Invest
Investors warned on commodities surge
The recent spike in commodities trading is sending shock waves through global commodity markets and could also have significant ramifications for the Australian economy, one Aussie fund manager has warned.
Investors warned on commodities surge
The recent spike in commodities trading is sending shock waves through global commodity markets and could also have significant ramifications for the Australian economy, one Aussie fund manager has warned.
Instreet managing director George Lucas said retail investors, high-net-worth individuals, wealth managers and Chinese investors have all piled into commodities futures over the past couple of months.
“Adding fuel to the fire was the decision by Chinese regulators to clamp down on equity markets,” said Mr Lucas.
“In response, Chinese investors have diverted their money into commodity futures – not property assets as many may have expected.”
Mr Lucas said all of this has significant consequences for Australia, given that the Australian currency, economy and stock market are influenced by the price of iron ore.
“Having the price of iron linked to Chinese retail investors is not ideal to say the least,” he said.
“This madness has surprised western investors and rattled global commodity markets, causing a sharp run-up in the price of steel and iron ore futures.”
At the start of this week, Mr Lucas said, the number of steep reinforcement bar contracts traded in Shanghai exceeded the volume produced by China annually.
“In an attempt to cool the market and reduce the high volumes, the Chinese regulator increased transactions fees and margin requirements on Chinese commodity futures,” he said.
“This led to the large fall in iron ore prices we experienced last week.”
RELATED ARTICLES
Commodity
Is crypto getting the shaft for a big gold re-polish?
While the spotlight shines on trendy cryptocurrencies, investors evidently haven’t lost interest in traditional and tangible commodities like precious metals. Read more
Commodity
Morrison’s gas-led recovery sees manufacturers ‘held to ransom’ by gas cartel
Australia’s manufacturing sector and its workers are being ‘held to ransom’ by the gas cartel, despite the Morrison government promising cheap gas as a key policy in the COVID-19 recovery planRead more
Commodity
‘Investors should take note’: Gas-led recovery to lead to stranded assets
Australia’s gas-led economic recovery could be relying on inaccurate financial assumptions, new research has revealed. Read more
Commodity
Credibility up in flames as government opens 21 new gas and oil exploration sites
Climate groups are saying the Morrison government lacks any credibility when it comes to climate change after it announced 21 new gas and oil exploration areas. Read more
Commodity
Morrison urged to drop gas-led recovery after new global warning
The International Energy Agency has found that countries like Australia need to transition their energy grid within 14 years to reach net zero, defying Prime Minister Scott Morrison’s gas-led economic ...Read more
Commodity
Taxpayers to bear brunt of Morrison’s $2bn pledge to oil refineries
Taxpayers are set to be on the hook for up to $2 billion over the next decade as the government commits to protecting two oil refineries. Read more
Commodity
Government unveils $1bn energy deal
The Morrison government has announced a $1.1 billion energy and emissions agreement between the federal and South Australian state government. Read more
Commodity
Australia can get rid of coal without prices skyrocketing
Australia’s transition to renewable energy is unlikely to create unaffordable electricity prices or come at the risk to reliability, with policymakers urged to generate the majority of power from ...Read more
Commodity
Is crypto getting the shaft for a big gold re-polish?
While the spotlight shines on trendy cryptocurrencies, investors evidently haven’t lost interest in traditional and tangible commodities like precious metals. Read more
Commodity
Morrison’s gas-led recovery sees manufacturers ‘held to ransom’ by gas cartel
Australia’s manufacturing sector and its workers are being ‘held to ransom’ by the gas cartel, despite the Morrison government promising cheap gas as a key policy in the COVID-19 recovery planRead more
Commodity
‘Investors should take note’: Gas-led recovery to lead to stranded assets
Australia’s gas-led economic recovery could be relying on inaccurate financial assumptions, new research has revealed. Read more
Commodity
Credibility up in flames as government opens 21 new gas and oil exploration sites
Climate groups are saying the Morrison government lacks any credibility when it comes to climate change after it announced 21 new gas and oil exploration areas. Read more
Commodity
Morrison urged to drop gas-led recovery after new global warning
The International Energy Agency has found that countries like Australia need to transition their energy grid within 14 years to reach net zero, defying Prime Minister Scott Morrison’s gas-led economic ...Read more
Commodity
Taxpayers to bear brunt of Morrison’s $2bn pledge to oil refineries
Taxpayers are set to be on the hook for up to $2 billion over the next decade as the government commits to protecting two oil refineries. Read more
Commodity
Government unveils $1bn energy deal
The Morrison government has announced a $1.1 billion energy and emissions agreement between the federal and South Australian state government. Read more
Commodity
Australia can get rid of coal without prices skyrocketing
Australia’s transition to renewable energy is unlikely to create unaffordable electricity prices or come at the risk to reliability, with policymakers urged to generate the majority of power from ...Read more
