MCX COMMODITY NEWS & UPDATES - 17 AUG 2016

GOLD:

The biggest event remaining on the calendar for gold traders, will be Janet Yellen’s speech on August 26^th at the Jackson Hole annual gathering.

CRUDE OIL:

According to OPEC report issued last week, Iran has been producing about 3.6 million barrels of oil per day in July still short of its original production before sanctions were imposed on the country in 2007, which was 4 million barrels.

Iran is trying to increase its oil production after international sanctions were removed on the Islamic Republic earlier this year and is trying to regain its lost market share.

An informal meeting of OPEC member countries is scheduled to take place on the sidelines of the International Energy Forum in Algeria from September 26 to 28.

NATURAL GAS:

Major energy sources and percent share of total U.S. electricity generation in 2015

·         Coal = 33%

·         Natural gas = 33%

·         Nuclear = 20%

·         Hydropower = 6%

·         Other renewables = 7%

1. Biomass = 1.6%
2. Geothermal = 0.4%
3. Solar = 0.6%
4. Wind = 4.7%

·         Petroleum = 1%

·         Other gases = <1%

The amount of electricity produced by natural gas hit 4,950 gigawatt-hours per day in July, 9 percent higher than the previous record set in July 2015, according to the Energy Information Administration.

VIEW ABOUT BASEMETALS:

Global stock markets continue to rise as we noticed last month. Stock markets have already made up for their losses following the U.K.’s decision to leave the European Union.

This recovery suggests that investors are turning more positive on the health of the global economy, which bodes well for industrial metals demand growth.

China’s stock market is possibly the best benchmark for China’s economy or at least investors’ sentiment about the Chinese economy. 

China’s stock market bottomed out earlier this year (coinciding with a bottom in metal markets) thanks to China’s stimulus measures that fueled demand growth. Chinese shares have risen rapidly this month to the highest levels in nine months as investors expect its central bank to ease monetary policy again.

COPPER:

On the supply side, copper’s dynamics are different from some of the other metals. Copper doesn’t face massive overcapacity like steel and aluminum. Furthermore, miners need to replenish their falling copper reserves with new mines. Also, copper mines have to be converted into underground operations once the open pit mine nears the end of its lifespan. These activities require a lot of cash and companies need an incentive in the form of higher copper prices to pursue new exploration projects.

ALU

LME lead will grow to USD 1,865-1,885/mt during Asian trading hours Wednesday.

NICKEL:

Jinchuan Group cut its ex-works prices 500 yuan per tonne on Aug. 17. 

China Aluminum International Trading Co. (Chalco Trading) cut aluminum prices it offered in major markets across the board, it said on its WeChat.

LEAD:

LME lead will grow to USD 1,865-1,885/mt during Asian trading hours Wednesday.

NICKEL:

Jinchuan Group cut its ex-works prices 500 yuan per tonne on Aug. 17.

 CAPITALSTARS