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Copper prices drop ahead of Fed rate announcement
Copper prices slid on Wednesday as demand concerns and a?strong dollar weighed down ahead of the end of the Federal Reserve's meeting in the United States. Benchmark three-month Copper on the London Metal Exchange fell?0.13%?to $13,667 per metric ton at 0700 GMT. The Shanghai Futures Exchange's most traded copper contract closed the daytime trade down 0.15%, at 104 890 yuan (15,494.96) per ton. Markets have increased the odds that rates will increase in September. The Fed is expected hold rates at their current level on Wednesday. According to CME FedWatch, traders see a 70% chance of no change in rates this week and 76% of an increase in September. Daniel Hynes, ANZ's strategist, said that investors in copper remained worried about tighter monetary policies. High rates could reduce economic activity, and the demand for copper. They would also support the dollar while making commodities more expensive for holders of other currencies. The fall in AI stocks has also affected expectations for rising copper demand. Hynes stated that the sentiment has been affected by the recent selloff of AI stocks. This week, shares in Asian chipmakers have suffered a blow, as valuations are feared ahead of important earnings by big tech companies. The copper price was boosted due to the AI infrastructure construction, where it is a key?commodity. Aluminium posted the largest gain on SHFE. The most active contract ended the day at 23,455 Yuan per ton, up 1.03%. Rupankar RM is the head of AL Circle's market research and data analytics. He said that the overnight?rise? in SHFE aluminum appeared to be more driven by sentiment and a?futures position than a?stronger physical need. Rupankar added that "the futures rally is yet to be validated by stronger demand in the physical market." He also suggested that broader macro-economic developments could have influenced sentiment. The LME counterpart was up 0.46% to $3,162 per ton. Other LME metals include zinc, which grew by 0.15%. Lead gained 0.29%. Nickel grew by 1.18%. Tin climbed by 1.09%. On the SHFE, meanwhile, lead climbed 0.86% while nickel grew 0.08%. Tin also gained 0.72%.
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Eni buys back more shares as profits in the second quarter reach a 3-year high
Eni, the Italian energy group, increased its share buyback program by EUR600 million on Wednesday to EUR3.4 billion ($3.9 billion), after reporting better-than-expected second quarter results. The company's adjusted profit net more than doubled from EUR2,09 billion to EUR2.3 billion in the period April-June, surpassing the analyst consensus of EUR2,09 billion that was compiled by?group and reaching its highest level in 3 years. Eni has said that it may pay an additional dividend in the fourth-quarter if Brent oil prices remain substantially higher than its forecasts. The results were boosted by a growth in the upstream business of the group, the progress made at the biofuel division Enilive, and the spike in energy prices caused by the conflict between Iran and the United States. The company's full-year target was raised to 5%, up from the previous 3% to 4%. Eni's E&P division's adjusted proforma earnings (EBIT), before interest and taxes, came in at EUR4.77billion. This was higher than the analysts' estimated EUR3.01billion. Claudio Descalzi, CEO of the company, said that they were scaling up their E&P operations for the next phase of growth and value creation. He mentioned the launch of a joint venture between Indonesia and Malaysia called Searah as well as several project advances and expansion into new geographical areas.
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MORNING BID EUROPE - Chip rout moves to pAnIc territories
Ankur Banerjee gives us a look at what the future holds for European and global markets The rout of chip stocks did not ease investor 'fears about AI risks despite the 'blockbuster earnings SK Hynix reported. This set a'stage for this week’s results from Big Tech companies. SK 'Hynix's 'April-June' operating profit soared by more than sixfold (557%) yet it still missed analysts' high estimates. This coincided with investors' concerns about the sustainability and long-term return of chip demand. The earnings of Microsoft and Meta, two members of the "Magnificent 7", later in the day will be an important test for the AI trade which has shaped the global markets. Alphabet spooked last week's investors with their negative cash flow reports. They highlighted the tug of war between the need to invest a lot in AI infrastructure, and the need for a steady cash flow. South Korea's KOSPI fell 12%, prompting a 20-minute trading stop, which is becoming more common. This follows a 10% drop in the previous session. The index is still the best performing in the world this year, but it is facing a decline of 35% in July. This is its worst performance month. Oil prices also jumped in other markets after the U.S. Central Command announced the interception by the U.S. of Iranian ballistic missiles. This shattered the calm that had prevailed over the last few days. The fear of inflation and a declining oil supply weighed heavily on the mood ahead of an important U.S. Federal Reserve decision. Investors have?priced in a 'one-out-of three chance of a rate hike. Policymakers are increasingly vocal about their concerns over inflation. Market participants still expect the central bank to remain steadfast. All eyes will be on Fed Chair Kevin Warsh's comments and any hints he may give about rates. The earnings report in Europe will provide clarity as to the state of the corporate health, while the war in the Middle East is not likely to end anytime soon. The following are key developments that may influence the markets on Wednesday. * Earnings of Danone, Hermes L'Oreal UBS Airbus Meta Microsoft Qualcomm * Fed policy decision by Ankur Banerjee (Singapore; edited by Christopher Cushing).
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Hold off Sparks, Liberty shoots the lights out
Breanna Stewart, who scored 29 of her total game points in the second period, also came away with an?important steal at the end to help the visiting New York Liberty defeat the Los Angeles Sparks 113-109 on Tuesday. Los Angeles (16-12) took advantage of a New York (16-12), which had a run of?20-4 midway through the second quarter. The lead lasted for most the third period. Sabrina Ionescu's 27 points, and her 21 points in each of the previous six games, helped the Liberty to never fall behind by more than nine points. New York was able to take control of the game by going on a 23-8 run that spanned both the third and the fourth quarters. Stewart was the driving force behind the crucial spurt that included a game-winning basket right before the end of the third quarter. The Sparks (10-17), which suffered their sixth consecutive loss, scored seven points in 51 seconds in the final quarter to reduce an 11-point gap to four. Los Angeles had the chance to close the gap on New York by one possession after Ionescu's traveling call. But Stewart's fourth theft of the evening gave New York back the ball. Stewart's last assist went to Rebecca Allen who nailed a 3-pointer, effectively putting the game out of reach for the Liberty. Allen's bucket was the final shot in a 17-of-32 (53.1%) performance from New York's deep range, which included Ionescu's 5-of-9 effort from beyond the arc. Han Xu, Mariane Fauthoux and Rebekah Gardner each scored 13 points after coming off the bench. Rebekah Garden, who scored?15 with two 3-pointers, came off the bench and made two 3-pointers. Los Angeles also shot well beyond the arc, with Nneka?Ogwumike making a pair late triples that helped the Sparks get within three points of the lead in the final minutes. Rae Burrell hit 4-of-8 three-pointers to score a team high 24 points. Erica Wheeler (17) also went 4-of-5 beyond the arc. Los Angeles shot 16-of-30 (51.6%) from outside the arc. Ariel Atkins and Dearica Hamby each scored 12 points for the Sparks. Cameron Brink, who came off the bench to score 11, was able to reach double figures in four of her last six games. Field Level Media
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SAIL and Krakatau Steel to invest $350 Million in stainless steel plant
Two Indian sources said this week that India's state run Steel Authority of India (SAIL) and Indonesia's Krakatau Steel are planning to invest up to $350 million into a'stainless-steel slab plant' in Indonesia. Sources said that the plant is expected to become operational in the next 3 to 4 years. SAIL and Krakatau Steel have signed a preliminary joint venture agreement in Indonesia to produce stainless steel plates during the visit of Indian Prime Minister Narendra Modi. Sources said that SAIL will'send a technical team next month to Indonesia to prepare a feasibility study. After this, the two companies will finalise details such as the equity structure, timelines for government approvals, and other details. Sources declined to identify themselves because the discussions aren't public. SAIL didn't respond to an email sent Monday asking for comment. Krakatau Steel failed to respond to an email?requesting comment made on Tuesday. Sources said that the capacity of the?proposed plant could be increased after it becomes operational. One source said that SAIL would consume the entire production of the planned Indonesian plant and bring the stainless-steel slabs to Salem for rolling and finishing. Salem is located in Tamil Nadu, a southern Indian state. Sources said that the state-run steelmaker would?primarily supply finished products to Indian clients, while a smaller percentage may be exported to Middle East and Europe. According to commodities consultancy BigMint, SAIL was India's third largest steel producer during the fiscal year ending March 2025. It had a 10.1% share of the domestic market. India, which is the second largest producer of crude steel in the world after China, has identified Indonesia as well as more than a dozen countries to cooperate with the steel industry. The goal?to boost exports and secure raw materials? Data from BigMint showed that the consumption of finished steel in India has increased by 55% in the last five years. This is more than the production increase, which was only?42%. Indian steelmakers are turning to the domestic market to offset lower exports due to tighter imports from Europe and Britain, but Chinese steel is sabotaging that strategy. (Reporting from New Delhi by Neha Arora; Additional reporting in Jakarta by Fransiska Nanangoy; Editing and Mayank Bhardwaj by Christian Schmollinger).
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EU: Wildfire response needs to evolve in line with climate change
As the climate changes and wildfires become more common, the European Union needs to increase funding and focus on forest management, and educate people about the risks of fires. This is what the head for crisis response at the EU said as France and Spain battle deadly fires. Tens of thousands have been forced to evacuate in France and Spain due to wildfires. The region has already suffered from a scorching hot and dry summer. Climate change is increasing. Hadja Lahbib is the EU Crisis Management Commissioner. "We must be prepared for disasters before they happen, and not just react after." Lahbib stated that it is not enough for countries to purchase more firefighting gear. They should also invest more of their EU funds in forest management practices to reduce wildfire risks, as well as better educate the citizens about "what behavior they absolutely must avoid" to reduce fire risk. Wildfires can be started by humans in 90% of cases. THREAT MEANS? STRENGTHENING CAPACITY IS REQUIRED The EU's role in wildfire management is limited. This responsibility lies with the national governments. Brussels coordinates the deployment extra resources from European countries when a country asks for emergency assistance. The EU has its own reserve fleet, "RescEU", consisting of 22 firefighting planes and five helicopters. These aircraft are contracted by its member states. The EU coordinated the deployment of 7 planes, 4 helicopters, and 3 ground firefighting teams in Spain and France as of Tuesday. Climate change increases the demand on 'the system. The EU has stationed a record-breaking number of firefighters in at-risk countries ahead of this summer. EU officials said that they are preparing to have fires still burning in November of this year. Lahbib stated that "the?scale and severity of these disasters means we will need confirm strengthening our collective capability," adding that the Commission has?proposed to more than double crisis-response financing in?the upcoming EU budget to EUR10,7 billion. The latest compromise proposal from the EU countries shows that they have reduced this figure to EUR9.1 Billion. The EU will also be purchasing its own permanent fleet of firefighting aircraft, including 12 Canadair firefighting airplanes and five helicopters, which are due for delivery between 2027-2030. (Reporting and editing by Alison Williams; Kate Abnett)
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Copper prices fall ahead of Fed rate announcement
Copper fell on Wednesday as a result of demand?worries, and a strong dollar in the run-up to the conclusion of the U.S. Federal Reserve meeting. The benchmark three-month copper price?on London Metal Exchange?dropped 0.28% at $13,647 per metric ton as of 0300 GMT. The Shanghai Futures Exchange's most traded copper contract was down 0.21% at 104 830 yuan per ton ($15,480.83). Market pricing for a rate hike has increased in the last week. The Fed will conclude its two-day meeting on Wednesday. According to CME's FedWatch, interest rate traders have priced in a 70% probability that rates will remain unchanged. Daniel Hynes is a senior commodity strategist at ANZ. He said in a note that investors [in 'copper] remained worried about a tighter monetary policies. By reducing economic activity, high interest rates can affect the demand for commodities that are dependent on growth like copper. The dollar has also been supported by rate expectations, which makes commodities priced in greenbacks more expensive for buyers who use other currencies. Other stumbling AI stock have hit expectations of copper demand. Hynes added that "Sentiment was also affected by the drop in AI stocks." This week, shares in Asian 'chipmakers', who were among this year’s big winners from the AI-driven rally, have been slashed amid concerns about valuations before crucial earnings by big tech companies. Copper's value was boosted due to the AI infrastructure construction, for which it is a vital commodity. Aluminium gained 0.43% among other LME metals. Zinc dipped by 0.06%. Lead dipped by 0.26%. Nickel gained 0.77%. Tin gained 1.3%. On the SHFE, elsewhere, aluminium rose 0.95%. Zinc fell 0.22%. Nickel dipped 0.14 %. Lead increased 0.32%. Tin gained 0.66%. $1 = 6.7716 Chinese Yuan Renminbi (Reporting and editing by Ronojoy Mazumdar).
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Sources: Commodity trader IXM expands its portfolio into iron ore
Three people familiar with the matter have confirmed that global commodity trader IXM has expanded its portfolio to include iron ore. This is despite the fact that the near-record low price volatility of the steelmaking ingredient reduces profit opportunities and dampens investor interest. IXM in Geneva, one of the largest traders of non-ferrous physical metals like?copper or nickel?, signed last week a prepayment agreement with Brazilian miner Itaminas, to lock-in supply. One of the sources, who asked to remain anonymous because they weren't authorised to talk to the media about the matter, confirmed this. The terms of the agreement were not immediately known. IXM, and its Chinese parent CMOC Group, did not reply to inquiries about timing or reasons. Itaminas refused to comment on any commercial issues. Iron ore prices have become less volatile in the past four year on the $132 billion Chinese market, the largest buyer and consumer. The state buyer, China Mineral Resources Group, has been buying iron ore for an increasing number?of steel mills. This has helped to reduce volatility. IXM’s website shows that its trading portfolio includes cobalt and nickel. It also has gold, copper and lead. IXM began trading iron ore in this month's report, according to a second source. Phadke's LinkedIn page showed that the company had appointed Saurabh Phadke to lead iron ore from July. Phadke could not be reached to comment. He traded iron ore for Trafigura and then joined IXM as the non-ferrous concentrats desk in 2023. IXM researcher Li Yi also spoke this month at a webinar hosted by brokerage Xinhua Futures about ferrous?market basics. Data from Wenhua Caijing showed that the iron ore volatility index trended downwards to a low of?17.99 in July '28 after peaking at 78.97 in March 10 2022. Data showed that the figure has been below?20 since most of the year and is just above the record low of 11.84? on December 9, 2019. Unidentified Singaporean asset manager said that the reduced volatility led him to reduce the iron ore share in his portfolio from 90% to 50% this year, and to favor metals such as aluminium and copper, which are crucial for energy transition. Reporting by Amy Lv, Tom Daly and Christopher Cushing; Editing by Tony Munroe & Christopher Cushing
As the heatwave intensifies, firefighters in Bordeaux are battling fires.
French firefighters brought under control a major fire west of Bordeaux, which had forced?massive evacuations overnight. This was ahead of the forecasted rising temperatures and wind that are expected to stoke fires on Wednesday.
The Gironde prefect, Sophie Brocas, posted on X on Wednesday at 0400 GMT that "the night was quiet; the fire is still under control today morning." She said this after several small flare-ups were quickly put under control.
After a prolonged dry spell brought on by a series heatwaves, the wildfire that raged in the Landes?area, west of Bordeaux - a popular tourist destination - has destroyed 42,000 hectares of mainly pine?tree forest.
Fire crews, with the help of European colleagues, managed to put out the fire after battling it for a whole week. The fourth heatwave of the summer is expected to make conditions even more volatile.
According to Meteo-France the temperature in the region is expected to reach 42 degrees Celsius on Wednesday. Dry winds blowing from the southwest early in the morning, and the west late in the afternoon, are also likely to ignite flames.
France is experiencing a 'wildfire season unprecedented in its history. The fire area has already exceeded the previous record of 2022.
The Landes is covered with?pine forest, which becomes highly flammable if it gets dry. A few hundred houses were destroyed by the fire.
About 220,000 people were evacuated, including tourists and local residents. The fire was threatening the Cap Ferret Peninsula?on the Atlantic Coast, which is only accessible via one road. On specially chartered ferries, hundreds of people left.
As firefighters put out a small fire near the town of Biscarrosse, several thousand people were allowed to return.
The flames were as close as nine miles (15 km) away from the Bordeaux metropolitan area. Several companies in the suburbs closed their doors to prevent the fires spreading. Reporting by Inti landauro, Editing by Michael Perry
(source: Reuters)