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Northam CEO: Platinum miners are not safe despite recent price rise
Northam Platinum CEO Paul Dunne stated on Friday that the recent platinum price rally brought relief to South African miner, but it is still below the levels required to support new production. Northam announced a 14.4% decline in its annual profit Friday as mining costs rose despite record sales. The company reported headline earnings of $3.81 per share ($0.2169) for the year ending June 30 compared to $4.45 rand one year prior. Low metal prices have hit the earnings of platinum miners since early 2023. This is mainly because the demand for automotive parts has been weak and the outlook has dimmed due to the increasing electrification in transport. The platinum group metals used in autocatalysts help reduce harmful emissions from fossil fuel powered vehicles. South African miner, who account for over 70% of the global supply of platinum, responded by cutting loss-making production, and stopping projects. Platinum prices have risen recently. They will rise 36% by the second quarter 2025, mainly due to Chinese imports, and a decline in South African supply. Dunne, in a press release, said that recent price appreciation has brought some relief to the PGM industry. He added that the level of funding is not high enough to support the sustainable mining in the entire industry, and it certainly does not allow for the development of much-needed new operations. Dunne stated that tight PGM supply was likely to continue in the medium-term, and new demand for minor PGMs ruthenium is driven by data storage among other applications. Northam stated in its results that many South African Platinum Mines were undercapitalised, and had a short remaining mine life. This resulted in a shrinking of primary PGM supplies. "In 2008, 81 PGM shafts were in operation in South Africa. Northam stated that there are currently only 53 shafts in operation, and the number is expected continue to decrease. Impala Platinum CEO Nico Muller issued a warning on Thursday against "flooding" the market with more ounces, as the sector faces a serious threat despite the slower adoption of electric cars than expected.
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Shanghai locals try to beat the heat by indoor skiing
On Thursday, thousands of people in Shanghai flocked to the largest indoor ski resort in the world to escape the heat. The temperatures in the Chinese capital reached around 37 degrees Celsius. Shanghai L+SNOW Indoor Skiing Resort is a 98,000-square-metre (117207 square yard) indoor ski resort where temperatures are kept at or below 5degC all year. Tang Junqi spent a day with her mother. It was hot and felt like I was in a pot. The 10-year-old boy said, "But it feels like you're in a refrigerator inside." Shanghai experienced on Friday its 24th consecutive August day with temperatures above 35 degrees Celsius. This ties a record set in 1926. According to the Shanghai Meteorological Bureau, temperatures are expected to remain high for the remainder of the month. The city has declared an orange alert - the second highest level in its three-tiered heatwave warning system. Scientists claim that extreme weather is more likely to occur due to man-made climate changes, which are caused by carbon dioxide emissions. This is exacerbated by energy intensive activities such as maintaining indoor temperatures artificially low. Reporting by Xihao Jiang and Brenda Goh, editing by Barbara Lewis and Lincoln Feast.
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ASIA GOLD - Indian jewellers stockpile for the festive season; elsewhere, activity is muted
Jewellers in India stocked up on gold ahead of the holiday season. Activity elsewhere remained low. Indian dealers are charged a premium Up to $4 per ounce above official domestic prices. This includes 6% import duties and 3% sales taxes. Last week, the offers ranged from a discount of $2 to a premium of $3. A bullion dealer in Chennai said that "Jewelers had been sitting on the sidelines, but as prices refused to improve much, they have now started purchasing for the upcoming holiday season." This year, the Dussehra/Diwali festival, which is a time when buying gold is considered auspicious (and therefore a good sign), will be celebrated on October. On Friday, the domestic gold price was around 102,000 rupees for 10 grams, after reaching a record-high of 102,250 earlier in the month. Gold has been at 100,000 rupees now for three months, and the shoppers are slowly getting used to it. They're coming back to market," said a Mumbai bullion dealer from a private banking institution. Bullion was traded in China, the world's largest consumer of gold at a premium between $5 and $10 per ounce above the global benchmark spot rate . Last week, dealers were charging premiums between $3 to $8 per ounce. Bernard Sin, Regional Director of Greater China for MKS PAMP, said that the volume at Shanghai Gold Exchange was low, with little participation from retail investors and speculators. There has been little demand for gold in RMB. The price is still high, but there's no obvious catalyst to buy. "The absence of new import quotas further dampened the physical flows." Gold is available in Hong Kong and Singapore The price of the bullion was $2.50 higher or lower. In Japan, bullion According to a Tokyo-based dealer, the prices of swaps were equal to spot prices. We are seeing a greater number of clients come to sell. The buying has dropped significantly because the prices are so high.
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Wall St. lifts Asia shares as markets await US inflation figures
Asian stocks rose on Friday on the back of a tech-driven rally in Wall Street. Investors are now looking forward to the key U.S. Inflation reading that will be released later today for more clues about the Federal Reserve's interest rate outlook. The results from Nvidia, the artificial intelligence giant this week, fell short of expectations. However they confirmed that AI infrastructure expenditure remains strong. This helped to lift both Dow Jones Industrial Average and S&P 500 to record closes on Thursday. The Asian markets seized on the positive momentum of Friday, as MSCI’s broadest Asia-Pacific share index outside Japan rose by 0.26%. European and U.S. futures for stocks were mixed. Futures for the EUROSTOXX50 fell by 0.1%, while FTSE gained 0.06%. S&P futures fell 0.12%, while Nasdaq lost 0.21%. The headline revenue numbers for Nvidia don't suggest much of a decline in the AI story, despite the uncertainty surrounding China. "The expectations are already high," said Thomas Mathews of Capital Economics, who is the head of Asia-Pacific markets. The stock market in the U.S. will likely continue to do well if earnings don't change materially. The STAR 50 Index, which is a tech-focused index in China, fell 3% following a rise of over 7% the previous session. The shares of Chinese chip company Cambricon Technologies fell more than 7% on Thursday after the company issued a warning to investors via a stock market filing. It cited a steep rise in its stock price since late July. Frank Benzimra is the head of Asia equity strategies at Societe Generale. "For me, this is a normal way for the market to function, since we all know the market will undershoot to the downside, and overshoot to the upside." The CSI300 blue chip index rose 0.5%, while Hong Kong's Hang Seng Index grew 0.8%. Japan's Nikkei slipped 0.33%. WAITING ON PCE The focus of the market now shifts to the release of U.S. PCE Price Index data, the Fed's preferred inflation measure. Khoon Goh is the head of Asia Research at ANZ. There are three key pieces of information ahead of the FOMC meeting in September. The PCE is the first, followed by the payroll number the following week and the CPI. According to CME FedWatch, traders are now pricing in a 85% chance that rates will be cut in September. This is up from 63% one month ago. Fed Governor Christopher Waller said on Thursday that he plans to begin cutting interest rates in the next month. He "fully expects," more rate cuts to follow, to bring the Fed’s policy rate to a neutral level. On Friday, the expectation of an imminent Fed rate cut led to a dollar decline of 2% monthly against a basket currency. The euro last fell 0.16% to $1.1664, mainly due to political and fiscal concerns in France. Sterling, however, eased 0.09% at $1.3495 but was still set for a gain of over 2% in the month. Dollar also faced headwinds due to concerns about Fed independence, as President Donald Trump intensifies his campaign to exert greater influence over monetary policies. This includes his latest attempt at firing Fed Governor Lisa Cook. Cook filed a suit on Thursday, claiming that Trump does not have the power to remove Cook from her office. Brent crude futures fell 0.55% on Friday to $68.24 per barrel. U.S. crude dropped 0.6% to $64.21 a barrel. Spot gold fell 0.23%, to $3.408.78 per ounce.
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India increases its oil purchases from the US at competitive prices and narrows its trade deficit
Trade sources reported that Indian refiners increased their purchases of U.S. crude this month due to the competitive prices. This could help reduce the trade deficit between India and the United States, amid tensions. Indian Oil Corp., the country's largest refiner, purchased 5 million barrels U.S. West Texas Intermediate Crude for delivery between October and November through a tender. Other sources reported that Vitol had sold 2 million barrels to Reliance Industries, while Bharat Petroleum Corporation purchased 2 million from Vitol. Indian refiners and others in Asia increased their purchases following the arbitrage window The door for U.S. crude oil to Asia was opened. India has also been urged to purchase more U.S. crude oil following the United States Doubled its tariffs On Indian imports, New Delhi has increased its purchase of Russian oil. Sources said that Gunvor and Equinor, European traders, each sold 2,000,000 barrels, while Mercuria sold IOC 1,000,000 barrels. They added that BPCL also purchased its first Nigerian Utapate crude oil, as part of its expansion to include other grades in its crude diet. (Reporting and editing by Himani Sarkar, Stephen Coates and Siyi Liu in Singapore. Additional reporting by Florence Tan and Siyi Lu in New Delhi.
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Waiting for PCE to give rate clues
Rae Wee gives us a look at what the European and global markets will be like tomorrow. Investors end a volatile week that was dominated by Federal Reserve drama, Nvidia earnings and Nvidia's quarterly report with the release of an important inflation measure on Friday. This could have a significant impact on the Fed's policy meeting in September. The core price index for personal consumption expenditures, the Fed's preferred inflation measure, is expected to remain unchanged at 0.3% per month. This would put the annual rate of inflation at 2.9%. The data could reveal further evidence that President Donald Trump's tariffs are affecting consumer prices. This is in response to a recent surprise increase in producer inflation. Markets have priced in the Fed's 25 basis-point rate cut in September. However, what will happen after this is still uncertain. Fed Governor Christopher Waller announced on Thursday that he plans to begin cutting rates in the next month. He "fully expects," more rate reductions to follow, to bring the Fed’s policy rate to a neutral level. This is a step up to his call for lower short-term lending costs. The dollar fell by a full percentage point on Friday as the dollar was tipped to fall for the month. Worries about the central banks independence were also contributing factors, especially with Trump's campaign to influence monetary policy. Fed Governor Lisa Cook has filed a lawsuit claiming that Trump does not have the power to remove her after he announced on August 25, an unprecedented move, that he was going to fire her. The French and German preliminary inflation figures are due to be released later that day, ahead of the PCE. ECB accounts on Thursday showed that policymakers at the European Central Bank (ECB), who met in July, were divided over whether inflation would be higher or lower than they expected. This debate is likely to reach a boiling point in the next few months. Sources have said that the ECB kept rates at their current level in July and will likely do so again in August before discussing further rate cuts. This is especially true if European economies are affected by U.S. Tariffs. The following are key developments that may influence the markets on Friday. - U.S. PCE Price Index (July). German preliminary CPI for August France preliminary CPI for August
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NKT Installs Cables for TenneT’s BorWin5 Offshore Grid Connection
Danish power cable maker and services provider NKT has installed the HVDC power cable system for Tennet’s BorWin5 offshore grid connection in Germany.NKT said it completed the installation of the 320 kV HVDC system, completing the pull-in works to the offshore platform with its NKT Victoria cable laying vessel.In 2020, NKT secured a turnkey contract by TenneT to deliver and install a high-voltage DC XLPE power cable system for the BorWin5 project in Northern Germany.The order comprised the manufacturing of approximately 30 km of 320 kV high-voltage DC on-and offshore power cables and accessories as well as offshore installation.It will serve for the transmission of electrical energy between the 960 MW offshore wind farm He Dreiht operated by EnBW in the German North Sea and a grid connection point on land.BorWin5 is TenneT’s fourth offshore wind DC project off the coast of Borkum in northwestern Germany. It connects the offshore converter platform BorWin epsilon in the North Sea to the converter station in Garrel/Ost close to Cloppenburg in Lower Saxony.
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BlueScope Australia's appeal against civil cartel cases dismissed
The Australian Competition Regulator said that the appeals of steel producer BlueScope, and its former General Manager against an earlier ruling in a civil anti-cartel proceeding brought by BlueScope were dismissed by a court. The court confirmed its previous findings, that BlueScope's former general manager and BlueScope tried to convince distributors in Australia to enter into agreements containing price-fixing clauses between September 2013 and July 2014. In 2019, Australia's Competition regulator initiated civil cartel actions against the company, and its former employee. The alleged conduct was in the supply flat steel products. Australian Competition & Consumer Commission stated that the decision meant that a penalty for a breach of competition law of A$57.5m ($37.36m) against BlueScope and a fine of A$500,000 on the general manager would remain in effect. BlueScope said in a separate press release that it accepted the court's decision and brought the long-running matter to an end. By 0304 GMT, shares of the company had risen by 0.9%. The benchmark S&P/ASX 200 was mostly flat. $1 = 1.5389 Australian Dollars (Reporting and editing by Mrigank Dahniwala in Bengaluru)
Goldman, hedge funds step up activity in physical uranium as rates spike
Financial investment banks Goldman Sachs and Macquarie as well as some hedge funds are positioning themselves to reap the benefits of a recently resilient uranium sector as costs of the nuclear fuel ingredient spike.
While many other financial investment banks are still avoiding uranium, Goldman and Macquarie are improving trading in physical uranium and in Goldman's case trading its options as well, five market and hedge fund sources with knowledge of the deals stated.
The heightened activity comes as utilities seek brand-new supplies in the middle of deficiencies that have lifted rates to 16-year highs.
A couple of hedge funds are also stepping up participation in both equities and physical uranium, a sign that the metal is starting to widen its appeal to financial institutions after a decade in the doldrums following the Fukushima nuclear catastrophe.
With the headings and positive momentum in nuclear more typically, hedge funds and other product financiers are back in the (uranium) sector. A great deal of it is done through physical funds, the most convenient way to get direct exposure to uranium prices, said Bram Vanderelst at trading firm Curzon Uranium.
The metal has captured financiers' attention after costs folded the past year to $102 a pound as top producers Kazatomprom and Cameco cut Since resumed mines that had been, production guidance mothballed had a hard time to increase production to fulfill restored demand.
It likewise features the revival of nuclear energy to help nations cut their carbon emissions, which was highlighted in the December 2023 Group of Seven most industrialised nations' statement that visualized tripling nuclear energy capability from 2020 to 2050.
Goldman Sachs has started composing alternatives on physical uranium for hedge funds, the first time it has actually produced a. derivative for the metal.
Goldman has been increasing their exposure, they've been. increasing their book gradually, a source who dealt with the. bank said, declining to offer information of the transactions since. they are private.
Goldman is mostly dealing with financial customers like hedge. funds while Macquarie's primary focus is boosting trading and. marketing output from miners, another source who handled both. banks said, also decreasing to elaborate because the data is. personal.
All five sources talked to declined to be called. due to the fact that they did not wish to talk about openly personal trading. information.
Both banks declined to comment.
NUFCOR'S URANIUM INVENTORIES
Goldman has been involved in the uranium market because 2009,. when it purchased Nufcor, a London-based nuclear fuel trader.
5 years later, however, in the wake of Japan's Fukushima. nuclear plant catastrophe in 2011 when uranium prices plummeted,. Goldman intended to unload Nufcor, however was unable to find a buyer. and said it planned to unwind business.
Business never closed and Nufcor held $356 million worth. of uranium inventories at the end of 2022, the most current. regulative filings revealed.
That suffices uranium to sustain 17 big nuclear reactors for. a year, based on calculations and information from the World. Nuclear Association.
Investor purchasing of physical uranium by publicly-traded funds. and hedge funds represented almost 15 million pounds of uranium. oxide concentrate (U3O8), or about 26% of the total traded on. the area market in 2023, according to consultancy UxC.
This was down from 22 million pounds of investor purchasing in. 2022 as greater prices in 2023 indicated each dollar purchased less. pounds of uranium.
We have actually specifically seen large volumes bought by financiers. in 2021-2023, said Jonathan Hinze, president of UxC. See factbox.
U3O8 or yellowcake is a fine powder packaged in steel drums. that is produced when uranium ore is chemically processed.
While the greatest quantity of investor-held physical uranium. is by exchange-listed funds, a few hedge funds have actually been. investing in shares of uranium miners and other nuclear-related. firms for a number of years and are also now purchasing physical. uranium.
Sachem Cove Partners, a uranium-focused investment strategy. with about $250 million in properties under management, started. buying the sector in 2018 with equities and proxies for. physical uranium, like the Sprott Physical Uranium Trust .
It began buying physical uranium last year.
It offers us a look into both markets, the physical market. itself and the equity markets, said Mike Alkin, chief. investment officer.
(source: Reuters)