Commodities prices end golden year on record note

31st December 2010, Comments 0 comments

Copper prices struck all-time highs and silver hit the highest level for 30 years during a shortened trading week as commodities ended a record-breaking year in rampant style.

It has been a remarkable 2010 for trading of raw materials, with gold futures also striking a record peak as the precious metal benefited from its status as a safe-haven investment in times of economic uncertainty.

BASE METALS: Copper hit 9,675 dollars a tonne this week -- its highest level on record. The metal used in electrical wiring and pipes -- has been winning support from strong Asian demand and supply disruptions.

Other notable price risers across the base metals complex in 2010 were nickel, which soared 31 percent and aluminium which increased by a tenth.

"The outlook for both the base and precious metals looks upbeat for the moment," said analysts at research group

"Copper (is) set for further gains as near-term tightness continues."

By late Friday on the London Metal Exchange (LME), copper for delivery in three months jumped to 9,650.50 dollars a tonne from 9,339.50 dollars a week earlier.

Three-month aluminium climbed to 2,468.25 dollars a tonne from 2,446 dollars.

Three-month lead grew to 2,562 dollars a tonne from 2,448 dollars.

Three-month tin increased to 26,800 dollars a tonne from 26,650 dollars a week earlier.

Three-month zinc gained to 2,352.75 dollars a tonne from 2,314 dollars.

Three-month nickel advanced to 24,750 dollars a tonne from 23,900 dollars.

PRECIOUS METALS: Silver's rally this week was joined by palladium which ended the year by reaching the highest level since 2001.

Silver reached a 30-year high of 30.90 dollars an ounce on Thursday after main producer Peru announced a drop in output.

The metal used in jewellery and industry has soared by about 83 percent in 2010, aided also by the rise of sister metal gold, which soared to a record high of 1,431.25 dollars an ounce in December thanks to fears over the eurozone debt and deficit crisis.

Gold is also a hedge against inflation, which is on the rise as countries experience economic recovery.

By late Friday on the London Bullion Market, gold advanced to 1,413.35 dollars an ounce from 1,380.50 dollars a week earlier.

Silver climbed to 30.63 dollars an ounce from 29.07 dollars.

On the London Platinum and Palladium Market, platinum increased to 1,748.75 dollars an ounce from 1,725 dollars.

Palladium gained to 796.25 dollars an ounce from 764 dollars.

OIL: Oil prices fell as US data showed the country's crude stocks had declined less than expected.

"The slight drop in crude price... is likely due to US weekly data indicating lower-than-expected crude oil inventories drawdown," said Barclays Capital analyst Chen Xin Yi.

Figures released Thursday by the US Department of Energy showed crude stockpiles had fallen by much less than expected, even given the cold weather in much of the United States.

Crude stocks fell by 1.3 million barrels, much lower than the nearly three million barrel drop that market analysts were predicting.

The United States is the world's biggest oil consuming nation and the weekly stocks report is widely monitored by the market.

Crude prices had shot to 26-month highs above 94 dollars the previous week on the cold weather as well as upbeat US data.

By Friday afternoon on London's Intercontinental Exchange, Brent North Sea crude for delivery in February dipped to 93.08 dollars a barrel from 93.46 dollars a week earlier.

On the New York Mercantile Exchange, Texas light sweet crude for February dropped to 89.71 dollars a barrel from 91.51 the previous week.

COCOA: Cocoa prices fell as forecasts of strong supplies helped to offset fears of rising unrest in Ivory Coast, the commodity's biggest producer.

"The market will be on tenterhooks as the situation on the ground remains tense and could easily erupt into violence, which in turn could disrupt supplies," said Kona Haque, at analyst at Macquarie investment group.

"However, cocoa production globally is set to expand 6-7 percent this season thanks to almost-perfect weather in Africa."

France on Friday advised its citizens in Ivory Coast, "in particular families with children," to temporarily leave the West African state because of the political crisis there.

Around 14,000 French citizens live in the former French colony where Laurent Gbagbo is refusing to hand over power to his rival Alassane Ouattara, who is internationally recognised as the winner of November's presidential elections.

Cocoa futures meanwhile reached 33-year peaks in 2010 following strong buying from speculators.

By Friday on LIFFE, London's futures exchange, cocoa for March slipped to 2,013 pounds a tonne from 2,022 pounds a week earlier.

On the New York Board of Trade (NYBOT), cocoa for delivery in March dropped to 3,007 dollars a tonne on Thursday from 3,020 dollars a week earlier.

COFFEE: Coffee prices rose at the end of a year in which they have reached the highest levels for 13 years in New York owing to tight Brazilian supplies.

By Thursday on NYBOT, Arabica for delivery in March climbed to 238.50 cents a pound from 235.90 cents a week earlier.

On LIFFE, Robusta for March gained to 2,077 dollars a tonne by Friday from 1,998 dollars a week earlier.

SUGAR: Sugar futures reached fresh 30-year highs thanks to strong Asian demand amid weak global supplies but closed the week lower on profit-taking.

Sugar hit 34.77 US cents a pound in New York on Wednesday, reaching a level last seen in 1981.

On NYBOT, the price of unrefined sugar for delivery in March slid to 31.62 US cents a pound from 33.98 cents a week earlier.

By Friday on LIFFE, the price of a tonne of white sugar for March fell to 770 pounds from 820 pounds a week earlier.

GRAINS AND SOYA: Soya and maize prices hit the highest points since August 2008 amid drought in Argentina.

"For the most part, we are focusing on the South America weather. Argentina has been dry, we have some supply concerns," said Frank Cholly, an analyst at Lind Waldock brokers.

Wheat prices meanwhile also struck two-year highs earlier this year after rallying 80 percent in the wake of Russia's move to halt exports because of a domestic drought.

By Thursday on the Chicago Board of Trade, March-dated soyabean meal -- used in animal feed -- climbed to 13.76 dollars a bushel from 13.60 dollars a week earlier.

Maize for delivery in March gained to 6.16 dollars a bushel from 6.14 dollars.

Wheat for March increased to 7.84 dollars from 7.83 dollars.


© 2010 AFP

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