Oil drops about 2 USD/barrel due to Iran’s ability to export oil
Oil prices fell about $2 per barrel as investors braced for the possibility of Iran’s oil exports and on worries that rising US interest rates would weaken demand.
Ending the session on August 25, Brent crude oil fell 1.88 USD or 1.9% to 99.34 USD/barrel. WTI oil fell $2.37, or 2.5%, to $92.52 a barrel.
Negotiations between the European Union, the United States and Iran to restore Iran’s 2015 nuclear deal are continuing, with Iran saying it has received a response from the US on the EU’s final text to resume the deal. favorable.
Investors are also awaiting a statement from Fed Chairman Jerome Powell in Jackson Hole. Powell is expected to summarize the Fed’s stance on the fight to control inflation, including information on the path of interest rate hikes in the long and short term.
Weaker US gasoline demand raised concerns about slowing economic activity and pushed prices lower. Overall U.S. gasoline demand fell last week, making the four-week average daily gasoline supply 7% lower than it was at the start of the year, according to the latest data from the U.S. Energy Information Administration.
Limiting the decline in oil prices earlier in this session were comments on August 22 by the Saudi Energy Minister that sent prices to a 3-week high.
Gold rose
Gold prices rose as the dollar fell from recent highs, as investors waited for the Jackson Hole symposium for clues on the Federal Reserve’s monetary policy.
Spot gold rose 0.3 percent to $1,756.55 an ounce. US gold for December delivery closed up 0.6 percent at $1,771.4 an ounce.
The USD index fell 0.2%, making gold cheaper for foreign buyers.
Gold is seen as a safe investment amid economic turmoil. However, rising interest rates increase the cost of holding gold.
Investors also carefully watched the US economic data for the second quarter, which fell at a more moderate pace than initially thought.
In the spot market, China’s net gold imports through Hong Kong in July were the highest in 9 months.
Copper rises on hopes of China’s infrastructure project
Copper prices rose as the dollar fell and after China introduced new stimulus measures that could boost infrastructure projects and demand.
Three-month copper on the London Metal Exchange (LME) rose 1.2% to $8,130 a tonne, reversing a 1.1% drop earlier in the session.
Copper is up 17% since hitting a 20-month low on July 15, but is still down 25% from its March record.
To boost the economy, China has added 19 new policies in addition to existing ones, including raising the quota for funding instruments by 300 billion yuan.
China will focus on expanding employment and promoting fiscal, monetary and industrial policies to support stabilizing the job market.
ANZ bank said China’s energy shortage highlights the need for further investment in the power grid, leading to increased demand for copper and aluminum. The bank raised its estimate for copper demand growth in China this year to 3.6% from 2.2%.
Also supporting the market was a weaker USD index making USD-denominated commodities cheaper for buyers in other currencies.
China’s iron ore surges past a one-week high
China iron ore prices hit their highest in more than a week as domestic steel mills ramped up production, but demand outlook remains uncertain amid heatwave and property crisis.
Iron ore for January 2023 on the Dalian Commodity Exchange rose about 2.1% to 721.50 yuan ($105.38) a tonne, the highest since Aug. 17, before retreating to close. The door fell 0.2% to 705.5 CNY/ton.
In Singapore, October futures also hit their highest since August 17, but then fell 0.5% to $103.15 a tonne.
Spot iron ore prices in China rose to $105.5/ton on August 24, according to data from consulting firm SteelHome.
As of August 19, hot-rolled coil inventories in China fell to 2.9 million tons, the lowest since June 2, and rebar inventories were at their lowest level since January 28 at 5. ,4 million tons.
This move by China to support the economy, including financial support for infrastructure projects, also boosted sentiment.
However, China continues to experience severe hot weather affecting construction activities, while power cuts to maintain power in the country also take a toll on industrial enterprises.
Iron ore prices will not exceed 110 USD/ton on the Singapore Exchange and 750 CNY/ton on the Dalian Exchange as steel demand will come under pressure from China’s real estate crisis.
In Shanghai, the contract of bar steel fell 0.3% to CNY 4,052/ton, hot rolled coil rose 0.6% to CNY4,000/ton.
Reduced rubber
Japanese rubber prices continued to depreciate for the third consecutive session, as the Shanghai market weakened and the JPY strengthened against the USD.
Rubber contract for January 2023 on the Osaka exchange closed down 1.9 JPY or 0.4% to 224.8 JPY ($1.64)/kg.
In Shanghai, the price of rubber for delivery in January 2023 decreased by 140 CNY to 12,660 CNY (US$1,849)/ton.
A stronger JPY makes assets denominated in this currency more expensive to buy in other currencies.
On the supply side, rubber output from Thailand, the world’s top exporter, could be impacted by forecasts of continued heavy rain and flooding across the country, including the traditional southern rubber-growing province.
Indian rice prices rise as buyers hoard
Rice prices in India rose this week as volatile weather prompted Asian buyers to buy more to stockpile, while rice prices were stable in other regions such as Thailand and Vietnam.
India’s 5% broken parboiled rice was offered for sale at $366-372/ton, up from $365-371/ton last week, due to concerns about new supplies due to low rainfall. Indian farmers planted 34.37 million hectares, down 8.3% from a year ago.
Bangladesh is set to finalize a deal with India to import 100,000 tonnes of rice under a government contract after a private import scheme hit a snag. The government is struggling to reduce domestic rice prices.
Vietnam’s 5% broken rice price was offered at 390-393 USD/ton, unchanged from a week ago. Vietnam exported 311,000 tons of rice in the first half of August, bringing the total rice exports from the beginning of the year to August 15 to 4.39 million tons.
The price of Thai 5% broken rice increased slightly to $415-422/ton from $416-$420/ton a week ago.
Mixed coffee
December arabica coffee futures closed up 0.5 US cents or 0.2% at $2,395/lb, after rising to the highest level since February at $2,4295/lb.
Dealers say dry weather in Brazil’s coffee growing region remains a concern, threatening the development of coffee buds and berries, after heavy rain earlier this month caused some flowers to bloom.
Stocks of ICE certified arabica coffee on August 24 stood at 663,780 bags, increasing for the seventh day in a row after falling to a 23-year low at 571,580 bags on August 15.
November Robusta coffee futures closed down $36, or 1.5%, at $2,312 a tonne after rising to a 7.5-month high at 2,355 on Aug.
Dealers say prices have increased recently due to inclement weather in Vietnam and strong domestic demand in Brazil.
Coffee prices in Vietnam increased this week following a sharp increase in prices in London due to supply concerns.
Farmers in the Central Highlands sold green coffee beans at 48,100 – 50,200 VND ($2.05 – 2.14)/kg, higher than 46,800 – 48,500 VND/kg a week ago. But trading in Vietnam remained quiet due to low supply and exhaustion at the end of the season starting from October.
According to the weather forecast, the coffee growing area may experience rain during the harvesting months from late October to January next year. That adversely affects the harvesting process and coffee quality.
In Indonesia, Sumatra robusta coffee is offered at a discount of 60-70 USD/ton compared to the October futures contract on the ICE exchange, unchanged from last week.
Falling line
Raw sugar for October delivery closed down 0.14 US cents or 0.8% at 17.9 US cents/lb.
Dealers say the market remains volatile, lacking a clear overall trend with prices not far from mid-month between 17.20 and 18.7 US cents/lb.
White sugar for October delivery fell $1.6, or 0.3%, to $547.9 a tonne.
Nordzucker, Germany’s second-biggest sugar producer, said it will start this year’s sugar refining season on September 3 and has reported success in converting to oil fuel at refineries due to poor conditions. uncertain gas supply.
Soybean, wheat, corn fell due to profit taking
Soybean, wheat and corn on the Chicago Mercantile Exchange fell on profit-taking after prices rose earlier this week.
CBOT November soybeans closed down 25-3/4 US cents to 14.31-1/4 USD/bushel.
CBOT December corn futures fell 7-1/4 US cents to $6.50/bushel.
Winter soft red wheat for December futures fell 24-1/4 US cents to $7.89/bushel, with concerns about global demand adding to the pressure.
Prices of some key items in the morning of August 26
