Archive for the ‘REPORTS PAPERS STUDIES’ Category

China’s Staggering Demand for Commodities

Sunday, March 4th, 2018

China’s Staggering Demand for Commodities

>50% of all steel, cement, nickel, and copper goes there

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

It’s said that in China, a new skyscraper is completed every five days.

China is building often, and they are building higher. In fact, just last year, China completed 77 of the world’s 144 new supertall buildings, spread through 36 different Chinese cities. These are structures with a minimum height of 656 feet (200 meters).

Just for comparison, there are only 113 buildings in New York City’s current skyline that are over 600 feet.

Unbelievable Scale

It’s always hard to put China’s size and scope in perspective – and we’ve tried before by showing you 35 Chinese cities as big as countries, or highlighting the growing prominence of the domestic tech scene.

Today’s chart also falls in that category, and it focuses in on the raw materials that are needed to make all this growth feasible & possible.

Year of data Commodity China’s % of Global Demand Source
2017 Cement 59% Statista
2016 Nickel 56% Statista
2017 Coal 50% NAB
2016 Copper 50% Global X Funds
2017 Steel 50% World Steel Association
2017 Aluminum 47% MC Group
2016 Pork 47% OECD
2017 Cotton 33% USDA
2017 Rice 31% Statista
2017 Gold 27% China Gold Association, WGC
2017 Corn 23% USDA
2016 Oil 14% Enerdata

Note: Because this data is not all in one location, it is sourced from many different industry associations, banks, and publications. Most of the data comes from 2017, but some is from 2016.

China Demand > World

There are five particularly interesting commodity categories here – and in all of them, China’s demand equals or exceeds that of the rest of the world combined.

Cement: 59%
This main ingredient in concrete is needed for roads, buildings, civil structures (bridges, dams, etc.), foundations, and in making joints for drains and pipes.

Nickel: 57%
Nickel’s primary use is in producing stainless steel, which is corrosion resistant. It also gets used in superalloys, batteries, and an array of other uses.

Steel: 50%
Steel is used for more or less everything, but demand is primarily driven by the construction, machinery, and automotive sectors.

Copper: 50%
Copper is one of the metals driving the green revolution, and it’s functional in electronics, wiring, construction, machinery, and automotive sectors, primarily.

Coal: 50%
China’s reducing coal usage – but when you have 1.4 billion people making demands for power, one has to be mindfull of how it is to be done. China has already hit peak coal, but the fossil fuel does still account for 65% of the country’s power generated by source.

 

 

 

 

 

 

 

 

 

 

Henry Sapiecha

Ranking the 20 top mining schools of the world

Wednesday, March 15th, 2017

The QS World University Rankings by Subject released this week lists the world’s top universities in 46 individual subject areas.

The rankings are based on data for academic reputation from a survey of more than 70,000 academics, research citations per paper and its so called H-index which measures the impact of a scholar or scientist.

The engineering – mining and mineral field has 51 entries and the top tier is dominated by US, Australian and Canadian universitiesWhat sets QS apart from similar rankings of educational institutions is a fourth component of the ranking – employer reputation. A survey of over 40,000 employers ranks schools according to the quality of recruits.

The mineral and mining engineering ranking was introduced for the first time ever last year.

The QS engineering – mining and mineral field has 51 entries and the top tier is dominated by US, Australian and Canadian universities. Top rated Colorado School of Mines, established in 1859, is placed well above the competition with a score of above 90.

Established in 1986 Curtin University in Western Australia’s mining faculty shot up the rankings from 19th to second place ahead of Queensland University which also moved up 7 places in the rankings.

Saudi Arabia’s King Fahd University of Petroleum & Minerals fall just outside the top 20 while South Africa’s University of the Witwatersrand is in joint 22nd after falling 4 places.

Indian School of Mines (ISM) University, Dhanbad ranks 24th while the top ranked Chinese school, the University of Mining and Technology based in Xuzhou is placed 27th.

top-20-mining-schools chart image www.www-globalcommodities.com

Click here for detailed rankings.

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Henry Sapiecha

HISTORICAL CHART – On the precipice: Will global markets follow commodities off the cliff?

Tuesday, August 25th, 2015

chart-market-to-follow-commodities image www.www-globalcommodities.com

From 1970 to 2004, commodities moved the opposite direction of assets like equities and bonds. For example, it was during times such as the 1990s that cheap inputs like oil and metals helped to fuel growth in industries across the globe.

When the oil price spiked, like in instances such as the Iranian Revolution and the subsequent Iran-Iraq War in 1980, the market reacted accordingly. In that particular case, inflation jumped to 11.3% in 1979 and 13.5% in 1980, a US recession was triggered, and many economic sectors were hit hard.

However, as we see in today’s chart, from 2001-2012 commodities (as measured by the Bloomberg Commodities Index) have more or less kept in line with the S&P 500. This is historically unusual and many analysts expected it would not last. In 2012, commodities diverged in a big way.

Gold and silver were the first to drop off. More recently, it was base metals and oil that fell off the cliff because of slowing growth in China and supply gluts. Today, the Bloomberg Commodity Index and the TSX Venture Composite Index are lower than they have ever been since their inception. The former is down -19.9% from the beginning of 2001. The Venture is down -40.1% since then.

Today may be the end of this trend of divergence. US equities are at a precipice: fueled by low rates and quantitative easing for years, they have finally started to tumble from record highs. Yesterday, the Dow had its largest one-day drop since April 2014 as it slid 350 points. Even tech darlings were down as $49 billion in market capitalization was wiped out, with Apple, Google, Netflix, Facebook, and Twitter all getting crushed in trading yesterday. Market sentiment is decidedly worse than it has ever been in recent years with the tailwinds of Greece, Puerto Rico, China, and other problems.

Making predictions are the dumbest possible idea, but they say that fortune favours the brave.

So here are some bold predictions:

Gold will at least hold its current value, if not see gains in the upcoming six month. US equities do not see sizable gains for awhile. The Fed does not hike rates in September (or if they do, it will be to a lack of fanfare from the markets). Industrial commodities like base metals will continue to drop off a little further as the overall market feels like it has lost momentum and supply gluts remain supreme.

What do you think will happen in the short and medium term?

OOO

Henry Sapiecha

50 years of Liquid Natural Gas [infographic]

Tuesday, April 7th, 2015

liquid natural gas storage tanks image www.www-globalcommodities.com

As we hit the milestone of 50 years since the first LNG export, Wood Mackenzie examine the current state, and future of the LNG industry.

This future looks particularly bright for the Australian market, with the country this year celebrating its 20th anniversay of LNG exporting, and set to become the 2nd largest LNG export in the world, only behind the US, eventually leaping into position as the world’s number one exporter by 2017.

liquid natural gas over 50 yrs infographic image www.www-globalcommodities.com

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Henry Sapiecha

Oil sands in focus [infographic]

Tuesday, April 7th, 2015

oil-sand_in hand image www.www-globalcommodities.com

Visual Capitalists have put together a new infographic detailing the enormity of Canada’s oil sands region,and the role it has to play in the global oil industry.

Oil sands, or tar sands as some call them, have only recently been considered a seriously viable source of oil and hydrocarbons as higher oil prices combined with new technology has enabled profitable extraction and processing of the oil sand reserves.

The material, more commonly known as bitumen, are found worldwide, however approximately 71% of all resources are found solely in Canada.

The infographic below explains in detail the region, its reserves, how it compares globally, and who is mining them.

oil-sands infographic image www.www-globalcommodities.com

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Henry Sapiecha

 

Diavik Diamond Mine releases 2014 Sustainable Development report

Friday, April 3rd, 2015

The Diavik Diamond Mine, a joint venture with Dominion Diamond Corporation (Rio Tinto 60 per cent; Dominion Diamond Corporation 40 per cent) has released its 2014 Sustainable Development report.

The Diavik Diamond Mine, located on an island in a remote sub-arctic lake in the Northwest Territories, Canada, began production in 2003 and became a fully underground mining operation in 2012. The Diavik mine produces predominantly gem quality diamonds, destined for high end jewellery in all major consumer markets around the world.

Marc Cameron, president and chief operating officer of Diavik said “At Diavik, sustainable development is integrated into everything we do. Our operations provide benefits and opportunities for local communities, businesses, and governments and we work with all our stakeholders to deliver substantial and lasting benefits.”

Highlights of the 2014 Diavik sustainable development report include:

  • Safe mining and processing of over two million tonnes of ore for the second consecutive year asa fully underground mine;
  • An underground mining team that comprises sixty per cent northerners and forty per cent Aboriginals;
  • The highest percentage of northern spending since 2006. Of the C$251 million of northern spending, C$110 million was with northern Aboriginal businesses;
  • A comprehensive transportation contract awarded to Det’on Cho Logistics, a Yellowknives Dene First Nation company; and
  • Multiple energy management initiatives resulting in a reduction in greenhouse gas emissions.

In 2014 the development of a fourth pipe, known as A21, was approved, providing an important source of incremental supply for Diavik and economic and social benefits to the communities in which Diavik operates.

www.riotinto.com

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Henry Sapiecha

 

TOP WORLD MINERS.Canada’s Saskatchewan second only to Finland as world’s top mining destination

Saturday, February 28th, 2015

Canada’s Saskatchewan second only to Finland as world’s top mining destination

Saskatchewan is the most attractive jurisdiction for mining investment in Canada, and the second best worldwide, according to the latest annual global survey of mining executives released Tuesday by the Fraser Institute.

Canada’s policy think-tank’s Annual Survey of Mining Companies 2014, rates 122 jurisdictions around the world based on their geologic appeal and the extent to which government policies encourage exploration and investment.

This year, the potash and oil-rich prairie province was placed at the top by executives surveyed between August 26 and November 15, 2014.

But what is it that makes Saskatchewan such a magnet to mining investors? According to Kenneth Green, Fraser Institute senior director of energy and natural resources and the survey’s leader, there are two key reasons: the province’s abundance of mineral potential, and Saskatchewan’s government transparent and productive approach to mining policy.

Canada’s Saskatchewan second only to Finland as world’s top mining destination

The province offers a competitive taxation regime, good scientific support, efficient permitting procedures and clarity around land claims. That’s what miners look for,” said Green.

Canada as a country did fairly well, as four jurisdictions — besides Saskatchewan —finished in the top 10 worldwide: Manitoba (4), Quebec (6), Newfoundland and Labrador (8) and Yukon (9).

Quebec rebounds, B.C. falls

Quebec, which had got poor reviews in the last three years, climbed back up, which suggests the period of increased red tape, higher royalties and regulatory uncertainty may be coming to and end, the report shows.

Two of Canada’s other geographically large jurisdictions — Ontario and British Columbia — didn’t fare as well. Internationally, Ontario was placed 23rd and B.C. ranked 28th, falling nine and 12 spots, respectively, compared to the 2013 survey.

“In Ontario, the New Mining Act amendments regarding First Nations consultation have resulted in complete incomprehensibility of rights on all sides,” Green said.

“Similarly in British Columbia, uncertainty concerning disputed land claims and ambiguity about what regions will be protected are deterrents to investment and exploration,” he added.

The latest survey included responses of 485 mineral exploration and development company executives from around the world. Exploration budgets reported by companies that participated in the study totalled US$2.7 billion in 2014 and US$3.2 billion in 2013, the Fraser Institute said.

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Henry Sapiecha

Worldly wealth via a gold infographic interaction

Thursday, February 12th, 2015

WORLD WEALTH IN GOLD HOARDING

In 2014, we took a look at where in the world the most gold was mined. Now, we want to take that a step further and look at which countries in the world hold the most gold reserves.

Countries hold gold as a precaution to safeguard themselves against inflation, loans, debt and economic disasters. The total gold holding globally was just under 32,000 tonnes in the summer of 2014.

So, with this in mind we want to take you around the world with our latest interactive infographic to show you which countries have the most gold.

ooo

Henry Sapiecha

US Dollar destruction of commodity prices is almost at an end

Friday, November 28th, 2014

dollar-and-gold-standard-image www.www-globalcommodities.com

The gold price drifted lower on Thursday falling below $1,200 and down nearly $10 overnight, hurt by a 6% slide in the price of oil.

The two commodities often move in tandem because cheaper crude leads to lower inflation, tarnishing gold attractiveness as a hedge against faster rates of price growth.

The fall in the price oil has given another boost to the US dollar. Commodities priced in US dollar usually have an inverse relationship to the world’s reserve currency.

The greenback’s rise to near five-year highs against a basket of currencies has pressurized not on the price of gold, but everything from copper and cotton to milk and molybdenum.

InvesTRAC passed on this price graph to MINING.com indicating that the US dollar’s stunning run since May may be close to correcting.

The technical research and investment blog notes the advance from the May low has “unfolded in five waves which ought to be followed by a three wave correction”:

The top of wave 5 seems to be tracing out a head and shoulders top and a dip through 87.50 would open the way to violate the uptrend and teat the bottom of wave 4 at 84.50. The technical picture shows InvesTRAC’s short term direction indicator has turned down from an overbought situation with the forecaster showing weakness could be expected until the last week of December. So the stage is set for declining dollar and rising to soon get underway.

investrac-dollar-index image www.www-globalcommodities.com

InvesTRAC believes the dollar chart confirms movements in the CRB Commodities index and that the decline in the broader commodities index from its June high was probably terminating after a 15.5% decline.

The InvesTRAC short term model shows that the OB/OS indicator has just begun to rise with the forecaster showing a rising ternd into early February. The daily chart below shows a 15 percent rise form the January lows which has more than been taken back by the second half slump…the index has ticked up slightly and is encountering the downtrend with a massive divergence on its RSI. My conclusion is that the worst is over and that we should now (or very soon) see the hard hit commodity prices lifting off their lows.

investrac-commodity-index image www.www-globalcommodities.com

Henry Sapiecha

U.S. Senate reveals major banks had‘unfair advantage’ in global commodities business

Friday, November 21st, 2014

u-s-senate-reveals-top-banks-unfair-advantage-in-physical-commodities-business image wall st sign www.www-globalcommodities.com

A two-year probe into U.S. Senate-led into Wall Street’s top three banks’ involvement in physical commodities has concluded they exposed themselves to catastrophic financial risks, environmental disasters and potential market manipulation by investing in oil, coal and power plants.

A report published by the Senate’s Permanent Subcommittee on Investigations say the heavy involvement of Goldman Sachs (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM) and Morgan Stanley (NYSE:MS) in the business of storing and moving commodities like oil, aluminum, uranium and copper also gives them unfair trading advantages in financial markets.

The 400-page report, which was made public on Wednesday evening, adds the lenders assumed a role of such significance in the commodities markets that it became possible for them to affect prices paid by consumers, while also securing inside information about the markets that could be used by their own traders.

Banks defend their businesses 

Bankers from Goldman Sachs and JPMorgan, along with other industry executives and regulators, will testify about the allegations at hearings today and Friday. According to the Wall Street Journal, they will address several questions, including “conditions at a Goldman-owned coal mine in Colombia and the airline fuel arrangements that Morgan Stanley struck with United Airlines.”

The lenders assumed a role of such significance in the commodities markets that it became possible for them to affect prices paid by consumers, while also securing inside information about the markets that could be used by their own traders

The subcommittee also studied over 30 power plants owned by JPMorgan, as well as its copper activities and trades.

Last year, JPMorgan had to pay a $410m penalty to settle with the Federal Energy Regulatory Commission, which accused the bank of manipulating energy markets at the expense of consumers.

You can read the full report here.  Charts and exhibits can be found here.

Henry Sapiecha

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