MARKET MOVEMENTS:
–Brent crude oil is up 1.1% at $71.54 a barrel.
–European benchmark gas is down 2.3% at 42.21 euros a megawatt-hour.
–Gold futures are up 0.4% at $2,791.60 a troy ounce.
–LME three-month copper futures are down 0.4% at $9,512.50 a metric ton.
TOP STORY:
Glencore Keeps Guidance After Sequentially Stronger Metals Output
Glencore reiterated full-year production targets after reporting its strongest operational quarter this year, while also maintaining an earnings outlook for its marketing division of up to $3.5 billion.
The world’s largest mining company by revenue said Wednesday that it produced 242,600 metric tons of copper in the third quarter, a 2% fall compared with the same period last year, but an 8.8% increase against the second quarter.
The steelmaking-coal division received an expected boost from the integration of Elk Valley Resources, which the Anglo-Swiss company bought in July. Quarterly output rose to 7.7 million tons from 1.5 million tons a year prior.
OTHER STORIES:
Orsted Sells Around $2.3 Billion in U.K. Wind Farm Stakes to Brookfield
Denmark’s Orsted said it would sell minority stakes in four U.K. offshore-wind farms to Canadian asset manager Brookfield in a deal valued at 1.745 billion pounds ($2.27 billion), as the struggling wind-energy giant aims to boost its financial position by selling off assets.
The renewable-energy company said Wednesday that Brookfield, institutional partners, and its listed affiliate Brookfield Renewable would acquire 12.45% stakes in the Hornsea 1 and 2 wind farms in the North Sea and the Walney Extension and Burbo Bank Extension wind farms in the Irish Sea.
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Wall Street Giants to Make $50 Billion Bet on AI and Power Projects
KKR and Energy Capital Partners have agreed to invest a combined $50 billion in data-center and power-generation projects to support the development of artificial intelligence.
The investment is a bet on AI’s huge energy needs and the mounting stress it is putting on the U.S. power grid. Much of it will be invested over the next four years, the companies said.
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Hochschild Mining Buys Cerrado’s Monte Do Carmo Gold Project in Brazil
Hochschild Mining said its subsidiary exercised an option to buy Cerrado Gold’s Monte Do Carmo Project in Brazil for up to $60 million, as first flagged in March.
The South America-focused precious-metals miner said Wednesday that its subsidiary Amarillo Mineracao do Brasil will pay $30 million, with further payments of $15 million upon certain milestones being reached.
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Posco Profit Dropped in Third Quarter on Flagging Demand
Posco Holdings reported weaker profit for the third quarter as it struggled with flagging steel demand and lower prices for steel and battery-material products.
The company’s downbeat quarterly results showed that South Korean steelmakers continue to face tough challenges at home and abroad. The country’s construction and housing markets remain sluggish, while rival Chinese steelmakers are flooding global markets with cheaper products, causing a slow industry recovery.
MARKET TALKS:
Sinopec’s Downstream Segment Likely to Face Slower Recovery — Market Talk
1031 GMT – Sinopec’s downstream segment will likely face slower recovery, Morningstar’s Chokwai Lee writes in a note. The Chinese oil refiner’s 3Q earnings were disappointing and raised worries about its timeline for recovery in the downstream segment, Lee says. The refining, marketing and chemicals units all registered sequentially softer results, Lee notes. Inventory losses should ease in 4Q, barring sharp falls in oil prices, he says. The company’s H shares remain attractive, given 2024 dividend yield of over 7% and its continuing share buybacks, but investors may prefer upstream-focused peers like Cnooc and PetroChina instead, Lee adds. Taking into account the latest energy prices and operating assumptions, Morningstar trims earnings estimates for Sinopec through 2026 by an average of 5%, cutting its fair-value estimate by 5% to HK$5.80. Shares closed at HK$4.36. (kimberley.kao@wsj.com)
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Europe’s Gas Falls on Easing Geopolitical Risks But Supply Worries Linger — Market Talk
1027 GMT – European natural-gas prices slide in morning trade on a lower geopolitical risk premium and comfortable storage levels across the region. The benchmark Dutch TTF contract is down 2.5% to 42.13 euros a megawatt hour, after recently surging to this year’s high due to concerns over supply disruptions in the Middle East and production outages in Norway. Prices are still up more than 10% on the month as the prospect of potentially tight supplies next year keeps traders on edge. “The market is facing the loss of Russian gas flows via Ukraine, while disruptions at key suppliers, such as Norway, persists,” ANZ Research analysts say in a note. “This is likely to lead to rising demand for LNG, pitting it against Asian consumers who are experiencing strong demand.” (giulia.petroni@wsj.com)
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Palm Oil Closes Higher on Stronger Export Demand — Market Talk
1006 GMT – Palm oil ended higher, supported by stronger export demand and higher soybean-oil prices, said David Ng, a trader at Kuala Lumpur-based proprietary trading company Iceberg X. Ng pegs support for crude palm-oil futures at MYR4,600 and resistance at MYR4,780. Investors are watching for October export data from the Malaysian Palm Oil Board due Nov. 11. The Bursa Malaysia Derivatives contract for January delivery closed MYR58 higher at MYR4,695 a ton. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
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Gold Futures Rise to Fresh Record on Safe-Haven Demand, U.S. Election — Market Talk
0912 GMT – Gold futures are up 0.6% at $2,793.50 a troy ounce after hitting a fresh record of $2,801.70 an ounce earlier in the session. The new high reflects safe-haven demand, boosted by uncertainty around the U.S. election, says Vivek Dhar, analyst at Commonwealth Bank of Australia. The growing likelihood of a Trump presidency has likely played a role too. Former President Trump’s plans raise the risk of policy disruption, geopolitical tensions and a higher U.S. debt profile, Dhar says in a research report. These have further boosted gold’s appeal as a safe-haven asset. CBA expects gold to average $2,800 an ounce throughout the fourth quarter of 2024. It expects gold to rise to average $3,000 an ounce by the fourth quarter of 2025. (joseph.hoppe@wsj.com)
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Oil Rises on U.S. Crude Stocks Draw Report But Remains Under Pressure — Market Talk
0911 GMT – Oil prices edge higher in early European trade, supported by reports of a surprise U.S. crude stockpiles draw. But a lower geopolitical risk premium and weak fundamentals weigh on sentiment. Brent crude is up 0.8% to $71.27 a barrel, while WTI trades 0.9% higher at $67.83 a barrel. Reports citing figures from the American Petroleum Institute ahead of official EIA data showed U.S. crude inventories fell 0.57 million barrels last week, sending positive signals about demand in the world’s top oil consumer. Crude benchmarks are though still hovering at one-month lows as fears of supply disruptions in the Middle East ease and the market shifts its focus to a weaker demand outlook and prospects of a supply surplus next year. (giulia.petroni@wsj.com)
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Glencore’s Energy Coal Output Offset Weaker Zinc Performance — Market Talk
0818 GMT – Glencore reported stronger volumes than expected from in energy coal division which offset a weaker performance at the zinc and steelmaking-coal assets, RBC Capital Markets analysts write in a research note. They expect the market to react neutrally and estimate that full-year Ebitda consensus expectations will increase by 1% following the report. RBC continues to see material upside and expect the Anglo-Swiss commodity trader to outperform over the coming twelve months driven by an outperformance in its commodity basket and shareholder distributions. Shares are up 1.4% at 4.10 pounds. (christian.moess@wsj.com)
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High Cocoa Costs to Pressure Profitability, Mondelez Says — Market Talk
0733 ET – Mondelez says it is working to control costs, but that high cocoa prices will put a damper on profitability next year. The snack giant, which sells chocolate brands like Milka and Toblerone, says it will continue raising prices on chocolate, and that it expects an uptick in pushback from consumers as a result. Mondelez says it would focus on managing costs tied to areas like overhead and productivity, but that it is hard to see a path to per-share earnings growth in 2025. “We have to price next year,” says Mondelez CEO Dirk Van de Put.(jesse.newman@wsj.com)
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Copper Rises In Anticipation of China’s Fiscal Stimulus Package — Market Talk
0314 GMT – Copper rises in early Asian trade in anticipation of fiscal stimulus measures by China. Investor sentiment is buoyed by a media report that China is considering an over 10 trillion yuan package to revive the economy, ANZ Research says in a research note. The fiscal stimulus may be approved at a meeting by China’s top legislative body from Nov. 4-8. Investors are also upbeat on China’s pledge to further support the electric vehicle industry by considering more EV charging infrastructure, ANZ says. “Such infrastructure requires large amounts of various metals including copper,” they add. The benchmark three-month LME contract is up 0.2% at $9,551.00 a ton. (sherry.qin@wsj.com)
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Iron Ore Edges Higher; Near-Term Volatility Likely — Market Talk
0235 GMT – Iron ore edges higher in early Asian trade. China’s macroeconomic policies continue to take effect, with iron ore supply and demand increasing simultaneously, analysts at Huatai Futures write. Steel trading sentiment has fluctuated recently with steel mill profits falling and molten iron output growth slowing slightly, they write. Macroeconomic policies will dominate steel price trends in 4Q, which may remain volatile in the short term, they add. The most-traded iron-ore contract on the Dalian Commodity Exchange is 0.2% higher at CNY784.00 a ton. (kimberley.kao@wsj.com)
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10-30-24 0805ET