The price of crude oil and metals came under pressure this week as investors took their lead from mixed updates on the US economy and the escalating Ukraine-Russia crisis.
OIL: Oil prices retreated on easing supply strains, despite a worsening situation over Ukraine.
Ukraine, a major conduit for Russian natural gas exports to western Europe, is monitored closely by investors who are concerned that a full-scale armed conflict will disrupt supplies and send energy prices soaring.
Russia on Friday called an emergency UN Security Council meeting after at least seven people were killed in an Ukrainian military assault on the flashpoint town of Slavyansk, the deadliest day for months in the crisis.
A furious Kremlin said the raid was “leading Ukraine towards catastrophe” and pronounced dead a peace deal struck in Geneva last month to ease the worst East-West confrontation since the Cold War.
Despite the unrest, oil prices were weighed down by official data showing that US crude oil stockpiles last week rose by 1.7 million barrels to 339.4 million — the highest weekly level since 1982 — indicating weaker demand in the world’s largest economy.
That came a day after official data showed the US economy grew just 0.1 percent year-on-year in the first quarter. However, sentiment picked up after official data showed that the unemployment tumbled to 6.3 percent last month, the lowest level since September 2008.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in June fell to US$108.71 a barrel from US$109.46 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for June dropped to US$99.93 a barrel compared with US$100.76 for the May contract on Thursday last week.
PRECIOUS METALS: Gold and silver retreated, hit by the US Federal Reserve’s scaling back of its huge stimulus program.
“Precious metals are losing their attractiveness as a safe haven despite the Ukraine crisis,” analysts at Commerzbank wrote in a client report.
By Friday on the London Bullion Market, the price of gold slipped to US$1,281.25 an ounce from US$1,301.25 on Thursday last week.
Silver decreased to US$19.17 an ounce from US$19.66.
On the London Platinum and Palladium Market, platinum increased to US$1,425 an ounce from US$1,418. Palladium gained to US$816 an ounce from US$805.
BASE METALS: Prices fell across the board, weighed down by strains to the Chinese economy.
Although China’s manufacturing activity improved last month, showing increased strength for a second straight month, analysts cautioned over the latest data.
“We do not believe the economy has passed a turning point,” Nomura economist Zhang Zhiwei (張智威) said.
Thursday’s data, the first official reading on the world’s second-largest economy in the second quarter, came after China’s economic growth for the first three months of the year came in at its weakest pace in 18 months.
By Friday on the London Metal Exchange, copper for delivery in three months slid to US$6,648 a tonne from US$6,766.25 a week earlier.
Three-month aluminum slid to US$1,775.25 a tonne from US$1,856, while three-month lead slipped to US$2,078.25 a tonne from US$2,162.75.
Three-month tin fell to US$22,930 a tonne from US$23,700, three-month nickel retreated to US$18,150 a tonne from US$18,409 and three-month zinc declined to US$2,012 a tonne from US$2,060.50.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
ELECTRIC FARMLAND: TSMC’s proposal to clear 230 hectares of reforested land for what would become Taiwan’s largest photovoltaic solar farm has generated concerns New rules curbing solar farms built on agricultural land sparked fierce debate at a packed public hearing at the Legislative Yuan yesterday, with industry representatives saying that the new restrictions would endanger President Tsai Ing-wen’s (蔡英文) green energy goals, while agricultural officials emphasized the importance of protecting farmers and the environment. The Tsai administration has set a target to generate 20 percent of the nation’s power from renewable sources by 2025, by which time it also aims to install 20 gigawatts (GW) of solar power, including 6GW from rooftop solar systems and 14GW from ground-mounted solar farms. Although rooftop solar systems are
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday posted monthly revenue that suggested second-quarter sales surpassed analysts’ estimates, underscoring how its technological lead is helping the chipmaker weather the COVID-19 pandemic and US sanctions on its second-biggest customer Huawei Technologies Co (華為). Apple Inc’s main iPhone chipmaker posted sales of NT$120.88 billion (US$4.08 billion) for last month, up 40.8 percent year-on-year and bringing its revenue for the second quarter to NT$310.7 billion, beating the NT$308.8 billion analysts expected on average. TSMC, a barometer for the industry thanks to its heft in the global supply chain, had previously lowered its revenue outlook for this
‘SENSITIVE MARKETS’: The previously unannounced project would involve the company handing over control of data to a third party to sidestep privacy concerns Google has abandoned plans to offer a major new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the COVID-19 pandemic, two employees familiar with the matter said, revealing the challenges for US tech giants to secure business in those markets. In May, the search giant shut down the initiative, known as “Isolated Region” and which sought to address nations’ desires to control data within their borders, the employees said. The action was considered a “massive strategy shift,” said one of the employees, who added that Isolated Region had involved hundreds of employees