Raw material prices won support this week from upbeat Chinese economic data, while cocoa futures hit 11-month high points on tight supply fears, analysts said.
OIL: Oil prices fell over the week despite a rally on Friday in the wake of strong Chinese industrial output data that bolstered the outlook for the world’s top energy consumer.
Oil prices had dropped the previous four days on improving global supplies and owing to weakness across equity markets caused by concerns that the Federal Reserve could soon begin to withdraw its massive stimulus programme, traders said.
The International Energy Agency (IEA) on Friday trimmed its outlook for world oil demand growth over the next 18 months and highlighted threats to the dominance of producer cartel Opec.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in September fell to $107.52 a barrel from $108.92 a week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for September slipped to $105.41 a barrel from $106.81 a week earlier.
BASE METALS: Base or industrial metal prices rallied on Friday’s positive Chinese data as well as thanks to strong export figures out of China the previous day.
China’s imports and exports showed an unexpected jump in July, government data showed on Thursday in a positive sign for the Chinese economy, the world’s second-biggest after the US economy, after persistent weakness raised concerns over growth.
By Friday on the London Metal Exchange, copper for delivery in three months jumped to $7,276 a tonne from $7,063 a week earlier. Three-month aluminium climbed to $1,865.75 a tonne from $1,822. Three-month lead rose to $2,174 a tonne from $2,123. Three-month tin increased to $22,140 a tonne from $21,030. Three-month nickel advanced to $14,700 a tonne from $13,982. Three-month zinc gained to $1,945 a tonne from $1,881.25.
PRECIOUS METALS: Gold futures rallied on Friday to end steady over the week. “The higher than expected import growth indicates a Chinese domestic demand recovery, which will bode well for gold demand,” said brokers Sharps Pixley.
By late Friday on the London Bullion Market, the price of gold stood at $1,309 an ounce compared with $1,309.25 a week earlier. Silver climbed to $20.31 an ounce from $19.46. On the London Platinum and Palladium Market, platinum rose to $1,492 an ounce from $1,436. Palladium gained to $739 an ounce from $730.
COCOA: Prices reached 11-month peaks in London and the highest levels for eight months in New York trading on dry weather in leading producer Ivory Coast.
“The lack of moisture could have a negative impact on the main harvest, which is due to begin in October,” said analysts at Commerzbank in a note to clients.
London prices hit a peak at £1,671 a tonne and New York futures rose as high as $2,525 a tonne on Thursday. By Friday on LIFFE, London’s futures exchange, cocoa for delivery in December stood at £1,638 a tonne compared with £1,569 for the expired September contract a week earlier.
On New York’s NYBOT-ICE exchange, cocoa for December traded at $2,464 a tonne compared with $2,294 for the expired September contract a week earlier.
COFFEE: Futures rebounded from four-year lows struck a week earlier as Brazil moved to support the incomes of farmers.
Markets were meanwhile still betting on a record harvest in leading producer Brazil, capping price gains. “Earlier this week the Brazilian government announced a new price support scheme for coffee farmers. The scheme is designed to put a floor under the price of Arabica which has slumped over the last two years,” noted Thomas Pugh, analyst at research group Capital Economics.
By Friday on NYBOT-ICE, Arabica for delivery in September grew to 122.75 US cents a pound from 117.05 cents a week earlier.
On LIFFE, Robusta for November advanced to $1,928 a tonne from $1,857.
SUGAR: Prices extended gains as Brazil’s predicted output was revised lower. By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in October increased to 16.84 US cents a pound from 16.74 cents a week earlier. On LIFFE, the price of a tonne of white sugar for October climbed to $495.20 from $487.90.