By Anadolu Agency
January 16, 2023 5:34 amISTANBUL
The commodity market overcame concerns about economic activity last week, thanks to hopes for the Chinese economy and declining inflation in the US.
An upward movement was seen last week in the commodity market that has been dominated by the inflation and recession dilemma for a long time.
Consumer prices in the US decreased by 0.1% in December 2022, while they increased by 6.5% on an annual basis.
Last week, especially the performance of copper and oil was remarkable, while gold increased by 2.9% and silver by 1.8%.
Gold rose last week with the expectation that the Fed might soften its hawkish policies, while markets forecast that the Fed will raise interest rates by 25 basis points next month.
Rally in copper prices
While the bullish market trend dominated the metals last week, copper rallied.
Copper rose to $4.1297 per pound last week, and it was the highest level since June 2022.
With China’s loosening of strict pandemic restrictions, incentives for the housing sector have raised the demand for copper which gained 7.9% last week.
An announcement by Panama’s First Quantum Minerals company that it is about to make a deal for a copper mine with Panama’s government after some tax issues, and talks between the Chinese Tsingshan Holding Group’s founder Xiang Guangda and some struggling copper plants in China to process their copper to make it more valuable and refined reveal the optimism about copper demand, according to recent media reports.
Last week, aluminum rose 12% and zinc 9.5%.
France-based aluminum smelter Aluminum Dunkerque has increased its production to full capacity with dropping energy prices, which is perceived as a positive development about the economic activity in aluminum, analysts said.
Brent oil increased 8.8% last week, while natural gas traded on the New York Mercantile Exchange decreased by 11%.
The increase in Brent oil prices was due to the world’s largest crude oil importer China’s decision to open its borders to international flights.
Natural gas prices have also decreased due to the rise in natural gas stocks and storage in the US.
There was also an upward trend in the commodity markets last week.
Wheat traded on the Chicago Mercantile Exchange followed a flat course, while corn increased by 3.3%, soybeans 2.4%, and rice by 2.2%.
Cotton lost 3.8%, coffee decreased by 4.2%, sugar rose 3.3%, and cocoa increased by 1.8%.
The decrease in corn and rice production forecasts compared to the previous month caused an increase in prices.
The decline in the dollar index and the increasing demand expectations also reflected positively on sugar prices.
The fact that weekly export data in the US was below the average caused a depreciation in cotton prices.
The expectation that there will be excess production in the coffee market in the new season negatively affected the coffee prices.
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