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    Hello and welcome to the webchat with Naveen Mathur on 'How long will the slump in commodities continue?'


    Hello everyone

  • R


    How much more downside do you see for the oil prices which was are currently trading at their lowest level since 2003 post the lifting of sanctions against Iran?


    Oil prices are trading below the cost of production for a year now and it will be diffficult for produers of oil to produce and sell oil at such low prices. Hence, oil prices has to rise and the trigger can only come from Eurozone as well as from US. Coz China's slowdown is a trouble for financial markets across the globe including commodities. On the other hand supplies are increasing and technically prices are in down trend so for trading perspective in near term (1-2 month), we are expecting that prices may touch $22 - $25 per barrel levels on NYMEX.

  • M


    Commodity prices worldwide have collapsed due to Chinese demand falling. Of the base-metals pack, is there any pocket where a short-term uptrend is likely?


    In the base metals pack, Nickel is likely to go higher for in 2016. While in the near term, Chinese slowdown remains a cause of concern, for base metal prices. We are expecting base metal may remain in bearish mode in the near to medium term.

  • P


    In the forthcoming Budget what would you look for in precious metals?


    The cut in import duty on gold is a demand from the jewellery industry to the government. This budget should focus on this issue, besides, there will be no additional surprise for the precious metals pack in the budget. However any major decision on economy front which may depreciate ruppee will give support to the precious metals prices.

  • N


    Will India benefit from the commodity price collapse?


    Yes, since India is an importing nation, the benefit of lower prices will trickle down to the economy.

  • A


    With rising uncertainties in various forms such as the geo-political tensions, sell-off in crude oil prices and global economy not picking up pace what is your outlook on gold for 2016?


    The geo-political tensions has taken a back seat for the time being, while sell of in crude prices has continued for two years in a row. Low oil prices will lower the inflationary scenario for gold and cap any price rally in the yellow metal. We are expecting Gold prices may turn back from lower levels and may seen between the price range of $1050 to $1150 per ounce.

  • V


    The ratio of gold to silver averaged 73 in the first half of 2015. What was the ratio in the second half of 2015 and will silver came a back as one of the favoured assets of 2016?


    Ratio of gold to silver has averaged 73 in first half of 2015, while it hover around 67 in the second half of 2015. However, this ratio is of significance with a complex sett of factors surrounding gold fundamentals which is dependent on how the US economy grow from hereon. Whether the US Federal Reserve raises interest rates gradually in 2016 or not, how low investment and physical demand is in 2016. As the ratio is not of much significance now it used to be of great significance when the volatility in both the asset was high now the volatility has reduced drastically.

  • P


    How have zinc prices panned out in the latter half of 2015 and what is your outlook on the same for the first half of 2016?


    Despite major supply cuts in the earlier part of 2015, Zinc prices did not get a breather as demand continues to stagnate and production cuts are not enough to balance the markets. Currently Zinc is hovering around Rs 101 on MCX. Technically zinc is looking weak and following bearish trend from last 9 months. We are expecting it may still in bearish trend and may touch 85 - 90 levels in the first half of 2016.

  • A


    Is Nickel, which is used for production of steel, going through a consolidation phase in the domestic market and what is your outlook for the base metal in the near to medium term?


    In the base metals pack, Nickel is likely to go higher for in 2016. While in the near term, Chinese slowdown remains a cause of concern, for base metal prices. As per the Technical chart prices are on over sold zone and we are expecting bounce back from lower levels. Currently prices are hovering around Rs 580 on MCX and It may touch Rs 650 to Rs 700 levels in near to medium term.

  • R


    What is your outlook on sugar prices for the first half of 2016?


    In 2015, prices have touched lowest levels in six years in Jul’15 and then recovered quite steeply during the second half. Overall, the prices closed higher by 16.5 per cent. In 2016, sugar is looking bullish, as world is moving into sugar deficit situation. Sugar fundamentals are also increasingly bullish sugar growing states like Maharashtra and Uttar Pradesh received below normal rains. Thus is is believed that, Indian farmers replaced cane with less water-intensive crops. Going forward the production of sugar may decline as India and Brazil may produce more ethanol from the sugar cane crush. The production cut and government policies in favor of ethanol usages in India and Brazil may provide much needed upside shock to sugar prices, in a scenario of global glut. Rising ethanol demand in Brazil following higher taxes for gasoline may be a bullish sign for the sugar as the mills may produce more ethanol than sugar. Moreover, the prospects for strong El Nino could provide the direction to sugar prices as it is affecting the production in Brazil, India and Thailand due to extreme weather related activity like floods, droughts or other events. Favorable government policy decision for the sugar sector, to reduce burden on sugar mills by paying directly to farmers, increasing cess on sugar and mandating ethanol blending from 5 per cent to 10 per cent in petrol may surge sugar prices from the current levels to touch Rs 3,500 per quintal or more in 2016.

  • P


    Rupee has weakened to nearly three-year lows and is seen heading towards Rs 70 to the US dollar. What levels do you forsee for the rupee if the US Fed decided to hike rates again in 2016?


    The Federal Reserve in its December’15 meeting decided to lift its interest-rate target from near zero levels and have also signaled a gradual increase of 1.375 percent by the end of 2016. This could prompt funds to move from emerging markets such as India to the US due to which the demand for American currency will increase thereby dragging the Indian Rupee lower. In order to curb this problem, both the government and RBI have been trying hard to revive the Indian economy so as to make it a favorable investment destination for the global investors. In the coming months, Prime Minister Narendra Modi will inaugurate the Make in India Week in Mumbai from February 13-18, 2016 a mega event in which the government expects participation of over a 1,000 companies and delegates from over 60 countries.This will revive the investment climate and boost foreign inflows thereby helping the Indian economy to grow and keep the Indian Rupee stabilized in times of crisis.

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