Baltic Dry Index. 809 unch. Brent Crude 50.30
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
October: This is one of the peculiarly dangerous months to speculate in stocks.
The others are July, January, September, April, November, May, March, June,
December, August and February.
Mark Twain.
Say goodbye to London. That seems to be the latest wrinkle in the
deepening commodities rout. Below, Mitsui sets the sun on London and New York.
Below that, the Russians are packing away the samovar and polonium and heading
home. To me, it doesn’t look like some very savvy commodity traders think these
commodity markets are turning around anytime soon. I wonder what Ivan, as in
Glasenberg rather than “The Terrible” really thinks. Still if the commodities
rout gets much deeper, maybe he’ll become Ivan the Terrible Two/too.
But first this new disaster from China.
China Imports Slump for 11th Month, Export Decline Moderates
October 13, 2015 — 3:04 AM BST Updated on October 13, 2015 — 5:14 AM BST
China’s imports extended the longest losing streak in six years,
underscoring the headwinds to global growth from a rebalancing in the world’s
second-largest economy. Asian shares, copper, the yuan and the Australian
dollar weakened.
Imports plunged 17.7 percent in yuan terms in September from a year
earlier, widening from a 14.3 percent decrease in August and an 11th straight
decline. Exports fell 1.1 percent in September in yuan terms, the customs
administration said Tuesday, compared with a 6.1 percent drop in August. The
trade surplus was 376.2 billion yuan ($59.4 billion).
The import slide reflects this year’s plunge in commodity prices and
tepid domestic demand as China shifts away from low-end manufacturing and
debt-fueled investment. On the export side, a moderation in declines offers the
first indication that the People’s Bank of China’s surprise devaluation of the
yuan in August is giving a boost to competitiveness.
"No
green shoots in this set of data," said Zhou Hao, a senior economist in
Singapore at Commerzbank AG, Germany’s second-largest lender. "The market
was waiting for upside surprise in China as reflected in the commodity market.
However, today’s data can’t support a long China view; therefore, I expect a
market correction in the short term."
More
Now back to the commodities sun setting on London as the sun rises in
the east.
Mitsui to shut precious metals business in London, New York-sources
12th October 2015
London - Mitsui will close its precious metals businesses in London and New York at the end of this year, two sources familiar with the situation said, owing to sliding commodity prices and more stringent regulation.
London - Mitsui will close its precious metals businesses in London and New York at the end of this year, two sources familiar with the situation said, owing to sliding commodity prices and more stringent regulation.
"Mitsui is shutting down precious in
London and New York in December," one source said.
A spokesperson for the
Japanese trading house declined to comment.
Mitsui, which started trading
precious metals in 1970, is the latest to join a retreat by banks and brokers
from some commodity markets as profits and prices tumble on concern about
slowing Chinese economic growth.
Mitsui & Co Precious
Metals, a wholly-owned subsidiary of Mitsui & Co incorporated in the US,
has a team of about 50 trading gold, silver, platinum, palladium, rhodium,
ruthenium and iridium from offices in Hong Kong, London and New York.
The sources did not know how
many jobs would be affected across trading, sales and research. Mitsui trades
precious metals on the Tokyo Commodity Exchange in Japan and also has offices
in Hong Kong.
"The decision will affect
global operations, as it will reduce volumes," the second source said.
The trading house also
participates in the twice-daily auction setting the London silver benchmark run
by the Chicago Mercantile Exchange and Thomson Reuters. Its withdrawal would
leave five banks to set the price.
Last month, Mitsui was included by
Switzerland's competition authority WEKO on a list of banks being investigated
for possible collusion over the pricing of precious metals.
Mitsui not only joins Western
banks, including Barclays and Deutsche Bank, in cutting back on commodities,
but also Mitsubishi UFJ Securities International, which withdrew from its
London-based commodities business, last year.
Commodities trading revenue
for ten of the world's biggest banks continued to fall to $2.6-billion in the
first half of 2015, compared with $3.5-billion in the same 2014 period,
according to estimates from analytics firm Coalition
http://www.miningweekly.com/article/mitsui-to-shut-precious-metals-business-in-london-new-york-sources-2015-10-12
http://www.miningweekly.com/article/mitsui-to-shut-precious-metals-business-in-london-new-york-sources-2015-10-12
The Russians Are Going: London Listing Exodus as Prices Sag
October 12,
2015 — 12:01 AM BST Updated on October 12, 2015 — 8:40 AM BST
Russian expansionism is going into reverse, at least on the London stock
market.
Three of Russia’s major commodity-related companies are already
preparing to withdraw their listings after the bursting of the raw-materials
boom and a slump in share sales by the nation’s companies from more than $30
billion in 2007 to below $1 billion this year.
Eurasia Drilling Co. Ltd., the country’s largest oil driller, said
Monday that it agreed on terms of a buyout by a group of management and some
shareholders which would take the company private. That follows a move
by potash miner Uralkali PJSC to buy back a major part of its free float,
saying in August it may delist shares in London as a result. Billionaire
Suleiman Kerimov’s family also plans to take Polyus Gold International Ltd.
private.
More may follow as their owners’ interest in using foreign shares as a
route to expansion wanes in tandem with overseas investors’ appetite for
raw-material and emerging-market stocks, said Kirill Chuyko, head of equity
research at BCS Financial Group in Moscow.
"Each company has a specific reason, but the common one is that
investors’ appetite for commodities-related stocks, especially from the
emerging markets, is exhausted," Chuyko said. "At the same time, the
owners see that the companies’ valuations don’t reflect their hopes and wishes,
while maintaining the listing requires some effort and expenditure."
Total equity sales by Russian companies this year are set to be about 30
times lower than the 2007 peak, when global commodity prices were about 90
percent higher than current levels.
More
Commodity contagion sparks second credit crisis as investors panic
Falling commodity prices have caused panic in credit markets and just like 2007 the contagion is spreading
The collapse in commodity prices has sparked a second credit crisis as investors dump high-yield bonds, shattering the fragile confidence necessary to support global markets. Those calling it a Lehman moment forget their history. Current events have chilling similarities to the Bear Stearns collapse and mark the start of a new crisis, not the end.Canary in the mine
The world of commodity trading has been thrown into chaos as the cost of borrowing to fund operations soars. Glencore has become the poster child for the sector’s woes as its shares have more than halved in value during the past six months. More worrying has been the impact on the group’s credit profile.
Glencore’s US bonds due for repayment in
2022 have collapsed to around 82 cents in the dollar. Only four months earlier,
they had been stable at around 100 cents, implying that those who lent money
would get it back plus interest. Now for every dollar lent to Glencore, banks
face losses, and as the price of bonds falls the yield has risen to 7.4pc.
Without the oxygen of cheap debt, commodity trading houses are finished.
Each trade in oil or iron ore might generate only 1pc to 2pc in margin – but
this greatly increases when magnified by debt. The only limit on profits is
then how much you can borrow. Greed drives returns.
Glencore is a profitable business when it can borrow at around 4pc, but
if it has to refinance at 7pc to 10pc those slim profit margins evaporate.
The fear of those holding Glencore debt can be seen in the soaring price
for the insurance against a default, or credit default swaps (CDS). Glencore
five-year CDS has soared to 625, from about 280 just a month ago.
A rule of thumb is that a CDS above 400 means a serious risk of a
default, or about a 25pc chance in the next five years.
----Trafigura is not listed but its debt
is publicly traded and the bonds have collapsed to 86 cents in the dollar, or a
yield of 8.9pc. Noble, the Singapore trading house, has also seen its shares
collapse as commodity prices slump. First-half profits from Noble’s metals
trading have fallen 98pc to just $3m. This has been offset by strong results in
oil trading, but the problems remain.
Last week, four senior metals traders are understood to have left the
business and the bonds have fallen to 73 cents on the dollar, or a yield of
almost 16pc.
More
OPEC Pumps Most Crude in Three Years as It Lifts Demand Forecast
October 12, 2015 — 12:00 PM BST
OPEC pumped the most crude in three years as it predicted stronger
demand for its oil in 2016 while supplies elsewhere falter.
The Organization of Petroleum Exporting Countries said it pumped 31.57
million barrels a day last month, the most since 2012, according to its monthly
market report. OPEC sees production outside the group shrinking by 130,000
barrels a day next year as the U.S. shale boom sputters.
“The oil industry has experienced a rapid fall in global upstream
spending,” OPEC’s Vienna-based secretariat said. “In 2016, the postponing or
canceling of upstream projections will likely continue, resulting in
contraction” of supplies.
Oil prices have rallied about 10 percent in the past month as drilling
cutbacks in the U.S. and reduced energy investment globally suggest the surplus
in world oil markets will eventually dissipate. OPEC Secretary-General Abdalla
Salem El-Badri said in Kuwait on Monday that the market may be “balanced” in
2016 as demand climbs and non-OPEC supply contracts.
OPEC boosted estimates for the amount of crude it will need to supply next
year by 500,000 barrels a day to 30.8 million. That’s still about 800,000
barrels less than the level pumped in September. OPEC’s 12 members raised
production by 109,200 barrels a day last month, led by gains in Iraq.
The man who begins to speculate in stocks with the intention
of making a fortune usually goes broke, whereas the man who trades with a view
of getting good interest on his money sometimes gets rich.
Charles Henry Dow.
At the Comex silver depositories Friday
final figures were: Registered 42.93 Moz, Eligible 119.84 Moz, Total 162.77
Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Back to the global environment
poisoners of Wolfsburg today. More on Germany’s dirty diesels. Don’t hold your
breath waiting on the EIB to take back anything from Volkswagen. This is the
German run, German paid, EUSSR. A level playing field is only for the lower
Muppets.
European Union bank could ask for its money back from Volkswagen
European Investment Bank has lent €4.6bn to the German car company since 1990, including funding for low emissions engines
The European Investment Bank (EIB) could recall millions in loans made
to German car giant Volkswagen over its involvement in a global emissions
scandal.
Werner Hoyer, chief executive of the EIB, said the EU-wide lender was in
the process of examining whether any of its funds had been used to help the
company cheat emissions targets.
The EIB could recall up to €1.8bn in outstanding loans it has lent VW.
Since 1990, the EIB has lent €4.6bn to the German car company, with some of
that money intended to be used on development of low emissions engines.
"The EIB could have taken a hit [from the emissions scandal]
because we have to fulfil certain climate targets with our loans," Mr Hoyer
told Sueddeutsche Zeitung.
The European Investment Bank is an EU-wide lender that finances
companies and projects around the continent.
Mr Hoyer added that he was "very disappointed" by VW's conduct
after it was revealed that as many 11m cars worldwide were installed with
software allowing them to pass pollution checks.
The EIB's warning comes after talk the European Central Bank could
suspend its purchases of bonds backed by VW loans as part of its quantitative
easing programme.
----In the latest round of vehicle withdrawals, the carmaker said it was
recalling up to 2,000 diesel cars sold in China.
“Volkswagen would like to sincerely apologise for any inconvenience
caused to our customers,” the company said in a statement on Monday.
“We would like to assure that we will do everything humanly possible to
win back trust and take care of any concerns."
Elsewhere, Singapore has suspended sales of VW diesel vehicles. Data
from the company's local office said that cheating software was found on 650
Singapore-registered vehicles.
VW Cut to A- by S&P as Diesel Scandal May Hurt Rating Again
October 12, 2015 — 2:49 PM BST Updated on October 12, 2015 — 6:08 PM BST
Volkswagen AG’s credit rating was cut one level Monday by Standard &
Poor’s, which said the German carmaker’s cheating on U.S. diesel-emissions
tests indicates management weaknesses that may lead to a further debt
downgrade.S&P lowered the Wolfsburg-based company’s rating on long-term debt to A-, the fourth-lowest investment grade, from A, and said another cut of as much as two notches is possible.
“VW has demonstrated material deficiencies in its management and governance and general risk-management framework,” Alex Herbert, a London-based analyst at S&P, said Monday in a statement. “VW’s internal controls have been shown to be inadequate in preventing or identifying alleged illegal behavior” and the potential for other violations “represents a significant reputational and financial risk.”
S&P put Volkswagen on watch for a potential downgrade on Sept. 22 following revelations that a line of the carmaker’s diesel-powered cars had software installed that was used to fool U.S. emissions testers. As many as 11 million vehicles worldwide may have to be fixed to remove the so-called defeat device. The manufacturer’s debt was upgraded to A in September 2014. Its top rating from S&P was AA-, the fourth-highest grade, which it received in 1991, according to data compiled by Bloomberg.
More
“The United States
have developed a new weapon that destroys people but it leaves buildings
standing. It’s called the stock market.”
Jay Leno.
Solar & Related Update.
With events happening fast in the development of solar power and graphene, I’ve added this new section. Updates as they get reported. Is converting sunlight to usable cheap AC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?PTC India Ties Up With Solar Energy Corp for Solar Power Trade
Press
Trust of India | Last Updated: October 12, 2015 14:09 (IST)
New Delhi: Leading power trading firm
PTC India today said it has inked pact with the Solar Energy Corporation of
India (SECI) for sale and purchase of power generated from 3,000-mw solar
projects.
"PTC India Limited (PTC)... has signed an MoU with Solar Energy Corporation of India (SECI) for sale and purchase of power generated from 3,000-mw solar projects for onward sale on a long-term basis, for a full 25 years from commercial operation date of each of the project/facility to state utilities," the company said in a statement.
Under the said arrangement, SECI will facilitate development of 3,000-mw solar projects at various locations in the country on behalf of central public sector undertakings (CPSUs) or any other government/private agency, it said.
"PTC will purchase solar power offered by SECI/project developers for onward sale to state utilities at tariff to be determined by SECI through reverse auction process or any other competitive route," it said.
"We are extremely delighted to sign this MoU with SECI which will facilitate us in undertaking activities in solar sector and support each other in productive utilisation of solar resources and optimising energy usage," PTC India CMD Deepak Amitabh said in the statement.
"PTC India Limited (PTC)... has signed an MoU with Solar Energy Corporation of India (SECI) for sale and purchase of power generated from 3,000-mw solar projects for onward sale on a long-term basis, for a full 25 years from commercial operation date of each of the project/facility to state utilities," the company said in a statement.
Under the said arrangement, SECI will facilitate development of 3,000-mw solar projects at various locations in the country on behalf of central public sector undertakings (CPSUs) or any other government/private agency, it said.
"PTC will purchase solar power offered by SECI/project developers for onward sale to state utilities at tariff to be determined by SECI through reverse auction process or any other competitive route," it said.
"We are extremely delighted to sign this MoU with SECI which will facilitate us in undertaking activities in solar sector and support each other in productive utilisation of solar resources and optimising energy usage," PTC India CMD Deepak Amitabh said in the statement.
India’s 100GW solar target presents major opportunity for UK developers and investors
By Tom Kenning 05 October 2015, 13:51
Updated: 05 October 2015, 14:23
The monthly Coppock Indicators finished September
DJIA: +41 Down. NASDAQ:
+138 Down. SP500: +65 Down.
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