Commodity markets fall over fed uncertainties, US manufacturing concerns

6/10/2024 7:29:45 AM

(MENAFN) Last week, commodity markets continued their downward trajectory amidst uncertainties surrounding the Federal Reserve's stance on rate cuts and apprehensions regarding the US manufacturing sector.

The unexpectedly robust non-farm payrolls report in the US, revealing a surge of 272,000 jobs in May, had a notable impact on market sentiments.

Concerns stemming from US macroeconomic data, particularly regarding the manufacturing industry, prompted a sharp decline in base metal prices. The Institute for supply Management's (ISM) manufacturing Purchasing Managers' Index (PMI) falling to 48.7 in May, below expectations, signaled ongoing contraction in the sector.

In tandem, copper stocks on the Shanghai Futures Exchange surged to their highest level since 2020, precipitating a significant drop in copper prices. The repercussions were felt across the board, with the pound prices of copper, nickel, lead, and zinc plummeting by 3.8 percent, 8.5 percent, 3.2 percent, and 6.8 percent, respectively, over the week.

Turning to precious metals, the ounce prices of gold, palladium, silver, and platinum experienced declines of 1.4 percent, 0.1 percent, 4.1 percent, and 6.9 percent, respectively.

On the energy front, crude oil stocks in the US swelled, compounded by plans from the OPEC+ coalition and certain non-OPEC producers to augment crude oil supply, leading to further price depreciation.

Conversely, natural gas prices bucked the trend, surging as daily production dipped in the US. The impending heatwave prompted households and businesses to turn to natural gas-powered air conditioners, bolstering demand. Consequently, the barrel price of Brent crude oil tumbled by 2.4 percent, while natural gas prices on the New York Mercantile Exchange surged by 13.5 percent throughout the week.

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