LONDON. Mar 2: Platinum and palladium, two precious metals used in the automobile and electronics industries, were in dazzling form this week on the London market, reports AFP.
After languishing for weeks in the shadow of gold, these two metals rebounded spectacularly. surging 7 and 14 per cent respectively in the space of just a few days.
The cause of this buying frenzy was Russia: this giant country, which produces much of the world's platinum and platinum and palladium, may reduce sales to overseas investors.
The country's main producing site. Norilsk, is facing the threat of strike action. And exports to Japan, an avid consumer of platinum and palladium, have been frozen, because of bureaucratic wrangling within the Kremlin.
The price of nickel, a metal used to make stainless steel, also shot up for the same reason. Norilsk being the world's biggest nickel producer.
Elsewhere on the commodities markets, soya prices retreated from their highs of the past few weeks, with the crucial crop in Brazil now apparently well on track.
GOLD: Glitter. The price of gold gained around seven dollars. to more than 360 dollars per ounce, in the wake of soaring platinum and palladium
prices. Gold prices, which have been languishing in the depths for some time, are now at an almost two-month high.
The rally was triggered partly by speculative buying on the New York futures market.
SILVER: Firm. Platinum's heady ascent had little influence on silver prices, which rose modestly by seven cents to 5.27 dollars per ounce.
PLATINUM AND PALLADIUM: Rocketing. The price of both platinum and palladium surged this week, after a speculative-led rally on Japanese markets, where fears are rife of a crunch in exports from Russia.
Japan is by far and away the world's largest importer of platinum. a metal used to make catalytic converters and also jewellery.
Traders fear that Japanese importers might have difficulties in obtaining supplies from Russia, the world's number two exporter after South Africa, explained Andy Smith, an analyst from Union Bank of Switzerland (UBS).
The price of platinum gained 25 dollars to 395 dollars per ounce, the highest level since September 1996.
COPPER: Hard. Copper prices held firm at about 2.370 dollars per tonne, under the ef feet of a fall in global stocks of the metal.
The GNI trading house said
that global reserves were estimated to total no more than 200.000 tonnes.
Such low stock levels would mean that any considerable rise in demand could not easily be met out of existing reserves.
London Metal Exchange (LME) stocks fell by 5.925 tonnes to 216.575 tonnes.
LEAD: Lift. Speculative purchases lifted lead prices by 30 dollars to about 700 per tonne.
Dealers expect car battery manufacturers who provide the main outlet for lead, to step up their purchases in 1997. GNI said that "the market could be surprised by the scale of demand for lead in 1997."
LME stocks fell by 800 tonnes to 108.250 tonnes, which served as some indication that demand has already started to rise.
ZINC: Float. The price of zinc, which is widely used in anti-corrosive treatments, rose by 12 dollars.
Traders are afraid that stoppages at Norilsk could hit Russia export levels.
Workers at the plant demanding the payment of wage arrears nave been threatening to strike since March 15.
The company is also under investigation by the Russian fiscal authorities for tax evasion, which could lead to seizure of some of its output by the Russia state.
ALUMINIUM: Robust.
Healthy demand and technical buying lifted aluminium prices by almost 40 dollars to 1.642 dollars per tonne.
The market was also cheered by a massive drop of more than 18.000 tonnes in LME stocks, to 890.175 tonnes.
NICKEL: Peak. Nickel prices shot up by 100 dollars to around 8,020 dollars per tonne, a high since June 1996, because of fears of strike action at Russia's giant metals complex in Norilsk. Siberia, which is the world's biggest nickel producer.
Traders are afraid that stoppages at Norilsk could hit Russian export levels.
TIN: Down. Tin prices fell by 220 dollars to 5,810 dollars pers tonne, weighed down by the announcement of a sharp rise in Chinese tin exports in January.
Traders believe that China, could step up its exports of the metal in 1997.
A rise of 180 tonnes to 10,220 tonnes in LME tin reserves also had a negative impact on sentiment.
OIL: Weak. Light at the end of winters dark tunnel in the northern hemisphere knocked oil prices off recent highs as demand for heating oil began to dry up. A surge in global oil production has also added a lighter tone to the market.
Prices rose briefly after Iraqi opposition parties said that Saddam Hussein was preparing to move back into
territory in the north of Iraq which is under Kurdish control.
TEA: Strong. Healthy demand fitted tea prices in the London auction houses and the price of medium quality leaves rose by one pence.
COTTON: Springy. Cotton prices on the US cash market advanced on strong import demand from countries such as Brazil and China. Both are cotton producers, but their domestic harvests are not big enough to satisfy local consumption.
The cotton outlook indicator gained two cents to 81 cents per pound.
WOOL: Warm. The Australian market was lifted by a surge in European Chinese and Japanese buying. Wool prices gained three Australian cents to 624 cents per kg.
RUBBER: Sticky. Rubber prices stuck at 795 pounds per tonne amid quiet trading in Europe and Asia.
SUGAR: Hard. Good demand form China and the prospect of a large order from Iraq buoyed sugar prices this week, although they fell slightly form last week's highs. A tonne of sugar was worth 307.5 dollars on the London market.
The market also took heart from a smaller-than-expected harvest in Thailand, which was expected to reap a crop of about six million tonnes.
VEGETABLE OILS: Slip
Soya prices eased form the highs of last week, when rainfall on Brazilian soya fields as this year's crop was coming up for harvest, coupled with dwindling stocks of the beans in the United States, caused prices to surge.
Dealers were relieved to learn this week that the harvest in Brazil, which is the world’s second most important producer after the United States, is going well.
Prices fell by four cents to 7.83 dollars per bushel (of 27.2 kg) on the Chicago Board of Trade (CBOT).
In Rotterdam, palm oil prices held at 577.50 dollars per tonne.
Rapeseed oil rose by two guilders to 101 guilders per 100
Sunflower oil was stable at 515 dollars per tonne and groundnut oil rose by five dollars to 900 per tonne.
GRAINS: Bright. Grains prices were higher this week on European markets, after the European union's decision: -making arm granted an unex pectedly large number of export licenses for grains sales to non-EU countries.
Allowing a greater flood of grains exports will give the markets in Europe a Ixxist
On the London futures mar ket. the price of wheat gained three pounds to 96 pounds per tonne.