Which way? Metals

Discussion in 'Commodity Futures' started by themickey, Dec 10, 2020.

  1. themickey


    I've placed this into this thread only because of coal's relationship with steel making.
    Also, didn't wish to start a new thread, but coal is primarily an energy commodity.
    Also, this is a little bit of old news but I went looking after I noticed the ETF 'KOL' was no longer was trading.
    Dec 14th looked like it was the last trading day.

    Screenshot 2021-02-11 at 05.47.08.png

    The Only Coal ETF Is Closing. What It Means for Investors.

    By Leslie P. Norton Dec. 17, 2020 12:13 pm ET

    The only coal-focused exchange-traded fund is closing at 12 years old, another sign of investors’ desire to withdraw from the industry.

    The VanEck Vectors Coal ETF, which went public in January 2008 under the ticker KOL, stopped trading this month and will return investors’ money on Dec. 22. It had about $35 million in assets. At its height in 2011, the ETF had $908 million, said Ed Lopez, head of ETF Product at VanEck Associates.

    The move comes as other investment companies withdraw from funding coal businesses.

    In January, BlackRock said the firm’s actively managed funds would no longer hold shares of companies that derive more than 25% of revenues from thermal coal. It unveiled a major expansion of its sustainable-investing lineup.

    This month, New York state’s $226 billion pension fund set itself the goal of reducing net emissions of greenhouse gases from its portfolio to zero by 2040. It said it is divesting from coal and tar sands and will next review fracking companies, major oil companies, fossil-fuel companies and oil-and- gas transportation and pipelines.

    A number of big money managers have also set net-zero targets for their portfolios, as the Paris Agreement to curb the rise in global temperatures marks its fifth anniversary. In such an environment, it’s no surprise that coal’s fans are diminishing.

    In a statement, VanEck said it “continuously monitors and evaluates its ETF offerings across a number of factors, including performance, liquidity, assets under management and investor interest, among others. The decision was made to liquidate the fund based on an analysis of these factors.”

    VanEck has been adding green offerings in recent years, including the $240 million VanEck Vectors Low Carbon Energy ETF (ticker: SMOG) and the $50 million VanEck Vectors Green Bond ETF (GRNB).
    Last edited: Feb 10, 2021
    #51     Feb 10, 2021
  2. themickey


    JPMorgan Says Commodities May Have Just Begun a New Supercycle
    Author of the article:
    [​IMG]Bloomberg News
    Gerson Freitas Jr. Publishing date: Feb 11, 2021 • 3 hours ago • 2 minute read

    JPMorgan Says Commodities May Have Just Begun a New Supercycle

    Everyone from Goldman Sachs Group Inc. to Bank of America Corp. to Ospraie Management LLC are calling for a commodities bull market as government stimulus kicks in and vaccines are deployed around the world to fight the coronavirus. The optimism has already driven hedge funds’ bullish wagers on commodities to the highest in a decade, representing a dramatic turnaround from last year when oil fell below zero for the first time ever and farmers were dumping produce amid snarled supply chains and plummeting demand.

    “We believe that the new commodity upswing, and in particular oil up cycle, has started,” the JPMorgan analysts said in their note. “The tide on yields and inflation is turning.”

    Commodities have seen four supercycles over the past 100 years — with the last one peaking in 2008 after 12 years of expansion.

    While that one was driven by the economic rise of China, JPMorgan attributed the latest cycle to several drivers including a post-pandemic recovery, “ultra-loose” monetary and fiscal policies, a weak U.S. dollar, stronger inflation and more aggressive environmental policies around the world.

    Hedge funds similarly haven’t been this bullish on commodities since the mid-2000s, when China was stockpiling everything from copper to cotton while crop failures and export bans around the world boosted food prices, eventually toppling governments during the Arab Spring. The backdrop is now starting to look similar, with a broad gauge of commodity prices hitting its highest in six years.

    Corn and soybean prices have soared as China loads up on American crops. Copper hit an eight-year high amid growing optimism over a broader economic recovery. And oil has staged a strong recovery from the depths of the Covid-19 pandemic as a worldwide supply glut eases.

    ©2021 Bloomberg L.P.

    Last edited: Feb 10, 2021
    #52     Feb 10, 2021
  3. I want in on commodies. Can anyone suggest good funds/etfs (or stock) to start dollar cost averaging into them? Thanks!
    #53     Feb 10, 2021
    murray t turtle likes this.
  4. %%
    Silver + SLV is up/trending much better this year than 2020............................................................................................................. NOT a prediction + not bank insured:caution::caution::caution::caution::caution:,:caution::caution:
    #54     Feb 11, 2021
  5. themickey


    China targets rare earth export curbs to hobble US defence
    Sun Yu and Demetri Sevastopulo Feb 16, 2021

    Beijing/Washington | China is exploring whether it can hurt US defence contractors by limiting the export of rare earth minerals crucial for the manufacture of F-35 fighter jets and other sophisticated weaponry, according to people involved in a government consultation.

    The Ministry of Industry and Information Technology (MIIT) last month proposed draft controls on the production and export of 17 rare earth minerals in China, which controls about 80 per cent of global supply.

    Labourers at the site of a rare earth metals mine in Nancheng county, Jiangxi province. Getty

    Industry executives said government officials had asked them how badly companies in the US and Europe, including defence contractors, would be affected if China restricted rare earth exports during a bilateral dispute.

    “The government wants to know if the US may have trouble making F-35 fighter jets if China imposes an export ban,” said a Chinese government adviser who asked not to be identified.

    Industry executives added that Beijing wanted to better understand how quickly the US could secure alternative sources of rare earths and increase its own production capacity.

    the Pentagon has signed contracts with American and Australian miners to boost their onshore refining capacity and reduce their reliance on Chinese refiners.

    The US National Security Council did not respond to a request for comment.

    Chinese rare earth miners themselves are worried about the enhanced power the regulations would give MIIT to control their output.

    China began setting rare earth production limits in 2007 to keep prices high and reduce pollution but the policy is not legally binding and many miners regularly exceed their output quota. The latest regulations would allow the government to impose steep fines for unapproved sales.

    “The new rule is not going to make China stronger in the global supply chain when local mines can’t operate at full capacity and an export ban is easier said than done,” said an executive, who asked not to be identified, at Guangdong Rare Earth Group, one of the nation’s largest rare earth groups.

    In a statement, MIIT said the new law would help “protect national interest and ensure the security of strategic resources”.

    According to government statistics, China’s demand for rare earths is so high that it has consistently exceeded domestic supply over the past five years, prompting a surge of Chinese imports from miners in the US and Myanmar.

    A wide range of industries are driving demand for the strategic resource, including China’s electric vehicle and wind power generation sectors.

    “China’s economic planners have failed to predict the surge in rare earth consumption,” said an executive at Gold Dragon Rare Earth Co in south-eastern Fujian Province.

    “China’s own rare earth security isn’t guaranteed,” said David Zhang, an analyst at Sublime China Information, a consultancy. “It can disappear when the US-China relationship deteriorates or Myanmar’s generals decide to shut the border.”

    While China’s dominance in rare earth mining is under threat, it maintains a near monopoly in the refining process that turns ores into materials ready for manufacturers.

    The country controls about four-fifths of global rare earth refining capacity. Ores mined in the US must be sent to China as the US has no refining capacity of its own yet.

    Industry executives, however, said China’s strength in refining had more to do with its higher tolerance for pollution than any technological edge.

    Financial Times
    #55     Feb 16, 2021
  6. themickey


    In a nutshell that's the reason for Chinese dominance, and its cheap labor.
    #56     Feb 16, 2021
    murray t turtle likes this.
  7. Overnight


    Don't worry mouse. The chinks are threatening to curb their rare-metal earth exports to the US now. They got us over a barrel also.

    Oh well. So much for green energy!

    #57     Feb 16, 2021
  8. So isn't this rare earth metals, and China limiting our access to it, SERIOUS shiat? I've worried about that for years since I read years ago China had the vast bulk of the world's supply. We can't just make some by bombarding other particles with photons or some dumb crap, and I assume we can't easily get some by just nudging a big asteroid full of them to crash into the oceans near us, say the Gulf of Mexico or something? Seems like a serious issue...
    #58     Feb 17, 2021
  9. themickey


    #59     Mar 3, 2021
    murray t turtle likes this.
  10. themickey


    Trader buys $36 million of copper, gets painted rocks instead
    9 March 2021

    6,000 tons of blister copper in more than 300 containers were switched with jagged paving stones, spray-painted to resemble the semi-refined metal.


    Commodities trader Mercuria Energy Group Ltd. struck a deal last summer to buy $36 million of copper from a Turkish supplier. But when the cargoes started arriving in China, all they held were painted rocks.

    The saga unfolds like a gangland thriller, with the Swiss trading house saying it’s been the victim of cargo fraud. Before its journey from a port near Istanbul to China even began, about 6,000 tons of blister copper in more than 300 containers were switched with jagged paving stones, spray-painted to resemble the semi-refined metal.

    The bizarre case highlights commodity traders’ vulnerability to fraud, even when security and inspection controls are in place. In 2014 and 2015, Mercuria took provisions to cover potential losses after metal contained in a warehouse in the Chinese port of Qingdao was seized by authorities as part of fraud investigation.

    Turkish police took 13 people into custody in relation to the faux copper scheme. Mercuria, one of the five-biggest independent oil traders in the world, is seeking redress in both Turkish courts and a U.K. arbitration case against the copper supplier, Bietsan. It’s also filed a formal criminal complaint with Turkish police and prosecutors alleging cargo substitution and insurance fraud, leaving the authorities to determine who’s responsible.

    Several calls to Bietsan’s offices in Tekirdag went unanswered.

    “Suspects have been taken under custody who are thought to be involved in the various parts of this organized crime against Mercuria,” the Geneva-based Mercuria said in a written statement in which it thanked the Istanbul Financial Crimes Department.

    The story was pieced together from legal documents, interviews and local media reports.

    Last June, Mercuria agreed to buy copper from Bietsan, a Turkish supplier it had done business with before, according to Sinan Borovali, the trading house’s lawyer in Turkey. It appears that copper was initially loaded into the first shipment of containers, before being surveyed by an inspection company. Seals used to prevent fraud were then affixed to the containers.

    But under the cover of darkness, it is alleged the containers were opened and the copper replaced with paving stones, Borovali of Istanbul law firm KYB said in an interview. The fraudsters switched between fake and real container seals in an effort to avoid detection.

    As ships left Marport terminal in the port of Ambarli every few days, the same thing happened: the copper was secretly unloaded at night and replaced with painted rocks. “This was how they did it,” Borovali said.

    With the vessels at sea, Mercuria paid $36 million in five installments with the last payment made on Aug. 20, 2020, according to documents provided by the commodity trader to Turkish investigators. The fraud wasn’t discovered until the ships began arriving in the Chinese port of Lianyungang later that month. By then, all eight vessels were en route to China.

    “There has been a criminal investigation petition by the buyer against the seller and two intermediaries,” Turkish police said in a statement. “It’s been determined that the incident is the outcome of fraud perpetrated in an organized manner.”

    Normally, in such cases of nondelivery a trading house could make a claim against a cargo’s insurance policy. But Mercuria found that just one out of seven contracts used by the Turkish company to insure the cargo was real. The rest had been forged.

    The 13 suspected fraudsters were taken into custody this month in a series of police raids. Some have since been allowed to leave custody and placed under house arrest, according to local newswire reports. More hearings on the case are expected from this week.
    #60     Mar 9, 2021