Steel Is the Poster
Child For Oversupplied Commodity Markets, and It's in Shambles - (www.bloomberg.com) The collapse
in oil prices following the shale revolution has stolen the
limelight for investors mulling the end of the commodities supercycle. But the real
"poster child for problems in commodities markets is perhaps the global
steel industry," according to Macquarie analysts led by Colin Hamilton,
the firm's global head of commodities research. The front-month contract for
U.S. hot-rolled coil steel futures traded on the New York Mercantile Exchange
is down nearly 40 percent year-over-year: Forecasts for a boom in Chinese
consumption helped spur a rise in production that left the segment with a
massive glut. The successful realization of economic
rebalancing in China, meanwhile, necessarily entails a material slowdown in
that nation's demand for steel. Macquarie observes that global steel
consumption has contracted on an annual basis throughout 2015. "With 1.6
billion tonnes of consumption globally, steel remains the lynchpin of
industrial growth," wrote Hamilton. "However, the growth part of this
equation is an increasing problem, and not only in China."
Copper Reaches
Six-Year Low as All Efforts to Revive Metals Fail
- (www.bloomberg.com) Copper traded little changed after touching a
six-year low as investors added to bearish positions amid expectations for a
global supply glut and slowing demand in China, the world’s biggest consumer.
Short positions in the metal increased 39 percent, the most since January 2014,
according to U.S. Commodity Futures Trading Commission data released Monday. A
rally for Chinese stocks fizzled Tuesday after technology and small-company
shares plunged, as the Asian nation heads for the slowest economic growth in 25
years. The metal has lost 25 percent this year. “The copper market has been one
of the worst markets I’ve ever seen, copper demand is basically non-existent
right now, and all this started when there was a downturn in the Chinese stock
market this summer,” Phil Streible, a senior market strategist at RJO Futures
in Chicago, said in a telephone interview. “Copper prices are going to continue
to travel down to historical levels.”
Junk-Bond Buyers Said
Seeking Bounty to Fund Carlyle Deal - (www.bloomberg.com)
The banks backing Carlyle Group LP’s
$8 billion buyout of Symantec Corp.’s data-storage business are facing one of
the costliest debt deals of the year to offload part of the financing in the
corporate-bond market. As investors squirm at the amount of debt being piled
onto the unit, known as Veritas, underwriters are discussing yields of 11.5
percent to 12.5 percent to lure potential buyers to a $1.775 billion junk-rated
portion of the debt, according to people with knowledge of the talks. That
would be one of the highest bond yields of 2015 and shows just how risk-averse
fixed-income investors have become as the global economy cools and the U.S.
Federal Reserve moves to raise interest rates for the first time in almost a
decade. Borrowing costs on junk bonds are soaring back toward a three-year high
set last month as investors grow wary of increasing their exposure to risky
assets in the credit markets. That is beginning to impact banks that have
committed to finance buyouts in the last few months and are now finding it
difficult to syndicate the debt.
Commodities Rout
Weighs on U.S. Stocks as Bonds Fall on Fed Bets - (www.bloomberg.com) Firming inflation in the U.S. reinforced speculation the
Federal Reserve will raise rates next month, triggering a selloff in Treasuries
and boosting the dollar. U.S. stocks added to a rebound from the worst week
since August. Yields on 10-year Treasury notes rose to 2.30 percent as price data pushed
the odds for a Fed rate increase to 68 percent. The Standard & Poor’s
500 Index extended its best rally in three weeks, as retailers gained on
earnings from Wal-Mart Stores Inc. and Home Depot Inc. The stronger dollar hurt
commodities, while a weak euro boosted exporters and sent European shares to
their biggest gain in six weeks.
Struggling U.S. oil producers get credit
lifeline amid downturn - (www.reuters.com) An
autumn credit crunch was expected to hit many independent U.S. oil producers,
starving the industry of billions of dollars and further denting company
budgets and drilling plans. But banks that adjust their loans to energy
companies every six months based on the oil price and volumes of reserves were
more lenient than many expected this time, leaving producers with more cash for
drilling and allowing them to supply more oil to a market already flush with
excess crude. The biannual process, known in the industry as redetermination,
shaved only 4 percent off bank loans to oil and gas companies, according to a
Reuters analysis of loan data, surprising experts who had expected deeper cuts
because of a protracted oil price rout.
China Uses Old Playbook to Challenge World in Higher Technology - (www.bloomberg.com)
BNDES Offers to Buy Back Dollar Bonds at Discount to Face Value - (www.bloomberg.com)
Billionaire Pickens Energy Fund Loses Half Its Value in Downturn - (www.bloomberg.com)
China, Brazil Are Left Out of M&A Boom That's Sweeping the Globe - (www.bloomberg.com)
The Fallout From Attacks Is Measured in More Than Stock Markets - (www.nytimes.com)
No comments:
Post a Comment