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Commodities

Base metal prices news: surviving the stress of the US Federal Reserve’s key rate hike

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Base metals price chart

On Wednesday, July 27, copper prices showed positive dynamics in London on hopes of strengthening demand for metals in China. The three-month LME copper contract rose 1.1% to $7,620 a ton by the close of trading, after falling to $6,955 a ton on July 15.

The overall market sentiment was bullish, boosted by positive US corporate reports that lifted the stock market.

Base metal prices news

According to Marex’s estimates, metal prices were supported by active short covering by speculators, who accumulated short positions and are now forced to make buybacks.

Meanwhile, copper inventories in ShFE warehouses and Chinese customs warehouses are at historic lows. Yangshan premium to the price of copper rose to $87 per ton, the highest value since December, indicating an increase in demand for imported metal.

Meanwhile, analysts at Citibank forecast that China’s economic recovery will stall and copper prices will fall to $6,600 a ton within 6-9 months. “We recommend selling copper and nickel in the coming week as a recession in Europe, a global economic slowdown and a serious supply increase move the commodities market into surplus,” the bank’s experts said.

Base metals price trends

According to economists polled by Reuters, a lot of key economies face the risk of a recession amid high inflation.

Current price of base metals: the cost of aluminum with delivery in 3 months at the LME did not change, amounting to $2,421.5 per ton. Zinc also remained unchanged at $3039/t. Nickel gained 0.8% to $21,750 per ton. Lead dropped by 0.2% to $2,020 per ton. Tin dropped by 1% to $24235/t.

In morning trading on Thursday, July 28, prices of most metals grew in London amid a weaker dollar, and prospects of less aggressive raising the key rate in the U.S., as well as optimism about China’s economic stimulus measures.

As, a three-month LME copper contract rose 1.8% to $777 per ton.

The U.S. Federal Reserve raised its key rate by 0.75% to curb inflation, which is in line with market expectations. Fed chief Jerome Powell’s comments after the rate hike are seen as “calmer,” prompting expectations of fewer possible base rate hikes in the remainder of the year.

Aluminum on the LME rose 1.6% to $2,460.5 per ton. Zinc with three-month delivery rose 2.4% to $3,126.5 per ton. Lead futures rose by 1% to $2,033 per ton. The price of nickel was down 0.4%, to $21730/t.

“More stimulus for [China’s] economy will help support confidence in the market in the short term,” said CRU Group copper market analyst He Tainyu. – However, pressure on prices will persist if China’s export market and real estate market remain in a weak position for a longer time.”

What is the base metals price outlook? The September copper contract rose 3% on the ShFE to 6,280 yuan ($8,937.65) per tonne.

Aluminum rose 4.1% to 18775 yuan per ton in Shanghai. The price of lead rose 0.7% to 15305 yuan per ton. Tin rose by 1.3%, to 195.23 thousand yuan per ton. Quotes on the price of nickel rose by 0.6%, to 169.06 thousand yuan per ton. These are base metals price trends we have today. 


Commodities

Brent oil prices could reach $150 per barrel, says JPMorgan

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Brent oil prices could reach $150 per barrel, says JPMorgan
© Reuters.

In a recent forecast, JPMorgan has predicted a potential surge in prices to $150 per barrel. This prediction was made on Monday, as the financial institution observed escalating oil rates that have been on a consistent upward trajectory.

The bank’s forecast reflects the ongoing trend in the global oil markets where prices have steadily increased. The price of Brent oil, a benchmark for international prices, has been rising consistently, indicating a robust demand and tightening supply.

This prediction by JPMorgan comes amid a global economic recovery from the pandemic, which has seen an uptick in energy consumption across various sectors. The consequent rise in demand for oil and other energy commodities is putting upward pressure on their prices.

JPMorgan’s forecast is one of several indicators pointing towards a bullish trend in the global oil market. However, it remains to be seen how this potential surge will impact the broader economy and whether it will sustain over the long term. For now, investors and market stakeholders will be closely watching these developments in the oil markets.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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Commodities

Gold prices hold steady amid Federal Reserve’s interest rate warning and global economic concerns

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Gold prices hold steady amid Federal Reserve's interest rate warning and global economic concerns
© Reuters.

Gold prices remained mostly steady on Monday, despite the potential for a further drop due to warnings from the Federal Reserve about prolonged higher interest rates. The strength of the dollar and yield pressures have also contributed to the situation. Over recent weeks, gold has shown minimal fluctuation in its trading range.

The Federal Reserve recently signaled that interest rates could rise again this year and may decrease less than previously anticipated in 2023, possibly remaining above 5%. This has caused investors to favor the dollar as a safe haven, as global economic conditions appear to be worsening.

Inflation is resurging in major economies due to rising oil prices, which could potentially hamper growth this year. Amid these circumstances and growing concerns about a possible U.S. government shutdown, gold has found some support.

Meanwhile, on Monday, industrial metals saw little movement due to escalating worries about additional economic challenges in China. The London Metal Exchange (LME) and nickel finished last week on a lower note. These concerns were amplified after China Evergrande (HK:) Group, a struggling property developer, announced it could not issue new debt due to an ongoing government investigation into one of its units.

China’s property sector is facing a cash crunch that has persisted for three years and has received limited fiscal support from Beijing. This week, attention will be focused on Chinese purchasing managers’ index data, scheduled for release on Friday, for further insights into business activity.

Oil prices rose on Monday as investors shifted their attention back to tighter supply outlooks. This shift occurred after Moscow implemented a temporary ban on fuel exports while remaining wary of potential further rate hikes that could dampen demand.

contracts ended their three-week winning streak and fell last week following the Federal Reserve’s hawkish stance which unsettled global financial sectors and raised concerns about oil demand. Prices had surged over 10% in the preceding four weeks due to predictions of a significant crude supply deficit in the fourth quarter, following Saudi Arabia and Russia’s decision to extend additional supply cuts until the end of the year.

Last week, Moscow temporarily banned gasoline and diesel exports to most countries in an effort to stabilize its domestic market. More updates on stock market trends and other business, political, tech, sports, and auto news are expected to follow.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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Oil prices steady as Russia eases fuel export ban

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Oil prices steady as Russia eases fuel export ban
© Reuters. FILE PHOTO: Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang province, China December 7, 2018. REUTERS/Stringer

By Paul Carsten

LONDON (Reuters) – Oil prices held steady on Monday after Russia relaxed its fuel ban, taking the edge off earlier gains on a tighter supply outlook and wariness over interest rates that could curb demand.

futures were up 17 cents, or 0.18%, at $93.44 a barrel by 1133 GMT after settling 3 cents lower on Friday.

U.S. West Texas Intermediate crude was up 7 cents, or 0.08%, at $90.10.

Russia approved some changes to its fuel export ban, lifting the restrictions for fuel used as bunkering for some vessels and diesel with high sulphur content, a government document showed on Monday.

The ban on all types of gasoline and high-quality diesel, announced last Thursday, remains in place.

“The market continues to digest Russia’s temporary ban on diesel and gasoline exports into an already tight market, offset with the Fed’s hawkish message that rates will stay higher for longer,” said IG Markets analyst Tony Sycamore.

Crude prices fell last week after a hawkish Federal Reserve rattled global financial markets and raised concerns over oil demand. That snapped a three-week rally of more than 10% after Saudi Arabia and Russia constrained supply by extending production cuts to the end of the year.

Last week, Moscow issued a temporary ban on gasoline and diesel exports to most countries to stabilise the domestic market, fanning concerns of low products supply as the Northern Hemisphere heads into winter.

In the United States, the number of operating oil rigs fell by eight to 507 last week – the lowest count since February 2022 – despite higher prices, a weekly report from Baker Hughes showed on Friday.

Compounding supply constraints, U.S. oil refiners are expected to have about 1.7 million barrels per day (bpd) of capacity offline for the week ending Sept. 29, decreasing available refining capacity by 324,000 bpd, research company IIR Energy said on Monday.

Offline capacity is expected to rise to 1.9 million bpd in the week ending Oct. 6, IIR added.

Expectations of better economic data this week from China, the world’s largest crude importer, lifted sentiment. However, analysts flagged that oil prices face technical resistance at the November 2022 highs reached hit last week.

China’s manufacturing sector is expected to expand in September, with the purchasing manufacturing index forecast to rise above 50 for the first time since March, Goldman Sachs analysts said.

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