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Shanghai copper continues to gain on US Government reopening cheer
Shanghai copper prices rose on Thursday, as investors welcomed the end of the U.S. shutdown and eased market uncertainty. However, gains were limited by the expectation of weak Chinese lending ahead of important economic data releases. As of 2100 GMT, the most traded copper contract at Shanghai Futures Exchange rose by 0.58%, trading at 87230 yuan (12,246.24) per metric ton. The benchmark three-month price of copper fell 0.25%, to $10,91.5 per ton, after hitting $10,972 a ton on Wednesday. The market is closely watching steps taken to end the longest government shutdown in the history of the U.S., where the Republican-controlled House of Representatives on Wednesday passed a spending package to extend funding for federal agencies through January 30 that can reopen the government. Now that the bill has been signed by President Donald Trump, it is now up to him to sign it into law. Investors are pleased that the U.S. Government will reopen soon, reducing market uncertainty. They also expect to see economic data returning to gauge the U.S. Economy. Copper gains are being held back by expectations of China's weak lending. Investors also await a number of economic data from China, which will be released this Friday. These include new home prices and retail sales as well as industrial output. Tin, another base metal in the SHFE, posted the largest gain of 2.25%, rising to 298,070 Yuan per ton. Data from Indonesia's Trade Ministry showed that the country, which is a major supplier of tin to China, export 2,643 tonnes of refined tin during October. This was down 53.89 percent from the previous year, raising concerns about the availability of this soldering material. Nickel fell 0.17% and zinc was unchanged. Aluminium rose 0.87%. Lead climbed 0.77%. The LME metals index showed that aluminium, nickel, and lead all fell by 0.19%. Zinc was also down 0.36%. Tin remained unchanged. $1 = 7.1230 Chinese Yuan Renminbi (Reporting and editing by Dylan Duan, Lewis Jackson)
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Restocking iron ore amid a softening of near-term Chinese demand
The iron ore futures price fluctuated on Thursday as market participants weighed the prospects of increased supply and a possible restock by steelmakers against a softening in demand near-term from China, which is the top consumer. By 0210 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange rose 0.26% to reach 772.5 Yuan ($108.45). As of 2200 GMT, the benchmark December iron ore traded on Singapore Exchange was down 0.32% at $102.45 per ton. Analysts at Shengda Futures stated in a report that traders have shifted their attention back to fundamentals which are on the weaker side. Prices were pushed down earlier this month by the expectation of a growing supply and a softer demand for the rest of the year. Analysts at broker Jinyuan Futures wrote in a report that some steelmakers have increased maintenance on equipment due to shrinking margins. Analysts at Shengda said that the market had already digested a few of the negative expectations and valuations have been restored. Analysts also said that the prices were supported by hopes that Chinese steelmills would begin restocking seaborne shipments in preparation for meeting needs during Chinese New Year in February. Analysts said that the trend to reduce the basis (the difference between spot prices and futures) also helped futures prices remain resilient. A Shanghai-based analyst, who spoke on condition of anonymity because he was not authorized to speak to the media, stated that futures prices fell at a faster pace than spot markets earlier in the month. Coke and other steelmaking components, such as coking coal, both fell by 0.33% and 0.38 respectively. The benchmarks for steel on the Shanghai Futures Exchange were traded within a narrow range. Rebar, hot-rolled coil and stainless steel were all little changed.
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Oil continues to lose money on US stock build-up, OPEC forecast change
The oil prices dropped for the second day in a row on Thursday, as a report from the industry showed that crude inventories were rising in the U.S. Brent crude futures dropped 3 cents or 0.03% to $62.69 per barrel at 0234 GMT after falling 3.8% the previous session. U.S. West Texas Intermediate Crude fell 5 cents or 0.09% to $58.44 per barrel, continuing its 4.2% drop on Wednesday. According to market sources, citing American Petroleum Institute data on Wednesday, U.S. crude stocks rose by 1.3m barrels during the week ending November 7. The API data showed that gasoline and distillate stocks dropped. The price of oil fell by more than two dollars a barrel after the Organization of the Petroleum Exporting Countries published its monthly report, which said that global supply would slightly exceed demand in the year 2026. This is a shift from the earlier predictions of a deficit. The OPEC signal that there was a surplus of supply in the market released previously pent up bearish sentiment during the previous session. A U.S. crude stock buildup added further pressure and pushed oil prices down on Thursday morning," Yang An, an analyst at Haitong Securities, said. OPEC predicted the supply surplus for next year due to the larger production increases of OPEC+. This group includes OPEC producers and their allies, such as Russia. The U.S. Energy Information Administration is expected to release its inventory data on Thursday. Nine analysts polled ahead of U.S. inventories data estimated that crude stocks rose on average by 2 million barrels. Investor sentiment has been exacerbated by other reports from Wednesday. In its Short-Term Energy Outlook, the EIA said that U.S. Oil Production is expected to reach a higher record than originally forecast. EIA said that oil inventories would continue to grow until 2026, as production will increase faster than demand. This will put pressure on the price of oil. A shift in market structure on Wednesday for WTI, where the spot price dropped below the futures prices for delivery within six months, a phenomenon known as a "contango", further reflected the bearish mood in the markets. A contango is a sign that oil demand will be lower in the near future or there may be an excess of supply. On Thursday, WTI front-month contract was 18 cents cheaper than the contract for six months.
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UK chooses North Wales for its first mini-nuclear power station
The United States has criticised Britain's plans to expand its nuclear energy infrastructure. The government announced in June that it would spend 3,36 billion pounds on SMRs. These are smaller and faster to build than large nuclear power plants. They aim to improve energy security while helping to achieve climate targets. The U.S. Ambassador criticized Britain's choice of Wylfa, an island off the coast of North Wales in the North Sea, to host the first SMR in a statement that was unusually strong on the day before the announcement. The United States has been pushing for an ambitious project at Wylfa. This is the location of a former nuclear power plant that shut down in 2015. The UK government has said that its nuclear expansion may also include the building of a large-scale facility. It added that it had tasked GB Energy-Nuclear, a state-owned company, with finding a large-scale location by autumn 2026. In June, the government chose a Rolls-Royce-designed SMR. Construction of the mini-reactors will create up to 3,000 local jobs. They will be connected to the grid by 2030. Two large-scale nuclear plants are currently being constructed in Britain. One is at Hinkley Point C, in western England. The other one is at Sizewell C, in eastern England. ($1 = 0.7451 pounds) (Reporting and editing by Peter Graff, Matthew Lewis and Sarah Young in London)
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Indigenous protesters defend summit intrusion as climate talks continue
On Wednesday, indigenous protesters defended the charging of the gates at Brazil's COP30 summit on climate change and the clash with security a few days earlier. They said the action was meant to demonstrate the desperation in their fight for the protection of forests. The protesters said they were mainly concerned about having their voices heard. They had been inside the compound listening to negotiators discussing the changing world as the temperatures increase. Auricelia is a member from the Arapiun tribe in Para state, Brazil, which hosts the Belem summit. She said that the protest was aimed at attracting the attention of government officials and U.N. representatives who were in the area. Indigenous leaders are appalled by the current industry and development taking place in the Amazon. The COP compound in an old airport was the venue for Wednesday's third day of talks on a wide range of topics. Climate finance is one of the topics discussed. It's used to fund clean energy transitions and prepare for climate impacts that will worsen in developing countries. In the COP negotiations the issue has grown more tense as funds are not flowing in sufficient amounts to meet the demand, despite the rising costs and damages from extreme weather events. In a report commissioned by the COP, independent academics said on Wednesday that reaching COP29's goal of scaling yearly climate funding to $1.3 trillion in 2035 is still "entirely possible" with the correct combination of national policy, regulatory standards and bank reforms. The report stated that "failure of these goals will put the world in danger". AL GORE RAISES THE ALARM AGAIN Former U.S. vice president Al Gore gave his annual climate presentation at the summit. The United States ignored this presentation despite being the largest historical polluter in the world since the Industrial Revolution. Gore, who rattled off a list of recent disasters that have been made worse by climate changes, asked the summit "How much longer are we going stand by while we keep increasing the thermostat so that these types of events become even worse?" Gore won the 2007 Nobel Peace Prize with his environmental advocacy. The splintering of the global consensus on climate change has caused concern among many delegates. They have targeted the U.S. for its reversal. Brazil, Canada France and Germany joined an initiative to combat special interests spreading climate misinformation. This included promoting evidence-based assessments of climate change. Before the United States fired its entire team and removed the website of the federal agency in April, many countries wanted to copy the way U.S. climate assessments are produced and peer reviewed. COP HELD IN HEART OF FOREST' On Wednesday, two Brazilian navy ships escorted an Indigenous leader and environmental activist protest flotilla around Guajara Bay in Belem. Participants held up signs that read "Save the Amazon", or called for land rights. The waterfront was crowded with hundreds of people, including Indigenous leaders, residents and members of the COP. Carolina Pasquali is the executive director of Greenpeace Brazil. She said, "We will bring climate negotiators to the forest so they can experience what it's like to live there." Scientists warn that if global warming increases beyond 1.5 degrees Celsius, we may be able to unleash extremes. Scientists warned last month that the Amazon rainforest would begin to shrink and turn into a savanna if deforestation continued at a rapid rate as global temperatures crossed 1.5 C. This is expected to happen around 2030. Margareth, of the Maytapu Community said that the Brazilian government was not concerned at all about the Lower Tapajos. This is a tributary to the Amazon located several hundred miles away from Belem. They don't care about our fight. "They say that we are against the government," said he. "On the contrary, we are not against the Government. We need government to be with us. "But it must be honest to everyone." Reporting by William James in Belem Brazil, Leonardo Benassato, and Simon Jessop; editing by Katrina Daigle and Philippa Fletcher.
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PLS CEO says government support can boost lithium supply chains
Dale Henderson said that collaboration between governments could improve global supply chains of lithium, but any intervention in prices must be carefully handled, he added. China is the world's largest producer of lithium, a key component in batteries for electric vehicles and renewable energy storage. Prices have fallen from their peak in 2022 due to weaker demand and slower growth than expected for the EV sector. Henderson stated that the futures market, which is a trading mechanism, should help to regulate the prices of the industry. Australia is the top lithium producer in the world, followed by Chile, China and Australia. In an interview, he stated that if the government were to intervene in the market and support prices, it would be important to carefully consider the implications, as this could support the wrong projects. He urged governments to increase support for supply chains that are not in China. "It's about the government-to-government collaboration to support industrial parks and other trade agreements to bring forth and accelerate these new supply chains," he said. PLS (formerly Pilbara Minerals) expects to release its exploration studies for the Colina Lithium project in Brazil by the second quarter next year. Henderson explained that the company will then make an investment decision "depending on where the market is at the time", Henderson.
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US purchases 900,000 barrels for strategic oil reserve
The U.S. Energy Department announced on Wednesday that they had purchased 900,000 crude oil barrels for almost $56 million. This is a small step towards replenishing the Strategic Petroleum Reserve. Energy Department documents stated that Trafigura Trading would supply 600,000 bbls and Energy Transfer Crude Marketing would supply 300,000 bbls. An Energy Department document stated that the solicitation for up to one million barrels was made in October. Energy Department announced that the oil would be delivered to Bryan Mound SPR in Texas in December and early January. The SPR is a reserve that has been hollowed out in salt caverns along the Texas and Louisiana coastlines. Pumps, pipes, and other SPR infrastructure above ground are continuously exposed to corrosive air. Trump's tax bill and spending bill included $171 million in order to purchase and maintain SPR oil, a much smaller amount than the original $1.3 billion. New legislation will be needed to purchase more oil for SPR. Former President Joe Biden's administration sold record quantities of oil from SPR. This included a 180 million barrel sale in 2022, after Russia invaded Ukraine, one of world's largest oil producers. The reserve has a capacity of 700 million barrels, but now holds more than 410 millions. (Reporting and editing by Ismail Shakil, Timothy Gardner)
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US criticises Britain over nuclear reactor proposals
The U.S. Ambassador to London attacked Britain's nuclear policy on Wednesday in a rare and strong criticism, just before a decision is expected on the development of the site in North Wales. The UK is expected to announce on Thursday that its first small modular reactor nuclear power plant will be located on Anglesey Island, a North Wales island, where an old nuclear station closed in 2015. The United States was pushing for an extensive nuclear project. On Wednesday, Ambassador Warren Stephens made a strong rebuke to Britain's decision. Stephens stated that he was "extremely disappointed" by the decision. "There are already approved, cheaper, faster and more efficient options for providing clean, safe energy in this location," he said. He added that while wishing to make Britain the strongest ally of the United States, the "high energy prices are a hindrance to that." "If you're looking to put shovels into the ground and make a major step to address energy prices and availability there are other options. We look forward to making decisions on large-scale nuclear projects soon." Keir starmer, British Prime Minister, has said that his close relationship with U.S. president Donald Trump helped on many fronts. From securing the deal to reduce some U.S. Tariffs to working on conflicts in Ukraine or the Middle East together. Trump has criticised Britain's energy policies and its efforts to achieve net zero by the year 2050. He has called on the government for more drilling in the North Sea, and criticized the country's wind farms. (Reporting and editing by Nick Zieminski, Alistair Smout)
Stocks rise as US shutdown nears its end, causing a yen squeeze.
The U.S. Congress voted on Thursday to end the longest shutdown in history. Markets are now waiting for U.S. economic reports to be released to determine the rate outlook.
U.S. Stock futures traded on either side of flat.
The Nikkei index in Japan was up 0.5%, but the Topix Index grew nearly 1% and reached a new record high. Investors shifted their portfolios away from the most frothy artificial intelligence companies to purchase exposure to other sectors of the economy.
Overnight, similar moves were made, as well as a rise in gold prices above $4,200 per ounce, and a modest rally of bonds, with the U.S. 10 year yield at 4,067%.
The White House announced that U.S. president Donald Trump would sign the bill ending the government shutdown at 9:45 pm (0245 GMT) on Wednesday.
Economists expect delayed economic data to trickle out in the next week. They are interested in whether they will confirm private surveys which have indicated a softening of the job market.
Damian Rooney is the director of institutional sales for Argonaut, a Perth-based stockbroker. He said: "I am cutting rates due to this."
He said that although the Australian market was relatively quiet, there were bids for lithium and gold miner companies, since lower interest rates are often what drives buyers to gold.
It means that these guys make a lot in Aussie dollars. Rooney stated, "I think we have a little more legs in that area." In Australia, the majority of other sectors declined and the index fell by 1%.
Hong Kong's Hang Seng fell from its one-month high, while the Shanghai Composite gained 0.1%.
Overnight, the Dow Jones index reached a new record high on Wall Street while the Nasdaq, which is dominated by technology companies fell.
The mining-heavy FTSE closed at a new record in London. The pan-European STOXX 600 also reached record highs, while Italy's FTSE MIB hit its highest level in nearly a quarter century.
SQUEEZE YEN
The yen is under new pressure, as Japan's premier wants the central bank not to raise rates any further. It reached a record low at 179.49 euros and was close to a nine-month low on the dollar, at 154.94.
The yen reached 155.05 per dollar on Wednesday. This prompted the Finance Minister to remind traders that the government was closely watching the market in preparation for possible interventions.
Kazuo Ueda, the Governor of Bank of Japan, appeared in front of parliament on Thursday. He said that the underlying inflation rate was slowly accelerating towards its target.
The Australian dollar also rose in the foreign exchange market after data revealed a rise in employment in October. This data reinforced the view that the easing cycles in Australia may have reached their end.
The Australian dollar was up 0.2%, at $0.6552. Expectations of a drop in May have dropped from 70% to 32%.
U.S. Treasuries remained steady. Brent crude futures dipped to a 3-week low of $62.48 a bar after OPEC shifted their projection to forecast a slight surplus in oil demand by 2026.
(source: Reuters)