Commodity prices slide before EU debt summits

21st October 2011, Comments 0 comments

Commodity prices mostly fell this week on eurozone debt tensions, weaker-than-expected Chinese growth data and the death of Moamer Kadhafi, the former strongman in oil-producer Libya.

There were late rallies however on hopes that European leaders would use summit meetings Sunday and next Wednesday to find a concrete solution to the eurozone debt crisis.

OIL: Oil prices were mixed as traders reacted to weaker-than-expected economic growth figures in China -- the world's biggest energy consumer.

China said economic growth slowed to a still-impressive 9.1 percent in the third quarter, as government efforts to tame inflation and turbulence in Europe and the US curbed activity.

The world's second-largest economy grew 9.5 percent in the second quarter and the third quarter outcome was its lowest rate in two years.

Oil market attention was also on Libya where Kadhafi was killed Thursday in a final assault on the last pocket of loyalist resistance in his hometown Sirte.

Libya's oil output has risen to more than 350,000 barrels per day (bpd) in recent weeks after slowing to a trickle during heavy fighting.

A key African oil exporter, Libya produced about 1.6 million bpd before the rebellion against Kadhafi broke out at the start of 2011.

Around 85 percent of Libyan oil output was exported to Europe, with the disappearance of its high quality light sweet crude from the market one of the reasons why Brent crude has traded much higher than oil quoted on US exchanges.

OPEC sees member Libya restoring production to one million bpd within six months, then attaining pre-conflict levels by the end of 2012.

By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in December stood at $110.77 a barrel compared with $114.18 for the expired November contract a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for December, traded at $87.93, up from $86.51 for the November contract.

PRECIOUS METALS: Prices mostly retreated.

"The metals as a whole remain vulnerable to further weakness should eurozone leaders again fail to agree on sufficient funding facilities, prompting another rush to generate liquidity," said FastMarkets analyst James Moore.

By late Friday on the London Bullion Market, gold fell to $1,642.50 an ounce from $1,678 the previous week.

Silver dropped to $30.80 an ounce from $31.82.

On the London Platinum and Palladium Market, platinum slipped to $1,510 an ounce from $1,553.

Palladium edged up to $616 an ounce from $614.

BASE METALS: Industrial metals fell across the board.

"The biggest casualty was copper ... setting off substantial weakness in lead, zinc, nickel, and aluminum, with all four metals crashing to fresh 2011 lows," said MF Global analyst Ed Meir.

By late Friday on the LME, copper for delivery in three months tumbled to $7,163 a tonne from $7,511 the previous week.

Three-month aluminium fell to $2,137 a tonne from $2,216.

Three-month lead dropped to $1,910 a tonne from $2,026.

Three-month tin slipped to $21,799 a tonne from $21,950.

Three-month zinc retreated to $1,815 a tonne from $1,921.

Three-month nickel edged down to $18,850 a tonne from $18,851.

COCOA: Prices hit the lowest levels for more than two years on ample supplies following record output in Ivory Coast and Ghana -- the world's biggest cocoa exporters, dealers said.

Cocoa prices on Tuesday dropped to £1,652 a tonne in London and $2,523 a tonne in New York -- the lowest since July 2009.

"The positive production outlook in west Africa should prevent higher cocoa prices on a lasting basis," said Commerzbank analyst Carsten Fritsch.

By Friday on LIFFE, London's futures exchange, cocoa for delivery in December fell to £1,678 a tonne from £1,707 the previous week.

In New York on the NYBOT-ICE, cocoa for December decreased to $2,583 a tonne from $2,655.

COFFEE: Coffee tumbled in London to a 10-month low of $1,805 a tonne on expectations of a strong Brazilian crop.

By Friday on LIFFE, Robusta for delivery in November slumped to $1,856 a tonne from $1,995 a week earlier.

On NYBOT-ICE, Arabica for December dropped to 236.40 US cents a pound from 240.95 US cents.

SUGAR: Prices firmed in a tight supply situation.

By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in March rose to 27.06 US cents a pound from 26.91 cents a week earlier.

On LIFFE, the price of a tonne of white sugar for December was up to £700.50 from £692.30.

GRAINS AND SOYA: Maize and wheat prices rose, while soya dropped.

By Friday on the Chicago Board of Trade, maize for delivery in December gained to $6.61 a bushel from $6.40 a week earlier.

Wheat for December rose to $6.44 a bushel from $6.22.

November-dated soyabean meal -- used in animal feed -- dropped to $12.35 a bushel from $12.70.

RUBBER: Rubber prices slipped.

The Malaysian Rubber Board's benchmark SMR20 dropped to 392.25 US cents a kilo from 420.80 US cents the previous week.


© 2011 AFP

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