Commodity prices diverged this week as traders weighed up weak global growth data, escalating eurozone debt fears and the latest outlook by the US Federal Reserve.
Trading was volatile on Friday as official data revealed a sharp slowdown in US GDP and worsening economic news for eurozone member Spain.
OIL: World oil prices were mixed over the course of the week that ended with official data on Friday showing US economic growth slowed sharply to 2.2 percent in the first quarter of the year.
Oil prices began the week lower as downbeat Chinese data and eurozone uncertainty cast doubt on the strength of global energy demand.
Investors were spooked by results in France’s presidential vote that left French President Nicolas Sarkozy hunting for far-right votes after losing to Socialist Francois Hollande in a first-round vote.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in June dipped to US$119.20 a barrel from US$119.21 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for June rose to US$104.23 from US$103.88.
PRECIOUS METALS: Prices were mixed, with gold rising and sister metal silver heading south.
“Gold prices have edged higher after this afternoon’s GDP number from the US came in light prompting concerns about further loose policy from the Fed,” CMC Markets analyst Michael Hewson said.
By late Friday on the London Bullion Market, gold gained to US$1,663.50 an ounce from US$1,641.50 a week earlier.
Silver fell to US$31.14 an ounce from US$31.79.
On the London Platinum and Palladium Market, platinum eased to US$1,573 an ounce from USS$1,579.
Palladium climbed to US$677 an ounce from US$666.
BASE METALS: Prices rebounded, lifted by the Fed’s latest outlook according to traders.
However, William Adams, an analyst at financial company Fast Markets, cautioned: “We feel the global economic conditions are still weakening and therefore we do not expect the stronger tone to last too long.”
By late Friday on the London Metal Exchange, copper for delivery in three months rallied to US$8,408 a tonne from US$8,181 a week earlier.
Three-month aluminum grew to US$2,106 a tonne from US$2,081.
Three-month lead gained to US$2,137 a tonne from US$2,117.
Three-month tin climbed to US$22,451 a tonne from US$21,650.
Three-month nickel increased to US$18,362 a tonne from US$17,858.
Three-month zinc advanced to US$2,042 a tonne from US$2,024.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a