Monthly Metal Review
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
June as the mid-point of the year was highlighted by a number of conferences and meetings that gave scrupulous analysis of the current situation of the non-ferrous and ferrous markets and the perspectives of their further development.
France was honored to chair the Group of Twenty in 2011. Nicolas Sarkozy, the French president, has used France’s spell at the head of the G20 to call for a con-certed effort to cope with raw materials inflation.
The most important driver of commodity inflation is supposed to be the growth in global demand. Dealing with this problem is easier in some markets than in oth-ers. Due to the finite nature of the mineral resources and the high cost of extraction, markets for metals and hy-drocarbons tend to be far from perfect. This makes it harder to keep prices closer to costs, since the cost of higher prices is borne by consumers the world over, whereas private companies reap the benefits.
In light of the above said Nicolas Sarkozy set out a three-directional approach including boosting of produc-tion; increasing transparency in commodities derivatives markets by standardizing contracts and forcing more deals on to exchanges; and setting a minimum amount of collateral that parties must post when they enter into a derivatives transaction.
Forcing more derivatives trading onto exchanges will make it easier to identify and mitigate systemic risk. Im-posing margin requirements will insure traders against adverse market movements. It may also reduce purely speculative positions. It is encouraging that on both sides of the Atlantic, moves are being made in this direction.
On the backdrop of global initiative Lakshmi Mittal’s keynote speech on India and analysis of the future devel-opments in China were hot topics at Steel Success Strate-gies conference in New York. Attention was focused on India and its voracious appetite for metals. Indian de-mand for steel is expected to surge by 10-15% in 2011. A growing, youthful population that will require additional housing and increased infrastructure supports this trend. It goes without saying that demand for non-ferrous met-als will go abreast.
This growth is attracting both domestic and foreign investors, who are also eager to tap into the country’s lucrative raw materials deposits.
Annual Investment Forum in Moscow organized by the bank Renaissance Capital presented vision of the political and business elite of Russia on the ways of im-provement of investment climate in the country in the nearest perspective. Russia aspires to acquire a stable position among the world leading economies and steadily moves towards creation of the investment friendly atmosphere being fixed on the legislative level in conformi-ty with international norms.
Potential of the CIS countries markets is considerable and has been gradually interweaving in the tissue of the world economy. One of the recent important signs on this way has been manifested by the creation of the unified economic space among Russia, Belarus and Kazakhstan.
Weaker-than-expected economic data from the US, combined with a return to the Eurozone sovereign debt crisis in recent weeks have caused investors to question the sustainability of the rally in risk assets. But as Greek government voted 155-138 to pass austerity measures, assuring the country to receive international aid and fol-lowed the approval of austerity plan, market concerns eased and risk appetite also returned.
There is already talk that equity sentiment has turned bearish. The ratio of buying of “put” options versus “call” equity options in the US has moved sharply up, as investors seek more protection.