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Stocks in the UK rise as industrials and financials gain momentum
Investors analyzed corporate updates and economic statistics ahead of next week's U.S. Federal Reserve rate decision. The blue-chip FTSE 100 closed up 0.2%, while the midcap FTSE 250 gained 0.3%. After the Russia-Ukraine talks broke down, aerospace and defence stocks gained 2.5% for the third session in a row. Rolls-Royce gained 2.6% and BAE Systems about 2.6%. Investment banks and brokerages rose by 2.2%. The investment firm 3i Group topped the FTSE 100 index with a 5.1% increase. Personal goods rose by 2.8%, with Burberry gaining 3% as HSBC increased the price target for the stock. Diageo fell 3.9% as UBS cut its target price and downgraded their stock. Pharma stocks fell by almost 1%. AstraZeneca dipped 1.3%. SSP Group rose 11.3% after airport outlet operator SSP said that it expected annual profits at the upper end of their forecasts. AJ Bell AJBA.L dropped 7.6% after the Investment Platform You can also read about the warnings below. The budget will add complexity and costs to the landscape of individual savings accounts, according to Mr. Frasers, the sportswear and fashion retailer, fell by 2.7% reported A 2.8% decline in the first-half profits. A survey revealed that British Construction activity contracted Last month, the highest rate since May 2020. In the run-up to Rachel Reeves annual budget, on November 26, other surveys revealed similar concerns regarding investment, hiring and demands. Calastone data shows that British investors sold shares worth 3 billion pounds during November, the sixth consecutive month in which they have sold net. The number of Americans who filed new claims for unemployment benefits in the U.S. dropped to its lowest level in over three years last week.
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US Defense Agency's push to stockpile Cobalt is paused as the price soars
A DLA spokesperson said on Thursday that the U.S. Defense Logistics Agency intends to continue purchasing cobalt as part of the National Defense Stockpile, but it is reassessing the strategy. There is no set date for reissuing this tender. The agency will likely pay more for any purchases of cobalt, as the prices have risen by 50% since the initial tender in August. The DLA has not stockpiled cobalt in over 30 years. Cobalt is essential to the United States' national security and industrial strength as global competition for strategic minerals increases. The U.S. also wants to reduce its reliance on China. China dominates the processing of metals used in missiles, aerospace components, magnets for communications and radars and guidance systems. DLA is currently reviewing its cobalt acquisition strategy. DLA's spokesperson confirmed that the requirement was still valid and the agency still intended to buy the material for its National Defense Stockpile. The agency has not set a date to reissue the solicitation. The original tender announced on August 19, with offers due to be submitted by August 29, went through several changes before being cancelled in October. Cobalt is currently priced at $24 per lb, or $52,910 per metric ton. This compares to $16 alb, or $35,275 for a ton back in August. Since February, when exports were banned by the top producer Democratic Republic of Congo, prices have been rising. Congo has since implemented quotas but producers still wait for approval from the government to resume exports. In its original offer, the agency detailed their plans to buy 16.49 million pounds or 7,480 tons of cobalt over a period of five years for the National Defense Stockpile. The initial offer was only from three companies: Vale's Port Colborne, Long Harbour and Sumitomo metal mining plants in Canada; Glencore's Nikkelverk operations in Norway; and Japan's Sumitomo. Sources in the cobalt industry say that the DLA wanted companies to commit to a fixed price for the five-year period, which didn't take into account the possibility of price fluctuations. This could lead to producers suffering losses. (Reporting and editing by Kirovan Donovan; reporting by Pratima Dasai)
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US allows transactions with Lukoil fuel stations outside Russia until late April
The Trump administration allowed transactions on Thursday with Lukoil outside of Russia, with a small waiver from sanctions imposed by the U.S. in October because the company's revenue is used to support Moscow's war against Ukraine. A posting on the Treasury Department website stated that the transactions for approximately 2,000 stations in Europe, Central Asia and the Middle East, as well as the Americas were authorized until April 29, 2026. In October, President Donald Trump imposed sanctions against Lukoil, one of Russia's largest oil companies. This triggered a rush of buyers to buy its assets, estimated at $22 billion. These were the first sanctions imposed by the United States directly on Russian entities during Trump's second tenure. The Treasury Department has cleared companies to speak to Lukoil about purchasing foreign assets until December 13, but specific deals will require approval. Lukoil operates about 200 gas stations under its own brand in New Jersey, Pennsylvania, and New York. Lukoil operates over 300 stations in Romania and around 600 in Turkey. It is also one of the largest retail players in Moldova, Bulgaria and Turkey. (Reporting Timothy Gardner, Bhargavacharya, Katharine Jack; Editing Bernadettebaum)
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OPEC oil production slips in November despite an agreed-uplift, survey finds
A survey on Thursday found that OPEC oil production fell in November despite an OPEC+ deal to increase production in the month due to unavailability in some members. This brought the supply of the group even further below their target. According to the survey, the Organization of the Petroleum Exporting Countries (OPEC) pumped 28,40 million barrels of oil per day in October, a decrease of 30,000 barrels per days from the total for October. Nigeria and Iraq recorded the largest declines. OPEC+ - a grouping of OPEC, Russia and its allies - has slowed down the rate of monthly production increases due to concerns about an oversupply. Many members are close to their capacity limits, and some have been given extra cuts in order to compensate for an earlier overproduction. This will limit the impact of any further increases. According to an agreement between eight OPEC+ member countries covering November output, five of the OPEC-members - Algerian, Iraqi, Kuwaitian, Saudi Arabian and UAE - had to increase output by 85,000 bpd, before the effects of compensation cuts totaling 140,000 bpd. The survey indicates that the actual increase of the five is 40,000 bpd. Iraq's exports were lower, according to the data and sources in this survey, because of pipeline maintenance. A fire at the Yoho platform in Nigeria and the subsequent shutdown of that platform led to a drop in shipments. Many outside sources estimate the output of Iraq and the UAE higher than those countries themselves. Other estimates, like those from the International Energy Agency (IEA), say that they pump significantly more than the quotas. The survey aims at tracking supply on the market. It is based upon flow data provided by financial group LSEG and other companies who track flows such as Kpler. Information was also provided by sources from oil companies, OPEC, and consultants. Ahmad Ghaddar contributed additional reporting. Mark Potter edited the article.
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As markets consider rate cuts, stocks are higher and the dollar's losing streak will continue.
The dollar fell and was poised to lose its 10th consecutive day against a basket major currencies, fueled by expectations of a U.S. interest rate cut. The benchmark S&P500 was flat in the early morning trade, after two sessions of gains. The biggest losses were in healthcare, consumer discretionary, and materials stocks, while real estate and financials were on the rise. The Dow Jones Industrial Average dropped 0.09%. The S&P 500 slipped 0.06%. And the Nasdaq Composite fell 0.14%. STOXX 600 in Europe was up by 0.42%, and is still on track for a modest gain each week. The FTSE 100 index in London was up 0.16%, while the DAX in Germany gained 0.45%. MSCI's global stock index rose by 0.18%. Japanese stocks rose sharply following an auction of government debt that attracted strong demand from investors. This helped set the tone for a broader equity market. The Nikkei rose 2.33%. Michael Farr, CEO of investment advisory firm Farr, Miller & Washington, in Washington, said: "After a 5% drop in stocks in late November, they have recovered and are trading near their pre-pullback highs." BIG DROP IN US PAYROLLS DATA POST The gains were made after the U.S. data on private payrolls posted its biggest drop in over two and a half years. Also, a survey conducted in the services sector showed that activity in November was stable while hiring decreased. Markets may be disappointed if they reduce rates by a quarter point, then pause. This is what every Fed speaker said. Farr added that if they do not cut rates and instead say we will wait until the next Fed meeting, then markets may be disappointed. Fed funds futures have a 90% probability of a quarter point cut at the Fed's meeting on December 10 compared to an 83.4% a week earlier, according CME Group’s FedWatch tool. According to LSEG, the dollar index tracks the performance of the U.S. dollar against six other currencies. It was down 0.08% last day and is on track for its 10th consecutive daily decline. This will be the longest losing streak since at least 1970. The yield on the US Treasury 10-Year Bond has increased by 3.4 basis points The yield of the 10-year Treasury Bond in the United States was at last up 3.4 basis point to 4.092%. The Financial Times reported Wednesday that bond holders had voiced concerns to the U.S. Treasury about Kevin Hassett's potential to aggressively reduce interest rates in order to match President Donald Trump’s preferences. Farr stated that the Trump administration had chosen to announce the President's choice of a new Fed Chairman in a way that would be perceived - whether correctly or incorrectly - as more dovish during this meeting, to appear to be an antidote for the message. The government debt sale in Japan attracted the highest demand for more than six year, helping to calm investor nerves over the long-term financial health of the country, which has stoked fears about similar concerns about other economies. The dollar is down by 0.28% to 154.8 yen, and the yen is on track for its biggest weekly gain in two months against the U.S. dollar. A report that said the Bank of Japan is likely to increase interest rates in December, with the government tolerating such a move, citing sources within the government familiar with deliberations. In Hong Kong, offshore trading, the yuan weakened a bit, resulting in a dollar gain of 0.18%, or 7.070 yuan. On Wednesday, the Chinese currency reached its highest level against dollar in over a year. After a recent run of hot metals, precious metals have cooled. Silver fell 2.4%, to $57.03 per ounce after reaching a record high on Tuesday of $58.98. Gold dropped 0.28%, at $4,195. Brent crude rose 0.06% to $62.71 per barrel.
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Gold stable as rising yields offset dollar weakening; PCE data is in focus
Gold prices were mostly unchanged on Thursday as rising U.S. Treasury rates offset support from the weaker dollar. Markets awaited Friday's U.S. Inflation data to get clues about Federal Reserve policy ahead of their December meeting. As of 1611 GMT, spot gold rose 0.1% to $4.211.19 an ounce. U.S. Gold Futures for February Delivery rose by 0.3% to $4,243.70 an ounce. Edward Meir, Marex analyst, said: "Higher yields keep a little cap on gold's upside. The general dollar index provides some support." The benchmark 10-year U.S. Treasury rate rose by 1%. Meanwhile, the U.S. Dollar Index hit a new low for a month, making gold more accessible to overseas buyers. The latest data on Thursday shows that the number of new U.S. unemployment benefits claims fell to 191,000 in the past week, which is lower than it has been for over three years. This figure was also well below what economists had predicted at 220,000. ADP's report on Wednesday showed that private payrolls in the United States fell by 32,000 during November. This was the largest drop in over two and half years. Over 100 economists surveyed by predicted that the Federal Reserve would reduce its key rate by 25 basis point at its policy meeting on December 9-10, as it seeks to support the cooling labor market. Gold is a non-yielding asset that benefits from lower interest rates. Investors will be watching the Federal Reserve’s preferred inflation indicator, the Personal Consumption Expenditures report (PCE), due on Friday. Meir said that the markets will remain relatively unchanged between now and next Monday. As for gold, we are likely to be in a trading range which is fairly uneventful. Silver fell 2.5%, to $56.99, after reaching a record-high of $58.98. The metal has risen by 97% in this year due to a structural shortage, market liquidity concerns and its inclusion on the U.S. Critical Minerals list. Palladium fell 1.8% to $1433.50, while platinum dropped 1.1% to $1652.17.
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Shell and Petrobras buy two areas at Brazil's oil auction
In an auction of crude oil held by the state-run PPSA on Thursday, a consortium of Petrobras (Petroleum) and Shell (Shell) secured two offshore fields in Brazil's Tupi & Atapu oilfields. The consortium was the sole bidder at the auction. It offered 7.79 billion reais (1.47 billion dollars) for the Tupi region, which is 2% higher than the minimum price. For the Atapu region, it offered 1 billion reais, or 16% more. The Mero field's third area did not receive any bids. The auction included stakes in fields that were already producing oil but had not been contracted. This gave the companies the right to profit off of additional production. Brent crude prices are falling, and the auction results did not meet the Brazilian government's target of at least 10,2 billion reais in order to increase revenue. Petrobras announced in a filing that it would pay 6.97 billion reais to cover the transactions. The contracts for these transactions are expected be signed before March 2026. It said that the disbursement had been planned. Although volumes were not forecasted, they should fall within a margin set by a production curve projected in its business plan for 2026-2030, published last week. Santander analysts warned that the payment would affect dividends in 2026, despite the positive outlook they had for Petrobras and its increased exposure to highly productive presalt areas. Petrobras preferred shares listed in Sao Paulo rose 1% at midday, while Bovespa's benchmark index rose 1.5%.
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Gold stable as rising yields offset dollar weakening; PCE data is in focus
Gold prices were mostly unchanged on Thursday, as rising U.S. Treasury rates offset support from the weaker dollar. Markets awaited Friday's U.S. Inflation data to get clues about Federal Reserve policy ahead of their December meeting. As of 1505 GMT, spot gold was down 0.2% at $4,195.69 an ounce. U.S. Gold Futures for February Delivery were down 0.2% to $4,224.10 an ounce. Edward Meir, Marex analyst, said: "Higher yields keep a little cap on gold's upside. The general dollar index provides some support." Benchmark 10-year U.S. Treasury Yields rose by 0.8%. The U.S. Dollar Index hit a new low for a month, making gold more accessible to overseas buyers. The latest data on Thursday shows that the number of new U.S. unemployment benefits claims fell to 191,000 in the past week, which is lower than it has been for over three years. This figure was also well below what economists had predicted at 220,000. ADP's report on Wednesday showed that private payrolls in the United States fell by 32,000 during November. This was the largest drop in over two and half years. Over 100 economists surveyed by predicted that the Federal Reserve would reduce its key rate by 25 basis point at its policy meeting on December 9-10, as it seeks to support the cooling labor market. Gold is a non-yielding asset that benefits from lower interest rates. Investors will be watching the Federal Reserve’s preferred inflation indicator, the Personal Consumption Expenditures report (PCE), due on Friday. Meir said that the markets will remain relatively unchanged between now and next Monday. As for gold, we are likely to be in a trading range which is fairly uneventful. Silver fell 3.3%, to $56.54, after reaching a record-high of $58.98. Silver is up 96% in this year due to a structural shortage, market liquidity concerns and inclusion on the U.S. Critical Minerals list. Palladium fell 2.1%, to $1430.38, while platinum dropped 2.2%, to $1634.15. (Reporting from Anmol Choubey and Naveen Thkral in Singapore, with editing by Leroy Leo.)
Andy Home: A gallium-lens on China's mineral dominance, and how to end it
Since China began restricting the export of exotic metals in August 2023, the price of gallium is on an upward trend.
It is not surprising that China holds a near-monopoly in the global production of gallium, as well as across a wide range of critical materials.
What should we do about the fact that a commodity most people never heard of has reached a 14-year high?
According to the United States Geological Survey, the global production for last year was only 760 metric tonnes. The world market is worth only $550 million, even at the current high prices.
Metal is used in so small quantities that it has no impact on the price of a cell phone or electric vehicle.
If you are in the semiconductor industry, it is important. It's even more important to U.S. defense planners. That's why China selected element 31 as a metal pressure point.
The Multiplier Effect
The economic impact of China's export bans is multiplied by the fact that gallium is used to make so many gadgets.
USGS estimates a suspension of Chinese exports for a year would result in a hit to the U.S. economic system of $3.1 billion.
The semiconductor industry would account for about half of this decrease, while the remaining half will come from downstream industries like computers, printed circuit assemblies and electric vehicles.
China hasn't completely suspended exports but has banned direct sales into the United States. Outbound flows are down since 2023, when dual-use regulations came into effect.
The USGS projections also assumed that gallium prices would increase by more than 2,5 in the event of an export stop.
Gallium prices have more than doubled since July 2023, when they were $350 per kilogram. They are now $725 per kilogram and still increasing.
As more gallium is kept on the Chinese market, the Chinese price falls. Other times, physical arbitrage could close the price gap. But not when China's Ministry of Commerce is guarding the gate.
THE MILITARY ANGLE
Gallium is of even greater importance to U.S. military planners.
The U.S. Defense Advanced Research Projects Agency, or DARPA, was responsible for the development of a compound known as gallium arsenide. This compound is used in precision-guided and radar weapons. More recently, DARPA has been involved with the development of the next-generation semiconductor chip, gallium nitride.
According to The Center for Strategic and International Studies (a non-profit research organization), the latter "revolutionizes modern radar by allowing new modules to track smaller and faster threats, and to be more numerous from a distance nearly doubled."
The U.S. Army is deploying gallium nitride-enhanced Radars in its Lower-Tier Air and Missile Defense Sensors (LTAMDS), which are an integral part Patriot missile defence units, and F-35 Joint Strike Fighter.
There's likely a lot more we don't even know.
Gallium, like many other critical metals, has a small market but a wide range of applications. Many of these are at the forefront of semiconductor design.
It's not a coincidence that China announced their export controls as a direct response to U.S. sanctions on next-generation chip imports to China.
THE CHINA CHALLENGE
Can the West sever China's grip on gallium?
The solution to the problem is right in front of us, or better yet, in the tailings pool.
Gallium isn't particularly rare on the surface of the Earth, but it only occurs at concentrations high enough to be extracted as a byproduct from other minerals.
China's gallium dominance has increased along with its massive expansion of aluminum capacity. China accounts for 60% global aluminium production and all of that metal requires alumina which is produced from bauxite.
Gallium can be produced by other refineries than China's. Western companies have stopped producing gallium after China took over the market in the first decade of this century.
That's changing.
Rio Tinto and Indium Corporation just announced that they had successfully extracted pure gallium out of a waste stream from Rio's Vaudreuil Alumina Refinery in Quebec. The next step will be to build a pilot plant that can produce 3.5 tons of gallium per year.
METLEN, a Greek aluminium manufacturer, plans to increase its bauxite-and-alumina processing capability to 50 tons annually by 2028. This is one of 47 strategic mineral projects in the European Union.
Two key lessons can be learned from this article for other mineral markets that are being affected by Chinese export restrictions.
First, it is likely that the West already produces many of these materials but has not appreciated their value until now.
Rio Tinto has begun extracting tellurium and scandium at its Kennecott Copper Smelter, Utah, as well as titanium from its operations in Quebec.
The two plants had been in operation for several years before anyone thought it necessary to separate the metals from the waste stream.
Second, it's clear that Western operators have to learn or, in the case gallium, re-learn the processing technologies needed to separate them and refine them.
It will take some time, especially since China restricts the export of this technology in many cases.
The higher prices that result from China's export restrictions are encouraging more and more Western companies back to metallurgy.
The author is a columnist at
(source: Reuters)