Data from the Mercantile Exchange Of VietNam (MXV) shows that, at the end of the trading week from April 15 to 21, despite significant volatility in commodity prices, the mixed increases and decreases led the MXV-Index to edge up by just 0.05% from the previous week, reaching 2,329 points. Nevertheless, this remains the highest level in the past 7 months.

Complex geopolitical developments, particularly the escalating tensions in the 'hotbed' of the Middle East, have significantly impacted commodity prices throughout the week. Amid these uncertainties, the metals group, serving as a safe haven, continued to attract investors.

In contrast, energy prices recorded a decline as geopolitical risks had not yet affected actual supply, while demand showed signs of weakening. The commodity market saw an active trading week, with average trading value increasing by 3% to over 7,700 billion VND per session.

Russian metal ban drives surge in copper, aluminum, and nickel prices

Most metal commodities experienced price increases in the previous trading week, except for platinum. Among them, copper, aluminum, tin, and nickel saw the most significant price hikes.

Data showed that China's economy grew by 5.3% in Q1 2024, surpassing market expectations of 4.8% and higher than the 5.2% growth of Q4 2023, strengthening the outlook for industrial metal consumption and driving price increases.

Specifically for copper, aluminum, and nickel, these commodities have benefited from concerns over potential supply disruptions due to the US and UK banning aluminum, copper, and nickel produced by Russia. According to MXV, Russia is a significant metal producer, accounting for 6% of global nickel supply, 5% of aluminum supply, and 4% of copper supply.

Adding to the support for nickel prices, China is planning to purchase 200,000 tons of nickel pig iron (NPI). Meanwhile, Indonesia, the world's largest nickel producer and a key supplier to China, is still considering approval of extraction quotas amidst increasingly scarce ore supplies.

For precious metals, silver prices rose by 1.81% to $28.84 per ounce, maintaining a three-year high. Despite macroeconomic pressures, silver continues to be supported by its safe-haven role amid escalating Middle East conflicts and supply concerns. The Silver Institute reports that the global silver deficit is expected to increase by 17% to 215.3 million ounces this year.

In contrast, platinum, with a weaker safe-haven role, dropped by 5.78% to $943.8 per ounce, ending a three-week winning streak as the Federal Reserve's (FED) potential to maintain high interest rates overshadowed its safe-haven appeal.

Demand pressure outweighs geopolitical risk; oil prices decline for the second week

Oil prices experienced significant volatility during the week of April 15-21, initially rising due to geopolitical risk concerns but quickly cooling off as psychological pressures eased. Additionally, macroeconomic pressures impacted the outlook for gasoline and oil demand. By the end of the week, WTI crude oil prices fell by 3.36% to $82.22 per barrel, while Brent crude dropped below $90 per barrel, declining by 3.49% to $87.29 per barrel.

At the start of last week, contrary to many forecasts, oil prices opened the week with a slight decline as tensions between Iran and Israel proved less damaging than anticipated, easing concerns about a potential escalation in conflict affecting oil supply.

However, by the end of the week, international sources reported that Israel had carried out an attack on Iranian soil. Oil prices surged by $3 per barrel within just one hour. Yet, selling pressure quickly pulled prices back down as the nature of the tensions remained limited. The persistent volatility in oil prices, moving in both directions, highlights the significant impact of geopolitical risk on price trends during this period.

Adding to the pressure on oil prices last week, the U.S. Energy Information Administration (EIA) reported a 2.7 million barrel increase in U.S. commercial crude oil inventories for the week ending April 12, reaching the highest level since June 2023.

Analysts at JPMorgan Chase pointed out that global oil consumption through April was 200,000 barrels per day lower than their forecast, averaging 101 million barrels per day. Since the beginning of the year, demand has increased by 1.7 million barrels per day, down from the previously forecasted 2 million barrels per day.

Source: MXV