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Copper prices are affected by the dollar's strength and concerns about China's demand
The copper price fell on Wednesday. It was the fifth session in a row that it had fallen. This was due to the strong dollar and concerns about China, which is a major metals consumer. At 1049 GMT, the benchmark copper price on London Metal Exchange had fallen by 0.2% to $10640.50 per metric ton. Metal, which is used for power and construction, has fallen 5% from its record high of 11,200 dollars a week earlier, when fears about a tightening global supply drove it up. The metal fell below the 21-day average, which was the level of resistance around $10,779. Analysts at Sucden Financial stated that "the pullback in the copper market appears to be a healthy consolidation with excess momentum being unwound, potentially providing some room for modest rebound when positioning is stabilized." FIRMER DOLLAR WEIGHS Copper has risen 22% this year so far, and is on track to be the biggest yearly increase since 2021. Standard Chartered analyst Sudakshina Unnikrishnan said that the metal will likely trade between $10,000 and $11,000 in the short term, as risk sentiment deteriorates. Macroeconomic drivers are also weighing on the metal, while last week's disappointing official Chinese manufacturing PMI data is adding to worries. On Wednesday, the Chinese yuan weakened to its lowest level in two weeks against the U.S. dollar. This made metals priced in dollars more expensive for Chinese buyers. Beijing will release data on trade Friday. Next week, credit lending and activity indicators will be released. Signs of trade tensions easing between Washington and Beijing were encouraging. China announced that it would remove export controls against 15 U.S. companies and continue to pause these measures for 16 other entities for one year, starting November 10. Other LME metals saw aluminium fall 0.2% to 2,852 per ton. Zinc fell 1.2% to 3,051.50. Lead was unchanged at $2,022.50. Tin dropped 0.6% to 35,550. Nickel has remained relatively unchanged at $15.075 after reaching $15.015, its lowest level since August 22. Polina Devitt (Reporting). Dylan Duan contributed additional reporting. Mark Potter (Editor)
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Dollar pause, gold rises by more than 1% in risk-off mood
Gold prices rose more than 1% in Wednesday's trading, driven by a slightly lower dollar and broader risk-off sentiment. By 1044 GMT, spot gold had risen 0.8% to $3,966.54 an ounce. U.S. gold contracts for December delivery increased 0.4% to $3.976.10 an ounce. Gold prices are up 52% in the past year and reached a record high of $4,381.21 per ounce on October 20, 2010. Carsten Menke, Julius Baer's analyst, said that the recent shift in financial markets to a more risk-off mindset due to concerns over equity market valuations has helped gold stabilize after its decline from record highs. European shares fell to their lowest level in two weeks as investors around the world continued to be nervous about equity valuations. Gold became less expensive to other currency holders after the dollar index eased by 0.1%, after reaching a three-month high. Investors are looking for clues about the U.S. rate path as the U.S. shutdown approaches the record-breaking length. The ADP National Employment Report, due on Wednesday, is one of the non-official reports that investors will be examining. Last week, the U.S. Federal Reserve lowered interest rates and Chairman Jerome Powell hinted that it could be the final reduction of borrowing costs this year. CME's FedWatch Tool shows that market participants see only a 72% probability of a December rate cut, compared to over 90% prior to Powell's comments. Gold that does not yield tends to perform well in low interest rate environments and times of economic uncertainty. Menke, Julius Baer's Menke, said: "We continue to see a strong demand for gold from those seeking a safe haven. This is also the case with emerging market central bankers." Silver spot gained 1.3%, to $47.69 an ounce. Platinum fell 0.1%, to $1.533.91; palladium rose 0.4%, to $1.397.46. (Reporting and editing by Alexander Smith, Ros Russell, and Brijesh Patel in Bengaluru)
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Brazil's most deadly police raid places Lula in political trouble
Luiz inacio Lula da Sol was left stunned by the most deadly police operation Brazil has ever seen. He is now trying to deal with the political fallout as he tries to reconcile growing international concern over human rights violations and public support for an aggressive crackdown on crime. This divide highlights a broader problem facing Lula. He is hoping to be re-elected next year, and has devoted much of his political capital towards an "ecological transform" of Brazil's economic system, capped off by the U.N. Climate Conference COP30, which starts this week. However, most Brazilians seem more concerned with public security. At least 121 people, including four officers of the Rio de Janeiro police force, died in the raid on October 28. United Nations officials condemned the level of violence and called for independent investigations to be conducted into any possible illegal killings. Since then, activists have staged protests as more bodies are identified. Lula called the raid "disastrous" during his appearance at COP30 on Tuesday in Belem. He said that the judge had ordered arrest warrants, and not mass murders. "And yet, there was a massive killing." Lula was on his way back from Malaysia in a plane without internet when the raid occurred. According to a source in the presidential palace, Lula has kept a low-profile since then. His administration is "walking on eggs" according one source. A second source stated that "the government cannot take responsibility for this but it can't also support the massacre." In a report submitted to the Supreme Court by the Rio State government, it defended the operation claiming that the security forces had used "proportional" force and "no deaths have been reported outside of the narco terrorist organization," suggesting that police actions were targeted. Support for Police Killings New polls suggest that despite the brutality of the operation, there is widespread support in the country for the police action. AtlasIntel's survey of Brazilians, published on Friday, showed that 55% supported the operation. Residents of Rio State were even more supportive at 62%. The results highlighted the political difficulties facing the leftist President, whose administration is struggling to meet voter demands for stricter security policies. Adeilton da Silva, 65, a Rio resident who works as a security guard in Copacabana, said, "A good criminal will be dead." "If it happened every week, criminals would be terrified." Brazil's political left has seized the opportunity to capitalize on this incident. Claudio Castro, the conservative ally who had ordered the operation and was a close ally to former President Jair Bolsonaro, has gained 10 points of approval following the incident, according to a separate Genial/Quaest survey conducted on Sunday. Ibaneis, the governor of the Federal District also supports Castro. In an interview he stated that it was astonishing that the organized crime had not only seized Rio de Janeiro, but also other major cities and capitals of state across Brazil. This is despite Brazil producing very little drugs and not manufacturing heavy weapons. Right-wing politicians and political analysts draw parallels between the popularity of President Nayib Bukele's anti-gang policy curtailing due processes in El Salvador, as well as that of his anti-gang policy. In an interview on Monday, Romeu ZEMA, the conservative governor from Minas Gerais said that "El Salvador's experiences demonstrate that meaningful changes are possible, but they depend on having a willing government to take action." Zema and five other governors congratulated Castro and the Rio de Janeiro police force two days after the raid. They said that the slain had the opportunity to surrender and give themselves up. Only those who did not want to did so. Fear of more violence The Genial/Quaest survey found that despite Castro's portrayal of the raid, it did not do much to reassure the Rio public. A majority of Rio residents reported feeling less safe. The result is more violence, said Paulo Henrique Machado Cruz, a 54-year old parking attendant from Rio. "You do not solve the problem; you only make it worse." You scare children and destroy families. The Supreme Court of Brazil may give in to the demands made by left-wing politicians for an investigation into police violence in Rio, which would also lead to a federal probe of this deadly operation. Sources close Lula are concerned that the incident could undermine his recent gains ahead of the elections in 2026. The fallout is likely to continue, as the investigations unfold. According to the most recent Datafolha survey, Lula's approval rating increased to 33%, its highest level this year. Meanwhile, disapproval dropped to 38%. The Supreme Court Justice Alexandre de Moraes led a high-level police operation meeting in Rio on Monday. He was joined by the Governor Castro, officials from law enforcement, and representatives of the public prosecutors and defenders offices. Moraes oversees a landmark case at Brazil's Supreme Federal Court that challenges the use of force by Rio police in Brazil's informal shantytowns, known as favelas. Luciana de Janiero in Rio de Janiero; Lisandra Paraguassu, Brasilia; and Lucinda Elliot in Montevideo. Additional reporting by Ricardo Brito in Brasilia. Brad Haynes, Michael Learmonth and Brad Haynes edited the story.
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Steel company Kloeckner Bets on Defence Growth amid Rising Demand
After reporting its third-quarter results, German steel processor Kloeckner & Co stated that it would be focusing its efforts on expanding its defense footprint on its domestic market. In March, Germany relaxed its strict debt rules to allow for an exemption on defence spending. It plans to increase this to 3.5% by 2029 - above the NATO target 2%, which was only achieved in 2024. Guido Kerkhoff, the CEO of Kloeckner, said that the company has experienced an increase in demand for its products from the defense industry. Kloeckner is also active in Germany and in the U.S.A., particularly in the shipbuilding sector. Kerkhoff stated that the defence industry would play a larger role in the future. He added that, while the demand for the sector was not as high as other industries, such as the automotive, orders were increasing. In the first half of this year, Kloeckner expanded its defence portfolio with the acquisition by Cologne-based Ambo-Stahl. This company specializes in high-tensile, wear-resistant special steels and ballistic steels. Kerkhoff stated that "Defence is a good niche because we excel at metalworking, and can expand it beyond the current small batch production." The company announced that it received official certification to process armour materials for German Federal Armed Forces on its Kassel site and was preparing large-scale orders for defence from all over Europe. The metals and steels processor reported that its third-quarter shipments increased by 1.9%, to 1,144 million metric tons. This was primarily due to growth in the Kloeckner Metals Americas division. The company reported an adjusted core profit (EBITDA), which was 50 million dollars, for the quarter that ended September 30. This is a double-digit increase from the previous year. Kloeckner Metals Europe reported in a earnings presentation that it had made the first positive contribution to EBITDA for the market since 2023.
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Can Africa benefit from the critical mineral wave?
Africa is home to 30% of the world's minerals Africa is looking for more profits as global demand surges African leaders want to drive value for money at the COP30 Clar Ni Chonghaile & Kim Harrisberg To capitalize on this burgeoning market, the continent needs to address the power shortages and skills gaps. It also has to tackle trade barriers, industrial capacity limitations, and the lack of skilled workers. Hany Besada is a senior fellow and professor at Wits School of Governance, as well as a senior fellow at London School of Economics' Firoz Lalji Institute for Africa. Africa's mineral resources, which include cobalt and lithium, are around 30% of those in the world. The International Energy Agency predicts that the demand for lithium will grow fivefold between 2040 and 2050, and graphite and Nickel demand will double. Demand for cobalt and other rare earth elements is expected to rise by 50-60% by 2040. Besada stated that Africa must "build local value chain integrations of mining, refining, manufacturing and innovation" to help the continent achieve a greener economy. Zimbabwe, Africa's largest lithium producer, is encouraging mining companies to process minerals in its country to boost its economy. Zhejiang Cobalt, a Chinese company with a $400 million investment in Zimbabwe, announced in October that it would begin producing lithium sulphate in the first quarter 2026 at its new plant. African countries are hoping to gain support from the Global South at the United Nations COP30 Climate Talks in Brazil, in November. They want to make sure that the demand for minerals to fuel the digital economy, and the clean energy transition, translates to growth, jobs, and development. Ibrahima Aidara is the deputy Africa director of the National Resource Governance Institute. He said that Africa wants to be an active participant in the green economy and a beneficiary. "This means an industrial strategy that creates jobs and protects rights, and allows countries to climb up the value chain instead of being stuck at the bottom." What is blocking the way? Aidara cited the Democratic Republic of Congo as an example of where mineral wealth led to child labor, displacement, and armed conflict. In Africa, the barriers to mineral processing, also known as beneficiation, include a lack electricity, high tariffs among African countries, infrastructure problems and cumbersome procedures. "Removing trade barriers is crucial... Besada stated that if you don't, your efforts to (mineral) beneficiation industrialisation and industrialisation will remain aspirational. Regional cooperation, such as the African Continental Free Trade Area(AfCFTA), is essential. It aims to unite all 1.4 billion citizens in over 50 countries into one market. The AfCFTA could gain momentum with the imposition of tariffs by Donald Trump, the U.S. president. It was launched in 2021 and has less than 50% of its members actively trading within the framework. The African Union’s Green Minerals strategy, launched in this year, as well as the Lobito Corridor Railway, which connects Zambia’s copper belt with Angola’s Atlantic Coast, are both examples of how cooperation can make Africa more than just a supplier. The minerals boom in West Africa has led to a revival of resource nationalism. Countries, and particularly military regimes such as the one that governs Guinea's bauxite rich Guinea, have imposed conditions on foreign mining firms, forcing them to add value. Aidara, however, said that this approach may not bring lasting benefits to local communities. "This problem is bigger than any one country." We think that at the national level, we need well-defined and evidenced-based strategies in order to leverage minerals and create economic and industrialisation possibilities. Listening to Gen Z Africa's streets are also calling for a better use of the resources. In the last year, protests by so-called Gen Z from Kenya to Madagascar saw young Africans express frustration about everything from corruption and power cuts. In October, protests in Madagascar led the country's president to resign. "There is a hunger for change among civil society groups, large populations and young people alike. "With the digital proliferation, people see how much things have changed in neighboring countries," Besada stated. Even dictatorial governments are aware that this engaged populace may not accept that only wealthy elites, foreign or local, can benefit from the national resources. The growing middle class in Africa also plays a part. They pay taxes and have a greater interest in the way economies are run. "They have more to loose if things don't go well, and governments know this," Besada added. The COP30 agenda will include a discussion on how to make sure that the energy transition is beneficial for local communities. Amnesty International, as well as rights groups from Brazil to Indonesia and more than 100 civil societies groups want the government to place transition minerals and communities affected by mining at the forefront of climate action. They called on the United Nations, governments, and indigenous peoples to work together with civil society and other stakeholders to improve governance in the sector.
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India's Grasim reports higher profit on chemical strength; Paint unit CEO resigns
India's Grasim Industries announced a higher profit for the second quarter on Wednesday. This was due to a greater demand for its chemical products. The Aditya Birla Group company posted an 8.05 billion rupee ($91.59 millions) profit for the period July-September, up from 7.21 milliards rupees the previous year. Revenue rose by 23% to 96.10 trillion rupees. Grasim’s chemicals business, which accounts for about a quarter, grew to 23,99 billion rupees in revenue, an increase of 17% from a previous year. The company's standalone numbers do not include earnings from its subsidiaries UltraTech Cement or Aditya Birla Capital. Grasim has seen its margins squeezed by its investments in "Birla Opus" - the paints brand it launched last year - as well as increased competition. Grasim’s earnings before interest tax, depreciation, and amortization margins dropped to 4.06%, from 4.52% a few years ago, as its total expenses grew by 26.5%. RakshitHargave who was the CEO of the paints division and left the company in December 5 will also resign from his position as CEO. The company said that while Grasim searches for Hargave’s successor, Himanshu Kapania, an insider, will be overseeing the business until a new leader is found. ($1 = 87.8950 Indian Rupees) (Reporting and editing by Krishna Chandra Eluri in Bengaluru, Hritam Mukherjee from Bengaluru)
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Dollar pause, gold rises by more than 1% in risk-off mood
Gold prices rose more than 1% in Wednesday's trading, driven by a slightly lower dollar and broader risk-off sentiment. By 0845 GMT, spot gold had risen 1.3% to $3,981.27 an ounce. U.S. Gold Futures for December Delivery rose 0.8%, to $3.991.90 an ounce. Carsten Menke, Julius Baer's analyst, said that the recent shift in risk-off sentiment on financial markets is helping to stabilize gold after its decline from record highs. European shares fell to their lowest level in two weeks as investors around the world continued to be nervous about equity valuations. Gold became less expensive to other currency holders after the dollar index eased by 0.1%. Investors are looking for clues about the U.S. rate path as the U.S. shutdown approaches the record-breaking length. The ADP National Employment Report, due on Wednesday, is one of the non-official reports that investors will be focusing on. Last week, the U.S. Federal Reserve lowered interest rates. Chair Jerome Powell said it could be the final reduction of borrowing costs this year. CME's FedWatch Tool shows that market participants see only a 72% probability of a December rate cut, compared to over 90% prior to Powell's comments. Gold that does not yield tends to perform well in low interest rate environments and times of economic uncertainty. Menke, a Julius Baer spokesperson, said: "We continue to see a strong demand for gold from those seeking monetary safety. This is also the case with emerging market central bankers." The gold price has risen by 52% in the past year. It reached a high of $4,381.21 at the end of October, boosted by economic and geopolitical uncertainty, bets on rate cuts, and central bank purchases. Silver spot gained 1.6%, to $47.87 an ounce. Platinum gained 0.7%, to $1.546.21, and palladium rose 1.3%, to $1.408.99. (Reporting and editing by Alexander Smith in Bengaluru, Brijesh Patel from Bengaluru)
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Congo Republic sells its first Eurobond in almost 20 years
According to a Monday statement, the Congo Republic has issued its first eurobond in almost two decades. The central African oil company has been working on easing its debt burden and servicing costs. Proceeds from the bond will be used for refinancing part of the domestic debt maturing between February 2026 and November 2025. In a press release, Finance Minister Christian Yoka stated that "This operation demonstrates the new Congolese energy: that of a nation combining fiscal discipline with exemplary governance and ambition." The bond has a coupon of 9.875% and will mature in November 2032. Yoka said that Brazzaville's debt to GDP ratio: a solution The most important issue was managing the local currency debt, which was 96% in the beginning of the new year. It implemented a regional exchange of debts last year that led rating agencies such as S&P Global Ratings or Fitch to reduce its local currency ratings to selective default. Yoka said that the country was also working on diversifying its economy to include agriculture and tourism in order to reduce its reliance upon oil.
Gunvor CEO: Western sanctions have resulted in an unprecedented amount of oil being stored on ships.
The CEO of Gunvor Group said that Western sanctions against Russia and Iran have led to record oil storage onboard ships, which prevents a global supply glut.
The European Union (EU), United Kingdom (UK) and the United States (US) have all imposed sanctions on Russia for its involvement in the war in Ukraine. Last month, the US embargo targeted Russia's top two oil producers, Rosneft & Lukoil.
Torbjorn Tornqvist of the Swiss commodities trader Gunvor Group told the ADIPEC conference in Abu Dhabi that the surplus oil supply had cushioned the effect of the trade disruptions due to the sanctions. This has kept markets stable and reduced price volatility.
He added that sanctions had also caused "enormous amounts" of oil to be dislocated, some of which is now being stored on tankers.
The size is unheard of. Tornqvist stated that if sanctions were to disappear, the market would be oversupplied.
The global oil price fell for a third consecutive month in October, as OPEC and its allies increased production while non-OPEC producers' production was increasing.
Marco Dunand, CEO and cofounder of Mercuria, said that oil supply could surpass demand by two million barrels a day next year. However, he added that Western sanctions are still a wildcard in curbing the supply.
Dunand stated that "that probably means we are moving more from the 2 million barrels per day surplus to the 1 million barrels per day surplus."
It is true that (global) oil inventories are low. The oil in the water is very high. This means that the glut (of supply) is slowly forming and will probably hit the market within the next few weeks. Reporting by Yousef Abdallah, Nayera Abadallah, Tala Ramadan and Jana Choukeir. Writing by Florence Tan. Editing by Muralikumar Anathraman, Kim Coghill, Christian Schmollinger.
(source: Reuters)