Why We Are in Secular Bull Market in Commodities

Commodity sudah ada di cover "Times" magazine ngga yah ? Bubble2 yg sudah burst dari Internet -> Housing -> Technology -> sekarang Commodity -> apa lagi ?? bubbles bursting everywhere ANALYSTS warn that speculative bubbles may be forming in commodity markets as global investors increasingly seek safe havens from uncertain stock markets and a weak US dollar, pushing gold and oil prices to record highs, and buoying base metal prices. Commodity prices surged again yesterday with oil approaching $US105 a barrel, buoyed by declining US inventories and the OPEC oil cartel refusing to raise production. Military tensions between oil-rich Venezuela and neighbours Ecuador and Colombia provided further price support. Gold hit a record high at $US991.80/oz on Wednesday and late yesterday remained at over $US986/oz. Metals prices were also strong, with copper and aluminium prices approaching record highs as investors increasingly bet that Chinese demand will continue to grow strongly despite a slowdown in the US and Europe - what economists call the "de-coupling'''' of Asian growth economies from downturns in developed economies. Copper, aluminium and nickel prices are up about 30 per cent so far this year. But with investors wary of equity and property markets in the wake of the global credit crunch, there are concerns that liquidity boosted by US interest rate cuts could be creating speculative bubbles in commodities. Metal prices prices have been buoyed by power shortages in China that are expected to ease, and there are concerns that a fall in copper stocks on the London Metal Exchange may be partly contrived as some stocks are held off market. "We have been pretty optimistic about China and we expect the decoupling will prove to be the right way to call the current situation but (given the US rate cuts) you tend to worry a bit about the next bubble and there could be some speculative activity here,'''' Westpac''s global head of economics Bill Evans told The Australian. Two weeks ago, the founder of Platinum Asset Management Kerr Neilson told The Australian that mineral prices were ``simply far too high''''. "Take iron ore, for example, which has been ramped to ridiculous price levels. The clowns are taking over and there will be an awakening one day,'''' he said. National Australia Bank''s minerals and energy economist Gerard Burg said investment money had become a significant part of commodity markets in recent years, and that speculative money is now quick to buy into any tightness in metal markets. But he said the demand fundamentals remain intact on the back of Chinese growth. And he believes last month''s 65-71 per cent iron ore price settlement is encouraging optimism on China. Mining giants BHP Billiton and Rio Tinto both this week reiterated their faith in a strong outlook for Chinese metal and mineral demand. "We expect continuing double-digit GDP growth in China in 2008 and metals demand to continue to rise at a rate well above GDP growth,'''' Rio chief executive Tom Albanese told a mining conference in Canada. Speaking in Melbourne on Wednesday, BHP chairman Don Argus was similarly upbeat. "China metal demand is growing and there is no evidence at this stage that this demand is abating,'''' Mr Argus said.
Multi Quote Quote
China holds the key to food prices\r\n\r\nBy Jing Ulrich\r\n\r\nPublished: November 7 2007 17:31 | Last updated: November 7 2007 17:31\r\n\r\nA globalised world is, in many ways, a smaller world. When shoppers scour the grocery store aisles in San Francisco, Sydney or Seoul, they may be purchasing different food items, but these days they are suffering from the same sticker shock. Whether due to drought in Australia or an ethanol boom in the US, the effects on food prices are felt in all corners of the world.\r\n\r\nIn China, soaring food prices have driven inflation to their highest levels in more than a decade, straining household budgets in the world’s most populous country. Dramatic price increases have been chalked up to an unfortunate confluence of factors – supply problems endemic in China’s pork industry, an outbreak of “blue ear” disease on pig farms and to drought and flood-related price hikes. But behind these events, a host of structural problems are contributing to higher prices.\r\n\r\nChina feeds 22 per cent of the world’s people with only 7 per cent of its farmland and must do so with a poor endowment of agricultural resources. Compounding matters, China’s per capita water supply amounts to just a quarter of the global average and is unevenly distributed. A host of daunting challenges suggests that the country’s agricultural productivity must pick up dramatically to keep pace with the changing nature of food demand.\r\n\r\nA wealthier generation of Chinese consumers is shifting from traditional meals to a diet heavy in meat, eggs and dairy products. China’s urban population – which is growing by 15m-20m people a year – consumes three times more meat than the rural population.\r\n\r\nThis ratio has tremendous implications for the country’s grain consumption: 70 per cent of China’s corn and soyabeans and about half of the country’s sweet potato supplies go towards feeding livestock. It takes 5-7kg of grain to produce 1kg of pork – the country’s staple meat. Since 1990, China’s feed industry has increased its annual output by an average of 18 per cent a year to supply the country’s livestock farms.\r\n\r\nIn the midst of surging demand, a recent initiative to encourage the use of less polluting biofuel has inadvertently created an alarming source of competition for grain. China’s ethanol producers ramped up production of corn-based ethanol, consuming an increasing portion of the country’s annual corn output. Recognising the threat to food security, China has suspended new approvals for corn-based ethanol projects, instead promoting a shift to biofuel production based on crops like cassava and sorghum.\r\n\r\nSince farmers adjust crop allocations to take advantage of higher prices, it is easy to dismiss swings in the supply and demand balance of grains as short-lived phenomena.\r\n\r\nBut where China is concerned, self-sufficiency in grain has been achieved through frequent policy intervention and an increasing burden of subsidies to keep more farmers from switching to cash crops. When such distortions are removed, the results can be dramatic. As restrictions against importing soyabeans were gradually lifted in the 1990s, China made a rapid transition from being a net soyabean exporter to the world’s largest importer within several years.\r\n\r\nLooking ahead, we expect China will aim to remain self-sufficient in food grains like rice and wheat, while importing more feed grains. China may soon become a net-importer of corn for the first time in a decade to make up for a domestic shortfall in supply.\r\n\r\nMeanwhile, big initiatives are being undertaken to modernise China’s agriculture. The $20bn south-to-north water transfer project is one example. In the years ahead, we expect improving farm incomes and rural education initiatives to propel demand for organic fertiliser and advanced irrigation systems. The government may also allow the commercial cultivation of genetically modified food crops.\r\n\r\nAs 1.3bn Chinese consumers move up the ladder of prosperity, extraordinary changes are occurring in China’s agricultural trade and domestic food economy. China’s success in resolving its agricultural limitations will go far in determining whether higher food prices are here to stay – not just in China, but across global markets.\r\n\r\nThe writer is managing director and chairman, China equities, at JPMorgan
Multi Quote Quote
Miners Top MBAs as Metal Boom Makes Geologists Scarce (Update2) By Rob Delaney and Stewart Bailey More Photos/Details March 13 (Bloomberg) – Brittan Jones passed up a $100,000- a-year job at a mining company last December when he finished his degree in geology. The 24-year-old Canadian said he''s confident he''ll get a better offer. ``I''m lucky to have graduated when metal prices are so high,'''' said Jones, who has traveled to the Arctic Circle, British Columbia and the U.S. on mining internships. ``There''s a lot you can do with this degree.'''' Mining companies such as Barrick Gold Corp., Teck Cominco Ltd., BHP Billiton Ltd. and Rio Tinto Group are paying geology grads 44 percent more than three years ago, giving them higher salaries than the average Master of Business Administration in the U.S. Demand from developing nations including China helped gold, copper and silver prices more than double in that time. Gold reached a record $1,001.50 an ounce today in New York. ``There is a chronic shortage of skilled people, and wages have skyrocketed,'''' said Bart Melek, commodity strategist at BMO Capital Markets in Toronto. ``There''s no relief in sight.'''' Wall Street firms have fired more than 30,000 in the last seven months as prices of mortgage-related assets slumped. Salaries for geology undergraduates in Canada, home to three of the world''s largest gold producers, jumped to an average C$90,000 ($91,776) from C$62,500 in 2004, according to Norman Duke, a professor at the University of Western Ontario, who has been a consultant for companies including Teck Cominco. Cameco Corp., the world''s largest uranium producer, Teck Cominco, the second-largest zinc producer, and Potash Corp. of Saskatchewan, the largest maker of the crop fertilizer, are also based in Canada. More Than MBAs Geologists'' pay tops the average for new U.S. MBAs, which, according to an August 2007 survey by the National Association of Colleges and Employers, was $86,696. Those with mining skills are also catching up with Harvard University MBAs, whose average starting salary rose 15 percent over three years to $115,000 in 2007, according to the university. Tuition for the two-year program is $87,600. This year there will be about 1,200 geology grads in Canada to fill 9,000 positions in the country''s mining industry, said Ryan Montpellier, executive director of the government''s Mining Industry Resources Council. In the U.S., the number of jobs open to geologists will rise 22 percent in the decade ending in 2016, about double the average for all occupations, according to the U.S. Department of Labor. Expecting Higher Offer Instead of taking a permanent, full-time position, Brittan Jones started a research project after completing his four-year course at Canada''s provincially funded Brandon University in Brandon, Manitoba. Tuition for his undergraduate honors degree was about C$15,000 for the program. In June, he will start a four-month contract managing a British Columbia drilling program. Jones said he is betting the additional experience will result in a more lucrative job than the position offered by a private Manitoba exploration company in December. Demand for his skills is unlikely to drop. Mining companies announced 1,100 new projects last year with a total value of $308 billion, 50 percent more than a year earlier, Magnus Ericcson, an analyst at Stockholm-based Raw Materials Group, said in an interview. The lure of higher salaries may push the annual number of graduates within the next three years to 1,800, still only a fifth of the people required, Montpellier said. Mining companies pared hiring in the 1990s, when a decline in global demand for metals slashed prices and forced cutbacks in exploration. Now, the industry needs to expand its workforce while replacing employees who are set to retire. Retiring Workers Teck Cominco estimates that as many as half its workers in British Columbia will retire over the next five years. Mining companies across the world are in a similar position, said Peter Kukielski, chief operating officer of the Vancouver-based company. ``The industry has been understaffed for years,'''' said Greg Wilkins, chief executive officer of Toronto-based Barrick. ``The mining industry has generally not been very attractive for graduates, so there is a lack of skilled people.'''' The shortage of mining expertise is particularly acute in Canada, Australia and the U.S., said Frances McGuire, chief executive officer of Major Drilling Group International Inc. The Moncton, New Brunswick-based company, the world''s second-largest mineral-drilling contractor, needs about 200 experienced rig operators, who earn as much as $120,000 a year. In Australia, employment in mining has jumped by almost two- thirds in five years. The Minerals Council of Australia estimates the national industry will need an extra 70,000 workers by 2015. `Huge Demand'' ``There is huge demand for skilled engineers, geologists, pipefitters, welders, technical people, right across the natural- resources industry,'''' said Kinross Gold Chief Executive Officer Tye Burt. ``Everyone is enjoying high wages in our industry at the moment, and with commodity prices being high and demand strong it''s hard to see that changing soon.'''' Kinross, the largest gold producer in Brazil and the second- largest in Chile, is offering more responsibility to younger staff and stock options further down the management chain to retain and attract staff, Burt said. The rising demand for their labor has given graduates unprecedented bargaining power, said John Humphreys, head of the geology and geological-engineering department at the Colorado School of Mines in Golden. ``We used to tell graduates to hang in there, that something would come along,'''' Humphreys said. ``Now we''re counseling our students on how to deal with multiple offers.
Multi Quote Quote
metal tewas short como tewas oil lewas correction ahead ?? or the party already over ?? saran hmin : Sementara avoid saham komodity play defensive….. deviden play or utility/infra kalau mau main…. CASH is THE KING
Multi Quote Quote
Bulan madunya hampir habis ya!
Multi Quote Quote
Short gw di freeport asyiiiiik smile)
Multi Quote Quote
Rogers says investors bet on commodity shortages By Pratima Desai LONDON (Reuters) - New money is pouring into commodity markets because supply shortages mean rising prices and high returns for investors, investment guru Jim Rogers told Reuters on Tuesday. Some analysts say commodities this year have experienced a bubble, which will quickly deflate when short-term investors pull out, but along with large institutions such as pension funds, Rogers is in the market for the long term. "Yes, there is always new money. That always happens in bull markets, because that''s where the opportunities are," he said in an interview. "Money will go into assets that are fundamentally strong. The only markets I know that are fundamentally positive are commodities, where there are serious supply shortages." Rogers cited the example of crude oil, which is trading near record highs above $100 a barrel. "People have been telling me for five years that oil prices are going down. "Every time I ask them where the supply is coming from. So far, nobody has been able to tell me. Please tell me where the new oil is because I want to invest in it." Other fund managers agree. They say the problem is many analysts only forecast demand, which is accelerating partly because of growing affluence in emerging markets, and assume supplies will keep up. Supply problems and historically low inventories are not just a feature of oil markets. "Shortages are developing because production is declining … Oil fields are in decline, copper mines are in decline," he said. "Whether it''s oil, wheat or sugar, the world does not have new production capacity." GOLD COINS Rogers only invests in exchange traded securities, with the one exception being gold coins. Agricultural investments include listed stocks with farmland holdings and underlying futures such as wheat contracts. "There are enormous opportunities in farmland if you are a good farmer. Even if you are a mediocre farmer you can make a lot of money," he said. "Farming is going to be one of the best places to make money in the next 10 years, if you know what you are doing." But Rogers said he is not a farmer and has instead invested in the sector through listed companies with holdings in places like Australia and Brazil. "If I bought a farm, I would probably lose a fortune," he said, adding that demand for grains was rising because of rising living standards. "The fact that the price of oil is at all-time highs means that people are going to use more sugar for ethanol." Record high oil prices also mean strong demand for commodities like cotton. "Synthetic fibres come from oil, people will try to use more natural fibres," he said.
Multi Quote Quote
smile komoditi pada turun karena udah pada banyak yg ngeshort (short term), mid term ya mesti long lagi …
Multi Quote Quote
saya tunggu crash lagi … mau tambah lagi pas semua teriak2 oil bubble udah burst … smile ride the bull market until it is over …………….. :evil
Multi Quote Quote
smile komoditi pada turun karena udah pada banyak yg ngeshort (short term), mid term ya mesti long lagi … Yup sudah diliquidasi kemarin malam. Mau long di OIL REFINERY….., harga crude terkoreksi (turun) harga gasoline/diesel naik. Jadi Refinery bagus. Valero (VLO) call option, baby….
Multi Quote Quote
Sign up or Sign in to create a reply.

Recent Updates


Loading...