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Gold records record highs as Dollar drops ahead of Fed meeting
Gold reached a new record high on Tuesday. This was helped by the weaker dollar, which is expected to be a factor in the Federal Reserve meeting that will take place later in the afternoon. The monetary authority has been widely predicted to lower interest rates. As of 0748 GMT the spot gold price rose by 0.3%, to $3688.41 an ounce. It had earlier reached a session high of $3697.05 per ounce. U.S. Gold Futures for December Delivery rose 0.2% to $ 3,726.70. The dollar has fallen to its lowest level in over two months against other currencies. The Fed is expected to cut rates next week, according to UBS analyst Giovanni Staunovo. CME FedWatch shows that traders are pricing in an almost certain 25 basis-point cut to the rate at the end the two-day session on September 17. There is a slight chance of a reduction of 50 bp. In a post on social media, U.S. president Donald Trump called for Fed chair Powell to implement a "bigger rate cut" in a Monday's post. Carlo Alberto De Casa is an external analyst with Swissquote. He said that traders are betting on the Fed continuing to reduce interest rates in 2019. This will also support gold. In a low interest rate environment, non-yielding gold bullion is likely to perform well. "We should expect higher volatility around the Fed's statement, especially if the market perceives the rate reduction to be accompanied by a hawkish comment. Staunovo said that Trump's desire for lower rates will likely lead to gold moving higher in the months to come. A U.S. court of appeals refused to let Trump fire Fed Governor Lisa Cook on Monday. This is the latest in a long-running legal battle which threatens the Fed’s independence. Gold's spectacular rally to successive records highs is expected to continue for the remainder of 2025. However, a healthy correction will be needed before it reaches $4,000/oz by 2026, according traders and industry analysts on the sidelines the India Gold Conference held in New Delhi. Silver spot was unchanged at $42.70 an ounce. Platinum was stable at $1400.58, and palladium was up 0.3% at $1187.94.
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Copper prices fall from multi-month highs on profit-taking
The copper price fell on Tuesday, from its multi-month highs. Profit-taking by traders overshadowed the support of cemented bets that a U.S. interest rate cut would occur and trade talks between China and the United States could progress. The Shanghai Futures Exchange's most traded copper contract, which had been trading at 81,530 yuan per metric tonne, lost some of its earlier gains and ended the daytime trade up 0.06%. The contract had reached its highest level since March 28, at 81.530 yuan, earlier in the day. The benchmark three-month copper price on the London Metal Exchange fell 0.61% by 839 GMT to $10,124.5 per ton. On Monday, the contract reached a 15-month high of $10,192.5. The traders are trying to cash out their profits in advance of the Fed's final rate decision. Two other traders claim that the rapid rise in prices has been met with resistance by downstream consumers. This has led to a limited increase for them. A Chinese copper smelter who requested anonymity said that downstream buying had slowed down after prices rose over 80,000 Yuan. U.S. officials and Chinese officials came to a framework agreement Monday on the short-video app TikTok. This sparked hopes of a close trade deal, which lifted sentiments and limited price drops. Analysts at Everbright Future noted that the prices were also supported by increased bets on a rate reduction by the U.S. Federal Reserve. Analysts at Benchmark Minerals Intelligence wrote in a report that rate cuts increase copper prices by combining a weaker US dollar with the expectation of higher demand. Nickel, among other SHFE metals rose 0.36%. Aluminium fell 0.33%. Tin dropped 0.42%. Zinc lost 0.22%. Lead fell 0.38%. Aluminium was largely unchanged, while nickel, lead, and zinc all declined. Tin, however, rose 0.23%. Click here to see the latest news in metals.
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Iron ore prices rise amid recovery of Chinese steel production
The iron ore futures price rebounded Tuesday due to the improvement in China's steel production. Meanwhile, gains in steel benchmarks reflect a positive sentiment despite weak housing statistics. The January contract for iron ore on China's Dalian Commodity Exchange was up 0.82% at 803.5 Yuan ($112.94) per metric ton. As of 0730 GMT, the benchmark September iron ore traded on Singapore Exchange was $0.24 per ton higher. According to Chinese broker Galaxy Futures, in early September, the key steel companies produced an average daily production of 2.087 millions tons. This represents a 7.2% increase from one month to another. The news comes as China's crude-steel output fell for the third month in a row in August, when steelmakers in Tangshan - China's largest steelmaking center – curtailed operations to prepare for a major Beijing military parade. Brazil's raw steel production fell by 4.6% on an annual basis in August. Chinese consulting firm Mysteel said that after weeks of declines in production, iron ore concentrats were produced by Chinese mining firms last week. This is a sign of the gradual restarting of operations of domestic miners, according to Chinese consultancy Mysteel. As the property market continues to be weak, China's new homes prices dropped 0.3% month-on-month in August. On Thursday, the China Iron and Steel Association (a state-backed organization) will host a meeting for the heads of the iron ore purchasing at steelmakers. Coking coal and coke both increased in the DCE, by 5.84% each. China's coal production fell by 3% in August compared to the same month last year, its lowest level in more than a year. Production restrictions continued to be a factor. The Shanghai Futures Exchange steel benchmarks gained a majority of ground. Wire rod and hot-rolled coil increased by 0.09% and 1.25% respectively, while stainless steel dropped by 0.27%.
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Top executives of KPI Green Energy say that SBI will raise $363 Million from KPI Green Energy.
Top KPI executives said on Tuesday that India's KPI green energy is planning to borrow 32 billion rupees (363,39 million dollars) from the largest lender in the country to expand production at its renewable power plant. Analysts say that the loan approval is one of the largest deals in recent history. It comes as the Indian government targets 500 gigawatts non-fossil energy capacity by 2030. KPI Green Energy is a renewable energy company that develops, builds and manages solar, wind, and hybrid power solutions. Sahil Yahya, chief financial officer, said that the company will raise the funds through a 20-year State Bank of India loan with an interest rate of 8,45%. The money will be distributed in stages over the next 1,5 years. Faruk G. Patel said that by 2027 the company will have completed all its projects, which will generate revenue of about 10 billion rupees. The company issued its first green bonds on Tuesday. It plans to raise 6.7 bn rupees with a coupon rate of 8.5%. The rating of the rupee-denominated 5-year bond has been boosted by a 65% GuarantCo guarantee, a company from the Private Infrastructure Development Group. Patel explained that without the guarantee they would have been forced to pay a coupon of 14-15% to raise money via equity or quasi-equity instruments. Yahoo reported that the guarantee raised the instrument's rating from A+ up to AA+ by CRISIL. Yahoo reported that Aseem Infrastructure Finance had purchased the majority of bonds while Jio Finance, SBI Capital Markets and SBI Capital Markets bought the remainder. The executives stated that SBI Capital Markets is the only arranger of the issue.
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Anglo American, Codelco finalise $5 billion Chilean copper mines deal
Anglo American, the state-run Chilean copper giant Codelco and their Chilean neighbours have finalised a joint operation agreement for their Chilean copper mines. The aim is to extract at least $5 billion from their key assets. The mining plan is based on the memorandum signed in February by both Codelco and Anglo American. It relates to the Andina Mine of Codelco, as well as the Los Bronces Mine of Anglo American in central Chile near the capital Santiago. Codelco Chairman Maximo Pacheco said, "We are now able to maximise the potential of Andina-Los Bronces without major investment and with much greater returns." Codelco plans to increase copper production by 2.7 million tonnes over a period of 21 years, subject to the receipt of permits. These are expected in 2030. The companies have said that a new joint-owned operating company will oversee the execution of the plan. Both Codelco Anglo will retain ownership of their respective asset. The agreement includes principles of sustainability and flexibility in order to adhere to environmental commitments made by the companies. Environmental groups have fought the expansion in Chile because of its potential impact on the glaciers and the water supply. Anglo American had earlier in the month A merger with Canadian mining company Teck Resources is set to be the largest mining deal in more than ten years. (Reporting and editing by Sumana Niandy in Bengaluru)
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China's steel exports set to reach record levels, threatening further tariff backlash
China's exports of steel are expected to reach a record high in this year. This is despite predictions that trade barriers would cause shipments to drop. They also threaten to trigger a fiercer backlash from protectionists against the world's largest producer. According to 11 analysts who had predicted earlier in the year that exports were going to fall, they expect to see a growth of 4% to 9% to between 115 and 120 millions metric tons this year. China's record exports, which produce more than half the world's metal, highlight the need for new markets to absorb the metal, as its consumption peaked at the end of 2020, before the collapse of property prices. Steelmakers are also concerned that trade barriers may continue to rise. Three analysts and one trader, who spoke under condition of anonymity due to the sensitive nature of the issue in China, believe that it is better to sell as much now as possible. This fear could become self-fulfilling, as the export push reshapes flows globally and encourages countries to shut down their markets in order to support domestic steelmaking. China Trade Remedies Information reports that 54 tariffs or other trade barriers will be imposed on Chinese steel starting in 2024. This is more than what was imposed between 2019 and 2023. Analysts believe that more exports will lead to further restrictions. The European Union announced earlier this month that it would look for new ways to reduce steel imports. Mexico announced a plan on Thursday to increase tariffs on Chinese imports including steel. PIVOT PIVOT PIVOT The last peak in steel exports was in 2015. However, rising trade barriers as well as a boom in the Chinese property market that increased demand for construction steel reversed this trend. Steelmakers maintain exports by focusing on new markets with lower barriers or no barriers at all. Baosteel or Baoshan Iron & Steel, China's largest listed company, reported last month that exports to emerging markets such as the Middle East, Central Asia, and North Africa are growing rapidly. The company forecasts 10 million tons of exports this year. In the first seven-month period of this year, steel exports from Canada to Saudi Arabia rose by 24%, Malaysia by 14% and Thailand by 13%, respectively, compared with a year ago. Malaysia imposed antidumping duties on certain imports in July. In a late-August note, the China Iron and Steel Association, backed by the government, said that China's exports fell 20% and 10% respectively in the first seven-month period to its major trading partners Vietnam and South Korea. Both countries have also implemented anti-dumping sanctions. "It is a very brutal market for traders." There are very few orders coming from Vietnam or South Korea. We must now develop new markets, said a steel trader in east China. Steelmakers in China are turning to simpler products such as steel billets - semi-finished blocks made of raw metal because they attract lower tariffs. The exports of billets were three times greater in the first seven month of this year than they had been a year ago, and shipments of steel bars, which are used in construction, grew by 77%. Customs data revealed that hot-rolled wide thin steel strips, which are used in manufacturing, and often subject to tariffs fell by 23%. Alexis Ellender is the senior lead for dry bulk insights, Kpler. She said that China's exports are suffering because of its shift to unfinished, lower-value products, despite their record volume. Customs data revealed that steel exports increased 10% in volume during the first eight month of the year, but declined 1% in value. "The rise in semis exports can be a sign of exports nearing their peak. Semis are more profitable to export than finished steel. It shows that the market is under pressure", said Tomas Gutierrez. He is head of data for consultancy Kallanish Commodities. THE PEAK The Chinese government is also opposed to the increasing exports of semifinished products. Beijing wants steelmakers add value, and is considering higher export taxes in order to discourage the shipment of lower-valued steel. Some analysts believe that exports are likely to peak this year due to a combination of the new wave in protectionism and these factors. "Overseas market saturation and trade barriers are increasing." Gutierrez said that selling overseas won't be any easier. Kpler predicts that China's exports of steel will decline to between 100 and 105 millions tons by 2026. Three analysts predict volume will fall below 100 million. Exports of around 100 million tonnes would still be higher than the total steel production in every other country except India. Baosteel's general manager Baojun Lu said during a call to discuss earnings last month that "this year we have experienced record trade disputes, including anti-dumping duty." But as a large steel company, we have to export."
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Gold's uptrend is intact but it will need to correct before reaching $4,000 by 2026
Gold's spectacular rally to successive records highs is expected to continue for the remainder of the year. However, a healthy correction will be needed before it reaches the $4,000 an ounce milestone, which is set for 2026. Investors have been prompted to buy gold by strong tailwinds including expectations of monetary easing from the U.S. Federal Reserve. The long-term bull run in gold looks intact as demand, especially from central banks, and ETFs continues to increase at a faster rate," Renisha chainani, head research at Mumbai refiner Augmont, said on the sidelines at the India Gold Conference, held in New Delhi. She said, "But gold has reached overbought levels and could see a short-term correction of 5-6% before consolidating again and reaching new highs in 2026 above $4,200." Gold spot was trading at around $3,680 an ounce on Wednesday, after reaching a session record of $3,689.27. It has gained 40% this year following a 27% increase in 2024. Nearly all participants in the industry at the conference expected gold's bull market to continue through 2026, based on a decline in U.S. rates of interest, strong demand for investment and geopolitical risk. Analysts have hedged prices to reach $4,000 by 2026. It's hard to say because the price is rising faster than expected, according to Nicholas Frappell of ABC Refinery, who heads global institutional markets. At the end of its monetary policy meeting, scheduled for September 17, it is widely expected that the U.S. Central Bank will cut interest rates. Trump has repeatedly criticized Federal Reserve Chair Jerome Powell's slowness and urged the Fed to reduce rates. Gold is a popular hedge against geopolitical risks and economic uncertainties. It also flourishes in an environment of low interest rates. Metals Focus' managing director, Philip Newman, said that gold prices have not been in this range for too long. The firm anticipates the price to rise to $3,800 by the end of the calendar year. We could see a possible correction after this price rally. But we also see it as an opportunity for investors to enter the market who have been waiting. In 2026, we could see gold prices rise above $4,000." SILVER BREAKOUT Silver, a metal that is both an investment and used for solar and electronics, has done well due to the strength of gold and the strong physical demand during this time of deficit concerns. On Tuesday, the metal reached its highest price in 14 years at $42,50 an ounce. Silver prices have been boosted by growing investor interest, said Chirag Thakkar. He is the chief executive officer of Amrapali Group Gujarat.
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Google invests $6.8 billion in the UK ahead of Trump's visit
Google announced on Tuesday that it will make new investments of 5 billion pounds (6.80 billion dollars) into Britain in advance of U.S. president Donald Trump's visit to the nation, which is expected feature a flurry business deals and partnership. The U.S. technology company announced also the opening of a data centre near London to meet growing demand for AI-powered Google Cloud, Search and Maps services. In a statement, finance minister Rachel Reeves stated that the investment was "a powerful vote for confidence in the UK's economy and our strong partnership with the US". Alphabet's company stated that the investment will create 8,250 new jobs each year at British companies. The announcement is expected to be a boost to the Labour government of British Prime Minister Keir starmer, who hopes to attract private investments to help grow an economy that has been stagnant and to regain momentum on national opinion polls. Trump's visit will also be expected to strengthen economic ties between both Western allies. Senior U.S. government officials have stated that deals worth more than $10 billion will be announced. Google said in its statement that it has also agreed to a deal Shell, which will contribute to grid stabilization and Britain's transition towards a cleaner energy. Google's Waltham Cross Data Centre, located about an hour from London, is equipped with air-cooling technologies to reduce water consumption and can reroute heat to homes or local businesses to minimise its environmental impact. Google's UK operations will be running at or close to 95% carbon-free energy by 2026, thanks to its clean-energy initiatives and its partnership with Shell.
Western miners push for greater metals costs to fend off Chinese rivals
CHALLIS NATIONAL FOREST, Idaho, July 22 (). T he just U.S. cobalt mine sits fallow in the northern Idaho. woods, a mothballed hunk of steel and dirt that is too expensive. for its owner to run because Chinese rivals have flooded. worldwide markets with cheap materials of the bluish metal used in. electrical lorry batteries and electronics.
Jervois Global, which dug the mine into the side of. an almost 8,000-foot (2,400-meter) mountain, watched helplessly. in 2015 as cobalt prices plunged after China's CMOC. Group opened the Kisanfu mine in the Democratic. Republic of Congo, pushing international production of the metal to an. all-time high.
The Idaho website, which Jervois bought in 2019, was idled in. June 2023 just weeks before it was set to open. More than 250. workers lost their tasks. A skeleton team now rotates unused rock. crushing devices weekly to keep it from flattening under its. own weight.
We were simple with our staff and told them: 'This. is everything about the price of cobalt,' website manager Matthew. Lengerich told throughout a see to the center. Jervois. says cobalt rates require to reach a minimum of $20 per pound for the. website to open. However prices sat near $12.17 in July.
A similar predicament faces BHP, Albemarle and. other Western mining companies attempting to take on metals. produced by Chinese-linked companies, a few of which usage. coal-generated electrical energy, kid labor or other practices not. meeting the standards set by lots of governments and makers.
Western miners state their rivals have intrinsic cost. benefits that make it possible for rapid production expansions even as. costs for cobalt, lithium and nickel have plunged more than a. 3rd in the past 18 months. Functional expenses for a lot of these. Western business have, as a result, been surpassing what market. prices will cover.
That has sustained growing calls from some policymakers and. miners, consisting of Jervois and Albemarle, for a two-tier prices. system with a premium for sustainably produced metals, according. to interviews with more than 3 lots traders, financiers,. executives, acquiring representatives, and prices firms.
The strategy is to charge more for a metal that is produced. sustainably, whether that is through direct transactions or through. multiple rates for a metal listed through futures exchanges,. depending upon production methods. For instance, there would be one. rate for standard nickel and another for green nickel.
Western miners merely can't compete with China, and China. has revealed the willingness to drive market value way, way down,. stated Morgan Bazilian, director of the Payne Institute for Public. Policy at the Colorado School of Mines.
Two-tier pricing could significantly move how metals required for. energy transition have actually been purchased and offered for centuries yet. also minimize market openness as miners might bypass metals. exchanges to work out directly with consumers.
It might also, two analysts told , cause several. definitions of just what constitutes green metal.
' COMMITMENTS HAVE An EXPENSE'
Market leaders have actually pushed for two rates structures for. a number of years, however the call for change began gaining more. attention from financiers, policymakers and clients last fall. as Western governments grew more concerned about Chinese. competitors.
In conferences throughout Washington and Brussels, mining. executives have been pleading with governments for some kind of. intervention till two-tiered prices is more extensively welcomed,. suggesting that tariffs, supply chain transparency requirements,. or government insurance for mines could be possible solutions,. three market sources said.
U.S. and E.U. officials have actually independently expressed sympathy. with the mining industry, according to two of the sources, but. have actually up until now been loath to inject themselves into the mechanics. of how costs are set by exchanges and others.
I do not wish to state what the markets should or shouldn't do. to guarantee strong ESG practices, said the U.S. State. Department's Jose Fernandez, who oversees a program designed to. facilitate metals supply offers. But it is true that all of. those dedications have a cost.
As a result, mining industry customers such as car manufacturers. remain in the unpleasant position of attempting to keep their expenses. low while preserving secure and varied metals supplies. Some. deals are taking shape, prodded in part by policies tied to. emissions.
The European Union by 2027 will need EV manufacturers to. show where they procure metals and the carbon footprint for. their production. Refusal to comply would suggest an EV can't be. sold in the region, an action not yet taken by the United States. however one extensively seen as the most aggressive worldwide to enhance. supply chain transparency and most likely to sustain premium metals. agreements.
In Canada last year, Northern Graphite started. effectively requiring a premium from clients desiring. guaranteed North American products of the battery metal.
Teck Resources previously this year started selling. a gently processed type of copper known as concentrate to. Aurubis, a source with direct knowledge said. The. deal does not rely on exchange prices and guarantees. Aurubis a consistent supply of ESG-compliant concentrate that it. turns into copper for sale to the automobile market.
Teck declined to comment. Aurubis said it sees the method to a. green-friendly copper industry as a joint task for the entire. worth chain, which requires to be honored from the raw material. provider to the end consumer.
Consumers in the meantime do not deal with a charge if they do not. source sustainable metals, however they increasingly face a. reputational risk.
The concern is really for automobile companies: Are you okay with. something that may be priced lower or are you willing to pay. premiums understanding that this is sourced sustainably in the right. way? said Michael Scherb, CEO of Appian Capital Advisory, a. private equity firm that buys mining companies.
' WEATHER THE STORM'
BHP, the world's biggest mining business, said this month it. would suspend operations at its Australia nickel mines due to. the substantial economic challenges driven by a worldwide. oversupply of nickel.
The move was a blow to a company that had unsuccessfully bet. its customers would want to pay a premium for nickel. produced in a country that mines sustainably.
BHP alerted that almost two-thirds of Australia's nickel. market remains in threat of closing amid low market value sustained by. a 153% boost in Indonesia's nickel from 2020 through the end. of in 2015 due to Huayou Cobalt and others -. production that environmentalists say has actually partly come by tearing. up the country's huge jungles.
U.S. officials are motivating Jakarta to improve the. nation's mining requirements. Huayou Cobalt did not respond to a. ask for remark.
Australia's nickel industry is among the cleanest in the. world mainly due to how it manages carbon emissions, according. to data from ESG consultancy Skarn Associates. Nickel processed. in Indonesia gives off more than 5 times the amount of carbon as. production in Australia, the data reveal, with emissions from. China's nickel industry nearly 7 times worse than Australia.
Albemarle, the top international producer of lithium, laid off. staff in January in the middle of low costs triggered in part by increase. production from Yongxing Special Materials Technology. and others in China.
If there isn't an incentive above current costs, you're. not going to get the financial investment you need to build the domestic. ( U.S.) supply chain, stated Eric Norris, who oversees Albemarle's. lithium operations.
Fernandez, the U.S. State official, anticipates increasing minerals. demand to offset present international oversupplies, however acknowledged. that miners, in the meantime, remain in a bind.
We need to find methods to weather the storm, Fernandez stated.
TRANSPARENCY
Since January, world leaders have taken a series of steps to. offset China's market control.
President Joe Biden imposed tariffs in May on critical. minerals produced in China, stating ( metals) rates are unjustly. low since Chinese business don't require to worry about a. revenue.
Jim Chalmers, Australia's treasurer, in February said. federal governments should consider support for a distinguished. global trading market for resources produced to higher. ESG requirements.
Chrystia Freeland, Canada's deputy prime minister, in April. stated Ottawa would fight the discarding of crucial minerals by. China, Indonesia and others.
The Chinese mission to the United Nations did not respond to. a request for comment. China has in the in 2015 prohibited exports. of graphite and other metals.
Numerous U.S. senators from both parties have said they are. considering legislation to offer rate insurance for metals,. comparable to a government insurance coverage program for crops, according. to Senate aides. Such a relocation would guarantee miners a cost for. their metals, despite market conditions.
Car manufacturers have been moving very carefully as this pattern for. green prices premiums progresses, conscious that consumers are. hesitant to pay more for EVs.
General Motors, the biggest U.S. car manufacturer, thinks. important minerals should be produced sustainably however does not. want to pay a premium out of concern that it will be unable to. take on Chinese competitors, according to a source straight. involved in the business's minerals procurement.
GM informed it needs providers to adhere to high. requirements, a stance echoed by Volkswagen, BMW and Stellantis.
Tesla and Ford, which is developing an. Indonesian nickel processing plant with Huayou Cobalt and PT. Vale Indonesia, did not respond to ask for. remark.
EXCHANGES
The London Metal Exchange (LME) stated it has actually gotten. positive market feedback regarding its move to price. sustainable nickel. Its partner Metalshub, a German online. metals auction platform, sold 144 metric lots of low-carbon. nickel in May and prepares to publish a matching price when. there are more deals.
Benchmark Mineral Intelligence, a UK-based service provider of. critical minerals pricing and data, has launched green metals. pricing contracts, with each rate derived from how a mining. business complies with 79 requirement that Criteria stated reflect high. production requirements.
You will not have the ability to ensure by any stretch of the. creativity a non-China supply of particular metals unless you're. happy to pay some degree of a premium for that product, stated. Criteria's Daniel Fletcher-Manuel.
That's the message that Jervois has actually been pressing,. unsuccessfully.
Eventually, ESG has an expense, said Bryce Crocker, the. business's CEO. It's a beneficial cost..
(source: Reuters)