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BHP signs $2 billion deal with GIP to fund WAIO power grid
BHP Group announced on Tuesday that BlackRock's Global Infrastructure Fund (GIF) will invest $2 bn in Western Australia Iron Ore (WAIO)'s inland?power?network for a minor stake. BHP and GIP will form a joint entity, in which BHP holds 51% of the shares while GIP will hold the remaining 49%. BHP will pay the entity a tariff based on its share of WAIO inland power over a period of 25 years. BHP will retain full operational control over WAIO and its inland electricity infrastructure. Vandita Pan, Chief Financial Officer at BHP, said in a press release that "this arrangement is a good example of BHP's disciplined capital portfolio management." She added, "It enhances BHP shareholder value and supports BHP's long-term value creation." Investors are looking for assets with low-risk and consistent returns, while miners evaluate new ways to unlock the capital in infrastructure investments. Rio Tinto's CEO Simon Trott stated last week that Rio Tinto has identified several assets that are worth a lot of money. It is not necessary to own It said it would explore options including partnerships and divestments. BHP said that the agreement with GIP would not affect its?existing joint-venture agreements.
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Copper prices drop from record highs; Market awaits Fed policy
The price of copper eased on Tuesday from its record high as the Federal Reserve's rate decision this week and tight supply continue to dominate trading. As of 0255 GMT, the most traded?copper?contract on Shanghai Futures Exchange fell 0.58%, to 91900 yuan (12,998.77 dollars) per metric tonne. The benchmark copper for three months on the London Metal Exchange was also down, falling 0.54% to $12,572.50 per ton. Shanghai copper is up 25% so far this season, while the London benchmark is up more than 30%. Analysts at Sucden Financial expect copper prices to be "characterized by sharp rallies, followed by shallow consolidation", since there is limited interest in selling at the current levels. Investors are expecting a U.S. rate cut this week, as well as Jerome Powell's hawkish remarks on future reductions. Markets now predict fewer rate reductions in 2026 due to lingering concerns about inflation and the resilience of the U.S. economy. Copper is a market that continues to be affected by supply issues due to the disruption of mines and the constant dislocation of copper stocks into the U.S. After reaching a record-high?on the 5th of December, copper stocks at Comex warehouses increased to 439 510 short tons (398 717 metric tons). Other base metals in the SHFE fell by 1.33%. Zinc was down 0.09%, lead dropped 0.72%, Nickel was down 0.17% and Tin was down 0.44%. Aluminium fell 0.54% on the LME, while zinc dropped 0.42%. Lead also decreased 0.10%, nickel increased 0.24%, and tin remained unchanged.
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Simandou iron ore project begins supply
Iron ore prices continued to fall on Tuesday as the Simandou project, located in Guinea in west Africa,?shipped out its first ore. This increased prospects for more supply, at a time when China, the top consumer, is expected to see a decline in demand due?to falling steel production. The most traded iron ore contract at China's Dalian Commodity Exchange was down 1.51% as of 0229 GMT. Its lowest price since July 10, and headed for its fifth straight session of losses. As of 0219 GMT the benchmark January iron ore price on the Singapore Exchange fell for a third session in a row, falling 0.94% to $100.11 per ton. This is its lowest level since November 10. Rio Tinto, the largest iron ore exporter in the world, announced on Monday that the first shipment of the Simandou Project had left Guinea. The mine will have a production capacity of 120,000,000 tons per year, making it the largest iron ore mine in the world. China imports 80% of its iron ore from Australia and Brazil. Analysts predict that the share of Guinean supply will fall as it increases. Analysts at broker Xinhu Futures stated in a report that the near-month contract would face 'further pressure due to high supply, swollen inventory, and decreasing demand. This year, China's crude steel production is expected to drop below 1 billion tons for the first time in six years. Coking coal and other?steelmaking components coke and coking coal both fell, by 2.39% and 2.67 percent, respectively. This was due to lingering fears about an increasing supply. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell 1.5%, while hot-rolled coil dropped 1.27%. Wire rod also declined 0.38%. Stainless steel was not affected.
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Asian stocks fall as nervous markets await the Fed
Asian stocks fell on Tuesday and the dollar remained steady as investors braced themselves for a?cut in U.S. rates this week. The yen remained calm after an earthquake that rocked Japan’s northeast region, though the impact was minimal. Investor sentiment remains cautious as the markets await a number of central bank meetings. This includes a decision that is expected to be made by the Reserve Bank of Australia. All three banks, the RBA, SNB, and Bank of Canada, are expected to keep rates unchanged this week. The Federal Reserve, on the other hand, is expected to reduce borrowing costs Wednesday. Bond investors are preparing for a short-term easing cycle in the U.S., following the Fed's rate cut of December. Wall Street banks expect fewer Fed rate cuts in 2026 due to lingering concerns about inflation and the expectation of a more resilient U.S. economic. Stocks are now trading in a sideways fashion. MSCI's broadest Asia-Pacific share index outside Japan fell 0.28% after a weak session overnight on Wall Street. Japan's Nikkei fell by 0.08%, while South Korea’s Kospi dropped by 0.58%. Prashant Nnewnaha, senior Asia-Pacific rate strategist at TD Securities said: "The low-hanging fruits from risk management reductions are likely over. Chair (Jerome Powell)'s presser will likely convey a more conservative approach moving forward?regarding further policy recalibration." The dot plot will likely show one reduction in 2026. If the dot plot showed two cuts next year, this would be "dovish." Some strategists believe that the Fed's Policy Committee could be divided, even though a rate reduction is expected. The meeting is also being held in the context of a heightened interest from the market on who will replace Powell as Fed Chair when his current term ends next May. Kevin Hassett, White House Economic Advisor and leading contender for the Fed chair role, said in an exclusive interview that the Fed must continue to reduce interest rates. According to LSEG, traders are pricing 77 basis point of easing at the end of next. David Mericle is the chief U.S. economics at Goldman Sachs. He expects that the Fed will raise the bar on further rate cuts. Powell will also be cautious. "But the FOMC can't box itself in, especially at a time where we have two outdated employment reports, as a January reduction could be appropriate." Asian chip stocks shook after U.S. president Donald Trump announced that the United States would allow Nvidia H200 processors - its second best artificial intelligence chips - to be?exported to China, and collect a 25 percent fee on such sales. China's CSI Semiconductor Industry Index fell about 1% during early trading. The dollar remained mostly stable in Tuesday's currency market. The dollar was mostly steady on Tuesday. The dollar index (which measures the U.S. money against six other currencies) was 99.09. The index has fallen by nearly 9% in the past year and is on track to have its biggest annual decline since 2017. The Australian dollar was stable at $0.6625 before the RBA's policy announcement later that day. It is expected that the central bank will maintain its current rate, but markets are worried about any hawkish comments in the commentary. After a sharp decline immediately following the earthquake, the yen traded at 155.87 to the dollar during early Asian hours. The Japanese authorities lifted the tsunami warnings Tuesday, hours after a powerful 7.5-magnitude quake shook northeastern Japan, injuring 30 people at least and forcing 90,000 residents from their homes. Gold was 0.13% more expensive at $4194.11 an ounce, ahead of the Fed's meeting. Oil prices stabilized after a 2% drop in the previous session, as traders kept an eye on the peace talks that are expected to end Russia's conflict in Ukraine. Brent crude futures remained flat at $62.48 per barrel. U.S. West Texas Intermediate Crude was trading at $58.84 a barrel, down by 0.07%. (Reporting and editing by Shri Navaratnam in Singapore)
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EU strikes agreement to further weaken corporate Sustainability laws
After months of?pressure by companies and governments including the United States, Qatar and others, European Union Members and Parliament reached an agreement early on Tuesday in order to 'cut corporate sustainability laws. These changes will weaken the corporate sustainability requirements for most businesses that are currently subject to them. They were made in response to complaints from certain industries who claim that "EU red tape" and strict regulations hinder their ability compete with foreign competitors. The EU negotiators have agreed that the reporting of social and environmental issues will only apply to companies with more than 1,000 employees, and a net annual turnover exceeding 450 million euros. The threshold for reporting sustainability was set at 450 millions of euros in revenue generated within the EU. According to the agreement, only large EU corporations - those with more than 5,000 employees or an annual turnover of over 1.5 billion euros - are required to conduct due diligence to reduce harm to people and to the environment. Non-EU companies that have a turnover in the EU over?that amount will be subject to the same rules. Before the law can be passed, both the EU Parliament and EU countries must give their formal approval. This is a standard procedure that passes pre-agreed agreements. $1 = 0.8591 euro (Reporting and editing by Christopher Cushing, Michael Perry and Mrinmay Abnett)
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Oil prices rise, Ukraine peace talks and US interest rate decision are in the spotlight
The oil prices were stable on Tuesday, after falling 2% the previous session. Market participants remained focused on the upcoming decision by the U.S. Federal Reserve on interest rates and on peace talks that could end Russia's conflict in Ukraine. Brent crude futures were down?2 Cents, or 0.03 %, at $62.47 per barrel as of 0101 GMT. U.S. West Texas Intermediate Crude was trading at $58.84 - down 4 cents or 0.07%. The prices of both contracts dropped by over $1 after Iraq re-started production at Lukoil’s West Qurna 2 Oilfield, which is one of the largest in the world. After talks in London between the President Volodymyr Zelenskiy and leaders from France, Germany, and Britain Tim Waterer, chief market analyst at KCM Trade, said that oil is "keeping to a narrow trading range" until we know more about the outcome of the peace talks. If the talks fail, we expect oil prices to rise. However, if there is progress and there is the possibility of Russian energy supply returning to the global market, then the prices are expected to fall," he said. Sources familiar with the issue claim that the Group of Seven and the European Union have been in talks to replace the price cap on Russian crude oil exports by a complete maritime service ban, as a way to reduce Russia's oil revenues. The Federal Reserve policy decision is also due on Wednesday, and the markets have priced in a 87% chance of a rate cut by a quarter point. Analysts at BMI predict that the market will be oversupplied with energy in 2026, causing prices to remain under pressure. BMI said that, "although much depends on OPEC+'s response to lower prices during the first quarter of 2026," we should still see crude prices recovering through the rest of 2026 due to the lower production from U.S. shale activities and steady growth of consumption bringing markets closer into equilibrium. Ashitha Shivprasad, reporting from Bengaluru; and Thomas Derpinghaus.
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Investors eye Fed rate cut next week; US yields and dollar rise.
U.S. Treasury Yields and the Dollar gained on Monday, as investors prepared for this week's Federal Reserve Meeting, where investors are widely expecting a rate cut. Major stock indexes, however, were lower. Investors also assessed the potential impact of an earthquake with a magnitude of 7.6 that struck Japan's northeast. About 90,000 residents were ordered to evacuate and tsunami warnings which were later downgraded. The iShares MSCI Japan ETF fell by 0.6%. The dollar gained 0.3% versus the yen. The Fed's Wednesday announcement will be key this week. Some strategists believe that the Fed's policy group could be divided, despite the rate cut expected. Investors speculated that this meeting might be the most contentious of recent times. Since 2019, the Federal Open Market Committee had not seen three or more dissents in a single meeting. It has only happened nine times since 1990. Investors awaited signs of a "milder easing than expected". According to CME Group’s FedWatch Tool, 87.4% of investors expect the Fed to cut its policy rate 25 basis points. The markets had priced in a chance of less than 30% until recent comments by Fed officials sparked a change in expectations. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. He said that the market may be anticipating that the Fed will indicate that there could be a pause after this rate reduction in the first quarter 2026. JAPAN DELAYS RATE DECISION? After the news of the earthquake in Japan, the dollar rose against yen. Analysts said that depending on the extent of damage caused by the earthquake, the Bank of Japan may delay its expected rate increase next week. The U.S. Dollar Index was also higher. The next BOJ meeting on monetary policy is scheduled for December 18-19 2025. A policy statement and decision are expected to be made the second day. Cabinet Office announced on Monday that Japan's economy contracted more than originally estimated during the three-month period through September. This was mainly due to new data which lowered capital expenditure figures. However, economists say the change in numbers is not sufficient to influence the central bank. The news of the earthquake also boosted U.S. Treasury rates. The yield on U.S. Treasury notes benchmarked at 10 years. Last up 3.1 basis point at 4.17%, after reaching 4,192%. This was its highest level since the 26th of September. It was on course for a third consecutive session of gains. Wall Street saw all major S&P sectors lower, except for technology. Tim Ghriskey is a senior portfolio strategist with Ingalls and Snyder in New York. He said, "The market sold off in the second half November. Since then, we have seen a strong rally." "Today, we've taken a small dip but I do not see anything that will really derail the market." The Dow Jones Industrial Average dropped 215.67 points or 0.45% to 47,739.32. The S&P 500 declined 23.89 points or 0.35% to 6,846.51 while the Nasdaq Composite fell 32.22 or 0.14% to 23,545.90. The S&P 500 is still up 16% so far this year. Investors were interested in Paramount Skydance’s hostile bid for Warner Bros Discovery, as they hoped to outbid Netflix. Netflix shares are down 3.4%. MSCI's global index of stocks fell by 2.69 points or 0.27 percent to 1,008.04. The pan-European STOXX 600 fell by 0.07%. The central banks of?Canada and Australia will also be meeting this week, and are all expected to keep rates unchanged. Swiss National Bank would like to ease rates again to counter the strength of their franc but is already at zero percent and hesitant to go negative. Investors have given up on the Reserve Bank of Australia easing again and are even pricing in a rate increase for late 2026. Energy prices fell by $1.20, with U.S. crude oil settling at $58.88 per barrel after Iraq restored oil production in one of its fields, which accounts for 0.5% world oil supply. Brent futures dropped $1.26 and settled at $62.49 Caroline Valetkevitch reported from New York. Additional reporting was provided by Iain Withers and Wayne Cole, both in Sydney and London, and Alun. John, also in London. Joe Bavier, Aide Lewis and Nick Zieminski edited the story.
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Investors expect Fed rate cut next week; US yields and dollar rise after Japan earthquake
Investors weighed the possible impact of an earthquake in Japan on the U.S. Treasury yields and the Japanese yen, while the major stock indexes fell. The northeastern region of Japan was shook by a powerful earthquake measuring 7.6 on the Richter scale, prompting tsunami alerts and evacuation orders. The iShares MSCI Japan ETF fell 0.7%. Dollar was up 0.3% last against the yen. This week, the Federal Reserve will make an announcement on Wednesday. A rate cut is expected by many, but some analysts believe the Fed's Policy Committee could be divided. Investors speculated that this meeting might be the most contentious of recent times. Since 2019, the Federal Open Market Committee had not seen three or more dissenters at a single meeting. It has only happened nine times since 1990. Investors waited for signs of a milder cycle of easing than expected. According to CME Group’s FedWatch Tool, the expectation that the Fed would cut its policy rate 25 basis points is at 87.4%. The markets had priced in less than 30% of a chance until recent comments by Fed officials sparked a change in expectations. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. JAPAN DELAY IN RATE DECISION? After the news of the Japanese earthquake, the dollar increased against the yen. Analysts said that depending on the extent of damage caused by the earthquake, the Bank of Japan may delay its expected rate increase next week. The next BOJ monetary meeting is scheduled to take place on December 18-19, 2020, with the statement and policy decision expected the second day. The yield on benchmark U.S. Treasury notes. Last up 2.7 basis point at 4.166% after reaching 4.19% its highest level since 26 September, and on track to a third consecutive session of gains. All major S&P sectors except technology were down on Wall Street. The Dow Jones Industrial Average dropped 297.28, or 0.62 %, to 47 658.70. The S&P 500 declined 35.60, or 0.52 %, to 6,834.83 while the Nasdaq Composite lost 86.67, or 0.37 %, to 23,491.46. Paramount Skydance’s hostile bid for Warner Bros Discovery attracted some investor interest as it sought to outbid Netflix. Netflix shares fell 3.6%. MSCI's global index of stocks fell 3.67 points or 0.36% to 1,007.06. The pan-European STOXX 600 fell by 0.07%. Nikkei soared 90.07 points or 0.18% to 50.581.94. Beijing's diplomatic spat between Tokyo and Beijing worsened after a Chinese carrier-strike group conducted intense air operations in the vicinity of Japan at the weekend. All three central banks will meet this week, and are expected to maintain their current stance. Swiss National Bank would like to ease further to counter the strength of their franc but is already at zero percent and does not want to go below that. The markets have given up on the Reserve Bank of Australia easing again after a string of strong economic data. They even priced in a rate increase for late 2026. Energy U.S. crude fell $1.20, to settle at $58,88 per barrel, after Iraq restored its production at an oilfield that accounts for 0.5% world oil supply. Caroline Valetkevitch reported from New York. Additional reporting was provided by Iain Withers and Wayne Cole, both in Sydney and London, as well as Alun John, in London. Joe Bavier, Aide Lewis, and Nick Zieminski edited the story.
EU to restrict exports of aluminum scrap
Maros Séfcovic, EU Trade chief, said that the European Commission intends to limit EU exports for scrap aluminum to prevent the metal from flooding the EU and leaving the industry without an input needed to decarbonise.
According to the industry group European Aluminium, EU exports of scrap aluminium will reach a record 1,26 million metric tonnes in 2024. This is an increase of about 50% compared to five years ago. The majority of these exports are headed for Asia.
The EU industry claims that the situation has gotten worse since President Donald Trump imposed import tariffs on aluminium of 50% but only 15% for scrap.
The levies increased scrap imports to the United States, and decreased exports. This pushed Asian buyers to concentrate more on EU supplies.
The EU executive started monitoring exports in early July and stated that it would determine if any action is necessary.
"Today... we launch the preparatory works on a new initiative to address the problem of aluminium scrap leaked," European Trade Commissar Sefcovic said at a conference in Brussels hosted by European Aluminium.
He added that the measure would be "balanced" and take into consideration the interests of downstream sectors, producers, and recyclers.
Scrap is not only a valuable resource for local producers but also plays a crucial role in decarbonising the sector, as recycling aluminium requires 95% less energy to produce metal than mining bauxite.
The recycling industry group EuRIC opposes the restrictions and says that scrap exports result from low domestic demand, as well as insufficient EU capacity for mixed scrap such shredded vehicle scrap. (Reporting and editing by Charlotte Van Campenhout, Clarence Fernandez, and Philip Blenkinsop)
(source: Reuters)