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Oil down 2%
Oil prices closed down nearly 2%, but were little changed for the week, as investors scaled back expectations for demand growth from China, the world’s largest oil importer.
At the end of the session on August 16, Brent oil decreased by 1.36 USD or 1.7% to 79.68 USD/barrel. WTI oil decreased by 1.51 USD or 1.9% to 76.65 USD.
Last week, Brent crude closed at $79.66/barrel and WTI at $76.84/barrel.
Data from China on August 15 showed the economy lost momentum in July, with new home prices falling at the fastest pace in nine years, industrial output falling and unemployment rising.
That raised concerns about a drop in demand from the world’s top importer, where refiners cut crude processing rates last month due to weak fuel demand.
On August 12, the Organization of the Petroleum Exporting Countries (OPEC) cut its forecast for oil demand growth this year due to weak demand in China. The International Energy Agency also cited weak demand from China when it reduced its forecast for 2025.
Independent oil analyst Gaurav Sharma said oil prices could lack direction until the Fed decides whether to cut interest rates at its September meeting.
Low liquidity could cause price volatility this week as many European and North American investors remain on vacation.
Gold prices hit record high
Gold prices rose to a record high as the dollar weakened on growing expectations of a Fed rate cut in September and as tensions in the Middle East boosted demand.
Spot gold rose 1.7% to $2,498.72 an ounce after hitting a record high of $2,500.99 an ounce. US gold futures for December delivery closed up 1.8% at $2,537.80 an ounce. Gold prices rose 2.8% this week.
The dollar index fell 0.4% and posted a fourth weekly decline, making gold cheaper for buyers using other currencies.
Gold prices rose to a new record high and surpassed $2,500 after two weeks of extremely volatile trading.
Copper decreased
Copper prices fell as mining giant BHP said it had reached a deal with a labor union to resolve a strike at its Escodida copper mine in Chile, easing concerns about global supplies.
Three-month copper on the London Metal Exchange (LME) fell 0.2% to $9,128 a tonne.
The metal posted a 3% weekly gain, its first weekly gain in six weeks, as a strike at Escodida fueled concerns about supply disruptions.
Escodida is the world’s largest copper mine, accounting for nearly 5% of global supply in 2023. A wage deal at the mine could be signed on Sunday if union members approve.
On the demand side, the outlook in China remains challenging, creating downside risks for copper prices.
Iron ore records weekly decline
Iron ore fell for a fifth straight session, posting a second weekly decline, with bearish sentiment prevailing after weaker-than-expected steel prices in China weighed on the demand outlook.
The January 2025 iron ore contract on the Dalian Commodity Exchange closed down 0.99% at 697 yuan ($97.16) a tonne. It fell 6.1% for the week and 26% year-to-date.
In Singapore, iron ore futures for September delivery fell 1.39% to $92.25 a tonne, down 8.7% for the week.
A larger-than-expected fall in steel prices in China has soured sentiment, weighing on demand and prices of steelmaking ingredients including iron ore.
Steel rebar, mainly used in the construction sector, fell to its lowest since June 2017 this week, while hot-rolled coil fell to its lowest since April 2020. Closing the day down 0.71% and 1.8%, respectively.
Analysts at Macquarie said 55% of steelmakers experienced a decline in domestic orders in August, compared with 30% previously. Steel mills showed less interest in replenishing raw materials.
Steelmakers’ daily hot steel output continued to decline for the third consecutive session, falling 1.3 percent from the previous week to around 2.29 million tonnes as of Aug. 16. Mills’ profit margins fell to 4.76 percent from 5.19 percent previously.
Japanese rubber posts biggest weekly gain in two months
Japanese rubber futures maintained earlier gains, posting their biggest weekly gain in two months, weighed down by global supply pressure, while stronger US economic data also supported investor sentiment.
The January 2025 rubber contract on the Osaka Exchange closed up 5.7 yen, or 1.76 percent, at 328.9 yen ($2.21) a kilogram. For the week, prices rose 2.14 percent, the biggest weekly gain since June 7.
In Shanghai, rubber for January 2025 delivery rose 135 yuan, or 0.85 percent, to 16,060 yuan ($2,238.83) a tonne, closing at its highest level since June 11.
The Southeast Asian spot rubber market is supported by unusually weak supplies during what is considered the global peak supply season.
Road to increase
October raw sugar futures closed up 0.8% at 18.03 US cents/lb, down 2.4% for the week.
Abundant supplies in Brazil continue to put pressure on global prices, while an improving crop in India is also weighing on the market, said analytics firm BMI.
October white sugar futures rose 0.7% to $516.70 a tonne, but fell 1.8% this week.
Coffee increase
December arabica coffee futures closed up 2.5% at $2.441/lb, up about 6% from last week.
Light frosts in parts of Brazil over the past few days have raised concerns about next year’s crop, while drier-than-usual weather has also dampened prospects, dealers said.
Brazil’s 2024/25 coffee harvest is estimated to have reached nearly 96% of the crop as of August 6.
November robusta coffee futures rose 1.7% to $4,452 a tonne, with supplies in Vietnam remaining tight.
Soybeans, corn down, wheat steady
Chicago soybeans and corn prices fell on Friday, both posting their third weekly declines, ahead of a forecast for a large U.S. harvest. Wheat was strong on crop problems in France and Germany.
CBOT wheat closed up 1-3/4 US cents at $5.30 a bushel, while corn closed down 4-1/2 US cents at $3.92-1/2 a bushel.
Soybean futures fell 11-1/2 cents to $9.57 a bushel, having earlier fallen to $9.55 a bushel, the lowest since Sept. 2, 2020.
Prices of some key commodities on the morning of August 17
