The diagnosis of commodity market Bashny.Net

Falling prices on commodities, which has been ongoing for 15 months, begins to resemble a full-blown crisis. Investors react to declining demand from China and the end of the era of cheap money. Commodities index Bloomberg Commodities Index has fallen by 50% compared with the peak in 2011, eight companies with the worst performance in the Standard & Poor's 500 are connected with the commodity futures. It seems that the industry is bursting at the seams:

• The largest U.S. aluminum company Alcoa (NYSE: AA), said that because of the excess production is forced to split into two separate companies.
• Royal Dutch Shell (AMS: RDS.A) announces the rejection of the mining project in the Arctic, which has already invested $ 7 billion.
• To top it off on Monday on the London stock exchange Glencore (LSE: GLEN) fell 31% — and that's raw materials giant with a huge success released on the IPO in 2011, and in 2013 absorbed one of the main competitors. However, on Tuesday the stock began to win back drop: 16:11 GMT the price growth amounted to almost 19%.

 

Ed Hirs, managing Director of a small oil company, teaching at the University of Houston's economy in the energy sector, said: "In China the economic slowdown and considerable uncertainty on this background in the market aktiviziruyutsya panic and the slowdown in demand growth for all commodities was the last straw."




Peak prices for gold and silver passed four years ago, oil prices have been falling since June 2014, and the decision of OPEC not to cut production has only exacerbated the situation, and the cost of natural gas in the United States since 2008, fell in four.
According to analysts John Laforge and Warren Paisa from research company Venice, on can become worse. According to their research note dated 14 August, current prices of raw materials — fourth year of the 20-year-old "bear supercycle". Analysts analyzed the fall of prices for raw materials since the eighteenth century and found that, in addition to fundamental factors, these falls were largely due to the momentum of the market.

However, the Forge indicates that the maximum decline occurs in the first six years. The researcher says: "In the commodities market expect the large number of bankruptcies and closures of companies. It is necessary to reduce demand."

Glencore strategy to reduce debt levels, announced three weeks ago, Director Ivan Glasenberg, and a plan for the sale of shares in the agricultural business failed. On Monday Investec Plc warned that while maintaining low prices for raw materials the cost of the shares could fall even more.

Shell, in addition to a failed Arctic campaign cost $ 7 billion, which for many years have criticized environmentalists will be forced to bear the costs related to the activities in Alaska — about $ 3 billion plus $ 1.1 billion in additional contractual obligations.

Alcoa plans to share manufacturing operations and smelting and processing industry, which are suffering from excess Chinese sentences.

Profits of China's manufacturers in August, compared with last year fell by 8.8% — despite the fact that since November the government five times to cut interest rates and took other measures to increase production.

Waves of this cataclysm disagree to neighboring industries. Last week, Caterpillar (NYSE: CAT) said about the coming reduction of 10 thousand or 9% of jobs due to the downturn in the mining industry and shares of chemical manufacturer Huntsman Corp (NYSE: HUN) fell to a four-year low after the announcement that the low prices on Titan will have a negative impact on revenue in the third quarter.published

 

P. S. And remember, only by changing their consumption — together we change the world! ©

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Source: insider.pro/EN/article/46311/