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Sources: China smelter company decides to not set Q3 copper fee guidance
Sources said that China's leading copper smelters chose not to set guidance for an important copper processing charge during the third quarter. This is the second time they have done this in a row, as the industry struggles with a tight supply of concentrate. Four sources who had knowledge of the issue but were not authorized to speak to the media said that the decision was taken at a meeting on Friday of the China Smelters Purchase Team. The CSPT is a group made up of China's sixteen largest smelters, who are expected to follow the guidelines in spot copper concentrat deals. The decision reflects an exceptional tightness on the copper market. The fight to obtain ore has reverted the standard commercial logic, leading to a situation in which spot fees are in negative territory since December last year. This means that smelters are paying miners for the ore they process, instead of doing it the other way round. Chinese smelters reached an agreement with Antofagasta, a Chilean miner, to pay $0 per metric tonne and 0 cents a pound for treatment and processing. The negotiations took place at the mid-year point last month. Smelters saw the agreement to process concentrate at no cost as a victory. (Reporting and editing by Christian Schmollinger, Muralikumar Anantharaman and Amy Lv)
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As Australia's PM Albanese travels to China, he will be focusing on security and trade.
On Saturday, Australian Prime Minister Anthony Albanese will depart for Shanghai in an official visit to China. Regional security tensions as well as efforts to increase economic ties is likely to dominate the talks. Albanese is traveling with Rio Tinto executives, BHP executives, and Fortescue executives to hold business events over six days in three different cities. Albanese, a reporter on Friday, said: "The relationship with China means jobs for Australia. It's that simple." Albanese will make his second trip to Beijing where he'll meet President Xi Jinping. This visit comes after Canberra increased screening of Chinese investments in minerals that are critical and while U.S. president Donald Trump is roiling the global economy by imposing sweeping import tariffs. Albanese has yet to meet Trump after the scheduled G7 talks were cancelled because the U.S. President left early. The United States is Australia's main security ally. Nuclear submarine partnership amid concerns that selling submarines in Australia could weaken U.S. military deterrence against China In a speech delivered in Malaysia on Friday, Foreign Minister Penny Wong said that China's nuclear and conventional militarism was "worrying", with the aim of changing the regional balance of power. AUKUS, she stated, contributed to "collective dissuasion in our region." Richard Maude (a non-resident fellow at the Asia Society and a former Australian intelligence chief) said Albanese had to not only expand Australia's economic relationship with China, but also "make it clear to Australia's closest partners and the Australian public, that Australia is speaking clearly and honestly to China about aspects that are concerning us". In February, the Chinese navy conducted live-fire drills in the Tasman Sea in between Australia and New Zealand without any advance warning. There have also been tensions between Australian and Chinese aircraft in the disputed South China Sea. Maude, the author of Australia's 2017 white paper on foreign policy, says that while Beijing is eager to advance ties, its proposals on cooperation in artificial intelligence have already been met with a cold response. Australia's bilateral trade with China accounted for A$312billion last year. This is a quarter of the total Australian trade. Since 2020, when China banned A$20 billion of Australian exports in an unofficial manner, the relationship has stabilised. Albanese, a reporter on Friday, said that direct engagement with Chinese leaders is important for Australia's safety. He said: "We work together where we can, and disagree when we have to. We are able to hold honest discussions about the differences that exist." Jim Chalmers, Treasurer of Canada, has stated that economic ties to China are not only a priority but also a complex issue. Beijing is likely to raise Australia's increased scrutiny of Chinese investments in minerals, renewable energy, and key infrastructure, according to company executives, even though Chalmers stated on Tuesday that Australia would not reduce its scrutiny. Maude said, "The Government understands that it is not in Australia’s national interest for China to further stranglehold the crucial minerals supply chain", Geoff Raby is a former Australian Ambassador to China. He said that China will probably increase its ambitions to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which Australia leads. Raby stated that the most dangerous thing to do is to adopt policies which force China to become even more isolated or encourage domestic forces within China to favour policies more inward looking. Albanese is scheduled to meet with businesses in Shanghai, then travel to Beijing to participate in the annual leaders' dialog with Premier Li Qiang and to host a roundtable of companies. She will also visit Chengdu, a city located southwest of China. (Reporting and editing by Kate Mayberry in Sydney)
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Australian rare earth stock soars on MP Materials' multibillion US dollar deal
The shares of Australian rare-earths miners including Lynas, Iluka Resources and MP Materials, which is based in the United States, surged on Friday following a multi-billion dollar deal between MP Materials and the U.S. Government to increase production of rare-earth magnets. Lynas Rare Earths - the largest rare earths producer in the world outside China - surged up to 20%, reaching its highest level since mid August 2022. It was on track for its best day ever since April 2020. Iluka's intraday gains were the highest ever, with a 27% increase. As of 0558 GMT, the stocks were the biggest gainers in the benchmark ASX 200, which was also on the rise. The U.S. Department of Defense's (DoD) deal with MP Materials has lifted the mood for Australian rare-earth firms. The deal comes after China placed restrictions on rare Earths last month, which led to a 75% decline in rare earth magnets exported from the country and forced some auto manufacturers to suspend production. Rare earths are 17 metals that can be used to produce magnets, which are essential in the production of cars, electric vehicles, auto parts, electronics, and weapons. The DoD, as part of this deal, will become the largest shareholder of MP Materials, and guarantee that the two most common rare earths are priced at $110 per kilo, almost double the current market price in China. This signals a strong U.S. effort to achieve rare earth magnet autonomy, which increases the upside risk for rare earth prices. Jefferies noted that Lynas appeared to be the next logical recipient of government market assistance. We see the resetting the pricing metrics of rare earths as providing material upside potential for Lynas earnings in the short term, and an increased possibility for de-risking its growth projects through government entity funding. The brokerage raised its price target from A$6.40 to A$10 per share, and upgraded Lynas from "underperform". Lynas's last price was A$9.67. Sayona Mining, a smaller lithium player, and Liontown Resources both saw their shares rise by 2.8% and 1.6% respectively. (Reporting and editing by Sonia Cheema in Bengaluru, with John Biju reporting from Bengaluru)
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ASIA GOLD-Demand is sluggish as volatility in prices affect sentiment
The demand for physical gold was sluggish across the major Asian markets this week as volatility in prices weighed on sentiment. Premiums in China remained firm, while discounts in India were narrowing. Dealers in the top consumer China have charged premiums between $10 and $25 per ounce above the global benchmark spot rate, compared to premiums between $4.2-$33 from last week. On Wednesday, spot gold dropped to its lowest levels in more than a week, dropping below the $3300 mark. It then recovered to trade at $3335 by 0520 GMT Friday. In recent days, U.S. president Donald Trump has expanded his trade war, announcing levies against several countries that will take effect August 1. Hugo Pascal said that this uncertainty failed to spark a renewed interest for gold purchases in China during the week. China's central banks issued new anti-money-laundering and counter-terrorism funding regulations that target precious metals and gem dealers, according to the state news agency Xinhua. A precious metals trader based in mainland China said that "this regulation" will kill some potential onshore demand. He added that gold demand could only increase when prices reach $3,000 to $3,100. Meanwhile, Indian dealers' discounts The price of gold has dropped to as low as $8 per ounce, including 6% import duties and 3% sales taxes, down from $14 last week. A Mumbai-based bullion seller with a private banking firm said that discounts are slowly narrowing because of limited supplies. Imports were low between May and June, and scrap is also scarce. The price of domestic gold per 10 grams was around 97.300 rupees (1,133.57 dollars) on Friday, after reaching an all-time high of 101.078 rupees in the previous month. During the monsoon period, which spans from June to September, gold demand in India is usually subdued. In Hong Kong, gold In Singapore, the price was $1.50 higher than in Singapore. Gold traded at par prices with a $2.20 price premium. In Japan, bullion The premium was $0.50. (85.8350 Indian Rupees = $1)
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Russia claims that Ukraine drone strikes target Moscow and kill a Russian in the southwest
Russian authorities confirmed that overnight Ukraine drone attacks killed one person, damaged an agricultural enterprise and targeted Moscow, as well as scores of other Russian regions. The Russian defence ministry announced on Telegram that Russian air defences shot down 155 Ukrainian drones from 11 pm on Thursday (2000 GMT) to 7 am on Friday. Of these, 11 were headed for Moscow. Russia's aviation agency Rosaviatsia announced late Thursday that three of the four airports servicing the Russian capital, Domodedovo Vnukovo Zhukovsky temporarily suspended their operations, but they later resumed. Igor Artamonov, the regional governor, said that a drone crashed into the Lipetsk agricultural enterprise, causing a fire to flare up and killing one and injuring two others. The Russian Defence Ministry reported that their air defence systems had destroyed four drones in the Lipetsk Region, which is located in Russia's south-west. The Russian defence ministry reports only the number of drones its units destroy and not how many Ukraine launched. The ministry said that the majority of drones destroyed overnight were over Russian bordering regions: Kursk Belgorod Bryansk. The reports could not be independently verified. Ukraine has not yet responded. Kyiv claims its attacks on Russia's territory are meant to destroy infrastructure that is key to Moscow’s war effort and are a response to Russia’s continuous strikes on Ukraine during the war. (Reporting and Writing by Ron Popeski, Lidia Kelly, Editing by Andrew Heavens Cynthia Osterman, Saad Sayeed).
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MORNING BID EUROPE - New tariff drama shakes complacent markets
Stella Qiu gives us a look at what the future holds for European and global markets. On Friday, the markets were jolted from what appeared to be a dull day in summer when U.S. president Donald Trump went on TV to inject new drama into his simmering wars of trade and to disrupt Wall Street's recent upward trend to record highs. Trump stated that tariff letters would be sent to Canada and Europe "today or tomorrow". He also floated the idea of increasing the tariff rate for other countries who do not receive a tariff letter from 10% to 15% or 20%. He posted his letter to Canada in social media shortly after, stating that from August 1, a 35% duty rate would be applied to all Canadian products. The market nerves were calmed slightly when an official from the administration clarified that goods covered by United States-Mexico Canada Agreement would be excluded. Wall Street futures fell 0.8%, and EUROSTOXX futures fell 0.7%. Last, they were down around 0.3%. The currency markets were also roiled, but once the dust settled the dollar had gained 0.3% against the loonie, and the euro was down 0.2%. As the chances of a U.S. - Japan trade agreement dim, so has the yen. The dollar rose 0.6% to 147.12yen on Friday, and is heading for the largest weekly gain this year of 1.7%. The yen has fallen for the seventh consecutive week against the euro, and is at a five-month high against the Australian dollar. Investors suspect that trade talks aren't going well between the EU and Trump, now that Trump has said the EU too will receive a letter. EU officials said they hoped to reach a deal by August 1. Investors will be focusing on the second-quarter U.S. earnings report next week in order to assess the impact of Trump’s tariffs. Fast Retailing, the owner of Uniqlo, has warned that tariffs could have a major impact on its U.S. operations later this year. It plans to increase prices to cushion the blow. Tokyo's stock market saw a drop of almost 7%. The following are key developments that may influence the markets on Friday. UK May monthly GDP Canadian Employment Statistics for June Eurozone Final CPI for June Possible Trump letter to the EU on tariffs
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Lloyd's Register Study Identifies Hidden Fatigue Risks in Offshore Wind Tech
Some offshore wind turbine (OWT) support structures may fall short of required fatigue life expectations, according to a new Lloyd’s Register (LR) report, which also pinpointed reliability-based inspection as one of the measures to manage fatigue-driven risks in such structures.The case study evaluated a North Atlantic offshore wind farm of 60–70 turbines, with the combined 500 - 600 MW capacity.Offshore wind turbines are typically designed for 25 years of service, using a fatigue design factor of three, implying a minimum required fatigue life of 75 years.However, the study found that a critical joint in the jacket foundation would reach the end of its fatigue life after just 52 years, falling short of this design requirement.Instead of redesigning the joint, the study took a reliability-based inspection (RBI) approach to identify and mitigate potential failure through targeted, risk-based maintenance.The study combined a S-N (Stress vs. Number of cycles) model, to estimate when structural safety drops below acceptable thresholds, with Fracture Mechanics (FM) crack growth analysis, to predict the probability of failure over time and inform inspection intervals.This approach incorporates inspection results via Probability of Detection (PoD) curves to allow inspection schedules to be dynamically updated, responding to real-world conditions and inspection findings.The results suggest that the first inspection should be carried out around year nine. After that, depending on the inspection method, further inspections might be needed every year to maintain acceptable safety margins.Advanced Inspection Techniques Offer Greater ReliabilityHowever, the case study highlights the limitations of current inspection methods. Visual and ultrasonic inspections were found to be less effective for fatigue-critical components.More advanced techniques, such as Eddy Current or ACFM, offer greater reliability and allow for longer inspection intervals, but only when operators were willing to adopt slightly lower safety thresholds.While RBI planning is effective in reducing in-service life costs and ensuring the longevity and safety for OWT structures, it requires expert input, reliable models, and software tools that can handle complex calculations.Ongoing research aims to refine the models and address the challenges during their application. Reliability updating, especially when integrating PoD curves, requires complex modelling and precise calibration of parameters such as initial crack size and stress intensity factors, areas often underdeveloped in practice.The study calls for wider industry collaboration to refine inspection standards, share real-time monitoring data to refine fatigue predictions, and adopt more flexible definitions of acceptable reliability where appropriate.“Many offshore wind assets are designed to a standard fatigue factor, but real-world conditions often expose critical vulnerabilities. Our findings show that using reliability-based methods allows operators to focus inspections where the risks are greatest.“By integrating sophisticated models and real-world inspection data, we can extend asset life, reduce costs and, most importantly, maintain safety,” said Kourosh Parsa, Global Head of Technology - Offshore and Subsea, LR. “By focusing on the areas with the greatest risk, we can not only help to manage fatigue-related issues more effectively, we’re also enabling developers and operators to make better-informed decisions that optimize asset life and performance.“This proactive, risk-based approach is exactly how we support our clients in navigating complexity, controlling costs, and ensuring the long-term viability of their offshore wind investments,” added Manuel Ruiz, Head of Offshore Renewable Solutions, LR.
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Officials claim that armed men have kidnapped and killed nine bus passengers in Pakistan.
Officials said that nine passengers were killed by armed men after they kidnapped them in Pakistan's southwest Balochistan Province. Shahid Rind, spokesman for the provincial government, confirmed that passengers were kidnapped on multiple buses Thursday evening. Naveed alam, a government official, said that bodies with bullet injuries were found overnight in the mountains. No one has taken responsibility. In the past, separatist Baloch militants were involved in similar incidents. They killed passengers who they identified as being from eastern Punjab. The Baloch Liberation Army (BLA) is one of the most powerful insurgents operating in a mineral rich region bordering Afghanistan and Iran. The Baloch militants accuse the authorities of Pakistan of stealing resources from their region to finance spending in Punjab Province.
As markets digest US tariffs, copper prices are on the rise
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw copper prices range-bound on Friday. After an initial shock from the U.S. announcement that a 50% tariff on imports would be effective on August 1, the market was waiting for more details. As of 0101 GMT, the LME's three-month copper was down by 0.18%, at $9,683.5 a metric ton. The contract is down 1.73% this week and could be heading for a second consecutive weekly decline.
The Shanghai Futures Exchange's most traded copper contract edged up 0.18% to 78.530 yuan (10,943.12) but is still on course to finish the week with a loss of 1.97%.
The U.S. president Donald Trump announced a 50% tariff on copper starting on August 1, to promote the domestic development of an important industry for automobiles, electronics and defense.
The futures analyst of a Beijing metals company who requested anonymity said that there were still many unknowns, including what copper products would be included in the plan, whether or not the 50% was final, or if it could be changed, and whether or not the implementation date will be extended.
The COMEX premium was $2,615 per ton in the previous session. This is a 27% drop from the peak reached on Tuesday. Traders have shipped about a full year's worth copper to the United States.
Analysts said that with so much copper shipped to the U.S. already, it may not be possible to implement the tariff as announced. However, an increase of 40% is more likely, even if the tariff was implemented.
Nickel fell 0.2% on Friday to $15,260 and LME lead dropped 0.54%.
SHFE nickel rose by 1.03%, to 121.140 yuan per ton. Zinc was up 0.58%, at 22.415 yuan. Aluminium was up 0.27%, at 20.725 yuan. Tin advanced 0.16%, to 265,430, yuan. Lead eased down 0.73%, to 17.090 yuan.
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DATA/EVENTS - (GMT) 0600 UK GDP Estimate MM & YY 0600 UK Services MM & YY 0600 UK Manufacturing Output MM & YY 0645 France Final CPI (EU Norms) MM YY 0645 France NSA MM YY 0645 France NSA MM YY 0645 France NSA MM YY 0645 France MM YY NSA 0645 ($1 = 7.1762
(source: Reuters)