Wednesday 14 January 2015

ZINC - Commodity Trading Knowledge

ZINC

Major Characteristics
Zinc (chemical symbol- Zn) is a bluish white lustrous metal. It is normally covered with a white coating on exposure to the atmosphere.
Zinc is the fourth most common metal in use, behind iron, aluminium and copper in terms of annual production.
Zinc can be recycled indefinitely, without loss of its physical or chemical properties.
It is present in a wide variety of foods, particularly in association with protein foods.

Demand and Supply Scenario
The rise in world zinc mine production in 2010 (8.8% compared with 2009) was primarily influenced by higher output in Australia, China, India, Mexico and the Russian Federation.
Global refined zinc metal production rose by a significant 13.3% in 2010, as much of the capacity suspended in 2009 was brought back on stream. In addition to a further rise of 18.5% in Chinese output, notable increases were recorded in Belgium, Brazil, India, Peru, the Russian Federation, the USA and Uzbekistan.
Global output of refined zinc metal exceeded usage by 264,000 MT; the fourth successive year that the market has been in surplus.
After a sharp decline in 2009 caused by the economic crisis, world usage of refined zinc metal rebounded by 15.6% in 2010, surpassing 12 million MT for the first time.

Global Scenario
The rise in refined zinc in 2010 was driven mainly by further growth in Chinese apparent demand of 13.3% and a recovery in European usage of 29.3%. Other contributing factors included increases in Brazil, India, Japan, the Republic of Korea, Taiwan and Thailand.
Major refined zinc exporting countries are Canada, Australia and Rep. of Korea, while major refined zinc importing countries are China, USA and Germany.

Indian Scenario
India's refined zinc production was 646,000 MT in 2009, an increase of around 8%-9% from the previous year.
Consumption of refined zinc in India reached 512,000 MT in 2009, an increase of 20.8% from 2008. lndia's per capita zinc consumption is at a meager O.4 kg, among the lowest in the world.
The principal use of zinc in the Indian market is in the galvanising sector, which currently accounts for an estimated 70% of the total production.

Factors Influencing the Market
Zinc prices in India are fixed on the basis of the rates that rule on the international spot market, and Rupee and US Dollar exchange rates.
Economic events such as national industrial growth, global financial crisis, recession, and inflation affect commodity-specific events such as the metal prices.
Construction of new production facilities or processes, new uses or the discontinuance of historical uses, unexpected mine or plant closures (natural disaster, supply disruption, accident, strike, and so forth), or industry restructuring, all affect metal prices.
Governments set trade policy (implementation or suspension of taxes, penalties, and quotas) that affect supply by regulating (restricting or encouraging) material flow.
Geopolitical events involving governments or economic paradigms and armed conflict can cause major changes.
There is also a national economic growth factor. Societies, as they develop, demand metals in a way that depends on their current economic position.

Monday 5 January 2015

Gold gains on strong global cues 05/01/2015

Gold gains on strong global cues

05/01/2015 12:44
Gold futures rose in the domestic market on Monday after a top US Federal Reserve official suggested patience on raising interest rates, bolstering the appeal of the bullion as a store of value. Eric Rosengren, the President of the Boston Federal Reserve said that lack of clear signals of a pickup in inflation and low wage growth justify the exercise of patience over monetary tightening. At the MCX, Gold futures for February 2015 contract was trading at Rs 26,878 per 10 gram, up by 0.55 per cent after opening at Rs 26,815, against the previous closing price of Rs 26,730. It touched the intra-day high of Rs 26,946 till the trading. (At 12.11 AM today).
However, a stronger dollar reduced the appeal of the bullion as an alternative asset. Stronger dollar makes the precious metal expensive for those holding other currencies, thus reducing demand

Weak US ISM data drags down Copper futures 05/01/2015

Weak US ISM data drags down Copper futures

05/01/2015 12:13
Copper prices fell by 0.20 per cent on Monday at the domestic markets after U.S. factory sector grew at its slowest pace in six months in December, a sign that weakness in the global economy is weighing on the United States which reduced the demand outlook for the metal. The Institute for Supply Management (ISM) said its index of national factory activity fell to 55.5 last month from 58.7 in November. At the MCX, copper futures for February 2015 contract were trading at Rs.397.25 per 1 kg, down by 0.20 per cent, after opening at Rs. 398 against the previous closing price of Rs. 398.05. It touched the intra-day low of Rs. 396 till the trading. (At 12.09 PM today).

Factory weakness weighs on Oil 05/01/2015

Factory weakness weighs on Oil

05/01/2015 09:17
Crude oil futures ended lower in the domestic market on Friday as investors and speculators exited positions in the energy commodity which hit the lowest level since May 2009 in the overseas market after tepid factory data from the US to the Euro area signaled a bearish demand outlook for the fuel while Russia and Iraq boosted production, widening a global supply glut. Manufacturing activity in the US expanded at the slowest pace in six months in December, signaling easing growth in the world's biggest economy. The ISM's factory index fell to 55.5 last month from 58.7 in November, with a reading above 50 signaling expansion. The Euro area manufacturing gauge stood at 50.6 in December, near the no-change mark of 50, but slightly up from November's 50.1. Oil production in Russia and Iraq rose to the highest level in decades in December, data from both countries showed, raising oversupply concerns. Crude futures may continue the downward slide today amid speculation of a global supply glut. At the MCX, Crude oil futures, for the January 2015 contract, closed at Rs 3,391 per barrel, down by 0.26 per cent, after opening at Rs 3,419, against the previous close price of Rs 3,400. It touched an intraday low of Rs 3,323 till the closing.

Fertilizer Min seeks Rs 12,500 cr for paying urea subsidy 05/01/2015

Fertilizer Min seeks Rs 12,500 cr for paying urea subsidy

05/01/2015 08:29
Faced with liquidity crunch to clear urea subsidy bills, the Fertilizer Ministry has sought about Rs 12,500 crore from the Finance Ministry for making subsidy payments to domestic manufacturers, reported PTI. The Fertiliser Ministry has not been able to make payments to domestic urea manufacturers since August 2014 as funds allocated in the Budget have been exhausted, sources said. It has not allocated additional funds for indigenous urea in the supplementary grants, they added. "Fertilizer Ministry has approached the Finance Ministry for seeking funds of about Rs 12,500 crore to clear pending subsidy bills," said a source. The government had allocated Rs 72,970.30 crore in the Union Budget 2014-15 for fertiliser subsidy. Of this, Rs 12,300 crore was meant for imported urea, Rs 36,000 crore for domestic urea and the rest Rs 24,670.30 crore for sale of partially de-controlled fertilisers (like phosphatic & potassic fertilisers). Urea is provided to farmers at a fixed subsidised maximum retail price (MRP) of Rs 5,360 per tonne. The difference between the cost of production and MRP of urea is provided as subsidy to manufacturers.

Friday 2 January 2015

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