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Copper to experience first weekly decline since June due to US tariff concerns
The copper price was headed for its first weekly decline?since June. They also stabilized on Friday after a steep drop in the previous session following reports?that White House had not yet made a decision on imposing tariffs on the metal. The London Metal Exchange's three-month copper was unchanged at $14,230 per metric ton during the official open outcry. It fell 3.6% on Friday after reaching a record high price of $14,875; it is expected to finish the week at a loss of?1.6%. This would put an end to its 10-week winning streak. Alastair Mudro, senior base metals analyst at Marex said via email that the market had been "caught long". He said that copper stocks were still tight in certain areas and it would take time to move large amounts of money. "We see the potential of further tightness but for now, it's about risk management." Sucden Financial stated that heavy volumes on the decline of Thursday showed "meaningful reduction in risk" but agreed with the fact that fundamental tightness underpinning any selloff should be limited. Copper stocks available on the LME Shanghai Futures Exchange stocks in China, the top metals consumer, were unchanged at 117.600 tons. The weekly decline in exports was 13%, to 54,780 tonnes, the lowest level since January 2024. Stocks on the U.S. COMEX Exchange The price of copper in the United States has dropped, but it is still rising. Three-month LME Copper Spread On Thursday, the market structure?flipped into a contango, where future prices?are higher than those?for immediate delivery, signaling a easing of concerns about near-term supply. Cash contract last traded at a discount of $5.50 per ton from?the forward three-month contract. As rising borrowing costs and inflationary concerns roiled the markets, the rest of the LME Complex was in the red. Aluminium dropped 1.4% to $3.249 per ton. Zinc fell 0.6% to $3.870, and lead lost 0.3% to $1.895. Nickel fell 1.5% to $16,410 and reached a new two-month low. Tin dropped 0.7% to $53,950 and hit its lowest level since July 28.
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Inflation in the US increases in August
U.S. consumer price increases accelerated in August as gasoline prices rebounded after two consecutive monthly drops. This boosted financial market expectations of a rate hike by the Federal Reserve next week. Bureau of Labor Statistics of the Labor Department announced on Friday that Consumer Price Index rose 0.4% in August after increasing by 0.1% in July. Consumer inflation increased by 3.4% in the 12-month period ending August after increasing by the same amount in July. The economists polled predicted that the CPI would increase by 0.4% in the month of August and 3.4% on an annual basis. The CPI increased 0.3% in August after increasing 0.2% the previous month. The core CPI rose 2.4% on an annual basis in August, after increasing 2.5% in July. For its 2% target, the U.S. Central Bank tracks Personal?Consumption Expenditures Price Indexes. The government announced on Thursday that the Producer Price Index rose in August. This was due to strong increases in several key components?that are used in calculating PCE inflation. This, along with the robust August employment report released last week, has boosted expectations for a rate increase next week. After comments made by Fed Governor Christopher Waller last week at a NEXT Newsmaker Event, he said he would be inclined to advocate for a rate hike if the data showed that inflation pressures had cooled. The oil price rose above $100 per barrel again on Thursday. Diesel prices are also at record levels, indicating that inflation is likely to continue and spread. Frustration over inflation is growing Tariffs on imports, including the most recent ones against Canada, one United States' largest trading partners, have caused some economists to see price pressures continuing. The frustration over rising prices, particularly for gasoline and foods, has caused a sharp decline in the approval rating of President Donald Trump and could cost him control of the U.S. Congress during?the midterm elections in November. Following Thursday's PPI, economists estimated that August's core PCE index would rise by as little as 0.15 percent to as much as 0.28%. In July, core PCE inflation increased by 0.2%. The estimates for the increase in core PCE inflation over the past year ranged between 3.2% and 3.3%. Core PCE inflation increased by 3.3% over the past 12 months. Some economists believe that the August?PCE report on inflation will include changes in the methodology. This could reduce the core inflation rate a few basis points. According to the CME's FedWatch, the financial markets had priced in a 70% chance that the Fed would raise rates by 25 basis points at its policy meeting on September 15-16. The Fed's overnight benchmark interest rate currently ranges between 3.50% and 3.75%. Fed Chairman Kevin Warsh said last month that the central bank would "have work to be done" if they don't get the confidence needed to believe inflation will?go down to 2%. Trump has been pressuring the Fed for a rate cut, and posted on social media "LOWER THE RATES OR I'LL STOP TRADER WITH COUNTRIES WHERE WE HAVE A DEFICIT." Economists blamed the rise in yields of long-term U.S. Government bonds on what they called political intimidation. Some people expected the Fed would tighten its policy on Wednesday in order to demonstrate its independence.
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German environmental group sues to block Rosatom-linked nuclear fuel permit
BUND -Niedersachsen, a German environmental group, has filed a lawsuit against the Lower Saxony government to stop the expansion of the Lingen nuclear power plant. They claim that the involvement of Rosatom, based in Russia, poses a security risk. The case challenges the clearance by the regional state for a French subsidiary, Framatome, to produce nuclear fuel in Lingen, a northern German town. This was done under a license agreement with a state-backed Russian company. Lower Saxony’s environment?ministry with the guidance of the federal environment ministry had approved approval subject to certain terms and conditions despite political concerns about Russia’s war in Ukraine. BUND, in collaboration with the anti-nuclear.ausgestrahlt group, claimed that the permit was "the result of procedural mistakes and would pose a risk to security because of Rosatom’s role." They claim that the environmental screening was based on outdated documents, and that Rosatom wasn't fully disclosed. Olaf Bandt, BUND Germany's Chair, said that production and inspection could have been manipulated because Rosatom machines are used in Lingen for both manufacturing and quality control. Berlin said that it viewed the collaboration critically. However, the decision was in line with the current laws. The instrument to address these concerns would be?stricter EU sanctions. Lower Saxony's environment ministry stated that the?legal challenges would be?thoroughly evaluated. The letter also referred to a statement made by Lower Saxony’s environment minister Christian Meyer in July, stating that he was 'fundamentally opposed to working with Rosatom' but 'that there were no legal grounds to deny administrative clearance. Rosatom has not responded to all requests for comment. Framatome said that the collaboration was an interim measure to help customers who operate Russian-designed reactors to diversify their purchases away from direct Russian purchase until it develops own production technology.
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Nabiullina, the Russian central bank's Nabiullina, on interest rates and economy
Elvira Nabiullina, Governor of the Russian Central Bank and Alexei Zabotkin, Deputy Governor held a press conference on Friday following the bank's decision to leave its benchmark interest rate at 14%. Nabiullina and Zabotkin both spoke Russian. The following quotes were translated by into English. NABIULLINA POLICY OPTIONS DISSCUSSED, AND NEXT STEPS We discussed the issue of maintaining the current interest rate. This meeting was different from the last one in that we did not discuss a rate reduction. We will update our assessment of the future room for rate cuts in the October forecast update. We do, however, note that pro-inflationary risk has?increased, and continues to be dominant, and will continue to take this into consideration going forward. NABIULLINA ON THE BUDGET PARAMETERS We haven't yet changed our assumptions, estimates or working hypotheses in relation to our budget and the impact on the fuel market. We haven't received any new information about fiscal policy, and we anticipate that the parameters of the "three-year budget" will be finalized this month. If these parameters differ from those in our "baseline scenario", which assumes a 2% budget deficit this year, and a 1% deficit next year. A 0.5% budget deficit is projected for 2028. And a balanced budget by 2029. We will consider that in the revised forecast we release in October.
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Wall St. futures rebound as oil falls ahead of inflation test
U.S. index futures rebounded on Friday as oil prices dropped and investors hoped that the consumer inflation report would end a 'rough' week on a positive. Oracle's premarket price jumped by nearly 7% after it surpassed estimates for its quarterly results on Thursday. This reassured investors that their AI investments are paying off. Nvidia gained 0.8%. The market is weakened by fluctuating interest rates expectations as the stock markets navigate through a convergence of factors, such as the Middle East conflict intensifying and the elevated Treasury yields. After Thursday's slightly higher-than-expected Producer Price Index, which did not reassure investors, the market is now facing a Consumer Price Index report, another data point, that could change rate expectations. Said Haidar is the founder of Haidar Capital Management. He believes that the Federal Reserve must act quickly to prevent a repeating of the high inflation of 1970s. This would be yet another failure in discretionary monetary policies. At 6:58 am ET, the Dow E-minis were up 286 points or 0.55% and S&P 500 E-minis were up 40.5 points or 0.53%. ET, S&P 500 E Minis rose 40.5 points or 0.53% and Dow E-minis gained 286 points. Nasdaq E-minis rose?175.25 or 0.6%. The blue-chip Dow Jones was heading for its steepest drop since March, and the S&P 500 benchmark was on course for its largest weekly loss since last June. Some investors wonder how far this year's rally will go. Jeff Schulze is the head investment strategist of Franklin Templeton Institute. He wrote that history shows that strong starts are likely to continue. According to Schulze, since 1950, when the S&P 500 index gained more than 10% by the end of August in the year, it continued to gain from September to December in 25 out of 28 cases. Brent crude futures fell more than 3%, but were still over $103 per barrel. West Texas Intermediate crude futures fell 3.5%, but were still close to $100 a barrel. Bill Adams, Fifth Third Commercial Bank's chief U.S. economist, said that the surge in energy costs since the beginning of the month created a new risk for inflation. According to GasBuddy, the average national price of diesel in the U.S. on Thursday exceeded $6 per gallon for first time. Separately the yield on 10-year U.S. Treasury notes dropped 0.16 basis points but was still at 4.9424% - its highest level since 2023. Stocks are less appealing when Treasuries have high yields. Adobe's premarket price dropped by more than 4% after its midpoint revenue forecast for the fourth quarter fell short of expectations. ACV Auctions shares soared by 44% following the agreement of online vehicle auctioneer Copart to purchase it for nearly $1.9 billion.
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Weekend Reads: Oil-Patch AI, data-tampering, and critical-minerals risk
Looking for inspiration? Weekend Reads is a weekly roundup of what the Open Interest Team has been reading, watching, and listening to. This week's top picks include?span?data integrity, China’s decarbonisation drive, AI-powered oils fields and more. This weekend we are reading... MIKE DOLAN is a ROI Finance & Markets columnist. This article by Jed Kolko, at the Peterson Institute for International Economics (Washington) examines the corrosive effects of political'meddling' in official government statistics. GAVIN MAGUIRE is the ROI Global Energy Transformation Columnist. The latest analysis by UK think tank Ember tracks China's progress towards reducing its fossil-fuel dependency across all of its energy-intensive industries. This is a must read for anyone who's interested in global industrial production, carbon emissions and green technology. Andy HOME, ROI Metals columnist: This OECD?report examines the issue?of?traceability of critical minerals which is crucial for creating resilient supply chain. The report examines both the current situation and the challenges ahead. It focuses on lithium in Argentina, Chile and Indonesia as well as nickel in the Philippines. Listening to... RON BOUSSO is the ROI Energy Columnist. In this podcast, Bassam Fattouh, Director of the Oxford Institute for Energy 'Studies, and energy analyst Paul Horsnell discuss?changes? in oil -trading since the collapse on the 17th June ceasefire between the U.S. and Iran. We're always watching. CLYDE RUSSELL is a columnist for ROI Asia Commodities & Energy. This podcast, "Digital Innovations - in Oil and Gas", from consultant Geoffrey Cann examines how AI can revolutionize the management and maintenance of oilfields. Opinions expressed are solely those of the authors. These opinions do not represent News's views, which are committed to independence, integrity and neutrality under the Trust Principles.
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Meloni's steelworks shut down by Italian court
A legal source reported that an Italian court upheld a Friday order to close?down the blast furnaces at former Ilva Works, in a blow against Prime Minister Giorgia Meloni’s efforts to keep the country's biggest?steel factory operating?while the buyer is sought. The plant is a major employer in the southern Italian town of Taranto and is widely considered to be strategically important to Italy's manufacturing industry, as it supplies steel to industries from construction to automobile production. The Milan Court of Appeal has rejected a request by Acciaierie d'Italia to appeal a previous decision?ordering that the hot-end be closed and remediated because there were inadequate environmental safeguards in place to 'protect residents from pollution'. The ruling casts doubt on the future of this sprawling plant that has been the subject of many disputes over public health, environmental damage, industrial policy, and employment. It is the only integrated steelworks in Italy that produces steel using iron ore and coke through a blast furnace process. Acciaierie d'Italia argues that closing the hot-end facility risks compromising steel?production on the site. They warn that after a certain limit, blast furnace cooling procedures may make it impossible to restart operations without extensive repairs. The government, which is looking for investors to buy a company that is currently under extraordinary administration, is being pressed by increasing pressures to find a new industrial solution, less than a calendar year before the national elections. Alfredo Mantovano told unions in a statement this week that the government had not ruled out retaining a stake in the company. Mantovano stated that Italy's steel sector needs to have a?green future based on electric arc furnaces powered by DRI.
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ROI-A $2,000 iPhone, double-digit oil and yen whiplash: Five charts of the financial week
Open Interest (ROI), every Friday, distills the financial week into five key charts that highlight the major trends and surprises, as well as the overlooked moves, that have characterized the last five days. 1. TRIPLE DIGIT COMEBACK RON BOUSSO is a columnist for ROI Energy. Benchmark Brent crude has risen 'above $100 a bar this week, after 'fresh titt-for-tat attack in the Middle East.?Including?the largest wave of strikes against oil tankers since the Iran War began more than six months back. This raises the multi-billion dollar question: How much oil is leaving the Strait of Hormuz actually? The market is dominated by uncertainty due to rising "dark crossings", indications that Iran may be losing control of the waterway, and conflicting estimations from the Trump administration. This will likely result in a geopolitical risk premium being baked into the energy price for many months. 2. INFLATION NATION JAMIE MCGEEVER, ROI Markets columnist: U.S. Inflation has been so high that it's easy to believe the Fed is referring to 3% as the new 2%. The University of Michigan Consumers' Inflation Expectations Survey shows that the Fed already does this: the five-year forecast has been above 3% in the survey for more than two years. The Fed could be forced to tighten monetary policy next week by a persistent inflation rate. Friday's consumer prices data for August will likely have a major impact on Kevin Warsh’s Fed's decision. 3. More to Come? MIKE DOLAN is a ROI Finance & Markets columnist. The European Central Bank raised its main interest rate on Thursday by a quarter-point to 2.50%, its second rate increase of the year. This brings the real or inflation adjusted policy rate into positive territory. European money markets still price in two rate increases over the next twelve months. ECB president Christine Lagarde refused to provide further guidance about what would happen next but said little to convince investors that the market pricing is correct. 4. YEN AND NOW JAMIE McGEEVER, ROI Markets columnist: "The yen rose to a seven month high against the U.S. Dollar this week. This was driven by expectations of faster Bank of Japan policy tightening, and increasing bets on Japanese investors repatriating overseas funds following another bout of intervention in late July. Foreign exchange traders and speculators are left with a burning issue after the Japanese currency's spectacular surge: Which currency should they use to fund their carry trades in? 5. FOLD THE?FOLD ANNA SZYMANSKI is the Editor-in Charge of ROI. John Ternus, Apple's new CEO, unveiled on Wednesday the $1,999 iPhone Duo, marking Apple's long-awaited entrance into the foldable phone market -- and setting a 'new ceiling' for iPhone pricing. Analysts anticipate strong demand despite the premium price, which could allow Apple to quickly gain ground in an industry dominated by Samsung Electronics and Huawei. The opinions expressed are solely those of their authors. These opinions do not represent the views of News. News is committed to the Trust Principles and to integrity, independence and freedom from bias.
German union demands Volkswagen commit to 2024 Labour Agreement
A leading union representative in Germany said that IG Metall demands Volkswagen honour a landmark labor deal signed in 2024. He cited fears of mass job losses due to a recent turnaround agreement.
Thorsten Groeger, a Hanover-based reporter, told reporters that IG Metall members 'decided on Friday to invoke a clause in the agreement signed?in December of 2024.
This move is a significant step in the 'fight for Volkswagen's Future', where management has been pitted against state governments and workers over a plan to double layoffs and dramatically cut production.
Volkswagen did not immediately comment on the move.
Daniela Cavallo is the head of Volkswagen's works council.
After mass walkouts the 2024 agreement resulted in wage concessions and 35,000 layoffs. However, it prevented immediate plant closures by securing job and investment assurances from management.
Existing labour agreements prevent IG Metall from striking until the end the year.
In recent months, tensions have flared up between the two sides over Oliver Blume's plans for a major overhaul, which includes four threatened plant closures in early 2020. This is as Europe's largest carmaker struggles with Chinese competition, mounting duties and high manufacturing costs.
Cavallo called the criticism of German manufacturing costs by management "finger-pointing". Cavallo called for more comprehensive policies to protect the industry from heavily subventioned competitors from China.
The labour chief stated that "we in the automotive industry are in fierce competition with players who enter the market under totally different competitive conditions. We simply cannot keep up."
(source: Reuters)