Page 112 - MEX-Yearbook-2017

MEX Almanac

December 2017

Precious Metals OPEC(Organization of the Petroleum Exporting Countries)-led production
The precious metals basket underwent a mixed trend during the month of cuts. Furthermore, rise in the Chinese crude demand and threat of a strike in
December as gold, silver and palladium treaded north whereas platinum Africa’s largest oil exporter, also pushed price. The US Energy Information
treaded south. At the beginning of the month, the gold and silver price Administration (EIA) reported that US natural gas stocks increased, which
steadied near its weakest level in almost four months amid expectations eased the supply, leading to price fall. Moreover, the improvement of
that the Federal Reserve would raise interest rates. The gold price weather after a cold spell in the US indicated a return to the mild weather,
reached the trough on 12th December which was the four-month low as which further pressured the price of natural gas.
US tax reforms fuelled optimism about the US economy and boosted the
dollar. However, gold and silver prices edged by the end of the month, as Brent Crude Open Close % Change
the dollar dropped on the concern about the progress of US tax reform. Crude Oil 6229.00 6659.00 6.90%
Moreover, U.S. data on domestic gross domestic product, jobless claims Heating Oil 5704.00 6009.00 5.35%
and regional business activity did not alter traders’ views on a stable Natural Gas 50.02 54.43 8.82%
economy, leading the gold and silver price to escalate. Moreover, 303.60 295.30 -2.73%
platinum touched a five-month low amid speculation of reduced demand
from China. Palladium inched up and briefly touched the highest level Agro
since February 2001 on expectations for a shift in demand from diesel The month of December saw a mixed trend in the agro commodities
to gasoline-fueled cars, which use the metal in their catalytic converters. basket as cotton and sugar treaded north whereas cocoa, coffee, corn,
Moreover, palladium escalated on heightened vehicle demand and a soybean and wheat treaded south. The cocoa prices fell to a two-month
current supply deficit. low attributed to favorable crop conditions in West Africa. Moreover,
abundant global supplies of cocoa and stronger pound further pressured
Gold Open Close % Change the price. Rising production in the top grower Vietnam boosted supplies,
Silver 40952.50 41955.00 2.45% which pressured coffee price. The corn price saw a bearish trend anchored
Platinum 526.30 545.90 3.72% by plentiful global grain supplies. However, cotton price rose because of
Palladium 30285.00 30037.50 -0.82% tightening world stocks and ever-increasing world consumption. Improved
32270.00 33917.00 5.10% weather condition across top producers, Brazil and Argentina’s drought-
hit regions enhanced expectations for abundant harvest in South America,
Base Metals which further pushed the soybean price. The sugar price rose amid worries
The copper prices scaled on expectations of strong demand in top consumer regarding tighter supplies of sugar than expected out of Brazil early next
China. It was reinforced by data showing China’s industrial output, which harvest as producers concentrated on ethanol production. The wheat price
rose more than the analysts’ estimates. The copper price was supported by saw a bearish trend as a higher-than-expected official estimate of Canadian
positive fundamentals and concerns of future industrial action. Ongoing output cleared doubts over the harvest. The ample supplies of wheat further
positive global risk appetite, fueled by expectations of a US tax reform and pressured the price.
encouraging macro-dynamics in China, has led to the price hike. Moreover,
optimism about demand and supply disruptions at mines combined with Cocoa Open Close % Change
China’s order to its top producer to halt output to check winter pollution, Coffee 204.80 188.80 -7.81%
also supported price rise. Corn 283.10 277.80 -1.87%
Cotton 14.02 13.78 -1.71%
Copper Open Close % Change Soybean Oil 160.12 173.00 8.04%
676.30 726.00 7.35% Soybean 74.76 73.26 -2.01%
Sugar 36.21 35.28 -2.57%
Energy Wheat 33.18 33.34 0.48%
The price of energy commodities saw mixed trend over the period of a 16.10 15.66 -2.73%
month during December as price of Brent Crude, Crude Oil and Heating
Oil treaded north while Natural Gas treaded south. The oil price drove The figures above are the percentage change in the prices of corresponding commodity over the
by strong demand and declining global inventories. Oil prices soared corresponding month. % change is calculated as ((Close-Open)/Open*100)
after the shutdown of the Forties North Sea pipeline which knocked out
significant supply from a market which was already tightened due to

111 | MEX NEPAL YEAR BOOK 2017