2024-05-22 23:00

LONDON, May 22 (Reuters) - The London Metal Exchange (LME) copper price hit a record nominal high of $11,104.50 per metric ton on Monday. The London market is playing catch-up with its U.S. peer CME Group (CME.O) New Tab, opens new tab, where a vicious short squeeze has been playing out on the COMEX contract. Traders are now scrambling to ship metal to CME warehouses in the United States to cover short positions. The panic has added fuel to a rally that has driven the copper price up by 27% since January and reinforced a bull narrative of a market caught between constrained supply and green demand boom. However, not everyone is short of copper. China, the world's largest buyer, has plenty of the stuff. This doesn't offer much relief for those short of the CME contract, at least directly, but it's a useful reminder the world hasn't run out of copper just yet. STRONG SEASONAL SURGE Inventory registered with the Shanghai Futures Exchange (ShFE) stood at 291,020 metric tons at the end of last week, compared with London Metal Exchange (LME) stocks of 105,900 tons and CME stocks of just 18,244 tons. This year brought the usual seasonal stocks surge around the lunar new year holidays but it's been the strongest since 2020, a year of COVID-19 disruption. Headline ShFE inventory peaked at 300,045 tons in the middle of April and has stayed around those elevated heights, the usual post-holiday drawdown so far conspicuous by its absence. There are another 45,000 tons of bonded copper registered with ShFE's international branch, the International Energy Exchange. The build in Chinese exchange stocks lifted global exchange inventory to 491,000 tons at the end of March, the highest monthly level since August 2021. STUTTERING DEMAND, HIGHER SUPPLY Weak spot demand, robust imports and rising domestic output have combined to keep China's exchange inventories high. Chinese buyers, like those everywhere else, have reacted to copper's sharp rally by de-stocking, which is probably why the seasonal post-holiday decline in ShFE stocks hasn't yet kicked in. Meanwhile, Chinese imports of refined metal have been running at a healthy clip since the middle of last year. Imports accelerated from 1.65 million tons in the first half of 2023 to 2.07 million in the second half. The pace dropped only slightly in the first four months of this year with cumulative imports of 1.25 million tonnes up by 17% on the same period of 2023. Net imports of 1.18 million tonnes were up by a sharper 26% on the year-earlier period reflecting lower exports, which fell to 70,400 tons from 129,000. Significantly, imports of raw material have also been rising this year. Inbound volumes of copper concentrate rose by 7% year-on-year to 9.34 million tons in January-April, Chinese players evidently adjusting to the loss of the Cobre Panama mine after its closure at the end of 2023. Higher copper concentrates availability has translated into higher domestic production of refined copper. After rising by 8% in the first quarter of the year, output growth accelerated to 9% in April. A March agreement by Chinese smelters to curtail output due to uneconomic treatment terms was one of the triggers for copper's super-charged rally but any impact on the country's production rate is so far hard to discern. IMPORT PREMIUM COLLAPSE The combination of elevated stocks and super-high prices has caused a collapse in the Yangshan premium , a closely-tracked indicator of China's copper import appetite. The premium is currently assessed by local data provider Shanghai Metal Markets at minus $5 per ton, the first time it has fallen into negative territory since the data series was launched in 2013. The spot import door has just firmly closed. Metal will still flow into China under annual supply deals, which tend to be favoured by larger buyers, but arrivals will likely drop a couple of gears relative to the last few months. This may allow CME shorts some flex in re-routing shipments of South American copper from China to U.S. ports. CME's list of deliverable brands doesn't include either Russian or Chinese brands, limiting the potential for a straight stocks transfer from the LME, where they accounted for two-thirds of warranted inventory at the end of April. China clearly won't miss the extra import units in the short term as the price spike suppresses buying at every stage of the product manufacturing chain. DISCONNECT This copper rally has been driven by fund buyers and accentuated by trade short position holders being forced to cover. Investors are still arriving at the bull party. Money managers have lifted their outright long positions on the CME contract to a near six-year high of 141,204 contracts. Investment fund long positions on the LME have also flexed wider over the last week to 107,385 lots, the most bullish positioning since the LME launched its Commitments of Traders Report in 2018. It takes two to tango in a bull market and it's the CME shorts that are also contributing to the upside momentum. However, assuming traders can shift copper to CME warehouses and rebuild depleted stocks, the current disconnect between CME and LME pricing will be closed. That will leave the far larger disconnect between price and supply chain reality. Can copper keep rising if the world's largest physical consumer stops buying? And if China won't pay these prices, who else will? The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/commodities/copper-squeezed-united-states-china-has-plenty-2024-05-22/

2024-05-22 22:47

SYDNEY/PARIS, May 23 (Reuters) - President Emmanuel Macron said police reinforcements in New Caledonia would remain as long as required, after viewing areas devastated by deadly riots in the French-ruled Pacific island triggered by a contested electoral reform. Macron's hastily arranged visit to New Caledonia on Thursday comes after six people were killed in riots that have left a trail of looted shops and torched cars and businesses since they began more than a week ago. "In the coming hours and days, massive new operations will be scheduled where necessary, and republican order in its entirety will be re-established because there is no other choice," Macron said during a meeting with political and business leaders in the capital Noumea. Roads across the island remained blocked by protester barricades on Thursday, and residents shared advice on social media on safe routes to find food, petrol and medicine. Macron earlier flew by helicopter over areas wrecked by arson, with bulldozers working to clear away rubble. Mayors from these worst-hit suburbs joined Macron's meeting at France's High Commission, along with pro-French and pro-independence leaders. With the island under a state of emergency, Macron said additional security totalling 3,000 personnel would remain, even during the Paris Olympics if required. "I personally believe that the state of emergency should not be extended," he said, adding it would be lifted only when protesters remove the roadblocks. Protesters fear the electoral reform, already passed by lawmakers in mainland France, will dilute the votes of indigenous Kanaks, who make up 40% of the island's population of 270,000 people, and make it harder for any future referendum on independence to pass. The reform requires a meeting of both houses of parliament for it to be ratified. A French government spokeswoman told Europe 1 radio on Thursday that Macron would address the issue of whether to delay that meeting. POLITICAL IMPASSE Indigenous Kanak political leaders meeting with Macron included the president of New Caledonia's government, Louis Mapou, and the president of its Congress, Roch Wamytan, who was a signatory to a 1998 Noumea Accord that ended a decade of violence by outlining a path to gradual autonomy. The expiry of the accord in 2021 and a Kanak boycott of an independence referendum held during the COVID-19 pandemic has since created a political impasse. Before the meeting, the pro-independence Front de Liberation Nationale Kanak et Socialiste (FLNKS) bloc issued a statement saying it expected Macron to make a strong announcement that could "breathe new life" into dialogue. Macron said the aim of the meeting, which also includes French loyalist politicians such as Sonia Backes, was to get all parties back around the table. "Calming down cannot mean turning back the clock. Calming down cannot mean disregarding the popular expression that has already taken place," said Macron. Coming out of the meeting with Macron, Georges Naturel, a New Caledonian representatives in France's senate and the mayor of Dumbea where stores were set on fire, said society needed to rebuild in a different way. "Supporting young people is something important to us. And then, having this real social project. Afterwards, there is the institutional political project, but we have not yet debated that." Macron had told the meeting more security forces are coming. "We are all convinced that this will not be enough. We also need strong, political messages," Naturel said. The message must be to pause and talk calmly, he said. FLNKS want Macron to shelve the electoral reform that Paris says is needed to improve democracy on the island. The Noumea Accord had frozen electoral rolls, and the reform would allow thousands more French residents who have lived in New Caledonia for 10 years to vote. Macron must also allow more time for a political agreement on the future of the island to be discussed, local political groups have said. New Caledonia is the world's No. 3 nickel miner but the sector is in crisis and one in five residents lives below the poverty threshold. Accompanied by his defence and interior security ministers, Macron later met police at Noumea’s central police station. "Thank you for being here, thank you very much," Macron told a uniformed officer, before going into a closed-door meeting. Sign up here. https://www.reuters.com/world/macron-arrives-riot-hit-new-caledonia-high-stakes-talks-2024-05-22/

2024-05-22 22:19

Researchers made used coffee grounds into concrete additive Say makes concrete stronger and more sustainable Concrete production responsible for 7% of global emissions -UN MELBOURNE, May 23 (Reuters) - Your morning coffee could help the planet. That's the promise of an Australian university turning used coffee grounds into a material that can be added to concrete to make it stronger and more sustainable, potentially lowering greenhouse gas emissions. Concrete production, which involves mixing sand and gravel with cement and water, is a major producer of greenhouse gases, responsible for around 7% of the world's emissions, according to the United Nations. Researchers at Melbourne's RMIT University heated coffee waste without oxygen, a process known as pyrolysis, to create a substance called biochar that can replace up to 15% of the sand used in concrete. The inclusion of the biochar makes the concrete 30% stronger and reduces the amount of cement needed by up to 10%, said lead researcher Rajeev Roychand. "This ticks all the boxes," he said. "You preserve carbon and you are getting significantly higher strength." Roughly 50 billion metric tons of sand is dug up each year, mostly for use in concrete, a 2022 U.N. report said. Its extraction is often environmentally destructive and it is in increasingly short supply, the report said. Cement production, which involves heating a mixture of limestone and clay to around 1,500  degrees Celsius (2,732°F), is responsible for most of concrete's emissions. BIOCHAR COMPANY The Macedon Ranges Shire Council near Melbourne used the coffee concrete earlier this month to construct a footpath. RMIT is talking with several construction firms and concrete makers and with Starbucks (SBUX.O) New Tab, opens new tab to take its waste coffee grounds, and could form a company to make biochar, Roychand said. Starbucks did not respond to a request for comment. Australian infrastructure company Bild Group said it planned to trial the concrete and hoped to use it on major road projects. Construction giant Arup supported the research. Millions of tons of used coffee grounds are produced globally and most are sent to landfills where they emit methane as they break down. Australia generates around 75,000 tons of waste coffee grounds a year and biochar made from this could replace up to 655,000 tons of sand in concrete because it is a denser material, Roychand said. Globally, coffee-waste biochar could replace up to 90 million tons of sand in concrete, he said. Food waste accounts for around 3% of Australia's emissions, according to the government, and most could eventually be made into biochar, Roychand said. "We anticipate that about 60-70% (of organic waste) we can divert from landfill into concrete applications," he said. Other international universities are also researching the potential of biochar and other bio-engineering in concrete. RMIT was the first to use waste coffee grounds in this way, Roychand said. Sign up here. https://www.reuters.com/business/environment/australian-researchers-turn-morning-coffee-waste-into-greener-concrete-2024-05-22/

2024-05-22 22:18

May 22 (Reuters) - Rescue teams in Iowa searched through the ruins of homes and buildings in Greenfield on Wednesday, looking for survivors of a deadly tornado that tore through the town the day before. Authorities were still determining how many people were killed, injured and displaced by the twister in the farming town of 2,000 located about 60 miles (97 km) west of Des Moines, Sergeant Alex Dinkla, a spokesperson with the Iowa State Patrol, told a news conference. "It is still a search mission as far as we are looking to make sure all residents are accounted for," he said. "When we have this many homes that have been destroyed, fully demolished, we want to make sure every person is accounted for." Images from Greenfield showed a path of utter destruction, with homes reduced to splinters, debris strewn everywhere and several large wind turbines toppled. "It's horrific. It's hard to describe," said Iowa Governor Kim Reynolds, who declared a disaster emergency for 15 counties. The twister that touched down in Greenfield was among a swarm of tornadoes that were reported in southwestern Iowa on Tuesday evening. At least one person, a woman in nearby Adams County, was killed in the storms, the county's medical examiner said. Reynolds said state officials were working to send a request for President Joe Biden to approve a disaster declaration in order to get federal assistance for state residents. Among the buildings damaged in Greenfield was a hospital, forcing authorities to create a makeshift medical care center at the lumberyard and send some of the injured to other area facilities. State Representative Ray Sorensen said several residents used their own vehicles to transport those who were injured to safety moments after the storm struck. "We pulled a guy from the rubble and put him on a little makeshift stretcher we made and threw him in the back of a truck," he said. Tornadoes along with severe storms packing large hail and damaging winds were likely again on Wednesday across the Southern Plains as well as Arkansas, Louisiana and Texas, the National Weather Service warned. Sign up here. https://www.reuters.com/world/us/iowa-crews-search-survivors-after-deadly-tornadoes-2024-05-22/

2024-05-22 21:55

May 22 (Reuters) - Russia exceeded its OPEC+ production quota in April for "technical reasons" and will soon present to the OPEC Secretariat its plan to compensate for the error, the Russian Energy Ministry said late on Wednesday. "Russia is fully committed to the OPEC+ agreements and plans to compensate for its failure to carry out the production plan and will soon present to the OPEC Secretariat its plan to cover the small deviation from the voluntary production levels," the ministry said in a statement. The statement said Russia maintained production within the OPEC+ quotas through the first quarter of 2024. It said the April overproduction was attributable to "technical particularities of reducing production by a significant amount." Russia has been a key member of OPEC+, a grouping of member-states of the Organisation of Petroleum Exporting countries and other producing nations which have agreed to impose production cuts. Sign up here. https://www.reuters.com/business/energy/energy-ministry-russia-exceeded-opec-quotas-april-will-compensate-2024-05-22/

2024-05-22 21:50

May 23 (Reuters) - A look at the day ahead in Asian markets. Asian markets could be delicately poised at the open on Thursday, with growing worries over how soon U.S. and global interest rates will come down offset by a potential boost from AI and chip-making giant Nvidia's earnings late on Wednesday. Nvidia shares jumped as much as 5% in after-hours trading immediately after its first quarter results were published, but quickly gave back a chunk of that in choppy trading. U.S. futures turned negative, pointing to a lower open on Thursday. Nvidia reported stronger-than-expected Q1 earnings, forecast Q2 revenues above estimates and announced a ten-for-one forward stock split effective June 7. If investors decide they like what they see from Nvidia's results and earnings call, a brighter trading day on Thursday beckons. In Asia, the calendar is dominated by a Bank of Korea policy decision, PMIs from Australia and India, inflation figures from Singapore and Hong Kong, and Singapore's Q1 GDP. The Bank of Korea is expected to keep its key policy rate unchanged at 3.50% for an 11th straight meeting, a Reuters poll showed, then cut by 50 basis points in the fourth quarter after the likely start of policy easing from global peers. Trading in Japanese bonds and the yen is stirring again, which is likely to cause Bank of Japan officials some degree of discomfort - the yen is weakening even though yields are rising. The 10-year JGB yield hit 1.00% on Wednesday for the first time in 11 years amid mounting bets for further BOJ policy tightening this year, while a weak auction of 40-year debt added to the pressure for higher yields. The two-year yield printed a fresh 15-year peak of 0.35%. Yet the yen fell, nearing 157.00 against the U.S. dollar and printing a 17-year high against the New Zealand dollar after the Reserve Bank of New Zealand New Tab, opens new tab struck a surprisingly hawkish tone in keeping interest rates on hold. U.S. bond yields are also ticking higher too, after minutes of the Fed's last policy meeting released on Wednesday showed that officials still expect inflation to return to their 2% target over the medium term, but "the disinflation would likely take longer than previously thought." Goldman Sachs CEO David Solomon joined the small but growing band who thinks the Fed won't cut rates at all this year. Meanwhile, the U.S.-China trade war will start hitting the headlines ahead of the G7 meeting in Italy later this week, where officials will push back on China's growing export strength in key sectors. The United States is not calling on its partners to slap tariffs on Chinese imports, but will want the G7 communique to express common concern for what it calls Beijing's industrial "overcapacity". Here are key developments that could provide more direction to markets on Wednesday: - South Korea monetary policy decision - Singapore, Hong Kong CPI inflation (April) - Japan, Australia, India PMIs (May) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2024-05-22/