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The PMI indicates that Saudi non-oil businesses expanded in November, but new orders slowed.
A survey released on Wednesday showed that Saudi Arabia's private non-oil sector expanded at the fastest rate in ten months in November. This was driven by robust hiring and increased demand, but new orders grew slower than in previous months. The seasonally-adjusted Riyad Bank Saudi Arabia Purchasing managers' Index fell to 58.5 from 60.2 in Oct., but remained above 50, indicating strong activity growth. The output subindex rose to 63.7, its highest level since January. New orders also continued to increase, although at a slower rate than the October peak. Domestic demand was particularly strong. In November, the subindex for new orders fell to 64.6 after a spike to 68.1 in October. Export orders rose for the fourth month in a row, but growth was modest. The employment growth rate slowed down from the near-record levels of October, but it remained strong. Firms increased staffing in order to meet the higher demand as well as increase unfinished work. The backlog of unfinished work has increased for the fifth consecutive month, the longest accumulation in 2019. Naif Al Ghaith is the chief economist at Riyad bank. He said: "Looking forward, confidence will be supported by an anticipated improvement in demand, active pipelines for new projects, and ongoing investment activity." The non-oil sector expressed optimism about the future, boosted by new projects and anticipated growth in demand. The survey showed a positive outlook, driven by healthy business investment and demand pipelines. Saudi Arabia is the top oil exporter in the world. As part of its ambitious Vision 2030 economic strategy, it invests heavily to grow and develop its non-oil industries to reduce its dependence on hydrocarbons. (Reporting and Editing by Joe Bavier).
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Steel price optimism overshadows lower hot metal production, causing iron ore to edge up
The price of iron ore rose on Wednesday, as the optimism about higher steel prices overshadowed concerns about a slowdown in hot metal production. As of 0322 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was trading 0.06% higher. It was 801.5 yuan (113.44 dollars) per metric ton. The benchmark January Iron Ore at the Singapore Exchange rose by 0.1% to $104 per ton. In his latest monthly outlook, Wang Jianhua, chief analyst at consultancy Mysteel, predicted that Chinese steel prices would increase in December due to the improvement in macroeconomic conditions and the recovery of market fundamentals. According to market intelligence provider Shanghai Metals Markets, iron ore concentrate prices are expected to be stable in the short term in Tangshan. SMM said that hot metal production, which is a measure of iron ore consumption, has been on a downward trajectory. Weakening fundamentals are putting pressure on the ore price, but market sentiment remains positive in advance of important policy meetings. Investors are waiting for signals from the Central Economic Work Conference, which sets the agenda each year, and the Politburo meeting in December to determine the growth targets for next year. According to broker Galaxy Futures, due to the recent tightening of environmental inspections, it is expected that pig iron production will continue to fall this week. This puts pressure on raw materials. Coke and coking coal were both up and down on the DCE. According to Mysteel's report, China's market for metallurgical coal is expected to decline in December, as steelmakers push to lower raw material prices. However, any decline will be mitigated by the mills' winter replenishment of feed coke over the next few weeks. The Shanghai Futures Exchange steel benchmarks showed mixed performance. Hot-rolled coils and wire rod both fell by 0.21% and 0.12% respectively. Rebar was up 0.06% and stainless steel was up 0.16%. ($1 = 7.0651 Chinese yuan). (Reporting and editing by Harikrishnan Nair).
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Copper prices fall from their peak as the market focuses on the upcoming Fed rate announcement
The market has now been focused on the Federal Reserve's upcoming rate announcement next week. As of 0245 GMT, the most traded copper contract at the Shanghai Futures Exchange was 0.22% lower, trading at 88 890 yuan per metric tonne ($12 581.21). Shanghai copper fell on Tuesday after the London benchmark copper for three-months, which had also weakened from its all-time-high on account of a lower risk appetite and profit taking. On Wednesday, the London copper price was up 0.46% to $11,196.50 per ton. Copper prices are on the rise as supply worries have fueled overall optimism. Now, traders are focusing their attention on the bets placed on a second Fed rate cut. Analysts at Sucden Financial stated that a December cut was expected, despite the limited economic data available due to the government shutdown. A 25-bps change has already been priced in, and policymakers would risk "creating an unnecessary market disruption" if they resisted the expectation. Other base metals in the SHFE rose by 0.21% and tin jumped 1.46%. Zinc, lead, and nickel were little changed. Metals on the LME saw gains. Aluminium gained 0.52%; zinc added 0.10%; lead increased 0.40%; nickel grew 0.61%, and tin rose 0.79%. Wednesday, December 3, DATA/EVENTS: 0850 France HCOB – Services, Composite PMI, Nov 0855 Germany HCOB – Services, Composite final PMI, Nov 0900 EU HCOB – Services, Composite final PMI, Nov 0930 UK S&P GLOBALPMI: COMPOSITE OUTPUT, Nov 0930 UK Reserve assets total, Nov 1330 US import prices YY Sep 14015 US industrial production MM Sep 1445 United States S&P Global
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Oil prices drop on weak demand while markets wait for signs of supply from the Ukraine peace efforts
The oil prices dropped for a second consecutive day on Wednesday, as investors waited to find out if the peace talks between Russia and Ukraine could lead to more supply. This was due to broader concerns over a surplus highlighted by increasing inventories. Brent crude futures fell 13 cents or 0.21% to $62.32 per barrel at 0221 GMT after falling by 1.1% the previous session. U.S. West Texas Intermediate Crude lost 12 cents or 0.20% to trade at $58.52 per barrel after falling 1.2% on Tuesday. The Russian government announced on Wednesday that the U.S. and Russia failed to reach an agreement on a potential peace deal for Ukraine following a five-hour summit between U.S. president Donald Trump and his top envoys. The oil markets are waiting to see the outcome of these talks in order to determine if an agreement can be reached that will allow the lifting of sanctions against Russian companies including Rosneft, Lukoil and other major oil companies. This would help to free up the restricted supply of oil. The accusations made by Putin on Tuesday, that European powers were hindering U.S. efforts to end the war because they put forward proposals which would be "absolutely inacceptable" to Moscow has increased fears about Russian supply being restricted to buyers like China and India if the talks do not lead to an agreement. Tony Sycamore is a market analyst at IG. He said that despite the worries of the talks not being conclusive, "concerns about an oversupply and soft demand continue weighing on the crude oil prices, which must stay above the support in the middle $50's in order to avoid a further setback." After Russia invaded Ukraine in 2022, the war has intensified and Ukraine now attacks Russian oil infrastructure regularly with drones. Recent attacks on Russian Black Sea export sites have brought to light the geopolitical implications of the war. Sources stated on Tuesday that Caspian Pipeline Consortium (which ships oil from Russia to Kazakhstan) aims to finish repairs on its third single-point mooring ahead of schedule. They are aiming to restore the full capacity of oil export after a drone attacked one of their other moorings. The concern about a crude oil surplus was also heightened by the rising U.S. inventory levels. Market sources cited API data on Tuesday to report that U.S. crude oil and fuel inventories increased last week. API sources report that crude stocks increased by 2,48 million barrels during the week ending November 28. Gasoline inventories increased by 3,14 million barrels and distillate inventories by 2,88 million barrels. The U.S. Energy Information Administration is scheduled to release official government data on stockpiles later today. (Reporting and editing by Christian Schmollinger in Tokyo, Katya Gölubkova)
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Sources say Valero will upgrade its CDU at Port Arthur refinery, Texas, in February.
Valero Energy will upgrade its large crude distillation unit in Port Arthur's Texas refinery, which produces 380,000 barrels per day, in February, according to people familiar with plant operations. Tuesday, a Valero spokesperson failed to respond to a question about the refinery’s maintenance schedule. Valero will begin a series upgrades in February to the AVU 146 CDU to increase the unit's average capacity from 235,000 bpd up to 260,000 bpd. Sources said that improvements would be made to the processing of bottoms, which are heavy, gunky residue crude oils usually sent to cokers or used to make asphalt. Sources said that the refinery could keep AVU 146 running while upgrades are being carried out. CDUs start the refining by converting crude oil to feedstocks that are used in all other refinery units. Cokers can convert residual crude oil into motor fuels, or petroleum coke that can be used to replace coal. Port Arthur is Valero’s largest refinery by capacity. (Reporting and editing by Erwin Seba, Chris Reese).
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Perseus Mining shatters Predictive and Robex gold partnership
Predictive Discovery, an Australian gold explorer, announced on Wednesday that it received a superior proposal from Perseus Mining. The company was valued at approximately A$2.1 billion (1.38 billion dollars), displacing a previous tie-up between Robex Resources and Australia. Early October, Predictive Discovery which is developing Bankan's gold project in Guinea agreed to merge with Robex as part of a A$2,35 billion deal. This will create a mid-tier West African producer. Perseus offers a premium of 24.5% over Predictive's closing price. The stock is valued at A$0.778 per share. Shareholders will receive 0.136 Perseus share for every Predictive share. Perseus holds 17.8% Predictive's outstanding ordinary share capital. Predictive’s board, after receiving financial and legal advice, said that it considered Perseus’ offer to be a "superior proposition" in its agreement with Robex. Robex will have five days to respond to Predictive's bid. This deadline will determine if Robex intends to match or reject the other bid. Robex didn't immediately respond to an 'ask for comment. Perseus also proposed a loan facility of A$37m to cover the termination fee due to Robex as well as pre-development and working capital costs.
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Sources say that Motiva Texas refinery will be doing coker work in 2019, and CDU replacements in September 2026.
Motiva Enterprises will perform maintenance on a coker this December and overhaul its large crude distillation system in September 2026, according to people familiar with the plant's operations. The refinery produces 640,500 barrels per day. A Motiva spokesperson failed to respond on Tuesday when asked for comments about the planned maintenance of the Port Arthur refinery in the United States, the largest. Sources did not specify which of the cokers in the refinery would undergo maintenance before the end 2025. Two cokers are available at the refinery. DCU-1 is capable of producing 54,000 bpd, and DCU-2 can produce 110,000 bpd. Sources said that the work was called a pitstop, which means it would be shorter than the planned full overhaul of the CDU VPS-5, with a capacity of 350,000 bpd, scheduled to start in September. Sources said that the work on VPS-5 was expected to last 60 days. Other units supplied by VPS-5 would also be closed for work. Cokers can convert residual crude oil to motor fuels, or into petroleum coke that can replace coal. CDUs start the refining by converting crude oil into feedstocks that are used in all other refinery units. VPS-5, the largest CDU at Motiva's refinery, is located in the VPS-5 building. (Reporting and editing by Erwin Seba)
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Gunvor CEO says no rebranding for the moment, as he considers US pressure on Russia
Gary Pedersen said that Gunvor's CEO Gary Pedersen had no immediate plans to rebrand. He took over the company in a management buyout a day earlier, less than a week after the U.S. Treasury referred to Gunvor as the "Kremlin’s puppet." Gunvor is the largest oil trading house in the world, with daily transactions that amount to 3% of global oil supplies. The company was founded by Swedish billionaire Torbjorn Tornqvist, and Russian oligarch Gennady Tichenko 25 years ago. They grew it into the biggest trader of Russian Oil in the 2000s. Gunvor's 25 years of leadership ended with Monday's buyout of the management, described by Gunvor as a "definitive re-set" to clear up "misperceptions about Gunvor's past". Pedersen became the first American in many years to be appointed as the leader of a major Swiss commodities firm. CEO: CORE BANKS "ARE WITH US" Pedersen faces immediate challenges in managing the fallout of the U.S. Treasury's statement made in early November, which sank Gunvor’s planned acquisition of Russian oil company Lukoil’s international assets. The U.S. Treasury's statement also caused reputational damage and forced Spanish bank Santander to withdraw from funding arrangements with Gunvor. Pedersen has to allay fears that Gunvor's business partners and creditors could cut ties. Pedersen told. Pedersen said that business was as usual at the trading house. He said that his focus was to get the new management structure of the company up and running. He said that Gunvor was a strong brand and there were no immediate plans to change it. Pedersen stated that his goal was to be as disruptive as possible. On Tuesday, the U.S. Government kept up pressure on Gunvor when Treasury Secretary Scott Bessent announced on social media how Santander set an example by pulling credit for Gunvor. The post was linked to the original statement about "Kremlin puppets". Gunvor declined comment on Bessent’s post. Santander and the Treasury didn't immediately respond to requests for more information. FAST RISE Pedersen moved quickly after joining Gunvor a little over a year before. He had been with the hedge fund Millennium Management for two years, overseeing fuel trading. Pedersen stated that despite the suddenness of the purchase, talks about Gunvor's joining had begun in 2023. Pedersen stated, "We knew there was the potential of this opportunity to take over." Pedersen stated that Gunvor has performed well in the second half this year. He added that the company had a solid team of traders, despite some turnover in earlier years. Gunvor and other oil-focused trading firms had a difficult start to the year, as a drop in benchmark prices caught many by surprise. Profits in the oil industry have fallen from record highs of previous years. Gunvor lost several senior traders, including the global head of crude, due to some misplaced bets on crude. Risk-taker with PHYSICAL EXPERIENCE AND FUND EXPERIENCE Oil traders from rival mercantile firms said that Pedersen is known for taking bold trading positions and making bold market predictions. Pedersen was born in Nebraska and spent his first 20 years of energy career working in different roles for the private U.S. conglomerate Koch, before joining U.S. oil trader Northville, in 2016. Former colleagues of Pedersen say that he is an expert in crude and fuel trading, and has a keen eye for the bigger picture. Pedersen's former colleagues said that Gunvor, which is a large trading firm with a portfolio of physical assets, would be a more suitable place for him to pursue his aggressive trading style than Millennium, which was a more financial-oriented company. Pedersen stated that combining his skills from both physical and financial trading shops is what attracted him to Gunvor. "I've always felt that if we combined these two, we would be able to do much better in terms of our return on equity." He said. (Reporting from Shariq Khan, New York; and Robert Harvey, London; editing by Rod Nickel Alex Lawler Simon Webb
Silver reaches record highs as gold rebounds after Fed cuts expectations
Silver soared to record levels on Wednesday, as investors held onto expectations of a Federal Reserve interest rate cut. This week, a number of U.S. economic data will determine the direction of monetary policy.
As of 0358 GMT spot gold was up 0.4% at $4,222.19 an ounce after falling by nearly 1% the previous session. U.S. Gold Futures for December Delivery were up 0.8% to $4,253.90 an ounce.
GoldSilver Central MD Brian Lan stated that "we've seen some profits-taking in gold and moved into crypto or equity so we should be seeing a return, which is quite normal. Especially with the high chance of a rate reduction as we approach the close of the year."
According to CME's FedWatch, U.S. rate-futures now indicate an 89% probability of a rate reduction next week. This is up from 85% one week ago.
The recent U.S. economic data, which showed a slight slowdown in the economy, has increased expectations for a Fed rate reduction at its meeting on December 9-10. Major brokerages have stepped up their bets.
Gold that does not yield tends to do well in environments with low interest rates.
Investors will also be watching the key data due this week. These include the November ADP Employment figures, which are scheduled to be released on Wednesday, and the September Personal Consumption Expenditures Index (PCE), the Fed's preferred measure of inflation, which is due on Friday.
The U.S. president Donald Trump announced on Tuesday that he will announce the person he has chosen to succeed Jerome Powell in his role as Fed chairman early next year.
According to the World Gold Council, central banks purchased 53 tons of gold during October, a 36% increase month-on-month. This is the highest monthly net demand seen since 2025.
Silver increased by 0.8%, reaching a new record high of 58.94 dollars per ounce.
Silver is increasing due to physical shortages, as COMEX stocks are decreasing and China's inventories are also dwindling. We believe the fundamentals for silver are also very bullish", said Kunal Sha, head of Nirmal Bang Commodities in Mumbai.
Palladium rose 0.1%, to $1,463.43, while platinum fell 0.1%, to $1636.10. Ishaan arora, Bengaluru (reporting) and Sherry Jacob Phillips and Harikrishnan Nair (editing).
(source: Reuters)