Prices take hit on Greece mess, China market fears

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Prices take hit on Greece mess, China market fears
A pedestrian looks at boards displaying stock prices and foreign currency values at the Australian Securities Exchange in central Sydney

The idea that a stock market crash could put a hole in China's economy and reduce demand from the world's biggest resource-consumer is adding to the pain for commodities.

By AFP

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Published: Sun 12 Jul 2015, 12:00 AM

Last updated: Sun 12 Jul 2015, 9:32 AM

London - Commodity prices faced some heavy selling last week as the spotlight fell on the impact of China's stock market crash, while uncertainty over Greece added to the downward pressure.
"The idea that a stock market crash could put a hole in China's economy and reduce demand from the world's biggest resource-consumer is adding to the pain for commodities," said CMC Markets analyst Jasper Lawler.
Oil
With prices already downbeat, the International Energy Agency, or IEA, on Friday forecast that global oil demand growth would slow in 2016, and that crude production in nations outside the Organisation of the Petroleum Exporting Countries, or Opec, would stall. In its first estimates for 2016, the IEA forecast that oil demand would slow next year to 1.2 million barrels per day, compared with an average of 1.4 million barrels per day this year. Meanwhile, growth in non-Opec oil supply "is expected to grind to a halt in 2016 as lower oil prices and spending cuts take a toll," the IEA said in its monthly oil report. US crude futures had sunk nearly eight per cent last Monday on worries about slowing global growth, as Greek voters rejected a bailout offer and China moved to calm financial market turbulence. The oil market was focused also on Greece amid hopes debt-strapped nation would reach a deal with its creditors after Athens laid out details Thursday of a new bailout plan to save it from financial collapse. Traders are also keeping an eye on negotiations in Vienna between western powers and Iran on a deal to curb Tehran's nuclear ambitions and allow the lifting of punishing sanctions. A reprieve would allow Iranian oil to flow back into the global market, adding to a supply glut and helping depress prices, according to analysts. US commercial crude stockpiles rose another 400,000 barrels to 465.8 million barrels in the week to July 3, even as refineries picked up activity. Gasoline inventories also jumped, with the summer holiday driving season in full swing. By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in August fell to $58.68 a barrel from $60.39 a week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for August dropped to $52.74 a barrel from $55.41 a barrel.
Precious metals
Gold led the precious metals complex lower. By Friday on the London Bullion Market, the price of gold dropped to $1,159.30 an ounce from $1,167.95 a week earlier. Silver fell to $15.45 an ounce from $15.64. On the London Platinum and Palladium Market, platinum slid to $1,029.30 an ounce from $1,083. Palladium slumped to $649.35 an ounce from $701.
Base metals
Prices mostly declined as traders took their lead from China. By Friday on the London Metal Exchange, copper for delivery in three months fell to $5,577.50 a tonne from $5,803 a week earlier. Three-month aluminium dropped to $1,690.50 a tonne from $1,728. Three-month lead rose to $1,794.50 a tonne from $1,775. Three-month tin slid to $13,975 a tonne from $14,400. Three-month nickel declined to $11,275 a tonne from $12,125. Three-month zinc retreated to $2,005.50 a tonne from $2,025.
Cocoa
London-traded cocoa hit a new four-year high at £2,206 a tonne as tight supplies offset macroeconomic concerns of risk weighing on demand. By Friday on Liffe, London's futures exchange, cocoa for delivery in September edged up to £2,199 a tonne from £2,171 a week earlier. By Thursday on the ICE Futures US exchange, cocoa for September grew to $3,293 a tonne from $3,288 on Thursday of the previous week, when US markets closed earlier than usual ahead of the July 4 Independence Day festivities.
Sugar
Prices retreated owing to higher-than-expected Brazilian output, analysts said. By Friday on Liffe, a tonne of white sugar for delivery in October slid to $358.60 compared with $372.60 for the August contract one week earlier. On ICE Futures US, unrefined sugar for October dropped to 12.05¢ from 12.30¢ on Thursday of the previous week.
Coffee
Prices struck an 18-month low in New York at 123.65¢ a pound with supplies expected to be robust despite previous dry weather in Brazil. By Thursday on ICE Futures US, Arabica for delivery in September fell to 126.80¢ a pound from 127.40¢ on Thursday of the previous week. By Friday on Liffe, Robusta for September slipped to $1,732 a tonne from $1,744 one week earlier.
Rubber
Prices declined as Malaysia's currency slumped.On Friday, the Malaysian Rubber Board's benchmark SMR20 fell to 145.25¢ per kilo from 149.90¢ a kilo one week ago.



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