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Dalian iron ore prices end the week lower due to improved supply and soft Chinese demand
Dalian iron-ore futures fell on Friday, and the week ended lower as rising seaborne shipments at year's end and tepid Chinese demands weighed. The January contract for iron ore most traded on China's Dalian Commodity Exchange fell by 1.01%, to 785.5 Yuan ($111.12), per metric ton. The contract closed the week at a 0.57% decrease. As of 0708 GMT, the benchmark January iron ore traded on Singapore Exchange fell 0.92% to $1003.3 per ton. It was still on track to finish the week at 1.48%. Iron ore shipments are expected to rise near the end of the year, and will be further loosen in December, with an increase in carriers arriving, whereas demand for steelmaking materials is likely to fall amid production cuts in steel mills. This was noted by consultancy Mysteel. In November, the top Brazilian producer shipped nearly 34.5 millions tons of grain by sea. This was an increase of 2.93% on a year-on-year basis. Mysteel said that positive macroeconomic signals as well as anticipated restocking demands among steelmakers would lend some support. We see the iron ore markets in a surplus this year, and we see this surplus growing over the next couple of years. Analysts from Citi said that with Simandou online, and China's steel production on a structural decrease, prices will trade on fundamentals in the future and tend closer to costs. Simandou's iron ore project, which is expected to have a production capacity of 120,000,000 metric tons per year, will be the largest iron ore mine in the world, and will play a key role in the green transformation of the global steel value chains. Coking coal and coke, which are used in the steelmaking process, have both fallen by 2.31% and 3.15 percent, respectively. The benchmark steel prices on the Shanghai Futures Exchange are mixed. The Shanghai Futures Exchange saw a mixed performance in steel benchmarks. Rebar fell 0.09%, hot-rolled coil closed level while wire rod rose 1.12% and stainless steel firmed up 0.52%. ($1 = 7,0688 Chinese yuan). (Reporting and editing by Lucas Liew, Sumana Niandy, Sherry Jacob Phillips).
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Citi raises its price forecast, and copper prices soar to record levels
The price of copper reached a new record on Friday after Citi raised its outlook for the metal. Supply concerns and the expectation that the U.S. Federal Reserve will cut interest rates next week are driving the market. After hitting a record high of 92.910 yuan per ton during the day, the most active copper contract at the Shanghai Futures Exchange ended the trading session 2.19% higher, closing the daytime trades at 92.780 yuan. Shanghai copper recorded a weekly gain of 4.99%. The benchmark three-month Copper on the London Metal Exchange surged as well, rising 1.90% at $11,667.60 per ton by 0705 GMT. It had previously reached a high of $11,705. The London copper price is expected to finish the week at a gain of 4.32%. Citi analysts expect copper prices will continue to climb into the first quarter of next year, and reach an average of $13,000 per ton in the second quarter 2026. This is up from their October outlook at $12,000, while their bull case has risen to $15,000, from $14,000. The bank said that prices would remain supported by macrofunds as investors prepare for a soft U.S. economy landing. They also noted a growing supply shortage as the mine supply does not keep up with demand due to energy transition and artificial intelligence. The bank said that additional tightness will be expected due to the stockpiling of U.S. commodities linked to COMEX and LME arbitrage. Reports on Thursday indicated that Mercuria, a commodity trader, was responsible for the removal of more than 40,000 tons of copper earlier this week from warehouses registered with LME. According to the data released by the LME on Thursday, copper continued to flow from warehouses registered with LME in Asia. Copper stocks in other countries have been kept low by the fact that a large amount of copper removed from the LME sheds was shipped to the U.S. where prices are still high due to tariff concerns. Copper prices were also supported by the elevated hopes of a Fed rate reduction next week. Aluminium was up by 1.29% among other SHFE base materials, while zinc was up by 2.04%. Lead was also up by 0.61%. Tin was down 0.28%, and nickel was little altered. The LME's other metals saw a slight increase in aluminium, while zinc, lead, and tin were all down. Nickel was also little changed. ($1 = 7,0688 Chinese Yuan Renminbi)
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Hong Kong's low voter turnout is a result of residents grieving for a deadly fire
The turnout for Sunday's legislative elections in Hong Kong is expected to low, as political campaigns are subdued. This comes amid the aftermath of the city's worst fire in decades which has so far killed 159. On Friday, volunteers handed out flyers to residents and hung up banners at busy intersections and subway stations. However, they were mostly ignored by the locals. Following the fire last week, campaigning was suspended for a couple of days. C.K. said: "This accident can, of course influence the attendance at the elections... (Hong Kongers), don't have interest or the desire to elect people." Lau, a 82-year old retiree. Some analysts have viewed the vote as a test for legitimacy by the Hong Kong Government as it attempts to calm public anger about the fire, and supervise a continuing national security crackdown. Locals expressed anger and traumatisation after authorities acknowledged that the fire was caused by substandard materials used in renovation work on the high-rise estate located in the northern Tai Po district. May Li, 48, said: "Everyone is in a bad mood right now." How can we even think about holding elections under such circumstances? "It has to be delayed." The lowest voter turnout (30.2%) was recorded in the 2021 Legislative Council Elections, since 1997 when the former British Colony returned to Chinese control. Hong Kong's National Security Office urged residents on Thursday to "actively vote," stating that it was critical for supporting the government's post-disaster rebuilding efforts. A statement stated that "every voter is a stakeholder" in Hong Kong. "If you love Hong Kong with all your heart, you'll vote honestly." The city's anticorruption agency announced on Thursday that four people had been arrested for attempting to influence others to not vote. According to an earlier statement by the anti-corruption body, three more people were arrested on November 20 for the same offense. The national security authorities have warned repeatedly against "exploiting" the fire in order to ignite another "colour revolution", referring to 2019's pro-democracy demonstrations that roiled this city. In 2021, public incitement to boycott the polls was criminalised as part of sweeping reforms in electoral law that effectively stifled pro-democracy voices in the 90-seat city legislature. Analysts say that after Beijing passed a national-security law in 2020 for Hong Kong, the reforms made it so only pro-Beijing "patriots", could run. This further restricted the democratic space of Hong Kong residents. Pan-democratic voters, who historically made up 60% of Hong Kong’s electorate, have shunned elections since. In 2021 when the peak registration was 4,47 million, there were 4.13 million registered voters. The Legislative Council's current term ends on December 31, 2019. A vacuum could develop if the election was delayed. This would make it difficult to maintain an effective lawmaking body. (Reporting and editing by Thomas Derpinghaus; Reporting by Laurie Chen)
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Gold falls as Treasury yields counter the soft dollar before key US data
Gold prices were broadly unchanged on Friday as higher U.S. Treasury rates offset support from the weaker dollar. Investors awaited important inflation data to get a sense of what direction the Federal Reserve will take at its next meeting. As of 0524 GMT spot gold was unchanged at $4,215.92 an ounce and on course for a weekly decline of 0.3%. U.S. Gold Futures for December Delivery edged up 0.1% to $4,245.70 an ounce. The benchmark 10-year U.S. Treasury Yields are hovering near their highest level in over two weeks. Gold priced in greenbacks was more appealing to foreign buyers as the dollar was not far off its five-week-low against major peers. The market is awaiting fresh triggers, which could be in the form what the Fed will do. (Gold) is consolidating, after a short run in November, but going forward, the trend looks to the upside, said Kunal Sha, Nirmal Bang Commodities' head of research. Shah also added that the higher Treasury yields are also contributing to the pressure on gold prices. The U.S. Department of Labor released data on Thursday showing that jobless claims dropped to 191,000 in the last week. This is the lowest level for more than three-and-a half years, and significantly below the forecasted 220,000. ADP figures released on Wednesday showed that private payrolls dropped by 32,000 during November, which is the largest drop in over 2-1/2 years. More than 100 economists surveyed by predicted that the Fed would reduce its key rate by 25 basis point at its meeting on December 9-10, as it seeks to support the cooling labor market. Gold is a non-yielding asset that tends to be favoured by lower interest rates. Investors await the September Personal Consumption Expenditures Index (PCE), the Fed's preferred measure of inflation, which is due at 1500 GMT. Silver gained 1%, to $57.68 an ounce. It was on course for a weekly increase. On Wednesday, the contract reached a new record high of $58,98. Palladium rose 1.1%, to $1.464.70, but also was set to finish the week with a gain. Platinum was down 0.1% at $1,644.04, and was on track to lose money for the entire week.
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Japan's Nikkei skids in upbeat Asia; investors eye US inflation data
Japan's Nikkei fell on Friday, wiping away this week's gains despite an otherwise positive Asian performance. Investors are waiting for the U.S. Inflation reading which could influence a deeply divided Federal Reserve. The European stock market was headed for a flat opening, as both EURO STOXX futures and FTSE Futures were little changed. Nasdaq Futures rose by 0.4%, and S&P500 Futures rose by 0.2%. In Asia, Nikkei fell by 1.3% as weaker than expected household spending data highlighted the inflation problem. Bets on a rate increase later in the month also grew. The week was expected to be mostly flat. Early in the morning, the yield on 10-year Japanese Government Bonds hit 1.94%, its highest level since mid-2007. It then dropped to 1.93%. The benchmark yield is on track to rise by 12.5 basis points this week. This will be the steepest climb in five days since March. However, recent auction results suggest that the low bond prices are attracting buyers. In previous cycles, such movements would have shook the markets. Instead, demand strengthened," said Nigel Green, chief executive at deVere Group. "Capital flows have changed, expectations are being challenged, and portfolios built on a permanently cheap yen face a new world." After Governor Kazuo ueda said on Monday that the central bank will weigh "pros" and "cons" of increasing interest rates, the Bank of Japan's quarter-point rate increase later this month has been priced at 75%. According to sources, the Japanese government will tolerate a price hike in December. The dollar fell 0.3% to 154.61 Japanese yen and was still well below its 10-month peak of 157.9. The MSCI Index of Asia-Pacific Shares outside Japan rose 0.4%, and is expected to gain 1% this week. South Korea, however, managed to rise by 1.4%. US INFLATION TESTS The dollar is under pressure on the foreign exchange markets again after stabilizing overnight, following nine consecutive sessions of decline. The dollar index fell 0.1% to 99 on Friday, and was down 0.5% over the past week. Bets on the Federal Reserve's almost-certainty to reduce interest rates by one quarter point by next Wednesday have contributed to the broad decline in the U.S. dollar. The markets have priced in a Fed rate reduction at 90%. However, this could be one of the most controversial decisions the central bank has made for years. Five out of 12 voting members publicly stated that they do not want to see rates reduced further. The U.S. Personal Consumption Expenditures (PCE) Price Index - the Fed’s preferred inflation gauge - will be released later that day. However, this data only covers September. Forecasts call for a 0.2% increase in the core index, which would leave the annual rate at 2.9%. The U.S. Non-Farm Payrolls Report will not be released Friday. The data on Thursday showed that jobless claims dropped last week. This may have been due to the Thanksgiving Holiday. Analysts at ANZ said that "Tariffs are preventing inflation from improving this year. However, we remain confident the disinflationary frame is intact." "This framework includes a softening of the labour market, moderated wage growth, and well-anchored long-term inflation expectations... We believe that the data will support a FOMC rate reduction next week." Treasury yields fell a bit on Friday, after they had risen the day before. The yields on two-year Treasury bonds fell by 1 basis point, to 3.5206% after rising 5 basis points overnight. The yields on 10-year Treasury bonds also dropped 1 basis point, to 4.098%. The price of U.S. crude oil fell by 0.3% to $59.46 a barrel, but rose 1.5% for the week. Brent crude futures are expected to finish the week at $63.12 per barrel, a 0.2% decrease. The spot gold price rose by 0.2%, to $4,216 an ounce. However, it was still down by 0.3% on the week.
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India's exports of steel to Europe are set to fall as EU carbon taxes loom.
Analysts and industry executives predict that India's steel exports will fall when the carbon tax of the European Union comes into effect in the next month. This will prompt mills to look for alternative buyers from Africa and the Middle East. Starting January 1, steel imports into the European Economic Area (EEA) will be subject to a carbon tax, under the EU's Carbon Border-Adjustment Mechanism (CBAM). The decarbonisation-oriented levy will also apply to cement, electricity, fertilisers and other products. India is the second largest crude steel producer in the world after China. Around two thirds of its exports are shipped to Europe. Experts say that Indian mills must reduce their carbon emissions. Aruna Sharma is India's former Steel Secretary. She said: "We are aware that we need to produce in an environmentally friendly way, and companies are preparing to comply. But they are also looking for alternative markets." Sandeep Poundrik said that the majority of India's iron and steel is produced by blast furnaces. These produce higher levels of emissions. Sandeep Poundrik, the top civil servant at the Ministry of Steel in September, said that further expansion of blast-furnace capacity is also a cause for concern. Additional planned capacity could add about 680 million metric tons of carbon-dioxide-equivalent emissions from the sector, according to Global Energy Monitor, a U.S.-based research group. Indian steelmakers are planning new investments in order to increase production as the domestic demand, fueled by government-backed spending on infrastructure, continues to grow. "Most companies have not yet found a solution to CBAM," said Ravi Sodah a cement metals and mining analyst with Elara Capital. In the short term, India's exports are expected to be affected. Electric arc furnaces emit less carbon dioxide than traditional blast furnaces. Two senior executives from large Indian steelmakers who declined to be identified because they were not authorized to speak with the media said that companies did not have a clear understanding of how the tax was calculated. We want to know the exact rate and if it will be specific to our company. One of the executives said. CreditSights, a Singapore-based credit rating agency, says that the levy on Indian steel exports will increase the price, particularly for blast furnace products. This will squeeze margins and EU share unless the producers reduce emissions. Shankhadeep Mukherjee is a principal analyst with the London-based CRU Group. He said that Indian steel mills were trying to offset the lower exports to Europe by tapping into the Middle East. They are offering flexible payment terms and quick delivery. (Reporting and editing by Mayank Bhadwaj, Thomas Derpinghaus and Mayank Bhardwaj)
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Morning bid Europe-Firming Fed cuts bets buoy stock, undercut dollar
Kevin Buckland gives us a look at what the future holds for European and global markets. The market is focused on the bets that the Federal Reserve will cut rates next week, and the murkiness in the economic data used by Fed officials to make policy decisions. The Fed is focusing on the state of the labour markets, so the Fed will release the most important data - the monthly payroll figures - in mid-December instead of today. This is the result of a record-breaking government shutdown. But at least the Fed will get key data pertaining to the other side of its employment-nurturing, inflation-taming mandate today with the delayed release of the PCE deflator, among the Fed's favoured price statistics, although the data is for September. The CME Group's tool FedWatch shows that bets on the FOMC reducing rates by a quarter point on Wednesday are now at 87%. This has been a steady increase over the last week, after the ADP private jobs report revealed a surprising decline in payrolls. The data showed that weekly unemployment claims had fallen to their lowest level in three years on Thursday. However, economists believe the figures were skewed due to the Thanksgiving holiday. The dollar index has been lagging near its five-week low and the stock markets are gaining momentum. The markets will focus on possible cuts next year in the press conference that follows Jerome Powell's meeting. It's not the first indication of the outlook for longer-term interest rates. President Donald Trump presented White House economist Kevin Hassett earlier this week as a possible Fed chair when Powell's tenure ends in May. A report by the FT said that bond investors had expressed concern to the Treasury about the possibility of Hassett becoming the head of the central banks, predicting he'd aggressively reduce rates to align himself with Trump's desire for much easier policy settings. The Fed is in a period of blackout ahead of the meeting. But markets should be alert to any social media posts from Trump. Today, ECB Chief Economist Philip Lane is in Europe to chair a session of a conference about fiscal policy. The UK house prices for November are the most important data points in this region. The following are key developments that may influence the markets on Friday. Halifax Halifax house prices November ECB's Lane chairs a session at the ECB-IMF Conference in Frankfurt -U.S. PCE deflator for September
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India's Adani and Hindalco are seeking Peru copper assets due to a surge in demand
Adani, an Indian conglomerate, and Hindalco Industries, a miner, are looking to invest in Peru's copper industry, either by way of joint ventures or taking stakes in the existing mines. Peru, which is the third largest producer of copper in the world, used for sectors like power lines, construction, and manufacturing, is wooing new investors as it negotiates an expanded free trade agreement with India. "Birla and Adani are trying invest in Peru." "We are willing to facilitate," Javier Paulinich said, Peru's Ambassador to India. Peru will produce about 2.7 millions metric tons copper by 2024, and the sector is expected to attract $4.96 billion of foreign investment. India, which is the fastest-growing economy in the world, has encouraged its mining companies, in a July government document, to invest abroad to ensure copper supply chains, and to manage any disruptions. Official estimates suggest that India, which is the second largest importer of refined cobalt in the world, will have to import 91%-97% its copper concentrate needs from abroad by 2047. Paulinich added that Hindalco had also sent a similar delegation to Peru in the past year. He said that both Adani, and Hindalco, were in the initial stage of trying to identify opportunities. Last year, a top executive of the company said that Indian billionaire Gautam Adani's group will source copper concentrates in Peru as well as other suppliers like Chile and Australia to build its $1.2 billion copper plant. This is the largest single-location copper smelter in history. Adani and Hindalco have not responded to emails seeking comments. India's copper exports increased by 4%, to 1.2 millions metric tons during the fiscal year ending March 2025. The government said that the demand is expected to rise to 3-3.3 millions tons by 2030, and 8.9-9.8million tons by 2047. Free Trade Pact Paulinich added that the discussions are still ongoing. India also requested a detailed copper chapter in its free-trade negotiations with Peru. Paulinich stated that the free trade negotiations could be concluded by May, and that the next meeting is scheduled for early January. He said, "It's in the final stages." (Reporting and editing by Stephen Coates; Mayank Bhardwaj, Neha Arora)
BRICS nations raise power emissions to new highs over rest of world: Maguire
The BRICS group of major emerging economies Brazil, Russia, India, China and South Africa emitted a record 1.98 billion metric tons of co2 from power generation during the first quarter of 2024, information from energy think tank Ember programs.
That emissions toll was approximately 500 million heaps higher than the whole emissions load generated by the rest of the world combined and highlights the diverging pollution trends between key fast-growing economies and most developed nations.
A compounding issue for emissions trackers is a potential deterioration in trade relations between BRICS members and the United States and its allies, and the possibility that BRICS members focus on financial development over decarbonization efforts.
Together, the BRICS nations account for more than 40% of the world's population and around a quarter of the worldwide economy, and so hold considerable influence when banded together.
The bloc was established as a casual club in 2009 to challenge a world order dominated by western economies, and over 40 other nations including Indonesia, Saudi Arabia, Egypt and Kazakhstan have revealed interest in signing up with the forum.
If the present BRICS group opts to integrate ambitious members, the brand-new club could have the means to mostly overlook western financial pressure to reduce pollution, as growing trade and investment within the new BRICS bloc could provide a guard against blowback by western-affiliated trade partners.
HEAVY HITTERS
China and India alone accounted for over 90% of the BRICS emissions total throughout the first quarter, highlighting how focused power contamination is within the BRICS bloc due to high coal usage by Asian countries.
China and India are likewise perhaps the most prominent members of the BRICS, with the power to deliver on trade pacts and to undertake considerable foreign financial investment projects that might entice new members.
As the world's largest power producer and renewable energy developer, China is also an essential gamer on the worldwide phase in regards to current nonrenewable fuel source emissions as well as sustainable energy generation possible.
The nation discharged approximately 5.4 billion tons of CO2 from nonrenewable fuel source power generation in 2023, or approximately 40% of the worldwide overall, which has made China an essential target for global pressure to lower international pollution.
China is likewise by far the world's top clean energy designer and exporter, and intends to control the production and export of tidy energy products over the coming years.
However, Beijing has faced allegations of unfair trade practices including the discarding solar panels, electric cars and other products onto world markets at prices that undercut rival manufacturers.
This has actually led to trade spats with the United States and Europe in the last few years and lengthy disputes at the World Trade Organisation (WTO).
Over the same duration, China has become the top location for exports from countries that deal with western sanctions, consisting of Russia and Iran, providing those nations with critical revenues that further strain China's relations with western powers.
India, the world's second biggest coal user behind China, has likewise frustrated western sanctions efforts by emerging as a. key purchaser of Russian product exports, consisting of crude oil,. coal and natural gas.
India is likewise under growing global pressure to cut. power emissions, but like China is struggling to balance the. energy needs of its fast-growing economy with promises to control. pollution.
India also deals with the difficulty of producing sufficient tasks. for its 1.4 billion population - the world's biggest - which. requires a rapid and sustained growth to its cost-sensitive. manufacturing sector.
Power firms have actually dedicated to sharply increasing energy. products from tidy sources but still count on low-priced coal to. produce over 75% of the country's electricity.
India has actually vowed to reach net zero carbon emissions by 2070. however is deemed highly unlikely to reach that target, given the. withstanding reliance on coal and prepared even more expansions in usage. of the fuel, according to Environment Action Tracker.
GROWTH DRIVE
In addition to China and India, Russia likewise recorded sharp. development in power emissions throughout the very first quarter, while Brazil. and South Africa kept emissions mostly flat.
These emissions patterns put BRICS members at odds with lots of. western countries.
But the fact that each BRICS country is a crucial producer of. several vital products that aid financial growth makes BRICS. membership attractive to other emerging economies.
In addition to surging volumes of low-cost made and. semi-finished goods, BRICS nations produce and export coal, gas,. crude oil, soybeans, corn, rice, metals and rare earth minerals.
Many BRICS countries are also committed to consuming growing. volumes of the majority of nonrenewable fuel sources for the coming decades, that makes. the bloc an appealing trade partner for the similarity Saudi. Arabia and Indonesia which have plentiful fuel products but face. decreasing need for them in western markets.
At present, the still-limited degree of BRICS forum. engagement with other countries suggests that western policymakers. still play an essential role in major choices by the majority of emerging market. federal governments.
Which suggests that western values about the environment may. still prevail and stimulate a power sector clean-up in some. countries.
But if BRICS nations choose to discover new club members that look for. economic development above all else, the decrease of emissions may. take a rear seats to more emissions-laden commercial. expansion.
<< The opinions revealed here are those of the author, a. writer .>
(source: Reuters)