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Iron ore prices slip on high inventories despite steady production
Iron ore futures fell on Thursday as inventories were high, indicating a steady production of blast furnaces. The most traded May iron ore contract at China's Dalian Commodity Exchange ended the daytime session down 1.73%, closing at 768.5 Yuan ($110.72), a metric tonne. This was?the fourth consecutive session of decline. As of 0707 GMT, the benchmark March iron ore on the Singapore Exchange had fallen by 1.71% to $100.75 per tonne. Data from the Shanghai Metals Market, released on Wednesday, showed that the blast furnace utilization rate increased slightly, and daily hot metal production increased by?21,000 tonnes week-on-week. Iron ore inventories were high, and most steel mills had completed their pre-Lunar New Year stocking. Prior to the Lunar?New?Year, a number of electric-arc furnaces in Anhui and Yunnan - Guizhou have scheduled maintenance. Profitability concerns are driving them to restart production sooner than expected. Coking coal and coke, which are both steelmaking ingredients, were down by 2.25% and 0.77 percent, respectively. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell by 0.29%; hot-rolled coils dropped 0.4%, and wire rods lost 1.1%. Stainless steel, meanwhile, rose by 0.69%.
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Greenpeace protests in Milan when the Olympic torch arrives
Greenpeace, an environmental group, staged a demonstration in front of Milan’s main cathedral Thursday. This was the day that the Olympic torch had arrived in the city. The installation showed the Olympic rings dripping with black oil. It was a visual denial of the companies that it accused of contributing to global heating and endangering winter sports which depend on cold temperatures. One of the banners posted in front of Milan’s Duomo Cathedral (cathedral), in the middle of the city, read: "Kick Polluters Out of the Games." Greenpeace has called on the organisers of Milano Cortina to break ties with Eni after it filed a lawsuit over climate change. The report argues that Eni's fossil fuel operations undermine efforts to protect snow-based sports as temperatures increase. Winter Olympics is scheduled to take place from February 6 through 22. Eni, a state-controlled company, is one of the Games’ top domestic sponsors. Eni stated that it "shares" the importance of addressing the climate change and will continue to invest in the energy transition as part of its goal of reaching net-zero emission by 2050. The Olympic flame reached northern Milan on Thursday after it began its journey across Italy. It was lit in Rome in December. Eni's headquarters was to be passed by later in the day. The torch was designed to create excitement in Italy ahead of the Games 2026. It has now travelled through 110 Italian provinces. Gazzetta Sport reported that the Olympic ski champions of Italy, Alberto Tomba and Deborah Compagnoni, will light the cauldrons on Friday. (Reporting and editing by Keith Weir, Giselda Vasgnoni)
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Anglo American cuts its 2026 copper production guidance by 10% and reports a 10% decline in copper output for 2025
Anglo American, a global miner, announced on Thursday a 10% decline in its?copper output last year, to 695,000 tons. This is the lower end of their guidance. They also cut their 2026 forecast for?the transitional metal. The London-listed company now expects copper production in 2026 to range between 700,000- 760,000 tons. This is down from the previous forecast of 760,000-820,000 tonnes, due partly to lower production at its Chilean mine, Collahuasi. Anglo expects to record charges of around $200 million for the second half 2025 in relation to "rehabilitation provisions" at its Chile copper operation. The London-listed company announced in September a plan to merge with Canada's Teck Resources for $53 billion, all-stock and no-premium. This would make the miner the fifth largest copper producer in world. The metal is used in electric vehicles and renewable energy infrastructure. Both companies have been undergoing significant restructuring in the last few years, largely due to previous takeover attempts. Anglo has refocused on copper and ore while trying to sell or spin-off its struggling De Beers business as well as its nickel and metallurgical coke assets. All of these divestments have not yet been completed. Duncan Wanblad, CEO of the company, said in a Thursday statement that he was "committed to see our portfolio transformation to its conclusion". He added that each sale or separation process would be progressed. Anglo has said that it is reviewing the value for the De Beers diamonds after the 2025 production of rough?diamonds dropped by 12%, to 21.7 millions carats. It has lowered its 2026 production forecast to a range between 21 million and 26 million carats from 26 million to 29, as the demand is low and inventories are high. De Beers is also expected to report a loss by 2025. Anglo will announce its financial results for 2025 on February 20, 2019.
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ArcelorMittal South Africa reduces its loss after closing long-stack steel operations
ArcelorMittal South Africa announced?on?Thursday that it had narrowed its loss for the full year by 34% due to lower raw material prices and after closing down its money-losing, long steel business. Sub-Saharan Africa’s largest steelmaker reported a headline loss in the year ending December 2025 of 3.355 billion Rand ($207.86million), compared to a loss of 5.1 billion Rand the previous year. South Africa's unit of global steelmaker ArcelorMittal is struggling with a weak local market, high electricity prices and competition from mini-mills for recycling scrap metals in the country as well as imports from China. ArcelorMittal South Africa's Luxembourg-headquartered parent company, however, on ?Thursday reported earnings before interest, tax, depreciation and amortisation (EBITDA) of $1.59 billion for ?the fourth quarter, beating analysts' ?average estimate of $1.51 billion. The South African unit reported that its crude steel sales and production were down by 12%, to 2.3 and 2 million tons respectively. The realised steel price was 5% lower, in rands and 3% less in dollars. ArcelorMittal South Africa shut down its long steel plants last year to reduce losses. In its results announcement, the company said that long-steel operations had a neutral impact on?EBITDA for 2025 after a loss of 1.7 billion rands in 2024. The company confirmed the date of January 22. With the state-owned Industrial Development Corporation, that could lead to a possible transaction. Bloomberg reported that ArcelorMittal South Africa, whose?second largest shareholder is IDC with 8.2% of the shares, had re-opened talks after the initial negotiations. Stalled Last year, there was a valuation. ArcelorMittal South Africa stated that the discussions are continuing and will shape its outlook in 2026, if successful.
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Sources: Nippon Steel is considering a convertible bond issue of $3.2 billion, according to sources
According to two sources familiar with the matter, Nippon Steel, Japan's largest steel company, is considering the sale of up to?500 billion yen ($3.2billion) in convertible bonds. This would be a transaction of unprecedented size in Japan. Sources said that the steelmaker was considering making a decision this month. They declined to name them as the information wasn't public. Reporting the potential issuance for the first. Nippon Steel stated in a press release that nothing had been decided. Following the release of this report, the company's shares fell by 2%. According to LSEG, at 500 billion yen the convertible bond issuance would be largest of its kind in Japan. One source said that the issuance amount could be reduced, or the plan could be re-evaluated. Sources said that Nippon Steel prefers to issue the convertible bonds in order to avoid a capital raise which would result in immediate share dilution. Also, as domestic interest rates are rising, they can be issued as zero-coupon bond. At a set price, convertible bonds can be turned into shares. The steelmaker needs capital to expand its overseas business, including in the U.S.A. and India?and for decarbonisation efforts. Sources?stated that the company needs long-term financing to replace a 2 trillion yen bridge loan taken out last year for its acquisition by U.S. Steel. Steelmaker's performance has declined due to tariffs imposed by President Donald Trump on imports of steel and the competition from Chinese exports. Sources also claim that the Japan?Bank of International Cooperation (JBIC) is looking at lending Nippon Steel funds totaling approximately 1 trillion yen (6.37 billion dollars). JBIC stated in a press release that it would not be commenting on specific cases.
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Copper, precious metals and oil are down as global tensions decrease;
The prices of commodities such as crude oil, silver, and gold, all fell on Thursday after the leaders of China, the United States, and Iran spoke by phone. Investors reduced their positions due to a stronger dollar in which commodities are priced. Silver fell almost 15%, while gold, crude and copper dropped about 2%. Tony Sycamore is an analyst at broker IG. He said, "We have seen extreme volatility this week in precious metals, other commodities, and we are now experiencing some aftershocks." He added that "talks between Iran and United States seem to be on track again, which has reduced some of the geopolitical premium in commodity markets, especially oil." The tensions in the trade front also eased after the call between Trump & Xi. Investors are tempted to sell gold when it is at these levels. The dollar was stable at the beginning of Asian trading ahead of the interest rate decisions of the European Central Bank and Bank of England. Both are expected to hold rates later in the day. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, traded at a near-two-week high. The dollar's strength makes commodities more expensive for buyers of other currencies. Prices dropped on Monday, after U.S. president Donald Trump announced Kevin Warsh's nomination as the new Fed chair. This triggered a sell-off of risk assets. The dollar is boosted by a hawkish outlook from the U.S. central banks, while gold and silver are at a higher cost of opportunity. VOLATILE COMPONENTS Spot silver also plunged from its earlier session high of?nearly one week. Last week, silver reached a new record of $121.64 and gold reached a record of $5,594.82 per ounce. Christopher Wong is a strategist with OCBC. He said, "Sentiment has become soggy in?most asset categories, as losses feed into each other and create a feedback loop that reinforces itself amid low market liquidity." He added that precious metals and cryptocurrencies, as well as regional equity, reflect such expectations. After the U.S. agreed to hold talks with Iran in Oman, the oil prices dropped about 2%. This eased fears of a possible military conflict disrupting supply from the Middle East's key producing region. Copper was also under pressure due to concerns about demand and the increasing stock in London Metal Exchange warehouses. The metal, which is widely used in the construction industry, had already recovered from a two session slump. This was aided by China's plans to increase its strategic copper reserves. Soybeans have bucked trend and reached a two-month peak, spurred by Trump's comments that China may consider buying cargoes of soybeans from the United States. High inventories also contributed to a 2% decline in iron ore. (Reporting and editing by Clarence Fernandez; Additional reporting in Bengaluru by Ishaan arora; Reporting by Naveen Thural)
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Sources: Nippon Steel is considering a convertible bond issue of $3.2 billion, according to sources
According to two sources familiar with the matter, Japan's Nippon Steel may sell convertible bonds worth up to 500 billion yen (about $3 billion), in the largest transaction of its kind ever in Japan. Sources declined to name themselves as they did not want the information made public. Reports the potential issue for the first. Nippon Steel stated in a press release that "nothing is decided yet". Following the release of the report, shares in the company fell by 6%. According to LSEG data, at 500 billion yen the convertible bond issuance would be the largest in Japan. One source said that the issuance amount could be reduced, or the plan reconsidered. Sources said that Nippon Steel prefers to issue the convertible bonds in order to avoid a capital raise which would result in immediate share dilution. Also, as domestic interest rates are rising, they can be issued as zero-coupon bond. Convertible bonds are able to be converted into shares for a set price. The steelmaker needs capital to expand its overseas business, including in the U.S. and India, as well as for decarbonisation projects. Sources said that the company needs long-term financing to replace its?bridge loan? it took out last year for its acquisition by U.S. Steel, which totaled around 2 trillion yen. Steelmaker's performance has declined due to tariffs imposed by U.S. President Donald Trump on imports of steel and the competition from Chinese exports. Sources also stated that the Japan Bank for International Cooperation (JBIC) is looking at lending funds totaling approximately 1 trillion yen (6.37 billion dollars) to Nippon Steel. JBIC didn't immediately respond to an inquiry for comment.
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Morning bid Europe-Skeptic investors haunted with tech sell-off
Stella Qiu gives us a look at what the future holds for European and Global markets on February 5th: Investors were confident that the major U.S. tech firms would deliver a strong quarter with rosy forecasts. They increased their exposures ahead of this earnings season. This has proven to be a costly error. Google Alphabet Released It delivered solid results, but also surprised analysts when it announced that capital expenditures would be between $175 billion and $185 billion in this year - far above Wall Street's expectations. This only fueled fears about the?explosion of artificial intelligence investment. The valuations of artificial intelligence are already high and there are signs that many jobs in software or data analytics are being automated. There seems to be only one direction to go: down. Alphabet's shares fluctuated wildly in the hours after closing - dropping over 6% once - before settling at 0.4% lower. You would think that the increasing AI spending would benefit a chip manufacturer like?Nvidia. Nvidia's shares rose 2% following the bell. However, equipment suppliers in Asia have been hit hard by the recession, with South Korea down a staggering 3.5%, and Taiwan down 1%. Wall Street futures tried to recover but lost momentum quickly as the selling spread to precious materials, with gold and silver both falling below $5,000 an ounce. European futures indicate a lower opening ahead of the policy decisions of the European Central Bank and the Bank of England. Both are expected keep rates the same. The ECB will likely indicate that no policy moves are imminent, even if recent euro-dollar surges fuel concerns that inflation could undershoot target. BoE is expected to keep its options open as to when it will reduce rates again, waiting to see if a weakened jobs market will help to lower inflation pressures. The following are key developments that may influence the markets on Thursday. ECB-BoE Policy Meeting, January PMI Data for Euro Zone, Germany and France
Aurubis' profit falls on lower copper refining costs
Aurubis, Europe's biggest copper producer, reported on Thursday a?first-quarter operating core profit? that was slightly below the?market expectation?. This was due to lower treatment and refinement charges for smelting Copper Concentrates and a maintenance shut down at its Hamburg facility.
The operating profit before interest, tax, depreciation, and amortization for the first quarter fell from 184 millions euros to 164million euros (193million euros) compared with a year earlier. This was slightly below the 169 million euro estimate of analysts in a poll provided by the company.
Hamburg-based company?said that its net cash flow was -8 millions euros for the first quarter, a significant decrease from the previous?year’s 178million euros. It said in a?presentation that this was due to?a temporary rise in working capital and increased metal prices levels.
Toralf haag, the chief executive of the company, said that despite a volatile geopolitical climate and a good result in metals markets as well as stable product markets for its products, it was a positive outcome.
Aurubis produces 1.2 million metric tonnes of copper cathodes, 2 million tons sulphuric acids, and other metals such as gold, silver, and tin.
Analysts expect the bull run in gold to continue.
Aurubis raised its forecast for 2025/26 by a few million euros on January 28.
The previous estimate was for an EBT of between 300 and 400 million euros in the fiscal year of 2025/26. The German company said that its EBT for the first quarter was 105 million euro.
(source: Reuters)