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London commodities

Oil, platinum continue their ascent

LONDON: Oil, platinum and nickel prices continued their ascent this week as the World Bank published its latest report predicting a general rise of commodity prices in the year ahead.

Oil prices were pushed higher by glacial temperatures in the northeastern United States and a decline in US stocks.

The markets continued to speculate as to whether the Organisation of Petroleum Exporting Countries (Opec) will maintain or increase production quotes as its March meeting.

Palladium and platinum prices soared to more than 500 dollars an ounce, with palladium at an all-time high and platinum at its highest level since the middle of 1997.

The two sister metals are still spurred by strong worldwide demand, particularly from the car industry, and by uncertainty about Russian exports.

Among base metals, nickel bucked the trend on a generally morose London market to attain its highest prices for four and a half years.

GOLD: Gold prices progressed slightly this week in a market which was largely apathetic, although sustained by strong platinum prices.

The spot price of gold on the London Bullion Market was 288.25 dollars compared with 286.50 a week earlier.

Prices appeared largely unaffected by interest rate rises announced by the US Federal Reserve and European Central Bank.

SILVER: The strong price of platinum failed to prevent the price of silver falling. The price per ounce on the London Bullion Market fell to 5.20 dollars compared with 5.29 dollars.

PLATINUM and PALLADIUM: Prices again broke records this week on strong demand and uncertainty as to when Russian exports will resume.

An ounce of platinum at 502 dollars at the end of the week, compared with 462 dollars the week before, was trading at its highest levels for two and a half years.

Palladium gained 35 dollars on the week to a record 511 dollars. The metal has been breaking record levels since mid-December as exports from Russia, the world's leading exporter, have dwindled on the imposition of a five-percent export tax on precious metals.

Meanwhile, exports of platinum from Russia, which is the second-largest producer after South Africa, have been paralysed since spring 1999 by a law restricting exports to "state organs".

In January, acting President Vladimir Putin signed an amendment to the law, but platinum exports remain severely restricted.

BASE METALS: Nickel prices bucked a generally weak trend on the London market to rise to their highest level for 4-1/2 years amid strong global demand for stainless steel, the metal's leading outlet.

Nickel also gained from production problems in Australia to rise to 9,105 dollars a tonne. Market reserves have fallen to their lowest level since 1991. Dealers said that the fundamental outlook global demand and low stock levels.

Three-month nickel prices on the London Metal Exchange (LME) rose by 445 dollars to 9,105 dollars per tonne. Market reserves fell to 41,958 tonnes from 42,708 tonnes. In contrast, copper lost 70.5 dollars to 1,807.5 dollars per tonne.

Aluminium prices fell by 63 dollars to 1,665 dollars per tonne. Zinc shed 43 dollars to 1,120 dollars per tonne. Lead lost 14 dollars to 468.5 dollars per tonne. Tin fall by 70 dollars to 5,790 dollars per tonne.

OIL: Crude prices gained from continued cold weather in northeastern regions of the United States and from a fall in oil reserves.

On the International Petroleum Exchange (IPE), Brent North Sea crude for March delivery rose to 26.42 dollars a barrel from 25.70 dollars a week earlier.

In New York, light sweet crude for March delivery rose to 28.03 dollars a barrel from 27.62 dollars.

The American Petroleum Institute (API) said that US crude stocks fell last week to their lowest level for 20 years.

Meteorologists predicted that cold weather would continue in the United States well into next week.

The US energy secretary, Bill Richardson, has on several occasions voiced concern that oil prices are too high. However, he said this week that the United States has not yet taken any decision in relation to widespread market rumours that Washington plans to sell off some of its strategic reserves of some 572 million barrels.

Prices remained buoyed by ongoing predictions that Opec will maintain production cutbacks beyond the current March deadline. In March last year, the Organisation of Petroleum Exporting Countries decided to reduce output for one year by 1.7 million barrels a day as part of global production cutbeak of 2.1 million barrels.

Oil ministers from the Gulf Cooperation Council countries will meet in Ryad on February 23. The World Bank predicted that the price of oil products would rise by 10.7 percent this year.

RUBBER: Rubber prices remained strong amid extremely light trading volumes. The London rubber index rose to 510 pounds per tonne (for February delivery) from 482 pounds.

In Kuala Lumpur, the RSS1 index rose to 2.71 ringgits per kilo from 2.64 ringgits.

SMR20 rubber, used to make tyres, rose to 2.89 ringgits per kilo from 2.85 ringgits.

COCOA: Cocoa prices fell back this week in the context of world wide over-production.

On the London market, cocoa for May delivery was selling for 567 pounds at the end of the week compared with 596 pounds at the end of last week. Trading house ED and F Man said the 1999-2000 world harvest would yield 2.95 million tonnes, up 6.3 percent from last year and production is expected to outstrip demand for the first time since the 1995/96 harvest.

COFFEE: Coffee prices were again mixed on international markets this week, with Robusta posting a modest price increase, while Arabica lost a little ground.

In London, Robusta for May delivery finished the week at 1,122 dollars per tonne, compared with 1,101 dollars a tonne for the March contract at the end of last week. At the start of the week, Robusta fell to around 1.050 dollars per tonne, its lowest level since 1993.

On the New York market, higher quality Arabica for May delivery was trading at 115.60 cents a pound at the end of the week down from 117.30 cents a week earlier.

In the US, the Arabica market was dominated by technical operations as dealers awaited news on the size of the Brazilian harvest which has been hit by drought followed by torrential rain at start of the year.

TEA: Demand was good and prices were generally higher in the Mombassa tea auctions in Kenya, although they are slightly lower in Colombo, Sri-Lanka, the London Tea Brokers Association said.

Top-grade BP1 (Broken Pekoe) gained 12 cents, while other qualities rose by as much as 18 cents.

SUGAR: White sugar prices rallied on the international market this week, primarily for technical reasons.

In London, May contracts finished the week at 171.9 dollars a tonne compared with 170.5 last week, while in New York, sugar for March delivery was selling for 5.61 cents a pound on Thursday compared with 5.41 cents the previous week.

VEGETABLE OILS: The price of US soya oil fell back this week in spite of the publication of better-than-expected US weekly sales as weather improved in US and South American production areas.

On the Chicago Board of Trade (CBoT), the price of a bushel of soya for March delivery fell 26 cents from the previous week to 5.01 dollars.

GRAINS: Better-than-expected US weekly sales figures failed to lift the price of cereals on the international market as the weather became more favourable for the South American harvest.

The United States sold 566,000 tonnes of wheat last week Ñ compared with analysts' expectations of 300,000 to 400,000 tonnes and 821,000 tonnes of maize.

Profit-taking hit the market from the start of the week as weather improved in Latin America and the southwest of the US. In Chicago, the price of a bushel of wheat (27.2 kilogrammes for March delivery) was 253.75 cents compared with 263.50 cents the week before.

A bushel of maize (25.4 kilogrammes for March delivery) was trading at 218.00 cents, compared with 225.75 cents a week earlier.

In London, a tonne of wheat (March delivery) was selling for 71.00 pounds, compared with 71.10 pounds for January delivery at the end of last week.

COTTON: US cotton prices dropped back over the week in a clam market. Traders were awaiting Friday's announcement of the area of land to be allocated to cotton growing in the US this year, which analysts expect to be greater than last year's allocation.

In New York, cotton for May delivery was selling for 57.72 cents a pound compared with 58.82 cents last week. Cash prices covered by the Cotton Outlook index were 51.40 cents a pound up from 50.10 cents.

WOOL: In Australia, prices continued to fall, including for the finest merino wool which has been much in fashion over the past weeks. Australia's Eastern index lost nine cents per kilo compared with last week to trade at 624 cents a kilo.

The Wooltops index was unchanged at 282 pence a kilo, while in Britain the 16th auctions of the 1999/2000 season saw heavy demand and rising prices.ÑAFP