miércoles, 23 de enero de 2013

miércoles, enero 23, 2013

Note from the editor

US emerges as a commodities bright spot

By Javier Blas, Commodities Editor

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Ask the boss of any major commodities trading house for a bright spot in raw materials demand and the answer may surprise you. It is not China, India, Brazil or any other superfast growing emerging country, but the US.
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Commodities trading executives say that the US economy, boosted by cheap credit and even cheaper energy, is starting to pull ahead after years of lacklustre growth, pushing up demand for anything from copper to corn to crude oil.
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“The US is doing very nicely. Demand is up,” says a commodities boss in New York. Another in Switzerland adds: “People are not realising it, but it is just happening: cheap energy, low interest rates… it is all propelling the US economy.”
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The renewed optimism in US commodities demand comes as lawmakers and the White House take the initial steps to avoid the so-calledfiscal cliff” – the potential for draconian spending cuts and tax hikes. There are problems ahead. To be sure, economic growth is still low. And unemployment remains stubbornly high. Of course, the starting point for many commodities is low after years of falling consumption.
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But there are anecdotal signs in the physical market that confirm the optimism among commodities trading executives. Take oil.


Consumption has fallen significantly from the peak of 2007-08, but the latest weekly figures – with the caveat that they are always imperfect and subject to multiple reviews – suggest a strong rebound. US oil consumption has been running 1-2 per cent higher year-on-year, at around 18.5m barrels a day since early December, a strong change from the beginning of 2012, which witnessed year-on-year drops of 5-7 per cent.
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The International Energy Agency, the western countries’ oil watchdog, earlier this month acknowledged that recent US oil demand figures have “surprised on the upside”, adding: “Diminished pessimism has emerged in recent months.” The IEA believes that after US oil demand contracted an average 1.6 per cent through 2012, consumption will remain flat year-on-year in the current year.
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Metals is another area of strength. Consumption of copper, aluminium and steel is up significantly over the past year – and the signs of a rebound in the housing market suggest more growth is ahead.
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US lumber – or sawn timber – is also benefiting from the strong economic growth. The price of the commodity is near an eight-year high as demand for the staple of the American house sector rises again.
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The renewed economic strength is even filtering into the agricultural market. The US Department of Agriculture recently revised up its estimates for domestic consumption of corn, even in the face of near record prices, as the US livestock and ethanol industry swallows more corn than expected only a few months ago.
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Would it last? Commodities executives openly acknowledge they do not know. But they highlight that the US, long considered a source of negative consumption rates, could be a positive demand surprise for 2013.

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