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Sources: Japan Q4 aluminum talks drag on in an effort to bridge the gap
Three sources involved directly in the discussions said that quarterly pricing talks between Japanese aluminum buyers and global producers took an unusually long time as both sides struggled to close a large gap on primary metal shipment for October toDecember. Japan is one of the largest Asian importers of metals and the premiums that it pays each quarter above the London Metal Exchange cash price (LME) set a benchmark for the region. However, it is rare to have talks continue weeks after the start date. Early September saw the beginning of talks between Japanese buyers, global suppliers such as Rio Tinto and South32. In the initial offer, producers offered Japanese buyers premiums ranging from $98 to $100 per ton, a drop of 5% to 10% over the previous level for July-September, due to low demand. Sources said that one producer cut its price to $97, from $103, and buyers refused, citing premiums of $70 or more, and wanting levels in the 80s. Source at a Japanese fabricator said, "The $97 offer has expired and we've asked the producer for a new offer." She added that low demand and high inventory keep bids in $80s. Three major Japanese ports have large stocks of aluminium Marubeni, a trading house, said that the total volume of coal sold in September was 341,300 metric tonnes, an increase of 1.8% over the previous month. Sources at a producer say that sellers are holding out for a higher price as the rising prices in Europe and the United States are expected to cause a shortage of supplies in Asia. They also said that discussions could continue until the end this month. Sources declined to identify themselves as this is a sensitive issue. (Reporting and editing by Clarence Fernandez; Yuka Obayashi)
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Shanghai copper falls as traders focus trade tensions, weak dollar limits decline
Shanghai copper fell on Friday, as investors continued to focus on trade tensions. However, a weaker U.S. Dollar and the rising prospect of another Fed rate reduction limited losses. As of 0330 GMT the most traded copper contract on Shanghai Futures Exchange fell 0.42%, trading at 84630 yuan (11,881.56) a metric ton, and is expected to finish the week down 2.42%. The benchmark copper for three months on the London Metal Exchange fell 0.82%, to $10,560 per ton. This was a 0.46% gain in a week. Market participants continue to be cautious as they closely monitor trade developments between China, the United States and other countries as an important meeting between these two countries approaches. China blamed Thursday the United States of creating a panic in the world over its control on rare earth exports. The U.S. official's comments on Wednesday that China's expansion in rare earth exports is a danger to global supply chains and threatens to decouple, as well as their urging China to alter its course. Beijing claimed that the U.S. "seriously misrepresented" China's actions and deliberately stoked misunderstandings and panic. The Federal Reserve cut interest rates again, which helped to support copper's decline. The soft dollar makes commodities that are traded in greenbacks cheaper for investors who use other currencies. Fed Governor Christopher Waller announced on Thursday that he would be on board with another rate reduction later this month. Citing weak labour market statistics, his colleague Stephen Miran urged a more aggressive path of rate cuts. Zinc fell 0.48% among SHFE's base metals. Lead was down 0.26%. Tin grew 0.52%. Aluminium and nickel were not affected. Zinc fell 0.72% on the LME, nickel dropped 0.41%, tin declined 0.23%, and lead rose 0.28%. Aluminium was relatively unchanged. ($1 = 7.1228 Chinese yuan renminbi) Friday, October 17, DATA/EVENTS - (GMT) 0900 EU Housing Starts Number Sep. 1230 US Import prices YY Sept. (Reporting from Dylan Duan and Lewis Jackson).
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Gold prices rise to $4,300/oz for the first time in five years
Gold reached a new record high of $4,300 per ounce on Friday, and investors were rushing to buy the metal as a safe haven due to signs of weakness among regional U.S. banks, global trade frictions, and the expectation of further rate cuts. As of 0233 GMT spot gold was up by 0.3% to $4,336.18 an ounce after hitting a new session high of $4 378.69. U.S. Gold Futures for December Delivery jumped 1%, to $4348.70. Bullion is up about 8% this week, which would make it its best week since the month of March 2020. Each session has seen a new record high. Silver spot fell by 0.7%, to $53.86 an ounce. However, it remained on course for a weekly increase. Prices reached a high of $54.35 earlier in the session as a result of the gold rally and the short squeeze on the spot market. Tim Waterer, KCM Trade's Chief Market Analyst, said that the $4,500 target for gold could be reached sooner than anticipated, depending on how long the concerns over U.S. China trade and the shutdown of the federal government linger. China has accused the U.S. again of creating panic with its controls on rare earths, but it rejects calls to reverse the export restrictions. Christopher Waller, the Federal Reserve governor, has also expressed support for a further rate cut in response to concerns about the labour market. Investors expect a reduction of 25 basis points at the Fed meeting on October 29-30 and another in December. Wall Street also closed lower Thursday. Signs of weakness among regional banks have frightened investors who were already on edge due to the U.S.-China Trade tensions. Waterer stated that "the resurgence of regional bank credit concerns in the United States has given traders another reason to purchase gold." The non-yielding gold, which does well in low-interest rate environments, has gained over 65% in the past year, driven by geopolitical turmoil, aggressive bets on rate cuts, central bank purchases, de-dollarisation, and robust inflows into exchange-traded funds. On Thursday, U.S. president Donald Trump and Russian president Vladimir Putin agreed to hold another summit about the war in Ukraine. The West continued to pressurize Russia on its oil sales. Britain even imposed sanctions against major Russian oil companies. Palladium fell 0.4%, to $1607.93, while platinum dropped 0.7%, to $1701.0. Both metals are headed for weekly gains. (Reporting and editing by Rashmia Aich, Subhranshu Saghu and Anmol Choubey in Bengaluru).
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Petrobras Picks Halliburton for Deepwater Completions Job off Brazil
U.S. oilfield services provider Halliburton has secured multiple contracts from Petrobras to provide completion and stimulation services for its deepwater fields offshore Brazil.The contracts entail vessel stimulation, intelligent completions, and safety valves services, using Halliburton’s engineering solutions.In the Búzios field, Halliburton will deploy its SmartWell intelligent completion technology to enable real-time reservoir management and actionable insights to optimize production. For the Sépia and Atapu fields, Halliburton will provide EcoStar electric tubing retrievable safety valves (eTRSV) to improve the safety and efficiency of this project.Additionally, Halliburton's Stim Star Brasil, tailored for Petrobras activity, will deliver stimulation services that focus on reservoir productivity and improve asset performance.The contracts are expected to begin in 2026.“Halliburton’s engineered stimulation solutions strengthen the collaboration with Petrobras. These awards demonstrate our longstanding relationship in Brazil and support our global strategy to improve asset value and safety through our completions services,” said Shawn Stasiuk, senior vice president, Halliburton Completion and Production division.
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Bankers claim that the bond sales by three Indian state-owned firms prompted by the yield decline accounted for $880 million of the total amount.
Three merchant bankers familiar with the matter on Friday said that a decline in corporate bond rates in secondary market following a dovish policy encouraged three state-run companies to raise approximately 77.50 trillion rupees ($880.5 millions) through bonds sales. Hindustan Petroleum, a state-run company, plans to raise 50 billion rupees. Bharat Petroleum plans to raise 20 billion rupees. The bankers said that both oil marketing companies will be looking to issue bonds with a maturity of five years or less in the next few days. North Eastern Electric Power Corp. (NEEPCO), a subsidiary wholly owned by NTPC, would like to raise approximately 7.50 billion rupees via bonds maturing between five and eight years. BPCL tapped into the market about six months ago. NEEPCO raised money via debt in May 2024, and BPCL did so in March 2023. One of the bankers stated that "NEEPCO was waiting for the central banking policy for a very long time and should be first to go out among the three." The companies did not respond to the emails asking for a response, and bankers asked to remain anonymous as they were not authorized to speak with media. The Reserve Bank of India maintained the status quo in its policy rate setting and said that lower inflation had opened policy space for growth. The expectation of a reading of record low in October and the drop in retail inflation down to an eight-month low have cemented bets on a rate cut in December. According to LSEG data, the bond markets are rallying and AAA-rated corporate bonds with shorter maturities have seen yields decline by 6-10 basis point. Bankers said that corporate bond issuances have slowed in September but will pick up again this month as the easing of yields is expected to encourage both issuers and investor. ($1 = 88.0190 Indian rupees). (Reporting and editing by Sumana Niandy; Khushi malhotra, Dharamraj Dhutia)
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The weekly iron ore loss is set to rise on the back of renewed US-China tensions and rising supply
The iron ore futures price fell by a significant amount on a weekly basis as the trade tensions between the U.S. and China weighed down on the outlook for demand. The most traded January iron ore contract at China's Dalian Commodity Exchange was unchanged by 0339 GMT. It stood at 773 Yuan ($108.52), representing a 2.8% decline so far this week. As of 0329 GMT, the benchmark November iron ore traded on Singapore Exchange was down 0.31% at $104.6 per ton. The price has fallen by 1.7% this week. The price of key steelmaking ingredients was supported by the strong demand from China, the top consumer. This helped to limit further declines on Friday. Data from Mysteel revealed that the average daily hot metal production stood at 2,41 million tons during the week ending October 16. This level indicates a steady ore supply despite a small drop of 0.2% on a week-to-week basis. Trade friction between China and the United States has rekindled concerns about China's ability to achieve its economic growth goal of around 5%. U.S. president Donald Trump has threatened to end some trade relations with China, and impose additional tariffs of 100% on imports. This comes after Beijing expanded its export restrictions last week on rare earths which are essential for electric vehicles and the defense sector. The expectation of increased supply in the fourth-quarter added pressure to ore prices. Rio Tinto, the world's biggest iron ore supplier, said Tuesday that it must finish strong in order to reach its target for iron ore shipments. Analysts said that other steelmaking ingredients, such as coking coal and Coke, have gained 1.72 % and 1.73 %, respectively, due to a shortage of these materials caused by safety checks. The benchmarks for steel on the Shanghai Futures Exchange have gained some ground. Rebar grew by 0.43%. Hot-rolled coils gained 0.47%. Wire rod climbed 0.66%. Stainless steel rose 0.56%. Reporting by Amy Lv & Colleen Howe. $1 = 7.1231 Chinese Yuan.
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Peru's new President faces protests that resulted in dozens of injuries and one death
The state ombudsman’s office reported on Thursday that at least one person died and dozens were injured during widespread protests in Peru overnight against President Jose Jeri who took power only days before. The demonstration on Wednesday night was called by Gen Z protesters and transport workers, as well as civil groups. It was part of a series against rising crime and corruption that culminated in the ouster at midnight of former president Dina Boluarte. Around the country, thousands of protesters gathered. Hundreds clashed with police in front of Congress in Lima. The police fired tear gas, while protesters hurled rocks, fireworks and burning objects. "Everyone must leave!" "Everyone must go!" protesters shouted when they reached Congress, and then tried to tear down the metal barriers protecting it. This led to clashes. Fernando Losada from the Ombudsman office of the country said that a 32-year old man named Eduardo Mauricio Ruiz was killed in the protest. His death will be investigated. The prosecutor's offices in Peru said Ruiz was shot to death. Oscar Arriola, head of Peru’s national police, told reporters later on Thursday that Luis Magallanes was physically assaulted by a PNP member and had committed the shooting. Arriola said Magallanes had been taken to hospital for treatment and was removed from his position. Jeri posted on X that she was sorry for the death and said it would be investigated "objectively". He blamed the violence on "delinquents" who had infiltrated peaceful protests to create chaos. He wrote: "The full force will be on these people." Jeri, who attended a meeting at Congress about protests on Thursday afternoon, told reporters that he would "ask Congress for the authority to legislate" on issues of public safety. Jeri stated that prison reform would be a major focus, but she did not elaborate what these powers would include. Vicente Tiburcio was appointed as the new Interior Minister shortly after the protest. He spoke to Congress and said that the government will push for a comprehensive reform of the national police. The interior ministry didn't immediately respond to an inquiry for comment about the reform of police or Jeri’s request for increased legislative powers. The protests on Wednesday were a good indicator of how Jeri’s presidency could end next July, due to elections scheduled. Jeri has pledged to put crime at the top of his agenda, but he has been involved in a number scandals, including allegations of corruption and an investigation that has now been shelved for sexual assault. Jeri, 38, has expressed his willingness to work with any investigation into corruption. He has denied all wrongdoing and is willing to cooperate. Boluarte was the subject of widespread protests when she took power in 2022. This led to dozens deaths and a drop in her popularity, which fluctuated between 2% to 4% during the days before her removal. Congress, which Jeri led before becoming president, is also unpopular. It has a one-digit approval rating. (Reporting from Marco Aquino, Lima; writing by Alexander Villegas and editing by Deepa Babyington and David Gregorio).
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Italian appeals Court upholds conviction of Milan prosecutors in Eni Nigeria Case
Two Milan prosecutors were sentenced to eight months in prison by an Italian appeals court for not filing documents that would have backed up the position of energy group Eni in an international case of corruption. Eni, Shell and all defendants were acquitted by a jury in March 2021, in what was dubbed the biggest corruption case in the oil industry, which involved the $1.3 billion purchase of an oilfield in Nigeria a decade earlier. The judges in Brescia, a northern city in Italy, confirmed the verdict of last year that Fabio De Pasquale & Sergio Spadaro had failed to comply with their legal obligations by failing to submit documents that would have been helpful to the defence. Spadaro, before Thursday's verdict read to the court a long statement in which he stated that "there was not omission, no refusal" and the prosecution had acted according to "conscience and law". Massimo Dinoia said that the two attorneys for the prosecution would appeal their case to Italy's highest court, The Court of Cassation. De Pasquale & Spadaro are able to continue working during the appeals process. The Milan court which acquitted defendants in Eni and Shell's trial stated that the prosecutors failed to include a video taken by an ex-external lawyer for Eni. This court considered the video relevant to the case. The Brescia Court has jurisdiction over judges in Milan and prosecutors there. (Reporting and editing by Gavin Jones, Emilio Parodi)
What next as China approaches peak aluminum production? Andy Home
China's aluminum production is approaching its capacity limit.
From just four millions metric tons of production in 2004, China's primary metal smelting industry is expected to reach 43 million tons by 2024 or 60% global output.
The West has increasingly resisted the growing dominance that China is gaining in the global aluminum supply chain, first through trade complaints and antidumping duties, and then more recently with U.S. Tariffs.
China's semi-fabricated aluminum exports, which increased by 19% last year to a record of 6.2 million tonnes, were not affected.
Things are about to get better.
Beijing's "Action Plan" on aluminium for 2025-2027 confirms that the cap will remain in place, and outlines a plan for what comes next.
TOUCHING the ceiling
According to the International Aluminium Institute, China's primary aluminum production increased by 2.6% on an annual basis in the first quarter 2025.
The average annualised production was 44 million tonnes between January and March, only a million tones short of the cap of 45 million tons set in 2017.
According to consultancy AZ Global, it is technically possible that the country's production could exceed the cap.
The capacity of a smelter is measured by the amperage designed for the electrolysis process. However, "one of first tasks of any plant manager would be to increase output above the rate," the article states. The smelter can produce more than its capacity by increasing the amperage.
AZ China estimates China's capacity utilisation at 98.2%. This leaves little room for collective amperage to increase.
China's average annual growth rate of 4.0% over the past five years is beginning to slow.
Going Green
Chinese operators continue to build new smelters. However, the new capacity will have to be offset by closing older capacity.
Beijing's policies in this sector focus on eliminating older, less-efficient capacity and making sure that newer smelters use renewable energy sources.
Aluminium production is moving from coal-rich regions to new energy hubs such as Yunnan, with its hydropower and Inner Mongolia which has a massive wind and solar power potential.
The goal is to produce more metals with low carbon content. According to the plan, renewable energy will account for 30 percent of national smelter electricity demand by 2027.
Beijing wants to boost production by recycling scrap to reach a target of 15 million tons annually in 2027.
Exports are reduced
Already, another offset has kicked in.
In December, the government eliminated tax rebates of 13% for exports of aluminum products. This was done to keep more metal on the domestic market.
Exports have slowed down sharply since then, with volumes outbound falling by 11% on an annual basis in January and Febraury.
Analysts at Macquarie Bank predict that exports will fall by 8% between 2025 and 2030. A more dramatic collapse is unlikely, as the world outside China relies heavily on its products for around 15% of the total demand.
Most Western buyers are likely to accept at least a part of the cost increase.
It is possible that Chinese aluminum exports have reached their peak.
REPRIEVE FOR WESTERN GENERALISERS?
Combining a slowdown in Chinese production growth with reduced exports opens up a window for the rest the world's primary aluminum producers.
Nearly a million tonnes of smelting capacity in the United States is idle. The 25% tariffs on aluminum imports imposed by President Donald Trump are meant to encourage restarts.
After the surge in power prices that followed Russia’s invasion of Ukraine, 2022, around half of Europe's primary smelting capacities are out of operation.
Although the structural changes implemented by the largest producer in the world may provide a reprieve for such plants, restarting idled capacities is also a matter of aluminium and electricity prices.
After years of low investment, there is renewed interest in greenfield smelters being built in the West.
The government has provided $500 million to U.S. aluminum producer Century Aluminum for the launch of the first new smelter built in the United States since 1945.
Rio Tinto is examining low-carbon smelter project in India and Finland.
But the Chinese dominance will remain
Due to the lack domestic expansion potential, Chinese producers also go overseas.
Beijing's aluminum action plan, for example, calls for closer cooperation with nations rich in resources, such as Guinea. Chinalco, a Chinese company, is involved in a project that converts Guinea's bauxite into alumina.
Shandong Nanshan Aluminium, which produces alumina in Indonesia, plans to expand their refining capability and add a smelter that can produce 260,000 tons per year.
China has stopped building its own capacity, but it appears that they have no plans to loosen their grip on a material classified by the United States as well as the European Union as a vital raw material.
These are the opinions of a columnist who writes for.
(source: Reuters)