Month: July 2011

The Monetary Policy Committee of the Central Bank of the Republic of Turkey maintained its benchmark 1-week repo rate unchanged at 6.25%.  The Bank also held the overnight borrowing and lending rates unchanged at 1.50% and 9.00% respectively.  The Bank said: “that it would be appropriate to narrow the interest corridor gradually should the sovereign debt problems regarding some European economies and the concerns on global growth continue to have adverse impact on the risk appetite.  The Committee has also stated that all policy instruments may be eased should global economic problems intensify and lead to a contraction in domestic economic activity.”

By China Research and Intelligence

www.cri-report.com – The chlor-alkali industry generally refers to the production involving three basic chemicals – caustic soda, PVC and chlorine gas, which are also the important basic chemical materials. By the end of 2010, listed companies taking chlor-alkali as their primary or concurrent service, whose number has reached 25, has been the sub-industry of China’s basic chemical material industry with the most listed companies.

In 2009, as Chinese economy recovering, China’s chlor-alkali market gradually recovered.
In 2009, the PVC production in China reached 9.16 million tons, increasing by 11.00% over 2008, and caustic soda production in China was 18.91 million tons, with 8.60% increase over 2008. Though the global financial crisis continued spreading in 2009, the production of the two major products of China’s chlor-alkali industry – caustic soda and PVC – still increased.

China’s total PVC production from January to October 2010 was 9.29 million tons, increasing by 11.60% while the caustic soda production in that period reached 17.29 million tons, with 14.20% increase, compared with the same period in 2009.

Currently, China has become a large chlor-alkali industrial country, but not a power yet. There are still gaps whether in production scale, product structure or in quality of products between China and developed countries.

Since 2004, the production capability of the major product – caustic soda – of China’s chlor-alkali industry has doubled, ranking the first in the world. By the end of 2010, the production capability of caustic soda has reached about 28 million tons with severe surplus supply. With the promotion of China’s macro economy, the annual growth rate of China’s PVC production capability has been over 20% in recent years, with the production capability of over 20 million tons at the end of 2010. With fast expansion speed, China’s PVC market has presented an oversupply situation. Although the Chinese chlor-alkali industry has possessed serious surplus production capacity, some domestic companies are still carrying out the expansion. Overcapacity exerts a great negative impact on the industry, while the operation under capacity and the difficulty for price increase are the most obvious influences.

From this report readers can acquire the following and more information:
-overview of China’s chlor-alkali industry
-development environment of China’s chlor-alkali industry
-productivity changes of China’s chlor-alkali industry
-development of China’s PVC industry
-competition of China’s chlor-alkali industry
-development of China’s caustic soda industry
-major enterprises in China’s chlor-alkali industry and their operations
-import and export of China’s chlor-alkali industry
-influence of the international financial crisis on China’s chlor-alkali industry
-prediction on development trend of China’s chlor-alkali industry

The following persons are suggested to buy this report:
– chlor-alkali manufacturers
-downstream consumers of the chlor-alkali industry
-chlor-alkali trading companies
-investors concerned about China’s chlor-alkali industry
-chlor-alkali device manufacturers
-securities traders/market institutions concerned about China’s chlor-alkali industry

To get more details, please go to http://www.cri-report.com/chemicals/92-research-report-on-china-s-chlor-alkali-industry-2011-2012.html

About the Author

www.cri-report.com

AUDUSD broke off the trading range between 1.0525 and 1.0798, and reached as high as 1.0856, suggesting that the sideways move has completed and the uptrend from 1.0390 has resumed. Further rise towards 1.1011 previous high could be seen in a couple of days. Support is now at 1.0790, as long as this level holds, uptrend will continue.

Daily Forex Analysis

Investors weren’t too discouraged by the increase in US jobless claims, instead focusing on positive news from the earnings front, sending the markets higher today. Pepsi (PEP) was among the companies reporting earnings.

By CountingPips.com

Today, I am pleased to share a forex interview commentary on this week’s major events and forex trends with currency strategist at DailyFx.com, David Song. David studied macroeconomic policies under a visiting scholar at the Federal Reserve Bank of St. Louis while attending the Zicklin School of Business at Baruch College and incorporates both fundamentals and technicals in his analysis. David authors the daily briefings for the U.S. at DailyFx.com.

The Eurozone finance ministers are meeting later this week over the Greek debt crisis and hoping to head off the escalating problems while the US government is fighting over the raising of the US debt ceiling. Do you feel these two themes should be at the forefront of forex trader’s minds over the next few weeks and where do you see these issues heading?

Given the far-reaching implications of a U.S. default, we expect the government to reach a deal in raising the debt ceiling, and the European crisis is likely to take center stage over the coming weeks as the EU plans to implement new measure in an effort to stem the risk for contagion. As the group plans to empower the European Financial Stability Facility with the ability to participate in the secondary market, the impact of the broadened powers could have an adverse affect on the global market as policy makers move into uncharted territory.  As Europe looks to monetize government debt, the next step could be to increase the lending capacity of the rescue fund, and the EU could be forced to increase its stake in the European periphery should the risk for contagion continue to materialize in the coming months.

On a technical basis, we have seen the EUR/USD pair make lower highs and lower lows since reaching almost 1.5000 on May 4th. Do you see the euro-dollar likely breaching below the significant 1.4000 support level on the view that the debt crisis will continue to drag on the euro?

Indeed, the EUR/USD continues to trade within a descending triangle, and the relief rally in the euro-dollar may come to a halt as the pair continues to trade below the 78.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.4440-60. As the pair appears to be finding short-term resistance just ahead of the 78.6% Fib, the exchange rate may consolidate in the days ahead, and we may see a bearish breakout in the exchange rate as price action approach the apex. At the same time, the euro-dollar also appears to be trading within a downward trending channel after carving out a major top in May, and the technical outlook suggests we will see lower prices over the near-term as we see lower highs paired with lower lows.

Now that the United States QE2 program is winding down, do you think we have seen or will see any noticeable impact on the sentiment for the US dollar in the short-term due?

As QE2 comes to an end, with the Fed laying out a more detail outline of its exit strategy, we should see a shift away from risk-taking behavior, especially as global economy faces a slowing  recovery. As the central bank starts to wind down its balance sheet, the reduction in monetary stimulus is likely to increase the appeal of the U.S. dollar, but the FOMC is expected to endorse it zero interest rate policy throughout the remainder of the year as it aims to stimulate growth. Indeed, the Fed is taking up a different approach compared to its major counterparts as we’ve seen central banks across the advanced economies start to raise borrowing costs, and the bearish sentiment underlying the U.S. dollar may linger as Chairman Ben Bernanke maintains his pledge to keep the interest rate exceptionally low for an extended period of time. As the central bank head continues to highlight the ongoing weakness within the real economy, market participants are still holding onto expectations that the committee will conduct another round of quantitative easing, and the greenback may struggle to find a clear direction until speculation for QE3 subsides.

The Australian dollar has been consolidating in a fairly tight range against the US dollar for the past several weeks with the upside being at the 1.0800 level. Do you feel there is the likelihood that we have seen the peak in the AUDUSD when it reached 1.1000 in May?

The Australian dollar has been in a phase of consolidation after breaching 1.1000 in May, and we expect the major top in the AUD/USD to hold as the fundamentals are just not there to prop up the high-yielding currency. In light of the recent comments from the Reserve Bank of Australia, the central bank looks poised to retain a wait-and-see approach throughout the remainder of the year, but there’s speculation that the central bank will have to lower the benchmark interest rate from 4.75% as the region faces a slowing recovery. As the RBA softens its hawkish tone, the mildly restrictive policy stance could be reversed over the coming months, and the Australian dollar remains at risk of facing headwinds in the second-half of the year as market participants speculate Governor Glenn Stevens to curb borrowing costs by more than 50bp over the next 12-months, according to Credit Suisse overnight index swaps.  Although the AUD/USD has advanced all the way up to 1.0856 in July, the rally appears to have been a false breakout, and we should see a near-term correction in the exchange rate as risk appetite wanes.

The Swiss franc has continued to be the major safe haven currency and trades at many historical highs against the other major currencies. Is more Swissy strength inevitable due to the uncertainty in many of the major economies especially in the euro zone at the present time? Do you think it is safe to assume that the Swiss National Bank will avoid the intervention policy that we witnessed a couple years ago?

I am fairly bullish on the Swiss franc even as it trades at record-high against its major counterparts, and I expected to see a further advances in the franc as it benefits from safe-haven flows. As market participants scale back their appetite for yields, the swissy is likely to be the major benefactor amongst the majors, and risk sentiment should deteriorate further in the second-half of the year as the fundamental outlook for the global economy remains clouded with high uncertainties. In terms of a currency intervention, previous attempts by the Swiss National Bank to stem the marked appreciation in the local currency has been far from successful, and it seems as though the central bank will continue to refrain from jumping into the currency market as its earlier endeavors have failed to bear fruit.

As we are around the half-year mark of 2011, do you have any predictions for winners or losers over the coming second half of the year in terms of specific currencies and trends?

For the second-half of the year, the New Zealand dollar looks as though it will one of the best performing currencies as the Reserve Bank of New Zealand shows an increased willingness to lift the benchmark interest rate off of 2.50%. According to Credit Suisse overnight index swaps, investors see borrowing costs in the isle-nation increasing by more than 75bp over the next 12-months, and interest rate expectations should help to prop up the high-yielding currency as market participants weigh the outlook for future policy. Meanwhile, the British Pound may lag behind its major counterparts as the Bank of England continues to defy calls to lift the interest rate off of the record-low, and the slowing recovery in the U.K. is likely to dampen demands for the sterling as the central bank keeps the door open to expand its asset purchase target beyond GBP 200B. As some members of the BoE see a risk of undershooting the 2% target for inflation, the dissenting views within the MPC will continue to curb expectations for a rate hike later this year, and the sterling may struggle to hold its ground should we see a growing shift within the committee.

Thank you David for taking the time for participating and sharing your views in this latest forex interview. To read David’s latest currency analysis and trading strategies you can visit DailyFx.com.

You’ve got a perfect hand at the blackjack table… and you’ve got a lot of patacas in your bet pile.

The night’s been lucky for you at the Lisboa Macau, and you’ve got an upgrade coming your way if your luck holds out. The dealer’s showing 15, then 19, then bust! Looks like you’ll be smiling all the way to your luxury suite.

The dealer’s counting your winnings when the Lisboa suddenly goes dark…

It’s pandemonium. Like something out of Ocean’s 13, when George Clooney and Brad Pitt engineer a fake earthquake to empty out their rival’s casino, the Bank — people screaming, grabbing chips, pushing, stampeding to get out.

But it’s not a movie.

China’s Guangdong province just cut power supplies, and outages have trickled down to the luxury playground of Macau.

Think it can’t happen? Insiders are already predicting it will.

China Southern Electric Power Grid said five southern provinces — including Guangdong — could face power shortages of up to 7 or 8 gigawatts (GW) in the third quarter of this year. The word “could” implies a chance of power shortages, but there’s more than just a chance in this instance.

In the first half of 2011, these five provinces have had to cut 9.01 GW because of tight electricity supplies and high demand.

Is it any wonder, then, that China is rushing around spending tens of billions of dollars on foreign energy acquisitions?

The latest grab is CNOOC‘s (CEO:NYSE) $2.1 billion deal to buy OPTI Canada (OPC:TSX), an oil sands company short on cash. The deal will give CNOOC 195 million barrels of proven reserves. It’s not the first Canadian oil sands deal that CNOOC has entered. In 2005 the company bought a stake in MEG Energy Corp. (MEG:TSX). The $158 million deal bought CNOOC reserves, and access to expertise that the company could use for projects in China.

(We talked about this kind of “educational” acquisition in Monday’s Smart Investing Daily. Don’t forget to sign up for Smart Investing Daily and let me and fellow editor Jared Levy simplify the market for you with our easy-to-understand articles.)

Chinese companies are hungry for energy deals. Over the past five years, China has bid $88 billion on international energy assets.

Power consumption is up in China. This isn’t anything new for the fast-moving country, but what is new is the rate at which China is importing its natural gas.

Reuters reports:

The [National Development and Reform Commission] said China’s natural gas imports in the first half of this year grew 100 percent from a year ago to 14.1 billion cubic metres (bcm).

This suggests the country brought in a record 2.7 bcm of the fuel last month based on January-to-May import figure released earlier by the commission.

Of the imports in the first six months, gas piped in from central Asia totalled 6.9 bcm and imports in the form of liquefied natural gas were at 7.2 bcm, it said.

The overall imports accounted for 22.4 percent of China’s national gas consumption, 9 percentage points higher than a year earlier.

Apparent gas consumption in the first half gained 21 percent on year to 63.1 bcm, according to the commission.

China is in the midst of a huge energy shift. It wants to generate more power from natural gas, and less power from coal. But its domestic resources can’t keep up. PetroChina (PTR:NYSE) supplied 1.83 billion cubic meters of natural gas to six power plants — a boost of 64.9% from the previous year.

That kind of growth is unsustainable — unless you get supplies from other sources.

And that’s why China is so frenzied… That’s why companies are shelling out billions for energy deals. Many of these deals involve Canadian companies, and there are a lot of investment opportunities in this region.

Look to the smaller, cash-strapped companies for possible acquisitions, and look to the bigger, established companies for joint ventures.

But there’s another area that China’s struggling to make a deal with: Russia.

Despite a memorandum signed by both countries in 2009, a pipeline is still just a pipe dream. The two countries can’t agree on a price for natural gas. Russia wants to charge $350 per cubic kilometer, but China doesn’t want to pay more than $235.

Why such a big difference? Russia charges its European customers $350, but China can buy natural gas from Central Asia or Australia for less than $180.

There will eventually be a deal between these two countries, but it will take a lot of haggling. When it happens, though, keep an eye on Russian energy companies, and pipe builders. Some analysts say a deal could add 2% to Russia’s GDP.

That kind of economic boost paired with China’s increasing demand for natural gas makes a pipeline deal almost inevitable.

Publisher’s Note: The action between China and Canada has played out exactly as Taipan’s Zach Scheidt said it would. In fact, earlier this week, one of his recent picks surged by 62% overnight… all thanks to a merger almost exactly like the one above.

To read where China and its billion-dollar billfold are headed, read Zach’s latest special report.

Article brought to you by Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed. Republish without charge. Required: Author attribution, links back to original content or www.taipanpublishinggroup.com.

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The markets are continuing their rally today with optimism across the board. This is the second strong rally in three days after the major cycle turn date was given out.

The South African Reserve Bank [SARB] held its monetary policy interest rate, the repo rate, unchanged at 5.50%.  The Bank said: “The MPC is not complacent and will remain vigilant and continue to monitor closely any indications of second-round effects on inflation emanating from these cost pressures as well as the changing risk profile of the inflation outlook.” On inflation the SARB said: “The view of the MPC continues to be that the underlying inflation pressures are mainly of a cost push nature, notwithstanding signs of a possible moderate increase in underlying inflation.”

July 21 (Bloomberg) — Elena Panaritis, a member of parliament for the Pasok party in Greece and a former World Bank economist, discusses Greece’s debt woes and the outlook for today’s meeting of European leaders in Brussels. She speaks from Athens with Owen Thomas on Bloomberg Television’s “Countdown.”