COM - Commodity Roundup: Brent near $80; JPM says tradeable commodity stocks critically low
2023-12-21 05:48:18 ET
companies insurance costs.Meanwhile JP Morgan in a note said, energy inventory availability declined on the month, primarily driven by the seasonal increase in demand for US natural gas albeit weaker than anticipated as winter around the globe has started warmer.
"Tradeable commodity stocks remain critically low, and the abundance of available inventories in leading commodity consumer and importer China remains sizable. Inclusive of exchange, visible commercial inventories, and strategic stockpiles, China currently holds an estimated 93% of global visible copper inventories, 67% of global visible aluminum, 64.1% of corn, 51.9% of wheat, 31.3% of soybeans, and 23.2% of crude oil, JPM said citing sources. "Chinese SRB holdings alone account for 92% of global copper inventories and 29% of global aluminum inventories"
Among base metals, nickel prices fell on Thursday, pressured by muted consumption as well as increasing production and inventories in exchange warehouses, Reuters reported. On a year-to-date basis, LME nickel is down 44.5% and SHFE nickel has dropped 35.4%, making the metal the worst performer across the nonferrous metals complex on the two bourses.
Fed funds futures point to more than 150 basis points of cuts next year, and similar expectations are now emerging around the Bank of England, with more than 100 bps of cuts similarly priced in for that central bank in 2024. Lower interest rates decrease the opportunity cost of holding non-yielding bullion. Spot gold gained 12% so far this year, supported by the U.S. banking crisis, geopolitical tensions amid the war in Ukraine and Middle East, and worries over a recession.
As per Bloomberg, nearly 300 tons worth of metal left vaults since the middle of this year, yet, the price held up firm, signaling strong physical buying.
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Commodity Roundup: Brent near $80; JPM says tradeable commodity stocks critically low