2024-05-07 10:56

LONDON, May 7 (Reuters) - Freeport-McMoRan is preparing to ship as much as 900,000 metric tons of copper concentrate starting in June from its Grasberg mine after positive talks with Indonesia to extend its export licence, two sources with knowledge of the situation said. An Indonesian minister urged the government last week to allow the U.S. copper giant to keep shipping copper concentrate from the mine it operates at Grasberg in Indonesia after its current licence expires at the end of May. Exports of copper concentrate, produced from crushing mined ore, in the second half would help smelters facing shortages. Copper prices hit two-year highs at $10,208 a ton last week, a gain of more than 20% so far this year, driven in part by major Chinese smelters planning to cut output after disruptions to mine, supply such as those at First Quantum's Cobre mine in Panama. Freeport (FCX.N) New Tab, opens new tab is talking to customers about selling Grasberg output in the second half this year, according to three sources, reflecting the company's confidence the government will allow continued exports. Initial commercial discussions on sales of Grasberg output were held in Santiago, Chile, on the sidelines of an industry conference in mid-April, two of the sources said. Freeport did not respond to requests for comment via email and phone. The sources asked not to be named because they were not authorised to speak to the media. INDONESIAN BAN Indonesia banned raw material exports in 2020 to try to force companies to refine minerals in the country, adding value to its exports. Miners have had to apply for export quotas when their smelters and refineries are under construction. Freeport has said that banning exports of Grasberg concentrates output could lead to a loss of $2 billion in revenues for Jakarta. The company's Manyar smelter is due to be completed this month, but it may take up to six months to reach full capacity, meaning it will not be able to process all of the concentrate produced by Grasberg, the world's second largest active copper mine. The amount of concentrate available for export could amount to between 500,000 to 900,000 tons from June until about November, the sources said. Freeport was allowed to export 1.7 million tons of concentrate from Indonesia between late July 2023 and when the export licence ends in May, it said in a filing last year. The release of Grasberg's output could cause an increase in treatment charges (TC), fees paid by miners to smelters for converting raw materials into metal. Miners typically can negotiate lower prices when traders and smelters have to compete for concentrate because supplies are low. The copper concentrate market is expected to be in deficit for the next three years. Last week, TCs, also a tracker of mined copper availability, turned negative. According to price rating agency Fastmarkets, treatment charges turned negative in April for the first time since 2013. That compares with annual 2024 benchmark TCs settled between Chinese smelters and Antofagasta at $80 per ton. The latest Reuters' poll showed analysts see a copper deficit of 125,000 tons in 2024, more than triple the deficit of 35,000 tons expected in the January poll and compared with a surplus of 302,500 tons expected late last year. (This story has been corrected to say Grasberg copper concentrate, not Grasberg copper, in the headline) Sign up here. https://www.reuters.com/markets/commodities/freeport-may-export-up-900000-metric-tons-grasberg-copper-concentrate-second-2024-05-07/

2024-05-07 10:20

LONDON, May 7 (Reuters) - The British pound edged lower against the U.S. dollar on Tuesday before the Bank of England's policy announcement on Thursday as markets moved to fully price in two quarter-point rate cuts this year. A survey of economists polled by Reuters expects the BoE to keep interest rates unchanged when it announces its decision this week, but analysts expect the central bank to leave the door open to lower interest rates as early as June. Traders price in 53 basis points of easing this year, implying at least two quarter-point cuts, having previously fully priced only one after inflation data last month showed prices slowed by less than expected in March. "We think they're going to sharpen their communication and we think another member will vote for a rate cut," said Danske Bank FX analyst Kirstine Kundby-Nielsen, who expects two of the nine-member Monetary Policy Committee to vote to lower borrowing costs this week. "We think the market reaction will send euro-sterling higher and overall weaken the pound," Kundby-Nielsen added. The pound was last down 0.2% against the dollar at $1.2534, and was at 85.86 pence per euro , down by 0.1%. The British currency has been one of the better performers among major currencies this year, having only fallen 1.5% year-to-date against the strong dollar, versus a 2.5% drop for the euro and an 8.5% decline for the yen . But as signs emerge that inflation is falling towards target and policymakers, including Governor Andrew Bailey, sound more comfortable with the trajectory of inflation, markets have moved to price additional easing. "We believe GBP is poised to weaken with it defying gravity for too long," said Paul Mackel, global head of FX research at HSBC in a note. Elsewhere, British construction companies enjoyed their fastest expansion in more than a year during April, despite a further drop in house building, a survey showed on Tuesday. "After two years of stagnation, the economic recovery is becoming more established and is broadening," said Peter Arnold, EY UK chief economist, referring to the construction data. "Though it's still very early days, another solid increase in GDP in Q2 seems a feasible prospect." Official data on first quarter economic growth is due on Friday, where economists polled by Reuters expect GDP to have expanded 0.4%, after shrinking 0.3% in the final quarter of last year. Sign up here. https://www.reuters.com/markets/currencies/sterling-slips-markets-add-2024-boe-rate-cut-bets-2024-05-07/

2024-05-07 10:05

A look at the day ahead in U.S. and global markets from Mike Dolan World markets have returned to levels of almost month ago as fears of an overheated U.S. economy abate even as corporate profit growth remains brisk. The April miss on new payrolls and the sight of annual wage growth ebbing below 4% have been enough to switch the narrative back to a Federal Reserve which is on hold for now, rather than one that may even consider further interest rate hikes. That may seem like scant consolation to investors who at the start of the year had expected more than 100 basis points of cuts in 2024 - but it's taken the edge off restive bond markets that see another $125 billion of new Treasury coupons hit the Street again this week, starting with $58 billion of 3-year notes on Tuesday. A standback look at incoming U.S. economic reports shows data surprises now running at their most negative since February last year. What's more, the Fed's latest loan officers survey shows renewed weakening in demand for industrial loans and a decline in household demand for credit in the first quarter of the year. And another New York Fed survey released on Monday showed Americans are bracing for another round of higher housing costs. New York Fed boss John Williams said that at some undefined point the U.S. central bank will lower its interest rate target. "Eventually we'll have rate cuts" but for now monetary policy is in a "very good place," he said on Monday. That's seen interest rate futures move back out to price almost 50bps of Fed easing for the year, albeit only from September on. Two-year Treasury yields hovered at 4.80% on Tuesday, well off highs above 5% seen before the payrolls report last week. Another strong gain in Wall Street stocks (.SPX) New Tab, opens new tab, (.IXIC) New Tab, opens new tab on Monday show sentiment buoyed again as first quarter corporate earnings have on aggregate come in well above expectations at the start of last month. Walt Disney tops the earnings diary later on Tuesday. The dollar (.DXY) New Tab, opens new tab held firm on Tuesday, pushing higher again against Japan's yen to as high as 154.65 despite the two suspected bouts of Japanese intervention last week to support the yen. Japan's top currency diplomat Masato Kanda once again on Tuesday said Japan may have to take action against any disorderly, speculative-driven foreign exchange moves. In overseas stocks, most Asian and European bourses were higher - with only Hong Kong's Hang Seng (.HSI) New Tab, opens new tab breaking its stellar recent run to end in the red. Still, the Hong Kong benchmark is still up 8.35% for the year to date in dollar terms - just shy of the S&P500's 8.6% gain. UBS TROUNCES EXPECTATIONS In Europe, Switzerland's UBS (UBSG.S) New Tab, opens new tab stole the show on Tuesday as its stock surged 8% on first-quarter profits that trounced forecasts and as the bank said it was sticking with plans for share buybacks over three years despite Swiss government proposals that would hike its capital requirements. The bank's shares have soared nearly 50% since its merger with Credit Suisse last year, with investors upbeat about UBS prospects given the low acquisition costs, its huge increase in assets and - so far - its relatively smooth progress in integrating its stricken rival. Elsewhere, UniCredit (CRDI.MI) New Tab, opens new tab, Italy's second-largest bank, gained nearly 3% as it raised investor reward guidance for the year after posting a much higher-than-expected net income and further boosting capital levels. But BP (BP.L) New Tab, opens new tab slipped after the oil giant reported first-quarter earnings down 40% from a year earlier and missed forecasts due to lower energy prices and a U.S. refinery outage, even as oil and gas production increased. Key diary items that may provide direction to U.S. markets later on Tuesday: * US March consumer credit * Minneapolis Federal Reserve President Neel Kashkari speaks * US corporate earnings: Walt Disney, Duke Energy, Mckesson, Occidental Petroleum, Sempra, Assurant, Wynn Resorts, Rockwell Automation, Reddit, Arista Networks, Lyft, Match, Henry Schein, Electronic Arts, Jack Henry, Bio Rad, TransDigm, NRG, Kenvue etc * Chinese President Xi Jinping in France and Serbia as part of week-long visit to Europe * UK finance minister Jeremy Hunt answers questions in parliament * US Treasury auctions $58 billion of 3-year notes Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-05-07/

2024-05-07 09:36

LONDON, May 7 (Reuters) - Tensions around Georgia's controversial draft "foreign agents" law could hit the country's economy and investor confidence, the president of the European Bank for Reconstruction and Development (EBRD) warned on Tuesday. The draft legislation, which is winding its way through the Georgian parliament, would require organisations receiving more than 20% of their funding from abroad to register as agents of foreign influence, a requirement opponents attack as authoritarian and Kremlin-inspired. The draft legislation sparked protests in recent days while Brussels and Washington have urged Tbilisi to drop the legislation or risk harming its chances of European Union membership and a broader Euro-Atlantic future. "We were surprised to see it coming back, and we are concerned by the dynamics of what's involved," EBRD President Odile Renaud-Basso told journalists during a media briefing ahead of the lender's annual meetings kicking off in Armenia on May 14. Georgia has benefited economically from making good reform progress, Renaud-Basso said. "But the new trend and the tension around that (draft law) could have an impact, an economic impact, on the private sector and the willingness to invest in the country so we are in contact with our partners," she said. Alkis Vryenios Drakinos, EBRD's regional director for the Caucasus, said the investment climate had not yet changed, but the draft law was a potential threat to what was otherwise likely to be a strong year for the bank's investments in the country. He cited work in the banking sector, two public sector projects signed this year worth 50 million euros ($53.8 million) in total and a private sector wind project investment worth just over 100 million euro it hopes to sign later this year. The EBRD has invested 5.16 billion euro in Georgia to date, around half of that in the private sector. Its current portfolio of projects in the country stands at 1.11 billion euros, according to the lender's web side. ($1 = 0.9297 euros) Sign up here. https://www.reuters.com/world/europe/ebrd-warns-georgia-foreign-agents-law-could-hit-economy-investor-confidence-2024-05-07/

2024-05-07 08:11

AHMEDABAD/GUWAHATI, India, May 7 (Reuters) - Prime Minister Narendra Modi voted early on Tuesday as India held the third phase of a massive general election, when seats in his home state Gujarat and 10 other regions will be decided. The world's most populous nation began voting on April 19 in a seven-phase election in which nearly one billion people are eligible to vote, with ballots set to be counted on June 4. Modi is seeking a rare, third straight term in a vote which pits his Hindu nationalist Bharatiya Janata Party (BJP) against an alliance of more than two dozen opposition parties. Surveys suggest he will win a comfortable majority. Modi cast his ballot in the Gandhinagar constituency where his number two, Home Minister Amit Shah, is the BJP candidate. He urged citizens to actively participate in the "festival of democracy", while taking care of their health as summer temperatures continued to rise in many parts of the country. Clad in saffron and white, he was surrounded by hundreds of supporters and party members, signing autographs and talking to children on the way to the polling station. Modi's campaign began by showcasing his economic record, welfare measures, national pride and personal popularity. The BJP relies heavily on his popularity, with his image adorning everything from sacks of rice handed out to the poor to large posters in cities and towns. But some voters said it was not enough. "Yes, the government gives us free rice, but what's the point? Look at the cost of potatoes and onions. It was never so high before," said 50-year old Rina Kathar from Baligate in the northeastern state of Assam, which also voted on Tuesday. Assam is prone to frequent flooding and M. Ahmed, 30, said his basic concerns included bad roads and poor drainage systems in the state capital Guwahati. PUSH TO BOOST VOTER TURNOUT Modi changed his campaign strategy after the first phase of voting and focused more on firing up BJP's Hindu base by attacking rivals as pro-Muslim, even as a survey said jobs and inflation were the main concerns of voters. In an interview with broadcaster Times Now aired on Monday, Modi said he does not oppose Islam or Muslims and wants the community to think about their future growth as they vote. Tuesday's polling covers 93 seats in 11 states and territories, with Gujarat and Maharashtra in the west and Karnataka in the south accounting for 50 seats. That would complete voting for 283 of parliament's 543 elected seats. In the 2019 elections, the BJP won more than 70 of 93 seats up for grabs on Tuesday, but faces tougher contests this time as the main opposition Congress party has gained strength in Karnataka and a regional partner has split in Maharashtra. Voter turnout of 66.14% and 66.71% respectively in the first two phases has been marginally lower than corresponding phases five years back, with analysts blaming the summer heat and the lack of a single strong issue to motivate voters. The Election Commission has since stepped up a campaign to encourage people to vote while consulting with weather officials and health and disaster management agencies to deal with the impact of the heat wave on Tuesday's vote. Among those who voted in Gujarat was Gautam Adani, the billionaire chairman of the Adani Group conglomerate. "Today is the festival of democracy and I appeal to people to come out and vote," he told reporters after voting. "India is moving forward and will continue to do so." Sign up here. https://www.reuters.com/world/india/modis-home-state-gujarat-among-11-territories-voting-third-phase-giant-indian-2024-05-07/

2024-05-07 08:08

NAPERVILLE, Illinois, May 6 (Reuters) - Nearly two weeks of wet weather in the western U.S. Corn Belt have put most of the Crop Watch producers’ planting efforts behind schedule after what was an efficient start to the season, and more rain this week could prolong the delays. Seven of the 11 Crop Watch producers report they have done no field work since about April 25 - or any at all so far this season - but one of those producers, in eastern Iowa, started planting in full force on Sunday. Crop Watch follows 11 corn and 11 soybean fields across nine U.S. states, including two each in Iowa and Illinois. The three easternmost producers were in the field last week, though rains held planting progress in southeastern Illinois and Indiana to a slower-than-normal pace while relatively normal progress occurred in Ohio. Several of the Crop Watch producers mentioned feeling anxious, frustrated or concerned by the slowdown and wetness. Soils that cannot dry out before planting may cause emergence issues. Heavy rains, especially in Nebraska, will cause some fields to need replanting. Half of the 22 Crop Watch fields (six corn, five soybean) have been planted by Monday compared with 15 by the same date in 2021 and 2023. Only five were planted as of May 6, 2022. Two weeks ago, producers reported planting pace a bit ahead of normal, matching a Crop Watch best. But now, nine of 11 producers say planting progress has slipped behind normal pace in their areas. Ohio is the only location where things are slightly ahead, and it is too early in North Dakota to consider efforts delayed. Wet conditions are slowing field work in every location except Kansas, where dryness is the cause. Half-inch rains on Friday marked the first measurable rainfall in two months for the central Kansas fields. Only irrigated fields were worked in Kansas last week after they were pre-watered. Just two Crop Watch fields were sown in the last week, including the Ohio soybeans on Wednesday. That is their earliest plant date in seven years of monitoring this field, besting the prior record of May 9, 2018. The southeastern Illinois corn was planted on Saturday, the second-latest for this field in eight years after May 18, 2019. Heavy rains early on Sunday may have warranted an eventual, full replanting of this field, though the producer reports that all his other planted and emerged crops look very good. Crop Watch producers were unsure when the remaining 11 fields would be planted as several days of drying may be needed following recent and upcoming rains, though one of the eastern Iowa fields could be sown on Monday. Many producers note that cloudy weather has slowed the drying process. None of the Crop Watch producers expect this week to feature fast or even normal planting pace due to the forecast rains, which will be on and off over the next couple of days throughout most of the Corn Belt. Temperatures may be normal to cool. U.S. corn planting was 27% complete as of April 28 according to the U.S. Department of Agriculture, ahead of the recent five-year average of 22%. USDA will be out with May 5 planting progress later on Monday. The date’s recent corn average is 39%, matching approximate trade expectations. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Sign up here. https://www.reuters.com/markets/commodities/crop-watch-anxiety-mounts-amid-10-day-planting-stoppage-west-2024-05-07/