Global commodity markets traded mixed this week as dealers reacted to global demand expectations for raw materials.
OIL: World crude prices diverged as traders seized on news of demand forecasts from major global energy organizations and reacted to positive US economic data.
Weighing on prices “are the demand forecasts of the three leading oil agencies,” Commerzbank analyst Carsten Fritsch said. “Without increased demand or a further cut in OPEC production, the global oil market will thus remain oversupplied, which may explain why oil prices have underperformed equity markets of late.”
The International Energy Agency this week eased its global forecast for growth in world oil demand for the second straight month, underscoring the effects of uncertainty from the US budget talks, sluggish Chinese business activity and unemployment in Europe.
The Paris-based agency estimated that demand for oil would total 90.6 million barrels a day this year, a cut of 60,000 barrels from its forecast last month.
OPEC on Tuesday stood pat on its crude demand forecast for the year, but raised its outlook for production growth by non-OPEC suppliers by 11 percent to 1 million barrels a day.
The cartel, which accounts for about 35 percent of global supply, expects global demand to be 89.7 million barrels per day this year, a rise of 0.8 million from last year.
The US Energy Information Agency on Tuesday lowered its forecast for the average West Texas Intermediate (WTI) and Brent prices this year.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in May stood at US$109.90 a barrel compared with US$110.03 for last month’s expired contract a week earlier.
On the New York Mercantile Exchange, WTI, or light sweet crude, for next month gained to US$93.48 a barrel from US$91.21.
PRECIOUS METALS: Precious metals rose across the board, with palladium and platinum boosted by higher car sales in China. The sister metals are used in the manufacture of catalytic converters.
Auto sales in China, the world’s top car market, rose in the first two months of the year, an industry group said, indicating strong demand as the country’s economy gradually recovers.
By late Friday on the London Bullion Market, the price of gold grew to US$1,595.50 an ounce from US$1,581.75 a week earlier, while silver gained to US$28.91 an ounce from US$28.78.
On the London Platinum and Palladium Market, platinum increased to US$1,593 an ounce from US$1,588 and palladium climbed to US$774 an ounce from US$769.
COCOA: Cocoa futures gained ground as traders bet that low prices would spark stronger demand.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in May rose to £1,443 a tonne from £1,404 a week earlier.
On New York’s NYBOT-ICE exchange, cocoa for May increased to US$2,140 a tonne from US$2,093.
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