We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Thursday, 16 November 17
THE PORT OF NEWCASTLE HAS SHIPPED 14.94 PERCENT LESS COAL IN OCTOBER 2017, DATA SHOWS
COALspot.com: The Port of Newcastle, Australia’s major trading ports, and the world’s largest coal export port has shipped $AU 1,466.8 ...
Thursday, 16 November 17
GOVERNMENT, 13 COAL MINERS AGREE TO CHANGE CONTRACTS - JP
The government and 13 coal mining companies have agreed to change the old Contract of Work (CoW), as part of the implementation of Law No. 4/20199 ...
Wednesday, 15 November 17
IEA RECOGNISES COAL'S CONTINUOUS IMPORTANCE TO GLOBAL ENERGY NEEDS - WCA
The World Coal Association (WCA) has welcomed the International Energy Agency’s (IEA) recognition that coal will continue to play a vital rol ...
Wednesday, 15 November 17
THERMAL COAL WAS DRAGGED DOWN BY THE WEAKNESS ACROSS THE WIDER ENERGY SECTOR - DANIEL HYNES
The coal market was mixed.
Thermal coal was dragged down by the weakness across the wider energy sector, said Daniel Hynes Senior Commodi ...
Wednesday, 15 November 17
MARKET INSIGHT - LINOS KOGEVINAS
For another week, oil seems to be the most volatile and interesting commodity to watch. In this segment we’ll look at some of the major facto ...
|
|
|
Showing 1876 to 1880 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- PTC India Limited - India
- Indika Energy - Indonesia
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- The Treasury - Australian Government
- Meralco Power Generation, Philippines
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Rashtriya Ispat Nigam Limited - India
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- European Bulk Services B.V. - Netherlands
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- The University of Queensland
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
|
| |
| |
|
