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Copper prices fall on stronger dollar and muted Chinese demand
The copper price fell on Tuesday due to a stronger dollar, and signs that demand for metals from China, the world's largest consumer, was muted. However, a decrease in stocks at the London Metal Exchange helped limit the losses. The benchmark LME three-month futures fell 0.4%, to $10.651.50 per metric ton at 1001 GMT. Traders are waiting for more updates on the U.S. and China trade talks ahead of a high-stakes summit between the leaders of the two world's largest economies scheduled to take place in South Korea next week. The market for copper used in construction and power was impacted by data that showed China's economy slowed down to its lowest level in a year in the third quarter. "While Beijing will likely introduce additional targeted assistance in the coming month, the message is clear. China is entering a more mature, slower phase of expansion. Analysts at Sucden Financial say that the old investment-driven business model is losing steam. Yangshan Copper Premium The price of copper, which reflects the demand for China's imports of copper, has fallen 38% in the last month, to $36 a ton. This is its lowest level since July. On Oct. 9, copper reached a 16-month peak at $11,000 due to multiple mine supply disruptions. The daily LME data showed that the available copper stocks at the LME registered warehouses dropped to 127.350 tons. This was the lowest level since July after 2,000 new cancellations in South Korea. The 21-day moving average at $10,529 per ton is the closest support for copper on the technical front. Aluminium, among other LME metals rose by 0.2%, to $2,781.50 per ton. The Globe and Mail reported that a U.S. Canada trade agreement on aluminum, steel and energy may be ready to approve at the South Korea summit this month. Zinc rose 0.9% to $3.003.50. Lead increased 0.2% at $1.992.50. Tin remained unchanged at $35,300. Nickel fell 0.2%, to $15,190. (Reporting and editing by Emelia Matarise; Additional reporting by Dylan Duan)
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Sources say that Anugrah Neo Energy Materials, Indonesia, plans to IPO for over $300 million.
Two people who have direct knowledge of this matter say that Anugrah Neo Energy Materials, a nickel mining and processing firm in Indonesia, plans to make an initial public offer on the Indonesia Stock Exchange. The company hopes to raise $300 million. Sources declined to identify themselves as this information is not public. According to sources, Anugrah Neo Energy Materials could be valued at more than 2 billion dollars. Proceeds will also be used for expansion. They added that DBS and RHB are among the banks involved in the IPO. Anugrah Neo Energy Materials didn't immediately respond to an inquiry for comment Tuesday. DBS declined comment. RHB stated that it is not in a position at this time to comment. Anugrah Neo Energy Materials, according to its site, operates two nickel-laterite mines in Central Sulawesi. TAS, located in Morowali, holds over 200 million tonnes in resources. MDK, located in Ampana, spans over 10,800 hectares (41,7 square miles). According to its website, the company is developing two industrial estates and a high-pressure acid-leach plant that produces mixed hydroxide, a precursor used in electric vehicle batteries. Indonesia, as the world's leading nickel producer, with a production of more than 50%, is driving investments in battery materials and EV supply chain. Indonesia is the largest economy in Southeast Asia.
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Globe and Mail reports that a US-Canada trade agreement may be approved at the APEC Summit.
The Globe and Mail reported that a U.S.-Canada deal on energy, steel and aluminium could be ready to be signed by U.S. president Donald Trump and Canadian Prime Minister Mark Carney at the Asia-Pacific Economic Cooperation Summit later this month in South Korea. The Toronto daily could not confirm the story immediately. Carney, the White House and the U.S. Commerce Department did not respond to any requests for comments outside of regular business hours. Reports added that the U.S. is not willing to negotiate on softwood lumber or Canadian automobiles. Trump imposed tariffs against Canadian autos, steel and aluminium earlier this year. Canada responded in kind. The measures against aluminium and steel were lifted after negotiations. Sources told The Globe and Mail that Canada would likely have to accept steel quotas in exchange for lower U.S. Tariffs, but critical minerals were not on the table. Reports earlier this week indicated that Canada had offered to reduce tariffs on certain steel and aluminum products imported from both the U.S.A. and China in an effort to assist domestic businesses that were being battered on two fronts by a global trade war. Carney, who visited Washington in the first half of this month, said that he and Trump had a "meeting of minds" on the future of steel and aluminum.
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IFC and Appian Launch $1 Billion Critical Minerals Fund in Africa and Latin America
The International Finance Corporation and Appian Capital Advisor, a private equity firm, have announced a $1 billion fund for critical mineral projects in Africa and Latin America. The fund will be anchored by a $100 million initial commitment from IFC (a member of World Bank Group), and focus on Nickel, Copper, Cobalt, and Rare Earths. These are all vital for energy transition and digital technology. IFC has launched its first joint fund with a mining investor. This is a reflection of the growing interest among development finance institutions in attracting private capital to mining projects. Appian CEO Michael Scherb said that the IFC is trying to invest more capital in this sector, which is a difficult one. Appian had already worked on rare earth and gold projects in Africa with the IFC. This is a more formalised relationship." Appian will co-invest alongside existing and future funds, managing assets of around $5 billion. The fund will invest its first money in Atlantic Nickel’s Santa Rita Mine in Brazil. This open-pit nickel, copper, and cobalt mine will also be developed underground by the parties. It is expected to produce 35,000 metric tons nickel per year for 34-years. The fund aims to support sustainable industrialisation and supply chain resilience in developing economies as governments and companies rush to secure critical minerals. Scherb stated that the fund was also considering building an downstream refinery at its Santa Rita Mine in Brazil. Scherb stated that Appian which produces graphite is already a downstream refiner of graphite, in the United States. The U.S. Department of Energy has recently given $125 million to this facility. He said: "We have expertise upstream and downstream and you could see us working with governments more based on this basis."
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Saudi Arabia's earnings are weak and most Gulf markets follow Asian stock prices higher
On Tuesday morning, most Gulf stock markets were up, following the Asian benchmarks. This was due to a possible easing in U.S. China trade tensions. Saudi Arabia's index, however, fell because of disappointing corporate earnings. Dubai's main stock index rose by 0.3% with the top lender Emirates NBD advancing 1.9%. RBL announced on Saturday that ENBD would buy 60% of the Indian private lender RBL Bank, the largest acquisition of its kind in India's finance sector. The index in Abu Dhabi rose 0.3%. This was due to a 0.3% increase by investment company Multiply Group after the board of its parent company International Holding Company approved a plan for it to acquire 2PointZero, an investment platform, and food firm Ghitha Holding via a share exchange. Saudi Arabia's benchmark stock index fell 0.6% due to a 9.6% drop in Yamama Cement Company after a 63% fall in profit for the third quarter. The stock of the company is set to experience its biggest intraday drop since May 2020. Al Rajhi Bank, the largest sharia compliant lender, fell by 0.5%, despite recording a solid third-quarter result, even though its quarter-onquarter profit growth was only in the single-digits. Oil prices, which are a major component of Gulf economies, fell for the second day, as fears about the supply and the risks to demand resulting from the trade conflict between the U.S., and China - the two largest oil consumers in the world - weighed heavily on the markets. The Qatari Index was up by 0.2% and Qatar Islamic Bank gained 0.8%. (Reporting by Ateeq Shariff in Bengaluru; Editing by Harikrishnan Nair)
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Shanghai copper gains pared back on caution before Sino-US trade talks
Shanghai copper lost its early gains on Monday, as traders awaited the upcoming U.S. China trade talks. China's slowing economic growth also stoked the market. After a session that saw a rise of up to 0.63%, the most active contract on Shanghai Futures Exchange ended daytime trading at just 85,380 yuan per metric tonne. As of 0722 GMT, the benchmark three-month futures on the London Metal Exchange fell 0.45%, to $10,643 per ton. Traders were looking for updates on the U.S. and China trade talks ahead of a high-stakes meeting between the leaders of the two world's largest economies next week in South Korea. Data shows China's Economic growth The third quarter saw a slowdown to an all-time low, and deflationary pressure continued. The previous gain was due to the return of copper bulls prices in the latest effort by U.S. president Donald Trump to reduce trade tensions. Trump said on Monday that China has no intention of invading Taiwan. He also acknowledged he would raise the matter at the meeting he plans to have with his Chinese counterpart Xi Jinping. Trump said he also expects a fair deal to be reached with Xi. The remarks were made during a meeting between the Australian Prime Minister Anthony Albanese and President Obama, at which they signed an important minerals agreement in order to counter China’s dominance of global supply. The U.S. Treasury secretary Scott Bessent will meet with China's vice premier He Lifeng in Malaysia to try and avoid an escalation of U.S. duties on Chinese products. Aluminium gained 0.19% among other SHFE base materials, while zinc rose 0.39%. Nickel increased 0.36%. Lead was up 0.35%. Tin posted a 0.69% gain. The LME metals index showed that aluminium fell 0.32%. Tin dropped 0.15%. Zinc increased 0.27%. Lead added 0.25%. Nickel was little changed. $1 = 7.1230 Chinese Yuan Renminbi (Reporting and editing by Harikrishnan Nair, Eileng Soreng and Lewis Jackson)
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China's important meeting on iron ore is in focus
Iron ore futures traded in a narrow range on Tuesday as investors focused their attention on a meeting between China's top leaders that will determine the economic policies of the second largest economy of the world for the next five-year period. A summary of the Communist Party's policy is expected at the end of the four-day meeting, which began Monday. The full plan with its development goals will not be published until March 2026. The meeting was held after data revealed that China's property crisis-hit sector continued to be a drag on the steel consumption. This also affected prospects for consumption of iron ore, an important steelmaking ingredient. The January contract for iron ore on China's Dalian Commodity Exchange closed the daytime trading 0.13% higher, at 769.5 Yuan ($108.03), per metric ton. It had earlier touched 760 yuan, the lowest since August 20, during the daytime session. As of 0755 GMT the benchmark November iron ore traded on the Singapore Exchange rose 0.41% to $103.95 per ton after having hit its lowest level since October 1, at $102.85. BHP Group, meanwhile, expressed optimism about global iron ore consumption on Tuesday, despite warnings of a slowing growth in China. China's crude output of steel fell to a 21 month low in September due to weak demand and declining steel margins. BHP's first-quarter iron-ore production, which is the third largest supplier in the world, was slightly below expectations due to maintenance work at Port Hedland, Australia. Coke and coking coal, the other ingredients used in steelmaking, fell by 3.49% and 2.73 %, respectively. The Shanghai Futures Exchange steel benchmarks have mostly fallen as a result of the lacklustre demand. Rebar dropped 0.36%. Hot-rolled coils fell 0.31%. Wire rod dropped 0.51%. Stainless steel gained 0.44%.
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Gold's record run is paused as dollar firms and investors book profits
The dollar rose on Tuesday and investors took profits. Gold had reached a new high the previous day on the hope of more interest rate reductions from the U.S. Federal Reserve, and on strong demand for safe-haven assets. As of 0634 GMT spot gold was down by 0.7%, at $4,323.69 an ounce. It had reached a record high of $4.381.21 per ounce on Monday. U.S. Gold Futures for December Delivery fell by 0.4%, to $4340.10 an ounce. Gold is now more expensive to other currency holders due to the 0.2% rise in the dollar index. Tim Waterer, KCM Trade's Chief Market Analyst, said that profit-taking and a decline in safe-haven flows have combined to take the edge of the gold price. Any pullbacks will be seen as opportunities for buying gold while the Fed continues on its current rate-cutting path. According to the CME FedWatch Tool, markets are pricing in a quart-point Fed rate reduction this month and another in December. In a low-interest rate environment, gold, which is a nonyielding investment, does well. Waterer stated that the current gold rally still has room to rise, provided U.S. CPI figures released later this week don't reveal any unpleasant surprises. According to economists surveyed by the, the data is scheduled to be released on Friday, after a delay caused by the government shutdown. The index should have risen 3.1% year-over-year in September. On Monday, the U.S. shutdown reached its 20th consecutive day after senators failed to resolve the impasse for the 10th time in a row last week. Kevin Hassett, White House's economic adviser, said that the shutdown would likely end this week. The shutdown has caused key economic data to be delayed, leaving investors and policymakers with a data vacuum ahead of next week's Fed policy meeting. In Malaysia, U.S. Treasury secretary Scott Bessent will meet Chinese Vice Premier He Lifeng this week in an effort to prevent a rise in U.S. tariffs against Chinese goods. Spot silver fell 1.8%, to $51.54 an ounce. Platinum dropped 1.8%, to $1.608.35, and palladium declined 0.9%, to $1.483.14.
Andy Home: Bad news for American beer consumers as aluminium tariffs begin to kick in
Here are some good news about aluminium in the United States. President Donald Trump has backtracked on his threat to slap a 50% tariff on Canadian metal imports.
The bad news. They will have to pay a 25% tariff on all aluminum products, regardless of where they come from.
The market has already changed to reflect Trump's double-down on tariffs in order to revive domestic smelting capacities.
CME Midwest Premium, which reflects the cost of unwrought aluminum delivered to an American fabricator above the London Metal Exchange base price, has reached record highs.
The premium on aluminium will continue to flow down until it reaches the final user. This could be Ford Motor, Lockheed Martin, or any of the many independent breweries in the country.
Tariffs are still the same as they have been and will remain so long as the United States is dependent on imports.
HANGOVER TARIFF
The original tariffs Trump imposed on aluminum in 2018 were 10%. Within a year, the Beer Institute which represents nearly 8,000 American brewers, estimated that they had already added $250 million to the cost of the industry.
Harbor Aluminum, a consultancy, found that 50 million dollars had been sent to the U.S. Treasury. Another 27 million dollars went to domestic smelters. The remaining $173 million was given to fabricators who turn metal into aluminium sheets for beer cans.
The Beer Institute was irritated that the import duty was passed on, despite the fact that U.S. cansheets typically contain around 70% recycled material sourced locally.
Tariffs usually work in this way.
Ask European aluminum buyers. Import tariffs on aluminum range from 3% for primary aluminium up to 6% for some alloys.
Researchers at the LUISS university in Rome have studied the impact of the metal duty exemption on consumers. In a paper published in 2019, they found that despite the fact that around half of the imports of the European Union were made up of duty-exempt material, the final price for everyone was 6%.
Researchers found that producers are encouraged to "align" their prices at the highest level possible, i.e. the price paid in duty.
In 2022, the Beer Institute conducted a follow-up study that confirmed this harsh economic truth. It found that, even after granting exemptions to key suppliers like Canada, beer manufacturers were still required to pay full import tariffs on their can metal. At that point, the cost had reached $1.4 billion.
Import Dependency
Harbor Aluminum's conclusion that first-stage processing companies have been the primary beneficiaries of tariffs up to this point reflects the imbalanced U.S. domestic supply chain.
There are many semi-manufacturers in the country, but there are only four primary metal smelters that can supply them.
According to the U.S. Aluminum Association, more than 164,000 people are employed directly in the aluminium industry. However, only 4,000 of them are involved in upstream metal manufacturing.
These four smelters will produce 670,000 metric tonnes of metal by 2024 compared to the US consumption of 4.9 million.
Imports totaled nearly 4.0 million tonnes, with 70% of that amount coming from Canadian smelters.
It is hard to imagine that this dynamic will change anytime soon. Even if the idled smelting capacities of around 1 million tons per annum were to be brought back into production, a huge "if", given the age and cost structures of the four mothballed facilities, there would still be a large import dependency.
Century Aluminum has been working on a new smelter for years, but the company still doesn't have a reliable source of power at a competitive price to fuel the electrolysis process.
Tariffs will continue to affect the final price of American buyers as long as imports are needed to meet the domestic demand.
Uncertainty in Trading
As the markets discovered on Tuesday, Trump can raise tariffs at his whim.
The fluctuating tariff rhetoric causes volatility in the CME U.S. Premium, which briefly rose to almost $1,000 per tonne over the LME Price on the threat to 50% tariffs on Canadian Metal before retreating after news of the truce between Ontario Premier Doug Ford and the United States.
It may also lead to a significant realignment in global trading patterns.
Prior spikes in U.S. aluminum premiums have pushed European premiums up. It is only logical that Europe, which also depends on primary metal imports to compete in the global marketplace for spare parts.
This time it's different. While the U.S. has seen its premiums soar to new heights, European premiums are falling.
It is counter-intuitive to say the least, given that European consumers will be losing Russian supplies over the next 12 months as part of the latest sanctions package. The European premium is more sensitive than ever to the North American market.
This divergence indicates that some US suppliers are looking to avoid Trump’s tariff tantrums and re-direct sales to Europe.
The European beer drinkers will benefit from this, as they can offer a can of aluminium to their American counterparts who are less fortunate.
(source: Reuters)