Daily FNArena News - Commodities

According to Scotia Capital it is again time to be bullish on commodities, with preferred exposures being iron ore, coking coal, zinc, copper and aluminium.

Commodity prices have not been immune from the current financial markets turmoil but Barclays Capital expects fundamentals will provide support once markets settle.

Following a weaker than expected July month industry consultant MEPS expects steel prices will stabilise over the rest of the year, with scope for small increases early in 2008.

Ux Consulting has followed TradeTech with its latest update of the weekly spot uranium price indicator. US$105/lb is the latest.

OPEC comments gave traders little reason to stay long oil and the price has fallen in response but Barclays Capital suggests the uptrend remains intact.

National Australia Bank’s latest survey of the mining sector shows labour costs as the greatest issue for companies but profits are expected to remain historically high.

A slowing economy on the back of the sub-prime crisis means the US no longer leads the world in base metal consumption, but an expected pick-up in coming months keeps Barclays positive on the sector.

Barclays Capital expects lead prices will re-test recent highs and remain strong in the medium-term thanks to a structurally tight market.

Ux Consulting has left its weekly U3O8 spot price indicator unchanged at US$120/lb.

No consensus exists between the two industry consultants that each set their weekly spot price indicator with TradeTech refusing to copy last week’s heavy price cut by Ux Consulting.