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As margins shrink, a major Japanese copper smelter will reduce output and capacity.
JX Advanced Metals is likely to cut copper production in fiscal 2025 by tens or thousands of tons compared with previous plans. The company will also unveil a roadmap for reducing smelting capacities by March. Due to the shortage of concentrate and increasing smelting capacity, Japanese copper smelters have been struggling with tumbling treatments and refining costs (TC/RCs). Some Chinese smelters have agreed to process copper at no cost for Chilean miner Antofagasta. Hayashi said this week that "in the short-term, we plan on reducing annual electrolytic output by several tens thousands of tons compared to our previous estimate because we cannot purchase concentrates in current conditions." JX, a major copper smelter in Japan with a production capacity of 450,000 tons per year, warned that possible cuts could be made. Its fiscal period ends in March. Hayashi, who did not give a scale, said that Hayashi intends to shrink the capacity in order to reduce risk when it comes to concentrate procurement and smelting. JX exports roughly half of its refined copper, mostly to China. However, the demand for this product could fall as more domestic smelters are built. Mitsubishi Materials, a rival company, is also considering reductions. Hayashi, when asked if a lower output of copper would have an immediate impact on domestic industries, said that there would not be any immediate impact as only half was used in the country. He said that if more capacity is needed, then the government should support it. Hayashi said that despite the cuts, smelting is still essential to recover rare metals such as tantalum. This metal is critical for semiconductor materials and a key business growth. He said, "We are reviewing optimal scales from different perspectives including the use recycling materials." Sources in the industry said that mid-year negotiations between Japanese smelters, and global miners, broke down without a TC/RC agreement, forcing firms not to fulfill their contractual term supplies. Hayashi said that some miners were willing to negotiate with Japanese companies different terms from those of the Chinese benchmark agreements to sustain the fourth largest smelting industry in the world. JX has accelerated its shift away from mining and melting towards semiconductor materials. In June, JX announced that it would purchase a stake of the Copi mineral-sands project, which is led by RZ Resources in Australia, in order to secure rare metals for chip materials. Hayashi stated that the company is actively looking for new projects. He added that its future upstream deals will be much smaller than their previous Chilean copper mine investments, which resulted heavily in impairment losses. JX has improved investor engagement and streamlined its decision-making since its March listing. Hayashi, the CEO, expressed confidence that it would be able to achieve fiscal 2027 goals including an operating margin between 12% and 17%. JX wants to double its operating profit by 2040 to 250 billion yen (US$1.7 billion). Hayashi stated that "achieving our goal of 2040 will require both organic growth and large-scale M&A beginning in fiscal 2028." (Reporting and editing by Jamie Freed, Tomaszjanowski and Jamie Freed; Kentaro Okasaka and Yuka Obayashi)
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Minister says Poland will freeze energy prices for the fourth quarter
Energy Minister Milosz Motyka announced on Friday that the Polish government would extend the price limit for electricity through the fourth quarter. This could eliminate one uncertainty regarding the inflation outlook of the country. Motyka announced that the power prices would be frozen in the fourth quarter at 500 zlotys ($137) per Megawatt Hour. The central bank has warned that the electricity price cap in Poland for households will expire at the end of October. This is a factor which could lead to inflation and uncertainty. Last month, President Karol Nwrocki vetoed legislation that included regulations to extend a price-freeze. The bill was intended to make it easier for onshore wind farm construction. Motyka stated that the government had prepared a bill to freeze prices for the fourth quarter. The parliament would adopt it by the end September. He said he didn't think that there would be any need to further freeze prices. He told journalists that he did not believe there was a need to freeze the prices, as he expected energy prices to drop below 500 zlotys a MWh. Motyka’s statement increased the market's expectations of interest rate reductions within three months. ($1 = 3.6405 zlotys) (Reporting by Marek Strzelecki, writing by Anna Wlodarczak-Semczuk; Editing by Emelia Sithole-Matarise)
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Workers of Thyssenkrupp approve restructuring plan and await financing
Thyssenkrupp Europe workers voted in favor of a sweeping restructuring program, paving the way for the revival and revitalization of Germany's biggest steelmaker. The IG Metall union announced on Friday that 77% members of the participating members voted in favor of the plan with 62% voting. The restructuring program includes reductions in jobs, working time, bonus payments and site closures. However, forced redundancies are avoided until 2030. According to a source with knowledge of the situation, the plan, which was agreed upon in July following marathon negotiations between management, IG Metall and IG Metall's board, should save over 100 million euros ($117) per year. Thyssenkrupp had announced earlier plans to cut up to 11,000 positions, or around 40% of their workforce, as well as reduce production capacity, from 11.5 millions tonnes per annum to 8.7-9.0million tonnes. Knut Giesler said that the decision "was not easy" for many of his members. They understood that the sacrifices were necessary for the future of the Steel Division. The agreement, which runs until September 2030 is seen as crucial for Thyssenkrupp’s broader strategy of spinning off its steel division into a joint-venture with the holding company of Czech billionaire Daniel Kretinsky, who already owns a 20 percent stake in tkSE. Thyssenkrupp intends to sell an extra 30% of its stake in the restructuring. The workers' representatives stated that it is now up to Thyssenkrupp AG to finalize financing arrangements. Tekin Nasikkol (head of the tkSE works council) said: "We have reached our limit and given our maximum contribution." Now it is time for the board of directors to act. $1 = 0.8542 Euros (Reporting and editing by Kirsti Knolle)
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European stocks increase, and long-dated yields decline ahead of US employment data
Early Friday, European stocks rose while bond yields on long-dated bonds fell as the markets awaited a rate cut by the United States. This helped to ease concerns over fiscal deficits across various countries. The S&P 500 reached a new record high on Thursday, after the weekly jobless claims data revealed more than expected. Overnight, Asian stocks followed Wall Street's upward trend. At 0752 GMT the MSCI World Equity Index had gained 0.3% for the day, and Europe's STOXX 600 Index was also up 0.4%. Both are expected to finish the week with a slight gain after recovering from the dip that occurred earlier in the week. The FTSE 100 and France's CAC 40 both rose 0.3%. 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. The monthly U.S. employment report, due in the afternoon session, will confirm traders' expectations. Stocks rise when the labour market is weaker, as it increases expectations that Federal Reserve will lower rates. Francesco Sandrini is the head of Amundi's multi-asset strategy. He said, "We saw yesterday the signs that there may be a weakened in the jobs market, which will pave the way for an agreement in September." Sandrini said that today's numbers can confirm, to a certain extent, an easing of the Federal Reserve. Fed Chair Jerome Powell reinforced speculation about rate cuts with an unexpectedly dovish address at the Fed symposium held in Jackson Hole 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 market sentiment has improved in recent sessions, after stocks in Europe and globally fell this week. Long-term bond yields have also reached their highest levels in years as investors were concerned about the financial state of different countries, especially Britain and France. The yields on 30-year bonds in France and the UK were lower on Friday. France's yield was 4.3944% compared to a high of 4.523% reached on Wednesday. The benchmark German 10-year yield is 2.7122%. German industrial orders fell unexpectedly in July, according to data released on Friday. The yields on Treasuries 30-years were at 4.8593%. They had reached their lowest level in three weeks, during Asian trading. The dollar index fell 0.2% to 98.054 while the euro rose 0.2% to $1.1678. The U.S. has signed an agreement to lower auto tariffs for Japan after months of negotiation. The dollar fell 0.3% against the Japanese yen. It was trading at 148.14. The oil prices are in their third consecutive day of declines. Brent crude futures dropped 0.5% to $66.65 per barrel while U.S. West Texas Intermediate crude fell 0.6% to $63.05 Gold was unchanged at $3,546.24, after reaching a record high of $3,578.50 earlier in the day.
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WNA: Uranium demand to increase 28% by 2030, as nuclear energy gains momentum
The World Nuclear Association (WNA), in a Friday report, said that the demand for uranium in nuclear reactors will increase by nearly 30% over the next five-year period as more countries rely on nuclear energy to achieve zero-carbon goals. The WNA's Nuclear Fuel Report, published every two years, said that new uranium mining operations and re-starting of existing ones will be required in the coming years to satisfy the growing demand. It said that concerns over energy independence and security due to geopolitical issues have also increased interest in nuclear energy. The report stated that the demand for uranium used in nuclear reactors will increase by 28% in 2030, and by 2040 it is expected to more than double to 150,000 metric tonnes a year from 67,000 tons per annum in 2024. According to the report, the mine supply is sufficient in the short-term, but shortages may occur after 2030. The report stated that it takes 10-20 years for uranium to be produced after the first discovery. In order to avoid future supply disruptions, it is necessary to accelerate the development of new projects in this decade. The global nuclear capacity by the end of 2025 will be 398 gigawatts (GWe), with an additional 71 GWe under construction. The report stated that nuclear capacity will increase by 13% in 2030, and by 87% by 2040 to 746 GWe. It said that "a number of countries have implemented nuclear moratoriums or phase-out policies, and are now re-evaluating their long-term policies on energy and considering nuclear energy as a part of the mix." The report also said that small modular reactors are cheaper and easier to build. The global uranium industry has been recovering in recent years. Production is expected to increase by 22% between 2022 and 2024, to 60,213 tonnes. The production is expected to grow, and secondary supplies, along with the output, will be sufficient to supply reactors for the short-term, added the report. The output of existing mines will halve in the decade following 2030. This means that new mines and idle operations will need to be restarted. The report stated that the regional market disruptions caused by Russia's invasion of Ukraine have increased the need for enriched capacity. Reporting by Eric Onstad and Editing by Louise Heavens
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Gold Heads for Best Week in Three Months Ahead of US Jobs Data
Gold prices rose on Friday, and were on course for their biggest weekly gain in three-months, as investors looked forward to the U.S. Non-farm Payrolls Data due later that day. As of 0741 GMT, spot gold was up by 0.1%, at $3,548.09 an ounce. Bullion is up 2.9% this week. U.S. Gold Futures for December Delivery rose by 0.1% to $3.608.90. The U.S. unemployment claims increased more than expected in the last week. Meanwhile, ADP's National Employment Report revealed that private payrolls were below expectations for August. Both of these signals further evidence of a weakening labor market. Investors now focus on the U.S. Non-farm Payrolls Report, due at noon GMT. According to a poll it is expected that 75,000 new jobs were created in August, compared to 73,000 in July. Ole Hansen is the head of commodity strategy at Saxo Bank. He said that the short-term outlook for gold depends on the U.S. employment report, its impact on bond yields and rate cuts, as well as the dollar. A weak NFP will drive prices towards $3,650 while the support level between $3,450 and $3,500 will remain key. Speaking earlier this week, several Federal Reserve officials cited labour market concerns to support the case for rate reductions. The Fed is expected to deliver its first rate reduction of the year at the end of its two-day meeting beginning September 17, lowering interest rates 25 basis points. Gold, which reached a record-high of $3,578.50 Wednesday, has no yield, but it performs well when interest rates are low. Hansen stated that the combination of lower financing costs, Fed independence, geopolitical risk, a steepening curve, and a weaker US dollar, all point to further gains for precious metals. If the current trend continues, spot silver will be up 0.3% at $40.81 an ounce, and it could reach its third consecutive weekly gain. Platinum rose 1% to $1381.33 while palladium gained 0.2%, reaching $1125.74.
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Iron ore gains for the second week in a row as dollar weakness overshadows supply problems
The price of iron ore futures increased for the fourth consecutive session on Friday, and was heading to a second week-long gain as a weaker dollar and more bets for an interest rate reduction in the United States overshadowed a muted recovery in demand after a military display by China, which is a major consumer. As of 0814 GMT, the benchmark October Iron Ore traded on Singapore Exchange was 0.28% higher than its previous price at $105.1 per metric ton. The dollar has been weakening amid speculation of a U.S. Federal Reserve interest rate cut. The contract for the most traded January iron ore on China's Dalian Commodity Exchange closed daytime trading 0.77% higher, at 789.5 Yuan ($110.37), recording a week-to-week rise of 0.3%. Some analysts attributed the strength of the ore prices in the afternoon to the price rally on the coal market. Coking coal, coke and other steelmaking components have risen by 6.3% and 4,7% respectively. This is due to renewed concern over the reduction of supply. Earlier in the morning session, both ore contracts retreated from multi-week high in the prior day as a sharper-than-expected fall in demand weighed. 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 hub for the military parade to be held on September 3, to commemorate World War II. However, a drop of almost 5% caught some traders and analysts off guard. Iron ore prices are also being limited by the growing supply. The Shanghai Futures Exchange steel benchmarks gained a lot of ground due to higher raw material costs. Rebar, hot-rolled coil and wire rod rose 1% while stainless steel fell 0.3%.
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S.African's ARM stops mining at Bokoni Platinum Mine
African Rainbow Minerals, a South African company, has suspended operations in its Bokoni platinum mining asset while it develops a revised mine plan. The announcement came on the heels of a dramatic fall in earnings. ARM recorded a 2.2 billion rand ($125,000,000) impairment at Bokoni. The company cited a delay in ramping-up mining operations as well as a change of mining method. This pushed ARM’s basic earnings to 330 millions rand for the year ending June 30 from 3.1 billion. The company said that its headline earnings for the year, which excludes one-off items like impairments, was 2.695 billion Rands, down from 5.08 billion in previous years due to lower iron ore prices and coal. ARM purchased Bokoni in 2022 from Anglo American Resources Corporation and Atlatsa Resources Corporation. The purchase price was 3.5 billion rand. In 2017, the platinum mine was put under care-and-maintenance after a series of losses. ARM operates Bokoni with an existing 60,000 metric tons per month concentrator as part of an initial "early ounces plan" aimed at expanding the operations. The collapse in platinum group metals prices in 2023 has forced ARM, however, to delay the planned mine development project of 240,000 metric tons per month. "Without this greater scale, the lower volumes of production obtained from the Early Ounces Project could not achieve required economies-of-scale," ARM stated in a results report. The company stated that the current capacity of mining and milling was not sufficient to offset fixed costs, and maintain profitability. As a result, operations were suspended at the end June. The mine's cash cost increased by 48%, to $2,051 an ounce, as Bokoni's production of platinum group metals concentrates rose 62% in 2012. ARM will now focus on the development of ore reserves at Bokoni, while a feasibility for a smaller mine producing 120,000 metric tons per month is in progress. The study should be completed by early 2026. ($1 = 17,5632 rand). (Reporting and editing by Nelson Banya, Jacqueline Wong Jamie Freed Emelia Sithole Matarise).
ASIA GOLD - Record prices inflict a stifling effect on top hubs, while China and India switch to discounts
Due to the record-high prices of gold, demand for physical gold dropped in major Asian hubs this week. Dealers in China and India, two top consumers in Asia, responded by offering steep discounts in order to attract buyers.
On Wednesday, spot gold prices reached a record high of $3.578.50 an ounce and were on track for their best three-month period.
Indian dealers offer a discount
The price hike has caused the demand to be thrown off. Harshad Ajmera is the owner of JJ Gold House in Kolkata.
Indians will celebrate Dussehra (October) and Diwali (October), when purchasing gold is considered auspicious.
India's gold price traded around 106.800 rupees for 10 grams last Friday after reaching a record-high 107.226 rupees this week.
A Mumbai-based dealer said that jewellers purchased gold in the last week before the festive season. However, the price spike has caused uncertainty about demand.
This week, Chinese dealers offered discounts ranging from $12 to $16 per ounce over the global benchmark price
The demand in China has been weak. The lack of interest in buying physical metals at these high costs is evident. The lack of new import quotas has a significant impact on the physical flow chain, said Bernard Sin.
In Hong Kong, gold
People are having a hard time digesting higher prices. Peter Fung, Wing Fung Precious Metals' head of trading, said that the lack of buying and some selling is due to this.
In Japan, bullion
(source: Reuters)