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Copper continues to retreat due to weak Chinese factory data and a stronger dollar
The copper price continued to fall on Friday. Weak industrial data from China, the world's largest metals consumer, coupled with a strong dollar and profit taking following a rally that reached a record high, all contributed to its decline. The London Metal Exchange's three-month copper was down slightly at $10,915 a metric ton, in open-outcry official trading. This is the second consecutive day of losses, after reaching a record high of $11,200 on Wednesday. LME copper is on track to achieve its third consecutive monthly gain after gaining 5.7% this month. The data showed that China's factories shrank in October for the seventh consecutive month, due to a decline in export orders. This was due to the fact that months of putting in extra work in order beat U.S. Tariff threats had finally worn off. Ewa Mnthey, commodities analyst at ING, said that the China data released today has affected the base metals market sentiment. She added that "while near-term indicators of demand remain mixed, disruptions in supply will keep prices at a level around $10,000 per ton." Copper will need to be in high demand, particularly from China, to continue its upward trend. The Shanghai Futures Exchange's most traded copper contract fell 1.7%, to 87.010 yuan (12,215.36) per ton. The copper contract was also set to rise 4.8% for the third consecutive month. As prices have risen, many Chinese buyers have remained on the sidelines. Yangshan Copper Premium The price of copper, which is based on the demand for imported copper into China, dropped by 28% in the last month, to $36 per ton. A slightly stronger dollar index also pressed the market, hovering around a three-month high touched on Thursday. A firmer dollar makes greenback-denominated assets more expensive to holders of other currencies. Marex said in a recent note that the copper price decline could continue. "Caution! We note that some indicators suggest that additional corrective action may be needed." LME aluminium prices rose by 0.6% to $2,880 per ton in official activity, despite a rise in LME inventories A 102,275 ton inflow into Malaysian warehouses has caused the increase to be a fifth. Other metals include LME Nickel, which rose 0.1% to $16,240 per ton. Zinc gained 0.6%, to $3,055, while tin increased 1.3%, to $36,265; and lead fell 0.2%, to $2,018. Click here to see the latest news in metals.
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The dollar and OPEC+ supply are weighing on oil prices, which is expected to drop for a third consecutive month.
The oil price was flat on Friday but headed for a third monthly decline as a strong dollar, weak China's data, and increased supply from major producers worldwide weighed. Brent crude futures recovered some of their earlier losses and were now up 29 cents or 0.5% at $65.29 per barrel at 1303 GMT. U.S. West Texas intermediate crude was up 53 cents or 0.9% at $61.10 per barrel. Dollar-denominated goods such as oil are more expensive because the U.S. currency is near its three-month-highs. Sources said that Saudi Arabia may cut its crude oil price in December for Asian buyers down to multi-month lows. The price of oil also fell after an official survey revealed that China's manufacturing activity had declined for the seventh consecutive month in October. Brent and WTI will fall by 2.6% and 2% respectively in October, as the Organization of the Petroleum Exporting Countries (OPEC) and other major producers increase their output. The increased supply will also help to cushion the impact on Russian oil exports, which are currently restricted by Western sanctions. These include China and India. Brent is expected to average $67.99 a barrel by 2025, which is about 38 cents higher than last month's estimate. WTI will average $64.83, which is slightly higher than September's estimate. People familiar with the discussions said that OPEC+ was leaning toward a modest increase in output for December. The group will meet on Sunday. The Joint Organizations Data Initiative reported that the top crude exporter Saudi Arabia's exports reached a six-month record of 6,407 million bpd during August. The U.S. Energy Information Administration also reported a record production of 13,6 million bpd in the last week. Donald Trump, the U.S. president, said that China had agreed to start the process of buying U.S. Energy. He added that an extremely large transaction could take place regarding the purchase of oil from Alaska. Analysts are unsure whether the U.S. China trade agreement will increase Chinese demand for U.S. Energy. (Florence Tan contributed additional reporting; Susan Fenton edited the article)
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MORNING BID AMERICAS TEMPLATE
What Mike Dolan, the ROI team and I are looking forward to reading, watching and listening to this weekend. Hello Morning Bid readers! Wall Street was spooked Thursday as Microsoft and Meta saw their shares fall due to concerns over the AI capex spree. The big news this week was that chip giant Nvidia became the first company whose market cap exceeded $5 trillion after only hitting $4 trillion three months earlier. It looks like Halloween will be more of a "treat" rather than a "trick," with U.S. equity prices rising before Friday's bell. We began the week with the news that there would be a likely agreement between U.S. president Donald Trump and his Chinese equivalent Xi Jinping. We saw that happen on Thursday, after a meeting that the U.S. President described as "12 out 10". They reached a deal which included a reduction of U.S. duties on Chinese products and a postponement of China's restrictions on rare earths. Jamie McGeever of ROI Markets warns not to get too excited. The U.S. China story is nothing new. The Federal Reserve Chair Jay Powell was the source of another big story this week. The Fed's Wednesday decision to reduce interest rates by 25 basis point was widely anticipated, but the Chair indicated that a cut in December was not a foregone conclusion. The Fed may have been recognizing that interest rates cuts are not the best way to help an economy with labor shortages. Mike Dolan, editor-at-large at ROI magazine, believes that the Fed's hawkish stance has given the U.S. Dollar a boost. It is expected to gain 2% this month. This will not go over well with Trump's administration. OPEC is meeting this Sunday, and it's expected that they will announce another increase in output. Saudi Arabia, OPEC’s de facto leader appears to be stuck between Donald Trump and a rock, argues ROI's Ron Bousso. The U.S. President's latest oil sanction against Russia forces Riyadh's to weigh competing geopolitical priorities and economic priorities. How effective have sanctions against Russia been? Clyde Russell, Asia Commodities columnist for ROI Asia, addressed this question in a recent article. He argued that the answer depends on how you measure success. Gavin Maguire, ROI Energy Transition columnist this week, discussed China's electric car output and exports after a major policy pivot. In the metals market, copper was again in the spotlight as the London Metal Exchange hit a nominal high of 11,200 dollars per metric tonne on Wednesday. Check out what the ROI team recommends you read, watch, and listen to as we enter the weekend. Stay informed and prepared for the coming week. Please contact me via This weekend we are reading... Here's how a New Zealand-based small insurer is an important link in the dark network responsible for shipping Iranian oil and Russian oil. Anne Krueger, former IMF and World Bank official, wrote a column this week for Project Syndicate that makes a strong case for - replacing the weakened WTO. She supports the Canadian Prime Minister Mark Carney's push. The latest report by the shows how China, India, and Indonesia -- three of the largest coal consumers in the world -- could all reach peak power sector emission levels by 2030. This week the copper prices in London reached a new high. Here's an overview of the current market. Here's everything you always wanted to know but were afraid to ask about copper. Listening to... I recommend it in general but particularly the most recent episode where the Russian Bureau Chief and commodities editor discuss how the energy war between Russia and Ukraine has intensified. They talk about its impact on both the Russian economy and the global energy markets. Sign up for the newsletter to receive Morning Bid every morning in your email. Subscribe to the Morning Bid newsletter Website You can find us on LinkedIn. The opinions expressed are solely those of their authors. These opinions do not represent the views of News. News is bound by the Trust Principles to maintain integrity, independence and freedom from bias. (By Anna Szymanski)
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EU countries divided over climate goals 2040 as COP30 approaches
According to documents and diplomats seen on Friday, the European Union is still divided over its new climate change goal and continues to debate changes just days before ministers are expected to approve it. The EU is racing towards a climate goal, with the European Commission hoping to reduce global warming emissions by 90% by 2040. However, some member states are worried about the costs for their struggling industries. If there is no agreement, Ursula von der Leyen, the President of the Commission, will not have a goal to share with other world leaders when they meet at the COP30 Climate Summit hosted by the U.N. This would undermine the EU's claim as a leader in climate change. When asked whether the EU would reach an agreement on a goal ahead of the COP30 leaders' meeting, which will take place on November 6, one EU diplomat said the bloc is "walking a razor's edge". China, Britain, and Australia are among the countries that have announced their new climate goals. However, due to internal disputes, the EU failed to meet a U.N. deadline last month. CENTRAL STICKING POINTS STILL UNRESOLVED Diplomats said that the EU ambassadors who met in Brussels on Friday to lay the foundation for an agreement failed to resolve key sticking points. The final negotiations will be held at a ministerial meeting on November 4. The EU diplomat stated that "Ministers must work hard" on Tuesday. The EU diplomat, along with others who asked to remain anonymous due to the sensitive nature of discussions, stated that it was unclear whether an agreement would be reached. To achieve the target, at least 15 out of 27 EU member states must support it. Spain and Sweden are among the countries that want to reduce emissions aggressively. DISAGREEMENT REGARDING FOREIGN CARBONA CREDITS The use of carbon credits by EU countries from developing nations in order to reach their targets is a major point of contention. France said that credits could cover up to 5% of 90% emission reductions, and Poland wants an even larger share. Germany publicly supported 3% while other countries, including Denmark, initially did not want any foreign carbon credits. According to the latest draft proposal seen by, countries are still not in agreement on whether they will offset 3% of their emissions with foreign carbon credits, as the original proposal from the Commission suggested, or when they will begin using them. France proposed an "emergency break" ahead of the Friday meeting. This would allow countries to reduce their 90% target for emissions by 3% if they absorb less CO2 than expected. The proposal is designed to convince governments that are sceptical by addressing their concerns about being forced to reduce emissions more quickly to meet the 2040 target if forests fail to deliver. A French government spokeswoman did not respond immediately to a comment request. (Reporting and editing by Kate Abnett)
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Dominion Energy exceeds expectations on high power demand in Virginia and South Carolina
Dominion Energy beat its third-quarter profit expectations on Friday, thanks to increased demand for power in its Virginian and South Carolina segments. According to the U.S. Energy Information Administration, a surge in artificial-intelligence and cryptocurrency datacenters, coupled with the accelerating electrification and homes and businesses is expected to push U.S. energy demand to record levels by 2025 and 2026. The company said on Tuesday that it expects the power demand for data centers to double in the next 15 years. The utility now accounts for 27% in Virginia's sales from data centers. The adjusted operating earnings of Dominion's Virginia division rose by 2.5% in the third quarter to $679 millions, while those from South Carolina rose by over 14% to $109 million. Revenue for the quarter was $4.53 Billion, up from $3.94 Billion a year earlier. Interest expenses for the company rose by over 30% in the third quarter, to $527 millions. Dominion has narrowed the range for its operating earnings forecasts to between $3.33 and $3.48 a share. This is down from an earlier range of $3.28 to $3.52 a share. The company expects to achieve results at or above this midpoint if the weather conditions remain normal throughout the remainder of the year. According to data compiled and published by LSEG, the utility's adjusted operating earnings were $1.06 per common share for three months ending September 30. This compares with an average analyst estimate of 95c per share. (Reporting from Bengaluru by Sumit Saha; editing by Sahal Muhammad)
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Public disillusionment returns as Iraqi politicians prepare for elections
Iraqis fear that the November 11 election will not bring about any real change. Many see the banners promoting reform as empty gestures by elites who have done little to improve the situation since the 2003 U.S. invasion. Since then, corruption has plagued daily life. High unemployment rates and poor public services are commonplace. Iraqis claim that their Shi'ite Muslim and Sunni Muslim leaders have become too involved in the rivalry for power on a sectarian basis to deal with Iraq's issues - despite Iraq's vast oil wealth. The election results are predetermined for many people, despite the billboards and banners that proclaim change. They serve to maintain Iraq's political equilibrium in the hands the same sectarian leaders. How do you make me trust you? Said Hatem is a Baghdad-based resident who expressed skepticism regarding the prospect of change. "You can see the advertisements on the street ...,, but they've been ruling for the past 20-25 years. How can you get me to trust you? He said. The Independent High Electoral Commission of Iraq has approved 7,768 candidates for the Iraqi Parliament, including 2,248 men and 5,520 women. The commission said that campaigning had been authorized from October 3 until November 8. The vote will test the confidence of Iraqis in their entrenched political system, which has failed to deliver on promises to improve services and combat corruption in a nation where Iraqis claim that vast oil revenues are only used to benefit the political elite. The Shiite party of Shia Prime Minister Mohammed Shia al-Sudani will compete primarily against other dominant Shiite factions backed by Iran. POLITICAL VIOLENCE SPREADS FEARS The frustration has been increased by the resurgence of political tensions, including the murder of Safa al Mashadani, a parliamentary candidate who had criticized everything from state-corruption to Shi'ite armed militias that he claimed were trying to seize his hometown. Tabark Tariq Al-Azzawi is a candidate of the Iraqi Progress Party. She said that she received threats, and feared for her own safety. "I hope that this phase will end without any more deaths or assassinations of ordinary citizens or candidates." "I hope that safety and security will always prevail," she said. It was not possible to independently verify the motive for or details of Mashhadani’s murder. According to Iraq's chief security spokesperson General Saad maan, authorities have increased protection measures, and arrests were made, while investigations continue. Many Iraqis think that it is almost impossible to bring about real change in Iraq through elections, because the same powerful groups continue their dominance of the state and its vast resources. ORCHESTRATED Election Results These parties are frequently backed by armed groups close to Iran, who control government contracts, key institutions and public funds. The voters say that this system allows the ruling alliances and their supporters to manipulate election results in their favor. These parties deny these allegations. Sheikh Abdul Jaber Hamoud is an Iraqi tribal leader who criticised the tendency of improving government outreach and services during election cycles, while neglecting most Iraqis at other times. Qais al Zubaidi, a political analyst, said: "I do not believe that the political process has been democratic since 2003. It is now a political system that is manipulated to benefit certain groups." The presence of uncontrolled arms makes it difficult for citizens to make a change. In 2003, U.S. officials believed that the removal of Sunni leader Saddam Hussein would lead to a new era in Iraq where all its communities could enjoy freedom and prosperity. In its place, a pro Saddam insurgency was followed by islamist Al Qaeda militants. A sectarian civil conflict gave rise to more extremist Islamic State jihadists. Even years after the bloodshed, few politicians have sparked hope for a better future.
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Israeli attacks in Gaza kill three Palestinians, test fragile truce
Palestinian health officials said that Israel attacked the Gaza Strip on Friday for a forth day, killing three, another test of an fragile ceasefire. Residents reported Israeli gunfire and shelling in northern Gaza, despite Israel's claim that it is committed to the ceasefire brokered Donald Trump. The Israeli military didn't immediately respond to a comment request. The Palestinian WAFA news agency reported that another Palestinian had died from wounds caused by previous Israeli shelling. Since its implementation three weeks ago, the U.S.-brokered truce, which did not resolve thorny questions like Hamas' disarmament and the timeline for Israel's withdrawal from Gaza, has been put to the test by periodic violence. Israel launched a series of bombardments in Gaza between Tuesday and Wednesday to retaliate for the death an Israeli soldier. Gaza's health authorities reported that 104 people were killed. MORE BODIES HANDLED OVER Gaza's Health Ministry said that the Red Cross delivered 30 bodies of Palestinians who were killed by Israel in the war. This was a day after Hamas had handed over the bodies of two hostages. In the ceasefire agreement, Hamas agreed to release all of its hostages in Gaza for nearly 2,000 Palestinian wartime prisoners and detainees. Israel, on the other hand, agreed to withdraw its troops, stop its offensive, and increase its aid. Hamas has also agreed to exchange 360 militants Palestinians killed during the war for the remains of the 28 hostages. Hamas handed over 17 corpses after Thursday's release. 225 Palestinians bodies have been returned so far to Gaza. Hamas said it would take some time to find and recover the bodies of the remaining hostages. Israel accuses Hamas for violating the ceasefire by delaying the transfer of hostages. Gaza's health authorities report that the conflict has killed more than 68,000 Palestinians in two years and destroyed the enclave. Israel began the war in Gaza after Hamas-led fighters invaded southern Israel, killing 1,200 and taking 251 hostages to Gaza.
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Tchiroma, the opposition leader of Cameroon, says that loyal soldiers brought him to safety
Issa Bakary, the opposition leader in Cameroon, said that he was escorted by his loyal soldiers to a safe location for his safety. This could be a sign of a division within the army after a disputed vote. Tchiroma has been holed-up in his Garoua house since the presidential election of October 12, in which he declared victory. He did not specify the number of soldiers but his claim that the members of the military are loyal to him may indicate a split in the security forces of the country. Tchiroma posted a Facebook message saying, "I thank the loyalist Army for escorting and protecting me in a safe place." The central African nation's Defence Ministry declined to comment. The Cameroon Constitutional Council declared on Monday that President Paul Biya - the oldest leader in the world at 92 years old - was the winner of the elections, causing violent protests across the nation's oil and cocoa producing cities. According to a group of civil society activists, the disputed election heightened tensions across the country. Security forces are accused of detaining and killing over 500 protesters, while also killing 23 others. Tchiroma, in a separate Facebook message posted on Friday, called for a 3-day lockdown starting Monday. He urged supporters to stop all activities and stay at home as a way to express their disapproval of the results. Tchiroma, in a video, said: "Let's bring the country to a complete standstill so that everyone knows we are resisting. We will not give up." "Let's keep our shops shut, suspend our activity, and remain at home in silence to show our solidarity, and to remind the regime that an economy's strength is its people." (Reporting and writing by Anait Miridzhanian; Amindeh Atabong, Bate Felix)
China's CATL will raise at least $4 Billion in Hong Kong listing
According to the prospectus it filed on Monday, Chinese battery manufacturer CATL aims at raising at least HK$31.01bn ($3.99bn) through its Hong Kong listing. This is the largest new share sales in the city for this year.
According to documents filed with the Hong Kong Stock Exchange, the maker of batteries used in electric vehicles will sell 117.9 millions shares at a maximum price of HK$263 each.
If the offer size adjustment and greenshoe options are used, then the size of this deal could reach $5.3 billion.
The prospectus revealed that more than 20 cornerstone shareholders, including Sinopec, Kuwait Investment Authority and Kuwait Investment Authority have subscribed for CATL shares worth $2.62 billion.
With the offer size adjustment, up to 17,7 million additional shares can be sold to raise an extra HK$4.65billion ($598,00 million). The greenshoe option allows for the sale of up to 17,7 million additional shares.
The filings indicated that the price of the shares is expected to be determined between Tuesday and Friday. A final price will be announced no later than May 19.
CATL will sell its Hong Kong shares at a slight discount to Shenzen's Friday closing price if they are priced at HK$263 per share. If the Hong Kong shares are below this level, the discount is larger.
CATL stated in its prospectus that it had been granted a Hong Kong Stock Exchange exemption to not publish the minimum price at which shares can be sold, as this could have an impact on the trading of the Shenzhen listed stock.
The prospectus stated that 109,1 million shares will be sold to institutional investors. Hong Kong retail investors can bid on 8,8 million shares.
This will be the biggest share sale in Hong Kong since Midea Group raised $4,6 billion last year.
CATL shares will begin trading at the Hong Kong Stock Exchange from May 20.
CLOSING EYE ON US - CHINA TRADE WAR
The filings revealed that U.S. investors onshore will not be allowed to purchase CATL shares as part of the Hong Kong deal. However, many of these funds have overseas operations and would be eligible to participate.
In January, the company was listed on a list of Chinese companies that U.S. Defense Department claimed worked with China's Military. CATL stated in its prospectus that it was working closely with the U.S. Department to correct the 'false label'.
It said: "It doesn't restrict us from doing business with entities, other than a few U.S. government authorities. Therefore is expected to not have a substantial adverse impact on business."
CATL's book-building comes at a time when the U.S., China and other countries held constructive talks on de-escalating the trade war in Geneva. However, the 145% tariffs on Chinese goods by Washington and the 125% tariffs on U.S. products by Beijing remain in effect.
Tariff policies are rapidly changing. We cannot assess with accuracy the impact that such policies will have on our business. However, we will monitor the situation closely.
CATL previously stated that the impact of U.S. Tariffs would be minimal, as this market only accounts for a small portion of the company's business.
The Biden administration's policies have severely restricted its North American business. These policies excluded Chinese batteries under an EV subvention scheme.
CATL licenses its battery technology in order to assist its U.S. customers, including Ford and Tesla, to build their own battery plants rather than building its. Such partnerships are often criticized by U.S. lawmakers.
(source: Reuters)