Commodities were buoyed this week by news of a breakthrough US budget deal to avert default, but some prices fell as traders questioned whether problems would soon resurface.
Sugar was the star performer, striking a one-year peak in New York after a fire at a terminal in top producer Brazil late on Friday.
Markets breathed a sigh of relief on Wednesday when US lawmakers agreed a deal to reopen the government and avoid a debt default, which would have ravaged the global economy and demand for raw materials, analysts said.
Photo: Reuters
The bill restarts government operations until Jan. 15 and raises the debt ceiling until Feb. 7.
Sentiment was lifted somewhat by news that China’s economy — a major consumer of commodities — expanded by 7.8 percent year-on-year in July to September. That snapped two quarters of slowing growth.
OIL: Crude oil prices experienced sharp swings as traders tracked the US debt deal negotiations, a weak US dollar and strong Chinese data.
Oil rallied on Wednesday, mirroring a turnaround for equities, after US lawmakers finally struck a deal aimed at avoiding a default. However, the enthusiasm was dampened by fears that the agreement was only a temporary measure.
The market also declined on Thursday after trade group the American Petroleum Institute reported a sharp increase of 5.9 million barrels in US crude inventories in the week ending Oct. 11, signaling weaker demand in the world’s biggest oil consumer.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in December slid to US$109.60 per barrel from US$111.39 for the November contract a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for November slid to US$101.02 a barrel from US$102.94 a week earlier.
PRECIOUS METALS: Gold dived on Tuesday to a three-month low at US$1,251.84 per ounce, as expectations of a US deal hit the precious metal’s safe-haven status.
However, gold rebounded back above US$1,300 after Wednesday’s agreement, as the US dollar dived to 8.5-month lows against the euro.
By late Friday on the London Bullion Market, the price of gold rallied to US$1,316.50 an ounce from US$1,265.50 a week earlier.
Silver edged up to US$21.87 an ounce from US$21.52.
On the London Platinum and Palladium Market, platinum gained to US$1,438 an ounce from US$1,369.
Palladium rose to US$737 an ounce from US$712.
BASE METALS: Base or industrial metals won only modest support from strong Chinese economic growth data.
By Friday on the London Metal Exchange, copper for delivery in three months rose to US$7,273 a tonne from US$7,167.75 a week earlier.
Three-month aluminum eased to US$1,855 a tonne from US$1,886.
Three-month lead increased to US$2,185 a tonne from US$2,097.25, while three-month tin slid to US$23,000 a tonne from US$23,345.
SUGAR: New York prices surged to a one-year high point on reports of a major fire at a terminal in Brazil.
According to media reports, a fire badly damaged the Copersucar terminal at Brazil’s port of Santos in Sao Paulo state. Brazil is the world’s biggest sugar producer.
In Friday deals on New York’s NYBOT-ICE exchange, sugar soared to US$0.2016 a pound (0.45kg) — the highest since Oct. 22 last year.
On LIFFE, London’s futures exchange, sugar prices vaulted as high as US$529.40 per tonne, reaching a level last witnessed on March 22.
“It is much more a logistical issue than something that changes the overall world balance sheets,” Price Futures Group analyst Jack Scoville said.
“It will hurt world availability for the short term, though, and probably help India and Thailand sell sugar at slightly better prices than they might have been able to do otherwise,” he added.
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