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London commodities Palladium, platinum at new peaks last week

LONDON: Palladium and platinum were the main attraction on commodities markets of last week, scaling new peaks as Russian exports remained fitful, while gold and oil failed to maintain recent gains.

The two sister metals cashed in on strong global demand and uncertainty concerning the date and amount of a resumption of exports from Russia, which were suspended for much of last year due to legal technicalities.

Platinum prices touched 10-year highs points and had gained 18 dollars an ounce by Friday to stand at 462 dollars an ounce, while palladium set a new all-time highs point at 476 dollars an ounce.

Gold meanwhile fell back despite a relatively successful auction of 25 tonnes of the precious metal by the Bank of England (BoE). The market eased after it emerged that producers figured among the buyers.

Oil prices also slipped as market players took profits from recent gains, concerned that a producer cutback that has helped swing prices higher might not be extended beyond March.

GOLD: Gold prices eased despite a better-than-expected outcome to the fourth BoE and gold auction in six months.

The spot price on the London market fell to 286.50 dollars per ounce from 287.70 dollars last week.

The BoE continued its programme of sales by auctioning 25 tonnes of bullion at 289.50 dollars an ounce in an operation which analysts said had been satisfactory, with the sale 4.3 times oversubscribed.

But the market then turned negative amid rumours that some gold producers had been among the buyers. An announcement by the Dutch central bank that it had sold 23 tonnes of gold last week also weighed on prices.

SILVER: Silver prices advanced as demand remained strong and the prospect of Chinese central bank sales dissipated somewhat.

The spot price on the London Bullion Market rose to 5.29 dollars an ounce from 5.13 dollars.

PLATINUM and PALLADIUM: Prices hit new heights this week boosted by strong world demand and continued uncertainty surrounding Russian exports.

Platinum prices rose to 462 dollars an ounce from 444 dollars last week while palladium was going for 476 dollars, a new record high, from 445 a week earlier.

Palladium, a precious metal much used by the auto-manufacturing industry, has scaled a succession of peaks since mid-December, amid irregular exports from Russia.

BASE METALS: Nickel prices soared to five-year high points, while fundamentals for the entire base metals complex remained essentially sound even if some prices fell due to an increase in market stocks.

Nickel benefitted from strong global demand for steel and from problems with Australia's laterite producing sector.

Aluminium's upside was capped by indications that Canadian producer Alcan was planning to increase production. Last week US group Alcoa announced an annual output increase of 200,000 tonnes from next month.

In general, the fundamentals for the complex are good, analysts say, as stock levels remain low, demand strong and supply limited.

Three-month nickel prices gained 60 dollars to 8,660 dollars a tonne as official stocks on the London Metal Exchange (LME) fell to 42,708 tonnes from 44,010 tonnes a week earlier.

Copper prices fell 47 dollars to 1,878 dollars a tonne as stock levels grew 27,200 tonnes to 813,075 tonnes.

Aluminium prices advanced 2.5 dollars to 1,728 dollars a tonne despite an increase in reseoE1eAAQonnes.

Zinc lost 40 dollars a tonne to 1,163 dollars as stock levels grew to 291,175 tonnes.

Lead prices gained 2.5 dollars to 482.5 dollars a tonne while tin prices shed 170 dollars to 5,860 dollars a tonne.

OIL: Oil prices fell back this week amid profit-taking of recent sharp gains, as hopes dwindled of an extension to producer output cutbacks.

The Brent North Sea reference crude fell to 25.70 dollars a barrel for March delivery on the International Petroleum Exchange in London from 26.76 dollars last week for February.

On the New York Mercantile Exchange (NYMEX), light sweet crude for February delivery fell to 27.62 dollars from 29.66 dollars last week.

Prices peaked at new nine-year high points early in the week as a US cold snap increased demand, eating into already low stock levels.

But prices fell after Norway and Saudi Arabia both said that crucial output cutbacks should remain in place until the end of March as planned, but said nothing about an extension to the cuts.

A pact last March to rein in global supply by 2.1 million barrels a day, including 1.7 million from the Organisation of Petroleum Exporting Countries (OPEC), helped oil prices more than double, but now the market is looking for indications of what will happen once the agreement expires in March.

OPEC will take a final decision on the production quotas in Vienna in March.

RUBBER: Rubber prices gained ground this week in a calm market. The arrival of winter in some Asian producer regions could limit supply, helping prices in coming weeks, one London dealers said.

The London rubber index jumped to 482 pounds per tonne (for February delivery) from 455 last week.

Meanwhile, in Kuala Lumpur, the RSSI index rose to 2.64 ringgit per kilo from 2.46 ringgit, while the SMR20 index for material used in tire-manufacturing rose to 2.85 ringgit from 2.74.

COCOA: Cocoa prices moved in a narrow range this week as the market shrugged off political instability in world number one producer Cote d'Ivoire because bean shipments to the country's ports remained regular.

On the London market, cocoa for May delivery rose to 596 pounds per tonne from 594 pounds last week.

The market largely ignored an announcement by the Ivorien junta that seized power in December of a 30-day delay to a date set for elections, noting that the political reactions were having little effect on the cocoa industry.

A more important factor was the rain which weighed down on prices as it improved prospects for harvests in West African countries. But prices are expected to pick up at the end of February when shipments start to tail off.

COFFEE: Coffee prices were mixed as speculation centred on the possibility of a lower-than-expected Brazilian harvest.

In London, Robusta for March delivery fell by 19 dollars to 1,101 dollars per tonne.

But in New York, Arabica for May delivery rose to 117.30 cents per pound from 114.90 cents.

Prices have been under pressure since the end of last year when Brazil said it was anticipating a larger coffee bean harvest than previously expected in the 2000/01 season.

But its prediction of 28.9 million sacks (of 60 kg) have given way to market rumours that the crop will amount to 24-26 million sacks.

The Economic Intelligence Unit nonetheless predicted lower medium-term prices, citing Brazil's strong production potential and weak demand.

TEA: Demand fell away in the Mombassa auction houses but picked up in Colombo. Top-grade BP1 (Broken Pekoe) leaves managed to claw back last week's losses by gaining up to 13 cents, but PDust, which is used mainly to make tea bags, fell up to 25 cents.

SUGAR: Sugar prices fell back this week as the market took a dim view of plentiful harvests and slack demand.

In London, May sugar contracts slipped to 170.5 dollars a tonne from 173.8 dollars. In New York, white sugar for March delivery fell to 5.41 cents a pound from 5.56 cents.

The declines were explained by strong crops reported in Brazil and other major exporters for the 1999-2000 season, coupled with the prospect of weak demand from major sugar-buyer Russia, which announced a hike in import tax on raw sugar for 200 days.

VEGETABLE OILS: US soya prices gained further ground this week amid predictions of dry weather over South American producer regions.

On the Chicago Board of Trade (CBoT), a bushel of soya gained 22 cents to 5.27 dollars (for March delivery).

Dry weather has reigned over Argentinean and southern Brazilian crops, but better weather has been forecast for the coming days.

GRAINS: The US wheat prices had contrasting fortunes on international markets this week as weather patterns in the Americas continued to push prices around.

Wheat prices were depressed by precipitation in US producer regions, but maize was given a boost by dry weather in South America.

In Chicago, wheat prices fell to 263.50 cents from 265.00 cents a bushel (of 27.2 kg, for March delivery).

Maize prices rose to 225.75 cents a bushel (of 25.4 kg, for March) from 220.75 last week.

In London, meanwhile, wheat prices rose to 71.10 pounds per tonne from 69.65 pounds.

The market was also digesting comments from Russian acting President Vladimir Putin who said his country, which has relied on considerable wheat supplies from abroad in the past, could do without imports, despite an agriculture ministry assessment of a 10-million-tonne shortfall this year.

COTTON: The US cotton prices picked up this week in calm trading with few new market-moving factors. In New York, May contracts rose to 58.82 cents a pound from 58.76 cents. Cash prices covered by the Cotton Outlook index rose to 50.10 cents a pound from 47.20 cents.

WOOL: Wool prices slipped back a fraction but remained well supported not far from the high levels touched earlier this month.

Australia's Eastern index lost a cent to 633 Australian cents per kilo. The Wooltops index remained advanced to 282 pence per kilo in the absence of auctions in Britain. AFP