LONDON - Platinum prices spiked this week as deadly violence costing the lives of 34 people struck a platinum mine in South Africa. Oil prices hit three-month highs on a number of factors, including positive US economic data and growing hopes of fresh economic stimulus by global central banks.
PRECIOUS METALS: Platinum prices hit the highest level since early July, at $1,462.50 an ounce, owing to the violence at a platinum mine in South Africa run by London-listed miner Lonmin. The metal’s price has risen about 4.0 per cent since Thursday. South African police on Friday insisted they fired only in self-defence in a clash with striking mineworkers in which 34 people died, the deadliest protest since the end of apartheid.
The workers at the Marikana mine were on a week-long wildcat strike demanding a tripling of their wages from the current 4,000 rand (400 euros, $486) a month. Lonmin, whose share price has slid on the violence, insisted that police and not the company were responsible for security at the mine.
“The (platinum) price jump was triggered by the escalation of violence in South Africa, which is responsible for 75 per cent of global platinum mining production,” Commerzbank analysts said in a research note.
“The investment climate in South Africa is likely to deteriorate further, resulting in lower platinum production. This would suggest further climbs in platinum prices, both in the short and long term,” they added.
Gold prices meanwhile fell after an industry body said global demand for the precious metal had fallen to its lowest level in two years on weaker buying in main markets India and China, despite rising demand from central banks. Worldwide demand fell 7.0 per cent year-on-year in the second quarter, the World Gold Council said in a report.
Reduced demand for gold from jewellery, investments and technology sectors offset the rise in buying of the safe haven commodity from global central banks amid economic uncertainty. By late Friday on the London Bullion Market, gold fell to $1,614.75 an ounce from $1,618.50 a week earlier. Silver climbed to $28.20 an ounce from $27.88. On the London Platinum and Palladium Market, platinum surged to $1,455 an ounce from $1,399.
Palladium gained to $592 an ounce from $578 an ounce.
OIL: World oil prices hit three-month highs before cooling Friday on profit-taking.
Crude futures on Thursday reached the highest levels since May on encouraging economic figures in top crude consumer the United States, traders said.
New York oil hit $95.69 a barrel and Brent $117.03. The Brent price was for its September contract which expired at the close of trading on Thursday.
“Brent has fallen (from Thursday’s highs)... and is thus priced three dollars lower than at close of trading yesterday,” said analysts at Commerzbank.
“The drop in price is largely the result of the contract rollover. The October contract, which from today represents the reference price, was trading 2.5 dollars lower than the September contract at the time of the rollover,” they added in a research note.
Oil prices meanwhile spiked Thursday thanks to a brighter demand outlook for the world’s biggest economy.
Weekly numbers for new unemployment insurance claims, an indicator of the pace of layoffs, came in as expected and in the same range of the past four months.
Elsewhere, July data on new US housing construction, although slightly down from June, gave a picture of an industry steadily picking up pace.
Oil prices had also rallied on Wednesday after the US Energy Information Administration (EIA) said crude inventories plunged 3.7 million barrels in the week to August 10, far heavier than the market had expected. Falling US inventories indicate stronger demand.
“The release of the weekly EIA oil inventories figures... bring optimism about a recovery in the US oil demand,” said Myrto Sokou, an analyst at Sucden brokers.
Prices have also won support this week from fresh hopes of more economic stimulus measures by central banks—and notably by the central bank in commodities-hungry China.
“Premier Wen Jiabao said that China faces economic headwinds, but that the recent moderation in inflation data gives the government more room for monetary easing,” said David Morrison, analyst at trading group GFT Markets.
“This boosted hopes that the People’s Bank of China may soon provide further stimulus... Any such loosening of monetary policy would be seen as positive for oil demand.”
The European Central Bank is also expected to resume its dormant bond-buying scheme, a move that could ease pressure on sovereign debt issued by Italy and Spain. In the US, investors are expecting the Federal Reserve to unveil its own drive to pump cash into the economy.
Crude futures were also lifted by Middle East unrest and tight North Sea crude supplies, traders said.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in October stood at $114 a barrel compared with $111.84 for the September contract a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for September jumped to $95.21 a barrel from $92.30.
BASE METALS: Aluminium hit a near three-year low at $1827.25 a tonne on Thursday.
“The situation facing aluminium producers is worsening from day to day, prices having plunged by 20 per cent since March alone and now riding close to levels last reached in September 2009,” said analysts at Commerzbank.
“The current price weakness is attributable first and foremost to continued high aluminium production in China.”
By late Friday on the London Metal Exchange, copper for delivery in three months jumped to $7,537 a tonne from $7,440 a week earlier.
Three-month aluminium fell to $1,857 a tonne from $1,877.
Three-month lead dropped to $1,872 a tonne from $1,898.
Three-month tin climbed to $18,460 a tonne from $17,785.
Three-month nickel grew to $15,467 a tonne from $15,305.
Three-month zinc decreased to $1,800 a tonne from $1,842.
COCOA: Prices retreated on profit-taking after recently striking 10-month highs on tight supply concerns. “The absence of fresh news out of the top-cocoa producing region of West Africa, allowed light selling to push values down,” said the Public Ledger commodities publication. “Some of the selling that surfaced in cocoa reflected the uncertain global macroeconomic situation and the potential for consumer demand to continue to decline,” it added.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in December dropped to £1,625 a tonne from £1,674 a week earlier.
In New York on the NYBOT-ICE, cocoa for December fell to $2,418 a tonne from $2,479.
COFFEE: Coffee prices fell further, reaching near two-month lows in New York, as dry weather in Brazil was expected to boost supplies.
“Recent dry weather in Brazil provided good conditions for the Arabica harvest to progress at a faster pace than originally anticipated, which also weighed on futures,” said the Public Ledger. Arabica prices reached 160.80 cents a pound Thursday, the lowest point since June 26.
By Friday on NYBOT-ICE, Arabica for delivery in December stood at 161.05 US cents a pound compared with 166.55 cents for the September contract a week earlier. On LIFFE, Robusta for November traded at $2,107 a tonne compared with $2,175 for the September contract the previous week.
SUGAR: Sugar futures hit the lowest levels since June on the prospect of strong Brazilian and Indian supplies.
“Drier weather in Brazil and increased precipitation during India’s monsoon season led to expectations for higher supplies, which in turn, undermined sugar values,” said the Public Ledger. By Friday on LIFFE, the price of a tonne of white sugar for delivery in October slid to $558.20 from $586.50 a week earlier.
On NYBOT-ICE, the price of unrefined sugar for October dropped to 20.20 US cents a pound from 21.04 cents the previous week.
RUBBER: Prices extended losses on sluggish demand caused by concerns over the global economic crisis and the release of disappointing Chinese trade data, dealers said.
By Friday, the Malaysian Rubber Board’s benchmark SMR20 slid to 248.65 US cents a kilo from 261.75 cents the previous week.