Commodities mostly fall in choppy trading

LONDON: Commodities mainly fell this week as traders digested an EU plan to tackle the Greek debt crisis, alongside news of moderately weaker economic growth in the United States, a key consumer.

“Most commodity markets (were) lower, weighed primarily by broader market concerns,” said Barclays Capital analysts in a research note to clients. They added: “Lingering concerns on sovereign risk in the euro area and a smattering of mixed US macro-economic data have all affected the trajectory of commodity price movements.” European leaders agreed in Brussels on Friday to rescue debt-ridden Greece, but markets remained cautious amid lingering concerns over the deal. Meanwhile, data showed on Friday that the US economy grew at a slower pace than previously thought in the fourth quarter, as business and consumer spending slackened amid a fragile recovery from recession. The world’s largest economy grew by 5.6 per cent in the October-December period, the Commerce Department said, revising downward an earlier estimate of 5.9 per cent growth in gross domestic product.

OIL: Prices fell at the start of the week, before attempting a brief recovery as the dollar weakened, but drifted lower on Friday as traders mulled the Greek rescue deal and the US economic growth outlook.

The euro strengthened further against the dollar on Friday, but European stock markets fell in a cautious reaction to an unprecedented EU plan to rescue Greece from its debt crisis. European leaders clinched a deal on Thursday in Brussels to rescue Greece with a standby package of loans backed by the International Monetary Fund. However, the euro had briefly touched a 10-month low against the dollar on Thursday on jitters over the Greek debt crisis, before the deal hit the headlines. A stronger US unit tends to dent oil demand because dollar-priced crude becomes more expensive for buyers using rival currencies.

Oil had fallen earlier in the week as traders also tracked US demand worries as a government inventory report showed a jump in American crude inventories. The US government’s Department of Energy said in its weekly inventory report on Wednesday that crude oil inventories rose 7.2 million barrels last week, confounding expectations of an increase of 1.7 million barrels.

By late Friday on the New York Mercantile Exchange, Texas light sweet crude for delivery in May sank to 79.82 dollars compared with 80.29 dollars a week earlier for the expired April contract. On London’s Intercontinental Exchange, Brent North Sea crude for May delivery dipped to 79.05 dollars from 79.66 dollars a week earlier.

PRECIOUS METALS: The prices of all precious metals declined. By Friday on the London Bullion Market, gold eased to 1,096 dollars an ounce from 1,105 dollars the previous week.

Silver dipped to 16.85 dollars an ounce from 17.31. On the London Platinum and Palladium Market, platinum edged down to 1,596 dollars an ounce from 1,617 dollars. Palladium fell to 458 dollars an ounce from 476 dollars.

BASE METALS: Base or industrial metals diverged, despite growing hopes of a recovery in demand. “There is a growing body of evidence to suggest that the biggest ever recovery in global base metals demand is taking shape,” Barclays Capital analysts said.

“Scepticism over the sustainability of this recovery and, in some cases, total blind sidedness over any recovery at all, means that prices have yet to fully reflect what are turning into very positive demand dynamics indeed.” By Friday on the London Metal Exchange, copper for delivery in three months rose to 7,512 dollars a tonne from 7,419 dollars the previous week.

Three-month aluminium dropped to 2,230 dollars a tonne from 2,252 dollars. Three-month lead slid to 2,110 dollars a tonne from 2,220 dollars. Three-month tin grew to 17,750 dollars a tonne from 17,700 dollars. Three-month zinc fell to 2,246 dollars a tonne from 2,290 dollars. Three-month nickel increased to 23,650 dollars a tonne from 22,450 dollars.

SUGAR: Prices extended recent losses. By Friday on the New York Board of Trade (NYBOT), the price of unrefined sugar for delivery in May dropped to 17.15 US cents a pound from 18.42 cents the previous week.

On LIFFE, London’s futures exchange, the price of a tonne of white sugar for May slid to 481 pounds from 523.90 pounds.

COCOA: Cocoa prices steadied in muted trade. By Friday on LIFFE, the price of cocoa for delivery in May eased to 2,210 pounds a tonne from 2,218 pounds the previous week.

On the NYBOT, the May cocoa contract firmed to 2,869 dollars a tonne from 2,863 dollars.

COFFEE: Coffee prices rebounded strongly after striking a three-year trough the previous week on expectations of rising output. By Friday on LIFFE, Robusta for delivery in May rallied to 1,344 dollars a tonne from 1,264 dollars the previous week. On the NYBOT, Arabica for May jumped to 137.15 US cents a pound from 133 cents.

GRAINS AND SOYA: Grains and soya prices weakened. By Friday on the Chicago Board of Trade, maize for delivery in May dipped to 3.57 dollars a bushel from 3.74 dollars the previous week. May-dated soyabean meal, used in animal feed, dropped to 9.45 dollars from 9.61 dollars. Wheat for May was down to 4.66 dollars a bushel from 4.83 dollars.

RUBBER: Malaysian rubber prices gained ground due to prolonged dry weather. On Friday, the Malaysian Rubber Board’s benchmark SMR20 rose to 315.10 US cents a kilo, from 313.0 cents last week.