Commodity Briefing

China tin output up 14.9%: China produced 636,600 tonnes of tin in the first 11 months of 1998, up 14.9 per cent compared with the same year-ago period, the Futures Daily said on Wednesday, quoting the State Statistical Bureau. China’s tin output in November alone was 72,900 tonnes, up 16.8 per cent from the year-ago period, the newspaper said.

China zinc output up: China produced 1.3146 million tonnes of zinc in the first 11 months of 1998, up 6.6 per cent compared with the same year-ago period, the Futures Daily said on Wednesday, quoting the State Statistical Bureau. China produced 125,500 tonnes of zinc in November alone, up7.2 per cent year-on-year, the newspaper saidwithout giving any further details.

Tocom palladium higher: Yen-based palladium futures closed higher on Wednesday pushed up by a strong cash market and heavy buying by trading houses, traders said. Other precious metals were hit by a weaker dollar against the yen, forcing them to give up most of the previous day’s gains, they said. Palladium futures ranged from three to 22 yen per gram higher. Benchmark October ended up three yen at 983 yen.

Copper, aluminium shaky: Both copper and aluminium were looking vulnerable on Wednesday but analysts said they could be in for a limited corrective bounce. In copper $1,500 a tonne was seen providing considerable psychological support, while aluminium was underpinned around $1,250.

Precious metals quiet, seen ranging: Gold was seen keeping to a narrow range on Wednesday after a quiet performance overnight, although some dealers saw it drifting lower towards solid support at around $292.00 an ounce. Silver trading was also expected to beuneventful and rangebound. For gold, dealers said the market looked set to remain quiet, with a slight downside bias since Monday’s advance lost momentum. One European dealer said 0producer selling of gold appeared to be coming into the market, although this was not confirmed elsewhere. But another said gold was expected to hold to a small range in thin volume and that the market was awaiting developments on revaluation of the gold reserves of the central banks of European countries that will be part of the new euro currency zone. Gold was seen capped below $298. In the news, India’s gold jewellery exports rose to $408.74 million in the April to October period this year, showing growth of 0.43 per cent over the same period a year ago, a senior government official said. Dealers expected little interest in silver, which was also quiet and expected to range between $4.70/$4.75 and $4.90.

Hong Kong gold lower: Hong Kong spot gold ended lower on Wednesday after weakness in the Australian dollar liftedthe local gold price and stimulated producer selling, dealers said. Gold bullion ended at $293.30/80 per ounce on Wednesday compared to New York’s previous close at $293.40/90 on Tuesday. The Australian dollar fell against the US dollar after world commodities price indexes fell to multi year lows, but later the currency recovered. Sentiment towards gold was mixed to bearish in a market left quiet by the approaching year-end holidays, traders said. The Commodity Research Bureau index fell to a 26-year low of192.54 in Chicago on Tuesday. A major gold supplier in Hong Kong said the Christmas shopping season has so far not helped physical demand. Gold was seen limited to a $292-295 range and likely to test the lower end later on Wednesday. Longer term, gold could gain from less supply made available by central banks and miners, a trader said. Local tael gold ended HK$8 down at HK$2,706.

Liffe coffee seen consolidating: Liffe coffee is likely to consolidate on Wednesday after retreating from the highs toclose in mid-range on Tuesday, technical analysts said. Traders called it to open unchanged. Fiona Tait, a technical analyst at Sucden, said the market retreated on Tuesday after testing resistance at $1,730. "This might encourage some further consolidation below $1,730 resistance, but we expect support to hold at $1,693 — the six-month trendline," she said. New York arabica futures remained in the doldrums overnight with prices ending mixed in thin, rangebound trade.

Liffe cocoa seen very weak on charts: Liffe cocoa remains very weak on the charts and the market should come under more pressure despite its current oversold condition, technical analysts said on Wednesday. Traders called it to open one pound down. "Even though this market is oversold, expect further weakness to emerge," said Fiona Tait, a technical analyst at Sucden. "Medium term structure remains very weak…so selling into strength remains the best strategy," she added. New York cocoa futures posted losses overnight for the thirdstraight session, setting new contract lows across the board on speculative selling amid weak technicals and few concerns about supply, traders said. Ivorian exporters and industry sources reported on Tuesday that cocoa arrivals in the week of Nov 30-Dec 6 were 65,500 tonnes, compared with 64,500 in the previous week, and totalled around 360,000 tonnes by December 6, compared with 360-370,000 by December 8, 1997.

China rubber output down: China produced 511,900 tonnes of synthetic rubber in the first 11 months of 1998, down 6.6 per cent compared with the same period last year, the Futures Daily said on Wednesday, quoting the State Statistical Bureau. China’s synthetic rubber output was 57,000 tonnes in November alone, up 5.3 per cent from the year-ago period, the newspaper said.

Sri Lanka to buy diesel: Sri Lanka’s state-owned Ceylon Petroleum Corp (CPC) has tendered to buy diesel and jet fuel for January delivery, a company official said on Wednesday. The tender seeks 220,000 barrels of1.0-per cent sulphur diesel and 80,000 barrels of jet fuel for delivery into Colombo between January 1 to 2, the official said. The tender will close December 16, with offers valid for two days. In its last tender, CPC bought 25,000 tonnes of diesel and15,000 tonnes of jet fuel for delivery December 20-21 into Colombo from Kuwait Petroleum Corp at 23 cents and 28 cents per barrel respectively over Singapore prices.

Indian cotton firmer: Fresh overseas demand coupled with steady mill buying helped Indian cotton prices to extend gains on Wednesday, traders said. In spot deals, Bengal-deshi rose by Rs 5 to Rs 1,525/1,560 per maund (37.32 kg). Saw-ginned variety rose Rs 10 to Rs 1,700/1,810 per maund. In the Gujarat segment, long staple sankar-4 held steady at Rs 18,000/19,000 per candy (355.56 kg) for average grade while superior grade gained Rs 100-300 to Rs 19,800/20,100 per candy.