Commodities start 2013 with a bang


Published — Sunday 6 January 2013

Last update 6 January 2013 5:00 am

| نسخة PDF Print News | A A

LONDON: Commodities mostly rallied last week on investor relief as US lawmakers clinched a last-gasp deal to avoid the fiscal cliff of tax hikes and spending cuts in the United States, stoking optimism over demand.
"The commodities markets have started the new year with a bang," said Commerzbank analyst Eugen Weinberg.
"The main reason cited for this is the agreement achieved in the fiscal dispute in the US, though growing economic optimism and risk appetite, a weaker US dollar and the expansionary monetary policy pursued by central banks are likely to lend additional support to the upswing.
"We thus look ahead to the year 2013 with great optimism. This will also be good news for most businesses, as prices are being driven above all by robust demand."
The fiscal deal was seen as a step, albeit a temporary one, toward correcting US public finances, which are suffering from a huge annual deficit and accumulated mountain of debt.
Traders also digested December's US non-farm payrolls report which came in largely as expected, showing modest job growth, while the American economy's huge services sector showed a surprising expansion.

OIL: Prices jumped following news that the United States — the world's biggest consumer of crude oil — has avoided harsh "fiscal cliff" measures that had threatened to plunge it back into recession.
However, while Democrats and Republicans passed a compromise, they only delayed the imposition of spending cuts for two months, meaning another debilitating stand-off is almost certain at the end of next month.
"Relief that the US avoided its fiscal cliff pushed Brent crude to a two-month high at the start of the New Year," said analyst Gary Hornby at Inenco.
"Although the deal was cobbled together at the last minute, oil prices rose as the alternative was much worse."
On Wednesday, the first trading day of 2013, Brent hit $112.90 per barrel — its highest level since mid-October. New York crude meanwhile touched $ 93.87, which was a mid-September pinnacle.
The oil market has since retraced some of its gains after minutes from the Federal Reserve's December policy meeting indicated that its quantitative easing stimulus policy could end sooner than expected.
Prices also pulled back somewhat on growing concerns over further political wrangling in Washington in the coming months.
There are big worries about the lifting of the debt ceiling, also at the end of February, with analysts saying the US could witness a repeat of the row in summer 2011 that saw Washington's credit rating downgraded for the first time.
"Oil prices have begun to ease back slightly, with the euphoria over the US budget deal fading away and the threat of a possible downgrade from the big three ratings agencies as well as high oil production levels," added Hornby.
By Friday on the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for delivery in February climbed to $ 92.65 a barrel from $90.97 a week earlier.
On London's Intercontinental Exchange, Brent North Sea crude for February gained to $ 111.22 a barrel from $110.72 the previous week.

PRECIOUS METALS: Gold faced a rollercoaster ride, soaring to $1,694.81 on Wednesday to the highest level since Dec. 18, as the market was driven by optimism over the fiscal cliff breakthrough deal.
However gold plunged on Friday to $ 1,625.85 — a low point last seen on Aug. 21 — as the Federal Reserve minutes dampened concerns over rising inflation.
Sister metal silver faced a similar fate, soaring as high as $ 31.48 on Wednesday before diving to $ 29.23 on Friday.
Glamorous metal gold is regarded as a safe store of value in times of elevated inflation.
"Gold has softened a little on US dollar strength now that the initial bout of euphoria over the deal to avert the fiscal cliff has passed," said Ross Norman, head of London-based bullion broker Sharps Pixley.
He added: "Gold is seen primarily as an inflation hedge and a wealth preserver and to that extent we are seeing some some investors exiting gold."" By late Friday on the London Bullion Market, gold dipped to $ 1,648 an ounce from $ 1,657.50 a week earlier.
Silver slid to $ 29.32 an ounce from $ 30.15.
On the London Platinum and Palladium Market, platinum rose to $ 1,557 an ounce from $ 1,527.
Palladium fell to $ 689 an ounce from $ 675.

BASE METALS: Base or industrial metals scored multi-month peaks in the first trading week of 2013, as traders celebrated the fiscal cliff deal and upbeat Chinese data.
"Despite the meager progress the politicians made, markets are rejoicing," said INTL FCStone analyst Edward Meir.
"Base metals are up sharply, with copper up by about $ 270 per ton and now at the $ 8,200 mark. There are good gains in the rest of the group as well, with lead and tin in breakout mode."
Sentiment was also boosted after official data showed that China's manufacturing activity expanded in December for a third straight month, adding to signs the world's number two economy is emerging from a prolonged downtrend.
The official purchasing managers' index (PMI) stood at 50.6 in December, unchanged from the previous month. A reading above 50 indicates expansion.
By late Friday on the London Metal Exchange, copper for delivery in three months soared to $ 8,116.50 a ton from $ 7,888 a week earlier.
Three-month aluminum rallied to $ 2,090 per ton from $ 2,067.
Three-month lead grew to $ 2,365.24 a ton from $ 2,325.
Three-month tin rose to $ 23,975 a ton from $ 23,252.
Three-month nickel increased to $ 17,585 a ton from $ 17,150.

COFFEE: Coffee prices forged seven-week peaks on speculative buying interest but finished the week with mixed fortunes.
By Friday on NYBOT-ICE, Arabica for delivery in March eased to 145.80 US cents a pound from 145.85 US cents a week earlier.
On LIFFE, Robusta for March gained to $ 1,937 a ton from $1,907 a week earlier.

COCOA: The market slid on the back of plentiful supplies of the commodity which is mostly used to make chocolate. By Friday on LIFFE, London's futures exchange, cocoa for delivery in March dropped to 1,417 pounds a ton from 1,445 pounds a week earlier.
On New York's NYBOT-ICE exchange, cocoa for March decreased to $ 2,213 a ton from $ 2,262 a week earlier.

SUGAR: Prices hit multi-week highs after the fiscal cliff deal, but ended in negative territory on expectations of rising output from key producer Brazil.
By Friday on LIFFE, the price of a ton of white sugar for delivery in March fell to $ 511.60 from $ 522 a week earlier.
On NYBOT-ICE, the price of unrefined sugar for March decreased to 19.00 US cents a pound from 19.45 cents the previous week.

What's happening around Saudi Arabia

JEDDAH: It is the Islamic duty of all citizens to protect the security of their nation, according to Grand Mufti Sheikh Abdul Aziz Al-Asheikh.Al-Asheikh said that scholars and preachers are required by Islamic law to address problems facing society,...
RIYADH: Prince Sultan University students will launch an application on Dec. 9 for emergency medical services, which would link patients with ambulances.The app would allow people to share their locations, determine the time for an ambulance to arriv...
RIYADH: A man and a woman died in the past 24 hours in rain-related incidents as the capital was lashed by heavy rains. Four more patients also died in the central hospital due to respiratory problems due to the cold weather.Riyadh Civil Defense spok...
RIYADH: The King Salman Center for Relief and Humanitarian Works (KSCRHW) has started implementing a directive to distribute 200,000 lambs to Yemenis in the Hadramout province.“The aid came within an integrated program for the alleviation of the suff...
MADINAH: The Board of Forensics Medicine in Madinah has cleared a hospital here of negligence involving the death of a citizen at its facility, citing lack of evidence and that the defendants, two consultants, failed to turn up for the hearing.The fa...
JEDDAH: A young Saudi man has won an international innovation award for inventing a “smart boat” that can monitor sea pollution.Abdulaziz bin Mashhoor Al-Shammakhi won the award with 20 young people who were selected from among 700 participants from...
JEDDAH: Umrah pilgrims can expect to save between 10 and 15 percent on the cost of their hotels under a new electronic booking system that cuts out intermediaries.This is according to Abdullah Qadi, deputy president of the national committee for Haj...
RIYADH: Surgery performed at King Khalid Hospital in Najran made a 40-year-old Saudi woman regain her sight which was lost eight months ago.Hospital General Supervisor Abdo Al-Zobayri said here that the patient had lost her sight eight months ago bec...
RIYADH: More than 200,000 women were tested for breast cancer and only 15 positive cases were detected in the capital during the monthlong campaign to fight breast cancer which ended here on Tuesday.Speaking at the closing ceremony of the campaign, D...
KUWAIT: Kuwaiti Minister of Commerce and Industry Yusuf Al-Ali issued a decree to ban the import of all types of livestock including cows, goats, sheep, giraffes, camels, lamas, antelopes, and others from markets including Saudi Arabia, France and Sl...
RIYADH: Health Awareness of Our Society (Hayatuna) Secretary General Dr. Abdulrahman Al-Qahtani has urged drivers to stop at a safe place if they have to call or answer their cell phones.“If a motorist wants to use his cell phone while driving or wan...
RIYADH: The Kingdom has recorded remarkable growth in the volume of expenditure for domestic tourism this year which has increased to SR42.2 billion as against SR35.4 billion last year, according to the Tourism Information and Research Center (MAS),...
JEDDAH: Pakistan Navy warship PNS Tariq has arrived at Jeddah Islamic Port on a goodwill and training visit. The ship, which arrived on Monday and is under the command of Capt. Syed Asad Ali Imran, had come from the Gulf of Aden after taking part in...
JEDDAH: The new Sri Lankan ambassador to Saudi Arabia has stressed the importance of improving the island nation’s relationship with Saudi Arabia.Ambassador Azmi Thassim was speaking during his recent visit to the Sri Lankan International School in J...
JEDDAH: A former member of the Commission for the Promotion of Virtue and Prevention of Vice (Haia), announced that he withdrew the lawsuit he had previously filed against a young man who assaulted him with a knife on the night of Eid Al-Fitr in 1434...

Events & Exhibitions

Stay Connected