Iron Ore Leads Commodities Higher
Commodities picked up last week and finished strong with iron ore back in bull market territory at over $US65 a tonne, while coking coal prices staged a nice bounce. Gold was up close to 4% for the week, copper rose and oil was up more than 5%. Wheat though, a recent star, fell 9% over the week.
The Metal Bulletin said prices for coking coal and iron ore both rose last during week from Monday July 10 to Friday July 14.
Despite a slight daily decline on Friday, Metal Bulletin’s said its 62% Fe Iron Ore Index ended the week at $US65.74 per tonne (cartage and freight or cfr Qingdao), up from $US62.80 a tonne a week earlier.
That’s up more than 20% from the previous low of around $US54 a tonne in June. But it is still well below the $US94.86 high for the year so far on February 21.
The Metal Bulletin’s China premium hard coking coal index jumped $US4.47 per tonne to $US166.47 a tonne on Friday, while the fob (free on board) Australia index rose 96 cents to $US161.34 per tonne.
“Bullish sellers in the seaborne market are refusing to budge from their offers with transacted prices edging up,” Metal Bulletin reported.
“In addition, China’s metallurgical coke export prices have continued to rise in the past fortnight despite thin trading, as a second round of increases are implemented in the domestic market” and this has flowed into the spot market for seaborne coal bound for China.
In New York, Comex gold futures prices on Friday ended at their high for a month, and the first weekly rise since early June, as weak data on US retail sales and consumer inflation again raised questions about the strength of uS economic growth and the Fed’s current push to raise interest rates and start contracting its balance sheet.
Gold for August delivery rose $US10.20, or 0.8%, to settle at $US1,227.50 an ounce.
That was the highest finish since June 30 and the strongest single-session climb since June 6, according to US data group, FactSet. Prices were up 1.5% for the week, a turnaround from the five straight weeks of losses. Comex silver futures for September rose 24.2 cents, or 1.5%, to $US15.933 an ounce, for a 3.7% weekly gain.
And Comex copper also saw a good gain with September futures rising 3 cents or 1.1%, to $US2.691 a pound to be up 2%.
In Chicago, wheat futures eased 50 cents over the week to end at $US5.10 a bushel.
And despite fears that some Opec members might be cheating on the production cap, more cuts to price forecasts and a belief the surplus will take longer to reverse than expected, oil futures had their best week for some time last week.
US oil futures rose 1% in New York Friday, pushing prices to a weekly gain of 5.2% for West Texas Intermediate, the marker crude for the Americas.
Traders ignored a small rise in the number of US oil rigs in use, a rise in US production, and focused on the biggest fall in stocks for some time. As well production problems for Shell in Nigeria saw the amount of crude from one of the smaller Opec countries fall.
West Texas Intermediate for August delivery added 46 cents to settle at $US46.54 a barrel in New York, the highest close in 12 days.
In London, Brent for September settlement climbed 49 cents to end the session at $US48.91. Brent prices jumped a solid 4.7% last week.
Drillers in the US added 2 oil rigs for a total of 765, according to the weekly report from services group, Baker Hughes.
That follows a weekly rise of seven rigs for the previous wee. The total active U.S. rig count, which includes oil and natural-gas rigs, was unchanged at 952. If this steadying is repeated in coming weeks it could mean that US oil and gas rig use has peaked for the time being.
Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.
At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.