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Highlights
- Oil prices were quite volatile during the fourth week of November.
- China has decided to resume its steel production, resulting in gains for iron ore prices.
- Gold and silver struggled to retain their highs as strong economic recovery and high inflation bolstered bets for higher US interest rates.
The last week of November witnessed mixed performance from commodities. In the energy sector, oil prices were quite volatile, with prices fluctuating on the back of the US’ call for emergency oil release for cooling global oil prices and rising concerns of the Omicron variant of coronavirus. However, the uncertainty around how OPEC+ may react to the key consumers releasing their strategic reserves in the market may further decide the course of oil prices.
The base metal sector has registered a relatively better performance as China – the leading consumer of the world – has decided to resume its steel production, giving a bump to iron ore prices. The battery metals, cobalt and lead, recorded significant gains, whereas the prices of palladium tumbled around 8% last week.
At the same time, precious metals, including gold and silver, struggled to retain their strength in prices. Moreover, gold witnessed its worst week in five months during the initial trading sessions on Friday.
Given this backdrop, let's have a look at a few commodities that were popular among traders in the past week.
Here are a few commodities that recorded substantial volatility during the last week.
Crude Oil
The prices of both the crude oil benchmarks tumbled last week over concerns of market surplus as the leading consumers of the world planned to release oil from their strategic reserves to cool down oil prices. The prices were additionally impacted by rising concerns over the new Omicron variant of COVID-19 across the globe. A meeting is to be held on coming Thursday by OPEC+ to decide on increasing oil supplies.
Iron Ore
Iron ore prices recovered from the 18-month low levels to trade above US$90 per metric tonne at the end of November on the expectations that Chinese steel mills will increase the output for rest of the year in compliance with a raft of strict curbs imposed by the government in the recent few months.
Nickel
Nickel prices climbed more than 5% last week amid tight supplies and strong demand, primarily from the battery industry and forced spot purchasing as consumers rushed to secure material for the coming year.
Tin
The prices of tin surged above US$39,000 per tonne during the last week of November to record new highs on the back of tight supplies and strong demand for the environmental and sustainable landscape, particularly in EVs, PV installations, and electronics. However, Tin futures eased to around US$38,500 per tonne at the end of November.
