Oil prices fall
Oil prices fell in the last session of the week due to market concerns about supply from instability in Kazakhstan and production stoppage in Libya.
Closing session 7/1, Brent oil fell 24 US cents or 0.3% to 81.75 USD/barrel, while US WTI oil fell 56 US cents or 0.7% to 78.9 USD/barrel. Brent and WTI are trending up 5% in the first week of this year, hitting their highest levels since late November 2021 on supply concerns.
Both crudes gained $1 earlier in the session, but oil, along with equity markets and the dollar, was under pressure after the US jobs data fell short of expectations.
Meanwhile, supply additions from OPEC+ have not kept pace with demand growth. OPEC+ output in December 2021 increased by 70,000 bpd from the previous month, compared with the 253,000 bpd increase allowed under the OPEC+ supply deal to restore production that had fallen in 2020.
This week, government data also showed that crude oil inventories in the US fell for the sixth consecutive week last week, to the lowest level since September 2021.
Extreme weather in North Dakota and Alberta is also expected to affect production in those regions and prompt operators to shut down the 590,000 bpd Keystone pipeline for a brief period earlier in the week.
According to energy services firm Baker Hughes, the number of US oil rigs rose to 481 this week, the highest since April 2020.
Gold rises from 3-week low
Gold prices rose from a three-week low after data showed U.S. job growth was weaker than expected last month, even as the Federal Reserve signaled a faster-than-expected rate hike.
Spot gold rose 0.5% to $1,797.1 an ounce, while US gold for February delivery closed up 0.5% at $1,797.4 an ounce.
Fewer jobs were added in December 2021, but the US unemployment rate fell towards multi-year lows, a mixed report for gold, analysts at UBS said.
The USD gained 0.6% making gold cheaper for buyers in other currencies.
Gold prices previously fell to $1,782.1 an ounce, the lowest since December 16, 2021 and set for a week down about 1.7% as 10-year US Treasury yields hit their highest levels. 2 years.
Aluminum hits 2.5-month high
Aluminum prices hit their highest since Oct. 21, 2021 as aluminum stocks fell at the LME exchange and traders worried high energy costs forced some smelters to cut output, exacerbating supply shortages.
Aluminum prices on the LME exchange rose to $2,980 per tonne before falling back to $2,914 per ton, down 0.3% this session. For the whole week, aluminum prices still increased about 3.5% after increasing 42% in 2021.
Energy prices have skyrocketed in Europe and Asia and many smelters will likely have to cut production before spring, pushing up aluminum prices.
LME aluminum stocks fell from more than 861,800 tons on December 14, 2021 to 536,175 tons, the lowest level since 2005.
A large aluminum smelter in Dunkirk, northern France, will reduce output by another 5% next week. Energy typically accounts for about 40% of the operating costs of aluminum smelters. About 68 million tons of aluminum are produced each year. Production cuts in China have pushed the market into a shortfall in 2021. Bank of America expects the shortfall to grow to 2.7 million tonnes in 2024, when prices are around $3,500 a tonne.
Iron ore continues to rise
Dalian iron ore prices rose at the end of the week and are up nearly 6% this week as investors returned to the market after holiday optimism about a recovery in demand in China.
Iron ore for May delivery on the Dalian Commodity Exchange, China closed up 1.4% higher at 719 CNY ($112.78)/ton, rising for the fourth consecutive session and touching 725.5 CNY. in this session, the highest since October 27.
On the Singapore Exchange, iron ore rose about 0.7 percent to $128.25 a tonne, the highest since December 22, 2021.
Steel products were also strong, with construction rebar in Shanghai up 1.2% while hot rolled coil gained 1.6%, both for a fourth straight session.
China is expected to limit the operation of factories in steel production centers to ensure fresh air during the Beijing Olympics next month. But analysts said hopes of easing steel production controls after the Olympics had supported iron ore, along with some stockpiling demand ahead of the Lunar New Year in China.
According to consulting firm SteelHome, spot iron ore price with 62% Fe content in China increased to 127.5 USD/ton, the highest since December 21, 2021.
Stainless steel in Shanghai fell 0.7% and for the whole week fell 2%, after 3 consecutive weeks of increase, due to improved supply situation while additional demand was weak in China.
Japanese rubber increased
Japanese rubber prices increased due to worries about transportation congestion from Southeast Asia and the spread of the pandemic that could cause labor shortages in rubber farms.
The June rubber contract on the Osaka exchange closed up 3.4 JPY or 1.4% to 241.4 JPY (2.1 USD)/kg. Prices rose .4% in the first week of 2022, marking the second consecutive week of gains.
Thailand, the world’s largest rubber producer, will have new restrictions after a spike in Covid-19 infections related to the Omicron strain, while Japan decided to declare semi-urgent measures in the country. three areas to prevent the rise of Covid-19.
The weak JPY also supported the price. USD hits 5-year high against JPY.
Rubber prices in Shanghai for May term increased by 200 CNY to 14,910 CNY (US$2,339)/ton.
Coffee rose
Arabica coffee for March delivery closed up 6.75 US cents or 2.9% at $2.3845/lb.
Dealers say the outlook for this year’s coffee crop in Brazil remains the focus, with adverse climate affecting the outlook and concerns that recent rains have been excessive in some areas.
Rain has flooded coffee fields in central-eastern regions of Brazil, the latest incident in the climate in the country.
March Robusta coffee futures rose $9, or 0.4%, to $2,316 a tonne.
Sugar prices fall
Raw sugar for March delivery closed down 0.14 US cents or 0.8% at 18.05 US cents/lb after falling to a five-month low at 17.99 US cents.
Dealers say the prospect of improving sugarcane production in Brazil has helped put the market on the defensive.
Sugarcane crops in India and Thailand are off to a good start and production in both countries may be higher than expected.
March white sugar futures fell $0.30, or 0.1%, to $485.8 a tonne.
Corn, soybeans and wheat all increased
Corn prices on the Chicago Mercantile Exchange rose for a second day in a row, as soybeans rose as dry weather across South America threatened crop yields in the region. However, future rain forecasts could be beneficial for corn crops in Argentina.
CBOT corn contract for March term closed up 3-1/4 US cent to 6.06-3/4 USD/bushel.
Soybean futures rose 23 US cents to 14.10-1/4 USD/bushel.
Wheat rose on strong cereal market and technical buying.
Winter soft red wheat for March futures rose 12-1/2 US cents to $7.58-1/2/bushel after falling to $7.35-1/2, the lowest since May 15. October 2021. For the whole week, wheat fell 12-1/4 US cents or 1.59%.
Prices of some key items in the morning of January 8:
