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Copper prices fall as trade tensions and the US government shutdown weigh
The copper price fell on Thursday, as U.S. China trade tensions and uncertainty caused by the United States shutdown weighed down on sentiment. However, the weaker dollar offered some support. At 0923 GMT, the benchmark copper price on London Metal Exchange had fallen by 0.7% to $10,566 per metric tonne. Last week, fears about tight supply due to disruptions in mining drove prices up to $11,000 per ton. This was a 16-month record. The U.S. government shutdown has lasted two weeks. Cost A Treasury official late on Wednesday said that the loss of output could be as high as $15 billion per week, which is a factor in the drop in the dollar. Metal traders reported that concerns about manufacturing and demand growth, especially in China, the world's largest consumer, have resurfaced. Some companies who had bet on higher copper prices are now reducing their positions. The GDP data for third quarter forecast is likely to confirm the expectations of poor demand prospects, given China's heavy reliance on exports and manufacturing. at a lower Rate than the second quarter. Goldman Sachs analysts expect the market will remain surplus "for now", and they also expect Chinese buyers to avoid the market if the price exceeds $11,000. In a recent report, they stated that "current high prices for Copper... reflect bullish sentiment for 2026. Fueled by U.S. Fed rate cuts, expectations for a weaker Dollar and AI-related Capex." Analysts expect copper demand to increase due to data centres, grid infrastructure and investment. Increases in the next few decades are expected to be substantial. Two companies hold large amounts of warrants, which are title documents that confer ownership of metals stored in LME registered warehouses (0#LMEWHL>). Also, large amounts of forwards and cash contracts 0#LMEWHC>0#LMEFBR> are being analyzed. Cash contract for three-month forward has been boosted by concerns about a tight LME aluminum market This week, the price of a ton of climbed to its highest level since February, surpassing $21. Last trading price was around $7. Aluminium for three months rose by 0.4%, to $2.755 per ton. Zinc was up 0.1%, at $2.943, while lead remained unchanged at $1.982. Tin increased 0.3%, to $35,500, and nickel fell 0.1%, to $15,175. (Reporting and editing by Harikrishnan Nair; reporting by Pratima Dasai)
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Munich Re, the German insurer, warns against riots in Europe's slower-growing regions
A top executive at the German insurer Munich Re warned on Thursday that a tepid economic growth could lead to civil unrest in Europe. Clarisse Kopff is a board member who oversees business in Europe and Latin America. She said that the lower economic growth rates in Europe compared to those in the United States and China are already creating tension. This will put pressure on European consumers' purchasing power. She told journalists that this could fuel more civil disturbances and riots. This week, the International Monetary Fund predicted that the United States would grow by 2.1% and China 4.2% in 2026. The euro zone was expected to grow only 1.1%. The world's biggest insurer warned of civil unrest as one of the many risks ahead of a upcoming industry meeting in Baden-Baden. Munich Re has also highlighted the growing risks of hail damage and cyber-risks that can cause business interruptions in Europe, particularly in countries with low levels of cyber insurance.
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Codelco increases 2026 European copper premium by record $345/T
According to three sources on the copper market, Chile's Codelco is the world's biggest copper miner and will offer to sell its metal to European customers at a record $325 per metric ton next year. This represents a 39% increase from this year. Codelco's premiums for physical copper delivery are paid in addition to the London Metal Exchange contracts and are used as benchmarks for global contracts. Copper is used by the construction and power industries. Codelco, a state-owned company, declined to comment. Fears of a copper shortage next year pushed LME Copper to a 16 month high of $11,000 per ton, last week. On Thursday, it was about $10,600. After a mudslide, Freeport-McMoRan declared force majeure last month at its Grasberg copper mine in Indonesia. It is the second largest mine of copper in the world. This year, there have also been problems at the Kamoa Kakula mine in Democratic Republic of Congo as well as at Chile's El Teniente Mine. According to sources, the biggest copper smelter in Europe Aurubis is also going to charge European customers $315 per ton of refined copper.
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Investors' guide to the Ivory Coast presidential election
Ivory Coast is the top cocoa producing country in the world. The presidential elections will be held on October 25, with Alassane ouattara expected to win a fourth term. Investors are focused on the following key issues. Who is running? Ouattara faces four opponents: Laurent Gbagbo’s ex-wife Simone Gbagbo and two former ministers. The race is notable because neither Laurent Gbagbo nor Tidjane Thiam - a former Credit Suisse CEO - have received the support of a major party. Thiam was found to have French nationality, which is illegal under Ivorian law. Ouattara is the only candidate who has a strong chance of winning the first round. He's an economist trained in the United States, and he previously worked for the central bank of the region as well as the International Monetary Fund. The 83-year old brushed aside concerns about his age and his health when he announced his candidacy back in July. He said Ivory Coast required experience to face "security, economic, and monetary challenges." WHY DO INVESTORS CARRY ABOUT THE IVORY COAST Ivory Coast has one of the fastest-growing economies in the entire region. Market participants claim that its international bonds are among the best performers in Africa. They attract investors who don't usually invest their money in frontier debt. In order to build on this success, the government has expanded into new markets and debt instrument. These include a swap of debt for education in December last year, an international bond denominated in regional currencies in March and a Japanese Samurai bond certified by ESG in July. It also secured Africa's first ever sustainability-linked loan last month. Investors are closely watching the elections to determine Ivory Coast’s democratic credentials. Is violence in relation to elections a risk? Ivory Coast is known for its tense polls. After Laurent Gbagbo refused the defeat, the 2010 elections that brought Ouattara into power led to a short civil war in which 3,000 people died. Around 85 people were killed in clashes around the 2020 election, which the opposition boycotted because of Ouattara’s decision to run despite the constitutional limit of two terms. Thiam dismissed the upcoming elections as a "coronation of Ouattara", calling the exclusions of opposition figures "an abandonment of democracy." Market participants say that while seasoned investors may be able to weather the turbulence of an election, those who are new to Ivorian assets might feel uncomfortable if violence breaks loose. They said that any unrest is unlikely to spiral out of control. What economic challenges will the winner face? The Ivorian economy is based on cocoa, but production in West Africa is decreasing. The issues that are behind this decline will have to be addressed by whoever wins the election: changing weather patterns, disease, and small-scale, destructive gold mining. Ivory Coast's plan to combat climate change and its impact on the economy is in place, but the implementation of the plan will be difficult due to the lack of funding for climate action in Africa. The cocoa industry could also be under pressure due to the landmark EU anti-deforestation legislation, which is not yet in effect but will require EU importers prove that their products do not cause deforestation. The economy may also suffer if the Ivory Coast faces greater threats from islamist militant groups operating elsewhere in West Africa. This includes Mali, Burkina Faso, and Niger.
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Dalian iron ore reaches a 6-week low after betting on falling demand
Dalian iron ore prices fell further on Thursday to a six-week low, due to the expectation of a fall in demand from China, their biggest consumer. The January contract for iron ore on China's Dalian Commodity Exchange ended daytime trading 0.89% lower, at 773.5 Yuan ($108.56), after hitting its lowest level since September 1, at 766.5 Yuan. As of 0809 GMT, the benchmark November iron ore price on the Singapore Exchange had slipped 0.02%, to $105.1 per ton, as hopes for further rate cuts by the U.S. Federal Reserve helped to curb some losses. On Wednesday, the contract reached a low of almost $103.6 per ton. A weaker dollar makes commodities priced in dollars cheaper for buyers of other currencies. Steven Yu, senior analyst at Mysteel, says that the market is now focusing on the potential softening of fundamentals within the steel industry, amid signs of a de-escalation in trade tensions between China and the U.S. "While stocks did fall this week, it was better than expected. However, steel inventories are expected to rise in the coming weeks. This could reduce demand for ore," Yu said. The disappointing credit data from China has also raised concerns about the outlook for demand. China's new loans to banks in September were lower than expected, as policymakers struggled to reverse an extended property slump and curb overcapacity. The renewed U.S. China trade war, fueled by the tit for tat port fee, has overshadowed the hopes of talks between the sides. This has weighed on sentiment and driven down ore prices. The Shanghai Futures Exchange saw a rise in most steel benchmarks. Wire rod, stainless steel and rebar all gained ground, but hot-rolled coils lost 0.19%. Coking coal, which is also used to make steel, increased by 3.36%. $1 = 7.1250 Chinese Yuan (Reporting and editing by Amy Lv, Colleen howe and Harikrishnan Nair).
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US rate cuts bets continue to drive gold's record-breaking run.
Gold reached a new record high on Friday, as investors flocked to gold due to U.S. China trade tensions, the U.S. Government shutdown and prospects of rate cuts. As of 0810 GMT, spot gold was up by 0.6% to $4,233.39 an ounce. Early in the session, gold bullion reached a record-high of $4,241.77. It was the fifth straight session that bullion rose. U.S. Gold Futures for December Delivery rose 1.1% to $4,247.10. Gold prices, which are traditionally used as a safe-haven during periods of economic instability, have risen by 61% in the past year. This week, investors have been focused on the trade dispute between the two world's largest economies. On Wednesday, U.S. officials criticized China's expansion of export controls on rare earths as a danger to global supply chains. Investors are turning more to gold because of renewed trade frictions, said Nitesh Sha, commodities strategist with WisdomTree. He added that the gold breakout is also indicative of investor uncertainty over U.S. policies. Shah said that there is a high probability the metal will remain above $4,200. The gold rally is a result of a number of factors including the expectation of interest rate reductions, political and economic uncertainties, central bank purchases, and inflows to gold exchange traded funds. A Treasury official stated on Wednesday that the shutdown of the federal government, which has lasted for two weeks, could cost the U.S. economic system as much as 15 billion dollars a week due to lost production. Traders are pricing a 25-basis-point cut for October and another in December. They see 98% and 95% chance of each. Gold that does not yield is usually a good investment in an environment with low interest rates. Aakash Doshi is the head of State Street Investment Management's gold metals strategy. Silver spot fell by 0.6%, to $52.77 an ounce. It had hit a record high $53.60 per ounce on Tuesday. The rally in gold was mirrored and the tightness of the spot market supported this decline. Palladium increased 0.3% and platinum fell 0.4%. (Reporting and editing by Elaine Hardcastle in Bengaluru, Anushree Mukerjee)
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Sources say that India will reduce Middle East imports and buy more US LPG by 2026.
Sources with knowledge of the issue said that India intends to reduce imports of liquefied gas from the Middle East, as its state refiners seek to increase purchases from the U.S. This will help New Delhi in its efforts to secure a wider trade agreement with Washington. Sources who spoke under condition of anonymity said that the state refiners had already informed their traditional LPG suppliers in Saudi Arabia and the United Arab Emirates about the expected reduction in LPG sales. It is not clear how much LPG India will reduce from the Middle East, but a report in July stated that India plans to import about 10% of cooking gas from the U.S. starting in 2026. India's Prime Minister Narendra Modi visited Washington in February and pledged to increase U.S. purchases of energy from $10 billion up to $25 billion. Both nations aim to reach $500 billion in bilateral trade in 2030. Indian officials are currently at Washington to engage in trade negotiations. India's trade deficit with the U.S. has been a major irritation for President Donald Trump. He has imposed a tariff of 50% on Indian goods, with 25 percent of that amount specifically levied as a penalty to New Delhi because of its purchases of Russian crude oil. Washington claims that Moscow uses petroleum revenues to fund its war on Ukraine. Trump said on Wednesday that Modi had assured him that India would stop purchasing Russian oil. Emails seeking comments from Indian state refiners, Middle Eastern producers (Kuwait, Qatar, UAE) and other Middle Eastern producers did not receive a response. Saudi Aramco declined comment. Sources said that LPG would be imported from the U.S. on a delivery basis. LPG, a mixture of butane and propane used for cooking fuel, is imported primarily by state retailers Indian Oil Corp. Bharat Petroleum Corp. and Hindustan Petroleum Corp. and sold to households at a subventioned price. Indian state refiners have jointly sought to purchase about 2,000,000 metric tons of U.S. LPG by 2026. According to government data, in 2024 the South Asian nation will import about 65% its 31 million tons of LPG. About 90% of the 20.4 million tonnes imported by refiners were under contracts with UAE, Qatar and Kuwait. India bought LPG from the United States this year. It took advantage of an arbitrage window, as China, embroiled in a trade war with Washington and a slowdown of purchases, was able to do so. As part of a larger trade agreement, India announced in April that it plans to eliminate import taxes on certain U.S. goods, including LPG. Sources said that India imported 8.1 millions tons of LPG in 2024 from the UAE, 5,000,000 tons from Qatar, 3,400,000 tons from Kuwait and 3.3,000,000 tons from Saudi Arabia. Also, the nation bought small amounts from Bahrain and Oman. (Reporting and editing by Shri Navaratnam; Additional reporting by Sarah El Safty)
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Shanghai copper prices rise as countries warn about low processing fees; trade problems persist
Shanghai copper rose on Thursday as investors focused their attention on the supply risks, with several countries warning of a tumbling fee for processing, and U.S. China trade tensions ahead of a high-stakes summit between leaders from both nations. The Shanghai Futures Exchange's most active copper contract closed the daytime trading at 85,050 Yuan ($11,938.18) a metric ton. As of 0703 GMT, the benchmark three-month price for copper at the London Metal Exchange was down by 0.13%, to $10,627 per ton. Japan, Spain and South Korea expressed concern on Wednesday over the plummeting treatment and refining fees (TC/RCs) for copper. They said the decline in this key revenue source threatened the sustainability of the copper industry. Three copper importers have warned that a persistently low or even negative TC/RC could reduce refined production by eroding profits. The warning was issued to intensify concerns about the refined copper supply, due to falling TC/RCs. This has given some support to red metal. Investors also pay attention to the latest developments in trade tensions between the United States and China. The top U.S. officials including Trade Representative Jamieson Grer and Treasury Sec. Scott Bessent warned that China's controls on rare earth exports were a threat to supply chains. They urged Beijing not to continue with its current course and warned of further decoupling. Beijing, on the other hand, defended its measure by saying that it did not constitute a ban on exports. The remarks were the latest development in the lead-up to a possible meeting between U.S. president Donald Trump and Chinese president Xi Jinping later this month, although the recent flare up of tensions has raised questions about whether or not the meeting will actually take place. Aluminium gained 0.48% among the SHFE base metals. Nickel closed at 0.21%. Lead rose by 0.26%. Tin increased by 0.34%. Zinc was the only one to fall by 0.25%. The LME also saw gains in aluminium, zinc, nickel, and lead. Lead rose by 0.1% while tin climbed 0.5%. $1 = 7.1242 Chinese Yuan Renminbi (Reporting and editing by Rashmi aich and Ronojoy Mazumdar;
Gold extends its record high due to trade anxiety, as Asia stocks rally with Wall Street
Stocks were up across Asia on Thursday. The chip sector was buoyant after a strong overnight rally by U.S. counterparts, and the start of Wall Street's earnings period also lifted the mood. Meanwhile, trade tensions between Beijing & Washington grew and the dollar was undercut. After U.S. president Donald Trump announced that Indian Prime Minister Narendra Modi pledged to stop purchasing oil from Russia - which supplies around one-third its imports - the price of crude oil soared from a five-month low.
Nikkei gained 1.2% in Japan, as shares related to chip and artificial intelligence boosted the index. The index gained momentum after Taiwanese semiconductor maker TSMC announced record earnings.
Taiwanese shares were already closed when TSMC announced its announcement. The day ended with a 1.4% gain and a new record. South Korea's KOSPI rose 2.2%, reaching a new record high after the country's top presidential adviser expressed optimism about the ongoing negotiations to finalise the U.S. trade agreement. Australia's equity index also reached a new record high as poor jobs data increased the likelihood of central bank easing.
In a volatile session, the Hang Seng in Hong Kong fell by 0.7% while blue chips on the mainland were flat. Investors pondered what the future of trade relations with the U.S. would be.
The European stock futures point to a 0.3% decline.
The U.S. Stock Futures are flat after overnight gains of 0.4% for the S&P500 and 0.6% for the tech-heavy Nasdaq. The Philadelphia SE Semiconductor Index soared 3%.
Michael Brown, Senior Research Strategist at Pepperstone, stated that he still believes the path of least opposition in the long-term is a positive one.
"I'd say that the intraday price movement is largely noise, even though conditions are choppy."
DOLLAR DIP - GOLD SURGE CONTINUES
Stock investors were captivated by the optimism over AI and the signs of economic strength in the U.S. banks' earnings, despite Trump declaring late Wednesday that "the U.S. was engaged in a trade conflict with China", confirming what the markets already believed based on recent comments made from both sides.
Gold reached a record $4,241.77 an ounce in the last session after rising by 0.8%.
The dollar fell for the third consecutive session, falling 0.1% against a basket major counterparts.
The pair fell as much as 0.4%, to 150.51yen. This brought the psychologically important 150-yen line into focus. However, the pair recovered to remain flat before the opening of European markets.
This retracement was prompted by the news that Takaichi, the leader of the ruling Liberal Democratic Party, had been in discussions with the Japan Innovation Party (a right-leaning opposition party) for a partnership to secure enough votes in parliament to win the prime ministership in an upcoming vote.
The euro rose by 0.1%, to $1.1657. Sterling increased by 0.1%, to $1.3412. The signs of a calming of trade tensions were encouraging. U.S. Treasury secretary Scott Bessent said that an extension of current tariff reprieve could be possible and that Trump expected to meet Chinese Leader Xi Jinping later this month in South Korea.
The brinkmanship between China and the U.S. hasn't yet dissipated, said Kyle Rodda senior financial market analyst at Capital.com.
It will only calm down when China backs off its threat to restrict rare earth exports, and the U.S. reverses the tariff increase scheduled for November 1 to 100%. Markets will be apprehensive until then."
Trump's trade maneuvers have also helped oil prices rise from five-month lows. Brent crude futures are up 0.8% to $62.41 per barrel, and U.S. West Texas Intermediate futures are up 0.9% at $58.77.
The U.S. President said on Wednesday that India will stop buying oil from Russia, its largest supplier. Washington would then try to convince China to follow suit as it intensifies its efforts to cut Moscow's revenue and to pressure it to negotiate an agreement in Ukraine.
(source: Reuters)