ANIL SASI
Posted: Thursday, Jul 26, 2012
Financial Express
The slowdown in emerging economies, led by China, combined with the euro zone crisis and America’s continuing economic weakness, continues to drive down prices for oil and other commodities, from copper to corn.
HSBC, last week, trimmed its 2012 price outlook on global aluminum, copper, nickel and zinc, noting that base metal prices are starting to reflect slower global growth. This is broadly in line with a World Bank report titled ‘Global Economic Prospects’, released in January 2012, which predicted that the average price of these metals is expected to fall 6 per cent this year. The reasons, it said, were lower demand and rise in output as new projects go on stream.
This has only exacerbated the problems for metal investors, who failed to get good returns in 2011 due to fall in demand as the European Union and the US went into recession and China tightened its monetary policy. During the year, the London Metal Exchange (LME) Index fell 21 per cent, and was at 3,306 on December 30, 2011. On February 29, 2012, the index was at 3,751. The index tracks six metal contracts — aluminium, copper, lead, nickel, tin and zinc — in USD.
COPPER: In the domestic market, analysts expect that during the next few months, the upside will be limited while in the longer run, prices could perk up on account of supply problems, falling ore grades and demand from China.
ALUMINIUM: Globally, aluminium prices fell 18 per cent, or $453, in 2011. This year too, domestic experts are say they expect sustained price pressure in the short term, but a recovery is likely in the longer run as demand from China, Japan and the euro zone countries is likely to improve by later this year.
NICKEL: Nickel, too, did not do well in 2011. In the domestic market analysts expect nickel to remain under selling pressure as the global market is likely to have a surplus in 2012.
COAL: Global coal prices are currently trading at nearly 30 per cent below their year-ago levels. Major reasons include China’s economic slowdown and high coal inventory levels, increased exports from Indonesia and Australia, and the US switching to cheap natural gas.
With domestic production falling short of demand, India is estimated to import over 130 million tonne in 2012-13. The slide in the spot coal prices bodes well for power producers.
Posted: Thursday, Jul 26, 2012
Financial Express
The slowdown in emerging economies, led by China, combined with the euro zone crisis and America’s continuing economic weakness, continues to drive down prices for oil and other commodities, from copper to corn.
HSBC, last week, trimmed its 2012 price outlook on global aluminum, copper, nickel and zinc, noting that base metal prices are starting to reflect slower global growth. This is broadly in line with a World Bank report titled ‘Global Economic Prospects’, released in January 2012, which predicted that the average price of these metals is expected to fall 6 per cent this year. The reasons, it said, were lower demand and rise in output as new projects go on stream.
This has only exacerbated the problems for metal investors, who failed to get good returns in 2011 due to fall in demand as the European Union and the US went into recession and China tightened its monetary policy. During the year, the London Metal Exchange (LME) Index fell 21 per cent, and was at 3,306 on December 30, 2011. On February 29, 2012, the index was at 3,751. The index tracks six metal contracts — aluminium, copper, lead, nickel, tin and zinc — in USD.
COPPER: In the domestic market, analysts expect that during the next few months, the upside will be limited while in the longer run, prices could perk up on account of supply problems, falling ore grades and demand from China.
ALUMINIUM: Globally, aluminium prices fell 18 per cent, or $453, in 2011. This year too, domestic experts are say they expect sustained price pressure in the short term, but a recovery is likely in the longer run as demand from China, Japan and the euro zone countries is likely to improve by later this year.
NICKEL: Nickel, too, did not do well in 2011. In the domestic market analysts expect nickel to remain under selling pressure as the global market is likely to have a surplus in 2012.
COAL: Global coal prices are currently trading at nearly 30 per cent below their year-ago levels. Major reasons include China’s economic slowdown and high coal inventory levels, increased exports from Indonesia and Australia, and the US switching to cheap natural gas.
With domestic production falling short of demand, India is estimated to import over 130 million tonne in 2012-13. The slide in the spot coal prices bodes well for power producers.
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