Commodity markets rebounded in the past week on hopes that the US economy will haul itself out of recession and spur demand for raw materials.
Upbeat US company results and rising home sales fueled optimism that the world’s biggest energy consuming nation may soon emerge from the downturn.
“Commodity index returns have continued their upward march over the past week,” Deutsche Bank research analyst Michael Lewis said.
“We believe these higher returns are benefiting from recent strength in the US equity market and the increasing likelihood that the United States will move out of recession by the end of the current quarter,” he added.
Voracious Chinese demand also boosted prices, particularly for agricultural commodities and industrial metals.
OIL: Prices rose on Friday, powered higher by growing optimism that the recession-stricken US economy is on the mend after a series of positive corporate earnings reports.
New York’s main futures contract, light sweet crude for September, climbed US$0.89 to close at US$68.05 a barrel.
In London, Brent North Sea crude for September delivery increased US$1.07 to settle at US$70.32 a barrel.
The rise in prices “was sharply buoyed by positive economic sentiment,” and the upward trend is expected to persist, Amrita Sen of Barclays Capital said.
Even though the euphoria was tempered somewhat, oil prices advanced.
“Higher stock prices suggest higher aggregate output which spells increasing energy demand,” Mike Fitzpatrick of MF Global said.
“Short-term upward momentum though still appears quite strong, but unless strong signs of sustainable growth appear soon, that momentum could dissipate rather quickly,” he added.
PRECIOUS METALS: Prices rose across the board this week, with gold winning support from the weakening US currency.
A weaker dollar can make commodities prices in the US unit cheaper for buyers holding rival currencies, pushing up demand in the short term.
By late Friday on the London Bullion Market, gold rose to US$951.50 an ounce from US$937.50 a week earlier. Silver climbed to US$13.78 an ounce from US$13.16.
On the London Platinum and Palladium Market, platinum grew to US$1,186 an ounce at the late fixing on Friday from US$1,165.
Palladium increased to US$258 an ounce from US$245.
BASE METALS: Base metals prices soared, with aluminum and copper striking nine-month peaks on solid Chinese demand.
“Sentiment continues to improve as economic data show that not only is the worst behind us, but that growth in key metals-consuming countries, such as China, is speeding up,” Barclays Capital analysts said.
Copper raced as high as US$5,575 per tonne, while aluminum touched US$1,808 per tonne.
NEXT GENERATION: The four plants in the Central Taiwan Science Park, designated Fab 25, would consist of four 1.4-nanometer wafer manufacturing plants, TSMC said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) plans to begin construction of four new plants later this year, with the aim to officially launch production of 2-nanometer semiconductor wafers by late 2028, Central Taiwan Science Park Bureau director-general Hsu Maw-shin (許茂新) said. Hsu made the announcement at an event on Friday evening celebrating the Central Taiwan Science Park’s 22nd anniversary. The second phase of the park’s expansion would commence with the initial construction of water detention ponds and other structures aimed at soil and water conservation, Hsu said. TSMC has officially leased the land, with the Central Taiwan Science Park having handed over the
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