Copper demand may outstrip supply in 2011 for the first time in
four years as China, the world's biggest consumer, sustains
purchases and as ore grades decline.
The demand-supply gap will be the extent of 200,000 metric
tons. Copper, used in pipes, tubes and wires, faces a "deepening
supply crunch" and record prices are highly likely in the next two
years, Barclays Capital said in a report on July 27. Prices for
immediate delivery will average $7,763 a ton next year as a market
shortage widens, the bank said. The spot price in London has
averaged $7,088 this year.
Commodity assets under management
Commodity assets under management surpassed $300 billion for the
first time in July, Barclays Capital said in a report. Inflows were
$5 billion compared with June's $2.3 billion, Barclays said
India ETF gold collections up 82%
India's gold collections in exchange traded funds (
) rose more than 82 percent on year in July as investors plucked
bargains in anticipation of higher prices going ahead. Gold
collections by the seven fund houses rose to 11.294 tonnes in July,
when the yellow metal struck a low of 17,660 rupees per 10 grams on
July 29.Prices have rebounded by 5 percent since then till
Thursday, but are still below the all-time high of 19,198 struck on
SMC gets approval for trading
Financial Technologies (
) Group's Singapore Mercantile Exchange has received final approval
from Singapore authorities to operate as an international commodity
and currency derivatives exchange there.
SMX is the first pan-Asian multi-product commodity and currency
derivatives exchange. The Monetary Authority of Singapore (
) granted 'Approved Exchange' status to SMX to operate out of
Singapore as a regulated and licensed exchange, a company release
Coffee prices jump on news of Colombia rainfall
Coffee prices jumped the most in two weeks on speculation that
excess rainfall may hurt output in Colombia, the world's
second-largest arabica-bean producer, tightening global supplies.
Cocoa also gained.
Persistent wet weather in Colombia may hamper a recovery from
last year's 33-year production low by depriving plants of sunlight,
Jorge Lozano, the head of the National Association of Coffee
Exporters, said on Aug. 4. Inventories of arabica coffee in
warehouses monitored by ICE Futures U.S. have dropped to the lowest
level since May 2000
India food inflation sees upsurge
Food inflation, based on the Wholesale Price Index (
), witnessed an upsurge during end-July, after having dipped for
two straight weeks. The annual food inflation increased 11.40 per
cent during the week ended July 31 from the previous week's
year-on-year rise of 9.53 per cent, mainly on account of a surge in
items such as milk and pulses, official data released on Thursday
The increase in the fuel prices index, however, slowed to 12.66
per cent on an annual basis during the latest week as against 14.26
per cent recorded in the previous week.
The primary articles index gained 15.66 per cent compared with
the previous week's 14.36 per cent.
Comexes turnover up 63%
Driven by increased trade in bullion and metals, the turnover of
commodity exchanges in the country surged by 63 per cent to Rs 5,
01,046 crore during the fortnight ended July 31, 2010, according to
the Forward Markets Commission (
The total turnover of the bourses was Rs 3,07,829 crore in the
same period last year, commodity market regulator FMC said in a
statement. The cumulative value of trade in the first four months
of this fiscal grew by 59 per cent at Rs 33,72,249 crore compared
to Rs 21,23,637 crore in the corresponding period last fiscal
Gold prices continued to trade range bound after Federal
reassessment of the US economy but rallied 1.5% on Thursday thanks
to weakness in US equity markets. Weak US jobs data and signs of
economic slowdown bolstered the safe-haven appeal of the yellow
metal. US retail sales have rebounded in July but still shows signs
of weakness. Gold prices are still not too near to the all time
highs recorded in June but looks bullish. Gold held firmly against
dollar even as the latter was headed for strong performance in
about 2 years against a basket of currencies. Gold still has chance
of sustaining above $1200 in the near future and may rise to $1280.
Spot gold prices rose to $1213 after rising to with SPDR gold
holdings gaining last week. Silver prices rose to $18.10 while
platinum prices were ruling at $1,519 levels.
MCX October Gold rises to Rs 18565 on an upward trend, support
levels 18430, 18285
After a recent rally that saw LME copper gaining 12% in July on
climbning China imports, the red metal is indeed showing signs of
cooling. For the past two weeks, copper prices have remained
subdued with market feeling the slump was overdone. Fall in
inventory levels at Shanghai and London have provided firm support
for the base metals pack.
Copper premiums in China, the world's largest user, dropped to a
four-month low this week as higher prices weighed on demand and
supplies remained ample. Premiums paid by Chinese importers dropped
to as low as $70 a metric ton over the London Metal Exchange cash
price on a cost, insurance and freight basis to Shanghai this week,
That's the lowest level since April and down from this year's high
of $160 last month, according to news reports.
The drop in premiums is being interpreted as unwillingness to
buy overseas metal as it is now unprofitable.
At Nymex, Copper for September delivery rose from earlier slump
to $3.3055 per pound while LME Copper rose to $7255 in the weekend.
MCX Aug Copper has also shown weakness offlate with prices tracking
weak overseas trends and strength in Indian rupee. Doubts
concerning economic recovery and China demand have created
uneasiness in the base metals market. Aluminium, zince tin, lead
prices gained while nickel prices fell.
Crude oil prices have turned weak on rising US gasoline inventories
and higher supplies by OPEC countries. Nymex crude oil futures have
already fallen 6.6% this week with US retail sales figures showing
less growth than forecasted suggested gloomier economic growth. The
fundamentals for the energy complex continue to remain weak with
high inventories and weak demand. Oil supplies were above the
5-year average last week, according to US Energy Department. Oil
rigs operating in US jumped the most in nine months. Rigs exploring
for oil produdction rose form 25 to 636.
Nymex Crude Oil for September delivery fell to $75.39 while ICE
Brent Crude for September falls to $75.11. OPEC has raised the
global oil demand forecast this year and next year to by 140,000
barrels per day thanks to consumption growth seen in Asia, Middle
East and Latin American countries.
Chana prices have turned weak due to higher sowing of kharif pulses
while improved spot demand ahead of festive season has provided
firm support. Kharif pulses acreage as on August 12, 2010 is 10.32
mn ha while as against 8.6 mn ha a year ago. August Futures at
NCDEX has ended teady at Rs 2254 before moving up to a high of 2274
while September contract gained marginally from Rs 2293 to Rs 2302.
With rains abundant in major pulses growing regions of India, Chana
may continue to trade weak.
Rubber prices globally have shown signs of weakness due to falling
crude oil prices and strength of yen against dollar. However, the
trend was reversed towards the end of the week with
January-delivery rubber gaining as much as 2.1% at 281.9 yen a
India's rubber prices continued to trade rangebound at above Rs
180 levels but turned weak as trading was inactive at higher
levels. NMCE Aug futures contract fell from Rs 189.66 levels to Rs
183.50 while September contract fell from Rs 174.77 to Rs 173.89
levels.Supply concerns in Thailand, Indonesia as well as Malysia
continue to provide firm support for natural rubber prices. TOCOM
rubber was hit by lower oil prices, declining equity markets and
concerns over glbal economic growth. However, automobile
consumption in emerging economies continue to be strong which
provides firm support to rubber prices. NMCE Aug Contract has
support at 184 levels while September contract has support at Rs
India's pepper prices have gained last week thanks to festive
season demand and squeeze in supplies, however, with Indian parity
prices higher by 10-12 percent to overseas competition, export
enquiries appear weak. Vietnam pepper production has fallen by 5%
in 2010 and India's exports have fallen 5% to 4650 tonnes in
April-June 2010. Vietnam's total export target for 2010 has been
scaled down by 27% to 100,000 tonnes. India's peper prices have
risen by 40% since January this year thus outpricing global
Pepper prices have support from squeezed supplies while lot
depends on growth in overseas demand.
NCDEX Aug Pepper has risen from Rs 18749 to Rs 18902 while
September contract has risen from Rs 18973 to Rs 19131. NCDEX
August Pepper suppor at Rs 18500 while September support is at Rs
Soybean prices have rallied in global markets thanks to imports by
China to meet short fall for edible oil and oilseeds. Upcoming
festivals and firm trends in global markets have led to rally in
oil and oilseeds futures in India. India's July oilmeal exports
have risen by a third from a year earlier reversing 8-months of
weakness. As on August 12, the area under oilseeds stood at 15.82
mn ha compared to 15.28 mn ha a year ago. Oil meals exports from
India have surged to 166,632 tonnes in July recovering from a
recent slump. NCDEX Rapeseed contract hit a high of Rs 580.7 while
NCDEX September soybean weakened slightly to Rs 2171.5 from Rs 2180
levels while September soyoil falling from Rs 517 levels to Rs
513.55 levels. Oilseeds market is expected to witness an uptrend
although higher acreage, and sowing progress due to monsoon rains
could limit gains in the short term.