Commodities fall on worries about future demand

Commodities fall on worries about future demand
August 18, 2011





Commodity prices fell Thursday after fresh economic reports added to concerns about a weak global economy. Gold was a notable exception as it hit a new record near $1,830 an ounce.

U.S. economic news was discouraging: consumer prices and claims for jobless benefits rose, existing home sales fell and manufacturing weakened in the mid-Atlantic region. Overseas, Japan’s exports fell for the fifth straight month in July and European leaders continued to grapple with sovereign debt problems.

Investors sold contracts for everything from oil to wheat and industrial metals as they worried about the potential for future demand if the global economy continues to slow.

Kingsview Financial analyst Matt Zeman said debt issues are key concerns for investors. “Add to that these just extremely weak economic numbers that we’re seeing and it spells trouble and that’s what we’re seeing,” he said.

The government said the number of people applying for unemployment benefits rose last week. The Consumer Price Index increased 0.5 percent in July as Americans paid more for necessities like fuel and food.

Gold prices rose for a fourth day. The precious metal is considered a relatively stable asset during economic turmoil. Gold for December delivery rose $28.20 to finish at $1,822 an ounce after hitting $1,829.70 an ounce earlier in the day. That was a record in dollar terms but still below the 1980 peak after adjusting for inflation.

Several analysts have predicted that gold could reach $2,000 an ounce if economic troubles deepen.

Gold’s increase benefited silver and platinum, which are traded both as precious and industrial metals.

September silver rose 33.7 cents to end at $40.688 an ounce and October platinum increased $6.90 to $1,847.70 an ounce.

In other trading, September copper fell 6.6 cents to finish at $3.966 a pound and September palladium fell $18.90 to $757 an ounce.

Oil and other energy products dropped. Benchmark West Texas Intermediate crude for September delivery declined $5.20, or 5.9 percent, to finish at $82.38 per barrel on the New York Mercantile Exchange.

In other Nymex trading for September contracts, heating oil fell 8.68 cents to end at $2.8748 per gallon, gasoline futures lost 8.71 cents at $2.7832 per gallon and natural gas fell 4.1 cents to $3.892 per 1,000 cubic feet.

Wheat for September delivery fell 19.75 cents to $7.0775 a bushel, December corn lost 12.5 cents at $7.13 a bushel and November soybeans fell 5.75 cents to $13.61 a bushel.







Rubber Plunges Most in More Than One Week on Growth Concerns
August 19, 2011





Rubber declined for a fourth day, tumbling the most in more than a week, amid concerns that a global economic slowdown may reduce demand for the commodity used to make tires and gloves.

The January-delivery contract plunged as much as 2.8 percent to 352 yen a kilogram ($4,606 a metric ton), the lowest level since Aug. 9, before closing at 352.3 yen on the Tokyo Commodity Exchange.

Asian stocks slumped, dragging the region’s benchmark index to a fourth weekly loss, while oil led commodities lower amid concern that the U.S. recovery is faltering and Europe’s debt crisis will spread.

“The breakdown of stocks and oil prices put pressure on rubber market,” Gu Jiong, an analyst at commodity broker Yutaka Shoji Co., said by phone from Tokyo. A downward revision of global economic growth raised concern that demand for rubber may weaken, he said.

Morgan Stanley cut its forecast for global growth this year, citing an “insufficient” response to Europe’s sovereign debt crisis, weakened confidence and the prospect of fiscal tightening. The bank predicted an expansion of 3.9 percent, down from a previous forecast of 4.2 percent. It cut its China growth forecast for next year to 8.7 percent from 9 percent.

China will expand 8.9 percent this year, down from an earlier forecast of 9.1 percent, Deutsche Bank AG said in a report dated Aug. 17, citing the “shock” of a U.S. and European Union slowdown. It lowered its 2012 estimate to 8.3 percent from 8.6 percent.

In Shanghai, rubber for January delivery dropped 0.8 percent to close at 33,490 yuan ($5,236) a ton on the Shanghai Futures Exchange.

China

“Worries of an economic slowdown in China continue putting pressure on rubber prices,” the Rubber Research Institute of Thailand said on its website today. The downside was limited by a decline in production in the Thai south as rains covered 60 percent of the area, disrupting latex tapping, it said. The south produces about 80 percent of the country’s supply.

China is battling inflation that accelerated at the fastest pace in three years last month, Zhao Cheng, an analyst at Zhongcai Futures Co., said in a report today. “Most Chinese manufacturers are saddled with high-priced inventory while having to deal with tight cash flow, expensive labor and higher taxes,” he said.

The cash price of Thai rubber declined 0.5 percent to 138.05 baht ($4.62) a kilogram today, according to the Thai institute.





Rubber market on aug 19: Spot rubber slips below Rs 200/kg
August 19, 2011





KOTTAYAM, AUG. 19:
Physical rubber market fell further on Friday. Broad declines in the domestic and international futures weighed on the prices on early trades while the selling from dealers kept the commodity under pressure during closing hours. The technical outlook was weak as RSS 4 stayed below the Rs 200 level consecutively for the second day and the market is expected to seek further lows in the days ahead, an analyst said.

Sheet rubber moved down to Rs 197 (198) a kg according to traders. The grade closed weak at Rs 198.50 (200) a kg both at Kottayam and Kochi as reported by the Rubber Board.

The September series weakened to Rs 197.16 (199.11), October to Rs 194.50 (197.09), November to Rs 194.40 (197.23), December to Rs 194.52 (198.01) and January to Rs 197.01 (199.28) a kg for RSS 4 on the National Multi Commodity Exchange.






India: Mani flays cut in rubber import duty
August 19, 2011





Finance Minister K.M. Mani. Photo: C. Ratheesh Kumar
Finance Minister K.M. Mani has criticised the decision of the Central government to sanction import of 40,000 tonnes of natural rubber (NR) at a concessional duty.

Speaking at a meet-the-press here on Friday, Mr. Mani said it was wrong on the part of the Centre to implement a mechanism that would lead to a fall in the price of natural rubber at a time when it brought significant profits to cultivators. “The fact that there wasn’t any system in place to compensate rubber growers at times of slump in prices made the decision all the more uncalled for,” he said. He pointed out that there was no scarcity of rubber and that the Centre’s decision was shaped by the pressure exerted by the user industry. “I am confident that there is sufficient quantity of natural rubber in the country to cater to the market demand,” he said.

Mr. Mani said the State government would soon restructure the prize system of the Kerala Lotteries. This would result in more people winning prizes and help generate more interest in lottery among the public, he said.

He said the government was committed to introducing laws that would protect the interests of the public. “The proposed Right to
Service Act is intended to ensure dispensation of service in a time-bound and effective manner,” he said.

The government would look into the possibility of bringing in a legislation that would effectively protect the interests of depositors and arrest the rising trend of swindling people out of their investments.

Mr. Mani made a special mention of the importance provided to improving waste disposal and sanitation in the revised budget of the State. “The State government envisages a significant improvement of the waste management system. We intend to implement several projects that include the conversion of biogas into electricity and recycling of wastes. This would require the cooperation and active efforts of all local bodies and various self-help groups,” he said.