950826

Platinum under strike threat, silver

equally tense, nickel at 6-month highs

LONDON: The platinum market is in a tense mood, with the prospect of severe disruption to world supply looming as miners threaten a walk-out at giant South African producer Impala Platinum. The metal, used in catalytic converters and prized by Japanese jewellers, has already jumped by several dollars.

If the 30,000 workers, who are demanding higher pay and better working conditions, down tools, the effect will be immediate, as Impla produces a third of the South African output and accounts for 20 to 25 percent of world supply.

Equally tense, the silver market held firm at the highs it reached last week, with stocks on the New York market still very low.

Among the base metals, the price of nickel kept at six-month highs, supported by continued growth in stainless steel production.

Oil recovered after a mini-crash, lifted by a fall in US reserves and growing political instability in Iraq.

Grains remained at high levels on forecasts of a very poor world harvest in the 1995-96 season.

GOLD: Fluctuating. The gold market was uninspired this week, fluctuating around 384 dollars per ounce, apparently little influenced by the strong swings in the dollar against the yen and the mark, before retreating to 382 dollars.

SILVER: Steady. After last week's surge, prices did not fall back as traders had expected, but held steady between 5.60 and 5.70 dollars per ounce, still supported by weak supply on the New York market.

The stocks on Comex, which had plummeted by 34 million ounces in less than 10 days, recovered somewhat due to deliveries by air from London to New York, according to one trader.

But analysts at GNI held that the market was still very tight, and prices could move up again.

PLATINUM: Firm. After a weak start, prices rallied to over 430 dollars over fears of a strike by workers at the South African mining giant Impala Platinum.

According to a representative of the National Union of Mineworkers, which is demanding higher pay and better working conditions, it is "highly probable" that the 30,000 miners will go out on strike.

The industrial action would have an immediate impact on the world market, since Impala accounts for around 20 to 25 percent of the world supply.

A company representative, however, said that any strike before September 4 would infringe labour laws. Impala has already been hit by a temporary stoppage at one of its two mineral refineries.

COPPER: Swing. The price of copper swung first down then up, but ended the week still more than five dollars lower at around 3,033 dollars per tonne.

The summer slowdown prompted massive speculative selling by investment funds on Wednesday, but the next day they returned to the market, buying up large quantities of the metal.

Dealers were unsure as to the exact reason for the sudden spurt, but some suggested that the 0.5 percentage point cut in the Bundesbank's key rates, which should encourage growth and thus increased copper consumption, might have been the trigger.

But analysts said copper was still in a consolidation phase, waiting for higher demand to arrive in the autumn.

In the longer-term, the GNI trading house said it expected a surplus in copper supplies next year, which would cause prices to fall back.

LME stocks fell by 903 tonnes to 162,750 tonnes.

LEAD: Higher. Lead advanced slightly by a few dollars to 645 dollars per tonne, lifted by copper's surge and a healthy stocks fall of 3,450 tonnes to 226,775 tonnes.

ZINC: weaker. The metal fell by around 10 dollars to 1,043 dollars per tonne, affected by the dull summer trading conditions. LME stocks fell by 3,325 tonnes to 768,700 tonnes.

ALUMINIUM: Retreat. The metal lost nearly 15 dollars to 1,925 dollars, on speculative selling in a nervous market.

Analysts at GNI said the metal was likely to fall further as other producers followed the example of Australia's Capral in increasing capacity. The MOU agreement limiting output in the world's six largest producing regions runs out at the end of the year.

IPAI figures showed that global aluminium production rose by an average 200 tonnes a day in July to 47,700 tonnes a day. The IPAI also said output of alumina -- the raw component for aluminum--rose sharply in the second quarter of the year.

On the LME, weekly stocks fell by 9,800 tonnes to 551,925 tonnes.

NICKEL: Gain. The metal rose by around 90 dollars to 9,380 dollars per tonne, reaching a new high since February, supported by a stocks fall of 2,238 tonnes to 67,896 tonnes.

The market is still underpinned by rising worldwide stainless steel production, the major destination for nickel.

TIN: Steady. The metal held steady, rising 30 dollars to 7,150 dollars per tonne, around the highest levels since 1992, despite some speculative selling mid-week.

The market shrugged off news that China had exceeded its 20,000 tonnes ATPC export quota for the year to July and a stocks rise of 1,015 tonnes to 16,945 tonnes.

COCOA: Steady. Prices initially surged forward on the back of speculative buying, fuelled by last week's rally, to reach 960 pounds per tonne before stabilising at that level.

The advance slowed on fears of large sales by Ivory Coast and Ghana, the two largest world producers.

The Ivory Coast government, meanwhile, confirmed that it was liberalising the state body for cocoa and coffee exports in line with World Bank conditions tied to a 150 million dollar loan for the reform of the country's agricultural sector.

The stabilisation board (CAISTAB), which until now had a monopoly in the sector, will abandon the domestic trade in coffee and cocoa, which henceforth will be carried out by private traders.

Foreign trade will be run according to a system of auctions. The government, which previously fixed the prices paid to producers, will no longer intervene except to establish guideline price levels.

This announcement had no effect on the market, which had been awaiting the change for some time.

COFFEE: Modest. The price of robusta coffee advanced moderately by around 50 dollars to reach around 2,750 dollars per tonne, lifted by producer buying in a physically tight market.

A slight drought in Brazil also helped to lift prices. According to the trading house GNI, prices are likely to rise as high as 3,000 dollars under the effect of further buying by coffee producers.

SUGAR: Uncertain. The price of sugar advanced further by over 10 dollars to reach around 320 dollars per tonne under pressure of extreme supply shortages before the arrival of deliveries from new European harvests.

However, many analysts held that prices will fall back within the next few weeks because of large world output.

According to a London trader Czarnikow, the sugar crop in 1995-96 will be a record 119.4 million tonnes, due to an exceptional Indian harvest, improved Cuban output and a good sugarbeet crop in Europe.

However, this record crop will be almost entirely absorbed by strongly growing world demand, forecast at 116.5 million tonnes for the 1996 calendar year.

VEGETABLE OILS: Progress. The price of vegetable oils in general rose on the Rotterdam market. Soya advanced by two guilders to 100 per 100 kilograms in the wake of gains on the Chicago market, which was lifted by rising grain prices.

Palm oil gained a few dollars to 620 dollars per tonne, little affected by the market in Kuala Lumpur, which was depressed by the prospect of higher production in Malaysia.

Rapeseed declined a lttle, by two florins to 95 florins per 100 kilograms and sunflower oil lost five dollars to 695 dollars per tonne (for delivery in November-January).

OIL: Advance. The benchmark price of North Sea crude oil jumped by 20 to 40 cents a barrel to reach 16.45 dollars a barrel by Wednesday, the highest level since June.

Traders reacted to the announcement by the American Petroleum Institute of an unexpected an record drop of 8.4 million barrels in the US crude oil reserve, seeming to point to higher imports in the near future.

The market was also tense because of the political situation in Iraq following the defection of high-level figures. Operators worried about the recent US deployment in the Gulf in response to Iraqi army maneouvres.

However, US Defence Secretary William Perry then played down the importance of the "unusual" Iraqi troop movements, saying they did not point to any plans by Iraqi to invade its neighbours.

RUBBER: Lift. Prices climbed by around 55 pounds to reach 930 pounds per tonne, lifted by higher buying by tyre manufacturers and other industrial enterprises using rubber.

Buyers who had built up large stocks early in the year on fears of sharply rising rubber prices, kept out of the market for several months, which pushed the price down.

According to a British trader, this recovery in prices is only temporary, and prices are likely to fall back during the rest of the year. But the London-based research group Economist Intelligence Unit (EIU) predicted that prices will advance in the last quarter of 1995 to reach an average of 950 pounds per tonne.

GRAINS: Firm. The prices of British wheat and barley held firm at the relatively high levels of 112 and 105 pounds per tonne.

Trading was fairly limited due to weak demand. Producers are also awaiting the return of EU export subsidies before putting their wheat, oats and barley on the market.

In Chicago, prices advanced on hopes of exports to Egypt, China, the Philippines and South America and on pessimistic forecasts by the International Grains Council (IGC).

According to the inter-governmental body based in London, poor harvests in Russia and India will push the worldwide grains harvest down in 1995-96 (July-June) to 533 millions tonnes.

The outlook this year is bad for grain crops in Russia, Kazakhstan, Ukraine and India.

Global demand over 1995-96, meanwhile, is forecast at 543 million tonnes, and by the end of the harvest year, worldwide stocks will have fallen to their lowest levels for 20 years, the IGC said.

TEA: collapse. Prices collapsed under pressure of excessive supply and the poor quality of leaves arrived from Kenya. The price of medium-quality tea fell by five pence to 98 pence per kilogram while high-quality tea dived by 14 pence to 146 per kilogram.

Prices should recover in a few weeks as Indian teas --which usually arrive around this time-- will suffer from a weak harvest in the country, one British trader said.

COTTON: Surge. The Cotton Outlook price indicator climbed five cents to 0.88 dollars per pound, lifted by the fears of US traders about a fall in the country's harvest.

Worms have attacked the cotton plantations of Mississippi, one of the major producing regions, and the heat wave also could damage certain crops.

WOOL: Ascent. The reference price in Bradford, northern England, advanced by two pence to 510 pence per kilogram despite losses on the Australian market because of high demand.-AFP