Hello everyone. Welcome to the Smart Market Insights here on Kalkine TV. I’m Sage,
and today we will be shining some light on how China’s demand
expectations impacted commodities last week.
Prices of most of the commodities recovered last week. The ease in COVID-19 related restrictions
in China, coupled with strengthening market fundamentals and robust demand for commodities
against a tightening market backdrop, has triggered a rally in the global commodity market.
In the energy domain, the prices of Brent crude oil benchmarks gained more than 4 percent while
WTI crude oil futures logged a weekly jump of 5.83 percent. Both crude oil benchmarks exchanged hands
over US$115 per barrel last Friday. A significant jump in both crude oil benchmarks was witnessed as
investors weighted an expected demand recovery in China. Crude oil and natural gas prices also
surged as much as 8.04 percent last week due to robust demand and lower inventories.
The benchmark Newcastle coal futures also consolidated near US$406 a tonne on Friday,
supported by a strong demand against a tightening market backdrop.
Though the coal prices dropped 2.4 percent over the last week, the commodity has recorded
substantial gains lately due to increasing demand in the power generation sector.
Furthermore, uranium prices gained more than 2 percent in the last week
on the expectation of demand recovery due to an ease in COVID-19 curbs in China.
Talking about precious metals, both gold and silver prices logged a second straight weekly
gain. Comex gold futures gained 0.27 percent last week due to the continued softness of
the US dollar. Additionally, the demand for precious metals has been rising as a safe-haven
asset due to persistent geopolitical tensions and slower economic growth.
The prices of base metals, including copper, aluminium, and iron ore,
tumbled significantly in the last week as COVID-19 restrictions in China and aggressive
tightening policy from central banks sparked concerns related to weaker economic growth.
On the flip side, industrial metal zinc gained substantially last week. Furthermore,
battery metals lithium and nickel prices also gained marginally last week.
Against this backdrop, let's skim through a few commodities that were popular
among traders in the past week.
Here are a few significant commodities that recorded
substantial volatility during the last week.
Last week saw US natural gas futures rise more than 8 percent due to lower inventories.
The US Energy Information Administration data states that the current inventory levels are 15.3
percent below the 5-year average. The value of the contract has more than doubled since
the start of 2022, supported by higher cooling demand in the US and robust international demand.
Crude oil prices gained more than 4.08 percent last week, recording the second straight weekly
gain. The prices reached their highest level in the last three months on the prospects of
higher demand in China after an ease in COVID-19 related curbs. Rising concerns over future supply
also buoyed the prices amid the European Union's plan to ban Russian oil imports.
Well, that’s all for now. We will be back again with the exclusive
Smart Market Insights Show tomorrow. Till then, keep watching Kalkine TV
for the latest market updates and related insights. I’m Sage, signing off