Oil prices have been strong, but LNG prices have weakened sharply. Oil palm and coffee prices have fallen, but cocoa prices are steady. Business Advantage PNG’s monthly overview of commodity and financial markets.

Coffee beans. Credit: James Kubina

The LNG price has fallen by a fifth over the last month, reports Kina Securities. Japan/Korea LNG prices have fallen by 20 per cent over the month and are down by 31.1 per cent over the year.

According to S&P Global, supply disruptions in the Asia-Pacific region have failed to lift spot prices.

S&P points to ‘lackluster demand in northeast Asia and ample supplies elsewhere in the market.’

LNG prices Source: S&P

Oil prices, however, are showing signs of strength. According to Kina, West Texas Intermediate is up 6.4 per cent for the month and 22.1 per cent for the year.

According to oilprice.com, the price this year is likely to be volatile because of the crisis in Venezuela, tightening sanctions on Iran, and falling production in Libya. This is counterbalanced by growth in US shale oil production.

The greatest imponderable is a possible economic downturn. ‘The global economy has already thrown up some red flags, with slowing growth in China, contracting GDP in parts of Europe, currency crises in emerging markets and financial volatility around the world,’ comments oilprice.com.

‘Palm oil prices weakened.’

‘The tightening of interest rates looms large in many of these problems.’

Metals

Gold is up by 1.6 per cent over the month and has risen by a modest 3.8 per cent over the year according to Kina.

Silver prices enjoyed a similar performance. They were up down 1.2 per cent over the month; it is up 2.6 per cent over the year.

The one year copper price Credit: Infomine.com

The copper price showed some welcome signs of strength. It was up 10.1 per cent over the month, according to Kina, and is up 12.1 per cent over the year.

Palm oil prices weakened. They are down by 9.1 per cent over the month, but are 0.8 per cent over the year.

Cocoa prices moved sideways. They were down 0.1 per cent over the month and are down 7 per cent for the year.

Coffee prices were weaker. They are down 6.1 per cent for the month and 5.4 per cent over the year.

Equities

The stock market did little. Both the KSi Home Index (stocks listed only in PNG) and the KSi index (which includes dual-listed stocks) were up 0.6 per cent over the month. Shares in the ASX-listed Steamships Trading Company were up 1.3 per cent over the month but are down 15.5 per cent over the year.

Oil Search stock is up 8.2 per cent over the month and 17.3 per cent over the year.

Newcrest shares were also strong. They were up 9 per cent over the month and 15.9 per cent over the year.

The Australian All Ordinaries Index was up 4.9 per cent over the month and is up 9.7 per cent over the year.

America’s S&P 500 was also strong, rising 5.8 per cent over the month. It is up 11.5 per cent over the year.

Half-year Treasury Bills are trading at 4.6 per cent, while full year Bills are trading at 6.64 per cent, according to Kina.