Fresh Tariffs Could Raise Aluminum and Steel Prices in U.S. -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is up 0.7% at $73.01 a barrel.

--European benchmark gas is up 0.4% at 47.93 euros a megawatt-hour.

--Gold futures are up 0.8% at $2,639.80 a troy ounce.

--LME three-month copper futures are up 0.1% at $9,050.00 a metric ton.

TOP STORY:

Fresh Tariffs Could Raise Aluminum and Steel Prices in U.S.

Tariffs would likely drive up the price of steel and aluminum in the U.S., because Canada and Mexico are major suppliers of those metals to the country.

Canada is the largest source of imported aluminum to the U.S., due to its close proximity to U.S. manufacturers and an abundance of low-cost electricity needed to operate aluminum smelters.

Aluminum imports from Canada were up 24% last year from 2019, and were about 4% higher in 2024 through September versus the same period in 2023, according to the Aluminum Association trade group.

OTHER STORIES:

ArcelorMittal Says More Time Needed For Decarbonization Decisions in Current Conditions

Steelmaker ArcelorMittal said it needs more time to reach final investment decisions in its efforts to decarbonize, citing current European policy and tough market conditions.

The Luxembourg-based company said hydrogen derived from renewable energy as a replacement for polluting fossil fuels in steelmaking is evolving slowly, and interim measures aren't yet competitive.

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Backlash Against Chinese Steel Gives Preview of Trump Trade Tensions

China's industrial overcapacity became an issue of global concern even before the election of Donald Trump. Now his threat to place tariffs of 60% or more on Chinese exports will elevate the issue even further. There is perhaps no better example than steel to illustrate the problem.

China is by far the biggest steel producer in the world, accounting for more than half of the world's production. The country had been able to absorb a big chunk of steel with its booming construction and manufacturing. But with the implosion of its housing market, sluggish domestic demand has given rise to excess supply for the rest of the world.

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Global Platinum Market Set for Third Consecutive Deficit in 2025

The global platinum market is expected to be in deficit for a third consecutive year in 2025, though estimated shortfalls for 2024 have been significantly narrowed on improved supply and lower industrial demand.

The precious metal is set for a deficit of 539,000 ounces in 2025, as demand remains strong and supply remains strained, according to a new report from the World Platinum Investment Council.

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Rivian Automotive Shares Rise 7% on $6.6B Loan to Expand EV Production

Shares of Rivian Automotive shares were 7% higher in premarket trading after receiving conditional approval for a loan of up to $6.6 billion to boost its EV production capability.

Shares were trading around $12.41. The stock is down 51% on the year.

MARKET TALKS:

Palm Oil Rises Amid Expectations for Weaker Production -- Market Talk

1007 GMT - Palm oil closed higher amid expectations for lower tropical oil production, Kenanga Futures said in a research note. The Bursa Malaysia Derivatives contract for February delivery rose MYR35 to MYR4,734 a ton. A softer Malaysian ringgit also likely supported prices, Kenanga added. A weaker ringgit typically makes palm oil cheaper for overseas buyers. The price differential between palm oil and its substitutes will be a critical factor to determine CPO price movements, said Phillip Nova commodities strategist Darren Lim Tai An in a note. ([e-mail])

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Metal Prices Fall; Medium-Term Outlook Still Bullish -- Market Talk

0921 GMT - Metal prices fall, with LME three-month copper down 0.5% at $8,997.50 a metric ton and LME three-month aluminum down 1.1% at $2,617.50 a ton. Macroeconomics will dominate the metals market in the early stages of 2025 following the clear Republican victory in the U.S. presidential election, JPMorgan analysts say in a note. The market will be bearish in the near term as the pricing in of a risk premium for tariffs on China likely still has further to go, JPM says. The medium-term outlook is more bullish however as fresh China stimulus should arrive, setting up a recovery later in 2025. Continued weakness in the near term will present a good risk/reward entry point to buy supply-constrained copper, JPM says. High costs in aluminum insulate the downside risk at the very least, it adds. ([e-mail])

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Trump's Newly Pledged Tariff Could Have Mixed Impact on Energy -- Market Talk

0914 GMT - A string of potential new tariffs on U.S. imports from China, Canada and Mexico could have mixed effects on energy markets, according to ING analysts. President-elect Donald Trump pledged that soon after taking office he would slap Mexico and Canada with a 25% tariff and impose an additional 10% tariff on Chinese goods. "For energy markets, new tariffs could make crude oil and natural gas expensive in the U.S. as Canada is one of the major suppliers of energy products," ING's Ewa Manthey and Warren Patterson say in a note. "On the other hand, tight supplies from external markets could lead to bigger investments into shale drilling that may help push domestic production higher." ([e-mail])

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Oil Inches Higher as Traders Assess Ceasefire Progress, Supply Risks -- Market Talk

0910 GMT - Oil prices are edging higher in early European trade after falling around 3% in the previous session as traders monitor progress on a ceasefire deal between Israel and Hezbollah. Brent crude is up 0.6% at $72.92 a barrel, while WTI rises 0.7% to $69.43 a barrel. "A deal in the Middle East could also help reduce the tensions between Israel and Iran and lower the regional supply risks significantly for the oil market in immediate terms," ING analysts say in a note to clients. Meanwhile, investors also keep a close eye on risks to Russian supply and await OPEC+'s next move this upcoming weekend, with most expecting the group to further delay its planned production hike. ([e-mail])

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Gold Futures Slip After Intense Selloff in Prior Session -- Market Talk

0906 GMT - Gold futures tick 0.2% lower to $2,616.30 a troy ounce after a sharp selloff on Monday. The precious metal closed 3.7% down in the prior session on news that U.S. President-elect Donald Trump has picked Scott Bessent as Treasury Secretary, and the possibility of easing Middle East tensions. Bessent is viewed as a measured choice, reducing safe-haven demand for gold. Peace talks between Israel and Hezbollah are progressing well and a ceasefire agreement could be finalized in a few days, according to reports, ING analysts say in a note. De-escalation of tensions in the Middle East could shave off some of the risk premium from precious metals, ING writes. That said, other factors including Russia-Ukraine tensions and the prospect of U.S. Federal Reserve interest-rate cuts remain supportive for gold, ING adds. ([e-mail])

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Chinese EV Stocks May Get Boost From Potential EU Policy Shift -- Market Talk

0730 GMT - Chinese electric-vehicle stocks could get a boost if the EU decides to reverse the tariff applied on Chinese EV imports, Daiwa analyst Kelvin Lau writes in a note. China and the EU are reportedly nearing an agreement to eliminate tariffs on Chinese EVs, according to media reports, he adds. The potential policy shift would be a boost for the Chinese EV supply chain, he says. SAIC Motor stands to benefit the most due to the company's currently highest level of tariffs, Lau adds. Daiwa sees the most share-price upside for Geely Automobile due to its overseas expansion in Europe. ([e-mail]; @ivy_jiahuihuang)

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Copper Drops on Stronger Dollar -- Market Talk

0230 GMT - Copper prices fall in Asian trade amid a higher dollar after Trump's tariff pledge. The president-elect said he would impose tariffs on Canada, Mexico and China. If U.S. economic data continues to improve and geopolitical tensions further escalate, the dollar could continue to rise and further weigh on copper prices, Huarong Rongda Futures analyst Li Kui says in a research note. Investors should pay attention to the FOMC minutes out later in the day to gauge the Federal Reserve's next move, he adds. The three-month LME copper contract is 0.6% lower at $8,988.00 a ton. ([e-mail])

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Iron Ore Rises Amid Signs of China Infrastructure Investment -- Market Talk

0218 GMT - Iron ore rises in the morning Asian session amid signs of increased infrastructure investment in China. Infrastructure spending in China rose from 1.0% on month seasonally adjusted in September to 1.7% in October--the biggest expansion since November 2023, CBA's Vivek Dhar says in a research report. The increase in spending reflects the government's recently announced debt-swap program, the analyst says. Infrastructure investment accounts for 25%-30% of China's steel demand, Dhar estimates. Iron ore is used to produce steel. The most-traded iron-ore contract on the Dalian Commodity Exchange is 0.9% higher at CNY787.5 a ton. ([e-mail])

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(END) Dow Jones Newswires

11-26-24 0852ET