MARKET MOVEMENTS:
–Brent crude oil is 0.4% higher at $85.44 a barrel.
–European benchmark gas rises 1.5% to EUR 54.47 a megawatt hour.
–Gold futures are up 0.3% at $1,896.50 a troy ounce.
–Three-month copper is 1% higher at $9,012.50 a metric ton.
–Wheat futures are up 0.6% at $7.68 a bushel.
TOP STORY:
Volvo in Advanced Talks on Possible Lithium Mining
Volvo Car AB is in advanced talks with some of the world’s biggest mining companies, including over potential stakes in lithium mining or processing operations, Chief Executive Jim Rowan said, joining an auto-industry-wide race to secure the minerals and metals needed to power electric vehicles.
“Right now, we already have advanced conversations with some of the big miners, as well as the processing factories that process lithium,” Mr. Rowan said, adding that Volvo would decide in the coming months whether to engage in “long-term deals and long-term price negotiations for supply or whether you want to make an equity investment.”
Mr. Rowan said it was too soon to disclose any further details about the talks, but that the company was actively considering which parts of the electric-vehicle supply chain it should move in-house to control costs and secure supply.
OTHER STORIES:
Why Processing Sweden’s Rare-Earth Haul Won’t Be Easy
The discovery of Europe’s first major source of rare-earth oxides in Sweden raises hopes for the continent’s clean-tech ambitions, but making use of the new find will take years and will require creating facilities to handle a complex production process.
A mining company owned by the Swedish government, Luossavaara-Kiirunavaara Aktiebolag, or LKAB, said it found an estimated one million metric tons of rare-earth metals, Europe’s largest such deposit, in January. These minerals typically are used to make the magnets used in offshore wind turbines and electric vehicles.
The find is adjacent to the company’s Kiruna iron-ore mine, an operation that would eventually be expanded to extract the rare earths plus phosphorus, a critical mineral for fertilizers. LKAB is testing the new deposit and plans to apply for an exploitation concession, an early step in seeking approval for a mine, later this year. The company said it would take 10 to 15 years to start recovering the rare earths.
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European Wheat Stocks Expected to Rise on Low Demand
Stocks of European wheat are expected to rise in the coming year, on higher exports from the Black Sea and lower demand from the animal feed sector.
In a new report, French agricultural consultancy Strategie Grains said Thursday that it is forecasting soft wheat stocks to rise to 14.2 million metric tons in the 2022-23 season, up from the previous forecast of 12.6 million tons. Corn stocks are also expected to rise slightly to 6.8 million tons from 6.5 million tons.
Meanwhile, total cereal production for the 2023-23 season in the European Union is expected to reach 263.9 million tons, with consumption is expected to stand at 150.3 million tons.
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Bitter, Scorned Coffee Bean Seeks New Respect From Java Snobs
For decades the lowly Robusta coffee bean has been anathema to many American coffee companies. Though less expensive than the cherished Arabica bean, Robusta has a bitter taste that has been likened to burned rubber.
No wonder that Peet’s Coffee notes on its website that Robusta has “never been on the menu,” and that Dunkin doesn’t serve it in the U.S. or most international markets. Starbucks says the bean’s “less refined flavor is absolutely the reason we don’t even touch it.”
A younger generation of coffee geeks, though, thinks the time is ripe for a Robusta reputation reboot. They want to elevate the humble bean from the instant-coffee market to the premium-coffee universe. Old-school coffee snobs are highly dubious.
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South African Power Issues Put Metals Supply at Risk
South Africa’s supply of iron ore, manganese and platinum group metals remains at risk amid continuing power issues that have hurt smelting and refining activity and could propel prices higher, according to analysts.
South Africa, one of the world’s biggest metal producers, has seen yearslong power shortages exacerbated in recent months. State-owned power company Eskom’s fleet of aging power stations is constantly breaking down due to old age, poor maintenance and alleged sabotage, triggering nationwide rolling blackouts and further hobbling the country’s already hamstrung economy.
MARKET TALKS:
Higher Chinese Demand, Low Supplies to Keep Aluminum Prices Elevated
1012 GMT – Higher demand from China and lower supplies of aluminum are likely to keep prices elevated in 2023, according to Fitch Solutions. Fitch says in a note that it is maintaining its average price forecast for 2023 at $2,600 a metric ton, with prices on the London Metal Exchange currently sitting at $2,471 a ton. The research agency says that production strains in China and Europe are likely to remain as high power costs continue to hit producers, while sanctions on Russian producers are also likely to provide support. Meanwhile, Fitch expects Chinese demand to recover significantly from the second quarter on government policies to support growth in the construction, autos and renewables sector, giving further impetus to prices. ([email protected])
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Record Australian, Russian Wheat Crop to Cap Prices
0957 GMT – A record crop for both Australian and Russian wheat is expected to provide a ceiling to prices, according to Fitch Solutions. Fitch ups its expectation for Australian wheat production to 40 million metric tons from 34 million tons, and when combined with the USDA’s expectation of 85.35 million tons from Russia, this is likely to mean world prices for wheat will be capped. “With the harvest now almost complete, reports indicate that the expected damage to Australia’s wheat crop has been less than previously feared” after heavy rains in November raised concerns over crop quality, Fitch says in a note. Australia’s logistics chain is running close to capacity so despite the uptick in output, pace of exports is likely to be flat, the research agency adds. ([email protected])
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Oil Inches Up as China Hopes Weighed Against US Stock Build
0835 GMT – Oil prices edge higher as hopes for Chinese demand balance out rising stocks in the U.S. Brent crude oil rises 0.2% to $85.27 a barrel while WTI gains 0.1% to $78.55 a barrel. The prospect of stronger Chinese demand continues to keep prices supported. Saudi Aramco this week added to their prices for Asia, suggesting they are hopeful for Chinese demand. “We expect Chinese oil consumption to increase by around 1.0mb/d this year, with strong growth emerging as early as late in Q1,” ANZ says in a note to clients. A build in U.S. crude inventories was capping gains, however. U.S. crude stocks rose by 2.4 million barrels while stocks of gasoline and distillates also rose. ([email protected])
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Newmont Likely to Sell Some Mines if Newcrest Deal Gets Done
0546 GMT – If Newmont mounts a successful takeover of Australia’s Newcrest, there is a good chance it will look to offload some assets to focus on fewer mines with more production, UBS analyst Levi Spry says in a note. “Synergies appear limited to corporate but we assume divestments (e.g. [Newcrest’s] Telfer and some of NEM’s own assets) may be part of the future,” says Spry. He reckons Newmont’s attraction to Newcrest for its large Cadia mine and promising Red Chris and Brucejack assets “is obvious.” What is less clear is whether Newmont will be interested in holding onto Newcrest’s Papua New Guinea assets, Lihir and Golpu, which come with operational, geopolitical and environmental risks, Spry says. UBS raises its target price to A$26.60 from A$21.00, and upgrades its rating to neutral from sell. Newcrest is down 1.5% at A$25.22. ([email protected]; @RhiannonHoyle)
Write to Barcelona Editors at [email protected]
(END) Dow Jones Newswires
02-09-23 0645ET
