The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day.
0703 ET - Glencore's target for EBIT above $5 billion in its trading unit looks conservative given the disruption across commodity markets, RBC Capital Markets analyst Ben Davis writes. Davis expects $5.6 billion for the year. Glencore remains the bank's top pick in the mining sector, especially ahead of a potentially tough winter that could push thermal coal prices higher, he says. Shares fall 1.9% to 531.40 pence.(adam.whittaker@wsj.com)
0611 ET - Palm oil prices ended lower, tracking weakness in both soybean oil and crude prices. Weaker oil prices reduce palm oil's appeal as a biodiesel feedstock. Meanwhile, markets have been worried about a further increase in Malaysian palm oil stocks, as its production hasn't shown any significant decline yet, says Anilkumar Bagani, commodity research head at Sunvin Group. The likelihood of falling Indonesian palm oil export taxes also added pressure on Malaysian palm oil prices, he adds. The Bursa Malaysia Derivatives contract for January delivery fell 69 ringgit to 4,616 ringgit a ton. (sherry.qin@wsj.com)
0449 ET - Copper price may continue to benefit from China's AI development, according to BofA Securities in a research note. Copper use in China data centers is likely to rise as China continues to increase investment in artificial intelligence, the bank says. The base metal's use in Chinese data centers could rise to 1.3 million metric tonnes by 2030 from 340,000 metric tonnes in 2025, the bank says. This is led by power delivery and interconnects, which are copper cables linking data center hardware, the bank says. With supply constrained, copper is the bank's top pick in the materials sector. (tracy.qu@wsj.com)
0442 ET - Oil prices fall amid renewed U.S. efforts to revive peace negotiations with Iran. Brent crude for December delivery, which expires on Friday, is down 0.8% to $114.37 a barrel, while WTI futures decline 1.2% to $101.50 a barrel. However, significant obstacles remain, limiting the reaction across crude and refined-product markets, particularly given fears that military operations against Iran could resume after the U.S. midterm elections. "A credible agreement involving Iran could reduce Brent's geopolitical premium, particularly if shipping conditions improve and additional crude supplies become available," says Naeem Aslam from Zaye Capital Markets. "Future oil prices will depend heavily on whether geopolitical normalization restores production and transportation capacity faster than global consumption recovers." (giulia.petroni@wsj.com)
0435 ET - Gold could trade around $5,000 to $5,500 next year, Ole Hansen, head of commodity strategy at Saxo said at a media briefing. In the longer term, gold could rise even higher as central banks haven't finished accumulating the precious metal, which will take some time, he says. A key support level this year is $4,000, which may not hold if there is an escalation in energy prices and the inflationary outlook, Hansen said. If prices don't fall below $4,000, gold could approach $4,500 by year-end, he added. "I think gold should still be considered as a store of value, so one that beats inflation in the long run, and one that's good to have on a rainy day where something could potentially go wrong elsewhere," Hansen said. (kimberley.kao@wsj.com)
0421 ET - Gold prices fall in early trading as investors digest the Federal Reserve's policy meeting while waiting for the release of U.S. inflation data later on Thursday. Futures in New York are down 0.2% to $4,045.20 a troy ounce. The U.S. central bank kept rates steady, buying time to decide whether more rate hikes are needed after the midterms. Still, "the tug of war between short-term momentum sellers and longer-term accumulators continues, leaving prices directionless amid concerns over elevated energy prices, AI-related equity weakness, bond yields and the dollar," analysts at Saxo Bank say. (giulia.petroni@wsj.com)
0215 ET - Drought-related electricity shortages pose the latest risk to copper production in the Democratic Republic of Congo and Zambia, the continent's top producers of the industrial metal, says BMI Research, a unit of Fitch Solutions. The two countries, along with Zimbabwe, face the risk of power-generation disruptions due to their overreliance on hydropower for the bulk of their energy needs, as the region faces an El Niño-induced drought this year. "Reduced hydropower availability could also raise production costs across energy-intensive smelting operations," BMI notes. "Zambia, which generates 87% of its electricity from hydropower, saw the share of its hydropower capacity exposed to drought rise by 29% during previous El Niño events."(Nicholas.Bariyo@wsj.com;@Nicholasbariyo)
2237 ET - Palm oil falls in Asian trading, tracking weaker soybean oil on the Chicago Board of Trade overnight. Concerns over elevated Malaysian palm oil inventories and expectations of strong October production continued to weigh on sentiment, AmInvestment Bank says in a note. The CPO market is expected to maintain its bearish bias in the near term, it adds. AmInvestment Bank pegs resistance at 4,800 ringgit a ton and support at 4,650 ringgit a ton. The Bursa Malaysia Derivatives contract for January delivery is 53 ringgit lower at 4,632 ringgit a ton. (yingxian.wong@wsj.com)
2231 ET - Iron ore prices rise in a likely technical rebound after recent declines. Iron ore prices have found support at lower levels and staged a modest rebound, say Nanhua Futures analysts in a note. China's iron ore inventories saw a slight decline last week, and the pace of stock accumulation has been slow, they note. However, despite weak steel production, China's reduced use of scrap in steel has kept the country heavily reliant on iron ore for steelmaking, say Citi analysts. The most actively traded January iron ore contract on the Dalian Commodity Exchange is up 2.1% at CNY680.00. (sherry.qin@wsj.com)
2219 ET - Copper prices are lower in early Asian trade after rising overnight, as easing concerns over U.S. copper outflows and signs of softening seasonal demand weigh on the outlook for the metal, Everbright Futures analysts say in a note. A recovery in global financial markets has supported sentiment, they add. However, uncertainty over U.S. refined copper import tariffs continues to cloud the outlook for trade arbitrage, while rising copper inventories in the U.S. have eased some concerns over a potential squeeze, they say. Copper prices might face some near-term pressure, though sustained enthusiasm for artificial intelligence could help keep prices elevated, they add. The three-month LME copper contract is down 0.1% at $14,458.50 a ton.(jiahui.huang@wsj.com; @ivy_jiahuihuang)
2034 ET - Gold declines in the early Asian session after the Federal Reserve held rates at its October policy meeting. While the Fed's standing pat was widely expected, investors are likely mulling the tone of Fed Chairman Warsh's comments and what these could signal for further increases this year and in 2027, says Tony Sage of Critical Metals in a commentary. A higher interest-rate environment typically weighs on nonyielding assets like gold. The personal consumption expenditures data and U.S. economic growth data this week could also offer further monetary policy clues, he says. "Any dovish figures could soften yields and support gold, while firm data could lift the dollar and weigh on the metal," he adds. Spot gold is down 0.6% at $4,044.04 an ounce.(megan.cheah@wsj.com)
Jefferies is comfortable with its hold call on Amcor ahead of the packaging company's update for the September quarter. It expects Amcor to report quarterly Ebitda of US$916 million and Ebit of US$701 million on Nov. 5. Jefferies projects EPS of US$0.95, which is line with consensus forecasts and at the midpoint of guidance. Its price target falls by 2.7% to A$62.41/share. "We think this is a fair multiple for a mature business with little to no growth in volumes in the face of persistent industry headwinds," analyst Ramoun Lazar says. "Sustained evidence of volume growth is needed in our view for investors to mark a higher multiple to Amcor's earnings." Amcor ended Wednesday at A$64.98.
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