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Copper trapped between weak Chinese data and hopes for stimulus
On Monday, copper prices remained above $10,000 per metric ton as the market weighed downbeat metals consumption data from China against hopes of stimulus measures and interest rate reductions in the United States. The benchmark three-month copper price on the London Metal Exchange rose 0.1% by 1000 GMT to $10,073 per ton, after reaching an intraday high of $10,000, which was close to a five-month high reached on Friday of $101,126. The data showed that China's factory production and retail sales fell to their lowest levels since last year in August, putting pressure on Beijing to provide more stimulus. "This week, the theme will be stimulus. Not only in China, after that data dump which was not exactly pretty, but in the U.S., with a rate reduction expected later this week," Ole Hansen said, head of commodity strategies at Saxo Bank, in Copenhagen. It is expected that the U.S. Federal Reserve will cut rates by 25 basis points at its meeting next week, following recent weak reports on the job market. Investors also viewed the U.S. - China negotiations in Madrid. These focused on Bytedance's divestment of TikTok as part of broader discussions on tariffs and policy. The Shanghai Futures Exchange's most traded copper contract closed the daytime trading 0.4% higher, at 81,000 Yuan ($11371.77) per tonne. LME copper has gained 14% this year but is still struggling to break through the $10,000 psychological level. Hansen stated that he is watching a double top technical formation on the LME copper market, based off of highs in March 2010 at $10,164.50 and in September 2011 at $10,158. "That massive double-top is really holding the market back for now." He said that he thought we would need an economic stimulus to remove the cap in the near term. LME aluminium rose 0.1%, to $2,691 per ton. Nickel increased 0.6%, to $15,480. Lead fell 0.6%, to $2005.50. Tin dropped 0.1%, to $34,935; and zinc was unchanged at $2,956. Click here to see the top metals stories ($1 = 7.1229 Chinese Yuan) (Reporting and editing by Eric Onstad)
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China accuses the US of bullying in pushing for tariffs on Russian oil purchases
China accuses the United States "unilaterally bullying" for calling on allies imposing tariffs on China because of its purchase of Russian crude oil. This is fueling tensions at a meeting between Chinese and U.S. officials in Spain, where they are trying to resolve their trade disputes. China has rejected Washington's demand that the Group of Seven countries and NATO countries impose a secondary tariff on Chinese imports due to its purchase of Russian crude oil, China’s commerce ministry announced on Monday. It called it "a textbook example of unilateral bullying, economic coercion, and economic intimidation". On Monday, officials from China and the U.S. began a second round of talks in Madrid. They are seeking to find common ground over issues such as tariffs and a U.S. request that Chinese owner Bytedance divest from TikTok. China's regulator of the market said on Monday that a preliminary investigation had found that U.S. chipmaker Nvidia violated China's antimonopoly laws. Trade relations between the two largest economies in the world have soured despite a fragile truce on tariffs reached in May, which was extended in August. This truce prevented tariffs on goods of each other from reaching levels in excess of three digits. Negotiators on both sides are still tackling a number of difficult issues, including the U.S.'s curbs on tech and chip exports; China's support of Russia; and what Washington views as inadequate efforts to stop the flow of precursors chemicals for fentanyl in the U.S. The Chinese Ministry urged the U.S. in its statement to be "prudent" with words and actions and to resolve differences through dialogue. Reporting by Liz Lee and Yukun Zhu; Editing by Aidan Lewis, Christina Fincher and Beijing Newsroom
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Sources say that sanctions-hit Nayara is seeking the help of the Indian government to repair its refinery.
Three people with knowledge of the situation said that Russian-backed Indian refiner Nayara Energy was seeking Indian government assistance to obtain equipment and materials for maintenance, as European Union sanctions are making it difficult to procure key items. Sources said that the private refiner had approached the Centre for High Technology (a advisory body within the Indian oil ministry) to seek assistance in locating specialised equipment, catalysers, and other raw material. Nayara, and the Centre for High Technology, did not respond immediately to comments. Sources said that Nayara, which is majority owned by Russian companies, including Rosneft oil giant, operates in Vadinar, western India, a refinery with 400,000 barrels of crude oil per day. It has scheduled a shutdown for maintenance this February. Maintenance can last from 30 to 50 working days. Refineries are typically closed every four years. Nayara shut down its refinery in November 2022. Indian law requires periodic refinery maintenance in order to maintain operational safety and efficiency. Some companies also perform shutdowns in order to increase yields. The first source who had direct knowledge of the matter said that "they can delay the shutdown mandatory by a few month but they cannot push it back beyond four or six months." Sources declined to identify themselves as they weren't authorised to talk to media. Sources have confirmed that Nayara only processes Russian crude oil after suppliers from Iraq, Saudi Arabia and other countries stopped delivering due to payment issues caused by EU sanctions in July. Refineries require catalysts to maintain key units like hydrotreaters and hydrocrackers. Some catalysts are available from China and Russia while others can only be purchased from Western companies, according to the first and second sources. Third source: Nayara needs heavy equipment such as compressors, pumps, and valves. These are difficult to obtain under the current restrictions. "Catalysts can be obtained primarily from companies in the U.S.A. and Europe. B.N. said that Nayara might not be able get catalysts because of sanctions. Bankapur is the former head of refineries for Indian Oil Corp. He said that Nayara may turn to Russian, Chinese or domestic catalysts. However, it would be necessary to ensure that the catalysts are compatible, and that they would not negatively impact yields or product quality. Nidhi verma reported the story. (Editing by Florence Tan. Tony Munroe, Mark Potter and Mark Potter.)
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Savannah Resources increases lithium reserves estimate at Portugal Mine project by 40%
Savannah Resources, a London-listed company, announced on Monday that it had increased its estimate of the lithium reserves in its project for a mine in northern Portugal by 40 percent after additional prospecting. The company announced that the estimated reserves of Barroso's spodumene deposit -- a mineral rich in lithium -- are now more than 39 millions metric tonnes, up from 28 million metric tones, which were already the largest deposit in Europe. Savannah stated in a press release that "this substantial increase in resources" increases the strategic importance for the project. It said that the company was a "major contributor of raw material for Europe's battery industry, as well as a long-term, significant value creator" in the region. The company plans to begin production in 2027. It will build four open-pit mines in northern Barroso to extract lithium annually for around half a million electric vehicle batteries. The success of Savannah's project in Portugal will be a test for Europe's ability reduce its dependency on lithium imports and other materials from China and elsewhere, which are essential to the shift to non-fossil energy consumption. Savannah, however, has met with strong opposition by local residents and ecologists, as it is located in the Barroso Region, which is a World Heritage Site for Agriculture since 2018. Barroso, Savannah's sole venture, is currently working on completing the project's final feasibility study as well as the environmental licensing process. Both are expected to be completed by the end the year. (Reporting and editing by Inti landauro, Susan Fenton, and Sergio Goncalves)
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Investors seek Fed guidance as gold pauses.
Investors stayed away from big bets on gold on Monday, as they waited for the U.S. Federal Reserve to meet this week. The central bank will likely cut interest rates at the meeting and provide more insight on how the rate of further easing is progressing. As of 0742 GMT, spot gold remained at $3,641.19 an ounce. Bullion rose about 1.6% in the last week and reached a record-high of $3,673.95 per ounce on Tuesday. U.S. Gold Futures for December Delivery were down by 0.2% to $3,679.20. It is expected that the Fed would deliver a rate cut of 25 basis points. There are still doubts about the tone Jerome Powell is going to adopt at the end meeting, and what guidance he'll give for future policy decisions. Data released last week showed that U.S. consumer price indexes rose the most since seven months during August, mainly due to higher housing and food costs. However, a spike in the number of first-time claims for unemployment benefits made the Federal Reserve confident in its plans to lower rates on Wednesday. According to CME FedWatch, traders are pricing in an almost certain 25 basis points (bps) reduction to the Fed’s key interest rate after the two-day meeting on September 17. There is a slight chance of a 50% reduction. In a low-interest rate environment, non-yielding gold bullion is often considered to be a safe haven asset in times of uncertainty. The Fed's meetings comes amid challenges including a legal dispute about its leadership, and U.S. president Donald Trump's attempts to exert more power over interest rate policy and central bank's role. Goldman Sachs warned that "in the case of gold, we believe the risks are skewed upwards for our forecast of $4,000/toz by mid-2026, but the increasing speculative position increases the risk of a tactical pullback, since positioning tends towards mean-reversion," the firm said in a Friday note. Platinum rose 1% to 1,404.72, while palladium rose by 1.1% to 1,209.80.
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Copper firms bet on US rate cuts, but supply concerns
Prices of copper rose on Monday as a result of the expectation that U.S. Federal Reserve will cut interest rates this week, and persistent supply concerns. However, caution about the resumption of trade talks between China and the United States tempered gains. The Shanghai Futures Exchange's most traded copper contract closed the daytime trading 0.36% higher, at 81,000 Yuan ($11371.77) per ton. The benchmark three-month copper price on the London Metal Exchange rose 0.07% to 10,075 tons after reaching its intraday high of $10,101 in the morning session. This was close to the five-month high of $10,126, which was reached on Friday. After a series of weak reports on the labor market, it is expected that the Fed will cut rates by 25 basis points at its meeting next week. Analysts at ANZ said that the prospect of easing monetary policies improves outlooks and boosts confidence. Dollar-priced goods are cheaper for foreign buyers when the dollar is weaker. The prices were also boosted by a lingering supply concern, as the efforts to rescue seven miners at Freeport Indonesia’s Grasberg Mine were still ongoing one week after a heavy mudflow trapped them underground. The focus was also on U.S. and China negotiations in Madrid, to resolve the trade tensions between the two major economic powers. U.S. Treasury secretary Scott Bessent said that the countries were Close to an agreement TikTok is a short video app. This came after Washington asked its allies for tariffs to be placed on imports of Chinese oil. Meanwhile, Beijing launched an anti-discrimination probe into U.S. policy on trade over chips, casting a shadow over the prospects of talks. SHFE Nickel rose by 1.01%. Lead advanced by 1.72%. Tin rose 0.41%. Aluminium fell 0.55%. Zinc edged down 0.02%. LME aluminium dropped 0.26%. Nickel added 0.55%. Lead slid by 0.32%. Tin and zinc were not much changed. A number of negative data from China, such as the outstanding total social finance (TSF) or falling home prices, also weighed on the sentiment and limited price gains. Click here to see the latest news in metals.
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Analyst: Ukraine will curb Indian diesel imports due to Russian oil relations
Enkorr, a Ukrainian energy consultancy, announced on Monday that Ukraine would restrict the importation of diesel fuel from India, a country which buys a large portion of its crude oils from Russia. A-95 said in a report earlier this month, that traders were forced to import diesel fuel from India due to the loss of an important Ukrainian oil refinery during this summer. Even the Ukrainian Defence Ministry has purchased some Indian fuel because it meets post-Soviet standard. Drones and missiles have been used by Russia to attack Ukrainian refineries of oil and fuel and their storage facilities. Enkorr reports that Ukrainian security agencies have ordered that all consignments imported Indian diesel fuel be tested in a laboratory to determine whether they contain any Russian components. Enkorr reported that Ukraine imported 119,000 tonnes of Indian diesel fuel during August, which is 18% of its total diesel imports. Before the full-scale Russian war that begins in 2022, Ukraine imported diesel mainly from Belarus to compensate for its lack of production. Since 2022 it imports mainly from European nations to the west. A-95 reported that the imports of diesel fell 13% on an annual basis in the first six months of this year to 2.74 millions metric tons. (Reporting and editing by Sharon Singleton; Pavel Polityuk)
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Alamos divests Turkish unit in $470 million deal, ending $1 billion legal dispute
Alamos Gold, a Canadian mining company, announced late Sunday it would sell its Turkish subsidiary to a Middle East based mining firm for $470m. This will end a $1billion legal dispute that lasted years. Alamos is selling the Turkish unit of its mining conglomerate Nurol Holding to Tumad Madencilik Sanayi. Alamos has agreed to suspend any arbitration proceedings its Netherlands unit filed against Turkey in 2021, until certain milestones have been reached. Alamos' website states that the company has been active in Turkey since 2010. The miner halted the construction of its Kirazli Project in western Turkey, after mining concessions had expired. This was due to protests against this project. The firm filed a $1 billion lawsuit against Turkey, claiming "unfair and unfair treatment" in relation to the project. Alamos stated that the deal will close in the fourth quarter 2025. It added that the money it receives will be used to reduce its existing debt obligations as well as to support the projects the company is developing.
Stocks and the dollar remain steady at the start of a busy week
The global shares were trading steadily at record highs Monday, the first day of a week full of action that will likely see the U.S. Federal Reserve resuming its easing cycle and possibly leaving the door open for a series cuts.
Bank of Canada will also likely cut rates this week by a quarter-point, while Bank of Japan and Bank of England should both hold their rates at the same level.
Stocks in Europe rose by 0.3%, but MSCI's global index was just a hair away from its record highs of last week. S&P futures and Nasdaq Futures both remained steady.
The markets are priced in for a 25 basis point Fed easing, bringing its funds rate down to 4.0-4.25%. Futures indicate a mere 4% chance that the Fed will ease by 50 basis points.
The Fed's "dot-plot" projections of rates, and the guidance provided by Fed Chair Jerome Powell regarding the pace and extent of further easing will also be important.
Investors will be disappointed if the futures market is anything but dovish.
David Mericle is the chief U.S. economics at Goldman Sachs.
We expect that the statement will acknowledge the softening of the labor market, but we do not expect any change in policy or an indication of a cut for October.
On Sunday, U.S. president Donald Trump continued to attack the central bank by saying Powell is incompetent and harming the housing markets.
Kathleen Brooks, XTB's research director, said that traders were bracing themselves for volatility in the days leading up to Wednesday's Fed announcement. Options markets are pricing in a 1% move in either direction. This would be the largest daily movement in recent weeks.
The euro showed little reaction to Fitch downgrading France.
The euro rose 0.1%, to $1.1738. This is a small increase from the recent high of $1.1780. The euro was slightly weaker than sterling trading at 86.42p, down by 0.1% for the day.
The euro is supported by the steady outlook of EU rates. Last week, the European Central Bank said it was "in a good place" with its policy. This week, a number of ECB officials will be speaking. This includes President Christine Lagarde.
The dollar also eased by 0.2% to 147.42 against the yen, and the Norwegian crown reached multi-month highs in relation to the euro, as well as a 2023 record against the dollar, ahead of Norges Bank's policy meeting this week.
CHINA DATA MISSES
Investors redoubled their bets on Chinese technology shares in the wake of Sino-U.S. Trade talks.
On Monday, the second day of talks between U.S. officials and Chinese officials about their strained trading ties began in Madrid. Trump said that he is still in negotiations on the deadline for divesting Chinese short-video application TikTok.
The data released on Monday revealed that the Chinese economy has lost momentum in August. A number of indicators, from industrial production to retail sales, were below expectations. Home prices fell 0.3% more in August as well, continuing a downward trend which has been in place since early 2023.
Lynn Song, ING’s Greater China chief economist, said: "Given that the economy has slowed down in recent months, there is a strong argument for additional short-term stimuli efforts."
"We continue to see a high possibility for another 10bp rate cut and 50bp reserve-requirement-ratio cut in the coming weeks."
Oil prices rose on the commodities market as investors weighed the potential impact of Ukrainian drone strikes against Russian refineries, which could disrupt the country's crude and fuel exports.
Brent crude increased 0.2% to $67.143 per barrel. Gold was stable at $3.640 per ounce. This is just below the all-time record high of $3.673.95, set last week.
(source: Reuters)