Alcoa and metal prices
Metal prices moved upward today, led by copper, platinum and palladium, helping Alcoa (NYSE:AA) climb 1.2 percent by the end of the trading day, finishing at $14.44.
Most of this was the result of the drop in the U.S. dollar, which seems to be moving back to its inverse relationships to commodities, which had been swinging back and forth as the result of the uncertainty of Europe's response to the Greece sovereign debt crisis.
There was also a positive mood in the market when it was announced consumer spending was up for the fifth month in a row, implying a possibility that the recession may be starting to finally wind down, although that is a premature conclusion at this time.
Showing posts with label Metal Prices. Show all posts
Showing posts with label Metal Prices. Show all posts
Monday, March 29, 2010
Friday, March 12, 2010
Teck Resources (NYSE:TCK) Drops on China Inflation
Teck Resources China Inflation
The news that inflation had reached a 16-month high in China February, had a strong effect on the prices of metals, and Teck Resources (NYSE:TCK) partook in the negative response, getting rocked with a 1.4 percent hit to its stock price.
Many metals fell on the China inflation news, primarily on concerns China will tighten its monetary policy to cool of its economy even more, which would imply demand for raw materials could drop from what was expected.
Teck Resources is one of the largest base-metals producers in the world, and could get rocked if China cuts back in a big way, although that's not a certainty, although it would be more costly to do business there.
Teck has somewhat of a cushion though, as only 10 percent of its overall revenue comes from Asia, making them not as vulnerable as some other metals producers could be.
Teck Resources China Inflation
The news that inflation had reached a 16-month high in China February, had a strong effect on the prices of metals, and Teck Resources (NYSE:TCK) partook in the negative response, getting rocked with a 1.4 percent hit to its stock price.
Many metals fell on the China inflation news, primarily on concerns China will tighten its monetary policy to cool of its economy even more, which would imply demand for raw materials could drop from what was expected.
Teck Resources is one of the largest base-metals producers in the world, and could get rocked if China cuts back in a big way, although that's not a certainty, although it would be more costly to do business there.
Teck has somewhat of a cushion though, as only 10 percent of its overall revenue comes from Asia, making them not as vulnerable as some other metals producers could be.
Teck Resources China Inflation
Wednesday, July 15, 2009
Brazil Commodities Pushing Economy
Brazil Commodities
Stocks in Brazil, which are primarily fueled by the commodity sector, enjoyed a strong push, as oil and metals helped drive up the prices of producers and investors hope this is the beginning of a rebound in the Brazilian economy.
Vale SA, the world’s largest iron ore miner, climbed more than 7 percent after Bank of America Corp. upgraded the stock on valuations and higher ore prices. Tam SA and Gol Linhas Aereas Inteligentes SA, Brazil’s two biggest airlines, increased the most in the Bovespa index on hopes demand will increase. Rossi Residencial SA led gains for homebuilders after competitor MRV Engenharia & Participacoes SA recorded record contracted sales.
Industrial production in the U.S., the world’s biggest economy, had the smallest fall in eight months, the Federal Reserve said today. A New York regional factory gauge showed the smallest contraction in more than a year.
Vale Upgrade
Vale increased by the highest in two months, adding 7.2 percent to 29.84 reais, after it was raised to “buy” from “neutral” at Bank of America.
“Since March, the stock has been a big underperformer and we now believe investors are overly pessimistic on the name,” analysts led by Felipe Hirai wrote. “Vale’s current share price is not reflecting a stronger iron ore market scenario.”
The Bloomberg Base Metals 3-Month Price Commodity Index gained 3.5 percent to 156.86. Crude oil rose as much as 4.1 percent, the most in six weeks, after a government report showed a bigger-than-forecast drop in U.S. crude inventories as refineries increased operating rates.
The Bovespa has gained 36 percent in 2009 on speculation a rebound in commodity prices and falling interest rates will bolster economic growth. The measure had tumbled 10 percent from this year’s high on June 1 through yesterday on speculation the global recession will be prolonged, reducing commodity demand.
Grupo Elektra SA, the Mexican electronics retailer controlled by billionaire Ricardo Salinas, led the gains in the Bolsa index after Intel Corp. forecast sales that beat analysts’ estimates.
Grupo Financiero Banorte, Mexico’s largest publicly traded lender, rose. Mexico’s central bank is expected to cut interest rates by 25 basis points.
The Bolsa is tracking the rise of U.S. stocks, which had fallen “too much too quickly,” Guilherme Paiva, Deutsche Bank’s Latin American equity strategist, said in an e-mail. “Plus it looks like Intel figures were driven by top-line growth rather than cost cutting,” he said.
The Bolsa has gained 49 percent since its March 2 low on signs that the worst of the recession is over.
Commodities continue to help lead the way for Brazil, but I would be very cautious on making decisons based on wishful thinking that the recession is over.
Brazil Commodities
Stocks in Brazil, which are primarily fueled by the commodity sector, enjoyed a strong push, as oil and metals helped drive up the prices of producers and investors hope this is the beginning of a rebound in the Brazilian economy.
Vale SA, the world’s largest iron ore miner, climbed more than 7 percent after Bank of America Corp. upgraded the stock on valuations and higher ore prices. Tam SA and Gol Linhas Aereas Inteligentes SA, Brazil’s two biggest airlines, increased the most in the Bovespa index on hopes demand will increase. Rossi Residencial SA led gains for homebuilders after competitor MRV Engenharia & Participacoes SA recorded record contracted sales.
Industrial production in the U.S., the world’s biggest economy, had the smallest fall in eight months, the Federal Reserve said today. A New York regional factory gauge showed the smallest contraction in more than a year.
Vale Upgrade
Vale increased by the highest in two months, adding 7.2 percent to 29.84 reais, after it was raised to “buy” from “neutral” at Bank of America.
“Since March, the stock has been a big underperformer and we now believe investors are overly pessimistic on the name,” analysts led by Felipe Hirai wrote. “Vale’s current share price is not reflecting a stronger iron ore market scenario.”
The Bloomberg Base Metals 3-Month Price Commodity Index gained 3.5 percent to 156.86. Crude oil rose as much as 4.1 percent, the most in six weeks, after a government report showed a bigger-than-forecast drop in U.S. crude inventories as refineries increased operating rates.
The Bovespa has gained 36 percent in 2009 on speculation a rebound in commodity prices and falling interest rates will bolster economic growth. The measure had tumbled 10 percent from this year’s high on June 1 through yesterday on speculation the global recession will be prolonged, reducing commodity demand.
Grupo Elektra SA, the Mexican electronics retailer controlled by billionaire Ricardo Salinas, led the gains in the Bolsa index after Intel Corp. forecast sales that beat analysts’ estimates.
Grupo Financiero Banorte, Mexico’s largest publicly traded lender, rose. Mexico’s central bank is expected to cut interest rates by 25 basis points.
The Bolsa is tracking the rise of U.S. stocks, which had fallen “too much too quickly,” Guilherme Paiva, Deutsche Bank’s Latin American equity strategist, said in an e-mail. “Plus it looks like Intel figures were driven by top-line growth rather than cost cutting,” he said.
The Bolsa has gained 49 percent since its March 2 low on signs that the worst of the recession is over.
Commodities continue to help lead the way for Brazil, but I would be very cautious on making decisons based on wishful thinking that the recession is over.
Brazil Commodities
Friday, January 9, 2009
Platinum Prices and the Year Ahead
There are a couple of different takes on the importance of platinum as an investment over the next year.
Some think the downturn in the auto industry and the resultant decline in platinum demand will slow the pricing of the metal, while others look at the price relationship between platinum and gold, and think platinum will be the best performing metal in 2009.
Under normal conditions, it usually requires between 1.7 and 2.2 ounces of gold to buy an ounce of platinum. Today the two metals are very close in price, generating the idea it's at bargain levels.
On the demand side, today South African investment bank and asset manager Investec (INVP.L) cut its short- and long-term outlook for platinum, citing the uncertainty in the auto industry as the driving factor.
In a research note, Investec analyst Rebecca O'Dwyer said, "We see downside risk to the platinum price in the near-term, particularly if vehicle sales continue to decline in the first few months of 2009."
Revised numbers from the bank places platinum at $970 and ounce in 2009 and $1,350 an ounce in 2010. Original projections were $1,350 for 2009 and $1,675 an ounce for 2010.
Who's right? That will depend upon whether demand is the determining factor in why investors buy platinum. Metals should be an excellent investment in 2009, and the economic circumstances would do more to dictate why people invest in them, rather than demand.
What I mean by that is U.S. equities, bonds and treasuries aren't going to be the focus of investors, with the danger connected to the U.S. dollar and the misguided bailouts and increased government spending.
So metals should be one of the few promising safe and growth sectors going forward into 2009. That in itself could override the demand factor concerning platinum (assuming it does go down), and the price definitely could surge up as investors pour their money into metals, and specifically platinum.
Some think the downturn in the auto industry and the resultant decline in platinum demand will slow the pricing of the metal, while others look at the price relationship between platinum and gold, and think platinum will be the best performing metal in 2009.
Under normal conditions, it usually requires between 1.7 and 2.2 ounces of gold to buy an ounce of platinum. Today the two metals are very close in price, generating the idea it's at bargain levels.
On the demand side, today South African investment bank and asset manager Investec (INVP.L) cut its short- and long-term outlook for platinum, citing the uncertainty in the auto industry as the driving factor.
In a research note, Investec analyst Rebecca O'Dwyer said, "We see downside risk to the platinum price in the near-term, particularly if vehicle sales continue to decline in the first few months of 2009."
Revised numbers from the bank places platinum at $970 and ounce in 2009 and $1,350 an ounce in 2010. Original projections were $1,350 for 2009 and $1,675 an ounce for 2010.
Who's right? That will depend upon whether demand is the determining factor in why investors buy platinum. Metals should be an excellent investment in 2009, and the economic circumstances would do more to dictate why people invest in them, rather than demand.
What I mean by that is U.S. equities, bonds and treasuries aren't going to be the focus of investors, with the danger connected to the U.S. dollar and the misguided bailouts and increased government spending.
So metals should be one of the few promising safe and growth sectors going forward into 2009. That in itself could override the demand factor concerning platinum (assuming it does go down), and the price definitely could surge up as investors pour their money into metals, and specifically platinum.
Tuesday, October 21, 2008
Commodities | Copper Futures Drop
For the first time in almost two years, copper futures fell below the $2 a pound mark today, as a slowing global economy dries up demand.
In the middle of the session copper futures fell as low as $1.9920 before finishing at $2.0070 a pound for December delivery; a 5.2 percent decline. The last time it was below $2 a pound was in November of 2005.
If copper continues to fall at this pace, we'll see it suffer its worst yearly decline in 20 years.
So far this year its dropped by 34 percent, already its largest loss by percentage since 1988.
Because of the widespread use of copper in the market, it's used as a measuring stick for the overall economy. It's fall in price confirms the slowing global economy, especially growth in China.
In the middle of the session copper futures fell as low as $1.9920 before finishing at $2.0070 a pound for December delivery; a 5.2 percent decline. The last time it was below $2 a pound was in November of 2005.
If copper continues to fall at this pace, we'll see it suffer its worst yearly decline in 20 years.
So far this year its dropped by 34 percent, already its largest loss by percentage since 1988.
Because of the widespread use of copper in the market, it's used as a measuring stick for the overall economy. It's fall in price confirms the slowing global economy, especially growth in China.
Wednesday, September 17, 2008
Commodities Back in Favor as Investors Flee to Safety
Commodities are enjoying a strong surge again, as the U.S. dollar fell, financial institutions waver, and investors flee equities looking for a safe haven.
Gold was the major recipient of the commodity surge, as it exploded by over $60 an ounce to end at $850.50 an ounce on the NYMEX during regular trading, and already going as high as $870.90 an ounce in after hours trading.
Silver also enjoyed a resurgence, as it had its biggest one-day increase in price since December 31, 1979, growing by $1.158 an ounce to settle at $11.675.
Oil also partook in the commodity uptick, as October delivery for light sweet crude in New York surged by $6.01 dollars to finish the session at $97.16.
A key factor in the overall strength in commodities today was the decline of the U.S. dollar, which dropped against most major currencies today, with the dollar index falling to 78.159, from the 79.149 it was at on late Tuesday.
Commodities are denominated in U.S. dollars, one of the reasons its weakness spurred part of the commodity rally.
A number of grains, including corn, soybeans and wheat also enjoyed solid growth today, as corn gained 22 cents a bushel to close at $5.54 on the CBOT, while soybeans jumped by 26 cents to $11.39 a bushel.
Even with high global wheat inventories putting downward pressure on the grain, the numerous factors putting commodities back in favor were enough to push wheat upward again, as it ended at $7.25-3/4 a bushel, up 35-3/4 cents, a 5.18 percent upward move.
Gold was the major recipient of the commodity surge, as it exploded by over $60 an ounce to end at $850.50 an ounce on the NYMEX during regular trading, and already going as high as $870.90 an ounce in after hours trading.
Silver also enjoyed a resurgence, as it had its biggest one-day increase in price since December 31, 1979, growing by $1.158 an ounce to settle at $11.675.
Oil also partook in the commodity uptick, as October delivery for light sweet crude in New York surged by $6.01 dollars to finish the session at $97.16.
A key factor in the overall strength in commodities today was the decline of the U.S. dollar, which dropped against most major currencies today, with the dollar index falling to 78.159, from the 79.149 it was at on late Tuesday.
Commodities are denominated in U.S. dollars, one of the reasons its weakness spurred part of the commodity rally.
A number of grains, including corn, soybeans and wheat also enjoyed solid growth today, as corn gained 22 cents a bushel to close at $5.54 on the CBOT, while soybeans jumped by 26 cents to $11.39 a bushel.
Even with high global wheat inventories putting downward pressure on the grain, the numerous factors putting commodities back in favor were enough to push wheat upward again, as it ended at $7.25-3/4 a bushel, up 35-3/4 cents, a 5.18 percent upward move.
Monday, March 31, 2008
Commodities Drop in Quarterly Sell-Off
Many commodity prices plunged today as investors partook in profit-taking at the end of the quarter. Another factor was the report by the U.S. Department of Agriculture which said there will be a supply problem in corn, wheat and soybeans this year, as stockpiles around the world declined.
There wasn't a commodity sector that didn't experience strong declines and sell-offs.
Agriculture
While the number of acres dedicated to corn planting this year have fallen, soybeans and wheat, on the other hand are increasing, with 75 million acres projected to be planted for soybeans and 64 million acres for wheat in 2008. That's an 18 percent increase for soybeans and a 5.5 percent increase for wheat over last year's total.
Corn prices increased on the news there would be only 86 million acres planted this year, in contrast to the 93.6 million planted last year; a drop of 8 percent. Corn ended at $5.6725 a bushel on the CBOT.
Metals
Major metals also fell, with gold, silver and copper all dropping as investors assured themselves profits at the quarter's end. Gold dropped by $14.40 to finish at $916.20 an ounce on the NYMEX. Silver fell 62.5 cents to settle at $17.275 an ounce, and copper prices for May declined by 0.5 cent to end the day at $3.8635 on the NYMEX.
Energy
Futures for energy also fell, as crude oil for May delivery finished down by $4.04, ending at $101.58 a barrel on the NYMEX.
Gasoline futures for April plunged by 10.07 cents, ending at $2.6163 a gallon. Heating oil also dropped 5.58 cents to settle at $3.0492 a gallon.
Thursday, March 6, 2008
Commodity and Currency News from around the Web
Indonesian shares end morning higher, led by commodities stocks
Indonesian shares ended the morning session higher Thursday, in line with other Asian markets, on a technical rebound from recent losses, with commodities leading the rally on soaring crude oil prices.
Crude oil moved closer to 105 US dollars a barrel in Asian trade Thursday, touching a new record high following an unexpected drop in US stockpiles and OPEC's rejection of calls to increase output.
The composite index ended the morning up 30.57 points or 1.2 percent at 2,670.22, on volume of 1.5 billion shares worth 2.68 trillion rupiah.
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Commodities proving the saving grace for investors
According to bankers in London and New York, fears over rising global inflation, robust fundamentals and the weakness of the dollar are other reasons for the strong interest (in commodities).
Barclays Capital says inflows to both simple exchange-traded products and more complex commodity products are at all time highs.
The bank estimates that investors poured about $3bn into commodities in January, about double the amount for any month during 2007.
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Oil, Gold, Corn Rise to Records, Fueling Rebound in Commodities
Crude oil, gold and corn prices surged to records, leading a rebound in commodities on renewed concern that a slumping dollar and lower borrowing costs will spur inflation and increase demand for raw materials.
The UBS Bloomberg Constant Maturity Commodity Index of 26 futures contracts jumped 41.46, or 2.8 percent, to 1,549.09. The gauge has jumped 21 percent this year, reaching a record 1,573.8381 on Feb. 29.
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Commodities: The Squeeze Gets Tighter
Prices for oil, metals, and grains are surging, putting businesses and consumers in a bind. And there's little chance of relief anytime soon
Investors, worried about the shaky state of the equity, credit, and housing markets—and the steady decline in the U.S. dollar—are seeking safety in hard assets. And that is driving prices of commodities ranging from precious metals to grains through the roof. Speculators may be sporting ear-to-ear grins, but the surge is causing consternation among businesses as they watch prices for key manufacturing inputs reach uncomfortable levels.
The price spikes have occurred across the commodities spectrum, with oil, which hit a record closing high of $104.46 per barrel on Mar. 5, the most visible example.
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Weak $, real int rates helping commodities: Smith Barney
Alan Heap, Chief Commodity Analyst at Smith Barney said that the US is not an important consumer of metals as before but accounts for just 12% of the copper demand. He added that there is a massive inflow of long only funds into the commodity market and that US and European pension funds are moving money into the commodity market. According to Heap, a weak dollar and negative real interest rates are supporting commodities while the global energy crunch is supporting high crude prices. He added that bulk commodities are insulated from the US slowdown.
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Shanghai copper up, LME near peak on fund buying
Shanghai copper jumped 2.4 percent on Thursday after London futures surged to within 1 percent of a record high the previous day, as a weaker dollar sent funds back into commodity indices.
London Metal Exchange copper touched $8,725 a tonne in electronic dealing on Wednesday, just $75 off an all-time high, in a broader commodities rally that also drove oil and gold to record highs.
"The strong iron ore settlement prices, up 65-70 percent, have emboldened some investors into thinking demand from China will remain firm, Burg added.
The May copper contract the most active on the Shanghai Futures Exchange, rose 1,620 yuan to 69,460 yuan a tonne at midday. Spot copper in Shanghai rose 800 yuan to between 68,300 and 68,600 yuan.
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Asian currencies firm; Sing dollar and ringgit at highs
The Singapore dollar and Malaysian ringgit hit their highest in more than a decade on Thursday and other Asian currencies also firmed on heightened expectations of a US rate cut in March after weak US data.
The Philippine peso and Taiwan dollar gained 0.4 percent each after the US dollar weakened to a record low against the euro overnight due to soft private sector employment data from the US and figures indicating the service sector had contracted in February.
Tuesday, March 4, 2008
Investors take Profits on Base Metals
Base metals dropped today on the London Metal Exchange, as investors took profits, with the majority of the commodity markets participating in a sell-off.
A number of metals ended up at close to the record range before cutting back later in the session.
“Supply disruptions made the fundamentals for some metals (gold, platinum, aluminium and zinc) look much better, which combined with the poor equity, property market and corporate paper market, convinced funds to go into commodities,” said BNP Paribas analyst David Thurtell.
Tin reached a new high before dropping again, reaching $19,375 a ton before fears on what Indonesia's response in battling against illegal tin mining would affect the metal. It ended the day at $19,050, an increase of $100 over what it closed at yesterday.
With most of the world's tin exports coming out of Indonesia, MF Global analyst Edward Meir said, “Tin's fundamentals look solid to us.
“The bulk of the world's tin exports come from Indonesia, and so the complex has a good chunk of its eggs in only one basket.”
Most dealers believe the sell-off was long overdue, and a correction was needed. They also said that this will be a short-term event, and prices should continue on an upward climb. Even so, with many turning to commodities as an inflation hedge, some are starting to think some metals are reaching a potential bubble, and will have to be watched carefully.
Most say we can't overly react and read into the cutback, as metals overall should be strong for some time.
Some metals shedding some of their weight were nickel, which dropped by $405, to finish at $32,845; aluminum decreased by $23, to end at $3115 a ton; lead fell by $70 to come in at $3365 a ton; and zinc declined by $45 to finish the session at $2780.
A number of metals ended up at close to the record range before cutting back later in the session.
“Supply disruptions made the fundamentals for some metals (gold, platinum, aluminium and zinc) look much better, which combined with the poor equity, property market and corporate paper market, convinced funds to go into commodities,” said BNP Paribas analyst David Thurtell.
Tin reached a new high before dropping again, reaching $19,375 a ton before fears on what Indonesia's response in battling against illegal tin mining would affect the metal. It ended the day at $19,050, an increase of $100 over what it closed at yesterday.
With most of the world's tin exports coming out of Indonesia, MF Global analyst Edward Meir said, “Tin's fundamentals look solid to us.
“The bulk of the world's tin exports come from Indonesia, and so the complex has a good chunk of its eggs in only one basket.”
Most dealers believe the sell-off was long overdue, and a correction was needed. They also said that this will be a short-term event, and prices should continue on an upward climb. Even so, with many turning to commodities as an inflation hedge, some are starting to think some metals are reaching a potential bubble, and will have to be watched carefully.
Most say we can't overly react and read into the cutback, as metals overall should be strong for some time.
Some metals shedding some of their weight were nickel, which dropped by $405, to finish at $32,845; aluminum decreased by $23, to end at $3115 a ton; lead fell by $70 to come in at $3365 a ton; and zinc declined by $45 to finish the session at $2780.
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Silver Quietly Increasing in Value: Up 35 Percent this Year
So far in the short two months of 2008, silver has enjoyed running up by 35 percent, breaking the $20 mark today. We don't have to feel bad for gold though, as it's risen by 17 percent in 2008, a very hefty rise as well.
It's doubtful it will continue at this pace at all, and the inherent volatility of silver offers its own risk. Even so, during 2008, we'll probably see the metal grow in price, albeit at a much slower pace than it has been.
With the declining use of silver in the photography industry, this is surely an investor driven rise, and should be in the foreseeable future.
That will add to the possibility of a lot of ups and downs because of the potential for profit taking, although it should still steadily rise throughout the year. That, and the increase in scrap sales has to be watched carefully.
People will have to watch that they don't become "Silver Surfers."
It's doubtful it will continue at this pace at all, and the inherent volatility of silver offers its own risk. Even so, during 2008, we'll probably see the metal grow in price, albeit at a much slower pace than it has been.
With the declining use of silver in the photography industry, this is surely an investor driven rise, and should be in the foreseeable future.
That will add to the possibility of a lot of ups and downs because of the potential for profit taking, although it should still steadily rise throughout the year. That, and the increase in scrap sales has to be watched carefully.
People will have to watch that they don't become "Silver Surfers."
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