Posts Tagged ‘Russia’

ALUMINIUM… “PRICES ON ONE-WAY TRACK”

Aluminium is a silvery white and dull gray coloured, and the third most abundant element in the Earth’s crust after oxygen and silicon. In nature, it only exists in very stable combinations. Due to its strong affinity to oxygen, it is always found in the form of oxides or silicates. The chief source of aluminium is bauxite ore. Aluminum is lightweight, ductile and soft. Its density is only 1/3 of steel. Aluminum is resistant to weather, common atmospheric gases and a wide range of liquids.

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Global Scenario

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Aluminium ore, bauxite, occurs mainly in tropical and sub-tropical areas – Africa, West Indies, South America and Australia. The leading producing countries are United States, Russia, Canada, the European Union, China, Australia, Brazil, Norway, South Africa, Venezuela, the Gulf States (Bahrain and United Arab Emirates), India and New Zealand. Together they constitute more than 90 percent of the world primary aluminium production. The largest aluminium markets are North America, Europe and East Asia.

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Indian Scenario

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India is the fifth largest producer of aluminium in the world with production capacity of about 3 per cent of the world. India’s reserves are estimated to be 7.5 per cent of the total deposits. India is self dependent for aluminium supply and exports about 82,000 tonnes annually. The primary Indian aluminium producers were BALCO, NALCO, HINDALCO and MALCO.

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India’s per capita consumption of aluminium is 1 kg as against 30 kg in the developed world.

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World Aluminium Markets

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LME, TOCOM, SHFE and NYMEX are the important international markets that provide direction to the aluminium prices.In 2009, aluminium prices gained about 40% with the global combination of stimulus packages and the rapid recovery in demand in emerging markets. The prices and inventory level of metal in international market, such as LME and SHFE, influences the domestic market.

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Facts & Figures

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·World aluminum output in March rose 13% on the month to 2.045 million metric tonnes, according to figures released by the International Aluminum Institute.

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·Primary aluminium stocks in China, the world’s top consumer and producer of the metal, have risen more than 45 percent from January on increased production.

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·Brazil’s output of primary aluminum dropped 0.9% on the year in March to 131,700 metric tons.

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·Global demand rose by 29% in January and February compared with the very depressed levels recorded a year ago.

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Price Movement

Despite the poor news stemming from Euro weakness on Greek debt woes and monetary tightening in China, aluminium halted its downturn and traded sideways for most of last week.

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Most other base metals also traded sideways to higher last week, and aluminium continues to be strongly correlated with copper. Swollen inventories are no longer a problem for the aluminium market, as global demand is helping to push up alumininum prices (arrow line).

Global M&A Deals to Fall 56% in 2009: OECD

Global mergers and acquisitions (M&A) are projected to decline 56% in 2009 compared to last year due to sharp declines in such activities in rich and emerging markets including India.

However, the Organization for Economic Cooperation and Development (OECD) stated that the expected decline in M&A activities this year would be the largest year-on-year decline since 1995.

Meanwhile, the estimate is based on an OECD analysis of data for international M&A activities up to November 26, 2009 where the projected decline is primarily due to a 60% fall in value of cross-border M&A by firms based in the OECD area, to just $454 billion in 2009 from over $1 trillion last year.

Moreover, there has been a decline in M&A activities into and from major emerging economies while International M&A activity by firms based in Brazil, China, India, Indonesia, Russia, and South Africa fell by 62% to $46 billion in 2009 from $121 billion in 2008.

Additionally, it is said that such activities into these countries is anticipated to slide by almost 40% to little over $80 billion in 2009 from just under $140 billion last year while M&A investments have been severely hit by the financial turmoil, which has resulted in tight credit flow.

On the other hand, the latest international investment estimates suggest that total foreign direct investment into the 30 OECD countries will fall to $600 billion in 2009 from a 2008 total of $1.02 trillion.

India’s Investment in the US Bonds Stands Lowest Among BRIC Nations

India's Investment in US Bonds Stands Least Among BRIC Nations


India
stands least exposed among the other BRIC nations with respect to their respective foreign exchange reserves.

This is in addition to the recent development where it got evident that India has reduced its investments in US Treasury bonds between May and September.

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India’s investment in the US bonds stands at $35.90 billion as per the latest data released by the US Department of Treasury on November 17, as on September 30.

However, India’s investment in the US bonds is the lowest among all BRIC nations.

China’s investment in the bonds remained the highest at $798.9 billion.

Brazil’s exposure was $144.90 billion, followed by Russia at $121.80 billion.

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In terms of percentage of exposures to the US bonds to each of these economy’s total foreign exchange reserves also, India was the lowest.

India’s exposure to US bonds was 12.81 per cent of its forex reserves of $280.34 billion in September compared with

64.63 per cent of Brazil, 35.15 per cent of China, and 29.46 per cent of Russia.

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India’s forex reserves and US bond investments ratio improved during the period between May and September this year as its forex reserves went up.

In May, the ratio was 14.79 per cent on the forex reserves of $262.31 billion.

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Mr Jagannadham Thunuguntla of SMC Capital said: “With less exposure to US treasury bonds, India stands least vulnerable to US dollar depreciation in comparison to its BRIC peers”.

The current trend showed that though China and Russia too reduced their vulnerability ratio during May-September, Brazil increased it, Mr Thunuguntla said.


Brazil has forex reserves worth $224 billion, while Russia has $413.45 billion.

China has $2,272 billion foreign exchange reserves.

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Sweetness Of Sugar – Part 1 :)

Hello Friends here we come up with our another write up on “Commodity Corner Series” 🙂

Sweetness of Sugar

Sweetness of Sugar

We would touch upon aspects like seasonality,cyclic nature and analysis of price trend of Sugar.

The Commodity

Sugar is the most plentiful economic sweetener and India’s second largest agro-processing industry.

There are more than 600 installed sugar mills in the country.

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The Seasonality & Cyclic Nature

The crushing season in the country generally starts from October and reaches its peak in January before March end or April of the next year.

It has been seen that during this period, supply arrives in the market and resultantly prices starts falling.

The cyclic pattern of the sugar industry lasts for 3-5 years.

Currently, the domestic sugar market is entering into a severe shortage phase due to sharp decline in production.

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Analysis Of Price Trend

Tracking short term movements as well as the longer term trends seen in and over the last years, one can analyse and assess its prices.

Since 2006, Sugar has been widely talked displaying a continuous bullish rally both in domestic & international market.

In domestic markets, Sugar prices remained bearish in the most part of the year 2007.

Prices surged by almost 30% in the first half of 2008 & regained its sweetness with supportive factors like lower production estimates and rise in export demand.

From July 2008 sugar prices have been maintaining its bullish trend.

In January, 2009 sugar prices reached record high levels.

With an eye on the rising prices, the Central Government announced measures with aim to control sugar prices.

In the month of May, 2009 world sugar prices have surged to a near-three year high, on the back of speculative buying by
funds betting on supply shortfalls in India and Pakistan.

Since October (the beginning of the 2008-09 sugar season), prices in spot and futures market have witnessed a bull run due to lower production estimates for the season.

Market has already breached the long term bearish trend line and presently trading in an interim bullish trend channel.

Speculators, and especially large traders, have really embraced the long side of the Sugar market.

The commodity has one of the best fundamental pictures right now and it is getting a good deal of solid buying.
The sugar market is overbought but it seems that it still has room to move higher in the longterm bull market than imagined.

It has been one of the better performers of the commodities market.

The price of Sugar has more than tripled in about 3 years.

Though, Sugar seems set to lose some of its sweetness for consumers in the time to come.

Sugar prices recently touched a 28-year high of 25.39 cents per pound on September 30, 2009.

This is likely to climb up going forward, because imports by countries such as China, Russia, Mexico and India are set to rise. These countries are consuming more, but producing less of the commodity.

Sugar futures tended to do well in these years.
An investor could have increased his return variability in these years without sacrificing any of his return.

Stay Tuned for more on Sugar Market in commodity corner 😉

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POTATOES … GOOD SOURCE OF VITAMIN M (MONEY) – Part 1

POTATOES ………. GOOD SOURCE OF VITAMIN M (MONEY)

POTATOES ………. GOOD SOURCE OF VITAMIN M (MONEY)

Commodity Check :

Potato is probably the most popular food item in the Indian diet. Potato is a very rich source of starch. It also contains phosphorus, calcium, iron and some vitamins.

Indian Scenario

India is the third largest potato-producing country in the world, after China and Russia,with a total acreage of 14 lakh hectares, producing 250 lakh tonnes of the crop.

Potato is cultivated both as a Kharif & Rabi crop, under assured irrigation during short winter days from October to March.

Potato cultivation is more concentrated in the Gangetic plain comprising Uttar Pradesh, Bihar and West Bengal.

Price Movement

The price of potatoes from UP, Haryana and Punjab in the four key wholesale mandis of Delhi, Azadpur, Okhla, Keshavpuram and Ghazipur, ranges from Rs 10 per kg to Rs 16per kg, up from Rs 6-15 per kg a couple of months ago.

The prices, however, saw an up-trend touching highest in the last five years, at Rs.1,400 per quintal (100 kg) owing to poor production in the neighboring states of Bihar and West Bengal.

The current potato prices in the market are reigning between Rs.1,400 and Rs.1,700 per quintal.

The horticulture department expects the acreage to rise to 545,000 hectares this season in the backdrop of bullish prices.

The farmers would prefer potato since this would fill in their paddy losses without affecting their rabi wheat crop in winters.

The trend could again result in windfall production of potato next year, causing severe storage problems, as was the scenario last year.

Last year, the prices nosedived so much that the cold storage had no space and the crop was forced to lie on roads.

Prices…. Fireworks

Food prices are likely to go up in the coming weeks as floods in the southern states of Karnataka and Andhra Pradesh have destroyed crops.

Due to crop failure in states like Maharashtra, West Bengal and Karnataka, the potato crop output this year has fallen by about 20%.

The common man has been hit hard by the rising prices of potatoes and vegetables which have soared by 81% and 43% respectively in the past one year.

The prices are unlikely to come down before December as new crop is likely to arrive only in late November, which will then ease the supply pressure.

Rising prices of other vegetables are also providing support to the potato market. The potatoes available during April-October period are largely supplied by cold storages.

About 16-17 MMt of potatoes are estimated to have been stored from 2008-09 crop to meet the demand in lean season.

According to the Nasik-based National Horticultural Research and Development Foundation (NHRDF), potato production in 2009-10 is estimated to be about 31 million metric tonnes (MMt), same as last year.

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Dollar Supremacy to End? New Global Reserve Currency to Set In ?

UN called on Tuesday for a new global reserve currency to end dollar supremacy. Is dollar Supremacy at risk?

UN called for a new global reserve currency to end dollar supremacy. Is dollar Supremacy at risk?

The United Nations has called on for a new global reserve currency to end dollar supremacy, which has allowed the United States the “privilege’’ of building a huge trade deficit.

“Important progress in managing imbalances can be made by reducing the reserve currency country’s ‘privilege’ to run external deficits in order to provide international liquidity,’’ UN undersecretary-general for economic and social affairs, Sha Zukang, said.

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Speaking at the annual meetings of the International Monetary Fund and World Bank in Istanbul, he explained:

“It is timely to emphasis that such a system also creates a more equitable method of sharing the seigniorage derived from providing global liquidity.’’

Greater use of a truly global reserve currency, such as the IMF’s special drawing rights (SDRs), enables the seigniorage gained to be deployed for development purposes,’’ he said.

The SDRs are the asset used in IMF transactions and are based on a basket of four currencies—the dollar, euro, yen and pound—which is calculated daily.

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China had called in March for a new dominant world reserve currency instead of the dollar, in a system within the framework of the Washington based IMF.

Beside this another worrying news for Dollar lovers is floating around that Arab states had launched secret moves with China, Russia, Japan and France to stop using the dollar for oil trades, though denied by many of arab states.

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India on way to Become 3rd Largest Steel Producer by 2013.

India-3rd largest-steel-producer

The capacity expansions being carried out by various steel majors and the increase in crude steel production has pushed up India’s ranking to the fifth largest crude steel producer in the world.

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However, during the financial year 2008-2009, India produced 55 million tonne of steel and became the fifth largest steel producer stated Goutam Kumar Basak, Executive Secretary of the Joint Plant Committee (JPC) constituted by the Government of India.

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Additionally, as per the data available with JPC they have produced 22.14 million tonnes of steel during April-August this year, a jump by 6.6% compared to the figure of corresponding period last year.

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The capacity expansions being carried out by various steel majors and the increase in crude steel production has pushed up India’s ranking to the fifth largest crude steel producer in the world.

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Moreover, he expressed assurance that the steel sector would produce 60 million tonne steel this financial year.

On the other hand, China, which produced 501 million tonnes last year, was the leading steel producers in the world followed by Japan(119 million tonnes), USA (91 Million tonnes), Russia (69 Million tonnes).

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India, which had earlier set itself the target of becoming the world’s third largest steel producer by 2013, is also aiming to produce 124 mt of steel by 2011-12, as per the 11Th five year plan.

Going by the production of steel in the country so far, India is on its way to become the third largest steel producer in the world very soon.

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