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Canada's First Quantum signs $1 billion gold streaming agreement with Royal Gold
First Quantum Minerals, a Canadian mining company, signed a streaming agreement worth $1 billion with Royal Gold's subsidiary. The two companies announced the agreement in a joint statement released on Tuesday. A gold streaming financing method is one in which the buyer pays an upfront amount to a mining company in exchange for future production. First Quantum, in the agreement, will receive an upfront payment of $1 billion from Royal Gold AG for gold deliveries based on copper production at First Quantum Kansanshi Mine in Zambia. The deal is expected to be finalized on Wednesday. First Quantum receives 20% of the spot price for every ounce delivered. This will increase to 35% in certain cases, such as achieving credit or leverage targets. Royal Gold says the agreement provides immediate cash flow on a large-scale, long-term asset. The company anticipates receiving about 12,500 ounces from the stream in this year, and on average 35,000-40,000 ounces per year over the next 10 years.
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Aurubis beats profit expectations despite earnings dip
Aurubis reported a core profit of $1.2 billion for the first nine-month period of its financial year 2024-2025, which exceeded market expectations. Contributions from copper products, sulfuric acid and precious metals helped to boost this figure. The largest copper producer in Europe reported that operating earnings before taxes (EBT) dropped to 286 millions euros ($330.44) during the first nine-months of its fiscal year from 333million euros a year ago. This was higher than the 281 million euro estimate of analysts in a poll provided by the company. Aurubis expects the contribution from sulfuric acids, copper products, and metals will continue throughout the remainder of the financial year. However, it is also expecting a continuing shortage of copper concentrates, and recycling materials. The Hamburg-based firm has narrowed their forecast for 2024-2025 and expects an operating EBT of between 330 and 370 millions euros, down from the previous range 300 to 400 million euro. Aurubis stated in a press release that it anticipated the result to be in the middle of the range. Aurubis has also narrowed the range of its operating return on capital used, a measure for analysing profit, from 7% to 11%.
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Oil drifts lower on rising supply, concerns about demand
Oil prices fell on Tuesday due to concerns about oversupply. OPEC+ increased production despite a weak outlook for demand. This more than offset the possibility of a tightening Russian oil trade as a result of U.S. policy. Brent crude futures fell 11 cents or 0.16% to $68.65 per barrel at 0424 GMT. U.S. West Texas Intermediate Crude was down 12 Cents, or 0.1%, to $66.17 per barrel. Both contracts fell more than 1% the previous session, settling at their lowest level in a week. Both benchmarks have declined because the extra capacity of OPEC+ acts as a buffer to any deficiencies in Russian barrels. This is according to Priyanka Sackdeva, a Phillip Nova senior analyst. The Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed to increase oil production in September by 547,000 barrels a day. Analysts caution that the actual amount returned to the market may be lower. Analysts are concerned about the demand side of things, and some predict a slowdown in economic growth for the second half. Analysts at JPMorgan said that the risk of an American recession is high, as the labour demand has stagnated. The analysts noted that the July Politburo Meeting in China signaled no further policy easing, with the focus now shifting to structural rebalancing. Oil prices are now being driven by concerns about possible disruptions in supply, not the weakening of economic fundamentals. Donald Trump, the U.S. president, has stated that he may impose secondary tariffs of 100% on Russian crude purchasers such as India. This comes after Trump announced a 25% tariff in July on Indian imports. Trump threatened to increase tariffs again on Monday over Russian oil purchases. New Delhi branded his attack as "unjustified," and pledged to protect its own economic interests. This further exacerbated the trade gap between the two nations. India is the largest buyer of Russian crude oil by sea. It imported about 1.75 million barrels per day (bpd) from January to June, an increase of 1% compared to a year earlier, according to trade sources. Analysts fear that the latest U.S. trade tariffs could dampen demand for fuel and slow down economic growth. (Reporting from Anjana Anil, Bengaluru; Siyi Liu, Singapore; editing by Christian Schmollinger & Jamie Freed).
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Heerema Installs Substation at Inch Cape Offshore Wind Farm
The Inch Cape Offshore Wind Farm offshore jacket foundation and substation platform have been installed at the North Sea site of the 1.1 GW Scottish project.The Siemens Energy Offshore Transformer Module (OTM) and its 68-meter jacket foundation are now in position 21 kilometers from the Angus coast having been installed by Heerema Marine Contractors (HMC) semi-submersible crane vessel Sleipnir.The compact 2700-tonne platform comprises two circuits with two transformers and reactors, making it Siemens Energy’s first ever double OTM.The modular fabrication, which enables offshore wind platforms to be smaller and lighter than conventional alternating current designs, has now been in use for 10 years.A team of more than 250 at the Smulders yard in Newcastle, fitted out and assembled both the OTM and its jacket foundation over the past approximately 18 months. Around 80 local U.K. sub-contractors supported the project with work that included lifting, scaffolding, engineering and coating.Owned in a 50-50 equal joint venture by ESB and Red Rock Renewables, Inch Cape, is the largest offshore wind farm now in construction in Scotland. Once complete it will generate almost 5 terawatt hours (TWh) of energy each year or enough to power half the homes in Scotland.“This has been an impressive team effort by Siemens Energy, Smulders, Heerema and the myriad smaller contractors who contributed to ensuring the safe and efficient fabrication and installation of these major Inch Cape components,” said John Hill, Inch Cape Project Director.Inch Cape Offshore Wind Farm is owned by Inch Cape Offshore Wind, an equal joint venture between ESB and Red Rock Renewables.Construction of the project’s onshore substation and landfall works in Cockenzie, East Lothian, are well advanced and the next key offshore activity will be the installation of the first of two export cables, scheduled for late summer this year.First power is expected in late-2026 and with commercial operation date in 2027.
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Toyota and Honda prepare for profit drops as US tariffs and strong yen weigh
Toyota Motor and Honda Motor will report lower first-quarter earnings in the coming week as U.S. tariffs on imports and a stronger Japanese yen impact profits, despite strong demand for hybrids from their largest overseas markets. Japanese automakers are facing increasing uncertainty in the U.S. where tariffs on imported vehicles are driving up vehicle prices, and testing consumer demand. Investors are looking for clues as to how Japan's largest automakers will offset such burdens. According to the average forecast of seven analysts surveyed by LSEG, Toyota, the top selling automaker in the world, will post a 31% drop year-on-year in operating profit on Thursday. This would amount to 902 billion yen ($6.14 billion). This would be its worst quarterly result in over two years. Honda will report its second consecutive quarterly decline of 36% in operating profit, to 311.7 billion Japanese yen. The automaker had already predicted a 59% drop in its full-year profits. Following a bilateral agreement last month, both companies are now facing 15% tariffs on Japanese imports of autos to the U.S. The same tariffs and stronger currency have caused other Japanese automakers to report lower earnings. Christopher Richter, an autos analyst with CLSA, said that the first quarter will be tough for Toyota. He said that things should improve in the future, thanks to lower tariffs. Honda's dependence on the U.S., in particular, has grown in recent years due to the decline in sales in other areas. Both companies manufacture key models for the U.S. markets in Canada and Mexico. Honda's U.S. sales accounted for about two-fifths in the first six months of the year. The company's sales worldwide fell by 5% during the period. This was mainly due to double-digit drops in China, Asia, and Europe. Toyota's sales worldwide rose by 6% during the period, largely due to the strong demand for hybrid petrol-electric cars that typically have higher margins than traditional petrol cars. The Camry and Sienna Hybrids are still strong sellers in the U.S. In recent months, the company's performance in China has improved. It posted a 7% increase year-on year in vehicle sales in the first half year. Honda announced in May it would scale back its investments in electric vehicles due to a slowing market and focus on hybrids, with several redesigned models. The company had delayed its plans to establish an EV base in Canada because of the slowing demand for electric vehicles. Investors are looking forward to updates on pricing strategies and revisions of full-year forecasts from both companies. CLSA's Richter stated that the Japanese automakers are taking steps such as transfer prices to reduce the import tariff burden. Toyota shares are down 16% this year so far, while Honda's are flat.
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Gold prices rise for a fourth session, as US job data boosts Fed rate-cut bets
Gold edged higher on Tuesday for a 4th session, supported by a weaker dollar and lower Treasury yields. Weaker-than-expected U.S. job data boosted expectations of a September rate cut. As of 0239 GMT, spot gold rose 0.1% to $3375.89 an ounce. U.S. Gold Futures gained 0.1%, reaching $3,430.40. Dollar index was near its lowest level in a week, making gold more accessible to holders of currencies other than the dollar. The yield on 10-year Treasury notes, the benchmark note, fell to a new low. OANDA Senior Market Analyst Kelvin Wong stated that "short-term momentum for the bullish story has improved...fundamental message supporting gold prices is the Fed's continued intention to cut rates in September." U.S. Employment growth in July was lower than expected, and non-farm payroll numbers for May & June were revised downward by 258,000 jobs. This suggests a worsening of labor market conditions. CME FedWatch shows that traders now expect a rate cut in September. Mary Daly, San Francisco Fed Bank president, said that rate cuts are imminent given the mounting evidence of a softening U.S. labor market and the lack of persistent inflation due to tariffs. In an environment of low interest rates, gold, which is traditionally viewed as a safe haven during times of political and economic uncertainty, tends thrive. Donald Trump threatened again on Monday, on the trade front to increase tariffs on Indian products over its Russian oil purchase. New Delhi called Trump's remarks "unjustified," and pledged to protect its own economic interests. This further exacerbated the trade gap between the two nations. Gold still faces technical resistance. "I do not believe traders will push up above $3,450. OANDA's Wong stated that the gold price will not rise above this level unless there is a clear catalyst. The price of palladium rose by 0.2%, while platinum was up 0.1% at $1,330.31. (Reporting and editing by Sumana Nandy, Sonia Cheema, and Brijesh Pate in Bengaluru)
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Iron ore continues to gain on China's resilient demand
Iron ore futures rose for the third consecutive session on Tuesday. This was aided by a resilient short-term demand from China, a major consumer. However, expectations of a possible steel production limit ahead of Beijing’s main event limited gains. As of 2100 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.38% higher. It was 792 yuan (US$110.33) per metric ton. The benchmark iron ore for September on the Singapore Exchange rose 0.3% to $101.5 per ton. Analysts at Shengda Futures, a broker, said that iron ore fundamentals remained strong due to a firm demand. This supported the price of this key ingredient in steelmaking. Since April, the average daily hot metal production, which is a measure of iron ore consumption, has hovered around 2.4 millions tons, even during off-peak season in July and August, when output usually contracts. According to data from the consultancy Mysteel, the production would drop to 2,21 million tons at the end of August 2024. Analysts at ANZ noted that iron ore prices were also supported by the "hope" that efforts to address overcapacity problems in China's Steel Industry would ultimately improve demand. Price gains were however limited due to the prospect of a possible restriction on steel production for the September 3, Beijing ceremony commemorating the 80th Anniversary of the End of World War Two. Chinese steelmakers, particularly those in the north, often restrict production in advance of major events in order to maintain air quality in Beijing. This could lead to a decrease in demand for raw materials such as iron ore and a rise in prices. Coking coal and coke, which are used to make steel, have both gained in value, up by 2.31% each and 0.47% respectively. The benchmarks for steel on the Shanghai Futures Exchange have advanced. The Shanghai Futures Exchange saw a rise in steel benchmarks. ($1 = 7.1782 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
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Hong Kong issues its highest weather warning as rains close schools, courts, and hospital wards
Hong Kong's Weather Bureau said that its highest "black", or rainstorm, warning would remain in effect until 11 am on Tuesday. Heavy rains pounded the Asian financial center, forcing the closure of hospital wards and schools as well as the courts and register office. These storms come after deadly flash floods that occurred in Southern China at the weekend. Five people were killed in Guangdong Province and over 1,300 rescuers took part in a massive search. "Persistent rainfall will lead to serious flooding of roads and traffic congestion." The Hong Kong Observatory issued a warning on its website advising the public to seek shelter in a secure place. China's weather agency reported that between 6 a.m. and 6:59 am, 9,837 lightning strikes were recorded over Hong Kong. The city and nearby Chinese city Guangzhou are receiving 60-90mm of rain per hour. Hong Kong receives 2,220mm in average annual rainfall. More than half usually falls between June and August. Hong Kong Stock Exchange is open for business, after changing its policy late last year to allow trading in all weather conditions. Hong Kong's Hospital Authority announced that emergency and accident wards would remain open. However, general outpatient clinics as well as geriatrics and psychiatrics day hospitals will be closed due to extreme weather. In a press release, the judiciary stated that the courts, tribunals, and register offices will open "as quickly as possible within two hours of the cancellation of the 'black rainstorm' warning." Post office announced that it would suspend all of its services and premises until the storm warning has passed. Airports in the city have not reported any disruptions. Hong Kong Disneyland is still open with limited services.
India's robust LNG imports are Asia's standout, however greater prices may weigh: Russell
Asia's imports of melted gas (LNG) are displaying contrasting characteristics in May, with strength in generally pricesensitive buyers like India, but a softer pattern in the established economies such as Japan and South Korea.
The top-importing continent is on track to receive about 23.61 million metric lots of the super-chilled fuel this month, according to information assembled by commodity experts Kpler.
This is up slightly from April's 23.23 million loads, although every day May's arrivals are a touch weaker, while they are more powerful than the 20.75 million from May 2023.
However while the total LNG import figures are relatively steady for Asia this month, the breakdown is rather at chances with recent movements in the area price.
India's May imports are estimated at 2.46 million heaps, up from 2.03 million in April and the greatest month considering that October 2020.
The rise in arrivals comes even as the area rate for delivery to North Asia << LNG-AS > has been rallying, rising from a. near three-year low of $8.30 per million British thermal units. ( mmBtu) in the week to Feb. 23 to a five-month high of $12.30. last week.
What deserves noting is that the cargoes arriving in India. in May would have been secured in a window from later February. to early April, a time when spot rates were increasing but were. still listed below the $10 per mmBtu level.
Now that the area cost has risen decisively above that. level, it raises the possibility that Indian utilities will. downsize purchases as LNG will no longer be competitive in the. domestic market.
There may be some early signs of this with Kpler tracking. 1.13 million tons of arrivals so far in June, over half of. that originating from the United States, suggesting those cargoes would. have been protected at costs before the recent rise.
Another South Asian purchaser with robust LNG imports is. Pakistan, with Kpler tracking arrivals of 730,000 loads in May,. which along with the exact same volume in January marks the strongest. outcome since June 2022.
Qatar is the major provider to both India and Pakistan and. it's likely that the South Asian nations had the ability to secure. competitive terms for area freights offered the Gulf manufacturer is. likely to have seen lower need from Europe in current months.
LNG vessels have been preventing the Red Sea and Suez Canal. since of attacks on shipping by Yemen's Iran-aligned Houthi. group, despite the fact that up until now no LNG carrier has actually been targeted.
This suggests Qatar's LNG deliveries to Europe have actually been. declining, dropping to 870,000 tons in May, the lowest since. August and below a recent peak of 1.23 million tons in. January.
But they may be recovering with Kpler tracking exports of. 1.02 million lots of LNG to Europe so far for June, and an. ongoing healing in volumes to Europe may cut those readily available at. discount rates to India and Pakistan.
NORTH ASIA EASES
In contrast to the strength in LNG imports in South Asia,. those in North Asia were softer in May.
China, the world's top purchaser, is on track to receive 5.96. million loads in May, below 6.47 million in April and the. least expensive regular monthly overall given that February, according to Kpler.
Nevertheless, China's imports are most likely to surpass the 5.80. million lots from May in 2015, continuing the pattern so far. this year of greater LNG arrivals amid a recovering economy and. constrained hydropower output.
Japan, the world's second-biggest LNG buyer, is expected to. import 4.83 million tons in May, below 5.36 million in. April, however greater than the 4.13 million from May in 2015.
Third-ranked South Korea is on track for May imports of 3.45. million loads, down from 3.99 million in April but greater than. the 3.19 million from May last year.
The general dynamic for the big three North Asian importers. is that arrivals are trending lower, in line with usual seasonal. relocations, however imports are higher on a yearly basis, which does. supply fundamental assistance for the higher area price.
Nevertheless, the recent spike higher in area prices may start to. weaken imports in South Asia from July onwards, in addition to in. China, where an increase above $10 per mmBtu makes it hard for. LNG to compete in the domestic market.
The opinions revealed here are those of the author, a writer. .
(source: Reuters)