On the London Metal Exchange, a ton of copper for delivery in three months traded at 10,219.50 dollars around 4:30 p.m., against 10,315.00 dollars the previous Thursday at the close.
The prices of industrial metals, such as copper and aluminum, fell slightly over a week shortened by the long Easter weekend and trading limited by Chinese confinements.
“For metals, the Russian risk premium has eroded and attention has turned to Chinese demand due to Covid restrictions,” commented JP Morgan analysts. The city of Shanghai remains confined, weighing down the activity of the Chinese economic capital.
More than 17,000 new positive cases of coronavirus were still announced there on Friday – a figure, however, in decline.
Given the central role of the Shanghai Stock Exchange for the metals market and the importance of China as the leading importer of raw materials, “investors are waiting for the return of the Chinese to the market before taking too risky bets”, both up and down, comments Al Munro, broker at Marex.
Despite the risk of weakening Chinese demand, any downward price movement “would not last as it would be followed by a rebound boosted by government support for the Chinese economy,” analysts at JP Morgan said.
“The need to act to isolate Russia by weaning itself off its oil and gas is likely to accelerate the electrification of the world” to be able to use more renewable energy, “which will require an abundance of copper”, adds Ole Hansen, analyst at Saxo Bank.
On the London Metal Exchange (LME), a ton of copper for delivery in three months traded at 10,219.50 dollars around 2:30 p.m. GMT (4:30 p.m. in Paris), against 10,315.00 dollars the previous Thursday at the close. .
The sugar slides
Sugar moved away from its recent peaks over the week, penalized by the prospect of a more abundant supply in several producing countries.
Sugar prices have been buoyed since the start of the conflict in Ukraine by the idea that in Brazil, the world’s largest producer of sugar cane, the harvest will mainly be used to produce ethanol to replace traditional fuels, the price of which climb.
“The price support that comes from higher energy prices is partly offset by the prospect of higher production, especially from Asia,” commented RaboBank analysts.
The production of India, number two in the world, should thus reach a record level for the October 2021 to September 2022 season, at 36.8 million tonnes, before falling to 35.8 million tonnes, estimate the Department of l agriculture (USDA) in its annual report on the subject, published on Tuesday.
In New York, a pound of raw sugar for delivery next July was worth 19.30 cents, against 20.03 cents eight days earlier.
In London, a ton of white sugar for delivery in August was worth 531.30 dollars against 568.80 dollars the previous Thursday at the close.
Gold melts, palladium resists
The price of gold fell over the week despite the persistence of geopolitical risk, the prospect of a strict monetary policy in the United States weighing on the metal.
US Federal Reserve (Fed) Chairman Jerome Powell on Thursday did not rule out a half-point hike in May, confirming market expectations of a rapid rate hike in the United States.
“The expectation of tighter monetary policy is weighing on gold,” confirms Rupert Rowling, analyst at Kinesis Money.
This weighs on gold in two ways: the dollar rises, making commodities priced in US currency more expensive for investors using other currencies.
But above all, the rate of government bonds is rising, which makes them more attractive than gold, a metal with no return, as they compete for the interest of investors looking for safe havens.
Palladium, another precious metal, held up better to investors’ lack of interest in this asset class.
“Russia accounts for 40% of global palladium production,” note UBS analysts, who point out that available commercial reserves are limited, making the metal “very sensitive to diminished supply.”
“We believe that the recent surge in palladium prices will push consumers towards platinum,” which is less dependent on Russia, “and remain negative on the one-year price outlook,” adds UBS.
The ounce of gold traded for 1,941.61 dollars, against 1,978.25 dollars seven days earlier, and the ounce of palladium for 2,412.77 dollars, against 2,372.95 dollars .