LONDON, March 13, (AFP): Commodity prices diverged this week as traders reacted to a mixed demand outlook for raw materials.
Oil: World oil prices rose this week as traders eyed demand concerns, the US dollar and hopes of global economic recovery.
“The continued economic optimism buoyed the oil price above the mark of $82 per barrel,” said Commerzbank analyst Eugen Weinberg.
Crude oil began the week with slender gains on Monday as the euphoria faded from upbeat US jobs data that had boosted prices the previous week.
The market then drifted lower on Tuesday, under pressure from a stronger greenback, which makes dollar-priced oil more expensive for buyers using weaker currencies, and tends to dent demand. But prices rose Wednesday after news of a drop in crude oil and distillate stockpiles in the United States that suggested stronger demand in the world’s largest energy consumer as it emerges from recession.
Strong economic data from China, the number-two energy consumer, also lifted the market after the Asian powerhouse revealed surging exports.
China said its exports soared for the third straight month in February and at their fastest pace in three years.
But oil prices ended mixed on Thursday as the market weighed prospects for global economic recovery ahead of next week’s production meeting of the Organization of Petroleum Exporting Countries (Opec).
Opec ministers were widely expected to leave production quotas unchanged at the gathering on March 17.
The cartel’s president, Ecuadoran Oil Minister Germanico Pinto, said Opec anticipates no change in oil production quotas at the Vienna meeting.
On Friday meanwhile, oil clawed back some ground as the International Energy Agency reported strong growth in world energy demand, led by China.
Emerging markets are driving growth of world oil demand this year with a big boost from China, despite a fall in advanced economies, the International Energy Agency said on Friday.
The IEA warned that demand for oil, a strong indicator of economic activity, would not recover in advanced economies overall this year, but was signalling an “astonishing” growth trend of 28 percent in China.
But it raised its forecast for global demand in 2010 to 86.6 million barrels per day (mbd) from its projection last month of 86.5 mbd — a 1.8-percent increase from 2009 demand levels.
Base metals: Copper prices retreated on fears of a drop in Chinese demand.
Prices had jumped the previous week on better-than-expected US jobs data and following a massive earthquake in Chile, the world’s largest producer of copper.
This week all eyes were on Chinese data showing consumer prices in China rose for the fourth month running in February and a sharp slowdown in new lending. Analysts said the jump in inflation would not trigger a knee-jerk response from policymakers in the world’s third-largest economy but the figures raised the prospect of more drastic tightening measures later in the year.
By Friday on the London Metal Exchange, copper for delivery in three months fell to $7,493 a tonne from $7,600 the previous week.
Three-month aluminium dropped to $2,243 a tonne from $2,258.
Three-month lead rose to $2,280 a tonne from $2,260.
Three-month tin grew to $17,600 a tonne from $17,524.
Three-month dipped to $2,355 a tonne from $2,356.
Three-month nickel slid to $21,749 a tonne from $22,750.
Precious metals: Palladium was the star performer among precious metals, hitting a two-year high of $480 an ounce, before ending the week lower on profit-taking. The metal was boosted by strong vehicle sales in China. Palladium is used to make catalytic converters.
By Friday on the London Bullion Market, gold fell to $1,106.25 an ounce from $1,135 the previous week.
Silver rose to $17.31 an ounce from $17.25.
On the London Platinum and Palladium Market, platinum jumped to $1,619 an ounce from $1,578,
Palladium dipped to $464 an ounce from $466.
Sugar: Prices fell further, extending recent losses after hitting a 33-year high at the start of the month.
On LIFFE, London’s futures exchange, the price of a tonne of white sugar for May slid to £541.70 from £600.
Cocoa: Cocoa prices recovered after recently volatility amid unrest in top producer Ivory Coast.
On the NYBOT, the May cocoa contract grew to $2,859 a tonne from $2,836.
Coffee: Coffee prices struck a three-year low in London of $1,214 a tonne on Tuesday on expectations of a stronger-than-expected harvest in Brazil.
On the NYBOT, Arabica for May climbed to 134.40 US cents a pound from 130.50 cents.
Grains and soya: Grains and soya prices retreated.
May-dated soyabean meal — used in animal feed — dropped to $9.30 from $9.42.
Wheat for May was down to $4.80 a bushel from $4.93.
Rubber: Malaysian rubber prices rose amid strong demand from Japan, the world’s second largest economy, traders said.
On Friday, the Malaysian Rubber Board’s benchmark SMR20 rose to 318.35 US cents a kilo from 313.25 cents a week earlier.