Base metal prices charged ahead last week as a series of mine disruptions around the world left traders fretting anew about the availability of supplies.
Oil prices had a topsy-turvy week as the market remained nervous about the low levels of inventories ahead of a meeting of the OPEC oil cartel next week.
The volatile dollar meanwhile buffeted precious metal prices.
GOLD: Gold prices fell to the lowest level for two and a half months as the dollar battled back, but rebounded late in the week as the US currency resumed its slide.
Gold prices soared to 15-year peaks close to 430 dollars per ounce in early January as the greenback's fall prompted a flight to hard assets and made dollar-denominated gold more attractive to non-US buyers.
But many speculators appeared to have lost their appetite for the precious metal after the rally faltered, experts said.
"The hedge funds have been taking profits now that the upper trend seems to have run out of steam," said Matthew Turner, analyst at the research consultancy Virtual Metals.
"The gold price has lost 20 dollars since the start of the year and we will see if this trend continues over the next few weeks."
The precious metal received a fillip on Friday after a smaller-than-expected rise in US employment sent the dollar sliding again.
By Friday afternoon, gold prices stood at 404.25 dollars an ounce on the London Bullion Market against 399.75 dollars a week earlier.
SILVER: Silver prices were pushed lower by profit-taking.
The silver price stood at 6.095 dollars per ounce on the London Bullion Market on Friday against 6.225 dollars a week earlier.
"Silver rose so quickly at the end of last year and in January that it got ahead of itself," said Turner. "The funds took profits."
One factor weighing on the market is the boom in digital photography, which has reduced demand for silver for developing camera films, he noted.
PLATINUM AND PALLADIUM: Platinum prices were hit by the dollar's brief rebound, but ended the week on a more positive note as the US currency slid again.
"Platinum has come down quite a bit this week because the dollar was slightly stronger and the funds took profits after price reached 860-70 dollars," said Turner.
Palladium meanwhile benefited from hedge fund buying on signs that car companies are switching to the metal from the more expensive platinum for use in auto-catalysts, he added.
By Friday, the platinum price stood at 834 dollars per ounce on the London Platinum and Palladium Market against 837 dollars a week earlier.
Palladium traded at 236 dollars an ounce from 230 dollars.
"The degree of fund support for palladium is impressive and suggests that the market looks for another test towards 250 dollars, notwithstanding the likelihood of renewed producer selling," said Barclays Capital analyst Kamal Naqvi.
BASE METALS: Base metal prices rode higher on worries about supply disruptions and renewed interest from speculators.
"A large number of production disruptions at major base metal operations at times of improving demand have set the scene for sharply rising base metal prices," said Barclays Capital analyst Ingrid Sternby.
"Output losses are especially notable in the copper market, but there are now fresh fears over losses in both the nickel and lead markets."
Copper prices reached new levels not seen for six and a half years as a strike at the Escondida mine in Chile, the world's largest copper mine, as well as output losses at the Grasberg mine in Indonesia fanned supply worries.
Base metals also appeared to be benefiting from fresh interest from speculators growing disillusioned with sluggish stock market.
"With global stock markets running out of steam coupled with a desire to obtain exposure to China, the bull market in base metals seems far from being exhausted," said Standard Bank analyst Robin Bhar.
By Friday, three-month copper prices had risen to 2,549 dollars per tonne on the London Metal Exchange from 2,470 a week earlier.
Three-month aluminium prices firmed to 1,668 dollars per tonne from 1,647. Three-month nickel prices gained to 15,000 dollars per tonne from 14,950. Three-month zinc prices edged up to 1,071.5 dollars per tonne from 1,021. Three-month lead prices strengthened to 806 dollars per tonne from 767. But three-month tin prices fell to 6,420 dollars per tonne from 6,500.
OIL: Oil prices ended little changed at the end of a choppy week, roiled by two US refinery fires, news of a surge in US crude inventories and uncertainty about the outcome of an OPEC meeting next week.
Oil prices soared on Monday as two fires at refineries in the Midwest ignited worries on a market already nervous over crude oil supplies.
But such concerns were calmed after the US Department of Energy reported a leap in crude oil stocks of 7.9 million barrels to 271.6 million in the week ending January 30.
"We're back above the 270 million barrel level. It took a lot of strain out of the market," said AG Edwards market analyst Bill O'Grady.
Traders were also looking ahead to a meeting of the Organisation of Petroleum Exporting Countries in Algiers on Tuesday.
Most analysts expect OPEC to maintain its output quotas at 24.5 million barrels per day, and postpone any change until March.
But OPEC has surprised markets before and an early output cut in anticipation of a seasonal fall in demand has not been ruled out.
Algerian Energy Minister Chakib Khelil hinted that the cartel was reluctant to leave output unchanged.
"If production is maintained at the same level, there has to be a decrease in prices, and nobody knows how far down the price is going to go," he told the cartel's OPECNA news agency.
By Friday, the price of benchmark Brent North Sea crude oil for March delivery stood at 29.21 dollars a barrel in London from 29.31 dollars a week before.
In New York, the reference light sweet crude March contract traded at 33.00 dollars against 33.05 a week earlier.
RUBBER: Rubber prices slipped amid forecasts of rising supplies.
Production of natural rubber is expected to increase by nine percent this year and by 6.5 percent in 2004, predicted the International Rubber Study Group, an intergovernmental organisation.
Synthetic rubber supplies should grow at an annual rate of between four and five percent this year and in 2005, while overall demand is seen rising by five percent annually over the next two years.
In Singapore the RSS 3 contract for March closed at 124 US cents on Friday against 126.5 a week earlier.
COCOA: Coffee futures ended mixed as speculators tried to gauge the size of a harvest from leading producer Ivory Coast.
"Slowing arrivals are moderately supportive in that they have led to speculation that the 2003/04 crop may be smaller than expected," said Refco analyst Ann Prendergast.
However, overall market sentiment remained "mostly bearish", she added.
On LIFFE, the price of cocoa for May delivery fell to 909 pounds a tonne on Friday from 915 pounds a week before.
But on the CSCE, the New York futures market, the March contract advanced to 1,576 dollars per tonne from 1,550 dollars.
COFFEE: Coffee prices remained under pressure undermined by worries about bigger-than-expected harvests in Brazil and Vietnam.
"London coffee prices slumped on Thursday under speculative and fund liquidation," wrote analysts at the Sucden brokerage.
"Profit taking pressured prices from the open and a bout of fund liquidation pushed prices through support levels."
Refco's Prendergast added that the market was speculating that the 2004/5 Brazilian crop would reach about 38-44 million 60 kilo gramme bags, above previous expectations.
Vietnam meanwhile revised upwards its 2003/4 coffee output to 11.7 million bags from a previous estimate of 11 million, she added.
On LIFFE, Robusta quality for March delivery eased to 738 dollars per tonne on Friday, from 761 dollars a week earlier.
On New York's CSCE market, Arabica for March delivery dipped to 72.85 cents a pound from 72.95 cents the previous Friday.
SUGAR: Sugar prices weakened as ample supplies weighed on the market in the absence of any major new export orders.
"Physical action remains slack, with Russian buyers said to be deferring purchases to March and China so far making no moves towards the purchase of the one million tons it has authorised," said Prendergast.
"Fundamentals are depressing given the current surplus in Brazil, the deterrent of high freight prices, and prospects of an even more abundant Brazil crop in 2004/05," she added.
On LIFFE, the price of a tonne of white sugar for March delivery dropped to 185.6 dollars on Friday from 195.30 dollars the previous week.
On the CSCE in New York, a pound of unrefined sugar for March delivery sagged to 5.46 cents from 5.82 cents the previous Friday.
GRAINS AND SOYA: Maize and soya prices bounced back from the bird flu-inspired losses of the previous week as weekly US export figures either met or beat expectations.
But wheat prices headed south after snowfalls in Midwest producer areas helped shield crops from frost.
In Chicago, the price of wheat for March delivery stood at 380.5 cents a bushel on Friday from 385 a week earlier.
On LIFFE, wheat for March delivery fell to 101.75 pounds a tonne from 105.5 pounds.
In Chicago maize for March delivery rose to 278 cents a bushel from 272.5 cents.
Soyabeans for March delivery climbed to 842 cents a bushel from 807.
March-dated soyabean meal - used in animal feed - nudged up to 256.3 dollars per tonne from 251.5.
COTTON: Cotton prices were driven lower by speculative selling.
"The market came under continuous pressure as fund liquidation ran through stops and trade stood aside," said Refco's Prendergast.
New York's March contract dipped to 67.80 cents a pound on Friday from 70.00 cents a week earlier.
The Cotton Outlook Index of physical cotton, the average of the world's lowest prices, declined to 74.35 cents from 76.20 cents.
WOOL: Wool prices stabilised thanks to demand from China and a rebound in the value of the US dollar against its Australian counterpart.
"The Australian wool market steadied this week, as prices increased by 0.5 percent on average," the Australian Wool Industries Secretariat reported.
"Buying activity was predominantly for China with reasonable activity amongst others," it added.
The Australian Eastern index stood at 7.90 Australian dollars per kilo on Thursday from 7.89 dollars the previous week.
The British Wooltops index wilted to 468 pence from 475.
Comments
Comments are closed.