LONDON. Apr 3: After beginning the year at a low level, silver prices sparkled higher this week as speculators crowded into the New York market, reports AFP.
Investment funds willingly returned to the market, convinced that the current low level of US stocks is proof of strong, durable industrial demand for the precious metal.
The other precious metals followed silver higher, with gold additionally boosted by the collapsing dollar. A
OH prices also rose on firmer petrol prices in the US market, but the six base metals. copper, aluminium, etc. were all weaker, as was cocoa and sugar.
The other commodities were little changed.
GOLD: Higher. Gold rose around three dollars to 386 dollars per ounce on the collapse of the dollar and on stronger silver prices.
As foreign currency turmoil (gathered momentum, investors can be increasingly interested in the precious metals, particularly after the dollar fluctuated widely on a cut in both German and Japanese interest rates.
Investment funds were also eager to invest in gold of silver as the week went on, particularly as positive fundamentals showed growing demand in European and Asia.
SILVER: Soaring: A rush of speculative buying pushed silver some 50 cents higher to 5.16 dollars and ounce — its highest level since November, when prices plunged.
A large fall in silver stocks on comex. the New York market, also enticed investors back to the market. Stocks have fallen by some 25 million ounces since the end of February. proving that industrial use. particularly in photography, is growing.
The US research body C^(P group also predicted that prices would rise sharply as
production remained weak and demand soared.
PLATINUM AND PALLADIUM: Higher. The price of palladium climbed on US speculative buying to around 176 dollars- per ounce — its highest level in six yeafs.
Palladium, increasingly used by the electronics industry, was Judged extremely attractive by investors looking for safe investments.
Platinum was firm at around 420 dollars per ounce bn strong industrial demand.
COPPER: Easing.. Copper slipped" around 15 dollars to 2.924 dollars per tonne in dull trading during the week, as dealers left the metal despite unconfirmed rumors of strike action at the Canariea Coper Mine in Mexico.
Dealers said they were . waiting for further news on what was happening at Cananea, which has capacity of roughly 140.000 tonnes per year.
Elsewhere, the Bundesbank's surprise decision to cut German interest rates on Thursday "should boost German economic growth and demand for metals and other commodities." said William Adams, metals-analyst at Rudolf Wolff.
Weekly stocks on the London Metal Exchange (LME) fell by 9,400 tonnes to 239,000.
LEAD: Lower. Lead fell around 23 dollars to 603 dollars per tonne on a lazy market. dealers said.
Elsewhere, production : of lead and zinc ore from the main lead and zinc mine at Australia's Mount Isa mining 'and smelting complex was halted on Friday after workers began a new 24-hour work stoppage.
Overtime bans at refining plans, Miens and other sectors, including copper, of the Mount Isa operation in Queensland also remained in effect.
A series of one-day rolling
stoppages by union members since management and labour broke off talks over wage and compensation on February 21 has so far cut several hundred tonnes of copper and lead output, company sources said.
Stocks fell by *3,300 tonnes to 293,050.
ZINC: Slipping. Zinc fell 12 dollars to 1.052 dollars per tonne, despite news late last week that China's Huludao smelter was forced to shut its new 130.0O0 tonne per year plant because of lack of concentrates.
One trader said Zinc's performance was "disappointing" in light of the closure.
"Chinese exports were the single biggest cap on "the market In 1994 — this year we haven't seen any substantial exports at all and now we see confirmation of what a lot of people had been predicting would happen."' said another.
An analyst concurred, saying: "this has been on the cards for some time — China has gone fiat out on metal production at a rate that looked unsustainable in terms of the concentrates availability."
Analysts suggested that China would not be able to buy extra concentrates until the second half of this year, When shipments from the Arctie mines start and several new mines come oil stream.
Stocks fell 15,250 tonnes to 1.019,100.
ALUMINIUM: Lower Alu minium fell around 20 dollars during the week to end at 1.852 dollars per tonne in dull trading with little news continued firm slock downdraws supported the metal at tower levels.
Weekly stocks fell 43,800 tonnes to 1,177.750.
NICKEL: Down. Nickel toll around 170 dollars to 7,720 dollars per tonne.-
Although white collar workers at the Canadian producer Ineo s Sudbury plant voted to •trike on Wednesday, analysts
said this should have little effect on production.
Dealers at GNI said the strike was indicative of the industry as a whole. "During a recession and low prices the mining and smelting companies are in a position of strength and negotiate tough pay deals. When a recovery is seen, the workers start to.use their muscle to make up the difference.
"The ne\t 12 months is therefore likely to be dogged With industrial activity." they added.
A report by Rudolf Wolff analyst Martin Squares, said nickel would continue to fluctuate between 7.000 and, 8.000 dollars per tonne as the fundamentals improve and. demand remains strong in the stainless steel sector.
Stocks fell 1' 968 tonnes to 122.436.
TIN: Down. Tin fell 70 dollars to 5.760 dollars per tonne, despite news of a gen eral strike since Monday at two tin and zinc mines In Bolivia. Huanuni and Coquiri.
Dealers at GNI said there were currently no negotiations between the unidns and the management on the strike, which is seen as a genera) problem with the government, and not a corporate issue.
Both mines each produce aroupd 1.000 tonnes of Un and zinc concentrates per day.
Slocks fell 345 tonnes to 22,495
COCOA: Depressed the ref erence price fell over 10 pounds to 940 pounds per tonne, its lowest level since December, as dealers remained worried by a large har vest in the Ivory Coast, the world » largest producer
The Ivory ('oast harvest, estimated at between 800.000 and 900.000 tonnes, is likely to be one of the largest in the last It) years and will add to al readv considerable world Mik k*
Abidjan however Is dlsput
ing the figures. The Ivory Coast Minister for Commodities Guy Alain Gauze said produeffon for the season (September to August) will be only 750.000 tonnes, or 100.000 tonnes less than the previous season. These estimates, however, ignore new figures, dealers said.
Elsywhere. cocoa producers, al a conference in Abidjan, declared themselves to be in favour of chocolate made with pure cocoa, and criUcised the European Union, which has allowed the use of five per cent of vegetable oils in its chocolate.
COFFEE: Regular. Prices fluctuated between* 3."000 and 3.050 dollars per tonne, as the market remained confused . over whether Brazil, the world’s leading producer. In-tenjed-to join an export retention plan signed by the other members of the association of coffee producing countries in mid March.
On Wednesday, however. Brazilia announced ft was allocating 100 million reals (110 million dollars) to exporters to assist them with export restrictions. as agreed in the plan.
Coffee prices then lifted slightly. Weak exports from Colombia, the world's second largest producer, reached only 780.000 bags (each of 60 kilo grammes) in March, reminded the market that world supply remains poor.
SUGAR: Lower Prices fell by five dollars to around 364 dollar* per tonne, after specu lators. disappointed by the low leVel of prices tn recent weeks, finally excited the New York market
The market was hit by es timates of higher production this year In India, the world " leading producer Production could rise to 13 million tonnes analysts said, while previous predictions had Indi rated 12 million
If production rises above I 3 inlllton tonnes dealers believe
India will export the excess, which will further depress a market already hit by large amounts of Brazilian sugar.
VEGETABLE OILS: DecUne.
Soya prices in Chicago fell lower, depressing the prices of' the eight vegetable oils on the Rotterdam market.
The US market was hit by a large Brazilian soya harvest, one of the largest in recent years, and by the continued large scale of US stocks.
Likewise, palm oil was hit by the prospects of a four per cent rise in the Malaysian harvest. the world’s leading producer. In. 1995 to 7.5 million tonnes and a rise in world stocks of better quality vegetable oils.
OIL: Firm. Continuing last week’s rises, the price of Brent Crude North Sea oil rose to 17.40 dollars a barrel, lifting In the wake of strong petrol prices on the New York market.
On Thursday morning, the North Sea reference pribe rose to 17.6 dollars — its highest level since early November
TEA: Stable. The average price of teas was little changed on the London auction market, with the exception of top quality Africana teas, which rose.
COTTON: Easing. Cotton prices slipped from their peak last week, easing around six cents to end the week at around 105 cents per pound, as speculators sold on the Neu-York future* market
But any losses were limited by continued strong demand and a poor world harvest last
RUBBER: Firm Rubber prices were strong at around 1.220 pounds per tonne on large scale purchases of Thal rubber by China
A dealer at l^wts and Peat however said the European market is currently depressed or lack ol buying by tyre manu far Hirers who are iuti-tpaUng a slow down In western growth