Quotations for non-ferrous metals are mostly rising, Reuters reported. The energy crisis in Europe and China contributes to doubts about the sustainability of supply, but the potential growth of quotations is limited due to the weakening of the global economy and rising interest rates.
A lot of regions in China have recently imposed restrictions on electricity consumption by industrial consumers to make sure supply for households.
Because of restrictions on electricity consumption, China’s zinc production fell by 500,000 tons a year, CRU Group said Friday.
September zinc futures on the Shanghai Futures Exchange closed 1.8 percent to 25,365 yuan ($3,698.49) a ton.
Meanwhile, metal production in Europe is declining due to high energy costs. This affects quotations for non-ferrous metals and alloys. Last week, Belgium’s Nyrstar announced it would stop production at Budel, one of Europe’s largest steel mills, in the Netherlands, on September 1. The company also cut production by 50% at three zinc smelters.
Meanwhile, according to a trader in the zinc and lead markets, the short-term optimism seen amid power restrictions in China will fade when the weather turns cooler.
“The market is still under the influence of weak macroeconomic factors, and fears about recession and the possibility of further interest rate hikes by the Federal Reserve strengthen the downside risks,” added the trader.
Base metals rose in Asia
The dollar has been gaining support in recent sessions as Fed policymakers signaled an inclination to further tighten monetary policy ahead of the Jackson Hole conference later this week.
A rising dollar usually puts pressure on commodity prices, which become more expensive for holders of other currencies.
At the time of writing, nickel futures on the Shanghai Futures Exchange were trading up 0.7% to 177,270 yuan a ton. Quotes jumped 4.8 percent on Monday. Indonesian President Joko Widodo said in an interview with Bloomberg News last week that he was considering introducing a nickel export tax this year.
Indonesian authorities had previously talked about the likelihood of introducing the tax as early as Q3.
At about 07:48 GMT, three-month copper futures on the LME rose 1% to $8,103.50 a ton. Aluminum rose 0.8% to $2,408.5 a ton. Zinc rose 0.6% to $3,518.50 a ton, and lead fell 0.2% to 2010 dollars a ton.
Earlier we reported that the exchange price of electricity in France is rising by 5.5%.
Bloomberg: UAE to boost oil production beyond plan by 2025
UAE to boost oil production. One of Russia’s main competitors for oil exports plans to reach five million barrels per day by 2025. The Middle Eastern country was initially expected to reach this level only by 2030, Bloomberg reported, citing sources.
“Energy concern Abu Dhabi National Oil Co. (Adnoc), which produces almost all of the UAE’s oil, wants to be able to produce 5 million barrels a day by 2025. The company planned to reach such a level only by 2030,” – says the material.
But a crude oil production boost will be difficult without additional financing for expenses for the project. Adnoc explained the acceleration of production increase by the policy of the leading countries of the world on accelerated energy transition to renewable energy sources (RES).
“As we embrace the energy transition and focus our business on the future, we will continue to explore potential opportunities that can further add value, free up capital and improve profitability,” the Arab oil company said.
To realize the goal, Adnoc has asked international companies that are partners in its oil fields to increase long-term crude production by 10% or more, sources said. In the case of positive results of the negotiations, the UAE will be able to significantly increase the volume of oil production by 2025, concludes Bloomberg.
On September 19, the Times of India, citing sources in the Indian Ministry of Commerce, reported that the Asian country has saved since February 2022, $439.7 million on imports from Russia of oil at a discount. A total of about 62.5 million barrels of Russian crude were purchased by Indian state and private companies over the last six months. Moreover, volumes of imports have increased many times over as compared to 2021.
Earlier, we reported that Nigeria stopped benefiting from the sale of Nigerian oil due to the lack of dollars.
FT: Nigeria stopped benefiting from Nigeria crude oil sales due to lack of dollars
Nigeria’s crude oil sales used to grow steadily. But now the country, which is considered one of the world’s largest oil exporters, is facing a crisis. The country is short of dollars, and the factor of “massive theft” has only exacerbated the problems of the African state, reports the Financial Times.
“Since the beginning of the year, Nigeria’s foreign exchange reserves have fallen by 5%, to $38 billion. Restrictions on the purchase of dollars and the resulting deficit has led to the emergence of a black currency market. $1 is worth 420 naira at the official exchange rate and 700 naira on the black market,” the paper said.
Because of increasing corruption in the country, Nigeria, the world’s tenth largest oil exporter, can no longer increase production of crude oil. Nigerian crude oil buyers are not happy with this fact. The African state exports a little more than half of the established OPEC quota – 1.1 million barrels per day, instead of the required 1.8 million.
Despite all the difficulties going on in Nigeria’s economy, Timipre Silva, the African country’s Minister of State for Petroleum, announced plans to increase liquefied natural gas (LNG) exports to Europe by the coming winter. According to him, to realize this goal, it is necessary to improve safety in Nigeria’s fields and infrastructure.
Earlier we reported that coffee stocks in Brazil in six months will approach a record low level.
Coffee exporters in Brazil: coffee stocks in Brazil in six months will approach a record low level
Coffee exporters in Brazil said that coffee stocks in the largest coffee-producing country in the world – Brazil – in six months will fall to a record low level. This was written by Bloomberg agency about the statement of the president of the National Council of Brazilian Coffee Silas Brasileiro.
According to his forecast, stocks of coffee in Brazil’s coffee supply companies by March will drop to 7 million bags, whereas analysts consider a comfortable level of 9-12 million bags of 60 kg each.
Cecafe Exporters Group board member Nelson Carvallaish said the country’s coffee stocks are so small that even if next year’s crop is good, Brazil will barely have enough coffee to meet demand.” “We just need rain,” he concluded.
In August, The Wall Street Journal wrote that the price of coffee could rise seriously by the end of 2022 because of Brazil’s poor harvest.
Earlier we reported that aluminum production in China in August reached a record 3.51 million tons.
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