Rubber prices plunge as output in region surges to buyers' delight
LONDON: After soaring to new highs at the beginning of the year, rubber prices went into a free fall last week as production in Southeast Asia, which accounts for three quarters of world output, surged ahead.
Last year, increased demand, combined with a fall in exports from Malaysia and Indonesia, sent prices soaring. But industrial buyers, who then paid dearly for latex, are now rubbing their hands at the thought of the situation being unexpectedly reversed.
Certain traders have even suggested that tyre manufacturers have completely disappeared from the market, thus precipitating a collapse in prices.
Oil prices fluctuated irregularly without any particular trend, as did the precious and base metals.
Coffee suffered a bout of the blues, falling by some US$200 a tonne on speculative selling, before recovering slightly. Grains rose as a fall in the US harvest looked increasingly inevitable.
Gold: It rose $3 to about $386 an ounce, helped by large-scale buying on the physical market and a weak dollar.
At the beginning of the week, the metal was also affected by a fall in the price of silver and by new signs of a further slowdown in the US economy, thus indicating reduced risks of inflation.
Platinum: It fluctuated at around $433 an ounce.
Silver: The price fell to below $5.30 an ounce - the lowest since March - after speculators suddenly exited the market, before climbing to $5.35 after sustained demand on the physical market.
Copper: After beginning the week higher, the price then sank back to its previous Friday's close at about $2,860 a tonne, hit by another 9,525-tonne delivery of copper into Singapore warehouses.
Weekly stocks on the London Metal Exchange rose 4,225 tonnes to 210,550 tonnes.
Lead: It eased some $10 during the week to end at $614 a tonne, in quiet trading.
Weekly stocks fell 3,525 tonnes to 257,475 tonnes.
Zinc: The price dropped about $15 during the week to some $1,028 a tonne.
Aluminium: The metal dropped about $40 during the week to $1,778 a tonne, affected by market concern that the memorandum of understanding to reduce world production signed early last year was petering out.
Weekly stocks dropped by a massive 39,200 tonnes to 798,175 tonnes.
Nickel: The price rose about $25 to $7,875 a tonne in quiet trading.
Weekly stocks dipped 3,624 tonnes to 98,676 tonnes.
Tin: Prices rose about $25 to $6,290 a tonne, although the metal hit a five-month closing high of $6,310 on Wednesday.
Coffee: Robusta prices dropped about $200 to $2,700 a tonne before rallying somewhat to close at $2,750.
A lifting of frosty conditions in Brazil hit prices, as crops were no longer in danger of being damaged and thus provoking a drop in supply.
Sugar: After beginning the week at about $298 a tonne, the reference price for refined sugar then rose to over $301, supported by the imposition of a 40 per cent tax on Brazilian sugar exports. The market was also boosted by purchases by Jordan, Egypt, and Poland.
Oil: The price of Brent crude North Sea oil fluctuated last week, initially moving some 40 cents higher to $18.18 a barrel, on speculative buying and technical factors.
It then fell back to about $17.80, in line with weaker prices on the New York petroleum market.
Rubber: The reference price on the London market fell GBP80 to GBP1,020 a tonne as tyre manufacturers stopped buying on prospects of a rise in Southeast Asian production.