• Has steel turned around? In late April, John P Surma, chairman & CEO of US Steel, said that “we continue to face an extremely difficult global economic environment. We expect an operating loss in the second quarter as our order book remains at low levels and idled facility carrying costs continue to be incurred.”
• World refined copper production outpaced demand by about 150,000 tonnes in January, compared with a deficit of about 20,000 tonnes a year earlier, according to International Copper Study Group which anticipates a surplus of 345,000 tonnes in 2009.
• Gold price is struggling to stay above $900 as there is increasing confidence in the world about US and global economic recovery. It is not clear whether that hope would eventually turn out to be misplaced but, right now, nobody is in a mood to play safe.
• The quarterly commodity review of Royal Bank of Scotland paints a bleak picture for aluminium because of the metal's heavy exposure to the transport and construction. Demand is expected to contract by 8% in 2009 while cutbacks in production have not been commensurate.
Crude oil production is outpacing demand with the result that millions of barrels of oil are getting added to the inventory. Commercial crude stockpiles as reported by the US Energy Information Administration is at 19-year highs. And yet oil shows no signs of declining below $50. What is the reason for the oil market to defy the laws of demand and supply? Traders are betting on the US economy picking up later this year, though there is still little supportive data. In fact, on 29th April the US Commerce Department reported that gross domestic product shrank 6.1% in the first quarter - the third consecutive quarter of contraction. This is the first time something like this has happened in the last 34 years. But equity markets searched and found a silver lining - an increase in consumer spending. That created a sharp rally in stock indices and, therefore, in crude oil. How long will it last?