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Silver hits 13-year-high as gold pares gains after Xi and Trump call signals thaw of tensions
Gold, the safe-haven asset, trimmed its gains after a reported telephone call between Chinese President Xi Jinping ad U.S. president Donald Trump indicated a possible easing of trade frictions. Silver also broke through $35 to reach a new 13-year-high. As of 10:22 am, spot gold was up 0.1% to $3,377.29 per ounce. ET (1422 GMT), after earlier trading at 0.6% higher. U.S. Gold futures rose 0.1% to $3401.10. Chinese state media reported Xi had spoken with Trump on the phone Thursday. The call was made amid increasing tensions over vital minerals that threaten an already fragile trading truce. Daniel Ghali is a commodity strategist with TD Securities. He said that Trump will put a positive spin to the conversation with President Xi. This will reduce the risks of upcoming decoupling between China and the U.S. This year, gold, which is a good investment in times of economic and political uncertainty, gained 29%. Metals Focus reported that central banks around the world are planning to purchase 1,000 metric tonnes of gold by 2025. This will be their fourth consecutive year of large purchases, as they move away from dollar-denominated assets. Data showed that weekly unemployment claims had increased for the second week in a row, signaling an eroding labor market. Now, all eyes are on Friday's nonfarm payrolls data. Trump renewed his call for Federal Reserve Chairman Jerome Powell on Wednesday to reduce rates. Ricardo Evangelista is a senior analyst with brokerage firm ActivTrades. He said: "I believe that a weakening of the U.S. labour market will increase bets for a dovish Fed (which) would have a positive effect on gold." In an environment with low interest rates, zero-yield gold bullion is more likely to flourish. Silver spot jumped by 2.5%, to $35.84 an ounce. This is the highest price since February 2012. Gold-silver is currently at 94. This is down from 105. Tai Wong said that silver could really gallop in both directions. Palladium rose 0.1% to $1,009.40, while platinum rose 5%, reaching its highest level since the March 2022.
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Siemens Energy replaces the 11 billion euro government-backed financing facility
Siemens Energy announced on Thursday that it has replaced the 11 billion euro (12,6 billion dollars) government-backed financing facility put in place to stabilize the power equipment manufacturer in 2023. This is a crucial step in restoring its ability to pay out dividends. After major quality problems at Siemens Energy's wind turbine business, the government was forced to guarantee billions of Euros worth of projects in late 2023. Maria Ferraro, Chief Financial Officer at Siemens Energy, said that the federal government's "counter-guarantee" was crucial in 2023 to ensure our expected growth. The suspension of dividends at Siemens Energy was one of the conditions for the facility. Ferraro stated that "due to our performance over the last two years, and the positive environment in which we operate, we were able improve our margins and cash flow as well as strengthen our balance sheet." This allowed us to replace the building before the end our fiscal year, and fulfill our commitment. Last month, Siemens Energy's Chief Executive Christian Bruch said that the company would resume dividend payments in 2026 if the government facility was replaced. Reporting by Christoph Steitz Editing Madeleine Chambers
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UK intensifies drought response following the driest Spring in more than a century
After the driest, warmest spring England has experienced in more than 130 years, Britain announced on Thursday that it will increase efforts to protect water resources in the lead up to the summer. The Environment Agency (EA), said that reservoirs in England were only 77% filled, compared to the average of 93% at this time of the year. However, it noted the recent rains, which began at the beginning of June, had a positive impact. The National Drought Group, which met for the first time in a series to assess the current situation, heard that some canals had navigation problems, and the quality of the spring crops was deteriorating due to the dry soil. Helen Wakeham said that the spring of this year was the driest since 1893. We need to prepare for future summer droughts, as the climate changes. She added that "we must make sure we have enough to last us through the summer" and urged the public to take care of their water consumption. Wakeham said that recent rains were helping, but they weren't enough to stop a drought from being declared in northwest England. The EA also reported that the EA was experiencing dry weather in Northeast England, Yorkshire and East and West Midlands. The agency now conducts more compliance checks for water-intensive business, increases monitoring of river and underground water levels, and helps farmers plan water needs. Scientists claim climate change makes droughts and summers drier more common. Water companies presented their drought plans at the drought group meeting, including fixing leaks faster and communicating with customers more often. The EA stated that some companies might need to do more to conserve water in the absence further significant rain. (Reporting and editing by Catarina demony)
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Vermilion Energy leaves the US with an asset sale worth $88 Million
Vermilion Energy, a Canadian gas producer, said it will sell its United States assets at a price of C$120,000,000 ($87.88,000,000). The proceeds from the sale will be used to pay off debts and complete its exit from the U.S. Vermilion Energy will be able to concentrate on its core assets, which are gas-weighted, in Canada and Europe, after the transaction closes in the third quarter. It sold its East Finn assets to the U.S. in 2023. Calgary-based company, Alberta Oil and Gas Corporation (Alberta), has raised its forecasted production for this year from 84,000 to 88.000 barrels of equivalent oil per day to between 117,000 to 122,000 boepd. The company has also reduced its capital budget for 2025 by approximately C$100,000,000 to between C$630,000,000 and C$660,000,000, as a result of the elimination of expenses related with the assets that were divested in Saskatchewan or the U.S. It is expected to have a net of C$1.3billion by the end of 2025. Vermilion Energy purchased privately-held oil and gas company Westbrick Energy earlier this year for C$1.075 Billion, strengthening its position within the Deep Basin in Alberta. The average natural gas price has risen in the last few quarters, and reached a 2-year high on 10 March. This was due to a strong demand for LNG export facilities as well as supply concerns.
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Ceria Nugraha, an Indonesian nickel company, plans to expand its capacity
A company official revealed that the Indonesian nickel firm PT Ceria Nugraha Indotama intends to increase its ferronickel capacity, despite the fact that the nickel market is expected to be oversupplied in the next few years. Ceria started its Rectangular Rotary Kiln Electric Fire in late April. It has the capacity to produce 63.200 metric tonnes of ferronickel per year. Additional production would also increase capacity in a similar way and require an investment of around $200 million. We are currently in the process to secure strategic funding from financial institutions. We plan to begin construction in this year if all goes according to plan," Imelda Kiagoes, Corporate Secretary told an industry conference organized by Shanghai Metals Markets. Nickel executives and industry analysts told a conference this week that the oversupply of nickel in the world market will continue for the next couple of years due to the expansion in production capacity, and the slower growth for the metals used in stainless steel and batteries. Kiagoes, however, said that there is still a demand for the product of the company in Europe and America. The product has a nickel concentration of 22%. (Reporting and editing by Barbara Lewis; Bernadette Christopher)
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Thyssenkrupp executive: EU has tools available to help reduce the pain of steel tariffs
A member of the executive board of Thyssenkrupp said that the EU already has the tools it needs to mitigate the impact of Trump's tariffs and Chinese steel overcapacity. One of these is stopping Russian imports. After the invasion of Ukraine by Russia, the European Union has banned all steel imports. Shipments will be reduced gradually. Thyssenkrupp's Ilse Henne, a board member of the company, said that the EU can help the steel industry to weather Trump tariffs as well as a Chinese glut in supply by stopping those practices completely. There is still Russian steel entering Europe. How much? "Three to four million (tons) a year," Henne said. "And it is very easy to stop this." "Security begins with ensuring that industries are able to survive today. For the steel industry, this means merely applying some of the defense instruments we already have." EU and India are also currently in negotiations for a trade deal, which is expected to be concluded by the end this year. India's federal Trade Minister Piyush Goyal stated in April that India is trying to gain greater access to its steel exports on various markets, which includes the EU. Henne stated that Europe was "on the edge" of its negotiations with India. She said that there was a "solution" or a "high risk" of Indians dumping their products on the market after the Chinese deals. As a result of Chinese state subsidies, the EU is already concerned that much of China's aluminium and steel production will be redirected from the U.S. into Europe. In April, the Commission tightened the existing steel import quotas to 15% and is now working on a new system that will be even more restrictive before they expire next year. The committee is also looking at how to establish aluminium safeguards and possible export duties for metal scrap. (Reporting and Writing by Julia Payne; Editing by Benoit VanOverstraeten, Jan Harvey, and Charlotte Van Campenhout)
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Centrica, a British company, signs a $27 billion gas deal with Equinor in Norway
British Energy's Centrica signed a 10-year contract worth over 20 billion pounds ($27.07billion) with Norwegian producer Equinor to receive gas, the companies announced on Thursday. Gas-fired power stations account for about a quarter (70%) of Britain's electricity. In a press statement, Centrica CEO Chris O'Shea stated that "this landmark agreement highlights the vital role natural gas plays in our transition to a low-carbon energy future." Equinor is supplying five billion cubic metres (bcm), or around 8%, of the gas required by Britain until 2035. The contract allows the sale of natural gas to be replaced in future with hydrogen. The Labour government announced that it would not be issuing any new oil or gas licenses in order to achieve its climate goals. Last year, Britain imported nearly two-thirds its gas needs. Half of these imports came from Norway. In June 2022, Centrica signed its last agreement with Equinor to supply additional gas to Europe for three winters. This was in response to the concerns about gas supplies in Europe following the Russian invasion of Ukraine. Centrica has also signed liquefied gas agreements with U.S. companies Coterra Energy, Delfin Midstream and Brazil's Petrobras. ($1 = 0.7389 pounds)
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Copper reaches two-month high due to supply concerns and declining LME stock
Copper prices reached their highest in two months Thursday. Speculators were boosted after copper surpassed technical levels, as inventories in London Metal Exchange stores decreased and amid concerns about supply after a large mine in Congo had been suspended. The London Metal Exchange's three-month copper rose 1.52%, to $9,761 per ton, at 1025 GMT. This is the highest since April 1. Traders said that copper gained momentum after it decisively broke through technical levels to the upside. This prompted some automatic purchase orders. Overall, copper is in a very good position at the moment. "You still have this build-up of Comex stocks, so there is a squeeze on LME," said Dan Smith. The U.S. investigation on potential new copper import tariffs has been re-focused by President Donald Trump’s decision to double the tariffs on aluminum and steel from 25% to 50%. This has increased the flow of copper into the United States. It includes inventories from the London Metal Exchange, as traders try to profit from the higher prices in anticipation of U.S. Tariffs on the metal. U.S. Comex Copper Futures climbed 2.5%, to $5.01 a lb. This increased the premium over LME Copper to $1,321 a tonne. LME copper inventories fell to 138,000 tonnes, the lowest in almost a year. They are down nearly half this year. Comex inventories have risen by 90% in the last two months . LME data showed on Thursday that copper inventories were also expected to continue dropping as holders of 11,625 tonnes of inventory notified the LME of their pending removals. Smith also added that the suspension of Kakula Copper Mine in Democratic Republic of Congo is also a concern. Ivanhoe Mines, a co-owner of the mine, announced on Monday that it would restart a portion of the mine in late this month. LME tin increased 0.4% to $22,145 per ton, after reaching a record high one week earlier on Wednesday. This was due to concerns that a resumption in supply from Myanmar's rich tin-rich Wa State might take longer than expected. Other London metals include LME aluminium, which rose 0.2% to $2.489 per ton, and LME nickel, up 0.8% to $15.520. Zinc was unchanged at $2.701 while lead fell 0.3% to $1.984. Click here to read the latest news in metals
Wildfires in Canada are impacting oil supply
The wildfires in Canada's oil producing province of Alberta has reduced Canada's daily crude output by approximately 7%. The following is a list of oil production sites that have been affected so far.
CENOVUS Energy - CHRISTINA LAKE SITE: On May 29, Cenovus began to shut down production of approximately 238,000 barrels a day at its Christina Lake facility south of Fort McMurray in Alberta. The company stated that it was not aware of any damages to its infrastructure, and anticipates a full site restart in the near future.
CANADIAN NATURAL RESOURCES – JACKFISH LAKE: Canada’s largest oil-and-gas producer announced on May 31 that it had evacuated its Jackfish 1 thermal-in-situ operations south of Fort McMurray in Alberta, and completed a safe, temporary shutdown of approximately 36.500 bpd bitumen production.
MEG ENERGY CHRISTINA LAKE REGIONAL PROJECT
MEG, an oil sands firm, announced on May 31 that it had evacuated all non-essential staff from the Christina Lake Regional Project Site south of Fort McMurray. The company stated that the wildfire damaged the power line connecting MEG's Phase 2B project with Alberta's electrical grid. This was causing delays in the startup of MEG operations. These represent about 70,000 bpd in production. Amanda Stephenson reports from Calgary.
(source: Reuters)