Commodity Blog

Posts Tagged ‘LME’

Crude oil fell as the International Energy Agency said that the high fuel price will hurt the global economic growth. The prices slipped as slower growth means lesser demand for fuel. May contract for crude oil delivery fell $0.63 (0.6 percent) to $105.62 per barrel on NYMEX.

Slower economic growth also means lesser inflation pressure and that lead to decline of gold as an inflation hedge. June futures for gold delivery slid $14.50 (1 percent) to $1,453.60 by 13:50 on COMEX. May contract for silver delivery subtracted as much as $0.546 (1.3 percent) to $40.066 per ounce.

Still, there are investors who expect strong growth of the global economy and their positive outlook allowed copper to rebound. Copper for delivery in three months added 0.3 percent to $9,658 a metric ton on LME.

Copper recovered from the previous losses as economists expect that growth of demand will outpace increase of supply. The economic recovery is gaining momentum and demand for industrial metals grows. Lower demand from Japan after the disastrous earthquake and the tightening in China still can hurt the metal.

The International Copper Study Group estimated that the global consumption will rise 4.5 percent to 19.7 million metric tons this year. At the same time, the output will increase only 1.1 percent to about 19.3 million tons. That means a deficit of 435,000 tons.

Yingxi Yu, a commodities analyst at Barclays Capital, said:

We’re still positive on the economic recovery. We don’t think the events in the Middle East and Japan will derail the global economic recovery so anything that’s leveraged to economic recovery will still be relatively attractive.

Contract for delivery of copper in three months advanced 0.7 percent to $9,450 per metric ton on LME. The metal gained 0.6 percent to $4.2985 per pound on COMEX. Copper traded at $9,435 in Singapore, while it fell 1.5 percent to 70,230 yuan ($10,721) per ton on Shanghai Futures Exchange.

Copper gained on the speculation that rebuilding in Japan will increase demand. Earlier the industrial metal weakened on concerns that the crisis in Japan after the earthquake, the tsunami and the radiation leak from the nuclear pant will harm the world economy. Now the sentiment turned to positive for copper as the reconstruction in Japan will require a huge amount of the metal. Copper went $20 to $9,280 per metric ton as of 7:32 on LME.

The uprising in Libya pushed oil higher on concerns about supply, while also boosting gold as a safe haven. The warplanes of the Libyan government forces dropped bombs at the positions of the rebels around Benghazi. The US suggested the foreign intervention to remove Libya’s leader Muammar Qaddafi from power. Bahrain’s police arrested six opposition leaders. On March 15 Bahrain declared the three-month state of emergency. April futures for gold delivery gained $8.10 (0.6 percent) to $1,404.20 by 13:45 on COMEX. April delivery for crude oil advanced $3.44 to $101.42 per barrel on NYMEX.

Oil surged on concerns that political unrest will spread throughout North Africa and Middle East. The conflict in Libya threatens oil supply as the country holds Africa’s biggest reserve. April delivery for crude oil rose $0.09 to $95.51 per barrel on NYMEX by 9:24 after jumping yesterday $5.71 to $95.42, the highest price since October 2008.

The turmoil was also benefiting to precious metal, including gold and silver. The Libyan military and security forces were attacking protesters that demanded freedom and democracy. April futures for gold delivery gained $12.50 (0.9 percent) to $1,401.10 as of 13:51 on COMEX. The price reached the record level of $1,432.50 on December 7. May futures for silver delivery climbed $0.571 (1.8 percent) to $32.856 per ounce after it reached $34.315, the highest price since March 1980.

The unrest in Libya had negative impact on copper. The industrial metal dropped in London as well as in New York. Delivery for copper in three months dropped 0.6 percent to $9,524 per metric ton on LME, while futures on May delivery subtracted 0.7 percent to $4.3320 per pound on COMEX.

Wheat jumped today to the highest level since 2008 on concerns that drought in China will curb supplies while demand is increasing. Most of China’s major wheat-growing regions have below-normal precipitation that affects about 6.75 million hectares of crops. Declining global supplies caused US wheat exports to climb 26 percent and Egypt’s exports to double last year. May futures for wheat delivery gained $0.0525 (0.6 percent) to $9.04 per bushel by 13:15 on CBoT after reaching earlier $9.1675, the highest price for a most-traded contract since August 2008.

China also aided copper as the industrial metal gained on growing demand from the Asian nation. China’s imports of the metal climbed 5.7 percent in January from the previous month, totaling 364,240 metric tons, the most since September and surged as much as 25 percent from a year ago. Contract for delivery of copper in three months rose $192 (1.9 percent) to $10,153 per metric ton as of 17:34 on the LME. The price previously touched the all-time high of $10,168.50.

Oil extended its gains for a second day on concerns about the situation in Egypt. Yesterday clashes broke out between the protesters and the supporters of the current government. The contract for delivery of crude oil in March rose $0.41 (0.5 percent) to $91.27 per barrel on NYMEX.

Cotton jumped to the record as floods in Australia and Pakistan cut supplies. According to reports, Australia lost 300,000 bales, while Pakistan has a shortfall of 2.5 million bales. March futures for cotton delivery gained $0.04 (2.3 percent) to the record price of $1.7622 per pound as of 14:49 on ICE.

Copper prices also climbed to the record as the global economic growth have put strain on stockpiles. LME copper inventories dropped by 150 metric tons to 393,775 tons yesterday. Copper for delivery in Copper for March advanced 0.8 percent to $4.58 per pound on COMEX.

Crude oil surged to the record level in two year and Brent oil rallied above $100 level on the concerns about the unrest in Egypt. More and more people are coming out on streets and the troubles in Egypt can impact traffic through the Suez Canal, which is situated in Egypt. Goldman Sachs Group Inc. estimated that about 2.5 percent of global oil production is shipped through the Suez Canal. Ahmed El Manakhly, the head of traffic for the Suez Canal Authority, claimed that ships currently move through the canal as usual and the volume is “normal”. March delivery for crude oil jumped as much as $2.85 (3.2 percent) to $92.19 per barrel on NYMEX, the highest price since October 3rd, 2008. March contract for Brent oil advanced $1.59 (1.6 percent) to $101.01 per barrel on ICE.

Copper climbed as demand in the US picked up as the economic recovery continues, causing inventories to decline. Personal consumer spending rose 0.7 percent in December, above the median forecast of 0.6 percent — the sign of a recovering economy. LME-monitored stockpiles of copper dropped 1 percent the biggest decline since March 4th. Copper for delivery in three months rose $215 (2.3 percent) to $9,745 per metric ton by 18:22 on LME.

Oil headed to the best closing price at the end of a year on speculation that the global economic recovery will bolster demand for commodities. The global economy slowly recovers, helping crude to rise 13 percent this year. February delivery for crude oil slipped $0.40 (0.5 percent) to $89.44 per barrel on NYMEX, though analysts think that the decline was just a result of a short-term volatility.

Copper gained today on speculation that supply won’t be able to catch up a growing demand from China. Consumption for copper estimated to outpace production by 825,000 metric tons next year. Delivery for copper in three months rose $118 (1.2 percent) to $9,613 per metric ton by 9:10 on LME, following the advance to$9,631.75.

Gold rallied today as demand for safety grows among uncertainty and falling confidence in paper currencies. Investors are losing confidence in the dollar, the euro and other currencies as well, and this fact allowed the precious metal to rise 28 percent this year. February contract for gold gained 0.2 percent to $1,408.50 on COMEX.

Gold extended its rally today after the dollar weakened. The US currency rose 0.8 percent against the basket of major currencies before resuming its downfall. Analysts say that most traders and consumers aren’t ready to buy the metal for such high prices. The only interested parties are investors and central banks interested in expanding their reserves. December futures for gold delivery added $0.1 to $1,372.10 per ounce by 13:43 on COMEX.

Copper also benefited from the weakness of the dollar. Three-month delivery for copper gained 0.3 percent to $8,469 per metric ton on LME. Copper touched $8,490 per ton on October 14th, the highest level since July 2008.

Copper gained today as stockpiles shrank and the dollar declined, increasing appeal of commodities as an alternative asset. The dollar slipped 0.5 percent versus the basket of six major currencies today after the Federal Reserve signaled yesterday it would stimulate the US economy. LME-monitored copper inventories declined as much as 33 percent since March 1st to the lowest level in almost a year. December futures for copper delivery slid $0.031 (0.8 percent) to $3.8205 per pound as of 13:23 on COMEX.

Gold rose to the record for the 15th time in the past month as a weaker dollar increased investors’ demand for the precious metal. Gold proves its new role (or rather returned to its old role) as a currency, while conventional currencies weakens. An intention of the Federal Reserve to increase the Treasury purchase simply drives down the dollar and boosts gold. December futures for gold delivery rose $23.80 (1.8 percent) to $1,370.50 per ounce by 13:55 on COMEX. The previous record was $1,366.