Russian President Vladimir Putin visited Crimea on Friday for the first time since Russia annexed the Ukrainian peninsula, ahead of a separatist vote by pro-Moscow militants in eastern Ukraine this weekend.
“The referendum in the Donetsk region is to go ahead on Sunday [today] as planned despite Putin having called for it to be postponed,” Commerzbank analyst Carsten Fritsch said. “The crisis threatens to escalate once again if — as expected — a majority votes in favor of the region splitting from Ukraine.”
OIL: The market rallied on Ukraine-linked supply risks and stronger-than-expected US crude demand, but ended the week on a stable note as some traders cashed in their gains.
“Oil prices pushed higher on both sides of the Atlantic amidst increased geopolitical risks after pro-Russian separatists in the Ukraine announced they would go ahead with an autonomy vote scheduled for eastern Ukraine this weekend,” Tradition Energy analyst Eugene McGillian said.
“Additional support ... also appears to have come from increased concerns that Libya will not boost its oil exports after rebels that control two of Libya’s oil export terminals announced they will not work with Libya’s new Islamist-backed prime minister,” he added.
A full-blown armed conflict in Ukraine could disrupt supplies transported between Eastern Europe and the West, sending energy prices rocketing.
The oil market jumped by more than US$1 on Wednesday after US crude inventories unexpectedly fell from a record high last week, suggesting that demand may be rising the world’s No. 1 crude consumer.
The US Department of Energy said crude reserves sank by 1.8 million barrels in the week to May 2, confounding expectations for a gain of 1.2 million barrels and signaling solid demand.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month eased to US$108.09 a barrel from US$108.71 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for next month jumped to US$100.70 per barrel compared with US$99.93.
BASE METALS: Nickel on Friday surged to US$20,500 per tonne, hitting the highest level since February 2012 following a supply outage at a huge mine in New Caledonia.
Nickle for delivery in three months ended the week on US$20,100 a tonne, compared with US$18,150 a week earlier.
“A perfect storm appears to have blown up on the nickel market,” Fritsch said. “Besides the ore export ban in Indonesia and the uncertainty over what would happen to Russian shipments in the event of far-reaching sanctions against the country, it was news from New Caledonia that rocked the nickel market. Vale [SA], the world’s second-largest nickel producer, had to shut down production in the nickel complex formerly known as Goro ... following an acid spill.”
The facility, with a capacity of 60,000 tonnes per year, is one of the world’s biggest nickel mines.
By Friday on the London Metal Exchange, copper for delivery in three months advanced to US$6,736 per tonne from US$6,648 a week earlier, while three-month aluminum dropped to US$1,765.50 a tonne from US$1,775.25, lead rose to US$2,102.50 from US$2,078.25, tin increased to US$23,120 from US$22,930 and zinc gained to US$2,040 from US$2,012.
PRECIOUS METALS: Gold hit a three-week peak as Ukraine fears boosted demand for the precious metal, which is seen as a haven in times of geopolitical turmoil.
The metal rose as high as US$1,315.70 per ounce on Monday, before pulling lower as Putin attempted to de-escalate tensions.
“Some buying has occurred on the back of Ukraine concerns, but for the moment we are still rangebound,” IG trader Brenda Kelly said.
By Friday on the London Bullion Market, gold rose to US$1,291.25 an ounce from US$1,281.25 the previous week, while silver increased to US$19.25 from US$19.17.
On the London Platinum and Palladium Market, platinum advanced to US$1,429 an ounce from US$1,425 and palladium slipped to US$804 an ounce from US$816.
RUBBER: Prices in Kuala Lumpur fell on weak demand, as poor manufacturing data from top consumer China also hit sentiment.
The Malaysian Rubber Board’s benchmark SMR20 fell to US$0.16675 a kilo from US$0.17390 a week earlier.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
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US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
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