October Inflation Report to Outline Latest Price Trends – Commodity Roundup
— Brent crude oil edged down 0.5% to $92.25 a barrel.
— The European benchmark gas weakened 2.2% to 110.63 euros per megawatt hour.
— Gold futures edged down 0.1% to $1,711.50 per troy ounce.
— LME copper edged down 0.2% to $8,069 per metric ton.
— Wheat futures edged up 0.3% to $8.09 a bushel.
October Inflation Report to describe the latest price trends
The US Inflation Report for October will show how consumer prices have changed over the past month, signaling whether their rate of increase is slowing as interest rates rise.
Strong and broad price pressures fueled rapid inflation in September, the Labor Department said last month. The consumer price index rose 8.2% from a year earlier, down from annual increases of 8.3% in August and 8.5% in July. The 9.1% inflation rate in June was the highest in four decades.
The so-called core CPI, which excludes volatility in energy and food prices, rose 6.6% on the year to September, the biggest increase since 1982. It marked an acceleration 6.3% in August and 5.9% in June and July.
Carbon credit proposal faces hurdles
The United States has presented a new carbon credit scheme that aims to inject billions of dollars into the energy transition of developing countries, while some companies have expressed caution about investing in the program.
On Wednesday, US climate envoy John Kerry introduced the program, called the Energy Transition Accelerator, at the UN climate talks in Egypt. The program, he said, aims to engage investors in efforts to reduce emissions in regions or entire countries by paying developing countries to shut down fossil fuel sources and accelerate the renewable energy building.
The current $2 billion carbon credit market is unregulated, leading to what critics see as shoddy projects that don’t generate sustainable emissions reductions. Some companies have pledged not to rely on carbon offsets, saying credits should not substitute for more direct action to wean their operations off fossil fuels. US officials aim to raise tens of billions of dollars in new funding through ETA.
Missed views on ArcelorMittal Q3 earnings as shipments slump and energy costs hit
ArcelorMittal on Thursday reported third-quarter net profit that beat expectations as market conditions deteriorated, marked by lower shipments and higher energy costs.
The Luxembourg steelmaker said net profit fell 78% to $993 million from $4.62 billion in the year-ago period on sales that fell to $18.98 billion from $20.23 billion in the third quarter of 2021.
Earnings before interest, taxes, depreciation and amortization fell to $2.66 billion from $6.06 billion a year earlier.
Tate & Lyle 1H Profit Rose, Backs 2022 Market Views; Cut the dividend
Tate & Lyle PLC on Thursday said pre-tax profit for the first half of the 2023 financial year increased and said it expects to meet market expectations for the full year.
The FTSE 250 food and drink ingredients supplier said pre-tax profit for the six months to September 30 was £68m ($77.2m) compared to £21m for the first half in fiscal 2022. The company said its food and beverage unit had a strong half-year with broad-based growth across all regions.
Aluminum prices are expected to remain low until Q1 2023
09:00 GMT – Aluminum prices are expected to be kept low until the first quarter of 2023 due to Covid-19 lockdowns in China and weak Western demand, Fitch Solutions said in a note. Fitch expects prices to average $2,725 per metric ton in the final quarter of this year, up from its previous expectation of $2,800 per ton, “in light of growth and a demand weaker than expected, driven by the slowdown in mainland China, an emerging recession in the Eurozone, and evidence of oversupply in the market based on inventory data.” A strong dollar and rising interest rates acted as additional downside risks for aluminum, Fitch said as it lowered its 2023 forecast to $2,600 a ton from $2,700 a ton. Prices on the LME sit at $2,301 a tonne on Thursday. ([email protected])
Oil sell off pauses with US CPI data in focus
08:55 GMT – Oil prices are flat ahead of US inflation data after falling for three days on fears of a rise in Chinese Covid-19 cases. Brent crude oil is down 0.2% at $92.50 a barrel. Rising Covid-19 cases in China have dashed any optimism that Beijing could ease its lockdown measures sooner than expected, and has seen Brent crude fall 6% this week. Fears of a cryptocurrency sell-off are weighing more on risky assets as investors await the print of the US CPI at 13:30 GMT, says SPI Asset Management. “Adding to the oil slick, large-scale risk de-grossing and a strong US dollar ahead of the highly anticipated US CPI data does not help matters for many oil investors,” the company said in a note. . ([email protected])
Metals up amid optimism over China’s easing of Covid-19 policy
08:33 GMT – Base metals rise as optimism grows among traders that China’s zero-Covid-19 policy will end in the new year. Three-month copper is up 0.1% at $8,085 per metric ton while nickel is up 1% at $25,000 per ton. Goldman Sachs analyst Nicholas Snowdon said in a note that stronger activity in China would help diversify commodity demand “at a time when Western demand is slowing but inventories remain extremely tight.” Zenon Ho of Marex added that demand for nickel was increasing in China on short covers, after a white paper presented at the China International Lithium Battery Industry Conference in Suining on the supply and demand of batteries showed that global battery demand will reach 490 gigawatt hours this year and 1,406 Gwh by 2025. ([email protected])
Palm oil prices rise, followed by soybean oil
02:52 GMT – Palm oil prices rise, following CBOT soybean oil gains, says Low York Hong, head of futures brokerage at AmInvestment Bank. He believes the rise in crude palm oil futures is limited amid bearish expectations for data from the Malaysian Palm Oil Board due to high inventories. It sets Crude Palm Oil futures support at MYR 4,160 and resistance at MYR 4,497. MPOB data for October is due at noon. The benchmark Bursa Malaysia Derivatives contract for January delivery is MYR 12 higher at MYR 4,210 per tonne. ([email protected])
Lower copper prices; China demand concerns weigh
0246 GMT – Copper prices are lower in Asian morning trading, in line with broad base metal losses. Analysts at ANZ Research say the drop is likely the result of weak economic data out of China, which has raised demand concerns. Producer prices in China fell for the first time in nearly two years, while October auto sales data also showed a sequential decline. “Such data suggests growth is anemic,” analysts said. Sentiment is likely further hampered by calls from Chinese copper smelters to regulate capacity, which could further pressure demand, they add. The three-month LME contract is down 0.2% at $8,091.50 a tonne. ([email protected])
Decline of Chinese iron ore; Limited upside down appearance
02:33 GMT – Chinese iron ore prices are lower at the start of trading, pulling back from a broad rally so far this month amid growing investor hopes for softer Covid curbs in China. Yongan Futures analysts point out that the steel commodity has likely reached its upper limit after strong gains in recent days. Given the current high price level of iron ore, buying sentiment among steel producers could ease, according to the brokerage. Expectations of winter steel production restrictions are further weighing on demand sentiment, Yongan adds. The most traded January contract is down 1.8% at CNY 673.0 per tonne. ([email protected])
Iron ore recovery hinges on improving steel demand in China
0006 GMT – Macquarie closes an August bearish call on iron ore, but with a caveat: ‘We emphasize that real signs of improving activity on the ground in China are needed for a rally sustained in the ferrous markets takes place.” In a memo from its sales office, Macquarie says the balance of risk to iron ore prices is beginning to shift as some miners cut production. However, he is watching for a marked improvement in real estate sales, construction activity and steel margins. “We are skeptical of China’s ability to ease its Covid-19 policy ahead of the Chinese New Year and remain cautious on any rally until we see justified signs of improving steel demand,” Macquarie said. Spot iron ore was most recently at $89.55/tonne, down from over $110/tonne in early August, according to S&P Global Commodity Insights. ([email protected]; @RhiannonHoyle)
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