Oil prices jumped late on Friday on Iran supply tensions, but most commodities fell this week as worse-than-expected economic data from China and Europe stoked concerns over global demand.
Crude oil briefly surged, as traders seized on reports that Iranian exports were expected to fall this month, before trimming gains ahead of the weekend.
Most markets were weighed down on Thursday by news that manufacturing activity in China, the world’s No. 2 economy, had hit a four-month low.
HSBC bank said its Purchasing Managers’ Index (PMI) for China slid to 48.1 this month, compared with a final reading of 49.6 last month. A reading above 50 indicates the sector is expanding, while a number below 50 suggests contraction.
The figures — which come after Beijing reported a huge trade deficit last month and leaders lowered their growth target for the year — added fuel to fears that China’s economy is losing its strength.
In more bad news, a composite PMI of manufacturing and services for the 17-nation eurozone by the Markit research firm fell more sharply than expected this month, pointing to a recession.
The survey of 4,500 manufacturing and services firms slowed to 48.7 this month after reaching 49.3 last month.
“The week has reflected choppy moves across the commodity complex and prices are posting broad-based weakness by the end of the week,” Barclays Capital analyst Sudakshina Unnikrishnan said.
“Commodity markets have come under pressure from China’s PMI, which stayed below 50 for a fifth consecutive month, and a weak euro-area PMI reading,” Unnikrishnan said.
OIL: World oil prices staged a late burst on Friday to end the week in positive territory as the market was rattled by jitters over supplies from key producer Iran.
New York’s West Texas Intermediate crude jumped to US$108.25 a barrel — the highest level since March 2 — and London Brent oil rallied as high as US$127.06.
“The market remains nervous and very choppy indeed. Volatility spiked after news emerged of a drop in Iranian exports in March,” VTB Capital analyst Andrey Kryuchenkov said.
“Crude futures also rebounded on Friday after slumping the previous day on concern that elevated oil costs could hurt the global economic recovery.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in May stood at US$125.35 a barrel from US$124.83 the previous week.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for May rallied to US$108.25 a barrel, compared with US$106.23 for the April contract the previous week.
PRECIOUS METALS: Prices fell to their lowest levels for about two months, but gold pulled back into positive territory thanks to the weaker US dollar and bargain-hunting, dealers said.
“Precious metals ... were unable to resist the downward spiral on the commodities,” Commerzbank analyst Carsten Fritsch said.
By late Friday on the London Bullion Market, gold rose to US$1,664 an ounce from US$1,658 the previous week.
Silver dipped to US$31.54 an ounce from US$32.27.
On the London Platinum and Palladium Market, platinum decreased to US$1,617 an ounce from US$1,677.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to