Bloomberg News

Nickel Open Interest to Gain From Rebalancing, SocGen Says

December 14, 2011

(Adds sugar, cotton and Brent oil in third paragraph and change in GSCI index in last.)

Dec. 14 (Bloomberg) -- Nickel and zinc traded on the London Metal Exchange and wheat traded on the Chicago Board of Trade should benefit the most from the rebalancing of benchmark commodity indexes in January, Societe Generale said.

Nickel has dropped 30 percent this year on the LME, heading for the first loss since 2008, as escalating debt woes in Europe and the U.S. eroded prospects for the global economy. Zinc is down 25 percent for the year. Wheat has declined 27 percent in 2011.

Sugar and cotton traded on ICE Futures U.S. in New York and Brent oil on the London-based ICE Futures Europe will also “experience a significant increase” in open interest, or contracts outstanding, analyst Remy Penin in London said in a report e-mailed today.

Crude oil in New York and gold and silver on the Comex may see declines in open interest as a result of the re-weightings, the bank said.

About $74.2 billion tracks the Standard & Poor’s GSCI gauge and $77.3 billion the Dow-Jones UBS index, Societe Generale said. The GSCI index of 24 commodities is down 1.6 percent this year, heading for the first decline since 2008.

--Editors: Millie Munshi, Daniel Enoch

To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net

To contact the editor responsible for this story: Patrick McKiernan at pmckiernan@bloomberg.net


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