Fitch Solutions said industrial metals prices appear set to decline this year on concerns over global economic growth due to Omicron and continued weakness in China's property sector.
"We forecast the 2022 annual average for all metals under our coverage to be below current levels," adding that it believes base-metal prices peaked in 2021.
While manufacturing-linked metals like aluminum and tin may find some support from industrial demand, copper, often seen as a barometer of wider macroeconomic health, may underperform due to a poor macro outlook, Fitch said.
While unrest in Kazakhstan has put a spotlight on the uranium market--as it accounts for two in every five pounds produced globally--the country is also an important supplier of some other commodities, such as ferrochrome, that risks disruptions, too.
"Kazakhstan is also a significant player in the global ferrochrome market [12% share] via Kazchrome, which is owned by Eurasian Resources Group," said Morgan Stanley.
Should its supplies be disrupted, Finland's Outokumpu could find its ferrochrome--which account for roughly 27% of that company's Ebitda--in high demand, said MS.
EMEA HEADLINES
Eurozone Inflation Reaches Historic High
The eurozone's annual rate of inflation rose further in December, reaching the highest print in history, which was posted more than thirty years ago in July 1991.
Consumer prices rose 5.0% on year in December following a 4.9% rise in November, according to a first estimate released Friday by Eurostat, the European Union's statistics agency. Consumer prices rose 5.0% on year in July 1991, marking the highest point in history until December 2021.
Eurozone Economic Sentiment Fell in December to a Seven-Month Low
Confidence among the eurozone's consumers and businesses fell in December to the lowest level since May as the increase in Covid-19 infections due to the Omicron variant weighed on the services sector.
The European Commission said Friday that its economic sentiment indicator, an aggregate measure of business and consumer confidence, fell to 115.3 in December from 117.6 in November. Economists polled by The Wall Street Journal expected the index to come in at 116.2.
German Industrial Production Unexpectedly Declined in November
German industrial production fell slightly in November missing forecasts for an increase, as supply-chain bottlenecks and rising producer prices continue to take their toll on production.
Total industrial output--comprising production in manufacturing, energy and construction--declined 0.2% on month in November in calendar-adjusted terms, statistics office Destatis said Friday. Economists polled by The Wall Street Journal had forecast a 0.5% increase.
Sanofi, Exscientia Join Forces on Drug Development
Sanofi SA and Exscientia PLC are to partner on drug development in oncology and immunology in a deal that could see the latter receive up to $5.3 billion, the two pharmaceutical companies said Friday.
Paris-listed Sanofi and U.K.-based Exscientia will collaborate to identify and select target projects, using Exscientia's artificial-intelligence-driven personalized medicine platform.
Shell to Return $5.5 Bln From Permian Sale Via Buybacks
Royal Dutch Shell PLC said Friday that it will distribute the remaining $5.5 billion of proceeds from the sale of its Permian Basin assets in the U.S. through share buybacks.
The oil-and-gas major said this is in addition to the ordinary distributions of 20%-30% of cash flow from operations.
STMicroelectronics Shares Rise After Beating 4Q Revenue Goal
Shares in STMicroelectronics NV rose after the company said a dynamic market helped it perform better than expected in the fourth quarter, taking its top line above the high end of its guidance.
At GMT 0822, shares in the European chip maker traded 3.9% higher at EUR44.5.
Aston Martin Warns on 2021 Earnings
Aston Martin Lagonda Global Holdings PLC on Friday warned that earnings for 2021 will be lower than expected after the company shipped fewer than anticipated Valkyrie sportscars in the fourth quarter of the year.
The British luxury car maker said the adjusted earnings before interest, taxes, depreciation and amortization--which strips out exceptional and other one-off items--is expected to be around 15 million pounds ($20.3 million) lower after the company sold just 10 units of its luxury sportscar, less than expected.
German Exports Rose at Slower Pace Than Imports in November
German exports increased in November but at a slower pace than imports, narrowing the trade surplus, Germany's statistics office Destatis said Friday.
Exports rose 1.7% on month in adjusted terms. Imports increased 3.3% on month, Destatis said. The figures account for seasonal swings and calendar effects.
Danske Bank Reorganizes Commercial Activities Into 3 Business Units
Danske Bank AS said Friday that it is reorganizing its commercial activities into three business units as part of its continuing transformation, and that it is making "solid progress" towards the bank's 2023 ambitions.
The Copenhagen-based bank said it will split its personal and business customer unit into two units by May 1, headed by Christian Bornfeld and Johanna Norberg respectively.
Getlink Passenger Traffic Rose 10% in December
Getlink SE said Friday that December passenger traffic rose from a year earlier as there were fewer coronavirus-related restrictions in place during part of the month.
The French operator of the Channel Tunnel between the U.K. and France reported a 10% rise in passenger vehicles for last month, to 95,575. The increase is mainly explained "by less restrictive travel conditions than in 2020 in the first half of December, before the return of major restrictions on cross-Channel journeys," the company said.
Kazakhstan's Leader Gives Security Forces Order to Shoot Without Warning
Kazakh President Kassym-Jomart Tokayev said he had given the order to police and army to shoot without warning as the country's security forces scoured the streets of Almaty and other cities for protesters after days of unrest triggered by a fuel-price increase.
He said his government had largely restored order and told a meeting of security chiefs Friday that what he called a counterterrorism operation would continue "until the full liquidation of the militants," who he said were still using weapons. "Law enforcement agencies and the army were given an order by me to shoot at terrorists to kill without warning, " he said, following the arrival of Russian troops to support his government.
Kazakhstan Unrest Pushes Up Uranium and Oil Prices
Instability in Kazakhstan, the world's biggest uranium producer, threatens to curb output and boost prices at the same time supplies of the nuclear fuel are becoming tighter.
Dozens of people died Thursday when authorities moved against protesters after several days of unrest and the arrival of a Russia-led military alliance to quell the disorder.
GLOBAL NEWS
December Jobs Report Is Expected to Show Record Annual Gain
U.S. job growth for 2021 is poised to hit an annual record, and the economy is positioned to churn out jobs this year despite temporary disruptions from the Omicron variant's surge, economists say.
Economists surveyed by The Wall Street Journal estimate that hiring strengthened in December as employers added 422,000 jobs, or more than twice the 210,000 added in November. Such payroll gains would leave the U.S. economy with about 6.5 million more jobs than at the end of 2020-more than in any year on record-but 3.5 million jobs short of pre-pandemic levels.
Investors Brace for Slowing Corporate Bond Sales
Investors expect a pandemic borrowing boom by U.S. companies will continue to cool in 2022.
Analysts at banks including Citigroup, Bank of America and Deutsche Bank are forecasting U.S. companies will issue around $1.3 trillion or $1.4 trillion worth of investment-grade-rated bonds this year, including debt sold by financial institutions. That would nearly match last year's $1.46 trillion, though still mark a decline from 2020's record $1.86 trillion, according to Refintiv.
New Disclosures Revive Questions About Fed Policy Maker's Trades
Federal Reserve Vice Chairman Richard Clarida disclosed additional sales of shares in broad-based stock funds, drawing fresh scrutiny of financial transactions he conducted at the onset of the coronavirus pandemic.
Mr. Clarida last year said three financial investment transactions that he executed on Feb. 27, 2020, were part of a preplanned portfolio rebalancing that occurred before he had any conversations about coming Fed policy actions.
Unable to Get Covid-19 Tests, Americans Carry On, Go to Work, Get on Flights
Stephanie Chen has been working in the office in Orange County, Calif., each day, taking her 5-year-old son to school, attending church and going about her routine for nine days, all while wondering if she is positive for Covid-19.
When Ms. Chen learned that her cousin's entire family tested positive for the virus after a Christmas gathering she attended with them in Orange County, pharmacies were sold out of rapid tests. Lines exceeded two hours at a local testing site. A Rite Aid website said no appointments were available within 50 miles of her home for at least two weeks.
CDC Relaxes Isolation, Quarantine Guidelines for Schools
The Centers for Disease Control and Prevention updated its Covid-19 quarantine and isolation guidance for K-12 schools Thursday, bringing it in line with less stringent recommendations for the general public announced last week.
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