New year brings fresh highs for commodity prices

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Copper prices hit record peaks and oil futures reached the highest levels for two years as investors reacted to solid US economic data in the first trading week of 2011.

Official figures published Friday showed US unemployment fell sharply to 9.4 percent in December, its lowest level since May 2009.

The American economy created 103,000 jobs, many fewer than expected, but the unemployment rate blew expectations out of the water, easing from 9.8 percent.

The release sparked hope of a brighter economic outlook, after an ADP report earlier in the week showed a sharp rise in private sector hiring.

BASE METALS: Copper struck a record-high of $9,754 a tonne, boosted by strong Asian demand and supply disruptions for industrial metal that is used to make electrical wiring and pipes.

However its price fell over the week as traders banked their healthy profits ahead of the weekend.

"We forecast copper to have the most constructive fundamentals among the base metals, with the likelihood that supply growth will again lag behind demand growth, significantly expanding the market deficit in 2011," said Barclays Capital analyst Yingxi Yu.

By late Friday on the London Metal Exchange (LME), copper for delivery in three months jumped to $9,448.50 a tonne from $9,650 a week earlier.

Three-month aluminium climbed to $2,529.50 a tonne from $2,468.25.

Three-month lead grew to $2,627 a tonne from $2,562.

Three-month tin decreased to $26,350 a tonne from $26,800 a week earlier.

Three-month zinc gained to $2,434 a tonne from $2,352.75.

Three-month nickel declined to $24,510 a tonne from $24,750.

OIL: The oil market began 2011 with a bang, striking two-year peaks Monday on the back of confidence in increased global energy demand after the US economy showed more signs of recovery.

New York's light sweet crude hit $92.10 a barrel, reaching a level last seen in October 2008, and London Brent oil struck a similar multi-year peak at $96.17.

"Oil sentiment has turned decidedly bullish, partly driven by unusually cold weather, but more due to an increasingly optimistic consensus view on 2011 economic performance, especially for the US," analysts at JPMorgan Chase said.

This week, the market also digested news of a larger-than-expected fall in American crude inventories, which indicated stronger demand in the world's biggest oil consuming nation.

The US government's Department of Energy reported that stockpiles of crude oil slumped by 4.2 million barrels during the final week of 2010. Analysts had forecast a drop of 2.2 million barrels.

The International Energy Agency meanwhile warned that high oil prices were in danger of threatening a fragile economic recovery in developed nations during 2011.

By Friday afternoon on London's Intercontinental Exchange, Brent North Sea crude for delivery in February jumped to $94.16 a barrel from $93.08 a week earlier.

On the New York Mercantile Exchange, Texas light sweet crude for February, eased to $89.26 a barrel from $89.71.

PRECIOUS METALS: Silver hit the highest point for almost 31 years and palladium struck a near-decade peak on strong demand for the metals used heavily by industry.

"We reiterate our view that palladium should again be the best performer of the precious metals complex in 2011," said BNP Paribas analyst Anne-Laure Tremblay.

"The market deficit is likely to continue to increase. Moderate growth in supply, both from mining and recycling, may not match strong growth in demand, particularly in the autocatalyst and industrial sectors, which will continue to benefit from strong emerging market economic growth."

Silver prices hit $31.23 dollars an ounce -- a level last seen in March 1980. Palladium struck $807.72 for the first time since March 2001.

By late Friday on the London Bullion Market, gold dropped to $1,367 an ounce from $1,410.25 a week earlier.

Silver fell to $28.39 an ounce from $30.63.

On the London Platinum and Palladium Market, platinum edged up to $1,735 an ounce from $1,731.

Palladium retreated to $754 an ounce from $791.

COCOA: Cocoa prices slid as markets awaited possible military intervention in key producer Ivory Coast.

Laurent Gbagbo's stand-off with the world intensified Friday after Britain and Canada rejected his expulsion of their envoys, insisting they only recognise his rival.

Regional powers are mulling military intervention to remove Gbagbo in favour of the man the world says beat him in democratic elections, Alassane Ouattara, although neighbouring Ghana said it is opposed to the use of force.

"The political unrest in Ivory Coast has evidently not had any effects on cocoa supply so far," Commerzbank analysts said in a note to clients.

By Friday on LIFFE, London's futures exchange, cocoa for March slipped to £1,913 a tonne from £2,013 a week earlier.

On the New York Board of Trade (NYBOT), cocoa for delivery in March dropped to $2,863 a tonne from $3,007 a week earlier.

COFFEE: Coffee prices dipped in London and New York.

By Friday on NYBOT, Arabica for delivery in March fell to 233.85 cents a pound from 238.50 cents a week earlier.

On LIFFE, Robusta for March decreased to $2,028 a tonne by Friday from $2,077 a week earlier.

SUGAR: Sugar futures edged higher but failed to hit new 30-year highs on the back of strong Asian demand and weak global supplies.

The previous week, sugar had hit 34.77 US cents a pound in New York, reaching a level last seen in 1981.

By Friday this week on NYBOT, the price of unrefined sugar for delivery in March rose to 31.63 US cents a pound from 31.62 cents a week earlier.

On LIFFE, the price of a tonne of white sugar for March increased to £777.20 from £770 a week earlier.

GRAINS AND SOYA: Soya, maize and wheat prices all fell.

By Friday on the Chicago Board of Trade, March-dated soyabean meal -- used in animal feed -- dropped to $13.71 a bushel from $14.03 a week earlier.

Maize for delivery in March dipped to $6.01 a bushel from $6.29.

Wheat for March decreased to $7.87 from $7.94.

RUBBER: Malaysian rubber prices hit fresh historic highs, as strong demand outpaced limited supply with production entering the low yielding wintering season, dealers said.

The Malaysian Rubber Board's benchmark SMR20 rose to 506.45 US cents a kilo from 486.70 cents a week earlier.

© 2011 AFP

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