Commodity prices falter

World commodity prices faced another mixed performance last week as investors mulled a modest recovery in global stock markets and signs of strengthening Chinese and American demand.
Raw materials had been rattled the previous week amid a fierce global stocks sell-off that was triggered by concerns over an overheated Chinese stock market and fears over economic growth in the United States. But many commodity prices have since rebounded, in line with stocks across Europe, Asia and Wall Street, despite investor jitters and choppy trading conditions.
OIL: Oil prices dropped after a volatile week.
Crude futures had slumped Monday as traders sought to limit their investment exposure amid the global stock market downturn. As equity markets stabilised, oil prices rose on the view that there was less of a threat to economic growth, analysts said.
Further gains were made after the US Department of Energy revealed that American stocks of crude oil, distillates and gasoline (or petrol) fell across the board in the week to March 2. Crude futures drifted lower towards the end of the week as traders sought to bank their profits before the weekend.
Traders were also looking ahead to an output meeting in Vienna on March 15 of the Organisation of Petroleum Exporting Countries (OPEC). Analysts are not predicting any further cuts from the powerful cartel, which produces more than a third of global oil supplies.
By Friday in London, a barrel of Brent North Sea crude for delivery in April fell to 61.51 dollars per barrel, from 62.30 dollars the previous week. In New York, a barrel of crude for delivery in April slipped to 60.85 dollars per barrel from 62.10 dollars.
GOLD: Gold prices ended the week on a positive note after a poor start to the trading week. Gold was "supported by the weaker dollar and firmer oil prices amid uncertain market sentiment," said analysts at Barclays Capital.
The precious metal benefits from higher oil prices because they increase the risk of inflation, which in turn increases the attractiveness of gold as a defence against the erosion of the value of money. A weaker US dollar, meanwhile, makes gold less expensive for buyers using other currencies. On the London Bullion Market, gold prices firmed to 652.25 dollars per ounce at Friday's late fixing, from 651.90 dollars the previous Friday.
SILVER: Silver prices followed gold higher, before falling on profit-taking, analysts said. "Further gains by gold and the base metals are likely to draw speculative buying interest back towards silver," said James Moore, an analyst for specialist website TheBullionDesk.com. On the London Bullion Market, silver prices fell to 13.07 dollars per ounce at Friday's late fixing, from 13.53 dollars the previous week.
PALLADIUM AND PLATINUM: Platinum prices held steady but palladium made modest gains. Keen demand and low supplies "should continue to underpin the white metal (platinum) in the coming sessions," said Moore of TheBullionDesk.com.
On the London Platinum and Palladium Market, platinum stood at 1,203 dollars per ounce at the late fixing Friday, unchanged from the previous week. Palladium rose to 352 dollars per ounce, from 347 dollars one week earlier.
BASE METALS: Base metal prices strengthened, with nickel smashing a new record above 43,000 dollars per tonne on frenzied demand and low stockpiles, before running into profit-taking. Nickel climbed as high as 43,261 dollars on the London Metal Exchange (LME), which is the world's leading metals futures market.
Standard Chartered analyst Tariq Salaria said that nickel demand was expected to outstrip supply in 2007, with "continued upside (for prices) likely from potential output disruptions." Copper, meanwhile, rose back above 6,000 dollars per tonne, in line with resurgent Chinese demand.
"China's renewed import demand will push prices higher," Salaria added. On Friday, three-month copper prices rose to 6,150 dollars per tonne on the LME, from 6,056 dollars the previous week. Three-month aluminium prices declined to 2,727.5 dollars per tonne from 2,755 dollars.
Three-month nickel prices gained to 42,450 dollars per tonne from 41,305 dollars. Three-month lead prices fell to 1,804 dollars per tonne from 1,909 dollars. Three-month zinc prices slid to 3,300 dollars per tonne from 3,365 dollars. Three-month tin prices increased to 13,740 dollars per tonne from 13,475 dollars a week earlier.
COCOA: In London cocoa prices reached 1,005 pounds per tonne - the highest point since November 2004 owing to expectations of a large production deficit caused by dry conditions in West Africa.
But the International Cocoa Organisation pointed out that prices remain "well below" levels seen in 2002 and 2003 during the civil conflict in Ivory Coast, the world's biggest producer of cocoa. By Friday on the Liffe, London's futures exchange, the price of cocoa for May delivery rose to 995 pounds per tonne, from 988 pounds a week earlier. On the New York Board of Trade (NYBOT), the May contract stood at 1,789 dollars per tonne on Friday, from 1,797 dollars the previous week.
COFFEE: Coffee prices dropped to the lowest level for four and a half months in New York, but rose in London. "There was some pressure from the Brazilian export figures that came out on Tuesday, with shipments reported higher than expected," Sucden analyst Michael Davies said. In London, market participants were selling coffee amid plentiful supply of Robusta from its top producer Vietnam, he added.
By Friday on the Liffe, Robusta quality for May delivery stood at 1,508 dollars per tonne, from 1,500 dollars a week earlier. On the NYBOT, Arabica for May delivery dropped to 111.90 US cents per pound on Friday, from 115.65 cents the previous week.
SUGAR: Sugar prices fell on both sides of the Atlantic. "The market remains under pressure from the prospect of larger output in Brazil and India, with sentiment leaning towards the downside," Davies said.
By Friday on the Liffe, the price of a tonne of white sugar for August delivery slipped to 328 dollars, compared with 337.50 dollars a week earlier. On the NYBOT, the price of unrefined sugar for July delivery stood at 10.36 US cents per pound, from 11.14 US cents the previous week.
GRAINS AND SOYA: Grains and soya prices fell in Chicago. "The trade was rangebound, in a consolidation mode," Allendale analyst Joe Victor said.
"Investors will continue to watch the South American weather" for direction, he added. On the Chicago Board of Trade, the price of wheat for May delivery fell to 4.72 US dollars per bushel on Friday, from 4.83 dollars the previous week.
Maize for May delivery slid to 4.18 dollars per bushel on Friday, from 4.27 dollars the previous week. May-dated soyabean meal - used in animal feed - dropped to 7.54 dollars on Friday, from 7.62 dollars the previous week. On the Liffe, the price of a tonne of wheat for May delivery stood at 97.50 pounds, from 94.75 pounds the previous week.