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Copper falls to a 3-week low as inventories increase, with a focus on oil
The copper price fell to its lowest level in over three weeks on Tuesday as the London Metal Exchange increased their inventories, and oil prices rose. The benchmark copper price on the London Metal Exchange was 0.5% higher, at $14.075 per metric ton of official rings. This is the lowest level since August 20, and it's been trading there for a year. Copper recovered thanks to bargain hunters, traders said. Due to higher premiums on nearby contracts against longer-dated forwards, copper stocks in LME warehouses rose nearly 20% to 242,900 tonnes since the middle of August. The traders expect that more copper sold previously at high prices will be delivered to LME warehouses in the coming days. The premiums that were paid last week have now been reduced, and deliveries will likely dry up pretty quickly. After a report by?U.S. sources, copper prices for all maturities began to drop last week. The President Donald Trump has not made a final decision about whether or not to impose tariffs against copper imports. Comex copper prices rose above LME copper prices due to the possibility of tariffs on U.S. imports. Since 18 months traders have been shipping copper to the United States. Comex stocks are at record highs. Tom Price, Panmure Liberum's analyst, said: "There is no benefit to confusing the markets with government policy." "I have a gut feeling that he'll impose this at some point, otherwise we will see the largest trade reversal ever in copper history." Analysts believe that concerns over oil prices and supplies - at around $107 per barrel compared to $87 at the end of August - will impact growth, manufacturing and metal demand. The dollar's strength has made commodities priced in dollars more expensive to holders of other currencies. Lead was unchanged at $1,874 and tin at $51,900. Nickel was down 0.6% at $16,230.
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Sources say that ADNOC, the UAE's oil company, buys millions barrels of Iraqi crude.
Three people with knowledge of the matter said that Abu Dhabi National Oil Co (ADNOC), a trading firm in the face of supply disruptions caused by the Iran War, has purchased millions of barrels of discounted crude oil from Iraq's State Oil Firm. Two Iraqi energy sources reported that the state company through its trading arm was the largest lifter of Iraqi oil in August and September, helping to boost Iraqi exports, which had been severely cut in the early months of the war. One of the Iraqi sources said that ADNOC had agreed to purchase 32 million Iraqi barrels for $24.90-$27 per barrel in August, and another 40 million barrels for $27 in September. This included 10 million barrels with a $18 discount, and 30 million barrels with a $25 discount. According to the second Iraqi source, despite Iraq's state oil marketing organization SOMO having allocated ADNOC a total of 32 million barrels for August, ADNOC lifted 20 millions barrels because of export restrictions and Basra Oil Company not being able to secure enough?crude. ADNOC has so far lifted 14 millions Iraqi barrels in September, a person told me. Third source claimed that ADNOC had purchased about 20 million barrels from Iraqi?state owned SOMO? in tenders for a discount between $25 and $27 per barrel. Other companies are also buying Iraqi crude. SOMO offered August loading cargoes?at steep discount, attracting other buyers, including Chinese state-majors PetroChina and Zhenhua Oil as well as TotalEnergies and?Vitol. Trafigura Mercuria, and Cathay?Petroleum.
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Kremlin accepts Trump's idea for energy truce in Ukraine and calls for sanctions to be removed
The Kremlin welcomed on Tuesday a U.S. suggestion for a 'Russia-Ukraine moratorium against attacking each other’s energy infrastructure. Donald Trump, the U.S. president, said on Monday that Ukraine had agreed with Russia not to meet each other's targets in terms of energy production. However, neither side confirmed this agreement. On Tuesday, Russia struck petrol stations in Kyiv and Ukraine claimed it had hit a Russian oil refinery. Dmitry Peskov, Kremlin spokesperson, told reporters Trump's idea was "very good", but that it would take more to lower global fuel prices. "It's important to guarantee safe navigation and commercial shipping here, including for oil tankers." Peskov stated that the Kyiv regime had not shown any interest in ensuring such security. "The second thing to do is, of course lift the sanctions (against Russia), and these illegal restrictions on energy supply. Only then will the world be adequately supplied with petroleum products. Global markets will stabilize and prices will fall. Peskov stated that Russia will stay in contact with the Americans regarding Trump's proposal. Volodymyr Zelenskiy, the Ukrainian president, said that Kyiv would only support a ceasefire in the energy sector if Washington could guarantee that Moscow was truly ready to end its conflict with Ukraine. The Ukrainian strikes on energy plants have led to fuel shortages this summer in Russia. This has caused the country to restrict its exports. This has led to a shortage of jet fuel, gasoline and diesel on the energy markets. Ukraine, which is regularly attacked by Russia on its own energy infrastructure, claims that refineries are legitimate military targets. Trump asked Zelenskiy to stop attacking Russian diesel infrastructure on Sunday, saying that the attacks are causing a shortage of diesel which is "hurting?the world". The Kremlin stated on Monday that global market turmoil was primarily?due to conflict in the Gulf. Trump launched military attacks on Iran in Febrary and Tehran responded by closing the 'Strait of Hormuz', which had been used to transport about a fifth of global oil and gas supplies. Russia and Ukraine also hit each other's ships in the Black Sea and Azov Sea. This escalation in violence has pushed up the price for grain, which both countries are major exporters.
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Traders say that Orlen, a Polish oil company, is rushing to find alternatives to Saudi Arabia's oil supply.
Five industry sources have confirmed that the Polish integrated oil company Orlen is rushing to replace Saudi imports with crude oil shipments?from North Sea and further afield. Orlen, one of Europe's largest oil companies, is a major customer of Saudi crude. However, the conflict in the Middle East has escalated in recent weeks. Houthi attacks on Saudi installations by the Yemeni Houthi have led the Polish company to seek alternative sources of supply. Orlen bought'several cargoes' of crude oil at spot tenders between Friday and Monday. Two traders reported that Orlen purchased North Sea grades, including Grane, Johan Sverdrup, and Johan Castberg. Two sources said that the company also bid for grades from further afield, including U.S. WTI Midland as well as Kazakh CPC blend. The tender results could not be confirmed directly with the counterparties. Orlen declined comment on specific commercial transactions but stated that it manages its supply portfolio to ensure uninterrupted operation of the refining assets. Orlen's spokesperson said that "adjusting and optimizing purchase volumes is a part of the Orlen Group operations. It's driven by current production requirements and changing market conditions." The spokesperson confirmed that feedstock deliveries are currently proceeding as usual to the?Orlen refineries.
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Imports of palm and soyoil from India in August rose on the back of stocking
As refiners stockpiled ahead of the festival season in India, soyoil imports to India reached a record high in August. The world's largest importer of vegetable oil, Indonesia, Malaysia, and Argentina, could move more palm oil and soybean oil, supporting benchmark palm and soyoil prices. In a recent statement, the SEA (Solvent Extractors' Association of India) reported that India's imports of palm oil in August grew by 7% over the previous month, to reach 782,761 metric tonnes, the highest level since February. The industry group reported that imports of sunflower oil decreased by 36%, to 160 639 tons. Imports for soyoil increased 26%, to a record high of 628 736 tons. The total edible oil imports increased by 1.5%, reaching a record high of 1,57 million?tons after a surge in palm and soyoil shipments. Mumbai-based dealer of a global trading house said that refiners have increased their purchases in order to build up stocks before the festival season. India celebrates several festivals between August to November when the demand for edible oil is at its peak. A New Delhi-based dealer from a global trade house said that soyoil was available at competitive prices, compared to palm oil. This should help keep September shipments above 600,000 tonnes. The 'war' has?disrupted the sunflower oil shipments in the Black Sea Region. He said that this is also causing refiners' to increase their purchases of soyoil. Industry officials said last week that India's aggressive buying of vegetable oil has caused congestion in major ports. Ships are delayed by up to 10 days while shore tanks fill and refiners struggle with clearing incoming cargo. India imports a majority of its palm oil from Indonesia and Malaysia. Soyoil, sunflower oil, and other oils are mainly imported from Argentina, Brazil and Russia.
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The House is visited by MORNING BID AMERICAS
Treasury yields on 10-year U.S. Treasury notes have risen to their highest level in 19 years. This is just as Treasury Sec. Scott Bessent is preparing to speak to Congress, and the Federal Reserve begins its two-day critical meeting. Government bonds sold across the globe overnight as the prospect of rising interest rates and energy prices remained a primary aggravating factor. Japanese 10-year yields rose back to above 3%. Brent crude prices rose above $107 a barrel again on Tuesday after a brief drop on Monday, following President Trump’s suggestion that Russia and Ukraine could reach an agreement to spare their energy infrastructure during the war. Bessent will appear before the House Financial Services Committee today to discuss a number of thorny topics: his apparent failure to cap Treasury yields, Japan's joint intervention to lift the yen and the war on Iran, as well as the president's promise to provide Americans with $5,000 checks for a $1.3 trillion total cash injection. Bessent's opinion on what the markets expect to be a quarter point Fed rate increase on Wednesday will also make headlines. U.S. Bond markets are now trying to price in up to four rate increases over the next 12 months. The doomsday AI narratives, and calls for a halt in AI development, spilled over into chip stocks, and the SOX semiconductors index fell more than 5% on Monday for the first time since July. This dragged the S&P 500 and Nasdaq down into the red. Trump refused to accept calls for additional restrictions on AI, saying that the existing guardrails were sufficient. A sweep of Chinese economic data was mixed, with retail sales falling short and house prices continuing to decline. The world stock market and Wall Street Futures are both in the red as we approach Tuesday's opening. Chart of the Day This week, the 10-year Treasury yield in the United States, which is the benchmark for long-term borrowing rates by the government and the wider economy, reached its highest level since the eve before the global financial crisis of 2007. The recent efforts of Treasury Secretary Scott Bessent to 'calm the markets via a number of small buybacks' have failed. Bessent will be speaking to the House Financial Services Committee of Congress on Tuesday. Watch today's events The Fed's two day policy meeting starts * U.S. Treasury Sec. Scott Bessent Appearance Before Congress (10 am EDT) * U.S. bond auction for 20 years (1 p.m. ET), New York Fed Manufacturing?survey in September (8:30 am EDT). Check out my most recent column to see why AI could be too big and slow. Listen to the Morning Bid Daily Podcast, in which we discuss all that Scott Bessent has to do as he prepares to head to the Hill later today. Subscribe to the podcast and hear journalists discussing the latest news in finance, markets, and markets. Want to receive Morning 'Bids in your email every morning? Subscribe to the newsletter by clicking here. You can find ROI's website and follow us on LinkedIn or X. The opinions expressed are solely those of the authors. These opinions do not represent the views of News. News is a non-partisan organization that adheres to the Trust Principles and values integrity, independence, freedom from bias, and impartiality.
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South Korea and Kazakhstan sign MoU to explore mineral trade, explore atomic energy
Seoul reported that South Korea and Kazakhstan signed an 'understanding' on Tuesday regarding cooperation in the peaceful use of nuclear energy. Their leaders also pledged to work together on a range of issues, including trade, energy, critical minerals, and AI. The South Korean Presidential Office said that President Lee Jae Myung of South Korea and President Kassym Jomart Tokayev of Kazakhstan discussed the potential for future cooperation in a period of economic turmoil. According to the president's office, Lee told Tokayev that Kazakhstan has a great deal of potential for future high-tech industry. On Tuesday, 13 documents were signed. These included the MoU on Atomic Energy as well as agreements on crude oil, science and technology. Details were not immediately available. Lee will host Tokayev, as well as the leaders of other Central Asian nations on Wednesday to discuss expanding their cooperation. Seoul pursued its so-called New Northern Policy, launched in 2017, to deepen economic ties with Central Asia as well as other Eurasian countries. The energy-poor nation is seeking to diversify the supply of energy and minerals and increase industrial exports. Han Seong-sook, the South Korean Prime Minister, told business leaders in a forum that it was time to expand trade beyond crude oil and uranium. He also said they should include lithium and other critical minerals. Newsis reported that she invited companies to use?South Korea?s advanced technology to explore and produce?Kazakhstan?s rich mineral resources in order to address the growing uncertainty of global supply chains.
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China's aluminium production reaches record levels in August, with a capacity cap in sight
Data showed that China's aluminum production reached a record high in August. Strong margins encouraged smelters, despite the?long-standing national capacity cap, to maximize?output. Data from the National Bureau of Statistics revealed that production?rose by 4.7% compared to a year ago, reaching 3.98 million metric tonnes. The output of the world's largest aluminium producer increased to just under 3.9 million tonnes in July, and was near to the previous monthly record of 3.979 millions tons that was recorded in June. China produced 31,12 million tons in the first eight months of this year, an increase of?3.9% over the same period the previous year. The country's 45 million-ton maximum capacity would be exceeded if production?were to increase at that rate. Since 2017, China has tightened its controls on the aluminium smelting capacities. In 2025, China will produce 45.02 millions tons of primary aluminum. This is a 2.4% increase from the previous year. Strong margins have supported higher output despite the increase in prices due to the disruption of supply caused by the Middle East?war. Benchmark three-month aluminum has gained 8% this year and was up by?1.82% during August. In August, the production of ten?nonferrous?metals, such as copper, aluminum, lead, zinc, and nickel, increased 1.6% compared to a year ago. The production of 10 metals from January to August increased by 2.9%, reaching 55.58 millions tons.
Sources say that ADNOC, the UAE's oil company, buys millions barrels of Iraqi crude.
Abu Dhabi National Oil Co. (ADNOC), a trading company, has purchased millions of barrels at a discount from Iraq's oil company, according to three people who are familiar with the situation. This is a result of the Iran War, which has caused supply disruptions.
Two Iraqi energy sources reported that the state company's trading arm was the largest lifter of Iraqi oil in August and in September. This helped boost Iraqi exports, which had been severely curtailed during the early months of the conflict.
ADNOC has agreed to purchase 32 million Iraqi barges in August, at discounts of $24.90 to 27% per barrel. A further 40 million barrels will be purchased in September. This includes?10,000,000 barrels for $18 a barrel and 30,000,000 barrels for $25, according to one Iraqi source.
According to the second Iraqi source, 'while Iraq's State Oil Marketing Organisation SOMO allocated ADNOC 32 millions barrels in August due to export restrictions and Basra Oil Company's inability secure enough crude', the UAE giant lifted only 20 million barrels.
ADNOC has so far lifted 14 millions Iraqi barrels in September, a person told me.
A third source stated that ADNOC purchased about 20 million barrels?crude' from Iraqi state-owned SOMO through tenders, at a discount between $25 and $27 per barrel for the lifting of September to October.
Other companies are also buying Iraqi oil. SOMO offered August loading?cargoes for steep discounts to attract other buyers, including Chinese state-majors PetroChina and Zhenhua oil, TotalEnergies and Vitol as well as Trafigura Mercuria and Cathay Petroleum.
Iran's official news agency IRNA said that Iran had granted permission to a number of oil tankers transporting Iraqi crude to pass through Strait of Hormuz last month after Baghdad repeatedly requested it through different channels.
Iraq's exports were severely restricted in the early months of the war, in part due to its location on the Gulf and its lack of a shipping fleet.
ADNOC, the state-owned oil company, has become more agile since the start of the war. It uses an expanding fleet of tankers as well as a pipe to Fujairah in order to transport?oil across the Strait of Hormuz and out of the Gulf.
Put the past behind them
Despite the attacks on ADNOC 'tankers', Iranian President Masoud Pezeshkian on Sunday met with UAE crown prince Sheikh Khaled Bin Mohamed bin Zayed Al Nahyan at the BRICS Summit in New Delhi. He said that the two sides agreed to?put the past behind them.
According to Kpler, Iraq exported about 2 million barrels per day in this month. This is down from the 2.354 millions bpd of August but higher than the 1.374million bpd of July.
According to Kpler, UAE crude exports rose to 3.236 millions bpd this month from 2.886million bpd last August and 2.871million bpd during July.
One of three sources stated that ADNOC intends to process the majority of crude oil purchased from other Gulf producers and sell it more on the international market.
(source: Reuters)