The latest Market Talks covering Basic Materials. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0403 GMT - Patriot Battery Metals remains significantly undervalued, even after a roughly 18% rise in its stock this week, UBS analysts write in a note. Shares climbed following Volkswagen's announcement of a roughly $48 million investment in the lithium company. "Lithium equities have been weak, and unfunded, longer-dated projects like PMT have struggled even more, but this serves as a good reminder that some will succeed," the analysts say. For Patriot, the next major milestone is an environmental report and project study expected in September next year, ahead of a final investment decision in 2027. "Despite our cautious short- to medium-term outlook for lithium, PMT is too cheap, and we maintain a buy rating," the analysts add. UBS has an A$0.60 target price on the stock, which is up 2.1% at A$0.3725. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0234 GMT - Palm oil prices are down in early Asian trade. The CPO market outlook may trend sideways to lower, AmInvestment Bank says in a note. CPO prices remain under pressure as the market aims to maintain competitiveness amid broader challenges, Phillip Nova commodities strategist Darren Lim Tai An writes. From a technical perspective, the CPO market has broken below its previous uptrend support line and the baseline of a double-top price pattern, the strategist explains. "This shift signals the growing dominance of bearish forces, which have pushed prices lower," he adds. The Bursa Malaysia Derivatives contract for March delivery is down 24 ringgit at 4,484 ringgit a ton. (amanda.lee@wsj.com)
0228 GMT - Iron ore prices are lower in early Asian trade. From a fundamentals perspective, prices remain supported by stable demand and supply, according to Nanhua Futures analysts in a commentary. Short-term prices have slightly overcorrected, making a continued decline unlikely, the analysts note. Higher macroeconomic expectations are also likely to provide price support, Galaxy Futures analysts add. The most-traded iron ore contract on the Dalian Commodity Exchange is down 0.4% at CNY785.5/ton. (tracy.qu@wsj.com)
1701 GMT - There could be more downside in the cards for gold after the precious metal's plunge in the wake of the Federal reserve's hawkish rate cut, TD Securities' Bart Melek suggests. The head of commodity strategy says that at around $2,589/oz, gold is some $45 lower than before the Fed's cut and the rollback of expectations on future cuts. A further $50/oz drift lower is possible amid a now more restrictive interest rate environment and a less robust physical demand trajectory, though a rout doesn't look likely, Melek says. (robb.stewart@wsj.com)
1455 GMT - After a sparkling year for gold in 2024, the precious metal is on track for an only modest gain next year, RBC Capital Markets reckons. Gold rallied this year from around the $2,000 level to a nearly $2,800 peak in September. The outlook suggests a considerably weaker year ahead, with RBC looking at an average $2,771/oz in 2025 and $2,848 in 2026. The key drivers for the coming year are macro headwinds but healthy central bank demand, uncertainty and investor allocations, though RBC notes risk to its modeling given the outlook hinges on policies and a new U.S. administration that has yet to take office. There could be price downside if negative macro drivers assert themselves more than expected or there's a lack of uncertainty, but RBC also notes possible upside if conditions incite significant risk-off flows or there is stronger central bank demand. (robb.stewart@wsj.com)
1350 GMT - The commodities complex across the board is under pressure after Wednesday's decision by the Fed to cut rates by 25 basis points, and signals from Chair Powell that the Fed is now ready to take a break from easing. Metals in particular are feeling the most pressure as the dollar index strengthens to the highest level since November 2022 while treasury yields also climb, says ING Economics in a note. Agricultural futures are also under pressure in early trading. (kirk.maltais@wsj.com)
(END) Dow Jones Newswires
December 20, 2024 04:20 ET (09:20 GMT)
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