Page 90 - MEX-Yearbook-2017

MEX Almanac

March 2017

Precious Metals cuts. Natural gas price surged by 15.24% due to the frigid temperature and
Gold and silver edged lower this month after growing expectations of a US snowstorm in several key usage areas. A strong cold front with rain and
rate hike. A surge in business and consumer confidence during President snow swept across the Great Lakes, Mid-Atlantic, and Northeast where
Donald Trump’s first weeks in office had helped push the FED toward its first overnight lows dropped into the teens to below zero that drove the high
sustained series of interest rate hike in more than a decade, despite a dearth demand for heating.
of firm policies from the administration. Gold is highly sensitive to rising
US interest rates because they increase the opportunity cost of holding non- Brent Crude Open Close % Change
yielding bullion while boosting the dollar in which it is priced. There was a Crude Oil 5574 5260 -5.63%
huge decline in the price of platinum this month i.e. by 7.98%. The decreasing Heating Oil 5333 5067 -4.99%
demand for jewelry in China and Europe and declining investment were the Natural Gas 42.63 41.35 -3.00%
main reason for the huge price decrease of platinum. Platinum supply also 276.2 318.3 15.24%
diminished as South Africa’s reserve got depleted. Palladium took the other
side vis-à-vis the other precious metal this month, where its price increased by Agro
3.55%. Palladium also showed response towards rallying US Dollar pulled After the rapid drop in the price of cocoa for several months, its price
back in the aftermath of the Fed’s latest policy-setting meeting. Meanwhile, has increased this month with the rising expectations of global chocolate
palladium was gaining upside following the Reuters article stating that a fund consumption coupled with ageing farmers. The price declined in March after
created by Norilsk Nickel had purchased palladium from Russia’s central the worries of shortage of coffee disappeared which had increased in the
bank reserves to help meet demand from its customers where the demand month of January due to the bad harvest in Brazil and droughts in Vietnam
from customers was exceeding production of palladium. and Indonesia. Corn price had come down because of the big numbers from
USDA (U.S Department of Agriculture) saw South America and the new
Gold Open Close % Change government policies of Argentina favored corn production. The expansion
Silver 40355 40090 -0.66% of textile and garment industries in Europe, US, Japan and Australia has
Platinum 593 586.8 -1.05% increased the demand of cotton and thus has raised its price. The increase
Palladium 33105 -7.98% in acres planted in soybeans is the main factor behind the decrement in the
24791 30462.5 3.55% price of soybean and soybean oils. Further, the weather condition for the
25671 soybean was also healthy enough that increased its production. The price of
sugar crashed to a year-low by 12.79% this month after increment in health
Base Metals awareness among people and the use of sugar in biscuits, chocolate bars and
Copper slipped by 2.22% this month since the copper inventories were cereals decreased. The government of various countries has imposed the
higher this month, almost as high as in 2013. Reuters reported copper higher tax to reduce the sugar intake. The price of wheat slipped down due to
inventories controlled by LME jumped by almost 39,000 tones. Shanghai the abundant world supply and reduced export demand.
Exchange stocks jumped by 24,000 tones to total 320,000 tones. In
February, copper jumped to its highest level after a strike in Escondida, Cocoa Open Close % Change
but a slowdown in China which consumed some 46% of the world’s copper Coffee 191.1 209.2 9.47%
and diminishing prospects of a bold infrastructure program in US had Corn 314.4 305.5 -2.83%
shifted market attention to demand strength. Cotton 14.94 14.25 -4.62%
Soybean Oil 168.2 170.4 1.31%
Copper Open Close % Change Soybean 76.2 70.16 -7.93%
598.4 585.1 -2.22% Sugar 38.48 34.72 -9.77%
Wheat 42.54 37.1
Energy 16.41 15.61 -12.79%
March witnessed bearish patterns across the energy commodities except -4.88%
natural gas. The inventories of oil climbed more than expected this
month. Despite an agreement by the Organization of Petroleum Exporting The figures above are the percentage change in the prices of corresponding commodity over the
Countries and other exporters to cut output by almost 1.8 million barrels corresponding month. % change is calculated as ((Close-Open)/Open*100)
per day in the first half of 2017, the oil price fell as record U.S. crude
inventories kept sentiments weak, pointing to a global glut despite supply

89 | MEX NEPAL YEAR BOOK 2017