Most commodity prices fell this week after a surprisingly bad labor report in the US, which is a top consumer of many raw materials, while Brent oil also struck a five-month low on fears of a supply glut.
The US labor market was far weaker than expected last month, with the economy adding only 88,000 jobs, a third of the number in February, official data showed on Friday.
Job creation slumped to its weakest level since June last year and was far below the 192,000 jobs that analysts had expected. The total number of unemployed persons was little changed at 11.7 million.
The unemployment rate dipped in March to 7.6 percent — the lowest since December 2008 — from 7.7 percent in February as more people dropped out of the work force.
Investors also kept a close watch this week on the Korean Peninsula, where tension has risen to a high level amid a standoff that pits North Korea against South Korea and its main ally, the US.
Added to the picture, traders digested a new raft of monetary easing measures from the Bank of Japan.
OIL: London Brent prices plunged on Friday to US$104.20 per barrel — which was the lowest point since August last year — and New York crude hit a two-week trough at US$92.15.
“Prices have fallen dramatically over the last three days, shedding value in response to poor economic data from the US, with US companies just adding 88,000 jobs,” energy analyst Joe Conlan at British-based energy consultancy Inenco said.
“This was far worse than economists had predicted. The falls may have been greater had it not been for news from the Bank of Japan that they were launching a massive injection of capital into the economy,” he said.
“Not even the threat of military action on the Korean Peninsula has stopped the slide in the oil markets, with technical indicators pointing to a price around or just under US$100 per barrel,” he added.
Prices were also under pressure on the back of stubborn concerns over plentiful US supplies.
The market had dived by about US$3 a barrel on Wednesday after the US government’s Energy Information Administration revealed that US crude reserves rose 2.7 million barrels to 388.6 million barrels.
That was almost double market expectations for an increase of 1.5 million barrels, and sent total stocks to the highest level since July 1990. Surging US inventories signal weaker demand and tends to put downward pressure on prices.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in May decreased to US$104.82 a barrel from US$109.42 on Thursday last week.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for May slid to US$92.27 a barrel from US$96.67.
PRECIOUS METALS: Gold fell to its lowest point since May last year, punished by the strong dollar, but clawed back ground on Friday as payrolls data stoked expectations that the US Federal Reserve would continue with its quantitative easing (QE) stimulus.
“Gold rallied following the release of the figure. Another second-quarter downturn in the US economy is actually positive for those who want the Fed’s QE3 program to continue,” Alpari analyst Craig Erlam said.
“Gold, as an inflation hedge, tends to be one of the biggest beneficiaries of more QE, so this reaction clearly suggests that traders believe QE3 is here to stay,” he said.
By Friday on the London Bullion Market, the price of gold dipped to US$1,568 an ounce from US$1,598.25 the previous Thursday.
Silver slid to US$26.97 an ounce from US$28.64.
On the London Platinum and Palladium Market, platinum dipped to US$1,531 an ounce from US$1,576.
Palladium reversed to US$720 an ounce from US$770.
BASE METALS: Base or industrial metal prices fell across the board on demand worries linked to downbeat US data.
By Friday on the London Metal Exchange, copper for delivery in three months slipped to US$7,421 a tonne from US$7,606 the previous Thursday.
Three-month aluminum retreated to US$1,888 a tonne from US$1,913.
Three-month lead declined to US$2,067 a tonne from US$2,115.
Three-month tin sank to US$22,800 a tonne from US$23,150.
Three-month nickel reversed to US$16,065 a tonne from US$16,690.
Three-month zinc slid to US$1,887 a tonne from US$1,901.
SUGAR: Prices declined on the prospect of a supply surplus as a result of record crop in top global producer Brazil.
By Friday on LIFFE, the price of a tonne of white sugar for delivery in May eased to US$503.10 from US$505.50 the previous Thursday.
On NYBOT-ICE, the price of unrefined sugar for May dipped to US$0.1763 a pound (0.45kg) from US$0.1782.
On Ireland’s blustery western seaboard, researchers are gleefully flying giant kites — not for fun, but in the hope of generating renewable electricity and sparking a “revolution” in wind energy. “We use a kite to capture the wind and a generator at the bottom of it that captures the power,” said Padraic Doherty of Kitepower, the Dutch firm behind the venture. At its test site in operation since September 2023 near the small town of Bangor Erris, the team transports the vast 60-square-meter kite from a hangar across the lunar-like bogland to a generator. The kite is then attached by a
Foxconn Technology Co (鴻準精密), a metal casing supplier owned by Hon Hai Precision Industry Co (鴻海精密), yesterday announced plans to invest US$1 billion in the US over the next decade as part of its business transformation strategy. The Apple Inc supplier said in a statement that its board approved the investment on Thursday, as part of a transformation strategy focused on precision mold development, smart manufacturing, robotics and advanced automation. The strategy would have a strong emphasis on artificial intelligence (AI), the company added. The company said it aims to build a flexible, intelligent production ecosystem to boost competitiveness and sustainability. Foxconn
Leading Taiwanese bicycle brands Giant Manufacturing Co (巨大機械) and Merida Industry Co (美利達工業) on Sunday said that they have adopted measures to mitigate the impact of the tariff policies of US President Donald Trump’s administration. The US announced at the beginning of this month that it would impose a 20 percent tariff on imported goods made in Taiwan, effective on Thursday last week. The tariff would be added to other pre-existing most-favored-nation duties and industry-specific trade remedy levy, which would bring the overall tariff on Taiwan-made bicycles to between 25.5 percent and 31 percent. However, Giant did not seem too perturbed by the
TARIFF CONCERNS: Semiconductor suppliers are tempering expectations for the traditionally strong third quarter, citing US tariff uncertainty and a stronger NT dollar Several Taiwanese semiconductor suppliers are taking a cautious view of the third quarter — typically a peak season for the industry — citing uncertainty over US tariffs and the stronger New Taiwan dollar. Smartphone chip designer MediaTek Inc (聯發科技) said that customers accelerated orders in the first half of the year to avoid potential tariffs threatened by US President Donald Trump’s administration. As a result, it anticipates weaker-than-usual peak-season demand in the third quarter. The US tariff plan, announced on April 2, initially proposed a 32 percent duty on Taiwanese goods. Its implementation was postponed by 90 days to July 9, then
RSS