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Shanghai copper reaches record high due to tight supply
Shanghai copper reached a record-high on Thursday. This was boosted by an increase in the cancellation of metal from warehouses registered at the London Metal Exchange as well as increasing bets that the Federal Reserve will cut rates this month. After hitting a high of 91450 yuan, the most active copper contract traded at the Shanghai Futures Exchange for the day, the price jumped 2.26%, to 90,980 ($12,873.01), per metric ton. The rally was triggered by the record-breaking high reached on Wednesday for LME three-month copper benchmark. London copper was 0.10% higher at $11,476 per ton by 0700 GMT. LME data showed that on Wednesday, 50,725 tonnes of copper were cancelled in South Korea and Taiwan warehouses 0#MCUSTX -LOC>. This brought the amount of copper on warrant in LME sheds down to its lowest level since July, at 105.275 tons. Analysts at Chinese broker Jinrui stated in a report that the sharp increase in LME warrants cancelled suggested that expectations for tightening of supply on markets outside of the United States were starting to materialise. Glencore reduced its copper production forecast for 2026 on Wednesday but still expects a rise by 2035. Goldman Sachs has raised its average LME Copper Price Forecast for the first half 2026 from $10,415 to $10,710. The dollar fell on Thursday as a result of mediocre economic data that bolstered the argument for a Fed rate reduction next week. Tin prices have risen to their highest levels in over three and a half years. Shanghai tin ended the day 2.23% higher, at 316230 yuan per ton. It had earlier reached its highest level since April 20, 2022, at 323,700. London tin fell 1.40%, to $40,210 per ton. It had previously reached $41,010, the highest level since April 2022. Aluminium, zinc, lead, and nickel all rose in price. Lead added 0.30% in London. Nickel edged up 0.11%, zinc fell 0.15% and tin dropped 1.40%. Aluminium was not changed.
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Japan dominates Asian markets following strong JGB sales
Japanese stocks led gains on Asian markets Thursday, as investors bid heavily for government bonds at an auction. Meanwhile, the U.S. Dollar recovered from its five-week low. The Nikkei rose by 2.2%, led largely by the industrial robot maker Fanuc Corp. MSCI's broadest Asia-Pacific index outside Japan traded flat due to declines in Korea, New Zealand and Australia. Early European trading saw pan-regional futures up 0.6%. German DAX Futures also rose 0.6%. FTSE Futures increased 0.31%. Tokyo's most recent debt sale attracted the highest demand in over six years. This helped calm investor nerves following a selloff which pushed yields for super-long-dated bond to record highs, and spread to global fixed income markets this week. Bond yields increase when bond prices drop. Shoki Omori is the chief desk strategist at Mizuho, Tokyo. He said that "the 30-year JGB was unexpectedly strong." The extent of previous selling seems to have created a feeling of cheap valuation, which in turn encouraged demand. He added that the sentiment would need to be improved by multiple auctions. The yield of the 30-year Japanese Government Bond was down by 4.0 basis points to 3.38%. The dollar last rose 0.1% to 155.32 yens. The Japanese currency recovered some ground following reports that the Bank of Japan was likely to increase interest rates in December, and the government would tolerate such a move, according to three government sources who are familiar with deliberations. S&P 500 futures are little changed after the overnight momentum in U.S. markets has waned in Asia. Weaker-than-expected data on economic growth reinforced expectations that the Federal Reserve would cut interest rates next week. Wall Street stocks advanced on Wednesday, led by small cap companies. The Russell 2000 index rose 1.9% while the benchmark S&P 500 gained for the second consecutive day. Gains were made after the U.S. private employment data showed their largest drop in over two-and-a half years. A separate survey by the Institute for Supply Management revealed that its measure of employment in the services sector contracted in November. The subindex of prices received fell to a 7-month low. Henry Russell, an economist at ANZ, said on a podcast that this move is in line with his view that recent supercore inflation will subside and pave the way for a resumption in disinflation by 2026. "We still believe that the Fed should continue to reduce interest rates in response to the downside risks of the labour market," he added, adding that the bank anticipates a 25 basis-point reduction at the meeting next week and further easing for next year. Fed funds futures indicate an 89% implied probability that the U.S. Central Bank will cut interest rates by 25 basis points at its next meeting, on December 10. This is compared to an 83.4% implied probability a week earlier. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, last rose 0.1% to 98.99. This ended a nine-day loss streak, after it had reached its lowest level since November 29. The yield on the U.S. Treasury 10-year bond last increased 2.7 basis points to 4.083%. This was after the Financial Times reported that bond investors expressed concern to the U.S. Treasury on Wednesday, citing people familiar with these conversations, that Kevin Hassett - a candidate for the next Federal Reserve Chair next year - could aggressively reduce interest rates in order to align himself with President Donald Trump’s preferences. In Hong Kong, the Chinese yuan fell 0.1% to 7.64 yuan per dollar after reaching its highest level in over a year against the greenback on Wednesday. The Australian dollar gained 0.1% following official data showing that Australian household expenditure surged to the highest level in nearly two years in October. Meanwhile, the goods trade surplus of the country widened more than expected due to a rise in gold exports for the second consecutive month. After a recent run of hot metals, precious metals have cooled. Last week, gold was down 0.6% to $4,179.91 an ounce. Silver was 2.2% lower, at $57.28 an ounce. Brent crude rose 0.4% to $62.94. (Reporting and editing by Gregor Stuart Hunter, Lincoln Feast, and Sonali Paul).
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Aurubis reports a 14% decline in profit before tax as copper production slows
Aurubis, Europe's biggest copper producer, reported earnings that were below expectations on Thursday. This was due to lower concentrate output at reduced treatment and refinement charges. Operating earnings before taxes fell by 14% in 2024/25 to 355 millions euros ($414million), which was slightly less than the 359 million euro expected by analysts in a poll conducted by the company. Aurubis stated that the result was a result of high contributions from precious Metals, sulfuric Acid and high demand for Copper products. It added that this was partly offset by a decline in recycling revenue and higher ramp up costs and depreciation due to strategic projects, such as the expansion of its Pirdop plant in Bulgaria. The operating core profit (EBITDA), which analysts expected to be 604 million euro, fell by 5.3%. Revenue increased to 18.17 billion euro from 17.14 billion last year, but fell short of the consensus estimate of 18,37 billion euros. The Hamburg-based producer said that it would raise its annual dividend by 10 cents per share to 1.60 euro.
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Gold falls as investors become cautious ahead of Fed meeting
Gold prices fell on Thursday, as investors took profits and became cautious in advance of the U.S. Federal Reserve's meeting next week. They are awaiting data to get a better idea about interest rates. As of 0617 GMT, spot gold was down 0.5% to $4,179.71 an ounce. U.S. Gold Futures for December Delivery were down 0.5% to $4,210.20 an ounce. Soni Kumari, ANZ's commodity strategist, said that "with investors a little cautious ahead of the FOMC meeting (Federal Open Market Committee), the market is pricing in a Fed cut by 25 basis point... The market now needs a new trigger to push (gold) higher." Kumari said that a decline to $4,000 will likely attract new buyers due to gold's solid fundamental support. According to ADP's employment report released on Wednesday, U.S. payrolls fell by 32,000 last month, the largest drop in over two-and-a-half years. However, the low number of layoffs suggests that the decline may not be indicative of the true state the labor market. According to CME's FedWatch, the markets now expect an 89% probability of a rate reduction next week. Major brokerages are also expecting easing during the December 9-10 meetings. Gold is a non-yielding asset that tends to be favoured by lower interest rates. The Fed's preferred inflation indicator, the Personal Consumption Expenditures Index (PCE), due Friday, is the focus of attention. Silver fell 2.1%, to $57.22, after reaching a record-high of $58.98 last Wednesday. Silver prices have risen by 101% this year, mainly due to the concerns over market liquidity following outflows from U.S. stocks and its inclusion on the U.S. Critical Minerals list. Ajay Kedia of Mumbai-based Kedia Commodities said that since mid-November, Shanghai's silver inventories had fallen to a low level of 531 tons. This is the lowest level since 2015, as China's exports have increased significantly. Palladium fell 1.4% to 1,439.91, while platinum dropped 0.9% to $1640.30. (Reporting and editing by Rashmi aich in Bengaluru, Sherin Elizabeth Varghese from Bengaluru)
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Rio Tinto lifts 2025 copper production forecast on Oyu Tolgoi ramp-up
Rio Tinto raised its copper production forecast for 2025 on Thursday. The company cited a ramp up of operations at the Oyu Tolgoi Project in Mongolia. Rio expects to produce between 860,000-875,000 metric tonnes of copper on a combined basis in 2025, up from its previous estimate of 780,000-850,000 tons. The miner anticipates copper production of between 800,000 to 870,000 tonnes in 2026. Rio Tinto makes its profits from iron ore. However, it is now shifting their focus to copper. They aim to produce 1 million tons of copper annually by 2030. The copper price has reached a record level and is expected to remain in high demand as we transition to more environmentally friendly forms of energy. Rio has said that it is on track to increase copper production at Oyu Tolgoi this year by over 50% and by 15% by 2026. The miner stated that it would reduce unit costs by 4% between 2024-2030. It said that capital discipline, increasing prices for its commodities, and a 20% increase in copper production would help to boost its earnings up to half within the next decade. (Reporting by Himanshi Akhand & Rajasik Mukherjee in Bengaluru; Editing by Subhranshu Sahu)
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Turkey extends Russia gas contracts for an additional year in order to attract U.S. investment
Turkey has finalised an extension of one year to its gas import contracts that expire with Russia, totalling 22 bcm. It is also considering investing in U.S. production, according to the energy minister. Both import contracts with Gazprom expire by the end of the year. Turkey's share of Russian gas has steadily decreased, and is now below 40%. Turkey, Russia's final major gas market in Europe has signed deals to buy long-duration LNG, a large part of which is from the U.S. This takes advantage of the expected global abundance of LNG over the next couple of years. Bayraktar, the Energy Minister, said that "BOTAS has finalised the contract with Russia" in an embargoed press conference on Thursday. "They will be supplied by Gazprom in the coming year." "We are more focused on the short-term... say one year," he said to journalists on Wednesday in an embargoed comment. IRAN AND U.S. ENERGY TALKS Bayraktar added that Turkey was also in talks with Iran to extend a 10 billion cubic meter gas contract, which expires next July. Part of the talks are about increasing the volume Turkmen gas Turkey imports through Iran. He said that "we'd like the increase the capacity Turkmen gas through the swap agreement", adding that Turkey signed this year a one-year 1.3 bcm deal with Turkmenistan, sourcing the gas from Iran. Imports this year have been around 0.5 billion cubic meters. NATO member Turkey's ambitions are to become a hub for gas trading. It has begun diversifying its pipeline supply sources. Bayraktar stated that the company plans to invest in U.S. production facilities for gas to secure its commitment to buy up to 1,500 cargoes of LNG from the U.S. within the next 15-year period. Bayraktar stated that "to hedge our position and to create the entire value chain, it is possible we will invest upstream on the U.S. Market". He said that the state company TPAO is in talks with U.S. oil and gas majors such as Exxon, Chevron, and others. A deal could be reached next month. This year, the U.S. ranked fourth in Turkey as a gas supplier with 5.5 billion cubic meters and a share of 14%.
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MORNING BID EUROPE - Day off for Dollar Debasement Trade
Gregor Stuart Hunter gives us a look at what the future holds for European and global markets. The greenback has been given a reprieve by monetary authorities of Asia's largest economies, who are concerned about the weakness of the U.S. dollar. It hit a low for five weeks this week. Silver has cooled off after hitting a record high price of $58.98 on Wednesday. The U.S. Dollar Index also ended a nine-day loss streak. The Chinese yuan has retreated from its highest levels in over a year against the dollar after the central banks set an official midpoint that was weaker than expected for the sixth straight session. This is a sign of caution about the rapid appreciation of the renminbi. The yields of 30-year Japanese government bond yields have also fallen from their record highs, after Japan's chief Cabinet Secretary said that the government closely monitors market movements. Bond yields on longer-dated bonds had reached new peaks in anticipation of a rate hike by the Bank of Japan expected later this month. BOJ Governor Kazuo ueda, who was slapping the BOJ for the jawboning, said that there is uncertainty about the direction of the central bank's interest rate hike due to the difficulty in estimating the neutral rate. The auction of 30-year JGBs attracted the most demand in over six years, as record yields attracted buyers. This added to the relief in Tokyo about investor appetite for government debt. The Indian rupee has also fallen to a new record low against the dollar, surpassing the 90-dollar mark. This will put pressure on the Reserve Bank of India to lower interest rates when they meet this Friday. Stocks have been tepid outside Japan where Nikkei 225 has surged 1.8%. Fanuc Corp. is leading the way with a 12.4% increase. Shares of the industrial robot manufacturer have soared since their announcement earlier this week about a partnership with Nvidia. Early European trades saw pan-regional futures up 0.6%. German DAX Futures rose by 0.5%. FTSE Futures gained 0.3%. The following are key developments that may influence the markets on Thursday. Economic Data Euro Zone: HCOB Construction Sales and PMI for October, November Germany: HCOB Construction Purchasing Managers' Index for November France: HCOB Construction Purchasing Managers' Index for November Italy: HCOB Construction Purchasing Managers' Index for November U.K.: S&P Global Construction Purchasing Managers' Index for November Debt auctions: France: Government debt for 9 years, 15 years and 30 Years U.K.: 14-year government debt
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Gold falls as investors become cautious ahead of Fed Meeting, PCE data is in focus
Gold prices fell on Thursday, as investors took profits and awaited the Federal Reserve's meeting next week. They also waited for upcoming data to provide more clarity on interest rate policy. As of 0446 GMT, spot gold was down by 0.2%, at $4,196.96 an ounce. U.S. Gold Futures for December Delivery were down 0.2%, at $4225.90 an ounce. Soni Kumari is a commodity strategist with ANZ. She said: "The market has priced in a Fed cut of 25 basis points. What is needed now is a new trigger to push (gold) higher." Kumari said that a decline to $4,000 could attract new buyers due to the strong fundamentals of precious metals. The ADP Employment Report showed that the U.S. private sector payrolls fell by 32,000 during November, which is the largest drop in over two-and-a-half years. However, the low number of layoffs suggests the decline may not be a true reflection of the healthiness or the labor market. According to CME's FedWatch, the markets now give an 89% chance that a rate reduction will occur next week. Major brokerages are also expecting easing during the December 9-10 meetings. Gold is a non-yielding asset that tends to be favored by lower interest rates. The Fed's preferred inflation indicator, the September Personal Consumption Expenditures Index (PCE), will be released this Friday. Silver fell 0.4%, to $58.26, after reaching a record-high of $58.98. Silver prices have risen by 101% this year, mainly due to the concerns over market liquidity following outflows from U.S. stocks. It has also been included on the U.S. Critical Minerals list. Ajay Kedia of Mumbai-based Kedia Commodities said that since mid-November, Shanghai's silver inventories had fallen to a low level of 531 tons. This is the lowest level since 2015, as China's exports have increased significantly. Palladium fell 1.3% to 1,441.75, while platinum dropped 0.9% to $1656.15. (Reporting and editing by Rashmi aich in Bengaluru, Sherin Elizabeth varghese from Bengaluru)
Silver scales new record high, gold remains steady
The gold price held steady Wednesday, buoyed up by the weak payroll data, which reinforced expectations for a U.S. rate cut next Monday. Silver also hit a new record high.
By 2:03 pm, spot gold had not changed much from $4,202.06 per ounce. ET (1903 GMT), the session high was $4,241.29.
U.S. Gold Futures for February Delivery settled 0.3% higher, at $4,232.50.
Silver remained steady after reaching a session high of 58.98 dollars earlier.
Bob Haberkorn, senior market strategist at RJO Futures, says that the silver price hitting a record high overnight, coupled with this morning's missed ADP data is supportive of gold.
"Gold is currently following silver, while silver has pulled back a bit."
ADP's employment report on Wednesday showed that private payrolls in the United States fell by 32,000 positions in November. This was below economists' estimates of a 10,000-job rise. CME's FedWatch shows that there is an 89% probability that the U.S. Central Bank will reduce rates next week. Major brokerages have also predicted a rate reduction at the December 9-10 meeting.
The markets are still waiting for the Personal Consumption Spending data from September, which is the Fed's preferred measure of inflation. This data is due Friday.
Gold is a non-yielding asset that tends to be favored by lower interest rates.
Silver has risen 102% this year, mainly due to fears about market liquidity following outflows into U.S. stocks. It is also included in the U.S. Critical Minerals list.
Haberkorn explained that silver's strength is due to concerns about supply at the exchange level, and added that it could reach $60/oz in the near future.
The copper price also reached a new record on Wednesday, thanks to a weaker US dollar, concerns about supply and a tightening of the metal available in London Metal Exchange-registered warehouses.
Palladium was up 0.4% at $1,466.98 and platinum rose 0.9% to 1,652.03 per ounce. (Reporting and editing by Anmol Mukherjee and Anushree Choubey in Bengaluru. Alan Barona and Leroy Leo)
(source: Reuters)