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Andy Home: Myanmar mine still a major player in the tin market
As the market waits for the Man Maw Mine to return in Myanmar, tin continues to outperform other base metals on the London Metal Exchange. Two years have passed since the mine was shut down for a resource assessment. Six months have passed since the authorities of the semi-autonomous Wa State invited new applications for mining permits. There is still no sign of a significant increase in activity. The flow of tin concentrats from Myanmar into neighbouring China is almost completely dry. The uncertainty surrounding Man Maw led to a resurgence of fund interest in tin, which pushed the LME 3-month tin prices from less than $30,000 per metric tonne in April to over $35,000 by the end August. The tin supply is still a mystery to many speculators. WAITING FOR MAN MAW China's decreased imports of tin from Myanmar is a clear indication of the continued absence of Man Maw supplies. The flow of raw materials to Chinese smelters fell to 933 tons in the month of July. This suggests that activity has not yet resumed at Man Maw, and that other smaller mines in the country are also experiencing disruptions, perhaps due to the March earthquake that shook the country. Imports from Myanmar in the first half of this year have dropped by 77% compared to last year, and now total just 14,200 tonnes. Comparatively, the monthly average imports in 2022 and 2023 were 15,000 tons, when Man Maw still produced tin. The International Tin Association announced in July that the first permits for the mining of Man Maw had been issued. The Association warned it would be some time before actual tin production resumed and exports recovered. It has been proven. No Scratch China's tin-smelters have been able to compensate for the loss Man Maw, which was their primary source of supply until August 2023 when it was suspended. This year, the Democratic Republic of Congo emerged as a major supplier of tin concentrats. Imports from Australia and Nigeria also increased sharply. The total imports through July of 73,000 tonnes are down 32% on an annual basis. According to Shanghai Metal Market, the margins of Chinese smelters have been squeezed. Capacity utilisation in many areas of China was less than 70% last month. Many operators carry less than 30 day's worth of concentrates and take maintenance time in the hopes that raw material availability will improve when they return. Yunnan Tin is the largest producer of refined Tin in the world. It has shut down its Gejiu Smelter for 45 Days for its annual maintenance. The loss of Man Maw, however, has not yet caused any visible tightening in the refined metals segment of the supply chains. The global exchange inventory is stable at over 11,000 tons for the past three months. This is a far cry compared to the days of true scarcity, in 2021, when stocks were down to 1,000 tons. Exports from Indonesia are recovering from the disruption caused by last year's permits. Exports of 30,000 tonnes to July 2024 were 64% higher than the same period in 2014. The escalation of trade tensions between China and the United States has also likely helped. Tin is used in the electronics industry to solder circuit boards. BULLS RETURN Tin bulls remain unabated. Funds increased their bets for higher prices up to 4,515 LME (22,575 tonnes), while short positions were reduced to only 610 contracts. The net positioning has remained the same since March when the price spiked up to a three year high of $38,395 a ton following news that the M23 insurgents had briefly taken control of the Bisie Tin Mine in the Congo. Bisie quickly returned to normal operations following the M23 withdrawal as part of the U.S.-brokered Peace Deal between Congo and Rwanda. Man Maw remains conspicuous in its absence. Funds appear to be betting on the fact that production will not return to levels seen before closure. It's impossible to know if that assumption is correct, due to the near complete lack of information coming out of Wa State. When the raw material flow over the border into China begins to return to historic norms, the answer will be apparent. These are the opinions of the columnist, an author for.
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Bond yields fall before US payrolls, as Asian stocks follow Wall Street's upward trend
The Asian stock market followed Wall Street to a new record high on Friday, and Treasury yields fell to their lowest level in four months as traders bet that the Federal Reserve will cut rates later this month despite the fact that the U.S. employment data is due to be released at the end of the day. Gold held steady following Thursday's decline from its all-time high. The U.S. Dollar eased as traders adjusted their positions in anticipation of the Labor Report. Investors waited for an OPEC+ summit this weekend to discuss further production increases. Crude oil fell for a third consecutive day. According to LSEG, the markets are almost certain that the Fed will cut rates by a quarter point at the end of its two-day meeting on September 17. They also price in a total 60 basis points reductions for this year. Data released on Thursday showed that Americans filed more new unemployment benefit applications than expected in the past week. Meanwhile, hiring by private companies slowed down in August. This is further evidence of a softening labor market. The non-farm payrolls data due out on Friday is expected to show that the economy created 75,000 new jobs in August. This figure, which was not much higher than the 73,000 for July, initially sparked expectations of a Fed rate cut within the next few months. Fed Chair Jerome Powell then confirmed that speculation by delivering an unexpectedly dovish address at the closely watched Fed Symposium in Jackson Hole Wyoming last month. Ken Crompton is the head of rates at National Australia Bank. He said that unless there's a really stellar payrolls report, it's difficult to see anything that will change the market's mind about a September rate cut. The terminal rate, and how to get there, is still a question. The S&P 500 finished at a record-high on Thursday, thanks to expectations of a more accommodative monetary environment. The Nasdaq rose 1%, just missing its all-time high closing price from August 13th. S&P futures were 0.2% higher Friday and Nasdaq Futures gained 0.4%. The Nikkei 225 index in Japan rose by 0.9%, while the Taiwanese stock market benchmark rose by 1.1%. Both markets are near recent record highs. Hong Kong's Hang Seng index rose 0.8% while mainland Chinese blue-chip indexes advanced 1%. Australian stocks rose by 0.5%. Kyle Rodda is a senior financial analyst at Capital.com. He said that the non-farm payroll data released tonight was a "sink or swim" moment for markets. He said that the question was "whether the Fed is in a position to lower interest rates and cushion the economy or if they are behind the curve." If the data indicate that an economy is accelerating, it could cause volatility and risk aversion. This week, long-term sovereign bonds have seen a lot of volatility, as fiscal deficits worsened from Washington to Brussels, London to Tokyo. Political instability has also played a role. The bond yields rose sharply in mid-week, but a growing belief that the Fed would soon cut rates tempered this. The 30-year Treasuries yield fell to a 3-week low on Friday, Tokyo. Meanwhile, the 10-year and 2-year yields dropped to 4-month lows, 4.153%, and 3.582% respectively. The yields on Japanese 30-year government bonds fell to 3.230% for the second consecutive day, after reaching a record high of 3.255% on Wednesday. The U.S. Dollar Index, which measures currency against six major counterparts, fell 0.1% to 98.128 and regained the ground that it lost on Thursday. The week-over-week gain is around 0.3%. This is due to the big gains made on Tuesday when sterling and the yen fell amid an increase in fiscal concerns. Gold rose 0.4%, to $3,558 an ounce. This retraced Thursday's decline of 0.4%, as the market stabilized after a seven-day, 6.3% rally that culminated in a record high of $3,578.50. Brent crude futures dropped 0.2% to $66.68 a barrel while U.S. West Texas Intermediate crude fell 0.3% to $63.32. Two sources with knowledge of the discussions said that eight members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, will discuss the possibility of raising production at a Sunday meeting in October.
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Markets make a big bet on Goldilocks' payroll number
Kevin Buckland gives us a look at what the future holds for European and global markets. The markets are in a positive mood as they anticipate that the Fed will continue to reduce rates by this month, and again at year's end. The previous month's payrolls shockingly high reading sparked speculation that the U.S. would have to change its monetary policy quickly. This time, economists expect a slightly higher reading. Fed Chair Jay Powell shocked many last month at the closely watched Jackson Hole Symposium with a keynote suggesting a reduction on September 17, unless data get in the way. Fedspeak has generally been dovish. The window for further comments will close later today, as the central banks enters its blackout period leading up to the policy meeting. The U.S. Stock Futures are heading higher after the S&P 500 closed at a record high overnight and the Nasdaq Composite was just 6 points away from doing the same. European futures are also rising, while Asian markets are rising by about 1%. The bond markets, too, that had become so volatile at first of the week, were calmed down by the recent soft U.S. employment data. This has bolstered the confidence in a non-farm payrolls that will continue the narrative of easier Fed policy. The yields of Japanese 30-year government bonds have fallen by about half after reaching record highs Wednesday. U.S. Treasury yields of similar maturity have fallen to three-week-lows. Two-year and 10-year yields are at four-month lows. The yields on British 30-year gilts have returned to their levels of a week earlier, before the spike that lasted four days and reached the highest level since 1998. German and French yields have fallen from their multi-year highs. Gold is also waiting its turn, hovering just below the all-time high of Wednesday after a seven-day rally that was breathless. It's clear that a positive reading on U.S. payrolls is crucial. There's little to distract us from the main event, which is the release of German factory data, British sales, and the revised GDP for the euro area. The following are key developments that may influence the markets on Friday. Payrolls in the United States -Canada payrolls Euro zone GDP revised German industrial orders and manufacturing output Halifax house prices, UK retail sales
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Oil prices drop for the first time in three weeks as a glut of supply looms
The oil prices continued to fall into the third session of Friday. They are now headed for a loss on a weekly basis for the first time since three weeks, as supply expectations increase and a surprising buildup in U.S. crude stock adds to concerns about demand. Brent crude futures dropped 10 cents or 0.15% to $66.89 per barrel at 0420 GMT. U.S. West Texas Intermediate Crude fell 13 cents or 0.20% to $63.35. Brent is down 1.78%, and WTI is down 1% this week. ANZ Research analysts said in a Friday note that the price of crude oil remained low amid rising OPEC+ supplies. Analysts said that market expectations are increasing, with the expectation of the group pushing more barrels onto the market in order to regain the market share previously lost by U.S. producers. Two sources familiar with the discussion were quoted as saying that two members of the Organization of the Petroleum Exporting Countries (OPEC+) and their allies, such as Russia, will be considering raising production in October during a Sunday meeting. Another boost could mean that OPEC+ - which pumps around half the world's crude oil - would start unwinding a second layer, or 1,6 million barrels of oil per day. This would be more than a full year ahead of schedule. The Energy Information Administration reported on Thursday that U.S. crude inventories increased by 2.4 million barrels as refineries entered maintenance season. This was in contrast to expectations from a poll which predicted a draw of 2 million barrels. BMI analysts stated in a recent report that the strength in the downstream sector was a major support to prices. However, refining margins are likely to be squeezed over the next few months as global growth slows and refiners increase maintenance. The BMI analysts stated that this will reduce throughput and therefore the demand for crude. The market is still plagued by supply risks. A White House official confirmed that U.S. president Donald Trump had told European leaders Thursday to stop buying Russian crude oil. If Russia cuts its crude exports, or if there is any disruption in supply, it could drive up the price of oil globally. Reporting by Siyi LIu in Singapore and Arathy SOMASEKHAR and Georgina Mcartney in Houston. Editing by Tom Hogue and Sonali Paul.
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UN weather agency says wildfires fuel air pollution
According to a World Meteorological Organization report released on Friday, wildfires that are likely to be more frequent due to climate change contributed significantly to air pollution in 2017. World Health Organization reports that ambient air pollution is responsible for 4.5 million premature deaths each year. The WMO report on 2024 also highlighted pollution hotspots around places where there have been intense fires, such as the Amazon basin in Brazil, Canada, Siberia, and central Africa. Wildfires are becoming more common and widespread around the world as global warming, primarily caused by fossil fuel emissions, alters weather patterns. They also add to the airborne particle pollution produced by transport, farming, and the burning of wood, coal, oil, and gas. The WMO released a statement that said, "Wildfires contribute a lot to particle pollution. This problem will only get worse as the climate continues to warm. It poses a growing risk to infrastructure, ecosystems, and human health." Ko Barrett, Deputy Secretary General of the United Nations, added that "climate change and air pollution cannot be dealt with in isolation." To protect our planet, communities and economies, they must be addressed together. Although the WMO report is for 2024, it also stated that the WMO reported record wildfires this year in southern Europe had contributed to pollution on the continent. Despite the negative signs, some positive signs were also observed, as particle pollution in Eastern China has decreased due to efforts made by authorities.
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US jobs data and gold poised to be released
Gold prices increased on Friday, and are on track to have their best week for three months. This is due to growing expectations that the U.S. will cut its interest rates this month. Attention now turns towards the U.S. Non-farm Payrolls data, which is expected later in the afternoon. As of 0332 GMT spot gold was up 0.3%, at $3,556.21 an ounce. It is hovering around the all-time high reached on Wednesday of $3,578.50. Bullion is up 3.2% this week. U.S. Gold Futures for December Delivery gained 0.2% to $ 3,615. Tim Waterer, KCM Trade's Chief Market Analyst, said: "Gold is slowly creeping up today. Traders are not willing to push the price higher too much until we see non-farm payrolls printed." The market dynamics are still in favor of gold, with Trump's efforts to make the Federal Reserve a more dovish institution, and the Russia/Ukraine conflict continuing. The number of Americans who filed new claims for unemployment benefits last week was higher than expected, which is consistent with a softer labor market. The ADP National Employment Report also showed that private payrolls in the U.S. increased less than expected for August. This week, several Fed officials said that concerns about the labor market continue to motivate their belief that future rate cuts are imminent. Fed Governor Christopher Waller believes the U.S. Central Bank should cut rates at its next meeting. According to CME Group’s FedWatch tool, traders are pricing in a nearly 100% chance that the Fed will cut rates by 25 basis points at the conclusion of its two-day policy meeting on the 17th of September. Gold that does not yield is usually a good investment in an environment with low interest rates. The Fed will also focus on the U.S. Non-Farm Payrolls Data, which is due at 1230 GMT and could provide more clarity about the interest rate trajectory. Silver spot rose 0.4% per ounce to $40.85 and was on its way to a third consecutive weekly gain. Palladium increased 0.3% and platinum gained 1.3%.
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Iron ore declines as China's post-parade recovery of demand misses expectations
The price of iron ore futures fell on Friday as demand in China, the top consumer, missed expectations following the World War Two parade. As of 0321 GMT, the benchmark October iron ore traded on Singapore Exchange was down by 0.82% to $103.95 per metric ton. On Thursday, the contract reached its highest level since 24 July. As of 0331 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange added 0.13%. It now stands at 784.5 Yuan ($109.68). In the previous session it reached its highest level since the 14th of August, rising by 1.7%. The average daily hot metal production, which is a measure of iron ore consumption, fell by 4.7% compared to the previous week, reaching 2.29 million tonnes in the week ending September 4, the lowest level since February 28. The market participants expected that the output would fall more sharply this week, due to production restrictions in Tangshan's top steelmaking center, to prepare for the military parade to be held on September 3, to commemorate World War II. Prices were supported by the expectation that demand would improve after steel mills resumed production on Thursday. A fall of almost 5% caught some analysts and traders by surprise and weighed on sentiment and price. Iron ore prices were also limited by the growing supply. The Singapore contract, however, was headed for a second consecutive weekly gain, supported a weak dollar amid bets on a U.S. Federal Reserve interest rate cut. Dollar-priced goods are cheaper when purchased in other currencies. The Shanghai Futures Exchange saw a decline in steel benchmarks as the demand for steel remained low. Rebar fell 0.1%, while hot-rolled coils dropped 0.06%. Stainless steel declined 1.12%, and wire rod remained unchanged. Coking coal, coke and other steelmaking materials rose by 2.07% and 1,3% respectively on renewed supply concerns. $1 = 7.1529 Chinese Yuan (Reporting and editing by Amy Lv, Lewis Jackson)
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Viridien, TGS Start 3D Seismic Survey Offshore Northern Brazil
French seismic firm Viridien, in collaboration with joint venture partner TGS, has started the Megabar Extension Phase I survey in the Barreirinhas Basin offshore Northern Brazil.The 5,300 sq km multi-client 3D seismic survey will be acquired by TGS and imaged by Viridien and builds on Viridien’s existing Megabar survey coverage.The Barreirinhas Basin features proven petroleum systems and giant discoveries in adjacent Guyana and Suriname basins that demonstrate analogous deepwater plays.Recent licensing activity by IOCs along the equatorial margin, coupled with the success of Brazil’s 5th Cycle Permanent Concession Offer, supports growing momentum for the region.Megabar Extension Phase I will be acquired in a promising area with proven geological potential but no existing 3D data. TGS will deploy the purpose-built streamer vessel Ramform Tethys, equipped with its proprietary GeoStreamer technology, for high-quality 3D data acquisition. Acquisition is scheduled to commence in early September and conclude by late November.Imaging of the Megabar Extension survey will be conducted by Viridien’s Subsurface Imaging experts, leveraging their high-end proprietary time-lag full-waveform inversion (TL-FWI) and reverse time migration (RTM) imaging technologies to provide enhanced geological understanding.This will help to reveal new play potential, improve prospect evaluation and de-risk exploration. Initial imaging products are expected by the third quarter of 2026, and final data expected to be available in the first quarter of 2027.“We are pleased to commence this new Megabar Extension survey as part of our long-term commitment to unlocking high-potential frontier areas for new exploration opportunities in Brazil.2Megabar Extension will give our clients an unmatched early-mover advantage in a strategic area of the underexplored Barreirinhas Basin in one of South America’s most promising exploration plays.“With exclusive access to the first ultramodern 3D seismic data set in this area, explorers will be able to identify opportunities faster, make more confident decisions, and position themselves ahead of the competition for upcoming bid rounds,” said Sophie Zurquiyah, CEO of Viridien.
Venezuela rushes to mend Iran relationship as US sanctions loom
Iran and Venezuela are attempting to spot together an oil alliance that began to fray last year, according to six people acquainted with the matter, after the South American nation fell behind on oil swaps that had enhanced crude exports and assisted stem domestic fuel lacks.
The expected April return of U.S. sanctions on Venezuela's. oil market will make the Iran alliance vital to keeping its. lagging energy sector afloat. Washington in 2015 momentarily. unwinded sanctions on Venezuela's promise to permit a competitive. governmental election, something that has actually not occurred.
The scenario is growing alarming. An evaluation of shipping data and. documents from Venezuela's oil company PDVSA show that Venezuela. fell back in payments to Iran, a deficiency that intensified when. the U.S. started to release licenses in late 2022. Those. authorizations triggered the state firm to reassign freights. originally prepared for Iran to cash-paying customers.
To salvage the partnership, Venezuela is rushing to satisfy. terms of a three-year-old alliance that has actually involved numerous. countless dollars in oil swaps and contracts. The country is. attempting to settle pending financial obligation by speeding up shipments of. heavy crude and fuel freights to Iran.
Venezuela likewise is aiming to renegotiate lots of. unfinished tasks from agriculture to car manufacturing before. Iranian President Ebrahim Raisi gos to Caracas in the coming. months, individuals stated.
Two previous Iranian delegations that took a trip to Venezuela. considering that mid-2023 left without significant agreements announced, on. the guarantee that Venezuela would catch up on payments.
Regardless of coming across challenges, especially in regards to. payments by Venezuela, both nations stay undaunted in their. dedication to fortify their relationship and enhance their. energy partnership in the face of American pressure, said a. senior Iranian official.
Venezuela's oil minister Pedro Tellechea in February. acknowledged the scruffy relationship, stating PDVSA would. conduct its own upkeep for refineries and petrochemical. plants this year, something that was an essential part of the 20-year. deal with Iran.
We are completing the upkeep programs with our. workers, he said at a rundown at a fuel distribution plant in. main Carabobo state.
The home-grown work follows the completion of a. 110-million-euro overhaul by Iranian technicians at Venezuela's. tiniest refinery that was to be reproduced in 2015 at the. country's largest refining complex, Paraguana. That would have. generated much needed new processing equipment from Iran and. China to change aged, U.S.-made equipment.
Venezuela's and Iran's Foreign Affairs ministries and PDVSA. did not respond to requests for information on the status of the. relationship between the countries.
MONEY OVER OIL SWAPS
Minister Tellechea likewise stated last month PDVSA has actually found out to. handle U.S. sanctions and is much better prepared to deal with any. scenario with a stable of qualified workers and enhanced. functional facilities.
PDVSA's lack of vessels, frequent export terminal power. blackouts and poor-quality petroleum had left Venezuela struggling. to complete its side of the Iran deal at the planned pace. More recently, the easing of U.S. sanctions has actually progressively led. Caracas to prioritize selling its oil to other nations, cutting. into its swaps with Iran.
The initial contract from 2021 needed PDVSA to deliver. to Iranian state business at least 2 barrels of oil for each. one gotten. Iran last May stopped sending cargoes to. Venezuela, according to an evaluation of PDVSA's delivery documents,. after PDVSA fell behind. Caracas has given that dedicated to sending. at least one-cargo a month to Iran to minimize the deficiency.
Iran's supply of crude and condensate to Venezuela in between. 2022 and 2023 fell 44% to some 41,300 barrels each day (bpd),. while Venezuela's crude and fuel supply to Iran, which was. supposed to be two times as much as it received, fell a larger 56%. to 39,400 bpd, according to a evaluation of PDVSA's. files detailing cargoes from mid-2021 through February 2024.
The overall volume exchanges fell by half in 2015 as. Venezuela struggled to recuperate lost oil output, resolve quality. and facilities problems, and meet supply commitments with. all of its consumers.
Because the second half last year, PDVSA has actually slowly amortized. financial obligation by delivering one big cargo of heavy crude monthly. But. Iran has not resumed its supply, forcing the state company to. try to find other sources of oil including Russia, shipping data. and the PDVSA's documents revealed.
The Venezuela-Iran contract had likewise included providing. Iranian state-owned refiner NIORDC obligation for a revamp. of PDVSA's huge 955,000-barrel-per-day Paraguana Refining. Set to involve worker training in Iran, the building and construction. of temporary housing for Iranian technicians in Venezuela and. joint budget plan preparation for equipment imports.
But the task never ever progressed beyond the preliminary phases. as PDVSA's inadequate payment capacity and the deep. degeneration of infrastructure discovered in examinations developed new. barriers to conquer a currently weakened relationship. PDVSA is. now thinking about other companies, consisting of from Brazil, for. later on refinery repair work, leaving the planned NIORDC-led overhaul. in a drawer, two of the sources stated.
NIORDC did not comment on the matter.
COOPERATION CUT SHORT
The Iran-Venezuela pact projected approximately $25 billion in trade. and investment because 2022 in essential locations for both nations.
Despite the fact that leading officials have taken a trip in current months in. an effort to renew joint services, the worth of ongoing. organization represents less than $10 billion in total, one of the. sources stated.
We have actually wasted time, said another source, referring to an. audit in October showing a 168-day delay in essential jobs. including 18 companies that have yet to be completed.
The revisions that parties are now making from everything are. obligatory, the person said, referring to task inspections by. Iranian and venezuelan authorities and workers ahead of the. Iranian President's check out.
Everything related to Iran has faded. We just see companies. licensed by the U.S. to do organization in Venezuela. Some. imported spare parts are showing up, but they are American, a. refinery employee stated.
(source: Reuters)