Platinum prices fall to two-week low

The world raw material market reversed in the mid-week session (November 6), when red covered 3 out of 4 commodity groups. Profit-taking pressure and improved supply prospects caused the MXV-Index to fall more than 0.6%, down to 2,325 points. Notably, cocoa prices continued to plummet, while platinum also fell to its lowest level in two weeks.

Platinum prices turn down

Meanwhile, the metal market yesterday recorded clear differentiation in each commodity. Notably, the price of platinum turned down 1.6% to 1,537 USD/ounce, the lowest level in the past 2 weeks.

According to MXV, platinum prices in yesterday's session were under pressure from weak demand, but were still supported somewhat by expectations that the US Federal Reserve will continue to lower interest rates later this year.

Accordingly, weak manufacturing activity in China, the world's largest platinum consumer, is raising concerns about the outlook for demand for this metal in the coming time. According to the National Bureau of Statistics of China (NBS), the purchasing managers' index (PMI) of the manufacturing industry continued to remain below the growth threshold in October, at only 49 points, marking the sixth consecutive month in the contraction zone.

In addition, data from Chinese customs also showed that although China's platinum imports improved in September, they still decreased significantly compared to the same period last year. In the first 9 months of the year, the import volume reached nearly 77 tons, equivalent to 2.5 million ounces, equivalent to a decrease of about 12.4% compared to last year.

On a global scale, the World Platinum Investment Council (WPIC) says the supply shortage will last until at least 2029, averaging around 620,000 ounces a year, or 8% of global demand. While the short-term outlook is pressured by China, platinum prices are supported by steady demand from the industrial, jewelry and investment sectors.

In the short term, the platinum rally could be reinforced by expectations that the US Federal Reserve will soon resume monetary easing. The latest data shows a clear weakening of the US labor market: the Federal Reserve Bank of Chicago recorded that the unemployment rate rose to a four-year high of 4.4% in October, as hiring slowed and layoffs increased. According to Revelio Labs, the US saw about 9,100 non- farm jobs cut in October alone, mostly in the public sector.

The CME FedWatch tool now shows a nearly 70% chance the Fed will cut rates by another 25 basis points in December. The prospect of lower interest rates typically puts pressure on the dollar, making dollar-denominated commodities like platinum more attractive to global buyers.

Pressure from West African supply pushes cocoa prices down

Closing yesterday's trading session, the industrial raw materials market witnessed overwhelming selling pressure on most key commodities. Cocoa became the focus of the market as it continued to fall sharply - extending the weakening trend to the second consecutive session when it lost more than 3.3% to 6,185 USD/ton.

According to the Vietnam Commodity Exchange (MXV), cocoa prices are under downward pressure in the context of the market recording more optimistic prospects for the crop in West Africa, the world's largest cocoa producing region. In a recent survey, Ivory Coast farmers said that the crop is in the process of developing well, dry weather is favorable for drying beans, while in Ghana, stable climate conditions help cocoa pods ripen evenly and achieve high quality. Chocolate maker Mondelez said that the number of cocoa pods counted in the West Africa region this year is about 7% higher than the 5-year average, and also far higher than the same period last year. Now that the main harvest in Ivory Coast has begun, producers are showing quite confident about the quality of cocoa this year.

Meanwhile, weather forecasting agency World Weather also said that the weather in key cocoa growing areas will continue to be favorable. In southern Ghana, heavy rains in the past 24 hours may slow down the harvest in the short term but benefit crop yields in the long term. According to forecasts, rainfall in Ivory Coast is expected to remain high until the end of the week before gradually decreasing early next week. Ghana and Cameroon are also forecast to have similar weather conditions.

On the demand side, the outlook for cocoa consumption remains subdued. Barry Callebaut Group warned that cocoa product sales in the coming fiscal year could fall by a single digit as raw material prices remain high, putting pressure on chocolate makers' profits. However, the downward trend is somewhat restrained by supply risks, as the political situation in Cameroon, the world's fifth-largest cocoa producer, became tense after the recent election, and concerns about renewed unrest in Nigeria. At the same time, inventories on the ICE exchange continued to fall by 3,860 bags, to 1.807 million bags, the lowest since late March this year.

Price list of some other goods