ETFS Commodity ETP Weekly …
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Overview
Further signs of economic growth gaining momentum in China and the US helped flows into cyclical assets such as copper ETPs. Chinese Q4 GDP growth, December retail sales growth and December industrial production growth all beat consensus expectations in a clear sign that the world’s second largest economy avoided a hard-landing in 2012 and is on the path to further growth. In the US, housing starts rose to the highest level in 4 years, initial jobless claims fell to the lowest level since January 2008 and industrial production rose to the highest level since June 2008. Expected platinum supply shortages after Amplats announced mine closures drove platinum prices higher and led to flows into Platinum ETPs. The USDA’s January 2013 WASDE report highlighted supply tightness in corn and wheat lifting flows into agricultural ETPs.
Record inflows into ETFS Physical Copper (PHCU) received as further signs of global economic recovery lift cyclical assets. Physical copper received US$28m of inflows, the highest weekly inflow since the launch of the product in 2010. Investor optimism is being buoyed by continuing indicators of the persistent recovery in the US and China, driving positive flows into copper ETPs over the past nine weeks, totalling US$175mn over the period.
Physical platinum ETPs received US$18m of inflows as Anglo American Platinum (Amplats) announced mineshaft closures. Four mineshaft closures in South Africa, announced as part of a year-long business review will reduce platinum production by an estimated 400k oz, or 7% of annual production and will add to the production deficit already expected this year. The latest news in a string of supply issues for the PGM sector in South Africa has prompted additional flows into physical platinum ETPs as prices jumped nearly 4% last week.
ETFS Agriculture (AIGA) saw its highest weekly inflows since March 2011 after the USDA revised US grain stocks lower. The USDA said that inventories of wheat and corn would be even tighter than previously expected and lower than average analyst estimates. Corn stocks as of 1st December were at the lowest level since 2003/4. AIGA saw US$35.1m of inflows last week, with a further US$8.0m of net inflows in other broad agricultural baskets. ETFS Corn (CORN) and ETFS Wheat (WEAT) received US$7.6m and US$2.8m of inflows, respectively.
Investors take profit after the reopening of the Seaway pipeline pushed WTI prices higher. The Seaway pipeline in the US resumed operation, potentially helping to reduce the glut of crude oil in the US Midwest. The likely gradual decline in the surplus at Cushing in the Midwest pushed WTI prices higher and investors reduced holdings of ETFS Daily Leveraged WTI Crude Oil (LOIL) by US$6.1m, taking profit from the WTI gains. At the end of last week, the International Energy Agency announced that it had revised upward its crude oil demand forecasts for 2012 and 2013, citing higher consumption in China, the US and Brazil. The IEA also noted that Saudi Arabian oil production was cut back significantly in November and December of last year, but blamed that on seasonal effects that will be reversed.
Key events to watch this week: BoJ likely to announce a change in policy and US House Republicans to vote on debt ceiling. According to press reports, the BoJ and the Japanese government have agreed to set a 2% inflation target and will consider making an open-ended commitment to buy assets until the target is in sight. The BoJ policy meeting which will conclude on Tuesday will be closely followed for an indication of how aggressive their policy stance will become. The Republicans are to hold a vote to grant a three month debt limit extension this week – a move that would erase the most immediate fears of hitting the debt ceiling..
Source: ETFWorld.co.uk
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