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Commodities Now Jan/Feb 2015

A Real Commodity Crash ...

Following considerable losses in many commodities last year, its has been a bad start for the sector in 2015 with prices recently sinking to 12-year lows for the Bloomberg Commodity Index, wiping out most of the gains that were seen during the Chinese boom years. The strength of the US dollar has also hit commodity markets especially hard.

2014 will go down as one of the most difficult years ever for commodity investments, according to Barclays, which says steep price falls and liquidations triggered a $50 bn decline in assets under management.

 Click the button to the left to view the online edition

Saudi Arabia’s decision not to cut output – in spite of collapsing prices – is having far-reaching consequences for all commodities, all asset classes and, above all, the world economy.

One example of the rout can be seen in the Baltic Dry Index, currently trading at its lowest levels since the 1980s, even as traded volumes of many commodities have reaching record levels.

Rock-bottom (perhaps) oil prices, deflation fears and slowing growth, have led policymakers in every corner of the globe to enacting some sort of monetary easing program. Numerous countries have continued to cut rates and loosened borrowing standards. 

The European Central Bank has embarked on a huge bond buying program for the next 18 months – possibly beyond. In this environment, the safe haven attractiveness of gold should therefore remain strong, particularly over the next 6 months with prices well supported.

Volatility in global markets remains high. However, oil prices seem to be finding a floor (for now) even as economic growth around the world remains tepid (see page 6).

Meanwhile, geopolitical risks abound. Interstate conflict with regional consequences is viewed as the number one global risk in terms of likelihood according to the latest World Economic Forum Global Risks 2015 report. The risk landscape in 2015 also shows that there remains concern over the world’s ability to solve its most pressing societal issues, as the threats from economic, environmental and geopolitical risks escalate. Indeed, the societal risk accounts for the top two potentially impactful risks.

Therefore, 2015 may well see a rare occurrence for world commodity markets – a decline in all nine key commodity price indices, says the World Bank’s latest Commodity Markets Outlook.

There is pitifully little good news on the horizon. Voluntary cutbacks are now an essential if commodity prices have any hope of making a recovery in the near term.  

A special thank you to all those who attended the 2014 Commodity Business Awards.

Full details of the winners and rankings can be found on page 15.

  


 

The January edition of Commodities Now includes:

A Real Commodity Crash

Patrick Legland & Daniel Fermon

 

What Now for Oil Prices?

Guy Isherwood, Editor-in-Chief

 

Commodities Risk Outlook 2015

Commodities sectors’ downturn brings political risk uptick

 

Precious into 2015

Ross Norman, Sharps Pixley

 

Commodity Business Awards 2014

Shine the spotlight on the talent

 

Musical Chairs

What the bank exodus means for the commodities market

 

European Power & Energy

Progress Towards‘ Energy Union’

Commodities Now

 

EU Electricity & Gas Markets Remain Disturbed

EEMO 2014

 

Clearing, Gas, UK Power Volume Growth

Euro Commodities Markets

 

European Energy Exchange:

Becoming a truly European Commodity Exchange group

 

Europe’s Energy Transition

Secure power for a sustainable economy

 

European Regulatory Developments

Latest regulatory developments

 

Commodity Management

The vital investment

 


 

A Brief History of The Oil Crash

John Kemp, Senior Energy Analyst, Thomson Reuters

 

The Resource of Resourcefulness

Smart materials’ – How smart?

 

Is the Price Right?

A survey on commodity benchmark pricing

 

Monitoring Long Term LNG

An overview of recent LNG forward market developments

 

Carbon-Intensive Industrials

Easy times are over

September, 2013

June, 2013

September, 2012

Upcoming Events – We recommend ...

Structured Commodity Finance 2015

London, 10 March 2015 - 11 March 2015

 

Energy Trading Regulations & Compliance Summit

London, 11 March 2015 - 12 March 2015

 

Chatham House conference: Extractive Industries in Africa

London, 16 March 2015 - 17 March 2015

 

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