Global commodity markets were hit this week by weaker-than-expected manufacturing data in key consumers China and the US, and news of record-high unemployment in the eurozone, but many prices rebounded following the European Central Bank (ECB) interest rate cut and upbeat US non-farm payrolls data.
Commodity market sentiment has been dominated by “a weak China PMI [purchasing managers’ index] reading weighed on commodities and the base metals in particular,” Barclays PLC analyst Sudakshina Unnikrishnan said.
However, the week ended on a more positive note following a strong US non-farm payrolls report. The US Department of Labor reported on Friday that the US economy added a solid 165,000 jobs last month, well above market expectations.
OIL: Prices faced a roller-coaster ride, falling sharply on weak Chinese data before bouncing higher.
Crude futures had tumbled by almost US$2.5 on Wednesday as traders took their cue from fresh signs of economic weakness in the US and China, and after a US inventory report showed crude stocks at their highest point in more than 30 years.
However, the market then spiked by almost US$3 on Thursday and continued to head higher on Friday in the wake of the non-farm payrolls numbers.
“Oil prices have been very closely linked with economic sentiment over the past couple of days, rising and falling in conjunction with how investors judged economic results,” Inenco analyst Gary Hornby said.
Also helping was the weekly US jobless claims report, which came in much better than expected, suggesting some tightness in the jobs market. The Labor Department data showed new claims for unemployment benefits had fallen to a five-year low.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month rose to US$102.37 per barrel compared with US$102.35 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for next month rallied to US$95.83 a barrel from US$92.18.
SUGAR: Prices touched a new three-year low at US$0.1713 per pound, hit by Chinese demand worries and expectations of a record sugar harvest in Brazil.
“Concerns that demand from China may start to diminish because of weak manufacturing data from the country were ... bearish,” analysts at industry publication Public Ledger said.
By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in July firmed to US$0.1745 a pound from US$0.1744 a week earlier.
On LIFFE, the price of a tonne of white sugar for August dipped to US$497.90 from US$501.40.
RUBBER: Prices inched higher amid hopes of a spike in global demand.
The Malaysian Rubber Board’s benchmark SMR20 rose to US$0.2481 a kilo from US$0.246 the previous week.