Oil dropped to a 12-year low as investors focused on volatility in Chinese markets after the country sought to quell losses in equities and stabilize its currency.
Futures fell on concern that turbulence in the world’s biggest energy consumer might curb fuel demand. Prices rose by as much as 3.2 percent in early trading as China suspended an equity circuit breaker system, set a higher yuan reference rate and directed state-controlled funds to buy shares.
New York oil rebounded briefly after US payrolls surged and a pipeline to Cushing, Oklahoma, was shut down.
The turmoil in China is compounding the negative effect of growing US crude stockpiles, which remain at more than 120 million barrels above the five-year average.
Analysts from Nomura Holdings Inc to UBS Group AG predict oil might fall near US$30 per barrel, while OPEC has effectively discarded output limits to defend market share amid a global glut.
West Texas Intermediate futures for delivery next month declined US$0.11 to settle at US$33.16 per barrel on the New York Mercantile Exchange. It was the lowest close since February 2004. Prices dropped 10 percent this week. Total volume traded was 45 percent greater than the 100-day average.
PRECIOUS METALS: Gold trimmed its biggest weekly advance since August last year as China’s move to halt a rout in stocks calmed global markets and cut demand for a haven. Palladium rose from a five-year low.
Bullion ended its biggest four-day rally in almost a year. The metal fell from a two-month high as a stronger US dollar also reduced demand for an alternative investment before the US jobs report.
Bullion for immediate delivery declined 1.1 percent to US$1,097.24 per ounce by 10:36am in London, according to Bloomberg generic pricing, after prices jumped 4.5 percent in the previous four days, the most since January last year.
Gold has outperformed other commodities this week, as more than US$4 trillion was erased from global equities. Investors bought the most through bullion-backed funds in almost three weeks on Thursday, lifting assets from the lowest since 2009. Holdings and prices dropped in the past three years amid expectations of tighter US monetary policy cut the appeal of precious metals.
BASE METALS: Aluminum led a rebound in industrial metals.
The Bloomberg Industrial Metals subindex rose, trimming this week’s losses.
Aluminum also climbed as Alcoa Inc, the biggest US producer, on Thursday said it would permanently halt operations at a smelter in Evansville, Indiana, and shutter the remaining alumina-refining capacity at its Point Comfort operations in Texas.
Aluminum for delivery in three months gained 1.1 percent to US$1,491.50 per tonne at 4:17pm on the London Metal Exchange. A close at that level would mark the biggest advance since Dec. 23 last year.
Zinc and tin also rose, while nickel was little changed. Lead fell. Copper slid in London and on the Comex in New York.
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
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
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
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