LNG prices continue to surge and are now up by over a third this year. But oil prices eased and cocoa prices also fell slightly. Business Advantage PNG’s monthly review of commodity and financial markets.

Brent crude oil price changes for the last three months. Credit: Trendingeconomics

The LNG price soared by 41.9 per cent over the month and is now up 35.8 per cent for the year-to-date, according to Kina Securities. The oil price, however, was weaker. Brent Crude fell by 4.7 per cent over the month and is down by 38.7 per cent for the year to date.

According to Energyworld.com, demand for LNG is expected to be high in both Asia and Europe in the fourth quarter:

‘We are expecting a substantial year-on-year increase in Northeast Asia’s Q4 2020 demand for LNG because of increased heating load compared to last winter.’

Lower nuclear output in South Korea may also create additional LNG demand. Meanwhile, ‘in India, demand is back to usual levels after a fall caused by the COVID-19 pandemic earlier this year.’

Metals

The gold price, at US$1905.70 an ounce, was slightly up, rising by 1.2 per cent over the month. The price of the precious metal is up 25.1 per cent for the year-to-date, according to Kina, reinforcing its status as a ‘safe haven’ investment during tough times.

‘Cocoa prices were down, falling by 3.5 per cent over the month. For the year to date, the price is down by 1.7 per cent.’

Silver steadied to US$24.42 an ounce; it is up 3.5 per cent over the month and 36.3 per cent for the year-to-date.

Good news for Ok Tedi: the copper price was also stronger, rising by 3.3 per cent over the month; it is up by 10.5 per cent for the year to date and is trading at US$3.09 a pound.

Agribusiness

Oil Palm berries after harvest.

Cocoa prices were down, falling by 3.5 per cent over the month. For the year-to-date, the price has been stable, down by 1.7 per cent.

The coffee price has continued its disappointing year, easing by 2.6 per cent for the month. It is down 17.8 per cent so far this year.

The Malaysian palm oil price continued to reverse the trend of recent declines, rising by 9.3 per cent over the month. It is up by six per cent for the year-to-date.

Equities

On the PNGX, the KSi Home Index (stocks listed only in Papua New Guinea) was unchanged over the month and is up 1.5 per cent for the year to date. The KSi index (which includes dual-listed stocks) fell by 5.1 per cent, and is down 13.3 per cent for the year to date.

There has been talk of a possible new listing of late, with Lae-based mining services company HBS (PNG) Limited tooling up to raise capital, potentially on both the PNGX and ASX.

The Australian All Ordinaries Index was up 3.6 per cent over the month, but is down by 6.5 per cent for the year to date. The S&P 500 rose by 1.5 per cent over the month and is up by 5.3 per cent for the year to date.

The kina was unchanged over the month against the US dollar, and was weaker against the Australian dollar, falling by one per cent over the month. Against the British pound it fell by 2.1 per cent over the month.

Half-year Treasury Bills are trading at 4.59 per cent, while full year Bills are trading at 7.2 per cent. Two year inscribed stock, 2020-2022, was 8.04 per cent.