of the reasons why inflationary actions from the central banks will do no good. Demand is driving the commodities market, and other sectors, no matter how much money they throw at them, aren't going to be affected in any way, as the hundreds of billions in stimulus has already revealed to us. Trillions when you include the entire world.
So while throwing money into the market could offer support for commodity prices, they in fact don't need it, and when you consider the long-term consequences and need to pay back these outrageous sums of money, it isn't worth any short-term benefit from it, even if it does come.
Bank of America sees that even if commodity prices find support from inflationary actions of the Federal Reserve, the broader economy may not benefit at all. I would say it won't benefit at all, and we, our children, and our grandchildren will be stuck with the unethical bill to pay.
Monday, August 16, 2010
Citigroup (NYSE:C) Raises Deere (NYSE:DE) Price Target
Citigroup (NYSE:C) said it has increased its price target on Deere & Company (NYSE:DE) to $75. Earnings estimates were also raised, while a "Buy" rating was maintained.
Citigroup's Timothy Thein said in a note, "Our price target, and relative ranking amongst Buy rated names, both go up for DE as we see better N.A. large Ag equipment demand, and a more favorable price/cost spread driving upside to near-term numbers. Importantly for the stock, global grain price outlook has improved meaningfully on a tighter supply/demand outlook, with Citi Futures forecasting 8.2% stock-to-use for 2010-11 US corn crop (well below current USDA est. of 9.7%). In the last 30 crop years, US corn STU has fallen below 10% twice (95/96 and & 03/04) - two periods of solid relative outperformance for DE stock."
With the economic conditions much worse than has been reported, commodity prices are back in favor in a big way, which has been driving up the price and optimism concerning companies serving that market, like Deere does with its mining and farming machinery, and other companies like miners who are directly involved with commodities.
There's nothing in the economic outlook suggesting this will change any time soon.
Citigroup's Timothy Thein said in a note, "Our price target, and relative ranking amongst Buy rated names, both go up for DE as we see better N.A. large Ag equipment demand, and a more favorable price/cost spread driving upside to near-term numbers. Importantly for the stock, global grain price outlook has improved meaningfully on a tighter supply/demand outlook, with Citi Futures forecasting 8.2% stock-to-use for 2010-11 US corn crop (well below current USDA est. of 9.7%). In the last 30 crop years, US corn STU has fallen below 10% twice (95/96 and & 03/04) - two periods of solid relative outperformance for DE stock."
With the economic conditions much worse than has been reported, commodity prices are back in favor in a big way, which has been driving up the price and optimism concerning companies serving that market, like Deere does with its mining and farming machinery, and other companies like miners who are directly involved with commodities.
There's nothing in the economic outlook suggesting this will change any time soon.
Tuesday, April 6, 2010
Canadian Dollar Trading at Parity with U.S Dollar
Canadian Dollar
For the first time since July 2008, the Canadian dollar has traded at parity with the U.S. dollar, and even beyond it today.
The increasing price of crude oil and inevitable raising of interest rates in Canada are cited as the key reasons behind the increase in value of the Canadian dollar.
This is familiar territory as it relates to crude oil, as the last time the Canadian dollar was trading at parity to the U.S. dollar, oil had reached a record high of $147.27 a barrel.
With commodity prices expected to continue to skyrocket, the Canadian dollar should remain strong for years to come against the dollar, and its past behavior will no longer be the norm as it passes into an entirely new era.
This will be great for Canadian consumers who should enjoy lower prices, but a challenge to exporter, whose prices will struggle to compete on the basis of the strength of the Canadian dollar.
For the first time since July 2008, the Canadian dollar has traded at parity with the U.S. dollar, and even beyond it today.
The increasing price of crude oil and inevitable raising of interest rates in Canada are cited as the key reasons behind the increase in value of the Canadian dollar.
This is familiar territory as it relates to crude oil, as the last time the Canadian dollar was trading at parity to the U.S. dollar, oil had reached a record high of $147.27 a barrel.
With commodity prices expected to continue to skyrocket, the Canadian dollar should remain strong for years to come against the dollar, and its past behavior will no longer be the norm as it passes into an entirely new era.
This will be great for Canadian consumers who should enjoy lower prices, but a challenge to exporter, whose prices will struggle to compete on the basis of the strength of the Canadian dollar.
Thursday, April 1, 2010
Goldman Sachs (NYSE:GS): Commodity 'Price Spikes'
Commodity prices to explode upward
Goldman Sachs (NYSE:GS) said commodities may be in for “violent price spikes” as increasing demand from emerging markets leads to significant shortages. The constraints on supply is the second factor leading to the conclusion from Goldman.
Contrary to alleged manipulation of markets by speculators, the commodity price increases coming up will be related to supply, demand and storage, not investors.
Major price movements in commodities are largely related to when commodity inventories are low. When they're readily available, commodity prices are more stable.
Goldman added there's no proof or evidence currency movements affect commodity prices.
Goldman Sachs (NYSE:GS) said commodities may be in for “violent price spikes” as increasing demand from emerging markets leads to significant shortages. The constraints on supply is the second factor leading to the conclusion from Goldman.
Contrary to alleged manipulation of markets by speculators, the commodity price increases coming up will be related to supply, demand and storage, not investors.
Major price movements in commodities are largely related to when commodity inventories are low. When they're readily available, commodity prices are more stable.
Goldman added there's no proof or evidence currency movements affect commodity prices.
Friday, March 26, 2010
Commodities Rise as Greek Concerns Ease
Commodity Prices Going Up
Commodities had been taking a hit because of the indecision of Europe over the sovereign debt crisis in Greece. Now that a plan is in place to help Greece if they need it in the months ahead, commodities rebounded today in response to the news.
As far as the support from Europe, it's more of a support mechanism rather than loans offered to Greece in the present. It may or may not ever be used by Greece, but it's there as a backstop if the need ever arises. It also keeps many of the politicians in the region out of hot water with their constituents who largely opposed bailing Greece out.
If Europe is able to integrate better politically and learn from this crisis, gold should be a strong beneficiary, as it tends to move up when the euro is stronger and down when it is weaker against the U.S. dollar.
Almost all commodities responding be moving up in price on the news.
Commodities had been taking a hit because of the indecision of Europe over the sovereign debt crisis in Greece. Now that a plan is in place to help Greece if they need it in the months ahead, commodities rebounded today in response to the news.
As far as the support from Europe, it's more of a support mechanism rather than loans offered to Greece in the present. It may or may not ever be used by Greece, but it's there as a backstop if the need ever arises. It also keeps many of the politicians in the region out of hot water with their constituents who largely opposed bailing Greece out.
If Europe is able to integrate better politically and learn from this crisis, gold should be a strong beneficiary, as it tends to move up when the euro is stronger and down when it is weaker against the U.S. dollar.
Almost all commodities responding be moving up in price on the news.
Wednesday, March 17, 2010
Alcoa Inc. (NYSE:AA) Up On Little News
Alcoa Surges in Share Price Today
Aluminum giant Alcoa (NYSE:AA) helped lead the Dow Jones Industrial Average higher today, although little news emerged which gave a reason for the sudden spike in share price.
Also performing strong in the commodity sector was Exxon Mobil (NYSE:XOM), which also helped the Dow move higher. Exxon was easy to read as oil prices continue to go up.
It's possible with Alcoa that they were due for an upward adjustment after having a lot of downward pressure on them. We'll see if this is sustainable in any meaningful way, or just some investors attempting to guess and time the market in light of their recent performance.
Alcoa Surges in Share Price Today
Aluminum giant Alcoa (NYSE:AA) helped lead the Dow Jones Industrial Average higher today, although little news emerged which gave a reason for the sudden spike in share price.
Also performing strong in the commodity sector was Exxon Mobil (NYSE:XOM), which also helped the Dow move higher. Exxon was easy to read as oil prices continue to go up.
It's possible with Alcoa that they were due for an upward adjustment after having a lot of downward pressure on them. We'll see if this is sustainable in any meaningful way, or just some investors attempting to guess and time the market in light of their recent performance.
Alcoa Surges in Share Price Today
Tuesday, March 16, 2010
Barrick Gold (ABX.TO), Potash (POT.TO) Push TSX Up
Toronto Stock Exchange Up on Rising Commodity Prices
Rising commodity prices drove up the Toronto Stock Exchange today to its highest level since September 2008, led by majors like Barrick Gold (ABX.TO) and Potash (POT.TO).
This is the third straight day the index has finished the session above 12,000.
Gold mining giant Barrick Gold (ABX.TO) closed the day at $40.64, while Potash (POT.TO) endd the session at $128.75. Potash was moved by reports their inventory may have dropped.
Barrick Gold and other similar companies were moved partly by the anticipation of interest rates in the U.S. remaining the same, and the Federal Reserve confirmed this after their meeting, possibly signaling another upward move of gold as everything is lining up to favor the inflation hedge and safety currency for investors.
Toronto Stock Exchange Up on Rising Commodity Prices
Rising commodity prices drove up the Toronto Stock Exchange today to its highest level since September 2008, led by majors like Barrick Gold (ABX.TO) and Potash (POT.TO).
This is the third straight day the index has finished the session above 12,000.
Gold mining giant Barrick Gold (ABX.TO) closed the day at $40.64, while Potash (POT.TO) endd the session at $128.75. Potash was moved by reports their inventory may have dropped.
Barrick Gold and other similar companies were moved partly by the anticipation of interest rates in the U.S. remaining the same, and the Federal Reserve confirmed this after their meeting, possibly signaling another upward move of gold as everything is lining up to favor the inflation hedge and safety currency for investors.
Toronto Stock Exchange Up on Rising Commodity Prices
Wednesday, March 3, 2010
Commodities Rise on Weaker Dollar
Commodity Prices Rise as Dollar Drops
A number of commodity sector rose as the U.S. dollar weakened against major currencies.
Enjoying the increase were energy, metals and grains, with major crops like corn, soybeans and wheat increasing; something the grain market has been looking and hoping for for awhile.
Also rising in response to the collapsing dollar were gold, silver and copper, while on the energy side price also rose, even though they would normally have fallen on the news oil and gasoline pireced remained higher than expected for the previous week.
Oil gained $1.19 to finish the session at $80.87 on the New York Mercantile Exchange.
Commodity Prices Rise as Dollar Drops
A number of commodity sector rose as the U.S. dollar weakened against major currencies.
Enjoying the increase were energy, metals and grains, with major crops like corn, soybeans and wheat increasing; something the grain market has been looking and hoping for for awhile.
Also rising in response to the collapsing dollar were gold, silver and copper, while on the energy side price also rose, even though they would normally have fallen on the news oil and gasoline pireced remained higher than expected for the previous week.
Oil gained $1.19 to finish the session at $80.87 on the New York Mercantile Exchange.
Commodity Prices Rise as Dollar Drops
Wednesday, February 24, 2010
Charlie Munger Warns on America
Charlie Munger on Economics and America
Anyone reading Charlie Mungers parable over at Slate over the weekend should come away very sober, with the realization why precious metals like gold and silver, along with other commodities, will do well over the years ahead.
The parable by Charlie Munger attacked on two fronts. The first was the outrageous practices of the U.S. government which is out of control with its spending and taxation, and discourages entrepreneurs from flourishing when all they do is take wealth away from them and redistribute it like the growing socialist government and administration we now have.
On the private business side, Munger blasted the derivative trading of the banks which were a major part of the underlying problems many of us face.
While this is all true and accurate, we still face the consequences of the actions of the U.S. government and major banks no matter what is done in attempts to deal with the root causes.
This is why commodities will continue to be the major success story over the next decade or more, as real things will continue to be in demand, rather than things most people can't begin to understand.
Charlie Munger on Economics and America
Anyone reading Charlie Mungers parable over at Slate over the weekend should come away very sober, with the realization why precious metals like gold and silver, along with other commodities, will do well over the years ahead.
The parable by Charlie Munger attacked on two fronts. The first was the outrageous practices of the U.S. government which is out of control with its spending and taxation, and discourages entrepreneurs from flourishing when all they do is take wealth away from them and redistribute it like the growing socialist government and administration we now have.
On the private business side, Munger blasted the derivative trading of the banks which were a major part of the underlying problems many of us face.
While this is all true and accurate, we still face the consequences of the actions of the U.S. government and major banks no matter what is done in attempts to deal with the root causes.
This is why commodities will continue to be the major success story over the next decade or more, as real things will continue to be in demand, rather than things most people can't begin to understand.
Charlie Munger on Economics and America
Tuesday, February 23, 2010
Managed Commodity Assets Fall
Managed Commodity Assets Fall
Managed commodity assets fell for the first time in over a year, said Barclay's Capital, evidently based on worries over the global economy.
Overall commodity assets under management dropped to $245 billion, a $12 billion fall from the $257 billion from last month.
In what I think is a strange response to uncertainty, investors took close to $500 million out of exchange-traded funds, with the majority of that being funds backed by gold and a variety of other precious metals.
At a time when uncertainty should drive smart investors to gold, the idea that taking it out of gold and moving it to something else is ignorant and bizarre, although obviously a lot more was happening than only that in the overall commodity managed assets picture.
Managed Commodity Assets Fall
Managed commodity assets fell for the first time in over a year, said Barclay's Capital, evidently based on worries over the global economy.
Overall commodity assets under management dropped to $245 billion, a $12 billion fall from the $257 billion from last month.
In what I think is a strange response to uncertainty, investors took close to $500 million out of exchange-traded funds, with the majority of that being funds backed by gold and a variety of other precious metals.
At a time when uncertainty should drive smart investors to gold, the idea that taking it out of gold and moving it to something else is ignorant and bizarre, although obviously a lot more was happening than only that in the overall commodity managed assets picture.
Managed Commodity Assets Fall
Monday, February 15, 2010
Mining Industry: Energy Prices Rising
Commodity Prices Going Up
The mining industry has come out in force saying there is no doubt energy prices will continue to rise over the next five years, with oil increasing to over $100 a barrel.
While this will probably be true, with at least price increases at some level, the mining industry added that energy is far from the only raw material or other commodity sector poised to increase in price.
Almost every single future factor will confirm that prices for most commodities will continue to rise based on emerging markets, China, and an increasing population.
Those elements alone will push commodity prices up, even if nothing else happens.
It's only a matter of when it'll happen and with what commodity. To me, the recent tightening in China will only have an effect upon those commodities not that high in demand, as the iron ore price negotiations reveal.
Commodity Prices Going Up
The mining industry has come out in force saying there is no doubt energy prices will continue to rise over the next five years, with oil increasing to over $100 a barrel.
While this will probably be true, with at least price increases at some level, the mining industry added that energy is far from the only raw material or other commodity sector poised to increase in price.
Almost every single future factor will confirm that prices for most commodities will continue to rise based on emerging markets, China, and an increasing population.
Those elements alone will push commodity prices up, even if nothing else happens.
It's only a matter of when it'll happen and with what commodity. To me, the recent tightening in China will only have an effect upon those commodities not that high in demand, as the iron ore price negotiations reveal.
Commodity Prices Going Up
Sunday, February 14, 2010
Commodities and Sovereign Default = Opportunity
Commodities and Sovereign Default
It's interesting to read what some think will be the ruin of commodities because of the potential sovereign default from a growing number of countries, including Greece, Ireland, Spain and Portugal.
Of course the problem with ignorant writers on commodities is they're clueless as to how you make money with commodities, which is when they're on the way up or on the way down, so whether the price is going up or down for commodities is irrelevant from that point of view.
These writers only think in terms of whether or not those trying to make money on commodity prices going up are going to get clobbered, not realizing or even in some case - even knowing, that you make money either way.
For those investing in commodities, it doesn't make any difference whether you make the money on upwards or downwards price movements.
So don't forget to include that in your decision making going forward, as potential significant price movements in commodities one way or the other are always potentially great opportunities to make a lot of money.
Commodities and Sovereign Default
It's interesting to read what some think will be the ruin of commodities because of the potential sovereign default from a growing number of countries, including Greece, Ireland, Spain and Portugal.
Of course the problem with ignorant writers on commodities is they're clueless as to how you make money with commodities, which is when they're on the way up or on the way down, so whether the price is going up or down for commodities is irrelevant from that point of view.
These writers only think in terms of whether or not those trying to make money on commodity prices going up are going to get clobbered, not realizing or even in some case - even knowing, that you make money either way.
For those investing in commodities, it doesn't make any difference whether you make the money on upwards or downwards price movements.
So don't forget to include that in your decision making going forward, as potential significant price movements in commodities one way or the other are always potentially great opportunities to make a lot of money.
Commodities and Sovereign Default
Thursday, February 11, 2010
BHP Billiton (NYSE: BHP) Doubles First Half Profits on Commodity Demand
BHP Billiton (NYSE: BHP)
BHP Billiton (NYSE: BHP) had a tremendous first half to their fiscal year as profits doubled on continuing demand for commodities, largely fueled by China and India.
While some try to tout this as also being fueled by European and American demand, that's not true in general, as least from the point of view of being sustainable, as many manufactures, particularly in America, were simply replenishing supplies, a major reason the recent data haven't been that exciting to economists or analysts.
That is probably reflected in the lower dividend than expected from BHP, as the one-off results in the United States won't be repeated any time soon. The company reported a divident of 42 cents for the first half, while expectations were it would come in at 44 cents. That's usually an indicator of uncertainty and unpredictability, and I would say that would largely come from slowing demand from Western countries.
Even so, some commodities will continue to flourish as growth in emerging markets resumes, and as China especially focuses on relying less on imports and more on domestic growth, which is fueling numerous infrastructure projects which will continue for years and require numerous raw materials.
“Physical demand for bulk commodities continues to be very strong in most regions,” BHP said in the statement. “Commodity markets will continue to be largely dependent on Chinese and Indian demand. In the short term, it is critical to monitor the pace of monetary tightening and the rate of loan growth for commodity intensive sectors in China.”
BHP Billiton (NYSE: BHP)
BHP Billiton (NYSE: BHP) had a tremendous first half to their fiscal year as profits doubled on continuing demand for commodities, largely fueled by China and India.
While some try to tout this as also being fueled by European and American demand, that's not true in general, as least from the point of view of being sustainable, as many manufactures, particularly in America, were simply replenishing supplies, a major reason the recent data haven't been that exciting to economists or analysts.
That is probably reflected in the lower dividend than expected from BHP, as the one-off results in the United States won't be repeated any time soon. The company reported a divident of 42 cents for the first half, while expectations were it would come in at 44 cents. That's usually an indicator of uncertainty and unpredictability, and I would say that would largely come from slowing demand from Western countries.
Even so, some commodities will continue to flourish as growth in emerging markets resumes, and as China especially focuses on relying less on imports and more on domestic growth, which is fueling numerous infrastructure projects which will continue for years and require numerous raw materials.
“Physical demand for bulk commodities continues to be very strong in most regions,” BHP said in the statement. “Commodity markets will continue to be largely dependent on Chinese and Indian demand. In the short term, it is critical to monitor the pace of monetary tightening and the rate of loan growth for commodity intensive sectors in China.”
BHP Billiton (NYSE: BHP)
Monday, February 8, 2010
Is Vale (NYSE: VALE) About to Explode Upwards in Price?
Vale Iron Ore Prices
I don't think there's any doubt Vale (NYSE: VALE) is positioned and poised for an extraordinary upwards run in its share price, as their 80 percent exposure to iron ore has them ready to partake in the increasing demand for iron ore, from which steel is made.
Probably the best example of this was the recent attempt by China to dampen down the price of iron ore in the market, which they failed to do because domestic Chinese companies had such a high demand for it that they were willing to pay the asking price even as the Chinese government attempting to pressure the major three iron ore producing companies - including Vale - to drop the price.
China attempted this last year and it backfired on them as the spot price was higher than the negotiated prices other companies paid for a contract for iron ore.
Anyway, Vale should have a nice, long run going up as the demand for iron ore should outstrip the supply for some time to come. Of course any of the major three iron ore producing companies should participate in that upward run, it's just that Vale's 80 percent exposure puts them in an enviable position.
Vale Iron Ore Prices
I don't think there's any doubt Vale (NYSE: VALE) is positioned and poised for an extraordinary upwards run in its share price, as their 80 percent exposure to iron ore has them ready to partake in the increasing demand for iron ore, from which steel is made.
Probably the best example of this was the recent attempt by China to dampen down the price of iron ore in the market, which they failed to do because domestic Chinese companies had such a high demand for it that they were willing to pay the asking price even as the Chinese government attempting to pressure the major three iron ore producing companies - including Vale - to drop the price.
China attempted this last year and it backfired on them as the spot price was higher than the negotiated prices other companies paid for a contract for iron ore.
Anyway, Vale should have a nice, long run going up as the demand for iron ore should outstrip the supply for some time to come. Of course any of the major three iron ore producing companies should participate in that upward run, it's just that Vale's 80 percent exposure puts them in an enviable position.
Vale Iron Ore Prices
Wednesday, January 27, 2010
Commodities Prices: Sugar Prices Drop
Commodity Sugar Prices
Sugar prices fell from 29-year highs as commodities as a sector fell as well as the U.S. dollar was stronger, causing most commodity prices to pull back in response.
For sugar, that won't shouldn't be a deterent to further price increases, as continuing strong demand for the sweetener should cause sugar prices to resume their upward climb.
From the early part of December sugar prices have surged by 32 percent, as supply worries along with continuing demand pushed sugar prices higher.
That hasn't stopped countries to continue buying sugar, as new orders from a number of developing countries, including Pakistan and Indonesia keep demand high. Tailand has also recently said production estimates would be lower than expected, causing concerns over the supply side too.
If sugar prices continue to climb and begin to close above 30 cent a pound consistently, it's unsure how high it could end up going. Some traders are holding back on pushing the price even higher as it could cause a huge sell-off which could move prices quickly.
Commodity Sugar Prices
Sugar prices fell from 29-year highs as commodities as a sector fell as well as the U.S. dollar was stronger, causing most commodity prices to pull back in response.
For sugar, that won't shouldn't be a deterent to further price increases, as continuing strong demand for the sweetener should cause sugar prices to resume their upward climb.
From the early part of December sugar prices have surged by 32 percent, as supply worries along with continuing demand pushed sugar prices higher.
That hasn't stopped countries to continue buying sugar, as new orders from a number of developing countries, including Pakistan and Indonesia keep demand high. Tailand has also recently said production estimates would be lower than expected, causing concerns over the supply side too.
If sugar prices continue to climb and begin to close above 30 cent a pound consistently, it's unsure how high it could end up going. Some traders are holding back on pushing the price even higher as it could cause a huge sell-off which could move prices quickly.
Commodity Sugar Prices
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