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Zinc is on course to reach $4,000 in the next month, which will be its biggest monthly increase since January
Zinc reached a four-year peak near $4,000 on Friday, and was on track for its largest monthly gain since January. Available stocks at the London Metal Exchange were shrinking as investors renewed their concerns about market tightness. The benchmark three-month Zinc on the London Metal Exchange rose 1.6% to $3,947 per metric tonne as of 0900 GMT. It had earlier reached $3,955, which was its highest level since May 2022. Zinc is used to galvanize steel and was expected to gain 8.2% in August. This would be its strongest month since January. This week, it is up by 3.2% and heading towards a sixth consecutive weekly increase. The LME will be closed Monday, August 15, for the British bank holiday. LME stock data showed that 19,125 tons of zinc were cancelled on Thursday or ordered to be removed from?warehouses, mainly in Singapore. This reduced the amount of zinc available in LME warehouses 75,600 tonnes, or two days' global consumption. Neil Welsh, Britannia Global Markets' head of metals, wrote that "Zinc’s outperformance reflects an increasingly visible physical shortage" in a recent note. "LME inventories are down sharply, and mine and smelter interruptions have limited refined availability." Time spreads showed a tightening of the market immediately, with the premium for the cash LME Zinc contract being higher than the forward three-month price. Around $245 per ton. Shanghai Futures Exchange Zinc closed only 0.1% higher on Friday in China. The'relatively high' figure of 153,669 tonnes is a slight decrease from the previous weeks but remains high. Exports of Chinese zinc have helped to ease fears about a shortage in other countries. LME copper prices rose 0.6% to $14,363 per ton, aided by a combination of low inventories and cancellations of warrants. This metal is set to achieve a weekly increase of around 4% and a rise of nine straight weeks. SHFE Copper Stocks The?total?of 72,428 tonnes fell?by 19.1% this week. Nickel grew 0.3% at $16,925, while tin climbed 0.4% to $55,425. Aluminium was unchanged at $3,234.50. Lead fell 0.1%, and nickel grew 0.3%. (Reporting and additional reporting by Solomon Cefai, Editing by Subhranshu Sahu; Jan Harvey, Barbara Lewis and Subhranshu Sahu)
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This week's weekend reads include: Meta's AI rebellion, China's power struggle, and Fed's messaging battle
Want some inspiration? Weekend Reads is a weekly round-up of what the Open Interest team have been watching, reading and listening to. This week, our picks include central-bank strategies, important minerals, bond market strains, AI backlash, China's rising industrial power, and Australia's vulnerability in diesel supply. This weekend we are reading... MIKE DOLAN is a ROI Finance and?Markets columnist. This paper by the International Monetary Fund examines forward guidance as a tool in central bank monetary policies. It was released this week just as Federal Reserve Chairman Kevin Warsh heads to the Jackson Hole Jamboree this year with an aim to remove this weapon from Fed's arsenal. The authors defend this practice as a regular and important explanation of the central banks?reaction functions -- not an effort to eliminate volatility by communicating a specific future policy rate trajectory. ANDY HOME, ROI Metals Columnist: The U.S. Defense Logistics Agency has released a report that examines the findings of a wargame held in July last year to test the resilience?of the U.S. aluminum supply chain?during a major conflict. This is a fascinating look at the Pentagon's thinking on metals, as well as a primer for wargaming. JAMIE McGEEVER, ROI Markets columnist: Rebecca Patterson at the Council on Foreign Relations offers an in-depth analysis of the recent U.S. Treasury attempt to lower long-term bond rates. She says that the government is going to struggle unless they make additional policy changes, or if there's a significant economic slowdown. She says that the first scenario is unlikely and the second one is undesirable. CLYDE RUSSELL is a columnist for ROI Asia Commodities & Energy. This article on LinkedIn explains how Australia, the world's biggest diesel importer, sources its fuel. It also explains why it remains vulnerable to Middle East disruption risks despite the fact that it does not import any of its diesel from the Middle East. ANNA SZYMANSKI is the Editor-in Charge of ROI. This fascinating report examines how 'Mark Zuckerbergs plans to replace Meta with AI failed. This is a must-read for the brave new world that we are entering. Listening to... GAVIN MAGUIRE is a columnist for the Global Energy Transition at ROI. This podcast from Aurora Energy Research explores China's transition to energy, examining the challenges facing the world's biggest power consumer as it tries to optimize and integrate its mammoth system of energy. We're always watching you. RON BOUSSO is the ROI Energy columnist. Brad Setser believes that we are in the beginning stages of a China Shock 2.0. Brad Setser was a former Treasury and U.S. trade representative official. In this episode of The Ezra Klein Show he discusses the rise of China as a global leader in advanced manufacturing. The opinions expressed are solely those of their authors. The opinions expressed do not represent the views of News. News is bound by the Trust Principles to maintain integrity, independence and neutrality. (By Anna Szymanski Editing by Marguerita Choy)
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Gold overtakes Fed Chair Warsh’s Jackson Hole remarks
The gold price rose on Friday as investors awaited Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Symposium later that day in order to gauge the future monetary policies of the central bank. By 0839 GMT, spot gold had risen 0.1% to $4,607.47 an ounce. The price of gold reached a three-month-high of $4,696.18 after the U.S. Treasury announced support measures for bonds with long-term maturities. U.S. Gold Futures are little changed at $4,661.20. Kyle Rodda is a senior financial market analyst at Capital.com. He said, "I believe price action has been fairly constructive in recent months, and we are not seeing much movement because we are waiting for Warsh’s speech at Jackson Hole." Fed officials expressed their concerns regarding the U.S. Inflation landscape as central bankers met in Jackson Hole on Thursday. Kansas City Fed President Jeffrey Schmid, and Cleveland Fed president Beth Hammack, reiterated their belief that the central banks?needs? to increase interest rates in order to curb inflation. The policymakers' comments came a day after the Personal Consumption Expenditures price index, the main inflation gauge of the central bank, showed a reading of 3.7% for the 12-month period ending in July. According to CME FedWatch, traders see a 34 percent chance that the U.S. will raise interest rates in September. By December, they expect a 74.2% probability. Fed Chair Warsh will speak at 1400 GMT. Gold is less appealing in an environment with high interest rates because it has no yield. It's possible that gold will reach $5,000 by the end the year. Rodda said that it depends on the Fed's policy and the way they change their language. In India, gold discounts plunged as the market grew increasingly concerned that the government might 'consider rolling back recent increases in import duties. Silver spot rose by 1.8% to $70.48 an ounce and palladium rose 2.4% at $1,382.51, both metals are on course for a weekly increase. Platinum rose 1.3% to $1,869.33 but was heading for a loss on a weekly basis. (Reporting and editing by Mrigank Dahniwala in Bengaluru)
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IDB Invest will support Posco Argentina's lithium expansion up to $700 Million
IDB Invest will provide up to $700 million in financing to a unit of South Korea's Posco Holdings for the expansion of lithium production at the Sal de Oro Project in Argentina. The lender announced this on Friday. The funding would strengthen?Argentina’s role in global battery supply chains as automakers and tech companies compete for lithium, an essential?raw-material for electric vehicle batteries. According to a statement from IDB Invest, the project in the northwest, on the border of the Salta province and Catamarca, will?produce?about 48, 000 metric tons of Lithium a year when fully operational, and create 620 jobs. The package includes a?up-to $250 million loan from IDB Invest. A further $450 millions is expected from international?financial?institutions. The funding is intended to expand?Argentina?s capacity to process lithium into battery material. The funding will be used to support the startup of two Posco Argentina plants that produce lithium hydroxide, and lithium carbonate. The 'Lithium Triangle' is made up of Argentina, Bolivia, and?Chile. It contains the largest lithium reserves in the world.
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Copper is set to gain for the ninth week in a row as SHFE and LME stocks fall
After concerns about availability, copper prices rose on 'Friday. Benchmark 'three-month' copper on the London Metal Exchange rose 0.39% to $14,338 per metric ton at 0700 GMT and has risen by 0.86% this week. The SHFE's most traded copper contract ticked up by 0.47%, to 108.900 yuan (16,203) per ton. Copper available in LME registered warehouses Exchange data showed that the copper stock was 107,050 metric tons on Thursday. This is down from 166 775 tons one week prior. Stocks of copper in SHFE-monitored storage facilities The weekly total of 72,428 tonnes fell by 19.1%. Craig Lang, principal analysts at CRU, said that the copper prices were supported by a large increase in LME cancellations this week. The large inflows of copper last week, which led to a spike in LME warrant cancellations (metal earmarked for withdrawal), have been offset by this week's massive influx of copper. Concerns about availability have been raised by the outflows from LME/SHFE warehouses into U.S. warehouses ahead of an upcoming U.S. import tariff on refined copper. Lang stated that LME prices had risen 7.2% in June despite the outflows. Around?79% visible refined copper stock globally is now located in the U.S. Zinc was also boosted by falling warehouse stock this week, but only 0.08 % higher on Friday on the SHFE. Chinese zinc exports helped to calm fears of a shortage in other countries, even though supply is tight and speculation continues to drive prices. Analysts from ING stated that "LME inventories were low and?treatment costs remained deeply negative. This highlighted tight concentrate supply and put pressure on smelter's margins." Aluminium - a 0.06% drop, Nickel - a 0.14% dip, and Tin - 0.37% increase. Aluminium gained 0.36% among SHFE metals. Lead gained 0.84%. Nickel lost 0.38%. Tin gained 0.86%.
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Gold prices remain stable as Fed chief Warsh prepares to deliver his Jackson Hole address
Market participants were waiting for the remarks of Federal Reserve chair Kevin Warsh at the Jackson Hole Symposium, hoping to gain insight into the central banks future interest rate policy. By 0652 GMT, spot gold had not changed much from $4,603,91 per ounce. The price of gold reached a three-month-high of $4,696.18 after the U.S. Treasury announced support measures for bonds with long-term maturities. U.S. gold futures fell 0.1% to $4 657.10. Matt Simpson, senior analyst at StoneX, stated that the case for Warsh leaning hawkish was greater than for him to not do so. This could lead to gold falling further from its current cycle highs, in the near term. He said: "But I think any dip in the market will be welcomed by bulls who missed the first phase of this rally and want to have another go at $5,000." On Thursday, Fed officials expressed their concerns regarding the U.S. Inflation landscape as central bankers met in Jackson Hole. The Fed officials' comments come a day after the Personal Consumption Expenditures Price Index, the Fed’s main inflation indicator, was found to be 3.7% for the 12-month period ending in July. Later in the day, Fed Chair Warsh will speak. According to CME FedWatch, traders see roughly a third chance that the U.S. will raise rates in September. By December, they expect a 74.2% probability. Gold is less appealing in an environment with high interest rates because it has no yield. In a recent note, precious metals analyst Christopher Wong stated that the yellow metal is still supported by increased participation in exchange traded funds and futures. He also cited concerns about U.S. fiscal reliability and continued purchases from the official sector. However, there are risks of a consolidation, he said. In India, gold discounts fell sharply 'this week', on the back of rumours that the government might consider rolling back recent import duties. Silver spot rose by 1.3%, to $70.13 an ounce. Platinum was up 1.7%, at $1,878.58, and palladium gained by 2.1%, to $1,379.50. (Reporting and editing by Rashmi aich, Subhranshu Sahu, Ronojojo Mazumdar in Bengaluru)
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District official: Nepal lake's water level is rising and breaking its banks
Narendra Pariyar said that the district's most senior bureaucrat, Narendra pariyar, received a notification on Friday saying that a lake had?broken it banks two days after flash flooding hit?the area. Both Nepal and China warned of new flood risks in the Himalayas after a lake formed across their borders due to debris from the flash flooding. He said that he could see the?water level in the river rising, but that it was unclear at this time how high the water level actually is. The authorities in Nepal have said that they will not be continuing rescue operations during the next 90 minutes. Witnesses reported that helicopter rescue operations were halted in the district and that locals rushed up the hill. Chinese state broadcaster CCTV warned that a lake dammed upstream of the Gyirong port border had started to overflow. A Chinese rescue team captured aerial footage of the formation of a lake barrier on Thursday. The video showed masses of brown water collecting in a basin without a visible outlet. Water had submerged trees and bushes and was pushing against a wall of stones and debris. All Chinese personnel and vehicles were also moved to safer areas, as the risks of the lake breaking and secondary disasters like mountain collapses and an avalanche intensified. The death toll confirmed in Nepal following the flash floods that hit its border areas on Wednesday and Tibet neighbouring has now risen to 469, with almost 1,000 people still missing. The?glacier collapsing had sent a torrent of rock and debris through the Himalayan river systems.
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Northam Platinum declares record-breaking dividend following near eightfold increase in annual profit
Northam Platinum, South Africa, announced on Friday that its annual 'profit' increased by nearly a tenfold due to record production and higher price, allowing it to pay the highest dividend in its history. Northam reported headline earnings per share at 30.44 Rand ($1.90) in the year ending June 30, up from 3.81 rand one year ago. The miner announced that it would pay a record-breaking final dividend of 10 Rand per share. This is a 400% rise from the final payout last year. Northam's payout total for the year is now 6.8 billion rand. Northam's refined Platinum Group Metal (PGM), which is a subset of platinum, has increased 4% in output to 938.754 ounces. Chrome concentrate production increased by 17%, reaching a new record of 1.69 million metric tons. Northam reported a 57% increase in the basket price of its PGMs. Revenues increased 64%, to 54 billion rand. After receiving an unsolicited bid from a major South African platinum miner, the company has invited interested parties to participate in a competitive bidding procedure.
Stocks to gain weekly, Bonds and FX await Warsh's Jackson Hole debut
Oil prices fell for the first time in three weeks last Friday as investors weighed Gulf developments and awaited Kevin Warsh's potentially market-moving comments.
Brent fell 0.6% to $89.2 per barrel, close to the middle of its range since mid-June.
The benchmark was still on track to drop more than 5% this week. Attention is focused on an upcoming deal between Iran, Oman, and the U.S. on the management of traffic through the Strait of Hormuz.
The fall in oil prices combined with the rally in technology shares after Nvidia’s results on Tuesday helped the?MSCI all country world share indices gain 0.5% in this week, and return to the record high achieved earlier in the month.
The European stock market rose by 0.5% Friday, recouping Thursday's losses. They are now on track for a modest weekly gain. Asia-Pacific stocks were also marginally higher.
WARSH IN FOCUS
Warsh will speak at the annual Jackson Hole Symposium, which is the day's main event.
Three Fed officials already warned against sticky inflation. Warsh, however, has not yet given any forward guidance regarding the?path of interest rates.
Bruno Schneller said that Jackson Hole was the focus of global markets, as investors were looking for clarity about the Fed's reaction function and not just another hawkish or dovish soundbite.
The Fed is balancing inflation risks with the labour market outlook.
Schneller stated that Warsh's message is important, not only for the next rate meeting but also for how the markets view the future path of rates.
Futures prices indicate a 35% probability of an increase in the Fed's rate at its meeting on September 16, and fully factor in a rise by December.
Warsh's earliest months as chairman were challenging. Since the Fed's meeting in July, longer-dated Treasury yields are up. Some investors attribute this to a lack concrete measures to combat stubborn inflation.
He also preside over a Fed divided, with several policymakers calling higher rates to curb the price pressures. The U.S. Treasury's surprise decision?last weekend to increase its buyback program in an attempt to lower yields added yet another layer of complexity.
The 30-year Treasury yield rose 1 basis point on Friday to 5.20%. However, it was still down 8 basis points for the week. Last week, it briefly reached 5.3% for the first since 2007.
This week, the 10-year yield fell 6 basis points to 4.68%.
The dollar was little changed in relation to its major peers. The dollar was worth 159.45 Japanese yen, the euro $1.1647, and sterling $1.3585.
The Australian dollar was among ?the best-performing G10 currencies after a stronger-than-expected inflation report this week prompted ?investors to sharply reprice the Reserve Bank of Australia's rate outlook. The Aussie reached a three-month peak of $0.72, and was on course for a weekly increase of 0.4%. This would be its ninth consecutive weekly rise.
Gold was slightly firmer in the commodity markets on both the day and week, at $4,561 an ounce. Reporting by Alun Qiu and Stella Qiu. (Editing by Kim Coghill, Mark Potter and Mark Potter.
(source: Reuters)