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Copper falls from its peak due to a stronger dollar and a weaker risk appetite
The copper prices fell on Tuesday due to the stronger dollar and a lower risk appetite. Investors also locked in profits after a rally that reached a record-high in the previous session. The benchmark three-month copper price on the London Metal Exchange dropped 0.4% in open-outcry official trading to $11,207 per metric ton, after hitting a record high of $11,334 Monday. LME copper is up 27% this year so far, mostly due to fears about possible shortages. Ole Hansen is the head of commodity strategy for Saxo Bank, Copenhagen. He said: "We are pausing today as we have seen the dollar recovering and a general decrease in risk appetite." After a decline in cryptocurrency and a global bond saleoff, traders were cautious on Tuesday. After a strong demand for Japanese government bonds, the dollar rose against yen. The dollar's strength makes goods priced in U.S. dollars more expensive for buyers who use other currencies. Hansen stated that "Copper is still in a good mood but it needs a correction. As long as we keep $11,000 we are poised to see higher prices, as the outlook for 2019 indicates a tightening market." Investors are reaping profits by arbitraging between the U.S. Comex and the LME, delivering copper to U.S. warehouses. The market is also assessing how the plan of major Chinese smelters to reduce production by 10% in 2011 will affect it. Analysts at Chinese broker Jinrui Futures stated in a report that the plan of smelters to reduce output confirmed the view that supply of refined copper would become tight. After reaching a record-high of 89.920 yuan per ton earlier, the most traded copper contract at the Shanghai Futures Exchange ended daytime trading 0.1% higher, closing at 88.920 yuan. Other metals include LME aluminium, which fell 0.2% at $2,887 per ton. Zinc dropped 0.4% to 3,084, Nickel lost 0.2% at $14,900, Tin dropped 0.1% to 39,115, and Lead added 0.2% at $2,005.
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Nigeria's Oil Content Board unveils $100 million equity fund to support local producers
Nigeria's oil-and-gas content regulator announced on Tuesday a $100 million equity scheme to increase indigenous participation in energy sector. It also said that it will tighten the compliance rules starting next year. Felix Ogbe (executive secretary of the Nigerian Content Development and Monitoring Board, NCDMB) told the Practical Nigerian Content Forum at the Bank of Industry that the fund would be launched in partnership to provide equity financing for high-growth local energy services firms. Ogbe stated that the board would also introduce, from January 1, 2026 onwards, a certificate of compliance, which will confirm companies' compliance with a mandatory 1% payment obligation. The certificate is required for permits, approvals and other documents. Ogbe stated that Nigerian content in monitored projects increased to 61%, from 56% the previous year. He cited major projects like NLNG Train 7 and NNPC’s AKK pipeline as well as TotalEnergies’ Ubeta Gas Development. Some of the other initiatives include a challenge on technology in 2026, a training program for oilfield skills and measures to stop fraudulent applications for local-content certificates. Ogbe stated that "the work ahead of us is important, but so too is the opportunity." "Nigerian Content is Key to National Development and Industrialization" (Reporting by Tife Oholabi, Writing by Chijioke Ahuocha).
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Serbia will permit payments and transactions to Russian oil company NIS in the coming week
Serbian President Aleksandar Vucic announced on Tuesday that the country will continue to allow payments and transactions with the U.S. sanctioned Russian oil company NIS, until the end the week. This is despite the threat of secondary sanctions. Gazprom and Gazprom of Russia, who own the majority of NIS, are required to sell their shares in the company. The U.S. has imposed sanctions on NIS because it is owned by Russians. Vucic, the president of Serbia, said that payments made with NIS by its banks, which includes the central bank will continue through Monday. After meeting with government officials responsible for energy, he stated, "We have agreed to, at the risk to Serbia, ensure payment transactions to NIS until the weekend... in order to allow NIS workers to be paid and make payments due." Vucic stated that the only NIS oil refinery in the country will be shut down this coming week unless it receives a reprieve of sanctions from the U.S. Treasury Department Office of Foreign Assets Control. (Reporting and editing by Ivana Sito-Sucic and Daria Sekularac; Bernadette and Jan Harvey)
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Mali expects annual windfall of $1.2 billion from miners after new code
Audit uncovers irregularities leading to significant recoveries The new code will increase revenue by 586 billion CFA Francs annually Barrick settles dispute and migrates to new code By Tiemoko Diallo BAMAKO, 2 December - Mali recovered 761 billion CFA Francs ($1.2billion) in arrears due from mining companies after a thorough audit, the finance minister announced. This is one of Mali's largest clawbacks from extractive industry. In early 2023, the military-led government conducted an audit of Mali’s mining sector that revealed massive shortfalls and led to the creation of a new code. The new mining law increased royalties, increased state stakes in companies that mine and eliminated stability clauses. After an audit by Inventus and Mozar revealed financial irregularities, a recovery commission was established. The state's estimated shortfalls and irregularities were between 300 and 600 billion CFA francs. A two-year dispute erupted with Canadian mining company Barrick Mining - Mali's largest gold producer – over the overhaul of the industry. In November, a deal was reached. Alousseni Sanou did not mention Barrick's 244 billion CFA Francs deal in his Monday evening speech on state TV. B2Gold, Allied Gold, Resolute Mining and Endeavour Mining as well as lithium players such Ganfeng, Kodal and Kodal have all settled their arrears earlier and migrated over to the new regime. Sanou, who presented the audit report to Assimi Gouta during a ceremony, said: "I am thrilled with these results. We can mention that 761 billion CFA were recovered out of the 400 billion CFA target." Sanou said that all mining firms will now be operating under the code 2023, which should increase annual revenues by about 586 billion CFA Francs for audited companies alone. Their total contribution is estimated to be around 1,022 billion CFA Francs every year. He said that the total cost of audit and legal fees was 2.87 billion CFA Francs. Mamou Toure said that the aim was to not only recover the funds, but to also give the state an important stake in the mining contracts. Mali is one of Africa's largest gold producers and heavily relies on its mining industry for both export revenues and fiscal revenue. As a result of the scrutiny for tighter oversight, industrial gold production fell 32% on an annual basis to 26.2 metric tonnes by August.
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India-Russian oil and defense ties
The Russian President Vladimir Putin is scheduled to visit India for a summit this week with Indian Prime Minister Narendra modi. The meeting will focus on boosting energy, defense and economic ties as Moscow tries to secure oil sales despite tighter Western sanctions. Energy exports from Moscow are a major source of revenue, but sanctions that were imposed following its invasion of Ukraine in 2022 have started to impact its oil sales. India and Russia are likely to discuss the following issues: OIL PURCHASES Moscow wants India to continue buying more oil after Indian refineries stopped importing due to sanctions. India is the third largest oil consumer and importer in the world. Russia is their top oil supplier. India's crude oil imports will hit a minimum of a three-year high this month, as Washington tightened its sanctions against Russia's two largest oil producers, Rosneft, and Lukoil. Indian Oil Corp, among state refiners is purchasing Russian oil from entities that are not sanctioned, and Bharat Petrol Corp has advanced in negotiations with regard to orders. After other suppliers pulled out, the Indian refiner Nayara Energy - owned in part by Rosneft - is now exclusively using Russian oil. Russia wants India to support Nayara in increasing its local fuel sales and capacity usage. Reliance Industries Ltd, the top Indian oil client of Russia, said that it would process Russian oil arriving in its domestic plant after November 22. UPSTREAM ASSETS Oil and Natural Gas Corp. of India wants to keep its 20% share in the Sakhalin-1 oil and natural gas project in Russia's far east. Oil India Ltd., Indian Oil Corp. and Bharat PetroleumResources are Indian companies that hold a combined 23.9% of JSC Vankorneft, and a 29,9% stake in Tass Yuryakh Neftegazodobycha. ONGC Videsh is the overseas investment arm for ONGC. It holds a 26 percent stake in JSC Vankorneft. In Russian banks, millions of dollars in dividends due to Indian companies for these assets are still stuck. Oil India holds a 50% share in the Russian block License 61. NUCLEAR ASSETS India and Russia are collaborating on a civil nuclear project to build six reactors with a capacity of 1,000 megawatts each at Kudankulam, in the state of Tamil Nadu. The project consists of two operational units and four under construction. Russia will also provide fuel for the project. Both countries are discussing the possibility of establishing more Russian large reactors as well as modular small reactors. DEFENCE TALKS Two Indian officials who are familiar with the issue said that the Su-57 is the most advanced fighter offered by Moscow and will likely be discussed in the talks this week. Last week, Rajesh Kumar Singh, the Defence Secretary of India, said that India would also be likely to consider buying additional units of Russia's S-400 air defense system. The country has now received three units and two more are awaiting delivery under a 2018 agreement. TRADE AND ECONOMIC LINKS India and Russia are aiming to increase their two-way trade from $13 billion to $100 billion by 2030. This is after the rise of over five times, from around $13 billion to $68 billion by 2024-25. The growth was mainly due to India's imports of energy. The Commerce Ministry data shows that the decline in oil prices caused a drop to 28.25 billion dollars between April and August. Both countries are working to create a free trade agreement between India and the Eurasian Economic Union. This will reduce tariffs, remove non-tariff obstacles and increase market access. RUPEE-ROUBLE PAYMENT & TRADE MECHANISMS India and Russia expanded rupee-rouble agreements to protect trade from sanctions, and reduce reliance on foreign currencies. The Reserve Bank of India and the Indian Government have relaxed these payments and allowed investments of excess rupee balances into assets, including government securities. Diversification beyond traditional sectors A pact of industrial cooperation signed in this year has broadened India-Russian ties to areas like aluminum, fertilizers, railways and mining technologies. Both countries are working on boosting connectivity by implementing projects like the International North-South Transport Corridor, and the proposed Chennai-Vladivostok Sea Route to increase trade with Central Asia. Reporting by Nidhi verma, Krishna N. Das and Manoj Kumar; editing by Clarence Fernandez
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Sudan's RSF paramilitary claims to have taken control of West Kordofan Town
The paramilitary Rapid Support Forces of Sudan (RSF), a group that is part of the Sudanese military, claimed on Monday to have taken full control over Babanusa. This transport hub in the oil-producing southern region was seized by the RSF. However, its rival, Sudanese Army, denied the claim. In a Monday statement, the RSF stated that it "liberated" Babanusa state in West Kordofan -- the latest frontline of the war in Sudan -- after it defeated "a surprise assault" by the Sudanese Army in what it termed "a clear breach of the humanitarian ceasefire." The army denied on Tuesday that the RSF had captured the entire town and accused its opponents of continuing to attack Babanusa, despite the unilateral ceasefire announced by RSF commander Mohamed Hamdan Dagalo. In a press release, the army stated that RSF fighters have launched daily drone and artillery strikes on the city and that troops have repelled an attack on Monday. It was not possible to verify immediately the claims of the rival forces. The army dismissed this declaration of ceasefire as a political tactic to mask RSF movements, and the alleged support from foreign countries. Donald Trump, the U.S. president, said on November 19 that he would intervene in order to end the conflict which began as a result of a power struggle that erupted in April 2023. In November, the United States, United Arab Emirates (UAE), Egypt, and Saudi Arabia, collectively known as the Quad, proposed a plan that would include a three-month ceasefire followed by peace negotiations. RSF said it accepted the plan but attacked army territory shortly after with drone strikes. The RSF's attack on Babanusa builds upon the momentum the group gained after taking al-Fashir in October, the last army holdout in Darfur. Reporting by Menna Alaa el Din and Khalid Abdelaziz, Writing by Muhammad Al Gebaly, Alexander Dziadosz & Tala Ramadan and Editing by Cynthia Osterman & Aiden Lewis
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Copper falls from its peak due to a stronger dollar and a weaker risk appetite
The copper prices fell on Tuesday due to the stronger dollar and a lower risk appetite. Investors also locked in profits after a rally that reached a record-high in the previous session. The benchmark three-month copper price on the London Metal Exchange fell 0.4% by 1015 GMT to $11,202 per metric ton, after hitting a record high of $11,334 Monday. LME copper is up 27% this year so far, mostly due to fears about possible shortages. Ole Hansen is the head of commodity strategy for Saxo Bank, Copenhagen. He said: "We are pausing today as we have seen the dollar recovering and a general decrease in risk appetite." After a decline in cryptocurrency and a global bond saleoff, traders were cautious on Tuesday. After a strong demand for Japanese government bonds, the dollar rose against yen. The dollar's strength makes goods priced in U.S. dollars more expensive for buyers who use other currencies. Hansen stated that "copper is still in a good mood but it needs a correction. As long as we keep $11,000 we are poised to see higher prices, as the outlook for 2019 indicates a tightening market." Investors are reaping profits by arbitraging between the U.S. Comex and the LME, delivering copper to U.S. warehouses. The market is also evaluating the impact of the plan by major Chinese smelters to reduce production by 10% in 2019. Analysts at Chinese broker Jinrui Futures stated in a report that the plan of smelters to reduce output confirmed the view that supply of refined copper would become tight. After reaching a record-high of 89.920 yuan per ton earlier, the most traded copper contract at the Shanghai Futures Exchange ended daytime trading 0.1% higher, closing at 88.920 yuan. Other metals saw a 0.1% increase in LME aluminium to $2.896.50 per ton. Lead also gained 0.1%, to $2.003, while zinc fell 0.4%, to $3.085, Nickel dropped 0.2%, to $14.900, and Tin lost 0.4%, to $39,000.
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Newspaper reports suggest that the EU may delay its auto package due to increasing pressure on the 2035 deadline.
According to a report in Handelsblatt, the European Commission may delay the announcement a package of support for the automotive industry, which could include a possible easing of the 2035 phase-out of combustion engines, as lobbied by Germany and automakers. The German Business Daily reported that EU Transport Commissioner Apostolos Tzitzikostas said the package might be delayed for a few weeks. On December 10, the Commission, the EU executive branch, is expected to announce the date. Tzitzikostas, in a report published late Monday, said that Brussels was working "very hard", but it might not be done until January. We are still working on this. "We want to offer an automotive package which is comprehensive and covers every aspect," he said. The Commissioner signaled openness to Berlin’s calls for greater flexibility regarding the current target which effectively bans the sale of new combustion engine cars from 2035. This includes appeals to allow plug in hybrids and “highly efficient” combustion engines. Tzitzikostas stated that "we are open to any technology". He added that the letter of German Chancellor Friedrich Merz describing proposed changes supported by industry had been "very positively accepted".
Gold drops 1% as investors book profits, Treasury yields increase
The gold price fell by 1% on Monday, mainly due to rising U.S. Treasury rates and profit booking after a six-week-high was reached in the previous session. Silver prices also declined from their record high.
After falling more than 1% earlier, spot gold fell 0.7%, to $4,204.50 an ounce, by 1215 GMT.
U.S. Gold Futures for February Delivery were down 0.9%, at $4,235.50 an ounce.
The combination of a strong dollar, higher Treasury rates and profit-taking has conspired to reduce the shine of gold," said Ross Norman, an independent analyst.
The U.S. Dollar rebounded from a two-week high in the previous session. The benchmark 10-year U.S. Treasury rates hit a nearly two-week-high, due to the weakness of Japanese and European government debt, which reduced the appeal of non yielding bullion.
The data released on Monday revealed that U.S. Manufacturing contracted for the ninth consecutive month in November. Investors will now be watching the November ADP Employment Report and Friday's PCE Index for clues about a Fed rate cut next week.
According to CME’s FedWatch tool, traders are pricing in a 87% chance that the Fed will cut rates by December.
Gold that does not yield is usually favored by lower interest rates.
Carlo Alberto De Casa is an external analyst with Swissquote. He said, "I expect the gold price to consolidate lateraly between $4,000 and $3,400 over the next few months."
Silver fell 0.9% from its record high on Monday of $58.83 an ounce to settle at $57.42.
Norman said that it is not uncommon to see a little profit taken off the top after a move as dramatic as we witnessed.
Silver has risen 98% in value this year. This is due to the bull market for gold, a persistent shortage of supply, and its inclusion in a draft U.S. list of critical minerals.
Palladium rose 1.3% to $1,442.20, while platinum fell 2.1% at $1,622.56. (Reporting and editing by Harikrishnan Nair, Leroy Leo and Pablo Sinha from Bengaluru)
(source: Reuters)