Commodity prices mixed in volatile week

16th July 2010, Comments 0 comments

Raw material prices traded mixed this week as dealers assessed the outlook for demand amid weaker economic data in the United States and China -- the world's biggest commodity consumers.

OIL: Oil prices fell during volatile trading.

"Some economic data in the United States are signalling slower economic growth and that has put a lid on any price rally," said Victor Shum, an analyst with energy consultancy Purvin and Gertz.

He said that oil prices were likely to trade between 70 and 80 dollars a barrel for some time.

"There is really no big driver to cause oil to break out of this range," Shum added.

The strength of the economic rebound in the United States is being closely watched by investors because it consumes more energy than any other country in the world.

Economic indicators this week signalled slowing growth in the United States and China. The Federal Reserve said US growth figures were trimmed at a June meeting of its policy-setting Federal Open Market Committee (FOMC).

Meeting minutes showed that board members had cut their growth forecast to 3.0-3.5 percent this year, down from the 3.2-3.7 predicted just months ago, and that the Fed was weighing new measures to keep the faltering US recovery on track.

Meanwhile the Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's crude, this week forecast a 1.2-percent increase in global oil demand growth in 2011.

In its latest monthly report, OPEC held its forecast for world oil demand growth for 2010 steady at 1.1 percent, or an extra 0.95 million barrels per day (bpd).

Oil prices had soared in value on Tuesday, as the dollar weakened and the International Energy Agency (IEA) forecast that demand for the commodity was projected to increase slightly this year.

By late Friday on the New York Mercantile Exchange, Texas light sweet crude for delivery in August fell to 75.60 dollars a barrel from 76.04 dollars the previous week.

On London's Intercontinental Exchange, Brent North Sea crude for September delivery stood at 74.96 dollars compared with 75.39 dollars for the August contract which expired this week.

PRECIOUS METALS: Gold prices dropped under 1,200 dollars an ounce on profit-taking after being the "out-performer in the precious metals complex over the past few months", said Deutsche Bank analyst Adam Sieminski.

The metal hit an all-time peak of 1,265.30 dollars an ounce on June 21.

By late Friday on the London Bullion Market, gold fell to 1,189.25 dollars an ounce from 1,208.75 dollars the previous week.

Silver rose to 18.25 dollars an ounce from 17.87 dollars.

On the London Platinum and Palladium Market, platinum fell to 1,505 dollars an ounce from 1,527 dollars.

Palladium increased to 456 dollars an ounce from 454 dollars.

BASE METALS: Base metal prices dropped amid weaker manufacturing across Asia.

"We believe the weakness in Asian industrial production will sustain downside risks to the sector," said Sieminski.

By Friday on the London Metal Exchange, copper for delivery in three months had slipped to 6,483 dollars a tonne from 6,722 dollars a week earlier.

Three-month aluminium fell to 1,978 dollars a tonne from 2,000 dollars.

Three-month lead decreased to 1,770 dollars a tonne from 1,835 dollars.

Three-month tin dropped to 17,600 dollars a tonne from 17,690 dollars.

Three-month zinc declined to 1,791 dollars a tonne from 1,880 dollars.

Three-month nickel slid to 18,975 dollars a tonne from 19,440 dollars.

COCOA: Cocoa prices climbed "on the back of the release of strong second quarter North American cocoa grindings data", said Barclays analyst Sudakshina Unnikrishnan.

By Friday on LIFFE -- London's futures exchange -- the price of cocoa for delivery in September rose to 2,452 pounds a tonne from 2,378 pounds the previous week.

On the New York Board of Trade (NYBOT), the September cocoa contract gained to 3,166 dollars a tonne from 2,999 dollars.

SUGAR: Sugar prices firmed.

"While the International Sugar Organisation ... expects a further price decrease for sugar in the next crop year due to the massive increases in production in Brazil and India, we remain cautiously positive for the time being," said Commerzbank analysts

"We do not think that possible supply shortages are sufficiently reflected in the current price."

By Friday on NYBOT, the price of unrefined sugar for delivery in October rose to 17.19 US cents a pound from 17.18 cents the previous week.

On LIFFE, the price of a tonne of white sugar for October increased to 527 pounds from 519.10 pounds.

COFFEE: Coffee futures advanced.

By Friday on LIFFE, Robusta for delivery in September advanced to 1,758 dollars a tonne from 1,714 dollars the previous week.

On NYBOT, Arabica for September increased to 167.10 US cents a pound from 164.70 cents.

GRAINS AND SOYA: Maize, soya and wheat prices extended gains.

"Grains prices continued to rise, hitting multi-month highs and reflecting the bullish implication of recent production downgrades spurred by adverse weather conditions," said analysts at Barclays.

By Friday on the Chicago Board of Trade, maize for delivery in December jumped to 4.03 dollars a bushel from 3.95 dollars the previous week.

November-dated soyabean meal -- used in animal feed -- rose to 9.86 dollars from 9.53 dollars.

Wheat for September rallied to 5.86 dollars a bushel from 5.38 dollars.

RUBBER: Malaysian rubber prices declined.

The Malaysian Rubber Board's benchmark SMR20 contract fell to 285.90 US cents a kilo from 293.60 cents a week earlier.


© 2010 AFP

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