Foreword
AS WE PREPARE for the summer holidays – at least those of us Europeans who can afford one – we are hoping for warm waters, clear skies and idyllic sunsets.
Not so, unfortunately, for the immediate
prospects for commodity markets as the ravages of the eurozone crisis continue to be plastered-over casting a continuous dark cloud over proceedings. The age of austerity we so accurately predicted in 2007 may be coming to a partial end in parts of Euroland – at least for the time being– but the democratically elected short-term brains dictating much of OECD policymaking seem hard pressed to come up with any solutions that make sense in the long term.
This confusion and attendant doom-
fostering approach leaves most markets bereft of any clear direction as the constant cycle of risk-on/risk-off dominates the daily papers and newsblogs. Commodities are facing “the vicissitudes of choppy sentiment, risk aversion, and the current turmoil in markets,” according to Barclays Capital. This has meant that, on the whole, “sell in May etc.” traders have profited handsomely from the mini- rout as the S&P GSCI has plummeted. The eurozone crisis, contagion, and the slower pace of growth in emerging markets – the very engine of commodity demand growth – have all been appropriately cited as the cause.
If only we could find some kind of ointment
for ‘the vicissitudes’? Governments and central bankers seem intent on applying the same unctuous preparation to the intractable eurozone disease and the latest attempts looks equally doomed to failure.
The sharp falls in commodity prices during
May – indeed the declines over much of the past year – have highlighted several points that are central to understanding the market outlook, as Capital Economic’s Julian Jessop explores in this edition [see page 9].
Also in this edition you will find a host
of professional intellectual thought on the complex; from the developing role of interdealer brokers in commodity markets [page 14] to our inaugural survey of Energy e-Trading Solutions [page 26].
* Isherwood Production, the publishers of
Commodities Now magazine, are not an official sponsor of this year’s Olympics Games taking place in London, nor will it be so for any future Olympic events taking place in the emerging
markets which comprise the only countries that can afford to stage them.
June 2012 1 We also offer our annual CTRM Supplement
which delves into the key areas of trading and risk management processes and software solutions [page 29].
And if that weren’t enough to keep you occupied, why not focus your attention on the nominations for the 2012 Commodity Business Awards. Commodities Now will be holding its annual award ceremony for the good and the great of the commodity complex at the St Pancras Renaissance Hotel in London on November 6th
. If you would like to attend (for a small fee)
or submit a nomination (they open on July 6th
), we encourage you to tell us about those
companies you think deserve recognition – perhaps including you own.
Meanwhile, if it’s any consolation, many commodity markets still exhibit tight supply, so don’t prepare just yet for a 2008-style black hole down which prices descend. Our friends in high places are sure to conjure up the cash in some elaborate financial charade to keep the wheels going round for the immediate future.
And if you are reading someone else’s copy
of this magazine (or an old online version or free exhibition sample copy) and like what you see, I encourage you to please buy a subscription and help a dying industry continue to chop down trees and put ink on paper [see page 63]. We gladly accept all major currencies ... including geuros.
Happy Olympics all.* • Guy Isherwood, Publisher/Editor.
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