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Dalian iron ore drops on increasing portside inventories, but heads for a weekly gain
Dalian iron ore prices fell for the second time on Friday, due to higher portside inventories of this key ingredient in steelmaking. However, expectations that demand would improve kept prices on track towards a weekly increase. The May contract for iron ore on China's Dalian Commodity Exchange closed morning trade at 816 Yuan ($116.92), a 0.5% decrease. The contract is up 3.4% this week. By 0337 GMT the benchmark February iron ore price on the Singapore Exchange had risen 2.7% to $108.25 per ton. Data from Mysteel revealed that inventories of?imported ore in major Chinese ports had risen for the seventh consecutive week. They were up 1.9%?week-on?week by January 8 and close to the record high?of 162.8 millions tons. Mysteel data shows that steel inventories increased 1.9% from one week to the next, which also affected sentiment. Steelmakers' expectations that they will restock feedstocks ahead of the Lunar New Year holiday (February) and firm demand in the near term helped to limit losses in Dalian iron-ore futures. Investors also digested China's latest inflation data. China's annual consumer?inflation increased to a high of 34 months in December. However, the rate for the entire year?slammed to its lowest level in 16 years, while the producer deflation continued, supporting market expectations that more stimulus would be needed to boost the soft demand. Coking coal and coke, which are both steelmaking ingredients, traded at lower prices on the DCE. They were down by 1.08% and 2.13 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have fallen. Rebar fell 1.04%, while hot-rolled coil dropped 1.11%. Wire rod was down 0.03%, and stainless steel was down 0.43%. $1 = 6.9792 Chinese Yuan (Reporting and editing by Subhranshu S. Sahu).
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Gold drops as US jobs data weighs ahead of commodity index adjustments
Investors positioned themselves ahead of the crucial U.S. Non-farm Payrolls Data due later that day. Gold spot fell by 0.4%, to $4,464.57 an ounce, as of 0353 GMT. However, it was still set for a weekly gain of 3%. Bullion reached a record-high of $4,499.71 on December 26, 2017. U.S. Gold Futures for February Delivery? firmed by 0.3% to $4473.60. The U.S. Dollar strength is a major driver of gold prices at the moment, ahead of the NFP data, said Ross Norman, an independent analyst. The U.S. Dollar advanced to a near-month-high as traders prepared for the U.S. Supreme Court's decision on President Donald Trump using emergency tariff powers. The'stronger dollar' makes the greenback-priced gold more expensive for holders of other currencies. Economists predict a modest increase in jobs of 60,000, and a slight decrease in unemployment to 4.5%. The Bloomberg Commodity Index Rebalancing, a periodic adjustment to commodity weightings in order to align the index with current market conditions, begins this week. "At the start of the new year, several indexes reweight the amount of gold and precious metals in them. Norman said that although there is a weakness in the index rebalancing, things are still 'quite positive'. HSBC says that gold prices could reach $5,000 per ounce by the first half 2026 due to rising geopolitical risk and debt. In an environment of low interest rates and economic uncertainty, non-yielding investments tend to perform well. Silver spot fell 0.5%, to $76.48 an ounce, after reaching a record high of $83.62 per ounce on December 29. The white metal is on course for a weekly increase of over 5%. After reaching a record high of $2,478.50 per ounce on Monday, spot platinum fell 1.8%, to $2,227.11 an ounce. Palladium remained steady at $1.786.18 an ounce. Both metals are also set to gain weekly. Ishaan arora reported; Sumana nandy, Ronojoy Mazumdar and Ronojoy Mazumdar edited.
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Nickel and copper end the week with higher prices despite a selloff
Nickel and copper are expected to finish the week on Friday higher, despite recent selling as investors took profits after a rally. As of 0315 GMT the most active?copper contracts on the Shanghai Futures Exchange had declined by 0.98%, to 100,870 Yuan ($14452.74) per metric ton, and were poised to end?the?week up 2.13%. The benchmark London Metal Exchange three-month copper, however, increased 0.69%, to $12,808 per ton. This was a 2.64% gain for the week. Shanghai copper reached a record of 105,500 Yuan per ton earlier this week. London copper also peaked at 13,386.50. The pullback in copper prices since Wednesday has been largely due to profit-taking. However, the red metal remains well-supported because of supply concerns arising from mine disruptions as well as tightened refined copper availability outside the U.S. during tariff uncertainty. Global miners are also exploring other ways to increase their exposure to metals such as copper. Copper is expected to be a beneficiary of the energy transition and the electrification. Glencore and Rio Tinto have reopened merger talks that could create the largest mining company in the world. Anglo American and Teck Resources were close to completing a merger that would create a major copper producer. Shanghai's nickel fell 3.83%, to 137430 yuan per ton. It was expected to end the week with a gain of 2.78%. This week, it reached its highest level since June 2024 of 149.600 yuan per ton. The London benchmark nickel increased 0.82%, to $17 295 per ton. It is expected to gain 2.53% in a week after reaching its highest level since June 2024, at $18,800 per ton. The loss on Thursday's sale was narrowed after Indonesia's Mining Ministry did not give further details about its plan to "slash nickel miningquotas" in 2026. In a Thursday press conference, the mining minister reiterated that quotas will be adjusted in order to meet local smelters' demand. Aluminium rose by 1.23% among other SHFE metals. Zinc fell by 0.33%. Lead declined by 1.14%. Tin was flat. Aluminium, zinc, lead, and tin all rose in price on the LME. Friday, January 8, 2019 DATA/EVENTS (GMT) 0400 China Comprehensive Risk Q1 Q1: What is the overall risk of Japan? 0700 Germany Industrial Production MM Nov 0700 Germany Industrial Production SA Nov 1330 US Non Farm Payrolls Dec 1330 US Unemployment rate Dec 1330 US Average Earnings Year Dec 1330 US Housing starts Number Oct 1500 US U Mich Sentiment Prelim Jan
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Market reaction to Rio Tinto’s purchase talks with Glencore
The companies have confirmed that they are in the early stages of talks with Rio Tinto to purchase Glencore. This could result in the creation of the largest mining company in the world, valued at nearly $207 billion. Investor and analyst reactions to the latest news. WILSON ASSET MANAGEMENT PORTFOLIO MANAGER JOHN AYOUB, WHOSE FIRM HAS SHARES IN RIO TINTO: "We are eagerly awaiting more details and comments from both companies, but right now, in our opinion, no premium can be paid at all. Rio is undoubtedly the better company and we should be compensated by using synergies, not just paying for them. "Coal must be divested in order to gain the support of Australian shareholders." Rio's story has been relatively straightforward, with iron ore and copper being the main players. Aluminium, lithium, and aluminium were added later. Addition of a few other players dilutes the narrative and you'd need to have significant synergies in order to counteract that dilution. ARGO INVESTMENTS SENIOR PORTFOLIO MANAGER ANDY FORSTER WHOSE FIRM HAS SHARES OF RIO TINTO. It makes sense, if the terms are fair for both. The culture of both companies is the biggest question. Glencore has a strong trading background and is very results-oriented. Some of these aspects could be beneficial to Rio. "I hope Rio remains disciplined, but it is sensible to consider deals that can benefit both parties." ALLAN GRAY'S TIM HILLIER HOLDS SHARES IN RIO TINTO. There is a chance that Rio could overpay. The price is important, but if the transaction involves a large premium then there's a chance that shareholders could lose some value. Rio has a pipeline of high-growth internal projects. It is not clear why the company needs to look outside for projects. RBC ANALYST KANAAN PEKER "Consensus says they'll get rid of coal. Rio's shareholders in Europe, especially, find it impossible to accept a return of coal. "I don't believe they should do anything because I think BHP is a better company in terms of growth than Rio/Glencore merged together." JEFFERIES METAL AND MINING ANATOMISTS: The structure of a Rio Glencore merger would be complicated. The companies' iron ore and coking coal businesses could be merged into an Australian listed entity. This entity would likely trade with a high valuation if it distributed its strong cash flows through the cycle to Aussie investors via franked?dividends. Base metals business could be listed separately and trade at a higher price than most other miners because of the mix of commodities, asset quality and company growth. This scenario would have a number of tax implications, and be a difficult one to structure. "Another possible scenario is that Glencore separates coal and sells itself in an all-shares deal to Rio at a significant premium (we wouldn't expect Glencore to be taken out of a no-premium merger). This would dilute Chinalco’s stake in Rio, and could allow Rio to do a large-scale share buyback in the future (similar to BHP's proposal when it attempted to acquire Rio back in 2007/08). This full merger scenario could have substantial synergies in marketing." Reporting by Scott Murdoch and Melanie Burton, both in Sydney; editing by Jamie Freed
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Oil prices rise as fears about disruptions of supply in Venezuela and Iran increase
Oil prices rose again on Friday. They are now set to make their third weekly increase, due to uncertainty over the future supply from Venezuela, and because of increased concerns about Iranian production. Brent futures gained 44 cents or 0.71% to $62.43 a barrel at 0203 GMT. U.S. West Texas Intermediate crude (WTI), however, rose 39 cents or 0.68% to $58.15. Brent will rise 2.7% this week while WTI is up 1.4%. The price of oil has increased since the U.S. Donald Trump's last-week seizure by Venezuelan President Nicolas Maduro and his claim that the U.S. would control the South American country's oil industry have increased supply concerns. Concerns about supply have been heightened by civil unrest in Iran, a major Middle Eastern oil producer. Also, the Russia-Ukraine conflict and its potential to spread to Russian oil exports has raised concerns. Tina Teng is a market strategist with Moomoo ANZ. She said that the price increase was primarily due Trump's claim of control over Venezuela's oil. This could have led to a 'price hike' from discounted sales. Sources familiar with the situation say that oil major Chevron, trading houses Vitol, Trafigura and other firms are competing to get deals from the U.S. government to export Venezuelan crude oil. Trump demanded Venezuela grant the U.S. access to all of its oil sectors just a few days after Maduro was captured on Saturday. U.S. officials claim Washington will continue to control Venezuela's oil revenues and sales. Two sources claim that the companies are disputing the initial deals for the marketing of up to 50,000,000 barrels of oil that the state-run PDVSA accumulated as inventories during a severe embargo which has resulted in the seizure of four tankers. The market will pay attention to the outcome of the Venezuelan oil that is in storage in the next few days. Teng said that if sales are not limited, oversupply could continue to be a problem. Haitong Futures?reported in a Friday report that oil prices spiked after several days of low levels, partially correcting an earlier disregard for geopolitical risk. Internet monitoring group NetBlocks reported a nationwide internet blackout in Iran on Thursday, as protests against economic hardships continued throughout the country. Masoud Pezeshkian, Iran's president, warned against overpricing and hoarding of goods. This was reported by state media on Thursday as Tehran rolled out high-stakes reforms to subsidy policies during nationwide protests. Haitong Futures stated that global inventories continue to rise, but oversupply is the main factor that could limit the gains. Haitong Futures said that unless risks in the region of Iran escalate, it is unlikely to be a sustained recovery. Sam Li reported from Beijing, and Jeslyn Lerh edited the report in Singapore.
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BlueScope’s top investor rejects $9 Billion M&A Offer for Firm, Calls it Undervalued
AustralianSuper, BlueScope Steel's largest shareholder, said that a $9 billion takeover bid from SGH & Steel Dynamics in the U.S. undervalued the company and it supported its decision to reject this offer. After announcing its increase from 12.5% on Thursday, the pension fund now holds 13.52% in BlueScope. BlueScope, which rejected the SGH Steel Dynamics offer of?A$30 a share on Wednesday, said that it was "significantly undervalued" and accused the acquirers for trying to purchase BlueScope 'on the cheap. AustralianSuper's spokesperson stated that "we?support the BlueScope Board's decision to?reject?the offer" and to'remain focused' on executing the strategy of the company without distraction." The current BlueScope offer does not reflect the value we currently believe the business to be worth. According to our current valuation, a transaction would be supported only if the price was substantially higher than A$30 per share. SGH refused to comment on AustralianSuper’s statement and BlueScope didn’t immediately respond when asked for a comment. Australian pension funds are playing a more active role in corporate acquisitions. AustralianSuper, for example, scuppered Brookfield's offer of $10.6 billion to buy Origin Energy. The largest pension fund in Australia said that the bid was undervalued at the time. (Reporting and editing by Scott Murdoch, Cynthia Osterman, and Muralikumar Aantharaman).
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BlueScope’s largest investor rejects $9 billion takeover bid
BlueScope Steel’s largest investor, AustralianSuper said on Friday that it supported the Australian company's decision to reject a $9 billion offer from U.S.-based Steel Dynamics and?SGH?. After announcing its increase in stake on Thursday, the pension fund now holds 13.52 % of BlueScope. BlueScope rejected the $A30 offer from?SGH & Steel Dynamics on Wednesday, saying that it was "very significantly undervalued". The company also accused the acquirers of trying to buy BlueScope 'on the cheap. AustralianSuper's spokesperson stated that "we support the BlueScope Board's decision to reject the offer and remain focused on executing the company's strategy, without distraction." The current BlueScope offer does not reflect the value we currently believe the business to be worth. According to our "current valuation", we would only approve a deal that was substantially higher than the price of A$30 for each share. BlueScope,?SGH and?AustralianSuper did not respond immediately to a comment request on?AustralianSuper?s statement. Australian pension funds are playing a more active role in corporate takeovers, with AustralianSuper rejecting Brookfield’s $10.6 billion offer for Origin Energy. The largest pension fund in Australia said that the bid was undervalued at the time. (Reporting and editing by Scott Murdoch, Cynthia Osterman).
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Two people are wounded by US border agents in Portland
Police in Portland, Oregon said that two U.S. federal agents had shot and injured two people. They were then taken to hospital. Portland police released a statement saying that two people were hospitalized following an incident involving federal agents. Bob Day, the police chief in Minneapolis said: "We are aware of the high level of emotion and tension that many people feel in the aftermath of the shooting in Minneapolis. However, I ask the community to be calm while we continue to investigate the incident." The police said that they did not take part in the shooting on Thursday. The FBI announced that it was investigating a shooting in which U.S. Customs and Border Protection (CBP) agents were involved. In the Minnesota shooting, an officer of U.S. Immigration and Customs Enforcement was involved. ICE is a separate agency of Homeland Security. Portland Police said that the condition of those who were shot is unknown. Officers responded and found two people with gunshot injuries. Officers applied tourniquets and called emergency medical personnel. "The patients were transported to hospital." Portland Police said in a press release. ABC News reported that Portland City Council president Elana Pirtle Guiney said, as far as she was aware, they were still alive. On social media, FBI Portland announced that it was investigating a shooting that occurred at around 2:15pm near the 10000 Block of Main St. Portland. The circumstances of the shootings in Portland are not yet known. The fatal shooting by an ICE agent of a 37-year old mother of three on Wednesday in Minneapolis drew widespread condemnation and protests from Minnesotans and other officials. Portland Mayor Keith Wilson stated in a statement that his city is now dealing with violence from federal agents. "We cannot sit back while constitutional protections are eroded and bloodshed increases." He asked ICE to halt its?operations' in the city until a thorough investigation could be conducted. Wilson stated that "federal militarization undermines community-based safety and runs against the values which define our region." Wilson said: "I will use all legal and legislative tools available to protect the civil and human rights of our residents."
Stocks fall as investors consider geopolitical data and US data.
Oil prices remained stable?on Thursday, after a recent decline. Stocks fell as investors assessed the impact of escalating geopolitical tensions. labour market data.
Top U.S. officials stated on Wednesday that the country must control Venezuela's oil sales and revenue indefinitely in order to stabilize the economy of the latter, rebuild its oil industry, and ensure that it acts in America’s interest.
As part of Donald Trump's aggressive campaign to control oil flows in America, the U.S. also seized on the same day two Venezuelan-linked oil tanks in the Atlantic Ocean, including one that was sailing under the Russian flag.
The fall of Nicolas Maduro continues to dominate headlines, and the majority of the market's reaction has been in commodities.
The price of oil has fallen this week due to the possibility of increased Venezuelan crude production. However, they have recovered on Thursday. U.S. crude rose 0.54% to $56.29 per barrel while Brent crude futures climbed 0.55% to $60.29.
Daniel Hynes is ANZ's senior commodity strategist. He said that the market's reaction to Trump's comments about Venezuelan oil control was a bit misplaced.
Oil prices would rise if the U.S. controlled oil sales continued to be restricted or sanctioned. I suspect this is the reason why prices have recovered this morning.
Stocks traded mostly lower in Asia, after a strong start of the year that saw markets reach new highs, despite global geopolitical divisions.
The Nikkei, Japan's stock market index, fell 1.2% while MSCI's broadest Asia-Pacific share index outside Japan dropped 0.6%. China's CSI300 blue chip index fell 0.8%.
Nasdaq Futures declined 0.35% while S&P500 futures rose 0.22%. The EuroStoxx 50 futures fell 0.12%, while the FTSE Futures dropped 0.4%.
Charu Chanana is the chief investment strategist for Saxo.
Geopolitical headlines have the upper hand. Investors are reducing their Japan "beta" due to China's export ban on dual-use products and the potential risk of rare earth.
Stocks of Japanese chemical companies fell Thursday, while their Chinese counterparts rose. This was after China's Commerce Ministry announced that it would launch an anti-dumping investigation into the imports of chemicals for chipmaking. Tensions between China and Japan are escalating.
U.S. No-Farm Payrolls are Up Next
Investors also had their eyes on the U.S. Jobs report, due on Friday. This could provide more clarity about the Federal Reserve's rate outlook.
Goldman Sachs analysts said that they expect a rise of 70,000 nonfarm payrolls above the consensus in December and are expecting the unemployment rate will edge down to 4.5 percent.
Overnight, the release of a number of data released painted a mixed image of the U.S. labor market. It appears to be stuck in "no hire, no fire".
The November JOLTS Report indicates that the labor turnover is still low. In a recent note, Wells Fargo economists said that the low churn has led to a fragile balance between labor supply and demand.
We expect the job growth rate to be subdued, as firms are still hesitant to expand their headcount.
The readings didn't change the market's expectations for two more Fed reductions this year, and kept currency movements muted on Friday. The euro was little changed at $1.1681 and sterling last purchased $1.3458.
The dollar index was unchanged at 98.71, and the yen increased slightly to 156.67.
Spot gold fell 0.71% to $4,420.43 per ounce. (Reporting and editing by Stephen Coates; Rae Wee)
(source: Reuters)