Commodity Blog

Archive for April, 2008

Gold N.Y. Spot $ 0866.65
Silver N.Y. Spot $ 16.61
Lead LME Cash $ 1.2156
Copper LME Cash $ 3.9236
Zinc LME Cash $ 0.9956
Nickel LME Spot $ 13.11
Aluminum LME Spot $ 1.3129
Platinum N.Y. Spot $ 1914.00
Palladium N.Y Spot $ 414.50
Oil WTI Cushing $ 113.80
Natural Gas (Henry Hub)($/MMBtu) $10.92

USD-AUD $ 1.0620
AUD-USD $ 0.9416
CAD-USD $ 0.9871
USD-CAD $ 1.0131
EUR-USD $ 1.5566

Gold N.Y. Spot $ 0890.25
Silver N.Y. Spot $ 16.81
Lead LME Cash $ 1.2358
Copper LME Cash $ 3.9005
Zinc LME Cash $ 1.0024
Nickel LME Spot $ 13.07
Aluminum LME Spot $ 1.3213
Platinum N.Y. Spot $ 1941.00
Palladium N.Y Spot $ 435.50
Oil WTI Cushing $ 117.50
Natural Gas (Henry Hub)($/MMBtu)* $10.57

USD-AUD $ 1.0695
AUD-USD $ 0.9350
CAD-USD $ 0.9870
USD-CAD $ 1.0132
EUR-USD $ 1.5661

Gold N.Y. Spot $ 0902.05
Silver N.Y. Spot $ 17.17
Lead LME Cash $ 1.2497
Copper LME Cash $ 3.9894
Zinc LME Cash $ 0.9909
Nickel LME Spot $ 12.85
Aluminum LME Spot $ 1.3789
Platinum N.Y. Spot $ 2000.00
Palladium N.Y Spot $ 445.00
Oil WTI Cushing $ 117.60
Natural Gas (Henry Hub)($/MMBtu)* $10.56

USD-AUD $ 1.0560
AUD-USD $ 0.9470
CAD-USD $ 0.9967
USD-CAD $ 1.0033
EUR-USD $ 1.5874

Gold N.Y. Spot $ 0917.50
Silver N.Y. Spot $ 17.61
Lead LME Cash $ 1.2719
Copper LME Cash $ 3.9195
Zinc LME Cash $ 1.0065
Nickel LME Spot $ 12.99
Aluminum LME Spot $ 1.3662
Platinum N.Y. Spot $ 2025.00
Palladium N.Y Spot $ 457.50
Oil WTI Cushing $ 116.60
Natural Gas (Henry Hub)($/MMBtu)* $10.07

USD-AUD $ 1.0620
AUD-USD $ 0.9416
CAD-USD $ 0.9917
USD-CAD $ 1.0084
EUR-USD $ 1.5917

Gold N.Y. Spot $ 0942.00
Silver N.Y. Spot $ 18.29
Lead LME Cash $ 1.2882
Copper LME Cash $ 4.0193
Zinc LME Cash $ 1.0365
Nickel LME Spot $ 13.34
Aluminum LME Spot $ 1.3771
Platinum N.Y. Spot $ 2050.00
Palladium N.Y Spot $ 458.50
Oil WTI Cushing $ 114.90
Natural Gas (Henry Hub)($/MMBtu) $10.10
Carbon futures (€/tonne, Dec/08 sett) € 24.80

USD-AUD $ 1.0692
AUD-USD $ 0.9353
CAD-USD $ 0.9975
USD-CAD $ 1.0025
EUR-USD $ 1.5903

Even with demand slackening, gas prices have continued to rise.

Filling up at the pump has become such a pain in the pocketbook that for the first time ever, gasoline consumption in the U.S. has stopped increasing. But even though America’s consumption has been virtually flat for the past five years, prices in that same period have nearly doubled, with crude oil recently hitting record highs.

While commodity prices typically decline along with demand, gas has defied these market fundamentals. But the forces behind ever-escalating prices at the pump aren’t a mystery once you look at the big picture — and the good news is relief may be just down the road.

Gold N.Y. Spot $ 0946.70
Silver N.Y. Spot $ 18.41
Lead LME Cash $ 1.2791
Copper LME Cash $ 3.9626
Zinc LME Cash $ 1.0365
Nickel LME Spot $ 13.60
Aluminum LME Spot $ 1.3646
Platinum N.Y. Spot $ 2025.00
Palladium N.Y Spot $ 461.50
Oil WTI Cushing $ 113.30
Natural Gas (Henry Hub)($/MMBtu) $10.15

USD-AUD $ 1.0647
AUD-USD $ 0.9392
CAD-USD $ 0.9822
USD-CAD $ 1.0181
EUR-USD $ 1.5954

Gold N.Y. Spot $ 0929.10
Silver N.Y. Spot $ 17.82
Lead LME Cash $ 1.3132
Copper LME Cash $ 3.9368
Zinc LME Cash $ 1.0115
Nickel LME Spot $ 12.97
Aluminum LME Spot $ 1.3608
Platinum N.Y. Spot $ 1965.00
Palladium N.Y Spot $ 459.00
Oil WTI Cushing $ 111.00
Natural Gas (Henry Hub)($/MMBtu) $10.06

USD-AUD $ 1.0838
AUD-USD $ 0.9227
CAD-USD $ 0.9790
USD-CAD $ 1.0215
EUR-USD $ 1.5839

Gold N.Y. Spot $ 0922.90
Silver N.Y. Spot $ 17.54
Lead LME Cash $ 1.3368
Copper LME Cash $ 3.9957
Zinc LME Cash $ 1.0365
Nickel LME Spot $ 12.93
Aluminum LME Spot $ 1.3744
Platinum N.Y. Spot $ 2028.00
Palladium N.Y Spot $ 460.50
Oil WTI Cushing $ 109.60
Natural Gas (Henry Hub)($/MMBtu) $10.18

USD-CAD $ 1.0215
USD-AUD $ 1.0758
AUD-USD $ 0.9295
CAD-USD $ 0.9824
USD-CAD $ 1.0179
EUR-USD $ 1.5828

Soaring prices for bulk commodities could mean that the copper market is due another leg-up, with some forecasting a ”super-spike” in the metal to a record $11,000 a metric ton.
Market bulls argue that the recent hikes in contract prices for coal and iron ore suggest that fears of a global economic slowdown are playing second fiddle to supply constraints and buoyant, real world demand for industrial commodities. The implication is that further gains are likely for exchange-traded commodities, of which copper is the leading metal.
Still, the more cautious say an economic slowdown among Western nations will cancel out continued growth in China and push copper lower. And they add that consumers in China would in any case turn their back on a record price spike, dragging down prices.
“There is no doubt you could see a $5.00 a pound copper price ($11,020/ton) within months if the ’super spike’ scenario evolves,” said Southern Cross Executive Director Charlie Aitken.
The strong performance of commodity prices, both tradable and contract-based, at a time of U.S. economic weakness shows these markets are firmly supported, he said.
Crude oil, copper and various soft commodity prices have all hit record highs since the start of the year.
This week, coking coal price negotiations concluded at levels more than three times higher than last year, with BHP Billiton Ltd. (BHP.AU) announcing Wednesday a price increase to $300/ton with Japanese steel mills, from the current $98/ton. Thermal coal prices are expected to more than double to $135/ton. Earlier this year, steelmakers agreed to an iron ore price hike of 65% with Brazil’s Companhia Vale do Rio Doce (RIO).
“What it is telling you is when the U.S. economy stabilizes and perhaps reaccelerates a little later this year you will get the true commodity ’super spike’. The bulks are telling you what is coming for the tradable commodities,” said Aitken.
Unlike tradable commodities such as copper and crude oil, where speculative and investment flows have added a significant premium to prices, annual contracts for coal and iron ore are exempt from such distortions.
Copper Supplies Constrained
Copper, used in everything from electrical wiring to computer chips, is approaching its strongest period of seasonal demand.
London Metal Exchange copper inventories are down over 40% since the start of the year to cover just 2.5 days of global consumption. As a result, prices are very vulnerable to supply disruptions.
These unexpected events, like China’s snowstorms which prompted the closure of power plants and copper smelters, have already shaved 300,000 tons off expected supply for the year, effectively eradicating a forecast surplus, according to research from Macquarie.
“A price of $11,000/ton for copper is possible. Looking at copper’s price drivers, it’s industry constraints in South America, continuing reasonable demand from China, energy constraints, and a desire by the investment community to own copper,” said a senior trader with an international house.
No. 1 producer Chile is battling an electricity crisis, falling ore grades and potential strikes. Other key producing countries such as Zambia are facing similar problems.
“The supply problems are all bullish elements and there’s potential to see copper at these heights, but the people who’ll push it there won’t be consumers but the investment funds,” the trader said.
Other traders reckon copper will easily breach the $9,000/ton mark given low inventory levels, and could hit $11,000/ton in May, traditionally the strongest month for consumption. This could be followed by a correction in June, as has happened previously during copper’s four-year old bull run, they say.
If copper does move into a new, higher trading range it’s likely to take stocks in raw materials companies with it to outperform the broader market, Aitken said. It could be a rally “potentially more dramatic than at any time so far this cycle due to the dramatically superior earnings growth profile,” he said.
Not everyone is in the super-spike camp, though. A slowing global economy cannot be ignored, Westpac said in a research note.
The Group of Seven countries remain a significant swing factor for copper demand, said Westpac, pointing to 2005, when a G7 slowdown dragged on copper demand to outweigh growth in China. For this year, Westpac expects the same to happen, forecasting average copper demand growth of just 1.2%, down from 5.9% last year, and an average copper price of $7,200/ton for the June quarter. LME copper is currently trading around $8,500/ton.
Others note that in May 2006, when copper prices hit a record $8,800/ton, Chinese consumers turned their back on the market, feeding from stockpiles instead. Prices slumped to around $6,400/ton by mid-June.
Citigroup this week took a middling view, upping its average copper price forecast by 15% to $3.65/lb ($8,045/ton) for the year, citing tight supply and intense infrastructure buildups in China, India and the Middle East.