Sun, Jan 09, 2011 - Page 10 News List

New year brings record peaks for commodity prices


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 the year.

BASE METALS: Copper struck a record-high of US$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,” Barclays Capital analyst Yingxi Yu said.

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

Three-month aluminum rose to US$2,529.50 a tonne from US$2,468.25.

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

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

OIL: The oil market began the year with a bang, striking two-year peaks on 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 US$92.10 a barrel, reaching a level last seen in October 2008, and London Brent oil struck a similar multi-year peak at US$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 US crude inventories, which indicated stronger demand in the world’s biggest oil consuming nation.

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

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

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

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

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

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

Silver fell to US$28.39 an ounce from US$30.63.

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

Palladium retreated to US$754 an ounce from US$791.

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

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 US$2,863 a tonne from US$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 US$2.3385 a pound (0.45kg) from US$2.3850 a week earlier.

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