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Thursday, 22 February 18
WHY THE COMMODITY RALLY WILL GET BACK ON TRACK - SIMON FLOWERS
 Implications for the US dollar and producers
Are we in the early stages of a sustained rise in commodity prices? And what does it mean for the US dollar?
We posed these questions a year ago when robust global economic growth was driving commodity demand and the US dollar was starting to tip over from a 15-year high. The two are inextricably linked, though which is the horse and which the cart is not always clear. The recent disruption in financial markets suggests it’s worth a fresh look at the relationship.
Over the past couple of years, there has been a broad improvement in commodity prices, with indices up by around 50% on average since early 2016. It’s been far from uniform, and different commodities bottomed at different times.
Iron ore and oil have seen the most spectacular rebounds, both up more than 100% from their lows.
The fundamentals in each commodity market are very different, but Principal Economist Jon Butcher identifies common factors behind the recovery.
First and foremost is growth in the global economy. GDP growth strengthened from a low of 2.3% in Q1 2016 to a six-year high of 3.1% in Q4 2017. The upswing has been broadly based with growth accelerating across Asia, Europe and the Americas. In 2016, emerging market growth was just 3.7%; this year we expect 4.6%, with China and India driving much of the improvement. This is doubly important for commodity demand, given the resource-intensive nature of emerging market growth.
Then there is the US dollar. The currency dropped 10% on a trade-weighted basis by end-January 2018, from its high of a year ago. The relationship between the US dollar and commodity prices is not straightforward, or indeed constant. But the dollar tends to be inversely correlated with commodity prices; a weaker dollar usually means stronger commodity prices, and that’s what we’ve seen over the past six months.
The fall in the value of the dollar reflects strength in the emerging world rather than a weak US economy.
It’s also sentiment: with confidence boosted by the global economic upswing, investors have shifted capital out of traditional safe havens like US treasuries into riskier assets with potentially higher returns.
Better prospects for growth in major trade partners like Europe and Canada, and with the expectation of monetary tightening in those economies, they have pushed their currencies higher against the dollar. We’d expect continued dollar weakness through 2018 given the prospects for a strong year of global economic growth.
Financial market volatility in the last fortnight has upset the apple cart. Commodity prices have corrected and the US dollar bounced by 4%, taking it back to December levels. US jobs data released on 2 February highlighted tightness in the US labour market.
Associated wage gains prompted fears of higher inflation and raised the prospect of accelerated US interest rate hikes. Uncertainty spiked, and equities and commodities dropped. Increased risk aversion effectively pulled capital back into safe havens like the US.
So, turning point or just a blip? More likely the latter.
Our view is that the global economy is set fair for growth at a healthy pace, perhaps a tad slower than in 2017-18. Developing economies in particular will do well.
This provides a backdrop for a sustained recovery in commodities over the next five years, though each commodity market has its own fundamental story. Oil, for example, is stuck in oversupply for the next two years before the market tightens into the early 2020s.
As commodities gradually recover, the US dollar should revert to gentle decline – though markets adjusting to the end of 'easy money' means it will doubtless be a bumpy ride for the currency and commodities alike. If we’re right, then some commodity producers may be on a journey to a better place in the next few years – firmer prices and better margins.
On the other hand, it might not pan out this way. So producers have to learn from this tough down cycle and persevere with the relentless drive to keep costs down so they can still make money even at future cycle lows – and wherever the US dollar travels. That has to be the goal.
Simon Flowers
Chairman and Chief Analyst
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Tuesday, 06 February 18
THE FUNDAMENTALS FOR INDIAN COAL IMPORTS CONTINUE TO LOOK PROMISING - TORVALD KLAVENESS
Back in August we reported that the fundamentals impacting Indian coal imports looked more promising.
Trade flow data today implies 17.4Mt of ...
Monday, 05 February 18
SUPRAMAX : INDONESIA TO INDIA PASSING THROUGH SINGAPORE HAS SOFTENED
COALspot.com: The daily average earnings for Supramax, for the route Indonesia to India passing through Singapore has softened, week over week, own ...
Friday, 02 February 18
SUPRAMAX : INDONESIA TO CHINA COAL TRIPS ARE PAYING AROUND MID USD 9000 - FEARNLEYS
Supramax
Rather quiet week within Atl, specially Continent due to lack of cargoes.
According to Fearnleys Weekly - Dry bulk report published ...
Friday, 02 February 18
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 54.1 MMST, DOWN 8.8% YOY - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.3 million short tons ...
Thursday, 01 February 18
RISING US OIL EXPORTS, MARKET DISRUPTION, BRENT-WTI SPREAD - WOOD MACKENZIE
What will US tight oil growth do to crude markets? The build-up in volumes early this decade led to a supply glut that undermined prices in 2014.
...
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Showing 1816 to 1820 news of total 6871 |
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- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Manunggal Multi Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- Latin American Coal - Colombia
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- VISA Power Limited - India
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- White Energy Company Limited
- The University of Queensland
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- SMC Global Power, Philippines
- International Coal Ventures Pvt Ltd - India
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