Commodity prices mostly fell this week as traders balanced weak Chinese data against signs that the US Federal Reserve could curtail its quantitative easing stimulus policy sooner rather than later.
Fed Chairman Ben Bernanke told US Congress on Wednesday that the US central bank could scale back stimulus measures soon if economic conditions improved.
However, he said any tapering off could only happen once it had confidence that economic gains could be sustained.
OIL: Brent oil prices sank to a three-week low at US$100.64 per barrel on Thursday on the back of poor Chinese economic data and Bernanke’s comments.
Banking giant HSBC Holdings PLC reported that manufacturing activity in China slowed this month for the first time in seven months, in a new sign of the weak recovery of the world’s No. 2 economy.
China’s purchasing managers’ index for the month came in at 49.6, from a final 50.4 last month. A reading above 50 indicates growth and anything below contraction.
Crude futures had fallen on Wednesday following the bearish US oil inventory report and Bernanke’s testimony.
However, US gasoline demand was expected to surge this weekend as the Memorial Day holiday tomorrow starts off the summer vacation driving season.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in July dropped to US$102.27 a barrel compared with US$104.47 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for July sank to US$93.91 a barrel from US$95.64 for the expired next month’s contract one week earlier.
PRECIOUS METALS: Gold hit one-month lows, but rebounded into positive territory on Bernanke’s remarks and as dealers sought shelter in the safe-haven precious metal.
By late Friday on the London Bullion Market, the price of gold rose to US$1,390.25 an ounce from US$1,368.75 a week earlier.
Silver eased to US$22.38 an ounce from US$22.52, while on the London Platinum and Palladium Market, platinum fell to US$1,455 an ounce from US$1,470 and palladium fell US$729 an ounce from US$736.
COFFEE: Arabica prices struck the lowest level since March 2008 on expectations of abundant supplies from Brazil, dealers said.
“The plentiful supply is continuing to weigh on prices,” Commerzbank analysts said in a note to clients. “The harvest has begun in Brazil and looks set to produce a record crop for a low-yield year.”
By Friday on NYBOT-ICE, Arabica for delivery in July slid to US$0.13040 a pound (0.45kg) from US$0.14050 a week earlier.
On LIFFE, Robusta for July dropped to US$1,978 a tonne from US$2,042.
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
China’s economic planning agency yesterday outlined details of measures aimed at boosting the economy, but refrained from major spending initiatives. The piecemeal nature of the plans announced yesterday appeared to disappoint investors who were hoping for bolder moves, and the Shanghai Composite Index gave up a 10 percent initial gain as markets reopened after a weeklong holiday to end 4.59 percent higher, while Hong Kong’s Hang Seng Index dived 9.41 percent. Chinese National Development and Reform Commission Chairman Zheng Shanjie (鄭珊潔) said the government would frontload 100 billion yuan (US$14.2 billion) in spending from the government’s budget for next year in addition
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
Protectionism: US trade chief Katherine Tai said the hikes would help to counter unfair trade practices from China, while boosting domestic clean energy investments US Trade Representative Katherine Tai (戴琪) defended stiff tariff hikes against countries such as China, saying that paired with investment, they were a “legitimate and constructive” tool for reinvigorating domestic industries. Tai’s comments come a week after sharp tariff increases on Chinese electric vehicles (EVs), EV batteries and solar cells took effect — with levies down the line on other products also recently finalized. The latest moves targeting US$18 billion in Chinese goods come weeks before next month’s US presidential election, with Democrats and Republicans pushing a hard line on China as competition between Washington and Beijing intensifies. In an interview on Thursday
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