Oil rose
Oil prices rose about 7% in a volatile session as Russian export disruptions dwarfed hopes of more supplies from Iran if Washington strikes a nuclear deal with Tehran.
Closing session 4/3, Brent crude oil increased by 7.65 USD or 6.9% to 118.11 USD/barrel, WTI oil increased by 8.01 USD or 7.4% to 115.68 USD/barrel. This is the highest closing price since February 2013 for Brent and the highest since September 2008 for WTI. This week Brent crude hit its highest since May 2012 and WTI its highest since September 2008.
Oil prices rose early in the session after the Russian military took over Europe’s largest nuclear power plant. Prices then rose further as the Biden administration said it was considering options for the United States to cut oil imports from Russia and consider actions to minimize the impact on global supply and consumers.
Oil has risen more than 20% since the United States and its allies imposed sanctions on Russia following its military campaign in Ukraine. Russian oil sales have been disrupted, with buyers unable to place orders even as the price of Russian oil has fallen sharply against Brent.
Britain’s special envoy said on March 4 that indirect talks between Iran and the US on restoring the 2015 Iran nuclear deal were close to an agreement.
Also supporting oil prices this week was the Libyan National Oil Company (NOC) temporarily halting exports from four ports due to bad weather.
Palladium surpasses 3,000 USD/ounce
The price of palladium rose above $3,000 an ounce for the first time since May 2021, after concerns about a supply shortage from Russia increased.
Spot palladium spiked about 8.4% to $3,008.74 an ounce this session and was up 7.6% to $2,985.54 an ounce (at 2:30 a.m. Vietnam time). Russia accounts for 40% of global palladium production. The metal’s price is up 25% this week, its biggest gain since late March 2020.
Spot gold rose 1.6% to $1,965.97 an ounce and is up 4% this week. US gold for April delivery closed up $30.7, or 1.6%, to $1,966.6 an ounce.
The Russia-Ukraine crisis will continue to support a bullish precious metal price outlook.
Gold is seen as a safe-haven in times of uncertainty, largely ignoring the 1% increase in the dollar and the possibility of a rate hike by the US Federal Reserve this month.
Aluminum has a record week
Industrial metals rose at the end of the week, aluminum posted a record weekly gain and nickel set for its biggest gain since 2009 on worries about supply from Russia.
Aluminum prices on the London Metal Exchange (LME) rose 3.1% to $3,832 a tonne after hitting a record high of $3,867 a tonne. For the whole week, aluminum increased by 14%.
Nickel LME rose 8.3% to $29,120 a tonne after touching $30,295, its highest level since 2008, and is up about 20% this week.
Sanctions on Russian individuals and businesses have stopped many banks, shipping companies and other companies from doing business with Russian companies.
Adding to the supply fears is a decline in LME metals inventories. Aluminum stocks stood at 794,150 tons, down from nearly 2 million tons in March 2021. Nickel stocks fell to 77,082 tonnes from more than 260,000 tonnes in April 2021. Copper stocks stood at 69,825 tonnes, the lowest since 2005.
China iron ore records biggest weekly gain in two years
Iron ore in China increased in the last session of the week and had a weekly increase of nearly 20%, the strongest in more than two years due to fear of the Russia-Ukraine conflict disrupting supply.
Iron ore contract for May futures, the most traded on the Dalian Commodity Exchange continued to increase for the fifth consecutive session, closing up 2.8% to 813 CNY ($128.65)/ton. Earlier in this session, the price increased by about 5.7% to 836 CNY/ton. For the whole week, iron ore increased by 19.4%, the strongest since the week ended February 21, 2020.
Spot iron ore with 62% Fe content exported to China increased by 6.5 USD to 154 USD/ton on March 3, according to data of consulting firm SteelHome.
Shanghai stainless steel prices for April delivery rose 4.7% to CNY 18,775 a tonne, rising in line with raw material nickel prices.
Bar steel increased 0.3% to CNY 4,901/ton while hot rolled coil decreased 0.02% to CNY 5,210/ton.
Japanese rubber fell
Rubber prices in Japan fell and fell for the first week in 5 weeks amid the escalating Ukraine crisis.
Rubber contract for August delivery on the Osaka exchange fell 4.8 yen, or 1.8%, to 255.2 yen ($2.21) per kg. Rubber fell 2.3% this week.
Rubber prices fell due to panic selling after the news that Europe’s largest nuclear power plant was on fire, falling raw material prices may also drag down rubber prices.
Rubber for May term in Shanghai fell 270 CNY to 13,725 CNY ($2,171.68) per ton, the biggest drop since February 15.
Sugar prices increase
Raw sugar for May delivery closed up 0.42 US cents or 2.2% at 19.35 US cents/lb.
Dealers said the price of sugar increased as funds were buying on the view that more sugarcane in Brazil will be converted to ethanol biofuel production as the Russia-Ukraine crisis continues to drive up energy prices.
Limiting the upside is news that India could export a record 7.5 million tonnes of sugar in the 2021/22 season, up nearly 25% from previous estimates.
May white sugar futures rose $10.10, or 1.9%, to $532.3 a tonne.
Coffee rose
Arabica coffee for May delivery closed up 1.35 US cents or 0.6% at $2.2425/lb after falling to a 3.5-month low earlier at $2.2045/lb. The contract has lost 4.8% this week.
Coffee is under pressure due to fears that any global recession related to the Ukraine crisis could limit demand. There is also worry that sales to Russia, a major customer, could slow down due to sanctions.
Coffee exports in Brazil increased to 208,511 tonnes in February from 191,099 tonnes a year ago.
Robusta coffee for May futures rose $25, or 1.2 percent, to $2038 per ton.
Wheat has a record week, corn peaks since 2012
Wheat on the Chicago Mercantile Exchange had a record 41% weekly gain as the Russia-Ukraine conflict disrupted exports from the region.
CBOT wheat for May futures closed at $12.09 a barrel, up 75 cents, at the one-day limit. European Union wheat export demand surged this week as importers looked for wheat alternatives in the Black Sea.
Corn prices have hit their highest level since 2012 due to supply disruptions.
Corn futures for May on the Chicago Mercantile Exchange rose 35 cents, also at the one-day limit, to the highest level since September 2012. This contract closed up 6-1/2 US cents to 7.54-1/4 USD/bushel.
Soybeans fell as traders took profits. CBOT soybean for May futures closed down 7-1/4 US cents to 16.6-1/2 USD/bushel.
Prices of some key items on the morning of March 5:
