Metals / Commodities

• Pacific Ocean Seabed Rich in Rare Earth Minerals

  Spooked by the Chinese embargo of rare earth elements the rare earth mining industry is busily looking and investing in rare earth mineral extraction.  Several prospects look practical.  Meanwhile Japan’s Yasuhiro Kato, associate processor at the University of Tokyo’s Graduate School of Engineering is leading a research group that’s found widely distributed high-quality rare earth-rich mud in the central and southeastern Pacific Ocean. Pacific Undersea Rare Earth Element Deposits. First one asks is that kind of deposit possible to gather and how deep? Kato notes the mineral resources are distributed 3,500 to 6,000 meters below the surface of the sea,…

• UK Plans to Secure Strategic Metals Vital to Energy Security

  Not only are supplies of oil and natural gas under imminent threat of failing to meet demand for them, but so is a whole range of precious metals, along with indium, gallium and germanium and other vital elements such as phosphorus and helium. A report [1] from the Science and Technology Committee, advised by the Royal Society of Chemistry [2], warns that if the U.K. does not secure supplies of strategic metals, its economic growth will be severely jeopardized. Of particular concern are indium, used in touch screens and liquid crystal displays, and rare earth elements (REEs) particularly neodymium and…

• The Great Grain Market Massacre

  Grain prices were slaughtered today in the wake of a bombshell of a report from the US Department of Agricultural showing that plantings were much larger than expected. Corn and wheat were limit down, and the associated fertilizer and equipment stocks were a shambles. Corn took the biggest hit, with the government seeing acreage rising from an expected 90.76 million acres to a stunning 92.28 million acres. Of the open interest of 500,000 contracts in December corn futures contracts, 200,000 were for sale at market down 10%. Synthetic instruments were trading at levels indicating at least a further 5% decline…

• Here Comes the Rhodium ETF

  Deutsche Bank has launched the first ever ETF for the precious metal Rhodium, to be listed on the London stock exchange. Expecting a massive inflow of capital into this obscure corner of the hard asset world, traders ran prices up 20% last week. ETF launches for platinum (PPLT), and Palladium last year had a similar effect on prices. Rhodium is one of the world’s hardest metals, and is used by the auto industry as a substitute catalyst for platinum and palladium. Like the other white metals, it therefore has twin demand for both industrial and investment purposes. About $2 billion…

• Rare Earths Are About to Become a Lot More Rare

  Interest in Rare Earths is starting to heat up once again, and it something you should keep on your radar. China’s Baotou Steel has announced its intention to start up the world’s first rare earths exchange. The move is expected to increase the liquidity and visibility of these valuable elements while reducing their trading costs. So named because they were hard to get in the 18th and 19th century, these once obscure elements have suddenly become the focus of several converging trends in the global economy, as they are the key ingredient of magnets. There are 17 in all, divided…

• China’s Weather Could Support Metal Prices in Q3

  Metals prices may have come off in the wake of fears over continued tightening in China, Greek debt default and wider worries over stalling global growth, but strangely for some metal (such as aluminum and zinc) the weather may be one factor that supports metal prices in Q3. A Reuters article explains how the worst drought to hit central China in fifty years has brought water levels to critical levels at some of the country’s biggest hydro-electric power plants and could exacerbate the normal power shortage problems expected during the summer period. Water levels at the 26.7 GW Three Gorges…

• Falling Oil Prices Causing Temporary Drops in Aluminum

  A series of recent FT articles covering a range of topics such as global growth, commodity market volatility and aluminum demand appear to offer conflicting guidance on the direction of prices for the light metal later this year and next. Aluminum’s price correlation to oil is an issue we have raised before in recent articles. As the oil price rose, the energy-intensive nature of aluminum’s production supported the metals price even as other metals such as copper and tin fell. In the last month, the price has fallen about 10 percent on the back of a falling oil price and…

• A Look at the Recent Rout in Silver and Oil Prices and what it Means for Commodity Prices

  A fascinating special report by Reuters this week tracks the fortunes of oil and silver over the last few days and reads more like a novel of Wall Street trading than Reuters’ usual analytical style. Not that the report is sensationalist; more that the price falls it reports are sensational and, by most observers, unexpected. Crude oil prices plummeted on in early May after months of steadily rising prices. Graph source: stocktrader.com As the author Joshua Schneyer of the Reuters article explains, never before had crude oil prices fallen so steeply during the course of one day. At one point…

• Forget Oil and Gold – Phosphorus is the Commodity Everyone Should be Concerned About

  It’s phosphorus.  The element of great importance – its essential for life – humans and animals need it for healthy bone formation, and plants need it to grow.  Without it for fertilization of food crops, the supplies will drop over a few years much further than markets can adapt.  Some people will fall into malnutrition, starvation and the other grim realities of not enough food to go around -that’s not even to consider fuel crops.  Food vs. fuel and the ethanol debates pale to insignificance when compared to the phosphorus matter. Mining phosphorus, reclaiming it and other means to keep…

• Is Zinc Set for a Comeback?

  Zinc has dropped significantly along with copper these last few weeks as stocks have continued to rise along with a massive surge in mine production last year. One might be excused for thinking now is not a good time to be buying zinc and that the metal only has further to fall, but various reports suggest that the current weakness may not last much beyond the summer. As Standard Bank recently advised clients, power cuts due to low water levels in some parts of China have restricted production and caused a drop in operating rates. Reduced mine output in some…