At the end of trading session on October 11, oil prices continued to rise to multi-year highs, coal also rose due to a global energy shortage, aluminum rose to a 13-year high.
Oil continues to hit multi-year highs
Oil prices rose to multi-year highs as recovering global demand led to electricity and gas shortages in key economies like China.
Closing the session on October 11, Brent crude oil increased by $ 1.26 or 1.5% to $ 83.65 / barrel. During the session, the price reached 84.6 USD, the highest level since October 2018. WTI oil rose $1.17, or 1.5%, to $80.52 a barrel after hitting its highest level since late 2014 at $82.18.
The pace of economic recovery from the pandemic has boosted energy demand at a time when oil production is low as producing nations cut output during the pandemic.
A US administration official said the White House supported calls for oil-producing countries to “do more” and that they were closely monitoring gasoline prices.
The Organization of the Petroleum Exporting Countries and its allies (known as OPEC+) has delayed increasing supply even though prices have risen. In July, the group agreed to increase production by 400,000 bpd per month to restore the 5.8 million bpd of restricted output remaining from the 2020 production cut deal.
Oil prices have spiked to record highs in recent weeks, driven by energy shortages in Asia, Europe and the US. Rising natural gas prices have encouraged power plants to switch to oil. Analysts estimate the shift from natural gas to oil could boost crude demand by 250,000 to 750,000 bpd.
In India, several states have experienced power outages due to lack of coal. The Chinese government has asked mining companies to increase coal production as electricity prices soar.
Gold falls as USD rises
Gold prices fell as the dollar rose as traders bet the US Federal Reserve would not delay stimulus, although inflation expectations and a recession capped the downside.
Spot gold fell 0.1% to $1,754.54 an ounce, while US gold for December delivery closed down 0.1% at $1,755.7 an ounce.
The USD rose 0.3% hurt demand for gold among holders of other currencies.
Gold price support may come from some who think inflation is accompanied by a recession. Soaring inflation combined with stagnating economic growth has held back stock prices globally amid rising oil prices.
Aluminum price highest in 13 years
Aluminum prices rose to their highest levels since 2008 as traders worried about rising energy and raw material costs to produce the metal and top Chinese producers cutting output.
Aluminum production has been restricted by the Chinese government to combat environmental pollution, output continues to be affected by electricity shortages in the country.
India is also facing power shortages while rising energy costs force a Dutch aluminum producer and a Spanish steel mill to halt production.
Aluminum prices on the London Metal Exchange LME rose 3.1% to $3,057 a tonne after touching $3,072.5 a ton, the highest since July 2008. Aluminum is up more than 50% this year after rising 9% in 2020.
Analysts at Macquarie estimate the outage will also reduce China’s aluminum output by 1.5 million tons this year, leading to a 1 million-ton shortfall in the global market with consumption of around 65 million tons. .
Demand in China is falling, inventories are plentiful and prices could fall to $2,200 in 2022, according to Timothy Weiner at Harbor Aluminum.
The price of alumina, a raw material for aluminum production on the Comex exchange, rose to a three-year high at $478 a tonne.
Coal prices increase
Coke prices rose to a six-week high as recent flooding in China’s top coal producer Shanxi fueled worries about supply.
Worries about coal production and shipping from Shanxi have added to concerns about the energy crisis that has hit the world’s largest steel producer and hampered the functioning of many industries, including coal mining as well. Shanxi province closed 27 coal mines last week due to heavy rains causing flooding.
The January 2022 coking coal contract on the Dalian Commodity Exchange rose 6.9% to 3,428 yuan ($532.8) per ton. Coke prices rose 5.4 percent to CNY 3,728 a tonne, the highest since September 10.
Last week Shanxi Province and Inner Mongolia, another major coal mining region, requested more than 200 mines to expand their production capacity.
Dalian iron ore prices rose 6.5% to 797.5 yuan a tonne, near their highest since September 1 at 799.5 yuan a tonne.
Bar steel in Shanghai increased 0.8%, while hot rolled coil increased 0.3%. Stainless steel rose 1.9%.
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