Whipping season

THE European sovereign debt crisis is again whipping commodity prices back into shape as investors realise the dangers of expecting too much from central bankers.

Last week markets were more bullish on the back of European Central Bank President Mario Draghi's mere promises of a viable future for the region, with Reuters even calling it a "Draghi-sparked rally".

Last night Draghi failed to provide any suitable follow up on what can be done for the debt-plagued countries in the region. Widespread selling has resumed in Spanish and Italian stock markets.

London Metal Exchange spot nickel is getting awfully close to the dreaded $US15,000/t a level which can trigger the closure of higher-cost nickel operations according to precedents set during the global financial crisis.

LME spot nickel is down 4% from last Friday to $15,190 a tonne overnight.

By the same comparison, LME cash copper is down 3% to $7322.25/t last night.

Spot gold is trading around $1590.55 an ounce in the past hour - 2% down from last Friday's close.

The Asia Pacific benchmark of Singapore Tapis crude is treading water at $113.42 a barrel - just 42c up from last Friday.

As for PNG-related stocks, the three exciting explorers of Indochine Mining, Kina Petroleum and Foyson Resources are in front as expectations build on their positive news flow ahead.


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