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Copper falls on stronger dollar and weak China data
The copper prices were under pressure Thursday due to a stronger dollar, and poor data from China's top metals consumer. They had hit their highest level in nearly a month the previous session. The benchmark three-month copper price on the London Metal Exchange fell 0.7% to $10,893.50 per metric tonne by 1121 GMT. On Wednesday, the metal reached $11,025 - its highest level since October 30 - on expectations that the U.S. Federal Reserve would cut interest rates by December. The metal reached a record-high of $11,200 due to disruptions in mine supply on October 29. The metals market focused on the data that showed China's industrial profit contracted in October, as well as the debt woes of developer Vanke. The 21-day moving Average at $10,811 is a technical support for copper. An LME executive stated that the premium of 2% to 3% between the Comex and LME copper contracts, which continues to attract the metal into U.S. stocks, will likely persist for the next 18-months. This is due in part to the uncertainty surrounding copper tariffs within the U.S. Comex copper stocks Stocks in the LME-registered warehouses, which reached a record last week at 378.900 metric tonnes, have continued to rise this week. Stocks at the LME registered warehouses The total number of tons is down by 42% to 157,175 this year. The inventory situation outside the U.S. is expected to remain tight. The premium of the LME Cash Copper Contract over the 3-month forward On Monday, the price of a ton reached its highest level since mid-October at $25 and it was last seen at $20 on Friday. Other LME metals saw aluminium fall 0.9%, to $2,836.50 per ton. Zinc fell 1.1%, to $3,023.50. Lead and nickel remained steady, at $1,979 each and $14,815. On persistent concerns about supply disruptions, tin rose by 0.1% to reach $37,970, after reaching $38,650. This was the highest price since May 2022. (Reporting and editing by Eileen Soreng; Additional reporting by Dylan Duan)
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Wacker Chemie will cut over 1,500 jobs. High energy prices and German red tape are blamed
The German chemical company Wacker Chemie announced on Thursday that it plans to reduce its workforce by around 9%, mainly in Germany, before the end of 2027. It blamed high energy prices as well as excessive bureaucracy within Europe's largest economy. Wacker announced last month a cost-saving programme but did not provide details. The company said that it would aim to save more than $300 million per year. It said that more than 1,500 job losses worldwide, mainly in Germany, will contribute to about half the annual savings planned. Christian Hartel, CEO of Hartel Chemicals said: "In Germany in particular, excessively high energy costs and bureaucratic barriers continue to be a major braking force on the successful growth of the chemical industries." Wacker Chemie is a company that has been around for many years. Face Weak demand and increased competition from Chinese producers It lowered its sales and core profits for the full year, citing softening demand and competition from China. German chemicals, the third largest sector in the country, is struggling to cope with a subdued market, high energy prices, supply-chain issues, and an economic downturn. U.S. president Donald Trump's tariffs have added to the pressure. This has weighed on industry sentiment, with Germany's VCI chemicals lobby not expecting a recovery before 2026 despite indications that the downturn in the chemical-pharmaceuticals sector may have bottomed out. Wacker will have 16,637 workers in 2024. After the announcement, shares jumped around 1.6% but since then have pared back their gains.
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Oil prices rise as investors wait for peace talks
The oil price steadied Thursday as traders weighed the impact of Western sanctions on Russian supply against the talks to end Ukraine's war. Trading was expected to be thin because of the U.S. holiday Thanksgiving. Brent crude futures increased 9 cents, or 0.1%, to $63.22 a barrel as of 1102 GMT. U.S. West Texas intermediate crude futures increased 19 cents, or 0.3%, to $58.84 a barrel. Steve Witkoff, U.S. ambassador to Russia and other senior U.S. officials will travel to Moscow with Russian leaders next week for discussions on a potential plan to end the nearly 4-year-old conflict in Ukraine. This war is the deadliest to have occurred in Europe since World War Two. A senior Russian diplomat stated on Wednesday that Russia would not make any big concessions in regards to a peace plan. This was after a recording of Witkoff's call with Moscow revealed he advised Moscow how to approach U.S. president Donald Trump. Barclays stated in a report that "Geopolitical Volatility continues, and the hopes of a possible ceasefire between Russia & Ukraine has neutralized supply concerns caused by new US sanctions against key Russian producers." Three OPEC+ source told Reuters on Tuesday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will likely leave the output level unchanged during a Sunday meeting. OPEC+ members, who pump about half of the world's crude oil, have increased production levels since April in order to gain market shares. The expectation of a rate cut by the U.S. Federal Reserve in December was a major factor that limited crude prices declines. Lower rates are known to stimulate economic growth, which in turn boosts oil demand. Kelvin Wong, senior market analyst at OANDA, said: "We're approaching year-end without any new drivers except the Fed surprises markets with a more hawkish direction on the FOMC meeting of 10 December." He added that "WTI crude will likely be range bound between US$56.80 to US$60.40 until year's end."
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ASIA COPPER WORRID-China's crackdown on overcapacity reaches copper but market impact is unlikely
Plans to build a series of new smelters have been shelved The industry still expects to gain new capacity through projects in construction The move is seen as a sign of more to come Amy Lv. Lewis Jackson, and Dylan Duan Industry insiders say that the decision by China to shelve plans for a number of copper smelters will not have a significant impact on historically tight copper markets, unless more measures are taken to reduce output. Due to the disruptions in mines, supplies of copper concentrate have been stretched and increased. The fees paid for processing copper (also known as treatment and refinement charges) have dropped to negative historic levels. China announced on Wednesday that it had suspended the construction of 2 million metric tonnes of new smelting capacities. This was a gesture to the difficulties faced by Chinese smelters during annual negotiations over copper concentrate supplies. Eight analysts and three traders who spoke to us on the sidelines the World Copper Conference Asia, held in Shanghai, this week, stated that there would be no immediate impact on the copper market, as the projects currently under construction will be completed. Helen Amos is a commodities analyst with BMO Capital Markets. She said: "I don’t think that the decision will change anything over the next two years because we are still seeing new smelting capacities coming online." Unnamed Chinese analyst said that the announcement which didn't name any project raised many questions, such as how the 2 million ton figure was calculated. The Chinese government is redoubling its efforts to reverse the rampant overcapacity of industrial production. Policies to reduce production have been implemented for coal, lithium, and polysilicon (the raw material used in solar panels). Uncertain is how far Beijing would go to curb a sector that helps China offset its reliance on refined copper imports, which it wants to reduce. The industry figures warned that if Wednesday's announcement signals the government is planning or considering more drastic measures, such as forced capacity reductions or production caps, then it could have a greater impact. Amos stated, "For me it's symbolic of the industry being affected by policy changes like we have seen in the past with steel and aluminum." (Amy Lv in Shanghai, Lewis Jackson in Beijing; editing by Joe Bavier).
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Gold nears 2-week high as traders consider US rate cuts
The gold price was stable on Thursday. It held near its two-week high, as investors assessed the probability of a U.S. rate cut in December. As of 857 GMT, spot gold was unchanged at $4,165.24 an ounce. U.S. Gold Futures for December Delivery fell 0.1% to $4162.20 an ounce. Carsten Menke, analyst at Julius Baer, said: "We expect that the consolidation process that began with the October setback will continue because the dust from that setback is still not completely settled." Bullion is down 5% from its record high of $4381.21 reached on October 20. However, it has traded above the critical $4,000 per ounce price. Menke said, "The factors that we see favoring the gold market remain largely unchanged. These include slowing U.S. economic growth, which has led to lower interest rates, a weaker U.S. Dollar, and sustained demand for safe havens, as well as continued central bank purchases." Federal Reserve signals contradictory on timing and magnitude of U.S. rate cuts has accelerated hedge flows into swaptions, and derivatives linked to overnight rates. Kevin Hassett has aligned himself with Donald Trump, the frontrunner for Jerome Powell to be the next Fed chair, in calling for a rate reduction. The comments made this week by San Francisco Federal Reserve Bank president Mary Daly, and Fed Governor Christopher Waller have also raised expectations for a rate cut. CME FedWatch shows that traders now price in an 85% probability of a rate reduction next month, compared to just 30% one week ago. Gold that does not yield tends to do well in an environment of low interest rates. The U.S. market will be closed for Thanksgiving on Thursday and operate with a reduced schedule on Friday. Palladium rose 0.5% to 1,430.67, while platinum gained 2.9%. (Reporting and editing by Alexander Smith in Bengaluru, Noel John)
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Polish financial regulator examines Orlen’s offer for Energa
The Polish Financial Regulator KNF announced on Thursday that it is investigating the plan of state-controlled refiner Orlen to buy out minority investors in its utility unit Energa. Orlen announced the buyout plan on Wednesday. The regulator stated that it would examine all aspects of this and publish its findings as quickly as possible. The regulator stated on its website that "the KNF is undertaking explanatory activities which cover all aspects of this issue." KNF's spokesperson said that the statement it released contained all of the information they could provide at this time and declined to comment further. Orlen announced on Wednesday that it would invite minority shareholders to dispose of their shares in Energa, with the goal of acquiring 100% ownership of the company. In 2020, the state-controlled refiner will become Energa’s majority shareholder as part of its strategy to create a diversified group that includes oil, gas and renewable energy. It currently holds a stake of 90.92%. Orlen didn't immediately reply to an email request for comment.
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Pakistan's fuel oil exports will reach a new high in 2025 and then hold steady in 2026
Industry sources say that Pakistan's fuel oil exports reached a record high in this year. They are expected to continue to increase next year as domestic taxes discouraged purchases and power plants switch to cleaner alternatives. The increase in Pakistani fuel oil exports in Asia has increased the supply, further affecting prices on a market already oversupplied. Shipping data from Kpler & LSEG revealed that fuel oil exports to Pakistan hit a new high in 2018. Kpler data showed that exports have surpassed 1.4 million tons (8.9 million barrels) so far in this year, an increase of over 16% compared to the volume for the entire 2024 calendar year. The majority of these exports are destined for Southeast Asia and Middle East. LSEG data shows exports of 1.33 million tonnes so far in 2025. This is up from 1.11 millions tons last year. Market sources reported that the cargoes were mainly high-sulphur oil (HSFO), which was primarily added to marine fuel supplies, but some volumes were also used as feedstock by refineries. The majority of Pakistan's HSFO exports are to Asia, which has seen an oversupply post-summer and this has led to cracks being weakened in the region. Valerie Panopio is vice president at Rystad for oil commodities markets. Pakistani refiners have sold more fuel via tenders in the past year, after the government increased taxes on domestic fuel oil consumption. Meanwhile, power generators are gravitating towards alternative sources of energy such as solar and coal. According to traders, the leading Pakistani fuel oil exporter is Pak-Arab Refinery. Other exporters include Cnergyico. Attock Refinery. National Refinery. and Pakistan Refinery. Cnergyico is the largest oil refinery in the country and has stated that it wants to increase exports. Usama Qureshi, vice-chairman of the company, said that it exported 247,000 tons (or a little more) of fuel oil during fiscal year 2024-25. Qureshi said he expected at least 50% growth in this fiscal year. This is due to the increased use of lighter sweet crude oil, which has led to a higher production of fuel oil with very low sulfur. The company has formed a partnership with the global trading house Vitol in order to provide more low-sulfur marine fuel from Pakistani ports. The increase in fuel oil exported in recent years has helped to ensure that refinery runs were not restricted by inventory limits. This was a problem in previous years, said Xin Suai Huang, an oil market analyst with FGE. According to Pakistani industry sources, exports will likely continue to grow or even increase next year. Syed Nazir Abbas Zaidi is the secretary general of Pakistan’s oil companies advisory Council. He said that "the trend in furnace oil imports will only increase in 2026". Zaidi stated that "Fuel Oil is no longer viable for electricity generation and it's no longer profitable to be sold on the domestic market following the last Budget". In 2023, Pakistan went from being a net fuel oil importer to a net fuel oil exporter.
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The Gulf markets are tracking the Asian share price rises on Fed eased hopes
The major Gulf stock markets rose early on Thursday as they followed gains in Asian stocks, and expectations of a Federal Reserve rate cut next week grew. Investors are focused on Federal Reserve officials' statements this week, as there is a lack of data about the U.S. economic situation following the end to the government shutdown. CME FedWatch Tool shows that traders are now attributing an 85% chance of a rate reduction next month, up from 30% just a week earlier. The U.S.'s monetary policy changes have an important impact on Gulf markets where the majority of currencies are pegged with the dollar. Saudi Arabia's benchmark stock index rose by 0.4% on the way to ending a losing streak of three sessions. Al Rajhi Bank gained 0.7%, and Saudi National Bank, the largest lender in terms of assets, increased 1%. Saudi Aramco, the oil giant, also saw its price rise by 0.2%. The oil prices fell on Thursday, as traders remained thin because of the U.S. holiday Thanksgiving. Dubai's main stock index rose 0.5%. This was led by the 0.4% increase in Emaar Properties, a blue-chip developer. In Abu Dhabi the index rose 0.2%. Dana Gas fell 2.5% after a missile strike hit its Khor Mor facility in Iraqi Kurdistan, which is one of the biggest gas fields. The attack on the gas field caused major power outages in the region. The Qatari index fell 0.2%. (Reporting and editing by Conor Humphries in Bengaluru, Ateeq Sharif in Bengaluru)
Gold falls from near 2-week-high as traders consider US rate cuts
Gold prices fell on Thursday after hitting a two-week high in the previous session. Investors also assessed the probability of a U.S. rate cut in December.
As of 1052 GMT, spot gold was down by 0.2% to $4,154.27 an ounce. U.S. Gold Futures for December Delivery fell 0.4% to $4150.40 an ounce.
Carsten Menke, analyst at Julius Baer, said: "We expect that the consolidation process that began with the October setback will continue because the dust from that setback is still not completely settled."
Bullion is down 5% from its record high of $4381.21 reached on October 20. However, it has traded largely above the $4,000 per ounce key level.
Menke said, "The factors that we see favoring the gold market remain largely unchanged. These include slowing U.S. economic growth, which has led to lower interest rates, a weaker U.S. Dollar, and sustained demand for safe havens, as well as continued central bank purchases."
Federal Reserve signals contradictory on timing and magnitude of U.S. rate cuts has accelerated hedge flows into swaptions, and derivatives linked to overnight rates.
Kevin Hassett has aligned himself with Donald Trump, the frontrunner for Jerome Powell to be the next Fed chair, in calling for a rate reduction.
The comments made this week by San Francisco Federal Reserve Bank president Mary Daly, and Fed Governor Christopher Waller have also raised expectations for a rate cut.
CME FedWatch shows that traders now price in an 85% probability of a rate reduction next month, compared to just 30% one week ago.
Gold that does not yield tends to do well in an environment of low interest rates.
The U.S. market will be closed for Thanksgiving on Thursday and operate with a reduced schedule on Friday.
Other than that, silver spot fell by 0.2%, to $53.24 an ounce. Platinum rose 0.9%, to $1.601.95, while palladium increased 0.2%, to $1.426.30. (Reporting and editing by Alexander Smith in Bengaluru, Noel John)
(source: Reuters)