May 2009

Will Cap and Trade Cost American jobs?

by Stuart Burns on May 29, 2009

Style:    Category: Global Trade, Macroeconomics

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An interesting article in the New York Times charting progress on the cap and trade greenhouse gas emissions climate bill explains how consensus has been maintained by the granting of free allowances to emitters to mitigate the cost of implementing the bill’s limits. The caps would gradually tighten over time. But the allowances would allow [...]

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Is Oil Set to Challenge $100 per Barrel Again?

by Stuart Burns on May 29, 2009

Style:    Category: Commodities, Supply & Demand

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Building on a period of prices fluctuating around $45/barrel in the first quarter of 2009 oil has firmed to $60+ over recent weeks. Does this reflect a growing demand and if so can we expect oil prices to challenge $100/barrel again as some investors are suggesting? Certainly some in OPEC who are meeting this week would like [...]

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Piracy on the High Seas is Becoming a Major Cost for Shippers

by Stuart Burns on May 28, 2009

Style:    Category: Global Trade, Logistics

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No we are not talking Pirates of the Caribbean… and the perpetrators bear little resemblance to Johnny Depp. The high profile case of Captain Richard Phillips rescue by the US Navy last month is only the tip of the iceberg and though the issue fades from our TV screens, it becomes a growing threat to [...]

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What the New Iron Ore Contract Benchmarks Mean for Steel Costs

by Lisa Reisman on May 28, 2009

Style:    Category: Commodities, Ferrous Metals, Global Trade

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Though many had forecast that the benchmark iron ore contract price would decline by 35-40%, Japan’s Nippon Steel and Korea’s Posco each settled for a 33% price decline. But what’s good for the goose is not necessarily good for the gander. According to this article, Chinese steelmakers will reject this cut and likely hold out [...]

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China Iron and Steel Association Wants Bigger VAT Rebates to Boost Exports

by Stuart Burns on May 28, 2009

Style:    Category: Anti-Dumping, Ferrous Metals

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Following our articles from earlier this week and last, we wanted to examine the issue of China’s export tax rebates in greater detail.  A recent Reuter’s article mentions that China’s Iron and Steel Association CISA has called for export tax rebates to be increased. China should adopt more generous export tax rebates for steel products [...]

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What is Driving Metals Prices?

by Stuart Burns on May 27, 2009

Style:    Category: Commodities, Ferrous Metals, Macroeconomics, Non-ferrous Metals

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It is tough making sense of the commodity markets at the best of times and these are far from the best of times. Metals prices are being driven by several, often conflicting, pressures. On the one hand, currency movements, particularly in the US dollar frequently creates price movement in spite of fundamentals. The dollar has [...]

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Will Palladium Be A New Winner in the Green Economy?

by Lisa Reisman on May 27, 2009

Style:    Category: Precious Metals, Supply & Demand

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Yesterday, Stuart penned a blog entry discussing some of the metal industry beneficiaries of President Obama’s newly announced fuel economy agreement. The two key means of attaining the stated goals, according to my learned colleague, include the reduction of a car’s weight and better engine efficiency. Both will rely on lighter, stronger metals such as [...]

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Time to Cash in Your Rio Shares?

by Stuart Burns on May 27, 2009

Style:    Category: Commodities, M&A Activity

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Have you been wondering what happened to that deal for Chinalco to buy an 18% stake in Rio Tinto for $7.2bn via a convertible bond issue and take minority stakes in key mine assets for a further $12.3b? At the time, Chinalco was hailed in some quarters as the white knight riding to Rio’s rescue. There [...]

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