Most commodities struggled this week, with many striking multi-month lows, as investors eyed the strong US dollar and the eurozone debt crisis that is plaguing Greece and threatening Spain, traders said.
At the same time, a slew of recent bleak data has sparked fears that China’s economy — a key consumer of many raw materials — is cooling faster than previously thought.
OIL: World oil prices fell sharply as the market was rattled once again by concern about the weak demand outlook arising from the eurozone crisis and the faltering US economy.
“The oil market continues to remain under pressure following the fragile economic conditions in the eurozone and the lack of oil demand from the United States,” Sucden analyst Myrto Sokou said.
Brent North Sea crude struck US$106.40 per barrel on Friday, touching the lowest point since Dec. 21 last year. New York’s light sweet crude sank to US$91.60 a barrel, hitting the lowest level since Nov. 3 last year.
Prices have fallen considerably after soaring on the back of Middle East tensions earlier this year.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in July slumped to US$107.40 a barrel from US$112.46 for the June contract a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for June tumbled to US$92.20 from US$96.75.
PRECIOUS METALS: Gold dived to a four-month trough at US$1,526.97 an ounce, but ended the week in positive territory as investors sought a safe-haven investment.
“Prices bounced across the complex [on Thursday], following the weak start to the week, as equity markets remained under pressure and uncertainty over Europe heightened,” Barclays Capital analysts said.
By late Friday on the London Bullion Market, gold had risen to US$1,589.50 an ounce from US$1,583 a week earlier.
Silver declined to US$28.48 an ounce from US$28.58.
On the London Platinum and Palladium Market, platinum fell to US$1,456 an ounce from US$1,466.
Palladium was unchanged at US$605 an ounce.
BASE METALS: Prices mainly fell, with aluminum, copper and nickel hitting their lowest levels in more than four months amid the broader sell-off on global financial markets.
By late Friday on the London Metal Exchange, copper for delivery in three months dropped to US$7,716 a tonne from US$7,992 a week earlier.
Three-month aluminum rose to US$2,059 a tonne from US$2,038.
Three-month lead slipped to US$1,964 a tonne from US$2,065.
Three-month tin slid to US$19,332 a tonne from US$20,300.
Three-month nickel increased to US$17,153 a tonne from US$17,057.
Three-month zinc sank to US$1,915 a tonne from US$1,931.
AI SPLURGE: The four major US tech companies have lost more than US$950 billion in value since releasing earnings and outlooks, while equipment makers were gaining Four of the biggest US technology companies together have forecast capital expenditures that would reach about US$650 billion this year — a flood of cash earmarked for new data centers and all the gear within them. The spending planned by Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp, all in pursuit of dominance in the still-nascent market for artificial intelligence (AI) tools, is a boom without a parallel this century. Each of the companies’ estimates for this year is expected either near or surpass their budgets for the past three years combined. They would set a high-watermark for capital spending
China’s top chipmaker has warned that breakaway spending on artificial intelligence (AI) chips is bringing forward years of future demand, raising the risk that some data centers could sit idle. “Companies would love to build 10 years’ worth of data center capacity within one or two years,” Semiconductor Manufacturing International Corp (SMIC, 中芯) cochief executive officer Zhao Haijun (趙海軍) said yesterday on a call with analysts. “As for what exactly these data centers will do, that hasn’t been fully thought through.” Moody’s Ratings projects that AI-related infrastructure investment would exceed US$3 trillion over the next five years, as developers pour eye-watering sums
Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI). The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青). Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010. The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency,
COLLABORATION: Taiwan and the US could jointly find solutions to weaknesses in supply chain resilience for critical materials, focusing on mining and initial refinement Taiwan is likely to purchase rare earths from the US in the future, and is also in talks with Australia and Canada to strengthen global rare earth supply chain security, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. Taiwan and the US last month concluded the sixth Economic Prosperity Partnership Dialogue, during which both sides signed a joint statement endorsing the principles of the Pax Silica Declaration, pledging to deepen cooperation in areas including critical minerals. At the time, Kung said the two sides would establish working groups to advance cooperation in areas including artificial intelligence, digital infrastructure, critical materials and
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