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Shanghai copper falls to a new low after Fed rate cut
Shanghai copper futures fell for the third consecutive session on Thursday after a 25 basis-point rate cut from the U.S. Federal Reserve, and a higher supply of the top consumer China. In line with expectations, the U.S. Central Bank cut its benchmark interest rate on Wednesday by a quarter-point. At its October and December meetings, the Fed indicated that it would also make further cuts. The traders closed long positions in order to take profits from bets on the rate drop. This wave of profit taking continued even after the rate decrease, which weighed on the prices of red metals used in construction and power. As of 0238 GMT, the most traded copper contract on Shanghai Futures Exchange fell below the psychologically important level of 80,000 Yuan ($11252.23) for a metric ton. The price was down by 1.05%, to 79.870 yuan per ton. Earlier in the session, the contract reached its lowest level since September 10, at 79.690 yuan. The benchmark three-month copper price on the London Metal Exchange fell 0.25% to $9,971.5 per tonne after hitting its lowest level in a week at $9925 on Wednesday. ANZ analysts also said that the higher metals production in China weighed on the sentiment in a recent note. China's refined output of copper in August increased 15% on an annual basis, reaching a near-record high level. SHFE aluminium fell by 1.05%. Nickel dropped by 0.29%. Tin declined 1.04%. Zinc shed 1.1%. Lead added 0.26%. Aluminium, nickel, lead, tin, and zinc all fell in the LME.
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Powell's comments and Fed meeting have led to a strengthening of the dollar, lowering gold.
Gold prices continued to decline on Thursday, while the dollar strengthened after the U.S. Federal Reserve, as anticipated, cut interest rates a quarter percentage point and used a measured tone on future policy easing. As of 0156 GMT spot gold fell 0.2%, to $3,654.29 an ounce. It had hit a record-high of $3,707.40 per ounce on Wednesday. U.S. Gold Futures for December Delivery fell 0.8% to $3.690. Edward Meir, Marex analyst, said that the Fed's general message was a little hawkish on interest rates. They didn't endorse lower rates with enthusiasm. "As a consequence, we saw the Dollar firm up after Fed meeting and Treasury rates also moved upwards... I believe that in the short-term, we may be a little overbought and could possibly retrace further to the $3600 mark. Gold is now more expensive for holders of other currencies due to the dollar's 0.2% rise. The Fed cut rates by 25 basis point on Wednesday, and said it would continue to lower borrowing costs throughout the remainder of this year. Fed Chair Jerome Powell described the policy as a risk management cut in response the weakening of the labour market. The central bank is currently in a situation where it has to "meet by meeting" in order to determine the future interest rate outlook. The SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings dropped 0.44% on Wednesday to 975.66 tons from 979.95 on Tuesday. The gold price has risen by 39% this year after a 27% increase in 2024. This is due to expectations of monetary policy ease by the Fed and lingering geopolitical conflicts, as well as strong central bank purchases. The price of palladium remained unchanged at $1,153.87. Platinum rose 0.4% to 1,366.75 per ounce and silver fell 0.3% to $41.53 an ounce. (Reporting and editing by Rashmi aich in Bengaluru, Brijesh patel from Bengaluru)
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Investors assess Fed's outlook after rate cut and are cautious about stocks, the dollar
The global stock markets rose on Thursday, after the Federal Reserve lowered interest rates. However, investors were cautious after the world's largest central bank indicated a measured approach towards further monetary policy ease. U.S. equity contracts advanced by 0.3% after an uneven session overnight on Wall Street. Shares in Korea and Taiwan, which opened around 0.7% higher, led the gains in Asia. Japan's Nikkei 225 tacked on 0.3%. The MSCI broadest Asia-Pacific share index outside Japan edged down 0.1% as the declines in Australian markets and New Zealand weighed on this benchmark. The global stock market fell on Wednesday, after reaching a record-high in response to the Fed's quarter-point rate cut. It also indicated that it would continue to lower borrowing costs throughout the remainder of the year. In his post-meeting remarks, Fed Chair Jerome Powell temperated the more aggressive expectations of easing in the markets. He said that Wednesday's action was a risk management cut, and the central bank did not have to act quickly on rates. ANZ analysts wrote in a report that the decision made and the tone of the press briefing were both balanced and restrained. They weren't at all dovish. Investors were sceptical about Powell's projections of higher inflation and stronger U.S. growth. These doubts fueled the U.S. trade overnight. The S&P 500, and Nasdaq Composite closed down. Only Stephen Miran, the new Fed Governor who joined on Tuesday, was against a 50-bp increase. The currency markets are also indecisive. After the rate announcement, the U.S. Dollar Index fell to its lowest level since February 2022. It was 96.224. However, it recovered to 97.074 to end the day higher. After a knee-jerk response to the Fed's announcement, the euro remained at $1.1821. It had previously reached its highest level since June 2021 of $1.19185. Sterling is flat at $1.3626 after briefly reaching its highest level since July 2, at $1.3726, on Wednesday. It is expected that the Bank of England will announce its own policy later on Thursday and keep rates at 4%. According to CME Group’s FedWatch tool, traders are pricing in an 87.7% probability of another 25 bp cut during the Fed's October meeting, up from a 74.3% likelihood a day before. Shane Oliver is the chief economist at AMP and head of investment strategies in Sydney. He said that while "the Fed continues to signal more rate cuts", it still expects a good growth. This is a combination which is positive for share markets. He added, "I think the gains are going to be limited as the markets already rallied in anticipation of Fed rate cuts and therefore they're due for a pause or a near-term corrective." Bank of Canada reduced its key rate on Wednesday by 25 basis points to a low of 2,5%, a level not seen in three years. This was the first time in six months that the Bank had cut the rate. The Bank said it would cut the rate again if the risks to the economy grew in the coming months. S&P/NZX50 dropped 0.6% in New Zealand after data revealed a worse than expected economic contraction for the second quarter. The kiwi currency fell 0.6% against the dollar. The Australian market did not fare much better. It fell 0.8%, led by a drop of up to 13.6% in the shares of gas producer Santos after a consortium headed by Abu Dhabi’s ADNOC canceled its $18,7 billion bid, claiming that commercial terms couldn't be agreed. The yield on the benchmark 10-year Treasury note rose to 4.0872% on the bond market from its U.S. closing of 4.076% Wednesday. The yield on the two-year bond, which increases with traders' expectation of higher Fed fund rates, increased a bit to 3.5552%. Gold prices increased 0.3%, to $3670.19 an ounce. This is a recovery from the dip that occurred after Wednesday's record high. Brent crude oil prices remained steady at $67.95 a barrel.
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Oil prices barely changed after Fed rate reduction
The oil prices were not much changed Thursday, after the U.S. Central Bank lowered its main interest rate. This was widely expected. However, an indication that more rate reductions will be made before the end of the year raised the possibility of a surge in demand due to falling borrowing costs. Brent crude futures fell 8 cents or 0.12% to $67.87 per barrel at 0042 GMT. U.S. West Texas Intermediate Futures were down by 10 cents or 0.16% at $63.95. Federal Reserve policymakers responded in part to the signs of weakness on the job market by cutting their policy rate by one quarter of a percent point. They also said they would continue to lower borrowing costs throughout the rest of this year. Low borrowing costs usually boost oil demand. Claudio Galimberti is the chief economist at Rystad and the global director of the market analysis. He said that the Fed's decision to continue cutting rates indicates the Fed believes the risk of inflation to the economy is higher than the risk of unemployment. "For Brent, in particular,... the cuts and the two expected to be made by the end of the calendar year will be a positive factor that will counter the negative OPEC+ strategy of unwinding," he added, referring the increased oil supply coming from the Organization of the Petroleum Exporting Countries (OPEC) and its allies. The Energy Information Administration reported that the U.S. crude stockpiles declined sharply on the demand side last week, as net imports plunged to a new record low, while exports rose to a nearly two-year high. The world's largest oil consumer was concerned about the demand for distillate, and prices were pushed up by a 4 million barrel increase in stockpiles, as opposed to 1 million barrels expected by the market. JP Morgan stated in a note to clients that the global average oil demand was 104.4 million barrels of crude per day through September 17. This represents an increase from last year of 0.520 million barrels. The demand for oil has been up by 0.8 million barrels per day (mpd) so far this year, which is just a little bit less than the 0.83 mbd that was projected by JP Morgan. JP Morgan stated that "While flight volume in the U.S., China, and Latin America is easing, as summer travel season ends, activity continues to grow in Europe, Middle East and Latin America." (Reporting and editing by Christopher Cushing; Katya Golubkova)
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Mariah Carey's floating concert brings star power to Amazon ahead of COP30
On Wednesday night, less than two months before Belem welcomes heads of state to the U.N. Climate Summit COP30 in the Brazilian city, pop star Mariah Carey performed with a cast local artists at a floating concert for the Amazon rainforest. The concert was part of the two-day "Amazon Live Today and Forever" event, organized by Rock World. The company that organizes the music festivals Rock in Rio and The Town. Carey, 56 years old, was able to captivate more than 70,000 Sao Paulo fans on Saturday when she appeared at The Town. Fans watched from another location as the singer performed on a stage that resembled an enormous waterlily floating on the Guama River for a half-hour on Wednesday. "We are here tonight to raise awareness about the protection of the rainforest." Let's start with something tropical," she said, before singing "Sugar Sweet", the first song of the evening. Carey made her sixth visit to Brazil after performing in Sao Paulo last year and Rio de Janeiro the previous year. The Amazon concert was broadcast on Brazilian TV, and it was preceded by a showcase of Amazon-born female performers. Belem, Brazil, will host COP30 in November. This event, the first U.N. Climate Summit to be held within the Amazon, will bring together business leaders, climate activists, and foreign leaders. (Reporting and writing by Wagner Santana, Fernando Cardoso, Jamie Freed).
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Three police officers killed, two injured in Pennsylvania; suspect shot
Officials said that three law enforcement officers died and two were critically injured in Pennsylvania, following a confrontation on Wednesday with a shooter who was fatally wounded by police. State police commissioner Colonel Christopher Paris stated that the shooting occurred in Codorus Township in York County, in the southeast part of Pennsylvania, as the officers returned to the site where they had previously conducted some police work. He told reporters hours later that "they were there to follow-up on an investigation which began yesterday." He refused to provide any further details, other than to describe the investigation as being "domestic." Three officers were killed and two other officers were injured by gunfire. They were transported to a hospital nearby, where their conditions were listed as critical but stable. One local media outlet claimed that the officers were trying to execute a search warrant at the time of the shooting. Paris reported that the police shot and killed the shooter. The shooter was not identified publicly and the authorities refused to reveal immediately which law enforcement agency the officers were from. Governor Josh Shapiro, who visited the hospital to pay his respects to fallen officers, stated, "This is a tragic and devastating event for York County as well as the Commonwealth of Pennsylvania." He asked for prayer for the families of those who died. He said: "It is important that you know how proud these families are of the loved ones who wore uniforms to keep us safe." Shapiro acknowledged that he received a phone call from U.S. attorney general Pam Bondi, who offered whatever federal assistance was needed. Reporting by Steve Gorman and Christian Martinez. Editing by Bhargav Asharya and Sam Holmes.
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Report says India's CO2 emissions from the power sector have fallen for the second time in four decades.
India's carbon emissions from the power sector decreased by 1% in the first half 2025, primarily due to the addition of clean energy and a lower demand for electricity, according to a report. This is only the second decline in almost 50 years. According to an analysis of Carbon Brief by the Centre for Research on Energy and Clean Air, the fall in electricity demand was primarily due to record additions of clean-energy capacity and unusually warm weather. The Helsinki-based think-tank attributed 65% to the decline in fossil-fuel generation, 20% to a faster expansion of clean-energy, and 15% to increased hydropower output. This analysis is based upon official data collected by different government agencies and ministries on fuel consumption, production of industrial goods and electricity generation. CREA reported that India added 25.1 gigawatts of non-fossil power in the period January-June, a 69% increase from the previous record. This is enough to produce nearly 50 terawatt-hours (TWh), annually. Hydropower production increased as a result of lower temperatures and rain between March and may, which was 42% higher than normal. CREA reported that fossil fuel generation dropped by 29TWh while total electricity generation increased by 9TWh. The growth in oil demand also slowed, which contributed to the overall emissions decline. However, steel and cement emissions rose dramatically due to government infrastructure spending. CREA stated that India's emissions from the power sector could reach a peak before 2030, if the clean energy growth continues and if demand stays within projections. CREA said that the sector had historically accounted half of India's growth in emissions. The country is looking at adding 500 GW of renewable energy by 2030. (Reporting and editing by Yagnoseni das, Sethuraman N R and Janane Venkatraman).
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Exxon suspends European plastic recycling plans due to draft EU regulations
ExxonMobil has halted 100 million euros (118.4 millions) in investment in European Plastic Recycling due to draft EU rules that define the recycled content of a final product. Two projects are being developed by the U.S. energy company to recycle chemicals at its existing plants in Rotterdam, and Antwerp. The project will process 80,000 tons of plastic waste annually. In an interview, Jack Williams, Senior Vice-President of ExxonMobil, said that the two projects were now halted due to the EU draft rules which he claimed discriminated against existing petrochemicals facilities versus standalone installations. "Everything is going according to plan." He said, "We've received local support." "We are interested in making these investments." "The only thing that stands between us and this project is EU Policy." A draft law is being considered to determine the amount of recycled material based on both the mass of waste entering the system and that of the output. ExxonMobil has stated that it favors simpler standalone technologies, where the path to production from plastic waste is more clear. It penalises complex integrated facilities which feed fossil feedstocks. Williams stated that based on the proposed law, the facilities of its company would receive less than half the credit due. A public consultation on the draft ended one month ago. Exxon shares the view of industry groups and companies including Finland's Neste. By 2030, the EU has set targets for plastic recycling. For example, plastic bottles must contain 30% recycled material. According to the industry, it is necessary to combine mechanical recycling which reprocesses plastic waste without altering its chemical structure with chemical recycling. This can be done by reducing complex plastics into their basic chemical components. Williams said that while U.S. tariffs on imports weren't a major problem for his company, EU regulations were. He specifically called on the EU to repeal Corporate Sustainability Due Diligence (CSDDD), which requires large companies to verify if their supply chain uses forced labour or causes environmental damage. Williams claimed that the rules were complex, expensive, bureaucratic and in some cases impossible to achieve. They also applied outside of the EU. The EU has already loosened the rules and delayed their implementation. (1 dollar = 0.8447 euro) (Reporting and editing by Ed Osmond, Philip Blenkinsop)
United States copper imports speed up in wake of CME squeeze: Andy Home
The May capture on the CME copper contract has passed but the influence on global flows of the red metal is still playing out. U.S. imports of copper have risen after traders capitalised on an unusual arbitrage window that opened between the CME and the London Metal Exchange (LME) agreements at the height of the squeeze on CME brief position holders.
The outcome has been a redistribution of worldwide exchange inventory with CME stocks reconstructing from depleted levels and both LME and Shanghai Futures Exchange (ShFE) stock falling.
It remains to be seen the length of time this global readjustment lasts but durable demand and domestic production restrictions have the potential to draw more metal into the United States.
CHILEAN EXPORTS REDIRECTED
The United States imported approximately 57,700 metric lots monthly of refined copper in the first half of 2024.
Incoming deliveries then jumped to 106,400 lots and 117,500 loads in July and August respectively, according to LSEG Group trade information.
The primary source of the additional metal was Chile. U.S. imports from the South American country sped up from an average 39,600 tons per month in January-June to 78,200 loads in July and 89,800 tons in August.
Certainly, the United States became the significant location for Chilean copper in the May-August period as deliveries to China dropped to an average 30,300 loads.
SHORTS COVERED?
A considerable part of Chile's shipments to the United States has been provided versus brief positions on the CME. The CME's limited series of good-delivery brand names was among the factors the May capture became so severe.
Chilean metal represent 18 of a total 57 deliverable copper brands on the U.S. exchange, surpassing the 13 domestically-produced brands.
An overall 76,440 tons of copper have gotten in CME warehouses in New Orleans given that the start of August, helping raise signed up stock to 74,824 tons from a July low of 8,117 heaps.
The liquidity increase has relaxed CME time-spreads after the extreme backwardations seen in the second quarter.
It's visible that while CME stocks have actually been increasing, those registered with both the LME and the ShFE have actually fallen.
However, worldwide exchange stock is broadly the same at an elevated 521,600 heaps, up 308,000 tons on the start of the year.
MORE TO COME?
CME copper stocks are by no ways one-way traffic, with the daily inflows being offset by a consistent stream of metal relocating the opposite instructions.
This talks to resilient demand in the United States even before the Federal Reserve's bumper rate cut trickles to the production sector.
Furthermore, domestic production is going to take a substantial knock due to geotechnical problems at one of country's biggest mines.
Production at the Bingham Canyon mine dropped 44%. year-on-year in the 3rd quarter due to movement in the walls. of what is the world's inmost open-pit copper mine. Rio Tinto, which owns the mine, cautioned that mined production. would be affected to the tune of 50,000 tons this year as feed. to the concentrator is supplemented with lower-grade ore. Mined. output will also be affected both next year and in 2026, albeit. to an as-yet unidentified extent, it said.
It may not just be CME copper shorts that need more U.S. imports in the months ahead.
The viewpoints expressed here are those of the author, a. writer .
(source: Reuters)