LNG prices have surged clawing back earlier losses, while the oil price is steady and cocoa is also strong: Business Advantage PNG’s monthly overview of commodity and financial markets.

Liquified Natural Gas (LNG) carrier. Credit: DevPolicy

In good news for liquefied natural gas (LNG) exporters like Papua New Guinea, the LNG price has risen by 52 per cent over the month to US$3.98 Metric Million British Thermal Units (mmBtu) according to Kina Securities.

This price is still down by a quarter for the year-to-date, however, showing that it still has a long way to go to fully recover.

According to Global LNG Hub, the market for LNG is highly active, despite the extreme volatility caused by the COBVID-19 crisis:

‘Defying most expectations, LNG contracting during the past six months has soared compared to the same period in 2019. At least 24 contracts covering nearly 24 MMt/y of volume were signed in the first half of 2020, compared to just 14 contracts for 13.1 MMt/y signed during the first half of 2019.’

Oil prices, meanwhile were steady. Brent Crude rose by 3.2 per cent over the month, although it is still down by 31.7 per cent for the year to date, according to Kina. It is trading at US$45.09 a barrel.

Metals

Gold has weakened slightly, falling by 1.7 per cent over the month to US$1,932.60 an ounce, but it is up by 26.9 per cent for the year to date, according to Kina.

Silver continued its surge, rising 16.4 per cent to US$27.20 an ounce. The price is up a startling 51.8 per cent this year, according to Kina.

The copper price was steady, rising by 2.6 per cent to US$2.99 per pound. It is up 6.9 per cent this year. PNG’s major copper exporter, the Ok Tedi mine is temporarily closed due to a COVID-19 outbreak but Ok Tedi Mining Ltd has announced it will resume operations on 14 September.

Agribusiness

Cocoa prices moved sharply up, rising up by 10.5 per cent over the month; it is up 1.9 per cent for the year to date. The coffee price also rose. It was up 6.6 per cent for the month but is down 5.1 per cent for the year to date.

Malaysian palm oil prices moved sideways. They rose 0.1 per cent over the month and the price is down by 8.5 per cent for the year to date, according to Kina.

Equities

The KSi Home Index (stocks listed only in Papua New Guinea) was stable, falling by 0.1 per cent over the month on extremely thin trading. It is up 1.6 per cent for the year to date. The KSi index (which includes dual-listed stocks) fared slightly worse, falling 1.5 per cent over the month. It is down 9.5 per cent for the year to date.

The Australian All Ordinaries Index rose by 2.2 per cent over the month, and is up 7.2 per cent for the year to date, according to Kina. America’s S&P 500 was up 7.3 per cent for the month and is up 7.9 per cent for the year to date.

The Kina was steady against most currencies over the month; against the US dollar it fell only 0.3 per cent over the month.

Half year Treasury Bills are trading at 4.7 per cent, while full year Bills are trading at 7.2 per cent. Inscribed stock for 2020-22 is yielding 8.04 per cent.