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22 December 2010

Top 3 Commodity Picks for 2011

Forget about supply and demand issue of commodity, everyone knows the main mover now is Emerging Market, especially China. As long as US economy not yet recovered, China was expected to continue its great appetite to consume commodities globally. Not for its consumptions, but mainly because of China's currency management.


China, already the largest creditor of US by holding USD which was slipping with a series of quantitative easing programs, would definitely forced China to diversify its holding elsewhere. However, China would hand-picking according to its own local demand. As such, Finance Malaysia forecasts those commodities which were used heavily in construction, infrastructure, production will continue to perform in 2011.


 
Top pick #1: Palladium
One in four goods manufactured today either contain platinum group metals or the platinum group metals play a major role during their manufacturing process. Palladium was used in many electronics including computers, mobile phones, multi-layer ceramic capacitors, LCD televisions.

Top pick #2: Silver
Being a precious metal, silver is used to make ornaments, jewelry, high-value tableware, and  currency coins. Today, silver metal is also used in electrical contacts and conductors.

Top pick #3: Copper
About 98% of all copper is used as the metal, taking advantage of distinctive physical properties - being malleable and ductile, a good conductor of both heat and electricity, and being resistant to corrosion. It is widely used in piping for water supplies, refrigeration and air conditioning.


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