LNG prices surged, clawing back most of this year’s losses, but oil prices fell. Silver also lost some of its recent spectacular price gains. Business Advantage PNG’s monthly overview of commodity and financial markets.

Silver bullions. Credit: Pixabay

The LNG price jumped by 20.1 per cent over the month and is now down only 4.2 per cent for the year to date according to Kina Securities. The oil price, however, weakened. Brent Crude fell by 6.3 per cent over the month and is down by 35.7 per cent for the year to date.

According to the International Energy Agency (IEA), the prospects for next year for LNG are good. ‘After a four per cent drop in 2020, natural gas demand is expected to progressively recover in 2021 as consumption returns close to its pre-crisis level in mature markets, while emerging markets benefit from economic rebound and lower natural gas prices,’ an IEA report says.

‘The impact of the 2020 crisis is, however, expected to have repercussions on the medium-term growth potential, resulting in about 75 bcm (billion cubic metres) of lost growth over the forecast period: 2019 to 2025. This forecast expects an average growth rate of 1.5 per cent per year during this period.’

The IEA says the Asia-Pacific region will account for over half of incremental global gas consumption in the coming years, driven principally by the development of gas in China and India.

Metals

The gold price was weaker, falling by 4.9 per cent over the month; it is at $US1882.30 an ounce, which is up 23.6 per cent for the year to date, according to Kina.

Silver fell back after its recent rises to US$23.60 an ounce. That meant it was down 17.5 per cent over the month, but it is still up 31.7 per cent for the year to date.

The copper price came off slightly, falling by 2.3 per cent over the month, but it is up by 6.9 per cent for the year to date. It is trading at US$2.99 a pound.

Silver price fluctuations over the last year. Credit: Trading Economics

Agribusiness

Cocoa prices were down, falling by five per cent over the month, but for the year to date the price is up by 1.9 per cent.

The coffee price fell sharply, dropping 15.5 per cent for the month. It is down 15.6 per cent for the year to date.

The Malaysian palm oil price clawed back some recent losses, rising by 3.7 per cent over the month, but it remains down by three per cent for the year to date.

Recent cocoa price fluctuations. Credit: Trading Economics

Equities

The stock market did little. The KSi Home Index (stocks listed only in Papua New Guinea) was down by 0.2 per cent over the month and is up 1.5 per cent for the year to date. The KSi index (which includes dual-listed stocks) did not move over the month, and is down 8.2 per cent for the year to date.

The Australian All Ordinaries Index was up 1.8 per cent over the month, but is down by 9.8 per cent for the year to date. The S&P 500 fell by 4.2 per cent over the month; it is up by 3.7 per cent for the year to date.

The kina was steady against the US dollar, easing by 0.3 per cent over the month. It was stronger against the Australian dollar, rising by 4.1 per cent over the month, but is down by 3.1 per cent for the year to date. Against the other currencies, the kina was steady.

Half year Treasury Bills are trading at 4.64 per cent, while full year Bills are trading at 7.2 per cent. Two year inscribed stock, 2020-2022, is offering 8.04 per cent.