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Investors await US data and tariff clarity as copper prices set to reach $15,000
Analysts?said that copper?prices may break through $15,000 this week for the first-ever time, as investors prepare for another round of U.S.?economic?data and President Donald Trump continues to keep the market guessing about import tariffs. The benchmark copper price on the London Metal Exchange reached a record high of $14,779 a metric ton. This was the fourth session in a row that the rally continued. Will it reach $15,000 this coming week due to Trump's tariff confusion?" "Yes, it's possible," said Panmure Liberum Analyst Tom Price. You can choose any large number when you have this much speculative money behind a trading concept. The U.S.?proposed? a 15% duty on imported refined copper starting in 2027. This would rise to 30% by 2028. However, the U.S. neither confirmed or ruled out such a tariff. Copper has been flowing into COMEX warehouses approved in the U.S. due to the prospect of tariffs, which is draining inventories in China and the LME. LME is a combined LME of just over 300,000 tonnes. ShFE Copper stocks are less than half COMEX stock Imports from the United States are at record levels of 695,624 tonnes, and an arbitrage window that is open has helped to fuel this. DATA IN FOCUS Alastair Munro is a senior base metals analyst at Marex. He said that macro events this week could determine whether the copper price increase lasts. Details on a U.S. Treasury Bond Buyback are expected on Wednesday, and U.S. Consumer Price Index -data for August will be released on Friday. Broker Sucden Financial said in a note that copper could be susceptible to profit-taking, if the dollar recovers following the CPI release. A stronger ?U.S. The dollar makes metals denominated in dollars more expensive to investors who use other currencies. Sucden stated that there was still room for further gains, if copper held above $14,400. Amy?Gower is the head of metals, mining and commodity strategy for Morgan Stanley. The bank remains 'positive' on copper until 2026. Gower stated that "However, while we are cautious for 2027 where the U.S. demand for imports is likely to be?softer, if tariffs were either in place or ruled out." John Meyer, analyst at SP Angel, believes that copper prices will continue to rise as long as there is uncertainty about tariffs. There's a lot of copper around the world but all the physical copper is in the United States.
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Gambia protesters set fire to tyres in order to denounce power outages
Residents and witnesses said that police used tear gas in order to disperse protesters who gathered in several?locations overnight, including near the official residence of President Adama Barrow, to denounce their alleged prolonged power outages. Around Banjul's capital, protesters burned tires in the streets and built barricades while shouting, "Barrow must leave!" The witness reported that plumes of smoke were filling the air. Some residents have reported blackouts that lasted up to 48 hours. This is ahead of the presidential elections expected in December, in which Barrow will be seeking his third term. As a sign of their growing frustration, protesters from the town of Farato gathered in front of the residence of Vice-President?Mohammed B.S. Jallow destroyed banners in an office of the National People's Party. Ismaila Ceesay said that officials are "working tirelessly to restore stability and increase the reliability of electricity supply as quickly as possible" in a statement released on Tuesday. She described the events from the previous evening as "deeply disturbing." Ceesay apologized for the inconvenience caused by the power outages. He said: "As a Government, we understand the frustration, anger, and hardship many Gambians experience." On Tuesday, a police spokesperson failed to respond to an inquiry for comment. Barrow had been scheduled to visit the National Water and Electricity Company Ltd facilities on Tuesday morning and then address the nation at 8 p.m. UTILITY WARNED ABOUT DEMAND SURGE DUE HEAT NAWEC stated in a press release on August 15, that they were experiencing "an unexpected surge in electricity during the peak period", which was attributed to high temperature. The report did not elaborate on "a technical issue affecting one of the largest power-generating units imported." No dates were provided for the load-shedding that would be required in "several parts of the country". NAWEC didn't respond to a comment request on Tuesday. "There is no lighting everywhere. There is no light. "People have been complaining about electricity," Ousainu jammeh, a Banjul resident from the Westfield district said. Jammeh claimed that he joined the protesters outside after "tear gas" "landed in my house." Jammeh, after the protests had died down by?the early morning hours', joined a crowd of young men to use water to put out fires and remove barricades. On Tuesday, traffic had returned to its normal level in Banjul.
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Wall Street drops as oil, yen gain amid Middle East turmoil
U.S. stocks fell Tuesday morning as the attacks on energy facilities in the Gulf drove oil prices to near $100 per barrel. After a long weekend of holidays, all three major U.S. indexes traded lower. The Dow Jones Industrial Average dropped 1.21% in its first hour. The S&P500 fell by 0.49%, and the Nasdaq Composite dropped by 0.52%. Brent crude oil jumped 1.32%, to $98.28 a barrel, the highest in six weeks. U.S. crude oil rose 2.11%, to $93.40 per barrel. The rise in oil prices came after Houthis, who are backed by Iran, attacked Saudi Arabian cities and energy facilities. The recent resurgence of inflation has impacted the stock market, largely because the bond yields have risen to multi-year highs. This puts pressure on central banks to increase interest rates. The European Central Bank will almost certainly raise the euro zone interest rates by a quarter-point on Thursday this week. Meanwhile, the Bank of Japan is likely to do the same thing next week. This has put the yen in a position for its strongest rally in the past two years. STOXX600 fell 0.2% in Europe. MSCI's global index of stocks was down by 0.49% last week. Unwinding Yen Carry Trades The U.S. data on inflation could be decisive for setting expectations about the outcome of next week's Federal Reserve meeting. Money markets indicate that traders currently attach a 58% chance to a rate increase. The yen's rise may be the "bigger story" for the global markets. Due to its low yield, traders borrowed yen to buy higher-yielding assets, including currencies, bonds, and equities. This strategy is known as the "carry trade". The yen gained almost 4% in the last week, which is its biggest week-on week increase since July 2024. On Tuesday it was trading at around 154.1 and the dollar was roughly unchanged for the day. Francesco Pesole, a ING strategist, said that despite the fact that short-term fundamentals suggest the move has been overdone, it is still risky to block the way. The dollar index (which measures the greenback against a basket including the yen, the euro and other currencies) rose by 0.06%, to 98.88. Copper, another commodity besides oil, reached a new record on Tuesday as global supply dwindled. The metal continued to flow into the U.S. in anticipation of potential tariffs. The price of a ton of?copper traded on the London Metal Exchange for three months was up by 1.6%, at $14 736. The benchmark 10-year Treasury note yielded 4.8% on the bond market. This was up by 2 basis points for the day, and is not far from its highest level since November 2023.
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NextEra receives a loan from the US of up to $1.9 Billion for the restart of Iowa Nuclear Plant
NextEra Energy announced?on Tuesday that it had secured a U.S. Department of Energy Loan of up to $1.9 Billion to support the restart of the Duane Arnold Energy Centre in Iowa as the country sought to increase power generation capacity to satisfy rising demand. Google, owned by Alphabet, signed a 25-year contract last year with the nuclear plant to 'buy power. The surge in electricity demand from AI data centres is putting pressure on the U.S. power grids. It also spurs interest in extending existing nuclear plant life and bringing shut-down reactors online. Gregory Beard is the director of the Energy Dominance Financing office at the Department of Energy. He said that Duane Arnold was "exactly" the type of investment needed to help "restore American leadership in nuclear energy, improve our energy security and provide the reliable, affordable power Americans require for the future of our nation." The Duane-Arnold Energy Center in Iowa, which had operated for 45 years, was shut down in 2020. The plant is scheduled to resume operations in early 2029. Although there are efforts underway to restart three U.S. Nuclear Centers, including Holtec's 800MW Palisades Plant in Michigan (which is not linked to a tech deal), no nuclear power plant that has been mothballed has yet to resume operations. The Energy Department granted Holtec a $1.52 billion loan in 2024. The company had originally?said that the plant would restart by late 2025. However, it has now been delayed. The Trump administration announced last year that it had lent Constellation Energy Corp. $1 billion for the restart of a nuclear reactor in a Pennsylvania plant formerly called Three Mile Island. The plant's separate unit was shut down in 1979 following an accident which froze the nuclear industry. Constellation and Microsoft signed an?agreement in late 2024 to restart the 835 megawatt reactor that shut down in 2019. Microsoft's data centre would be able to use less electricity after the restart.
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Ukraine steelmaker Metinvest's bonds tumble after missile strike shuts plant
On 'Tuesday', the bonds of Ukraine's biggest steelmaker, 'Metinvest', experienced some of their largest falls since Russia invaded in early '2022. This was after one of 'the firm's main plants' was severely damaged by a Russian missile strike. Metinvest announced at the weekend the five deaths caused by the strike at its Kamet Steel Plant in the eastern Dnipro Region. The plant was forced to halt all production. Metinvest only controls two steel mills in Ukraine. Tradeweb data revealed that the firm's bonds on the international market were down as much as 4.44 cents per dollar, as U.S. Investors got their first opportunity to react on Tuesday following the announcement of the strike after Monday's Labor Day holiday. Metinvest's maturing bond 2029 was set to fall the most -- barring an inflated end-of-year move in December 2022 -- ever since its initial slumps post-invasion of late February or early March. The?bonds of the Ukrainian government were also lower, although not as dramatically following weekend talks between 'U.S. The?bonds of the Ukrainian government were also down, although not as dramatically after weekend talks between?U.S. Both Russian and Ukrainian officials have?also shown little sign of progress in ending this now 4-1/2 year-long conflict.
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Andy Home: China's aluminium dominance is not limited to its home market.
China's aluminum smelters are booming this year. Shanghai's aluminium price has risen to three-month highs. Raw material costs have been historically low, and margins remain strong. Each producer is encouraged to run their plant at full capacity. Indeed, national output has exceeded Beijing's 45-million-metric-ton capacity cap for the past couple of months, as smelters flex their full production ?potential. However, the mandated ceiling remains in place. Chinese producers have embraced this reality and are investing heavily in smelter projects abroad. While Donald Trump claims that the United States needs more aluminum "desperately", the world's biggest producer consolidates its position as the dominant player in the global supply chains. At the Limit China's cap on capacity dates back to 2017 when the sector was experiencing a boom. It seemed that everyone wanted to build an aluminium smelter. This put a greater strain on the power system of China. Beijing marked a line of 45 million tons in the sand. Wen Xianjin is the vice-chairman of the China Nonferrous Metals Industry Association. He said that by the end of this year, the authorities would have stopped 5.37 million tonnes of "illegal capacity" and 6.19 millions tons of "noncompliant capacity". The new rule required that, if you want to build a greenfield plant with the same capacity as an existing one, you must close it. Since then, the regulations have been?enforced with a stern hand and led to an upgrade in smelter technologies as new plants have replaced older ones. This technology is being used now. According to consultants AZ Global "the physical limit of an aluminium smelter is not immutable". Operating improvements can easily increase actual output above nameplate capacity. This collective capacity creep is the reason why national production has been above 45 million tons since March. AZ Global estimates China's smelters were operating at?99.7% their actual capacity of 45.26 millions tons in August. Ironically, China's smelters benefit from their own capacity limit and the lack of a "complementary" limit on domestic production. The price of the main input for?the smelting is at a bombastic level. It is not important whether China's smelters are able to maintain these levels of capacity usage, but any potential production increase is very limited. Powering Up in Indonesia Chinese producers now understand that they must go overseas if they wish to expand. The majority of investment has been directed to Indonesia where aluminium smelters are located in the same industrial parks built by China for nickel processing. Tsingshan Group has partnered with Chinese aluminium producers Huafon Group (the powerhouse behind Indonesia’s nickel boom) and Xinfa Group (the Xinfa Group) to construct the Hua Chin smelter and Juwan smelter, respectively. Existing infrastructure in power and logistics has enabled rapid construction. Hua Chin's annual capacity was 480,000 tons last year. In May, it applied to list the "HCAI" trademark at the London Metal Exchange. Juwan exported its first aluminum to the U.S.A. in March. PT Alamtri Resources Indonesia - in which China's Zhejianglygend Mining has a minority interest - did the same thing in June. CAPACITY SWAP Other Chinese aluminum smelter project are popping up in other countries. Xinfa, a Kazakhstani company, is preparing a full cycle industrial park in Kazakhstan with a planned?aluminum capacity of 2.4 millions tons?per annum. East Hope Group, meanwhile, is working on an integrated project that runs from bauxite to aluminium. A Chinese consortium led Hebei Huatong Wire and Cables Group supports a new smelter at the Barra do Dande free-trade zone in Angola. The first phase of the 120,000-ton project was built using equipment that had been transferred from China. This was likely an older smelter which was replaced by a newer one. China's aluminium market reach is extended further in the West thanks to its location along the Atlantic. Due to the Iran 'war, the Gulf has lost its production. This ratio has risen to 63%. As long as the West is unable to respond in a similar manner, this new generation of Chinese backed smelters can cement their dominance. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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MMG faces EU Antitrust Warning over Anglo American Deal, Sources say
EU regulators are about to issue a warning to Hong Kong listed mining and metals company MMG regarding its plans to purchase 'Anglo American’s Brazilian nickel business due to 'competition concerns. This move reflects the growing concern of the European Union about its reliance on China to supply critical minerals for defence, technology, and renewable energy. Beijing also uses export control measures?on these critical mineral supplies. According to the people, the European Commission, acting as the EU's "competition enforcer", is planning to send this month a document known as a "statement of objections" or "charge sheet", which will outline the concerns that must be addressed in order for the deal to pass. The 'people' spoke on condition of anonymity as the matter was not public. MMG may be able to stave off charges by offering remedies. However, this is unlikely, according to one person. MMG and the EU antitrust watchdog declined to comment. Anglo American repeated comments made two weeks earlier. In a press release, it said: "The evidence that we have provided shows that this transaction does not pose any?competition issues to the EU market. It should be approved unconditionally." The report stated that "over the past year the market has benefitted from a significant'structural expansion of FeNi supplies from a number of producers. At the same time, European customers have demonstrated how easily they can switch suppliers." The European Commission said in November that the deal could allow MMG to divert ferronickel away from Europe, and undermine the competitiveness for European stainless steel production.
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Imports of crude oil from China remained weak in August. Can this trend continue? Russell
China's crude oil imports by sea increased in August compared to July, but they remained 40% below the levels before the Iran conflict. According to Kpler, commodity analysts, China's largest oil importer saw seaborne arrivals increase from 6.93 million barrels per day in July to 7.14 million barrels per daily (bpd) during August. The imports in August were 4,27 million bpd less than the average of 11,41 million bpd for the three months leading up to the U.S.-Israeli attack on Iran, which took place on February 28. China is absorbing the majority of the Middle East's lower crude oil volumes, as its exports are falling due to the restricted flow through the Strait of Hormuz. While there are disagreements over the exact amount of crude oil and refined product that is getting through the narrow waterway, it's certain that the number is well below the 20 million bpd prior to the conflict. Asia's crude oil imports by sea were 22,64 million barrels per day (bpd) in August. This was down from 23,40 million bpd a month earlier, but still 4.29 million or 16% below the average 26.93 million barrels per day in the three-month period ending in February. The decline in Asia's seaborne imports of oil in August is only 20,000 barrels per day more than China's arrivals. The extent of the drop in crude oil imports is surprising. Most participants on the crude oil market expected Beijing to reduce its imports as a response to higher prices due to the conflict with Iran. China is known to cut imports during price surges, but boost them when prices drop. Benchmark Brent crude futures rose 75% since the beginning of the conflict, reaching a four-year peak of $126.41 per barrel on April 30. On September 4, they moderated, but the price remains above what most Chinese refiners are willing to pay. It is unclear whether China will keep limiting its imports despite the high prices or if its refiners are looking to secure cargoes to avoid having to use their inventories. IRAN, RUSSIA FLOWS Answering that question involves several factors. First, China's smaller independent refining companies are losing their access to Iranian crude because the U.S. blockade prevents any new Iranian crude from leaving the Gulf. The oil in tankers is also delivered and depleted. These refiners will either need to pay more or reduce their processing rates for the cargoes they receive from other suppliers. China buys more oil from Russia, a country also under Western sanctions. However, this puts China in direct competition with India, as refiners have replaced Middle East crude with Russian crude to replace the Middle East's limited supply. Kpler data shows that China's seaborne exports to Russia in August reached 1,68 million bpd, up from 1,40 million bpd during July, and the highest since March. China also purchases about 1 million barrels per day via pipelines. A factor to consider is whether China's refining companies try to export refined fuels given the high profit margins that are currently available in Asia for products like?diesel or gasoline. Exports of middle and light distillates reached 963,000 barrels per day in August. This is up from the average of 713,000 barrels per day for the three-month period prior to the beginning of the Iran War. The increase in light and middle distillates in August almost exactly matches the increase of crude imports. This may be just a coincidence but it illustrates the larger point that, if China increases product exports, then it will also have to increase crude oil imports. China's decision not to import crude oil has played a significant role in preventing the price of oil from rising since the beginning of the Iran War. Its lack of exports from 'April to June' is another factor that keeps fuel prices high in Asia. It may be better for the Chinese market to export more fuel than buy more crude oil, given the potential shortage of refined fuels in Asia. You like this column? Open Interest (ROI) is 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.
New York Fed survey shows consumers are more concerned about their personal finances and employment.
The New York Federal Reserve reported that the outlook of U.S. households for inflation remained unchanged in August as their?worries?about the job market?and the state of?their?personal finances grew.
In the latest Survey of Consumer Expectations from the regional Fed bank, respondents held steady to their projections of inflation of 3.6% a year hence and 3% in five years. They also marked down inflation expectations in three years from 3.3% to 3.2%.
The report stated that respondents in August predicted higher gasoline prices within a year.
Although households' inflation expectations did not change much, their outlook for hiring and personal finances grew?more uncertain.
In August, respondents to the survey increased their expectations of the unemployment rate in a year's time. This was the highest reading since April 2020 when the COVID-19 pandemic devastated the economy. This expectation was noted to be based on a wide range of factors, including age, income level and education.
The expectation of losing a job decreased in August compared to July. In the report, the likelihood of a 'new job' in the case of an involuntary loss of a job was also lower than the survey conducted in July.
In the August survey, respondents rated their financial situation now and in one year as well as their opinions on credit.
This week, the key data on inflation is due.
The report was released a week ahead of the U.S. Central Bank's two-day meeting. The Fed's benchmark overnight rate is set at 3.50% to 3.75%, but there is uncertainty about what it will do. Policymakers are still struggling with an inflation rate that is well above their 2% target.
The release of the Consumer Price Index for August on Friday is pivotal to the outcome of the policy meeting scheduled for September 15-16. Many Fed officials believe that the data they use could be decisive in determining their policy.
At a NEXT Newsmaker Event last Thursday, Fed governor Christopher?Waller stated that if the upcoming report on inflation shows continued progress towards?our 2% target, I would be willing to hold the policy rate where it is.
However, other Fed officials remain prepared to raise?rates.
In a Friday posting on LinkedIn, Beth Hammack of the Cleveland Fed, who had voted for a rate increase at the July meeting, stated that given the inflationary pressures in her district it was "time to act" in order to reduce the price pressures. This indicates she is still in support of a rate rise at next week's meetings.
(source: Reuters)