Thursday, December 31, 2009

2009 best year for commodities since 1973 (or 1970)

Copper and natural gas were the commods we had the most posts on this year.
From Reuters via MineWeb:

The Reuters/Jefferies CRB index is on track for a 24% increase, withbase metals strong, gold recording its ninth straight year of gains and soft commodities increasing too, 2009 has been a strong year for commodity prices.
Commodity markets are on course for their strongest year since 1973, lifted by oil's biggest annual gains in a decade and a 140 percent surge in copper prices.

With the Reuters/Jefferies CRB index .CRB on track for a 24 percent rally in 2009, gold heading for its ninth increase in as many years, sugar near record highs and cocoa headed for its fourth annual rise, traders are describing 2009 as "the year of commodities".

But the strategies that worked this year may fail in 2010 as the market switches from picking up bargains left in the wake of the financial market meltdown that started in 2008 to a strategy based on macro economic data and fundamentals. "The year 2009 was really a value proposition, it was about momentum buying on value, which was buying on cheapness in the market," Mark Pervan, Head of Commodity Research at ANZ, said.

"2010 is going to be much more macro driven, more fundamentally driven. You won't see so much influence from the dollar. It will be more closely aligned with supply and demand."

First amongst CRB constituents is copper HGc1, which is heading for a rally of nearly 140 percent this year....MORE

From Bloomberg via the Mayor's latest addition to the empire, BusinessWeek:

Commodities Heading for Best Year Since 1970 on Chinese Demand

Commodities headed for their best year since at least 1970, led by a doubling in copper, sugar and lead prices, as Chinese demand compensated for the steepest slump in the global economy since World War II.

The S&P GSCI Index of 24 raw materials rose 51 percent, its best annual gain according to data on Bloomberg going back to 1971, as of 8:57 a.m. in New York. That outpaced the 28 percent gain in the MSCI World Index of stocks in 23 developed nations and 3.5 percent decline in Treasuries, according to Bank of America Merrill Lynch indexes. The S&P GSCI Total Return Index climbed 14 percent this year.

China, the biggest consumer of commodities such as copper and iron ore, expanded 9 percent this year, according to the median estimate of economists surveyed by Bloomberg. The nation imported record amounts of both raw materials this year, making up for weaker demand from countries such as the U.S., whose economy is forecast to contract 2.5 percent, and the euro zone, with a projected 4.1 percent drop. Commodities drew record investment of $60 billion this year, Barclays Capital estimates....MORE