Base metals slide but gold, oil prices gain

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Prices of industrial metals slid this week as the ongoing eurozone debt crisis dented demand for copper and tin, but oil futures rose thanks to geopolitical tensions over Iran.

BASE METALS: Major industrial metals prices declined, except for aluminium.

"Base metal price action is all about the politics at present," said Barclays Capital analyst Gayle Berry.

"The continued rise in Italian bond yields and growing concerns over a Europe-wide collapse pulled metals prices lower ... Even in spite of some supportive supply side news and positive Chinese import data, copper prices have continued to slide to the lowest since the end of October.

"And with the markets and policymakers still as yet unclear on what shape a resolution to the European sovereign debt crisis will take, we expect base metals prices to come under further downward pressure," she added.

Strong doubts remained whether Italy and Greece could ultimately pay down or reduce their debt mountains without more turmoil in the eurozone where growth appears to have come to a virtual halt.

By late Friday on the London Metal Exchange, copper for delivery in three months fell to $7,623 a tonne from $7,832 the previous week.

Three-month aluminium rose to $2,169 a tonne from $2,143.

Three-month lead dropped to $1,996 a tonne from $2,031.

Three-month tin decreased to $21,700 a tonne from $22,100.

Three-month zinc slid to $1,912 a tonne from $1,943.

Three-month nickel retreated to $18,350 a tonne from $18,550.

PRECIOUS METALS: Gold prices won a small lift as the precious metal benefited from its status as a safe haven in times of economic unrest and geopolitical tensions.

"Given the ongoing high uncertainties and the current risk aversion, gold should remain well supported," said Commerzbank analyst Carsten Fritsch.

By late Friday on the London Bullion Market, gold nudged upward to $1,773 an ounce from $1,749 the previous week.

Silver fell to $33.77 an ounce from $33.95.

On the London Platinum and Palladium Market, platinum edged up to $1,628 an ounce from $1,623.50.

Palladium dropped to $651 an ounce from $682.

OIL: Crude oil prices advanced as concerns over Iran's nuclear plans offset eurozone worries.

The UN atomic watchdog released this week what it called "credible" intelligence suggesting that major oil producer Iran had worked on developing nuclear weapons.

The Vienna-based IAEA said it had "serious concerns" based on information indicating that the Islamic republic "has carried out activities relevant to the development of a nuclear explosive device."

With Washington threatening to increase international pressure on Iran and Israel's president stoking speculation of a pre-emptive strike, the IAEA report stoked tensions in the oil-rich Middle East.

Tehran maintains that its nuclear programme is exclusively civilian and peaceful in nature.

The IAEA report "could increase the risk of a military attack on Iran's nuclear facilities," analysts at Commerzbank said in a note to clients.

"We believe this justifies a certain risk premium on the price of oil."

By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in December jumped to $114.22 a barrel from $111.40 a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for December, rallied to $98.82 a barrel from $93.92.

COCOA: New York cocoa prices hit the lowest levels since July 2009 on bumper output of the commodity used to make chocolate.

"Cocoa prices slumped this week to their lowest level in more than two years, pressured by increased flow of main crop cocoa out of West Africa combined with broad-based weakness in commodity markets," said Barclays Capital analyst Kate Tang.

By Friday on LIFFE, London's futures exchange, cocoa for delivery in December dropped to £1,587 a tonne from £1,689 the previous week.

In New York on the NYBOT-ICE, cocoa for December slid to $2,505 a tonne from $2,730.

COFFEE: Coffee prices rebounded as the International Coffee Organization forecast lower-than-expected output in 2011-12.

By Friday on LIFFE, Robusta for delivery in January grew to $1,832 a tonne from $1,819 a week earlier.

On NYBOT-ICE, Arabica for December advanced to 230.05 US cents a pound from 227.80 US cents.

SUGAR: Prices extended losses as eurozone jitters offset forecasts of reduced output in Brazil, the world's biggest sugar exporter.

By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in March slipped to 25.18 US cents a pound from 25.79 cents a week earlier.

On LIFFE, the price of a tonne of white sugar for December declined to £660 from £679.

GRAINS AND SOYA: Maize, wheat and soya all fell.

By Friday on the Chicago Board of Trade, maize for delivery in December dropped to $6.41 a bushel from $6.55 a week earlier.

Wheat for December decreased to $6.12 a bushel from $6.36.

January-dated soyabean meal -- used in animal feed -- slid to $11.75 a bushel from $12.21.

RUBBER: Rubber prices fell sharply for a second week running, as traders reacted to the eurozone debt crisis, declining car sales in China, and lower vehicles output in Japan due to a shortage of parts from flood-hit Thailand.

The Malaysian Rubber Board's benchmark SMR20 slumped to 312.70 US cents a kilo from 368.30 cents the previous week.


© 2011 AFP

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