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Green Transition Set to Face Critical Minerals Shortfall, IEA Says — Commodities Roundup

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MARKET MOVEMENTS:

–Brent crude oil is down 0.1% to $83.15 a barrel.

–European benchmark gas is up 0.8% to EUR30.5 a megawatt-hour.

–Gold futures are up 0.3% to $2,393.4 a troy ounce.

–LME three-month copper futures are up 1.1% at $10,485 a metric ton.

TOP STORY:

Green Transition Set to Face Critical Minerals Shortfall, IEA Says

Electric vehicle, wind turbine and solar panel manufacturers face a shortfall in critical metals and minerals unless more investment is made in projects such as new mines and recycling, according to a report from the International Energy Agency.

While market pressures eased in 2023-leading to a slump in prices for metals including copper, lithium, cobalt and nickel-long-term investment is vital to avoid projected demand outpacing supply, according to the analysis from the IEA. The minerals are used in a number of technologies essential to the green transition.

“Secure and sustainable access to critical minerals is essential for smooth and affordable clean energy transitions,” said IEA Executive Director Fatih Birol. “The world’s appetite for technologies such as solar panels, electric cars and batteries is growing fast-but we cannot satisfy it without reliable and expanding supplies of critical minerals.”

OTHER STORIES:

Engie Backs Outlook Despite Dip in Earnings

Engie backed its guidance after its renewables and flexible generation segments helped buoy first-quarter earnings.

The French multinational power utility on Friday posted earnings before interest, taxes, depreciation and amortization of 5.4 billion euro ($5.87 billion) in the first three months of the year, 0.7% lower on an organic basis than in the same period last year.

Investors Are Striking Gold All Over

Investors are striking gold in most every market.

The Dow Jones Industrial Average crossed the 40000 mark for the first time Thursday amid an almost picture-perfect investing environment featuring resilient corporate profits, low unemployment and easing inflation.

Most everything is going up-established Dow stocks, faster-growing tech shares, bitcoin and other cryptocurrencies, and even gold and other precious metals. Risk-averse investors have a bounty of options, too, including certificates of deposit offering yields of about 5% and rising junk bonds and other fixed-income investments, adding to the glow.

MARKET TALKS:

Palm Oil Ends Higher, Tracking Soybean Oil’s Strength — Market Talk

1017 GMT – Palm oil prices ended higher, tracking soybean oil’s overnight gains. Despite the rise this session, palm oil has been volatile this week after stockpiles surged in April, analysts say. Meanwhile, production for May 1-15 surged 56.35% on month, according to data from the Malaysian Southern Peninsular Palm Oil Millers Association. TA Securities analyst Angeline Chin says the movement of palm oil prices in 2Q will be influenced by both palm oil production in key producing countries and weather patterns in the primary soybean-growing regions of Brazil and Argentina. The Bursa Malaysia Derivatives contract for August delivery ends MYR86 higher at MYR3,890 a ton. (sherry.qin@wsj.com)

Oil Prices Set to End Week Higher, Snapping Brent’s Losing Streak — Market Talk

1002 GMT – Oil prices are broadly flat, but look set to end the week with small gains, the first for Brent in three weeks. Brent crude and WTI are both broadly flat on $83.30 a barrel and $79.21 a barrel, respectively. This week’s gains have been driven by a softening in the dollar, but potentially the main price driver in the medium term rests on demand forecasts, says Ricardo Evangelista, senior analyst at ActivTrades. U.S. oil inventories came up lower than predicted, raising hopes of greater crude demand, but the upside was capped by Chinese economic uncertainty, Evangelista says in a note. “Against this background, the price of Brent looks set to remain firmly supported above the $80 per barrel level and face resistance at $84,” Evangelista says. (joseph.hoppe@wsj.com)

Gold Futures Rise as Markets Digest U.S. Economic Data — Market Talk

0822 GMT – Gold futures rise 0.1% to $2,387.8 a troy ounce, holding ground after U.S. inflation data for April came in a touch lower than expected and retail sales growth was notably weaker than anticipated. The precious metal remained strong after the data releases lowered U.S. Treasury yields and the dollar, and increased expectations for earlier Federal Reserve rate cuts, Commonwealth Bank of Australia says in a note. Markets are now pricing in around an 85% chance of a Fed interest rate cut by September, compared to around 75% prior to the release of the U.S. Consumer Price Index data on Wednesday, CBA says. Gold prices are typically inversely related to interest rates; higher rates for longer diminish the appeal of non-interest bearing bullion. (joseph.hoppe@wsj.com)

Oil Prices Rise on Positive Inflation Data, Stockpile Falls — Market Talk

0757 GMT – Oil prices rise, with Brent set to finish the week up on positive economic data and a fall in inventories. Brent crude is up 0.4% at $83.61 a barrel, while WTI rises 0.3% to $79.44 a barrel. Positive sentiment toward oil is being supported by the second consecutive weekly fall in U.S. crude oil stockpiles, while signs of slowing inflation added to the bullish mood, ANZ Research analysts say in a note. The market is awaiting OPEC’s next move, with three possible scenarios for the June 1 meeting–extend, unwind or completely remove the voluntary cuts of 2.2 million barrels a day, ANZ says. An extension is the most likely outcome–ANZ models removing the cuts could lead prices to fall as low as $75 a barrel, while an extension could produce deficits and push prices as high as $100 a barrel. (joseph.hoppe@wsj.com)

Iron Ore Rises Amid Optimism Over China’s Efforts to Tackle Property Crisis — Market Talk

0241 GMT – Iron ore rises in early Asian trading amid renewed optimism over China’s efforts to tackle the property crisis, ANZ Research analysts say in a research note. Investor sentiment is boosted by a media report that authorities are considering letting local governments buy unsold homes from distressed developers, the analysts say. Investors will pay attention to the key briefing housing and financial regulators hold later in the day about policies to ensure housing delivery. The most-traded iron ore contract on the Dalian Commodity Exchange is 1.4% higher at CNY884.5 a ton. (sherry.qin@wsj.com)

Copper Edges Lower in Likely Technical Correction — Market Talk

0106 GMT – Copper edges lower in early Asian trade in a likely technical correction. Prices tested a new high overnight, supported by news of more Chinese local government support for the slumping property market, Daria Efanova, Head of Research at Sucden Financial writes in a commentary. Broader sentiment remains supported by the prospect of Fed rate cuts after the U.S. CPI fell more than expected, the ANZ Research team writes in a note. The three-month LME copper contract is 0.3% lower at $10,392.00 a ton. (kimberley.kao@wsj.com)

Write to Barcelona Editors at barcelonaeditors@dowjones.com

(END) Dow Jones Newswires

05-17-24 0812ET

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