Daily FNArena News - Commodities

GaveKal looks at why commodity prices are soaring but commodity producer share prices are not.

What are the prospects ahead for the forgotten commodity and its associated listed stocks?

Steel producers are passing on higher input costs and steel industry consultant MEPS expects this will see prices move higher through to the middle of the year.

While some arguments suggest it isn’t demand that is driving commodity prices but a weak US dollar SVB shows there has been no re-pricing of commodity costs away from the greenback.

Power supply problems at South Africa’s Eskom may impact on available supply of uranium this year, but it hasn’t stopped the weekly spot price from falling below US$75/lb.

Oil again pushed through US$100 per barrel overnight but ANZ Bank suggests the market has it wrong and prices are headed to US$80 per barrel by the end of 2008.

If the IMF can make good on promised cost reductions, the US will allow it to sell some 13 million ounces of gold.

Spot uranium would have fallen below US$75/lb if it wasn’t for Uranium One’s production shortfall in Africa.

Slowing global growth usually means weaker commodity prices but Barclays Capital suggests the current supply side issues across the commodity spectrum should support prices.

OPEC meets early in March to discuss the outlook for the oil market and Commonwealth Bank suggests the meeting is likely to find no change in output levels is required.