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U.S. Copper stabilises and retains a premium over the global benchmark
The U.S. Copper prices stabilized on Friday, after the largest one-day drop in history the day before. Market participants continued to evaluate a surprise decision by U.S. president Donald Trump to exempt refined metal from import tariffs of 50%. After a 22% plunge on Thursday, U.S. Comex September copper futures last rose 0.8% to $4.391 per lb or $9,680.5 per metric tonne. In official open-outcry trade, the benchmark three-month price of copper at the London Metal Exchange dropped by 0.2% to $9.592 per ton. The price pressure is being applied by the rising stock in LME registered warehouses, and the possibility of further inflows after Washington removed refined copper from tariffs. Comex warehouses have copper stocks After a 176% increase between March and July, the number of short tons (257,915 metric tons) is at its highest level in 21 years. Stocks of LME available In July, however, the number of metric tons produced by more than doubled, reaching a record high for a period of three months at 127,475 tonnes. Even with the price drops this week, the Comex premium on copper futures over the LME price limits the possibility of massive outflows in U.S. stock markets. Metals traders said that the Comex copper premium was now just a few hundred bucks, which was still a huge amount historically, but not as much as the $3,000 premium of recent years. A private sector survey, which showed a decline in Chinese factory activity for July, added another layer of pressure to the metal. China, which is the top metal consumer in the world, has until August 12 to reach an agreement on tariffs with Trump's Administration. Trump imposed steep duties on the exports of dozens of trading partner countries, including Canada. Brazil, India, and Taiwan. The deadline for a trade agreement was Friday. Other LME metals include aluminium, which fell by 0.7% in official trading to $2.546 per ton, zinc, which dropped 1.7% to 2,714.5, and lead, down 0.4% at $1.963, while tin climbed 1% to $33,050, and nickel, which declined 0.8% to 14,810. (Reporting and editing by David Goodman.)
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Carbon project developers demand a change in the complaints procedure
After several high-profile incidents that have eroded trust in the industry, dozens of carbon project developers want the registries who set standards for voluntary carbon markets to revamp their complaint procedures. Many environmental groups have criticized the voluntary carbon market for generating "junk credits" that allow companies to "greenwash". Industry advocates, however, say that complaints about certain projects have led some registries, such as the U.S. based Verra, to prevent them from generating credit. This unfairly damages the industry as a sector and holds up funding sources for environmental and climate initiatives. The Project Developers Forum (PDF), which represents over 60 carbon projects in Kenya, Singapore and elsewhere, has said that current complaint procedures don't offer developers an effective way to defend themselves against any allegations of wrongdoing, before they are made public. Nick Marshall, the chair of the forum, said: "You can see that many projects are suspended, and they become public very quickly." "Integrity cannot be negotiable. But how we respond to allegations and surface them is equally important." Marshall said that a few bad apples were doing irreparable damage to the reputation of the industry and that developers who knew about wrongdoing did not come forward, because the whistleblowing process was not sufficiently anonymous. He said that the group had asked Verra, a leading registry, to create a policy with a secure submission form for its website. This would allow anonymous sharing of information regarding possible integrity issues. Verra said in a press release that a formal, robust complaint process has been in place since the beginning of 2024. It "contains provisions that already address the concerns raised by the PD Forum". Verra has rejected 37 low-emissions rice cultivation projects in China after a review of quality. (Reporting and editing by Virginia Furness)
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Enbridge's strength in the utilities and gas segments will help it to exceed estimates
Enbridge, the Canadian pipeline operator, beat analyst's expectations for its second-quarter profits on Friday. This was boosted by earnings from newly acquired U.S. utilities and from its gas distribution business. The company announced that it had sanctioned the expansion of Aitken Creek, a gas storage facility located in British Columbia to accommodate the growing demand for LNG on the west coast of Canada. It also said that Line 31 would be expanded by 160 million cubic feet a day in the U.S. Southeast. Pipeline operators benefit from a rise in natural gas demand, driven primarily by LNG exports and rising electricity demand. Greg Ebel, CEO of Ebel Energy Corporation, said: "We will capitalize on the growing demand for electricity and natural gas." Enbridge, based in Calgary, bought three Dominion Energy utilities last year -- East Ohio Gas (formerly Dominion Energy), Questar Gas and Public Service Co. of North Carolina. The deal was worth $14 billion, including the debt. The unit that handles gas distribution and storage saw its adjusted core earnings jump from C$567 to C$840, a C$217 million increase. Enbridge's gas transmission unit reported a core adjusted profit of C$1.38 (US$995.02 millions) compared to C$1.08 billion the year before. The company also builds out its renewables and announced last month that they had made a final decision to invest $900,000,000 in a 600 megawatt solar power plant in Texas. Enbridge approved new projects worth approximately C$2 billion during the third quarter. The company stated that it did not expect tariffs will have a significant impact on current operations or capital deployment, but it would continue to monitor developments. Enbridge reported an adjusted profit per share of 65 Canadian dollars for the quarter that ended on June 30. This was higher than analysts' expectations of 57 Canadian dollars, according to LSEG. (1 Canadian dollar = 1.3869 dollars) (Reporting and editing by Shinjini Ganuli and Sriraj Kalluvila in Bengaluru)
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LyondellBasell's quarterly profit forecast is missed due to lower margins
LyondellBasell's shares fell 2.5% on August 1, as it struggled to meet Wall Street's expectations for the second quarter profit. The chemical manufacturer was also struggling with higher energy costs and lower margins. The rising cost of energy is causing profit margins to shrink for North American chemical companies. This is due to the surge in power demand by data centers, which are energy-hungry. The U.S. Energy Information Administration announced in April that the U.S. electricity consumption would reach new records between 2025 and 26 due to the rise of cryptocurrency and AI-focused data centers. Chemical companies are also struggling because of a slump in demand and the rising cost of raw materials, particularly in Europe where a strict regulatory environment is forcing businesses to reassess how they do business in that region. As part of its review of European assets, the company had exclusive discussions with Munich-based investment group AEQUITA regarding the sale of certain olefins and polyolefins in Europe. LyondellBasell’s olefins, polyolefins, and Americas unit reported core adjusted earnings of $318 millions, down from $670million last year. The unit manufactures materials for construction and packaging, among other things. The company anticipates that in the third quarter it will have improved North American integrated Polyethylene margins, due to the competition from planned maintenance in April, and higher prices, supported by strong domestic demand and increased export volumes. According to LSEG, the company reported an adjusted profit per share of 62 cents in the April-June period, compared to analysts' estimates of 80 cents. Sumit Saha, Bengaluru. Vijay Kishore, editing.
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Volkswagen liable for defeat devices, top EU court rules
The European Court of Justice on Friday ruled that carmakers like Volkswagen remain liable for using unlawful defeat devices, such as temperature-sensitive emissions software, even if the vehicles met EU standards, which doesn't guarantee the technology's legality. The two German suits involving Volkswagen diesel cars fitted with defeat devices - either during production or later software updates - led to the case before the top court of the European Union. The Court stated that compensation for buyers could be reduced by vehicle usage or limited to 15% of the original purchase price. However, it should still reflect the damages caused. Volkswagen did not respond immediately to a comment request. It was not immediately apparent if the ruling would have any additional financial implications. The term defeat devices refers to tools or software which alter emissions from vehicles. This has led to legal disputes about whether manufacturers are misusing them in order conceal the true levels of pollution. These devices are only active at certain temperatures, according to carmakers. They claim this is done in order to protect engines and comply with law. Volkswagen has been found to have concealed excessive levels of toxic emissions from diesel in 2015. This scandal led to a management meltdown and thousands of regulatory investigations and lawsuits that are taking many years to resolve. (Reporting by Charlotte Van Campenhout; Editing by Kirsten Donovan)
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Exxon exceeds profit expectations with higher production despite low oil prices
Exxon Mobil's second-quarter profit beat Wall Street estimates on Friday, as increased oil and gas production enabled the U.S. top oil producer to overcome lower crude oil prices. According to data compiled and analyzed by LSEG, adjusted earnings for the second quarter totaled $7.1 billion or $1.64 a share. This was higher than analyst consensus estimates of $1.56 a share. The oil producer reported that the production of oil and gas was at its highest level for any second-quarter since Exxon Mobil was formed in 1995 by the merger. Energy sector is struggling with volatility in prices as OPEC+ producers increased production, driving Brent crude global benchmark down by 11% for the first quarter. The global tariffs imposed by U.S. president Donald Trump have caused concerns over a weakened global economy and oil consumption. Exxon CEO Darren Woods stated that the second quarter "once again proved the value and competitive advantage of our strategy, which continues to deliver for our investors regardless of market conditions or geopolitical development." Exxon distributed $4.3 billion as dividends, and purchased $5 billion of shares in the last quarter. This buyback puts Exxon on track to reach its annual share purchase goal of $20 billion. Exxon's main production areas are the Permian Basin, the largest U.S. Oilfield, and the Stabroek block off the coast of Guyana. Exxon previously stated that the cost of production in these fields is low, which allows them to remain profitable, even when oil prices are lower. Exxon, one of their partners in Guyana lost a court case against Hess last month. This cleared the way for Chevron, a rival company, to complete its purchase of Hess. Exxon claimed it had the contractual right to buy Hess's 30% stake in Stabroek Block. Woods stated in a press conference that Exxon had sought legal opinions from third parties neutral to the matter of the joint operating agreements that govern the partnership between Exxon Hess, and China's CNOOC, in Guyana. Woods stated that "in every case - and I mean literally every case - we were told our rights were very clear." Woods stated that although the arbitrators agreed that Exxon's argument was commercially reasonable, they said that it relied on an argument based solely on text. The company will take action to strengthen contracts in future if necessary. Sheila Dang, Houston; Marguerita Choy, Ni Williams and Sheila Dang.
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Orano, a nuclear fuels manufacturer, does not expect any impacts from the EU-US agreement
According to Orano's CEO Nicolas Maes, the trade agreement between the European Union (EU) and the United States will not affect the company, because the U.S. government has not yet imposed any tariffs on its uranium fuels. According to the agreement announced on Sunday, the EU has agreed to buy nuclear energy products as well as U.S. natural gas and oil liquefied for a total of $750 billion in the next three year. Maes stated that "we have examined the material and have found that isotopes and uranium as well as enriched uranium have been exempted from the ban." He said that the provision of the agreement for the export of nuclear fuel by the U.S. into Europe was surprising given that the U.S. imports the fuel for its nuclear power plant, not exports it. Maes stated that "the U.S. nuclear market is structurally imported and not exported." Orano also stated that the plans of the company to expand its nuclear enrichment facility in Oak Ridge Tennessee should not be affected either by the trade agreement or the executive order signed by U.S. president Donald Trump deregulating the nuclear industry. Trump signed an Executive Order in May to reduce regulation and speed up new licenses for nuclear power plants, reactors and reactors. He also wanted to reinvigorate the uranium enrichment and production industry. Maes stated that Orano would maintain its nuclear security standards, but the order could result in easier communication between the nuclear safety authority (the nuclear safety authority) and the utilities during their permitting process. He reiterated an earlier comment, stating that the final investment decision for the project will be made in 2027. Reporting by Forrest Créllin. (Editing by Dominique Patton, Barbara Lewis and Barbara Lewis.)
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Gold to suffer third weekly loss due to stronger dollar and reduced Fed rate cuts
Gold prices were stable on Friday but are on track for a third successive weekly loss, due to a stronger dollar, and lowered expectations of U.S. interest rate cuts. Meanwhile, uncertainty over U.S. tariffs against trading partners provided support. As of 0733 GMT, spot gold was unchanged at $3,288.89 an ounce. Bullion has fallen 1.4% this week. U.S. Gold Futures declined 0.3% to $3339.90. Gold is now more expensive to other currency holders due to the dollar index reaching its highest level since 29 May. Gold remains weighed down by lower bets on Fed rate cuts through 2025. The U.S. weekly jobless claims and PCE data this week also reinforced the Fed's unwillingness to commit to a cut in rates," said Han Tan. Fed kept rates at 4.25% to 4.50% on Wednesday, dampening expectations of a rate cut in September. U.S. president Donald Trump slapped tariffs on exports of dozens of trading partner countries, including Canada. Brazil, India, and Taiwan. He is pressing forward with his plans to reorder global economy before a Friday deadline for trade deals. Tan stated that "the precious metals should be supported despite the uncertainty of the impact of U.S. Tariffs on global growth." Inflation in the United States increased in June, as tariffs on imported goods began to increase the price of certain goods. Investors will now be assessing the Federal Reserve’s policy direction as they await the U.S. employment data due on Friday. July job growth is expected to have slowed, and the unemployment rate is projected to increase to 4.2%. In an environment of low interest rates, gold, which is often viewed as a safe haven during times of economic uncertainty, performs well. The physical gold demand on key Asian markets has improved this week, as the price drop has sparked a renewed interest in buying. However, volatility is keeping some buyers cautious. Silver spot fell by 0.7%, to $36.50 an ounce. Platinum dropped 0.8% to $1,278.40, and palladium was off 0.2% at $1188.28. All three metals are headed to weekly losses. (Reporting and editing by Harikrishnan Nair in Bengaluru, Anmol Choubey)
Gold as a safe-haven amid tariff uncertainty before August 1 deadline
Gold prices increased 1% on Friday as traders sought out the safe-haven asset amid continued tariff uncertainty as President Donald Trump's deadline of August 1, to conclude negotiations, approaches.
As of 855 a.m., spot gold rose 1% to $3,308.07 an ounce. ET (12:55 GMT).
U.S. Gold Futures rose 0.3% to $3.306,10.
We've seen a rise in trade uncertainty, as we near the August 1st tariff deadline... a slight revival of safe haven bids," said Peter Grant.
The midpoint is around $3,312/oz. We tested this level today. I would probably be more optimistic if the week's highs were to surpass those of last week. Trump announced a series of tariffs on Wednesday on the import of goods and copper from Brazil and South Korea. The deadline for increased tariffs in the U.S. is August 1.
Inflation in the United States increased in June, as import tariffs began to increase the price of certain goods. The PCE Index rose by 0.3% in June after a 0.2% increase that was upwardly revised in May.
Fed Chair Jerome Powell made comments following the decision that undermined confidence in the idea that borrowing costs will begin to drop in September.
In a low interest rate environment, gold is an asset that does not yield any income.
Investors are now waiting for the U.S. Non-Farm Payrolls Data on Friday to get more clues about the Fed's interest rate path.
Silver spot fell by 1.3% to $36.66 an ounce, the lowest level since July 7. Platinum dropped 0.5% to 1,306.98 while palladium rose about 0.9% to 1 215.7.
Jim Wyckoff said that it would not surprise him if the strong selling pressure on silver futures was partly due to the sympathy selling that occurred amid the massive copper market collapse seen in the last two days.
Trump shocked the market by announcing on Wednesday that the U.S. will impose a tariff of 50% on copper pipes and wires, which has caused the COMEX copper exchange to drop more than 20%. (Reporting from Sarah Qureshi in Bengaluru and Noel John; editing by Shreya Biwas)
(source: Reuters)