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‘Commodities to focus on Chinese economic outlook, virus situation’

Commodity prices at large ended the week higher driven primarily by a weaker US dollar. The US dollar index slumped to a 1-month low in reaction to Fed’s monetary policy decision. COMEX gold has jumped to a two-week high while crude oil has scaled above $73 per barrel and copper has tested mid-June highs. As expected, the Fed kept interest and bond purchases unchanged. The Fed also maintained an upbeat outlook and noted that they were moving towards the start of tapering of asset purchases. The US central bank, however, ...

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China wants to curb steel production. Some say it’s ‘virtually impossible’

China wants to lower its steel production this year, but that could prove difficult. In the first half of 2021, Chinese steel mills have churned out nearly 12% more crude steel compared to the same period in 2020, according to a Wood Mackenzie note. China produced a monthly record of 99.45 million tons of steel in May, though the number fell to 93.88 million tons in June, Reuters reported. The steel sector is one of the biggest polluters in China, producing around 10% to 20% of carbon emissions in the ...

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Funds play ‘wait and see’ on CBOT corn, soy ahead of U.S. yield data

Grain markets have recently been quieter than they have been for much of this year, but speculators are now looking ahead to the U.S. corn and soybean yield forecasts due on Aug. 12 from the Department of Agriculture. That report has delivered big surprises in the past, so unless there are demand developments or a major shift in the weather forecast, investors might be hesitant to make position adjustments ahead of time. In the week ended July 27, money managers increased their net long position in CBOT corn futures and ...

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New Capacity Roundup – August

Here is a rundown of the major steelmakers’ latest production and capacity investments announced this month. Europe ArcelorMittal plans to adapt its Sestao flat product facility, located near Bilbao, into what it calls “the world’s first full-scale zero carbon-emissions steel plant”, by 2025. To achieve this, the company has authorised the construction of a DRI plant at a nearby facility, in Gijón, which will produce up to 2.3 million tonnes of sponge iron, per year. Nearly half of this output will be used as feedstock for two EAFs operating at ...

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Corn falls on economic worries, U.S. crop report caps losses

U.S. corn futures fell on Tuesday amid a broad commodity sell-off on concerns over the global economy, though losses were limited by a widely watched report that showed the condition of U.S. crops was worse than expected. FUNDAMENTALS * The most active corn futures on the Chicago Board Of Trade Cv1 were down 1% to $5.54 a bushel by 0121 GMT, having gained 2.6% in the previous session when prices hit a July 27 high of $5.59-3/4 a bushel. * The most active soybean futures Sv1 were down 0.9% to ...

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Iron ore miners are awash with cash, but see different futures: Russell

Major iron ore producers are awash in a sea of cash, and are likely to remain so despite a recent retreat in the price of the steel raw material. Where they diverge is what they think will be the next big drivers of profit. Rio Tinto RIO.AX, the world’s biggest iron ore miner, posted record first-half profits on July 28, with underlying earnings almost tripling to $12.17 billion from the same period a year earlier. The surging profits were largely built on the back of the rise in iron ore ...

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Commodity tracker: 5 charts to watch this week

Iraq’s oil production forecast tops this week’s charts to watch as the country’s standoff against international oil companies may put its capacity expansion plans at risk. Also worth following this week are falling iron ore prices, waning fuel-switching capacity in the US, rising gas prices in Europe and a firm North Sea crude demand. 1. Iraq’s oil capacity expansion plans at risk What’s happening? International oil companies are trying to flee Iraq’s unattractive oil assets. The standoff between IOCs and Iraq over the management of some of the country’s biggest ...

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Bleak crop prospects likely to keep spring wheat supplies tight, prices firm

The prevailing dry and hot weather conditions across top producing countries are limiting the production prospects for spring wheat, raising concerns of tightening global supplies for the high protein-content wheat. Canada, Russia and the US are the world’s top producers and exporters of spring wheat globally, and all three countries have been witnessing severe dryness and drought-like conditions. In Canada — the largest grower of spring wheat — extreme heat and drought conditions are having a devastating effect on wheat crops grown in the Prairies region, while the neighboring regions ...

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Palm rebounds on production concerns, sliding exports cap gains

Malaysian palm oil futures rebounded on Tuesday, helped by lingering concerns over tight production, but gains were capped by data that showed export shipments fell in July. The benchmark palm oil contract FCPOc3 for October delivery on the Bursa Malaysia Derivatives Exchange gained 65 ringgit, or 1.58%, to 4,185 ringgit ($991.24) a tonne by the midday break, after plunging 5.7% in the previous session. The contract is recovering from Monday’s sell-off on concerns over tightness in production, said Paramalingam Supramaniam, director at Selangor-based brokerage Pelindung Bestari. “Until and unless production ...

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Base metals fall as Delta variant sparks recovery concerns

Industrial metals declined on Tuesday as a surge of the Delta coronavirus variant across the world raised doubts of a sustainable global economic recovery. Three-month copper on the London Metal Exchange CMCU3 fell 0.4% to $9,667 a tonne by 0250 GMT, aluminium CMAL3 was down 0.4% to $2,603.50 a tonne, nickel CMNI3 dropped 1% to $19,320 a tonne and zinc CMZN3 shed 1.4% to $3,007 a tonne. The most-traded September copper contract on the Shanghai Futures Exchange SCFcv1 fell 1% to 70,870 yuan ($10,961.09) a tonne, nickel SNIcv1 dropped 1.5% ...

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Coal India Apr-Jul offtake rises 28.4% year on year

In a reflection of growing demand, state-owned Coal India Ltd (CIL) has registered a 28.4% year-on-year growth in coal offtake for the first four months of the current financial year. “The company also clocked a robust 30.7% growth in supplies to power sector during April-July’21 with a whopping 39 million tonne (MT) increase over same period year ago,” CIL said in a statement on Monday. This was on account of higher demand from the power sector, with India’s electricity demand growth on an upward trajectory after it had dipped during ...

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Mining: Digitisation can wait no longer

The Centre’s new regime wherein mines are being allocated via the auction route under a revenue-sharing model has come as a wind of change for the sector. With mines being bagged after quoting hefty premiums, industry players must push digitisation to optimise core processes and cut costs if they are to ensure proper return on investment. Zero pilferage, and proper distribution and end use through digitisation are becoming necessary to boost revenues and protect the bottomline. Mining companies like Coal India, Tata Steel Mining, JSW Steel, Hindustan Zinc, and NMDC, ...

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China steel futures dive 6% on concerns of changes in steel output

Chinese ferrous futures fell on Monday, with steel rebar and hot rolled coils both plunging some 6%, after Beijing updated its stance on carbon reduction work, raising worries of an adjustment in output cuts. A Politburo meeting chaired by President Xi Jinping on Friday said China should avoid “campaign-style” carbon reduction efforts. While there were some places blindly launched projects with high emissions and energy consumption, there were others that “over-reacted” and made emission-cut plans too early, state media Xinhua said in a commentary, adding that such attempts could affect ...

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China’s utilities face rising H2 coal bill as mine safety checks crimp supply

China’s coal buyers are bracing for prices to rise in the second half of the year, from already near-record levels, as Beijing’s drive to boost domestic mine safety cuts into local output even as booming imports may be reaching their natural limits. Beijing is striving to strike a balance between increasing supplies to cool record prices that have squeezed its coal-reliant utilities while improving mine safety. In July, local media reported more than 20 mines in major coal hub Shaanxi province were shut for safety checks after a flooding accident. ...

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Analysis: Europe’s steel-raw materials spread slips in July after Q2 record

The European hot-rolled coil steel to raw materials price spread edged lower in July as higher coking coal, iron ore pellet and scrap prices limited gains from record monthly HRC spot prices. The Northwest European HRC-steel raw materials spot spread moved down to Eur758/mt ($900/mt) in July from Eur761/mt in June, according to estimates by S&P Global Platts on Aug. 2. In the second quarter, the European HRC spread averaged a new record high Eur695/mt, up 61% from Q1, on the back of higher steel prices. A recovery in steel ...

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