China killed Supercycle commodity market, and the Fed finally bury him

In that year, when
Bloomberg Commodity Index of investor commodity index
returns was as low as it is now,
the best-selling Apple products
It was a desktop computer, and buy
it you could for francs or German
brand.

exchange
index, which tracks the market
22 cycles of natural resources, fallen by 2/3
from its peak to its 1999 level. it
It signals the completion of the so-called
Supercycle commodity assets. During
ten years, at least until 2011
Chinese manufacturers formed
strong bull market for coal, oil and
metal - and now this period came to
end.

Andrew Lepping,
Deputy Director of Investment
in Allan Gray Ltd, says: "The
China's industrialization has affected 1.3
billion people: never before has the world
seen such a pace and scope of change.
But this can not go on
infinity, to increase the pace
consumption nowhere else. can only
leave at the same level of consumption. "

If the deceleration
Chinese growth (which is now the most
weak for 25 years) raised the first nail in the
coffin super cycle, the Fed is going to
last score.

first American
increases in interest rates since 2006
expected in December, the majority of
market analysts and investors. it
helping the dollar to go up. This year
American has increased by 9% to a basket of
10 major currencies. So, trade
assets that are traded mainly in
dollar, get more
problem. The fact that the declining
the purchasing power of global
raw materials buyers, and more attractive
investors are becoming more assets
generating profitability.

commodity
Bloomberg index (The
Bloomberg Commodity Index) tracks the actual
Income from trading commodity futures.
For comparison, the spot index, which
monitors prices for physical goods,
I fell on Monday to six years
minimum, and the raw materials sector indicator
stock market on September 29 was the most
weakest since 2008. In the mining
sub-index losses amounted to 31% since the beginning of
year, and this includes such major
copper producers, such as, First
Quantum Minerals Ltd., Glencore Plc and Freeport-McMoRan Inc.

In times of record
demand in the 2000s, commodity firms
- such as Total SA, Rio Tinto Group,
Anlo American invested billions
of dollars in long-term capital
projects. Now they are forced to leave them
because the world is suggestive of oil, gas,
iron ore and copper on as
weakening Chinese growth.

No doubt
that one of the most oversupplied
markets - oil. Stocks of raw materials swell,
and we have now reached a level
approximately 3 billion barrels (according to
international energy
Agency). OPEC's decision not to cut
production and record output from shale
deposits in the United States - the main reasons
oversupply of oil on the market.

First step
Fed to tighten monetary
policy will lead to an increase in the dollar and
significantly complicate "raking
blockages "in the commodities market. will
reduced exploration and drilling (which
often paid in other currencies).
Options for dealing with this are not many, and
chief among them - the depreciation of its own
currency to support exporters. For example, to drop Ruble
dollar helps
to maintain the profitability of Russian
Manufacturers of steel and nickel, and forming worthy production levels.

On
metals markets there is no agreement. Some
the largest global operators -
such as Glencore -
trying to reduce production of copper and zinc.
Other producers - for example, BHP
Billiton Ltd., Vale SA and Rio Tinto - can not afford
allow a reduction in production, as
seek to oust competitors from the market,
even with the strong price
downturn. They want to support their prey
and retain its market share (in the
metals market they operate similarly to
that takes, for example, OPEC
the oil market).

experts
write that the situation is complicated
way, and while no one can say,
when the market reaches the commodity
bottom. One thing is clear: the peak price levels have
passed, and a new large rise in
wait for the next decade, probably,
it is not necessary.