March 04, 2007	Sunday	Safar 14, 1428

LONDON, March 3: Global commodity markets saw mixed fortunes this week amid heavy losses on stock exchanges which sparked fears of slowing American and Chinese demand for raw materials, traders said.

From wheat and soya, to gold and silver, many commodities witnessed losses as investors ran for cover on fears that demand could slacken in the world's two biggest economies.

However, crude oil prices recovered from initial losses to post their highest levels so far this year following news of lower US energy stocks.

Equities have been volatile since Tuesday, when the Shanghai stock exchange had its biggest fall in a decade and Wall Street had its worst day since the aftermath of the September 11, 2001 attacks.

The wave of investor anxiety was caused by fears that the Chinese stock market was overheated and that US economic growth was slowing faster than expected.

GRAINS AND SOYA: Grains and soya prices mostly fell on China concerns.

The sharpest stock market decline in Shanghai in 10 years on Tuesday kicked off a wild week, with Chinese shares bouncing back nearly four per cent Wednesday, only to slide three per cent the following day.

This has brought a lot of nervousness in the market as China is a big consumer of American cereals and soy beans, said Allendale analyst Joe Victor.

If there are problems in the Chinese stock market, this could have negative effects on the trade. On the Chicago Board of Trade, the price of wheat for May delivery fell to US$4.8300 per bushel on Friday, from $4.9850 the previous week.

Maize for May delivery crept up to $4.2775 per bushel on Friday, from $4.4250 the previous week.

May-dated soyabean meal -- used in animal feed -- sank to $7.6275 on Friday, from $7.9400 the previous week.

On the LIFFE, the price of a tonne of wheat for May delivery stood at 94.75 pounds, from 94.50 pounds the previous week.

OIL: Crude futures rallied above $62 as traders set aside the global equities turmoil and concentrated instead on the outlook for gasoline or petrol demand.

Earlier in the week, prices had sustained losses after the equities sell-off, but recovered as traders took the view that the Chinese economy and its voracious demand for oil was strong enough to withstand the stock market dive.

Prices also staged a fightback after weekly data which showed that US stockpiles of distillates, which include heating fuel and diesel, and gasoline fell in the week to February 23.

The oil market's focus is starting to switch from heating oil to gasoline stocks, as the northern hemisphere winter draws to an end and the US driving season approaches.

The driving season -- when gasoline demand hits a peak as many Americans take to their cars for the summer holidays -- starts on May 31.

By Friday in London, a barrel of Brent North Sea crude for delivery in April jumped to $62.30 per barrel, from $61.21 the previous week.

In New York, a barrel of crude for delivery in April rose to 62.10 per barrel from $61.45.

GOLD: Over the course of the past three days, gold prices have fallen 5.7 per cent in value as world stocks fell.

The fall came after the precious metal hit $688.64 per ounce on Tuesday -- its highest level since May 19 last year.Gold prices weakened ... with the current negative market sentiment still weighing heavily on gold, and the dollar strengthening following the stronger than expected US ISM manufacturing data, said Barclays Capital analysts.

The dollar gained against the euro after data showing a rebound in the US manufacturing sector in February.

A stronger US dollar can make gold more expensive for buyers using other currencies.

The Institute of Supply Management (ISM) reported that the struggling US manufacturing sector had rebounded in February as American factories trimmed inventories and boosted output for a broad range of goods.

On the London Bullion Market, gold prices sank to $651.90 per ounce at Friday's late fixing, from $683 the previous Friday.

SILVER: Silver prices also finished on a weak note and remain vulnerable to further losses, according to UBS analyst John Reade.

Stock market turmoil prompted further bouts of speculative and fund liquidation in precious metals, added James Moore, an analyst for specialist website TheBullionDesk.com.

Prior to the stocks sell-off, silver had hit $14.74 the highest point since May 12, 2006.

On the London Bullion Market, silver prices sagged to $13.53 per ounce at Friday's late fixing, from $14.28 the previous week.

PALLADIUM AND PLATINUM: The prices of platinum and palladium fell in line with losses by gold and silver.

On the London Platinum and Palladium Market, platinum dropped to $1,203 per ounce at the late fixing Friday, from $1,234 the previous week.

Palladium stood at $347 per ounce, down from $353 one week earlier.

BASE METALS: Base metal prices were mixed amid global stock market turbulence, and after ISM manufacturing data in the US showed that the sector had rebounded in February.

Nickel and lead were the star performers as concerns persisted over low world stockpiles. Nickel climbed to $42,200 on the London Metal Exchange (LME), which is the world's leading metals futures market.

Lead, meanwhile, hit $1,975.15 the highest reading for the metal since the start of its quotation on the LME in 1953.On Friday, three-month copper prices slid to $6,056 per ton on the LME, from $6,231.50 the previous week.

Three-month aluminium prices declined to $2,755 per ton from $2,830.

Three-month nickel prices gained to $44,310 per ton from $39,895.

Three-month lead prices eased to $1,909 per ton from $1,915.

Three-month zinc prices slid to $3,365 per ton from $3,560.

Three-month tin prices increased to $13,475 per ton from $13,300 a week earlier.

COCOA: Cocoa prices hit seven-month peak in London and a two-year record in New York as speculators ploughed into the market on fears of a weak harvest in leading producer Ivory Coast.

By Friday on the LIFFE, London's futures exchange, the price of cocoa for May delivery rose to 988 pounds per tonne, from 971 pounds a week earlier.

On the New York Board of Trade (NYBOT), the May contract increased to $1,797 per ton on Friday, from $1,779 the previous week.

COFFEE: Coffee prices retreated this week, with trading in London hit by a production surplus in major producer Vietnam.

New York prices followed a sharp decline in London, where Robusta coffee futures suffered from fund and speculative selling, Davies added.

By Friday on the LIFFE, Robusta quality for May delivery tumbled to 1,500 dollars per tonne, from $1,575 a week earlier.On the NYBOT, Arabica for May delivery decreased to 115.65 US cents per pound on Friday, from 119.90 cents the previous week.

SUGAR: Sugar prices rose in line with higher crude oil futures.

Sugar cane is used to produce ethanol, a cheaper alternative to motor fuel, or gasoline, which is refined from oil.

By Friday on the LIFFE, the price of a tonne of white sugar for August delivery gained to $337.50, compared with $333 a week earlier.

On the NYBOT, the price of unrefined sugar for July delivery stood at 11.14 US cents per pound, up from 10.70 US cents the previous week.

WOOL: Wool prices rose on signs of encouraging Chinese demand, despite falls on the Shanghai stock market.

The market held up well in another week of a large offering and finishing on a firm note, the Australian Wool Industry Secretariat said, adding that the competition was led by buyers for China.

The number of bales on offer over the next three weeks is expected to range between 54,100 and 56,400, a decrease of 13,4 per cent over the same period last year.

The Australian wool market finished 0.2 per cent higher on average this week, with the Eastern index rising to 9.09 Australian dollars per kilo, from $9.08 the previous week.—AFP