MARKET MOVEMENTS:
--Brent crude oil edged down 0.6% to $75.62 a barrel
--European benchmark gas fell 3.9% to EUR134 a megawatt hour
--Gold futures edged down 0.4% to $1,803 a troy ounce
--Three-month copper edged down 0.4% to $8,453 a metric ton
--Wheat futures rose 2% to $7.49 a bushel
TOP STORY:
EU Delays Labeling Lithium Toxic as Concerns From EV Industry
Mount
The prospect that the European Union will classify lithium as
toxic is adding to worries in the electric-vehicle battery industry
that policymakers aren't doing enough to attract investment and the
EU will lose out to the U.S., an attractive destination for such
companies partly thanks to the Inflation Reduction Act.
Last week, the European Commission was set to give a final
ruling on whether lithium, a crucial battery input, should be
classified as a toxic substance. The commission's scientific arm
recommended that it do so.
The decision by the EU's executive arm has now been pushed back
into the new year, the second delay in as many months. Europe's
nascent battery companies are warning that investors may be drawn
away from the continent to the U.S., where the IRA has created
strong incentives to establish supply chains in the country.
OTHER STORIES:
BHP Invests in, Collaborates With Friedland's Pulsed-Power
Company, Affiliate
BHP Group Ltd., the world's biggest miner by market value, has
invested in and entered collaboration agreements with mining tycoon
Robert Friedland's I-Pulse Inc. and a venture that company has with
Bill Gates-backed Breakthrough Energy Ventures, called I-ROX.
The agreements will give BHP access to I-Pulse's pulsed-power
technology for the crushing and grinding of mineral ores and allow
it to collaborate on developing applications for the technology,
I-Pulse and I-ROX said in a statement on Monday. The value of the
equity investments in I-Pulse and I-ROX wasn't disclosed, but BHP
will join I-Pulse and BEV Europe as shareholders of I-ROX, the
entities said.
MARKET TALKS:
Palm Oil Ends Lower, Dragged by Decline in Soybean Oil
1014 GMT - Malaysian palm oil prices ended lower, dragged by a
selloff in soybean oil on the Chicago Board of Trade on Friday and
losses in palm-oil futures on the Dalian Commodity Exchange on
Monday, Singapore-based Palm Oil Analytics co-founder Sathia Varqa
says. Soybean oil, a close substitute for palm oil, declined after
the USDA's latest report lowered forecasts for soybean oil use in
biofuel and for export in 2022-2023, Varqa adds. The benchmark
Bursa Malaysia Derivatives contract for February delivery was
MYR254 lower at MYR3,741 a ton. (clarence.leong@wsj.com)
---
Copper Edges Lower as Market Weighs China Reopening Risks
0926 GMT - Copper prices edge lower but remain close to a
six-month high as expectations of China's reopening have lifted
prices. Three-month copper on the LME is down 0.4% at $8,454.50 a
metric ton. Having hit a low of $7,104 a ton during the summer, the
metal has rebounded and is up 13% for the quarter so far as demand
expectations have been lifted by China's reopening plans. Still,
analysts caution that the process could be bumpy as China
encounters spikes in Covid-19 cases along the way. China's metal
demand might actually underwhelm JPMorgan says in a note.
"Reopening is going to likely be a process of starts and stops,"
the bank says. (william.horner@wsj.com)
---
Oil Slips on Global Demand Concerns
0843 GMT - Oil prices fall as weak economies in the West and
concerns about China's reopening weigh on demand hopes. Brent
crude, the international oil benchmark, is down 0.6% at $75.64 a
barrel while WTI is down 0.6% at $70.61 a barrel. While China's
reopening was hoped to boost demand for crude, concerns have built
that it could send Covid-19 cases sharply higher, which could be
negative for oil demand. "An expected bumpy China reopening coupled
with the scenario of a mild recession in Europe and the U.S. could
lead to a harsher economic climate for oil markets," says Stephen
Innes, managing partner at SPI Asset Management.
(william.horner@wsj.com)
---
Palm Oil Prices Fall, Mirroring Weakness in CBOT Soybean Oil
0246 GMT - Palm oil prices fall, in line with weakness in the
CBOT soybean oil market and palm olein on the Dalian Commodities
Exchange in Asian trading hours, says David Ng, a trader at Kuala
Lumpur-based proprietary trading firm Iceberg X. He thinks weaker
soybean oil demand, weighed by the cautious economic outlook, is
causing downward pressure on soybean oil prices, hence dragging
palm oil prices lower as two oils often trade in tandem as they are
used in similar products. He pegs crude palm-oil futures support at
MYR3,700 and resistance at MYR4,100. The benchmark Bursa Malaysia
Derivatives contract for February delivery is MYR179 lower at
MYR3,816 a ton.(yingxian.wong@wsj.com)
---
Chinese Iron Ore Gains; Upbeat Sentiment Likely to Continue on
Easing of Covid Curbs
0237 GMT - Iron ore prices are higher in China morning trade,
extending recent sharp gains, as investors welcomed China's
wide-ranging relaxations of its pandemic curbs. Yongan Futures
analysts point out that buying interest is likely to remain
supported by upbeat sentiment for a mid-term rebound in demand, as
China's economic activities recover amid the country's reopening
and a stabilizing property sector. However, the analysts caution
that investors should monitor near-term port transactions in the
physical market as a sign of how fast steel-making demand is
picking up on the ground after the policy changes. The most-traded
January contract is up 0.5% at CNY835.5 a ton.
(yifan.wang@wsj.com)
---
Copper Prices Retreat; Buying Interest May Support Prices
0227 GMT - Copper prices are lower in early Asian trade,
retreating from a rally last week as China effectively relaxed most
of its Covid-Zero restrictions. The move has triggered investor
hopes over a demand rebound in China, one of the world's largest
copper consuming countries, ANZ Research analysts note. A
stabilizing property sector and stronger policy support for the
market would offer an extra boost to the metal's demand outlook,
they say. They reckon buying interest is likely to remain high and
support prices in the near term. The three-month LME contract is
down 1.5% at $8,414.50 a ton. (yifan.wang@wsj.com)
---
Proposed Pricing Rule Worries Australian Gas Industry
0119 GMT - A so-called reasonable pricing provision proposed for
Australia's domestic gas market could bring forward any shortfall
in local gas supplies by strengthening demand and deterring
investment, Commonwealth Bank of Australia analyst Vivek Dhar says
in a note. He highlights the planned provision as the biggest
surprise in the government's announcement of gas- and coal-price
caps Friday. "One of the key objectives of the 'reasonable pricing
provision' is to ensure that local gas prices 'reflect costs of
production' and allow 'for a reasonable return on capital'," but
"how this is managed, while having the objective of maintaining
'incentives for investment in new sources of supply', is a key
market concern," Dhar says. (rhiannon.hoyle@wsj.com;
@RhiannonHoyle)
---
Crude Oil Rises After Russia Threatens to Slash Production
0117 GMT - Crude oil prices are higher in early Asian trade.
Despite the release of higher-than-expected U.S. PPI data, prices
may continue to remain supported, in no small part due to Putin
threatening to slash Russian oil production in retaliation to the
G-7's proposed price caps, says Stephen Innes, managing partner at
SPI Asset Management, in a research report. However, several other
factors could keep the price of crude from gaining too sharply,
such as the prospect of slowing global economic growth, he adds.
The front-month contract for WTI futures rises 0.7% to $71.74/bbl,
while the front-month Brent crude contract is up 0.8% at
$76.71/bbl. (yiwei.wong@wsj.com)
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
December 12, 2022 07:08 ET (12:08 GMT)
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