MTECHTIPS COMMODITY MARKET NEWS 5

MTECHTIPS:-Thermal Coal: Strike, weather potential agents for supply disruption

With no foreseeable major demand catalyst to bring prices higher, and few producers demonstrating the inclination to adjust volumes, the primary risk to the upside in thermal coal may be a supply side disruption either in the form of wider strike action or weatherrelated effects. As of yet there is no clear sign that these factors will in fact materialise, said Deutsche Bank in a report.Unlike precious metals production, thermal coal production in South Africa has so far escaped major disruptions on account of labour unrest. The exceptions are the Umlabu mine workers, which have been on strike since 24 October along with the Mooiplaats mine since 22 September.Australian and Russian thermal coal production saw yoy increases in Q3-2012 despite Newcastle and Russia West FOB prices being 28% and 29% lower yoy. At current Newcastle prices, 11% of Australian export volume is uneconomic, and Russia West prices suggest that as much as 55% of Russian production is uneconomic.Widespread signs of a production response are lacking, and Deutsche Bank is therefore neutral to negative on thermal coal pricing in the near term despite the already-low level relative to marginal costs.

MTECHTIPS:-Gold futures little changed as stronger dollar weighs

Gold futures were little changed during European morning trade on Monday, as the fiscal uncertainty surrounding Spain and Greece continued to drive investors to the relative safety of the U.S. dollar. Growing expectations the Bank of Japan will introduce more monetary easing measures at its next policy meeting on October 30 supported the precious metal.On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,711.65 a troy ounce during European morning trade, nearly flat on the day.Prices held in a tight trading range of USD1,717.85 a troy ounce, the daily high and a session low of USD1,710.85 a troy ounce. Gold futures fell to a seven-week low of USD1,699.65 a troy ounce on October 24.Gold prices were likely to find support at USD1,688.85 a troy ounce, the low from September 7 and resistance at USD1,731.25, the high from October 22.Trading activity was expected to remain thin on Monday, as a result of the first unscheduled, market-wide shut down since September 2001, as Hurricane Sandy approached the northeastern U.S.Golds losses came as the euro re-approached a three-week low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.27% to trade at 80.32, close to a sevenweek high. A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.Markets were jittery amid ongoing uncertainty over whether Spain is preparing to request a bailout from its euro zone partners, which would activate a bond buying program by the European Central Bank.

MTECHTIPS:-Crude oil re-approaches 3-month low with Sandy in focus

Crude oil futures were under pressure during European morning hours on Monday, re-approaching last weeks three-month low as traders monitored the trajectory of Hurricane Sandy.On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD85.54 a barrel during European morning trade, dropping 0.85%.New York-traded oil prices fell by as much as 1% earlier in the day to hit a session low of USD85.36 a barrel. Futures fell to a three-month low of USD84.95 a barrel on October 24.Trading activity was expected to remain thin on Monday, as

Hurricane Sandy approached the northeastern U.S.NYMEX floor trading will remain closed, according to exchange operator CME Group, while electronic trading of energy and other NYMEX products will be unaffected.The U.S. National Hurricane Center said earlier that Sandy will likely make landfall near New York late-Monday or early-Tuesday. The storms maximum sustained winds strengthened to 85 miles per hour.Sandy is forecast to converge with two other systems, creating a phenomenon the National Weather Service dubbed Frankenstorm. Oil prices remained on the back foot, as increasing concerns over the outlook for global economic growth and the impact on future oil demand prospects dampened the appeal of the commodity.Investors were jittery amid ongoing uncertainty over whether Spain is preparing to request a bailout from its euro zone partners, which would activate a bond buying program by the European Central Bank.Meanwhile, doubts over whether Greece can meet austerity targets demanded by the troika mounted after the countrys opposition leaders said his party would vote against an austerity package expected to go before parliament later this week.The euro re-approached a three-week low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.27% to trade at 80.32, close to a seven-week high.

MTECHTIPS:-Copper drops to 8-week low as global growth concerns weigh

Copper futures fell to the lowest level since early-September during European morning hours on Monday, as ongoing concerns over the outlook for global growth and lingering uncertainty over Spain and Greece dampened the appeal of growth-linked assets.On the Comex division of the New York Mercantile Exchange, copper futures for December delivery traded at USD3.510 a pound during European morning trade, tumbling 1.1%.Earlier in the day, prices fell by as much as 1.2% to hit a session low of USD3.508 a pound, the cheapest level since September 7.Trading activity was expected to remain thin on Monday, as a result of the first unscheduled, market-wide shut down since September 2001, as Hurricane Sandy approached the northeastern U.S.Copper prices have been under heavy selling pressure in recent sessions, losing nearly 9% since touching a four-month high of USD3.838 in mid-September, as increasing concerns over the outlook for global economic growth and the impact on future demand prospects dampened the appeal of the commodity.Investors were jittery amid ongoing uncertainty over whether Spain is preparing to request a bailout from its euro zone partners, which would activate a bond buying program by the European Central Bank.Later Monday, Spanish Prime Minister Mariano Rajoy was to hold talks with Italian Prime Minister Mario Monti in Madrid, to discuss the crisis in the euro zone.