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Crude oil futures fell for a second day Tuesday as the recent rally paused while traders took stock of where the conflict in Middle East was heading.

The West Texas Intermediate contract for May delivery fell 48 cents, or 0.56%, to $85.95 a barrel. The June Brent futures contract lost 32 cents, or 0.35%, to $90.06 a barrel.

– TASTE THE ORIGIN –

In recent days, we have witnessed the scene of domestic coffee prices soaring rapidly, continuously breaking decades-old records to reach a new peak of nearly 105,000 VND/kg. The price level hasn’t stopped here but is forecasted to continue rising in the future. High prices combined with a shortage of supply have pushed many coffee businesses onto the path of losses. The equation to escape losses has become more difficult and urgent than ever.

Coffee prices continue to soar

As of April 9, 2024, coffee prices are ranging between 104,000 and 104,500 VND/kg (See today’s coffee prices in each locality at Today’s coffee prices, view today’s accurate coffee prices). The beginning of April marks the peak period of the dry season in the Central Highlands provinces, with this year’s drought forecasted to be more severe than in previous years. Water levels and flows in rivers and streams are gradually decreasing and maintained below-average levels for many years. Thousands of hectares of crops are withering due to water shortages. The scarce rainfall, dry conditions, and water shortages during the dry months of 2024 will significantly impact the production activities and livelihoods of the people. Coffee production, which is already low, is further expected to decrease this year. Concerns about the supply have driven coffee prices to unprecedented levels.

Many coffee businesses are seeking ways to escape losses

The sudden surge in coffee prices has caught many businesses off guard because contracts are usually signed when coffee prices are low, without much fluctuation as seen currently. Businesses are forced to fulfill contracts they have already signed in a situation where there is no coffee to buy and prices are “skyrocketing.”

Many businesses are struggling to fulfill previously signed contracts

According to Mr. Phan Minh Thong, Chairman of Phuc Sinh Group – one of the leading coffee export companies in Vietnam, in the first three months of the season, export companies, foreign traders, and FDI often sell up to 50% of their production in advance and buy during the season. However, companies sell at low prices in advance, and when companies buy, coffee prices are continuously pushed up. In November 2023, prices ranged from 59,000 to 60,000 VND/kg, then in December 2023, it was 62,000 VND/kg and 69,000 VND/kg. By January 2024, it was 70,000 VND/kg and 82,000 VND/kg by early March, reaching 86,000 VND/kg and up to 94,500 VND/kg.

For each ton of coffee, companies have to bear losses of tens of millions of VND, while coffee contracts range from hundreds to thousands of tons. The level of damage is extremely high, incalculable, causing many small and medium-sized enterprises unable to sustain themselves.

Traders also face many risks when buying from farmers, and when farmers see high prices and refuse to deliver the goods they have signed contracts for, traders incur significant losses or bankruptcy, and they also lack financial resources to deliver to export companies or foreign companies for the contracts they have signed. Many exporters are demanding thousands or tens of thousands of tons they have already bought or even received deposits for but have not been delivered, facing mounting difficulties.

As manufacturing enterprises, they face even more difficulties such as low capital turnover. They have to increase various expenses, such as production costs, labor costs, bank loan interest costs, transportation costs, even double compared to traders, machinery depreciation costs, opportunity costs,…

What are coffee businesses doing to address immediate challenges?

A volatile market is the time when businesses need to change their procurement plans and strategies. To ensure the supply from farmers, businesses may have intensified their cooperation with farmers by investing in fertilizers, providing them with loans to cover living expenses as well as cultivation costs. By applying this method, Bao Anh company still ensures a supply of 10,000 tons per year for Vinh Hiep each year and partially meets the demand for other leading export businesses in Vietnam amid the broken coffee supply chain.

The surge in prices coupled with the risk of not being able to collect goods has put many businesses, especially small and medium-sized ones, in a dilemma. Supply chain integration is seen as a useful solution to help businesses overcome this situation.

Stay tuned to the News section for more useful information!

Related article:

– The rise in domestic prices pushes coffee businesses into a loss-making position

– The side effects of drinking coffee on an empty stomach in the morning

– Application of biochemical analysis in coffee quality testing

What is the price of platinum today?

The price of platinum opened at $984.87 per ounce, as of 9 a.m. That’s up 4.12% from the previous day and down 0.29% from the beginning of the year.

The lowest trading price within the last day: $954.39 per ounce. The highest platinum spot price in the last 24 hours: $986.39 per ounce.

Platinum spot price

Platinum price chart

The chart below shows how the spot price of platinum is trending over the year.

Year to date, platinum is down 0.29%, as of 9 a.m. The 52-week high reached $1,135.49 on April 21, 2023, and the 52-week low dropped to $843.15 on Nov. 10, 2023.

The precious, silvery-colored metal is priced in U.S. dollars. This means that the fluctuations in the value of the U.S. dollar can impact its price.

The price of XPT/USD reflects the value of one ounce of platinum in U.S. dollars, and it is traded like traditional currency pairs. Because platinum trades occur globally, investors can also track the spot price of platinum in other currencies, such as XPT/EUR for euros and XPT/GBP for British pounds.

Factors that can influence the price of platinum include changes in demand, geopolitical events and tensions in major platinum-producing countries. Of course, investor opinion and speculation can also affect prices.

Precious metals spot prices

Platinum is one of four main precious metals investors can trade via physical bullion, exchange-traded products or futures contracts. Gold, silver and palladium spot prices are also updated 24/7 in various currencies.

Platinum vs. gold price

Currently, platinum trades at $984.87 per ounce, as of 9 a.m., compared to gold, which trades at $2,349.44 per ounce. Year to date, platinum prices are down by 0.29% and gold prices are up by 13.70%.

“Historically, platinum has often been more expensive than gold due to its relative scarcity and unique properties. However, the price of platinum can fluctuate in response to changing market conditions,” said John Bergquist, president of Elysium Financial.

Political instability and supply disruptions in major platinum-producing regions like South Africa and Russia affect prices.

The silvery metal also tends to be a less reliable store of value than gold.

While historically, platinum has been pricier than gold, that flip-flopped briefly in August 2011. When looking at the gold-to-platinum price ratio, platinum was priced above gold from January 2013 until December 2014. Since then, gold has more than doubled its value compared to platinum prices.

Platinum price history

Like any metal, the price of platinum can be volatile. Various factors affect it, the most significant being supply and demand dynamics. Other factors, such as economic conditions, geopolitical events, and changes in industrial and investment demand, can also impact the price of platinum.

At the start of the new millennium, the precious metal’s spot price was around $420. Fast-forward over 20 years, and the current price of platinum has more than doubled.

The spot price soared to new heights, trading in February 2008 at around $2,200 per troy ounce. In November of that year, the price returned to less than $1,000.

Platinum’s spot price has fluctuated between around $800 to $1,400 for the past decade, hovering around the $1,000 threshold on average.

Platinum prices today remain historically low. Prices dropped as low as $623.50 in March 2020 during the COVID-19 pandemic. While prices have recovered, platinum is nowhere near its all-time high of $2,213.20, set on March 3, 2008.

Platinum futures

Futures contracts let investors speculate on the future price movements of an underlying asset like platinum.

These financial contracts represent an agreement between two parties to trade a set amount of platinum at a specified price at a future date. They can be settled by exchanging the physical commodity or cash in place of the commodity.

Futures contracts differ from spot prices in that futures contracts establish a future price whereas spot prices are for immediate delivery. These contracts can be fulfilled by trading the physical commodity or exchanging cash in place of the underlying asset. They are usually traded through an exchange.

Platinum as an investment

The automotive industry creates the highest demand for platinum. Platinum is a key component in manufacturing catalytic converters, which are responsible for reducing vehicle emissions.

In addition to the automotive industry, platinum is widely used in the industrial industry to create medical products, nitric acid and glass. As the demand for these products rises, so does the price of platinum.

It is anticipated that platinum will play an essential role in the development of hydrogen technology. Platinum is used to produce carbon-free hydrogen from renewable energy.

“If hydrogen-based power meets expectations in the coming decade, then one could expect a material demand tailwind in platinum,” said Stash Graham, managing director of Graham Capital Wealth Management.

Precious metals such as platinum, gold and silver have long been used to diversify an investment portfolio.

When choosing investments, it is crucial to consider potential drawbacks. While there may be an increase in the demand for platinum, other factors may throw a wrench in the investment benefits.

When considering an investment, it is essential to consider your current holdings and individual financial goals.

Platinum is rarer than both silver and gold, which could make it attractive to investors seeking a scarce metal. This practice helps protect other holdings, such as stocks, in an economic downturn. Investing in platinum can help balance inflation and economic uncertainties.

Frequently asked questions (FAQs)

• Aussie shares set to rise again after a modest tick up on Wall Street
• Gold price hit a new high
• Bank of America’s bullish predictions on gold and copper prices

Aussie shares are set to rise again on Wednesday after Wall Street ticked up modestly. At 8am AEDT, the ASX 200 index futures contract was pointing up by +0.4%.

Overnight, the S&P 500 rose by +0.14%, the blue chips Dow Jones index was down by -0.02%, and the tech-heavy Nasdaq climbed by +0.32%.

US treasury yields dropped -5bp from a four-month high ahead of the US inflation report tonight, suggesting traders are positioning themselves for a soft print.

Gold stocks will be in focus today after the bullion price touched briefly above US$2,380 an ounce, extending its rally to hit a new record.

To stocks, the start of the US Q1 earnings season gets underway in earnest on Friday, which will provide the next catalyst for the market.

Nvidia’s shares fell nearly -2% after Intel revealed a new version of its AI chip at its Vision event. Intel’s shares rose +1%.

Moderna jumped by +6% to a three-month high after the company revealed positive responses in its early-stage cancer vaccine developed with Merck.

Alphabet lifted 1.3% to a one-year high after announcing a new video-creation app, Google Vids, which also utilises AI.

Meanwhile, respected market commentator Mohamed El-Erian said Europe’s ECB could cut rates faster than the Fed Reserve.

“The ECB is going to signal quite strongly that June will be when they cut, something the Fed will not do,” El-Erian said, adding that USD currency could trade at par with the EUR when that happens.

Gold and copper on bullish trajectory

The price of gold has risen over the past eight trading sessions, hitting a fresh record overnight.

At the time of writing, gold is trading at US$2,351.60 an ounce.

A note from Bank of America’s analysts say they project gold prices to jump to US$3,000 per ounce by 2025, buoyed by strong demand from central banks. The Chinese central bank, in particular, has amassed over 200 tonnes of the yellow metal in 2023 alone.

“And if the Fed ultimately starts cutting rates, investors should return to the market, also offsetting potentially lower Chinese investment demand as sentiment there improves and the economy accelerates.

“We had previously proposed a US$2,400/oz price estimate if the Fed cut rates in 1Q24; we now raise that and see gold rallying to US$3,000/oz by 2025,” said BoA’s note.

BoA is also sounding the alarm on a potential copper supply crisis, predicting that copper prices are expected to average US$10,750 per tonne in 2025, and US$12,000 per tonne in 2026 (copper currently trades at around US$9,411 per tonne).

“Tight copper mine supply is increasingly constraining refined production; the much-discussed lack of mine projects is finally starting to bite,” said BoA.

In other markets …

Gold price was up +0.53% to US$2,352.25 an ounce.

Oil prices came off another -1.3%, with Brent now trading at US$89.45 a barrel.

The benchmark 10-year US Treasury yield fell by 5bp (bond prices higher) to 4.37%.

Iron ore 62% fe climbed further by +1.6% to US$104.33 a tonne.

The Aussie dollar lifted by +0.4% to US66.28.

Bitcoin meanwhile slumped -3.5% in the last 24 hours to US$69,236.

5 ASX small caps to watch today

Kinatico (ASX:KYP)
During Q3FY24, Kinatico earned $2.5m in SaaS revenue, an increase of 73% on pcp. Annualised SaaS revenue is now more than $10m. SaaS revenue for the quarter comprised 36% of Kinatico’s total Q3 revenue of $7.0m, an increase of 0.5% on pcp.

Wildcat Resources (ASX:WC8)
Exploration drilling beneath the Leia deposit has discovered a thick lithium mineralised repetition named the “Luke Pegmatite”, with best intercepts of: 41.0m @ 1.0% Li2O from 267m. Meanwhile diamond drilling at Leia continues to return impressive new results including: 68.0m @ 1.4% Li2O from 337m.

Neurotech (ASX:NTI)
Nurotech announced the 54th and final patient has completed their last visit for the Phase II/III NTIASD2 clinical trial for children with Autism Spectrum Disorder (ASD). The trial recruited patients aged 8-17 (inclusive) with Level 2 (requiring substantial support) and Level 3 (requiring very substantial support) autism, who have now completed eight weeks of daily NTI164 treatment (the randomisation period of the trial).

Dart Mining (ASX:DTM)
Dart provided an update on field activities across the Dorchap Lithium Project in Northeast Victoria. Field reconnaissance of pegmatite targets highlighted by the LiDAR survey has been completed, with initial results received. Highlights include: Sample 70847 – 2m @ 2.35% Li2O – Boones North Dyke, and Sample 70840 – 5m @ 2.00% Li2O – Boones North Dyke.

Argenica Therapeutics (ASX:AGN)
Argenica has successfully dosed five patients in its acute ischaemic stroke Phase 2 clinical trial, representing the first cohort of patients to be reviewed by the Data Safety Monitoring Board (DSMB), highlighting a promising early recruitment response to date. The patients, who presented to both the Royal Melbourne Hospital and Princess Alexandra Hospital emergency departments, were enrolled into the trial following meeting the inclusion criteria: a confirmed diagnosis of an acute ischaemic stoke caused by a large vessel occlusion (LVO) and were eligible for mechanical thrombectomy.

At Stockhead we tell it like it is. While Neurotech is a Stockhead advertiser, it did not sponsor this article.