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Copper prices increase as US-Iran lull calms concerns over oil and economic growth
Prices of copper rose on Monday as oil prices dropped after the U.S. & Iran ended hostilities. This eased 'concerns over price pressures and global economic growth. Benchmark copper on the London Metal Exchange was up 0.9% at $13,770 per metric ton of official rings. The Pentagon suspended its campaign against Iran on Friday after 13 nights of increasing airstrikes by the United States. Iran has been holding fire for the past two days after it had responded to each night's U.S. airstrikes with its own strikes on neighbouring countries which host U.S. base. The oil prices fell as the pause in fighting gave rise to hopes of a diplomatic resolution that would allow shipping in the Strait of Hormuz to resume. Tom Price, a Panmure Liberum analyst, said: "The market now waits for a resolution and is trying to price in peace instead of an ongoing war." "Chile was hit by unusual storms that put pressure on the grid of power distribution and raised questions about the copper production guidelines across the industry." According to the U.S. Geological Survey, Chile accounted 23% or 5.3 millions tons of global mined copper production last year. Traders also said that the market was focused on "copper stocks" in LME approved warehouses. Stocks have fallen 30% to 272,975 tonnes since May. Since February of last year, producers and traders have shipped?copper into the United States, after President Donald Trump 'threatened tariffs on imports.' This has created a premium in U.S. Copper over LME Prices. The U.S. Commerce Department had to finish a review of the copper market?by June 30. However, Trump has not yet announced his decision on tariffs. Price of Panmure Liberum said that the movement of copper to the United States will tighten short-term supplies elsewhere, because inventories are just that: "short-term supplies". Aluminium gained 0.6% at $3180 per ton. Zinc rose 0.8% at $3,619; lead increased 0.4% to $1,894; and tin was up 1.4% at $54,545. Nickel was unchanged at $17375.
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Stocks and bonds rally as oil prices fall
The stock and bond markets around the world staged a relief rally Monday, as easing Middle East conflict sent oil prices down and eased inflation concerns ahead of an upcoming week packed with central bank meetings and earnings announcements. U.S. president?Donald?Trump has halted the two-week long bombing campaign that was launched against Iran. According to reports, U.S. officials were concerned about the depletion in air defence weapons. Iran has said that it will halt its attacks as long as U.S. officials continue to fire. Brent crude fell 7.8% to $89.41 per barrel during the lull of fighting in the Strait of Hormuz, while U.S. Crude dropped almost 7% to $83.2. STOXX 600 Europe climbed by 0.9% to close in on the all-time highs of early July. Retail and travel stocks, which are sensitive to economic conditions, rose more than 2%. However, a decline in oil stocks hurt the overall market. S&P futures increased by 0.9%, while Nasdaq Futures gained 1.4%. This positive start to Wall Street is a result of the futures. As traders reduced the probability of a rate hike by the Federal Reserve in the coming week, most major currencies rose against the dollar. The dollar fell 0.2% against yen (163.64) and the euro rose 0.2% to $1.139. Markets indicate that the U.S. Central Bank's decision will be made on Wednesday. Most analysts do not believe Chair Kevin Warsh is likely to support such a move. Since the last FOMC, the inflation, labour market, and consumption data were?all sufficiently comfortable that they prevented the need for aggressive hikes. Samy Chaar is the chief economist of Lombard Odier. He said that oil prices were closer to $70 than $100. Chaar said the relatively high oil price created a window for hawks to push rate increases at the U.S. Central Bank. "But we are not there yet." "I think it depends how long tensions persist in the Middle East," he said. Oil's decline helped the 10-year Treasury yields drop 4.3 basis points on Monday to 4.64%, further below their 18-month-old high of last week. This is the largest single-day fall in Treasury yields since June 24, and it was a result of the pullback. The yields of all European government bonds also dropped. Both the Bank of England and Bank of Japan are expected to keep their policy decisions unchanged, but remain cautious regarding inflation risks. Earnings from TECH BULLS LSEG IBES' data shows that about a third of S&P500 companies will report their results this week. Earnings are on track to increase by 26.5% over the previous year. Even blockbuster results might not satisfy investors with the high expectations and growing unease about the cost of AI capex. A report in the Wall Street Journal stated that Nvidia had been in discussions to provide an estimated $250 billion as part of OpenAI's data center project. This week, companies reporting include Microsoft, Meta Platforms and Apple, as well as a host of industrial, healthcare and defence stocks. CXMT Corp, a Chinese chipmaker, soared 466% - in its Shanghai debut, following Asia's largest IPO of the year. The U.S. second-quarter advance GDP is a data highlight. After a slow start to the year, growth should pick up to 1.5% annualised after accelerating from a soft first quarter. Weekly?jobless claim, the second quarter employment costs index, and July Michigan consumer confidence round out this week's calendar. The Eurozone's schedule includes the flash Q2 GDP (Gross Domestic Product), July economic sentiment (consumer confidence), flash inflation (inflation in a flash) and June unemployment. According to the Ifo Institute survey conducted on Monday, German business morale increased more than expected in August due to significantly better expectations. The drop in yields has helped gold prices to rise 1.1%, or $4,098.76 per ounce, on commodity markets. (Reporting and editing by Wayne Cole, Sruthi, and Sruthi Shakar; Sam Holmes, Mrigank, Dhaniwala and Amanda Cooper)
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Indonesia eases the bottleneck that is preventing alumina and nickel exports by easing rare-earth inspections
Indonesia's Presidential?staff Office has called for a?cooperation among government agencies, law-enforcement officials and the?industry? to resolve a regulatory void that has reportedly delayed exports of nickel and alumina products due to their rare-earth contents. Indonesia is one of the world's largest exporters of minerals, but it produces rare earths only as a minor by-product. No rules have been established yet to govern how much of these elements can be added to shipments of other mineral. Officials stated that exporters faced delays in their shipments on Monday due to the lack of clear regulations. Dudung Abdurachman, the Chief of Staff to the President, said that he had received reports about disruptions in mineral exports from "several" companies. He made this statement after he chaired a meeting between representatives of government agencies and law enforcement officials. According to two sources in the aluminium industry, exports of alumina - the main raw material used for aluminium smelting - had been?affected. One source said that the government claimed our alumina contained rare earth materials, and added?that it had an immediate impact on shipments. Two nickel industry sources confirmed that some shipments, including nickel pig iron - a critical input in stainless steel - and mixed hydroxide precipitate – used to produce materials for electric vehicle batteries - had been delayed. The sources did not specify how much material was affected. The four sources refused to identify themselves because they weren't authorized to speak with the media. RARE EARTHS Prioritised for Domestic Use Dudung stated that exports of rare earth elements, as by-products, were hindered due to a regulatory gap regarding the allowable content in rare-earth products. He did not specify which type of shipment was affected. He said that authorities, such as the military, shouldn't obstruct trade in the absence rules for rare earth by-products. He was joined by representatives of key economic ministries, the national research and development agency BRIN (National Research and Innovation Agency), the Attorney General's Office (Attorney General's Office), sovereign wealth fund Danantara as well as state mining firms, industry groups, and the police. Indonesian regulations specify that rare earths should be given priority for domestic use, and the President Prabowo Sbianto set up a separate agency to oversee their development. Trade Data Monitor data shows that the top five destinations for Indonesian alumina exports were Malaysia, India and Qatar. Singapore, China, and Singapore were also on the list. China received almost 98% Indonesian ferronickel exports during the same time period. This category includes nickel pig iron. (Reporting from Dewi Kurniawati, Tom Daly and Dylan Duan respectively in London and Shanghai; Additional reporting by Bernadette Cristina in Jakarta; Editing done by Jan Harvey).
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Russell: Crude oil futures prices are a measure of market adaptability and not a sign of Iran peace.
Since the beginning of the Iran War, there has been a debate about whether crude oil futures accurately reflect?the stress in the physical markets for oil and refined products or if the are blindly 'optimistic' that peace is on the horizon. The Iran War between the United States of America and Iran continues on its volatile and unpredictable course, with renewed hope that there is a chance for a new pause in the?reverse strikes. This flicker of optimism led Brent futures to fall in the early Asian trading on Monday. The price fell by nearly 5%, reaching around $92.06. The Strait of Hormuz is still at best contested. Shipping volumes have dropped through the narrow waterway after surging in mid-June during a three-week ceasefire between the Trump Administration and Tehran. After the collapse of the deal and the renewed U.S. attacks on Iran, Tehran responded with a series of strikes against U.S. bases and vessels attempting to cross the Strait of Hormuz. Tehran appears to also have activated its Houthi ally in Yemen to target Saudi oil tankers that are trying to cross the Bab el-Mandeb Strait. This eliminates a route that Saudi oil could have taken to reach refineries on the Asian continent via the Red Sea Port of?Yanbu. Alternative routes include a much longer and more complex route via the Suez Canal. This involves partial discharging of cargoes as well as using the SUMED Pipeline due to draft restrictions. Overall,?the crude oil exports out of the Middle East are still constrained. There is a limited volume through the Bab el-Mandeb and Hormuz straits. A lasting peace agreement also seems distant as the United States is far from Iran on important points, and they are deeply distrustful of each other. UKRAINE LESSON This situation seems to call for a much stronger reaction than what has been seen in the oil futures market. Brent fell as low as $70.14?a barrel during the brief cessation of hostilities on July 2. It then rallied by 45%, reaching a high price of $102.00 in July 23 before falling back. This may seem like a big rally, but it is still well below the $139.13 peak Brent achieved in the weeks following the Russian invasion of Ukraine in February 2022. At the time, this event raised concerns about the disruption of Russia's exports, as they were the second largest crude shipper. These fears were not justified, as crude markets quickly adapted. They rerouted Russian oil to China and India buyers while Europe increased its imports from Americas and Africa. The situation is different with the?Iran conflict in that there is a real disruption of crude supplies. And the longer this continues, the more the buffers are strained by inventory drawdowns as well as China's reduction of imports. The argument is that crude futures are not high enough to reflect the risk of a prolonged disruption in Middle East crude supply, which appears to be more likely. It's less likely that crude futures will not price the worst-case scenarios, or even the best-case scenarios of "lasting peace", and more likely they will price adaptability. The market has effectively bet that it will handle disruptions through rerouting of flows and increasing alternative sources. The Suez Canal is a more expensive and longer route for Saudi Arabian Red Sea crude to reach Asia, but this is still possible and will be done if the market demands it. Other smaller workarounds, like Iraq sending fuel oil to Turkey are also emerging. These, when combined, help reduce the loss of approximately 10 million barrels of crude and products per day from the Middle East. It may be that the market is betting on traders of crude and refined products to help mitigate the worst effects of the Iran Crisis. You like this column? Check out Open Interest, your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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After crude's plunge, investors reduce rate-hike bettings and the Pound rises
The pound edged up against the dollar Monday, as a sharp fall in oil prices helped ease concerns about energy-driven inflation and dampened expectations of further tightening by the Bank?of?England ahead of its policy meeting this week. By 1010 GMT the pound had risen 0.07%, to $1.3330. This was a recovery for a second consecutive session after Thursday's low of three weeks. Brent crude prices fell 9% to $87.24 a barrel, after U.S.-Iran paused their strikes at the weekend. This boosted hopes for a de-escalation. Last week, the flare-up of hostilities briefly drove oil prices above $100 per barrel. This stoked concerns about inflation. The yields on two-year gilts, which are more sensitive than other maturities to the short-term interest rate outlook, fell by 6 basis points to 4.362%. This is a greater decline than what was seen with comparable U.S. or German government bonds. On Thursday, the BoE will likely keep rates at 3.75% after June's inflation was below central bank forecasts. The longer-term outlook remains divided between economists and the markets, as higher energy costs threaten to?complicate the inflation picture. Money markets are pricing in a roughly even chance of an increase in September rates. Francesco Pesole of ING FX wrote that if inflation remains contained, the BoE is likely to keep rates the same for the remainder of the year. He added that a dovish repricing is "the most immediate risk" for sterling. Sterling strengthened by 0.2% against the euro to 84.55pence, continuing its recovery from an?more-than-one-year low reached on July 15 of 84.5pence. Pesole stated that "our short-term models still suggest that the pair is inexpensive at these levels." NEW GOVERNMENT, NEW RULES? Investors are also evaluating the fiscal outlook of Britain's new government, after Andy Burnham and John Healey were appointed last week. Burnham's government intends to maintain the previous administration's approach of pro-growth to the financial services industry, including regulation. A person familiar with the matter said on Friday. Healey retained several Treasury Ministers who worked under his predecessor Rachel Reeves. This is a sign of continuity in the financial services sector, said this person. The data on currency positions also showed an improvement in sentiment. For the fourth week in a row, speculators have reduced their net bearish bets on the pound sterling ahead of Burnham taking over Downing Street. According to the U.S. Commodity Futures Trading Commission, net short positions in sterling fell from $5.96 to $4.64 billion during the week ending July 20, down from $5.96 to $5.96 billion a few weeks earlier. (Reporting from Bengaluru by Medha Singh; editing by Amanda Cooper and Arun K. Koyyur.)
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Sundance Resources has announced that it has won an arbitration award of $616 million in Cameroon for its iron ore project
Sundance Resources announced that it had 'won an arbitration by the International Chamber of Commerce against Cameroon. A tribunal awarded the Australian miner $616 million for damages, costs and interest over a project stalled in iron ore. The Perth-based mining company said that the tribunal had found that Cameroon breached their legal obligations towards Sundance, its subsidiary Cam Iron?SA and their investment in the Mbalam Nabeba iron-ore deposit which is located on the border of Cameroon with the Republic of Congo. Mbalam-Nabeba, Africa's largest?iron ore deposit, has been mired in dispute after Cameroon revoked Sundance’s mining rights. It then awarded the Mbalam permit to another developer. Sundance then launched arbitration proceedings to seek compensation for its losses. In January, the?company lost an?arbitration involving the same deposit and the Republic of Congo. A tribunal rejected its $8.8 Billion damages claim related to the Nabeba Iron Ore Project. Sundance released a statement Sunday stating that the tribunal had ruled that Cameroon also violated an arbitral agreement by refusing to 'comply with ICC emergency orders issued in March 2020 that prohibited it from granting a mining permit for Mbalam to another?party. The Cameroon mines ministry didn't immediately respond to an inquiry for comment. The mines minister said in July that Mbalam is one of the new projects that will boost mining revenues to 1 trillion CFA francs (1,75 billion dollars). Sundance chairman David Porter stated that the company and its legal advisers Clifford Chance, as well as litigation funder Burford Capital, were happy with the decision of the tribunal. Sundance said that if the government did not comply voluntarily with the award, it would have to take enforcement action.
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Poland could act again to lower fuel prices, PM says
Donald Tusk, the Prime Minister, said that if fuel prices remain volatile, Poland may act to lower them again, perhaps in the last two weeks of August, when many Poles are returning from their holidays. Poland, like many other countries introduced measures to cap fuel prices in March?after a surge in energy costs caused by the U.S. and Israeli war against Iran. As tensions in the Middle East eased and oil and gas prices stabilised, the government lifted the curbs. However, they have since been re-instituted as the conflict continues. "If the situation becomes unstable again and prices rise, we'll propose a solution for reintroducing regulated prices at least during the last two weeks of the summer holiday," said Prime Minister Tusk. He stated that he will discuss the issue with the Finance Minister as soon as Monday. The ruling coalition had proposed to tax oil and gas companies for windfall profits they generated due to 'rising margins amid supply disruptions caused by the war in the Middle East. The tax, which was expected to bring in 4 billion zlotys (about $1.06 billion) to the budget did not take effect because the Polish President Karol. Nawrocki sent it to the Constitutional Tribunal.
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Bordeaux is threatened by wildfires as Spain fights off more fires
On Monday, firefighters battled wildfires that threatened the French city of Bordeaux and its wine region, while crews struggled to control forest fires in Spain, which have been raging for the past week. This is the result of an incredibly hot, dry summer in Western Europe. Authorities in France have evacuated 220,000 people including tourists and residents. In Spain, nearly 100,000 people have been asked to leave their homes. Authorities say that the French fires, which started last week near the Atlantic Coast, are only 15 kilometers (9.3 miles), from the entry points of the Bordeaux metropolitan area. Jerome Steffe said, "This is an unprecedented fire." Cestas is a suburb just outside of the Bordeaux city area. Authorities said that the spread of large fires in central Spain was slowed by more favorable weather conditions overnight. However, a separate fire in the eastern province of Castellon raged uncontrollably as the weather agency predicted another heatwave in this week. "What's happening is not a series of isolated incidents. The climate emergency is the most painful manifestation of this. "It makes heatwaves and sixth-generation fires more intense, our territory more vulnerable, and wildfires of a more destructive nature," said Prime Minister Pedro Sanchez on Monday. These so-called "sixth-generation" fires are the worst and most uncontrollable forest fires. They can generate their own weather and destroy thousands of hectares an hour. Scientists blame human-induced climate change for such fires and extreme heatwaves. Maria Angeles Serrano said she was worried about the destruction of nature: "Material damages is one thing but they can be repaired." The emotional pain is what really hurts." Economic Impact Being Feel Roland Lescure, the Finance Minister of France, said that wildfires in Bordeaux and other parts of southwest France had caused a major shock to regional economies. The region is a centre of French wine production, and also a major tourist destination. Lescure, a reporter at the time, said: "It is like thunder in a place that could have done without it." The government of President Emmanuel Macron was to meet on Monday and discuss the wildfire crisis. Three separate fire fronts remain active in central Spain's mountains, northwest of Madrid. The authorities estimate that 77,000 hectares has been burned in the three provinces of Madrid Toledo and Avila. Avila's fire has been deemed the largest wildfire in Spanish history. WINDOW -OF OPPORTUNITY Weather forecasts are less favorable for firefighting operations from Wednesday, but we still remain confident," said the Spanish Interior Minister Fernando Grande Marlaska. Forecasts by France's weather office indicate that France also faced similar conditions, with more favorable conditions on Monday, before temperatures rose again this week to 37 C (98.6 F), in the Bordeaux region. Steffe, the mayor of Cestas, said that it was a race against the clock to prevent a heatwave from returning. According to Climate Monitor, the average July high temperature in Bordeaux and Avila was 32 degrees Celsius, almost 6 degrees above the normal maximum between 1961 and 1990. RESPONSE TO SCRUTINY The size of the wildfires that raged in Europe this summer is putting pressure on firefighting equipment and raising questions as to how we should respond. Portugal and Greece have deployed over 100 personnel and military equipment as part of the European Union civil protection mechanism. Spain's interior ministry announced that two more planes would be arriving from Turkey. The Swiss government is helping France by sending its two Super Puma helicopters with their crews in response to a request made by Paris.
Gold rises 1% amid US-Iran truce; oil prices are under pressure. All eyes on Fed meeting
Gold prices rose on Monday as the pause in the strikes between the United States' and Iran's forces lowered crude oil prices. This helped ease inflation fears and concerns about higher interest rates during the week that Fed policymakers will meet.
Spot gold rose 1% by 1200 GMT to $4,092.87 an ounce, while U.S. Gold Futures for August Delivery rose 0.7% to $4,098.00.
"Precious Metals started the week in a positive way, thanks to a pause of hostilities in the Middle East. "Oil has fallen and both the dollar yield and U.S. Treasury yields are down," said Ross Norman, an independent analyst.
The U.S. Dollar Index dropped by 0.2% making greenback bullion prices more affordable to buyers abroad.
Iran announced on Sunday that it would halt its attacks if the United States did the same, according to a senior Iranian official. Washington paused their bombing campaign when President Donald Trump’s advisers informed him that they were running low on targets and worried about depleting U.S. weapons.
The oil prices fell more than 5% Monday, raising the hopes of a diplomatic resolution to the conflict around the Strait of Hormuz.
Energy prices are rising, which is a factor that fuels inflation fears and increases expectations for higher interest rates. Gold is seen as an inflation hedge, but its non-yielding nature makes it less attractive in high interest rate environments.
Investors are now looking forward to the Fed's rate decision meeting on Wednesday. About 34% of participants in the market expect a rate increase.
Gold is sending cautiously positive signals. One eye on Iran and the other on Fed. Norman stated that if Warsh tries to revert the two hikes currently embedded in the curve and pushes back, it could be very supportive for gold.
According to the CME FedWatch tool, traders are pricing in a '79% chance that interest rates will be raised in September.
The price of spot silver increased by 1.5%, to $59.05 an ounce. Platinum rose 2.7%, to $1.631.22 and palladium gained 2.7%, to $1.277.47. (Reporting and editing by Ronojoy Mazumdar in Bengaluru, Joe Bavier, Joyjeet Das).
(source: Reuters)