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.
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.
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.
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.
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.
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.
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.
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.
"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.