Metals & Mining Monitor | Iron Ore Prices Plummet to 2022 Lows; Joe Biden Poised to Halt Nippon Steel's Acquisition of US Steel

Moomoo News AU wrote a column · Sep 9 15:40

Metals & Mining Monitor | Iron Ore Prices Plummet to 2022 Lows; Joe Biden Poised to Halt Nippon Steel's Acquisition of US Steel

Hello mooers! Check out the latest market dynamics of the metals and mining industry over the past week.
•Base metals: copper prices fall to $9,013 per tonne
•Energy metals: Li carbonate prices drop 3.3% in a week
•Precious metals: Gold prices keep stable
•Bulk commodities: Iron ore prices fall to $90 per tonne threshold

Spot Price Snapshot

Key Price Moves

Last week, iron ore shipments with a 62% iron content experienced their steepest weekly decline since February, falling nearly 9% to approximately $91. This drop was largely due to subdued economic indicators and diminishing demand for steel in China, the foremost consumer. Recent figures indicate that China's manufacturing sector continued to contract in August, and growth in the services sector decelerated. Additionally, the pace of new home price increases in China slowed in August, exacerbating challenges in the property sector. Declining profits at Chinese steel mills further soured market sentiment. Concurrently, industry reports revealed an increase in iron ore stockpiles at major Chinese ports, underscoring the weakened demand.

In the United States, faltering manufacturing and labor market figures revived fears of a recession in the world's leading economy. However, expectations of potential Federal Reserve rate reductions offered some economic relief. $TSI Iron Ore CFR China (62% Fe Fines) Index Futures(JAN5) (FEFmain.SG)$

Last week, copper prices declined to approximately $9000 per tonne, marking a loss of over 3% in the initial trading week of the month. This downturn was primarily driven by a weakening sentiment following disappointing US manufacturing and labor market data, which reignited fears of a potential recession. The looming possibility of a US recession casts a shadow on the demand projections for industrial metals like copper.

Adding to the concerns, analysts have noted a decline in commodity demand from China, the largest consumer of such materials. The Australian mining conglomerate BHP Group recently revised its expectations downward for China's copper demand, citing worries about the nation's economic resurgence. Furthermore, recent official statistics indicate a continued contraction in China's manufacturing sector in August.

On a somewhat positive note, anticipations of the US Federal Reserve initiating interest rate cuts this month have offered some support to commodity prices. The market is now poised for key US inflation data expected this week, which will likely impact the magnitude of the Fed's initial rate cut. $Copper Futures Current Contract (HGcurrent.US)$

Gold prices held steady at approximately $2,500 per ounce on Monday, amid speculation about the extent of the upcoming Federal Reserve interest rate reductions following a mixed U.S. employment report. The U.S. economy added fewer jobs than expected, with significant adjustments downward for the June and July data. Despite this, the unemployment rate dropped to the predicted 4.2%, and wage growth accelerated to 0.4%, surpassing the expected 0.3%. John Williams, President of the Federal Reserve Bank of New York, advocated for a reduction in interest rates, pointing to improvements in inflation and a slowing job market.

While opinions vary on whether the Fed will implement a cut of 25 or a more aggressive 50 basis points in its next meeting, consensus remains on an overall reduction of 125 basis points across the remaining Federal meetings of the year. Such easing of monetary policy typically favors gold, as it lowers the opportunity cost associated with holding the non-yielding asset. $Gold Futures(FEB5) (GCmain.US)$

Top Company News

Biden to Halt Nippon Steel's Acquisition of U.S. Steel Over National Security Concerns

President Joe Biden is poised to prevent $Nippon Steel (ADR) (NPSCY.US)$'s purchase of $United States Steel (X.US)$ after determining that the $14.9 billion deal presents an insurmountable national security threat, according to sources close to the administration. The decision to block the acquisition of the Pittsburgh-based company on national security grounds is expected soon. This move coincides with intensified campaigning by Kamala Harris, the Democratic presidential nominee, in Pennsylvania—a pivotal battleground state in the upcoming U.S. election.

Alamos Gold Announces Promising Exploration Outcomes at Mexican Projects

$Alamos Gold (AGI.US)$ unveiled new findings from its latest surface exploration drills at the Puerto Del Aire (PDA) and Cerro Pelon projects in Mexico, the company announced Wednesday. The results are anticipated to bolster reserve and resource growth at PDA and contribute to the initial underground resource estimation for Cerro Pelon, with a comprehensive update scheduled for release in February 2025.

Vale and BHP's Samarco JV Close to $18 Billion Settlement for Brazilian Dam Disaster

$Vale SA (VALE.US)$, $BHP Group Ltd (BHP.AU)$, and their joint venture Samarco are nearing an agreement with Brazilian authorities to settle nearly 100 billion reais ($17.89 billion) for the 2015 dam collapse in Mariana, sources told Reuters. The anticipated settlement, expected to be concluded by October, surpasses the 82 billion reais previously offered by the companies in June as compensation for the catastrophe.