Fossil-Fuel Demand Likely to Peak Before 2030 as Renewable Uptake Rises, IEA Says — Commodities Roundup

— Gold futures fall 0.8% at $1,972.60 a troy ounce.

— LME three-month copper futures are down 0.1% at $7,977 a metric ton.

— Wheat futures slip 0.7% to $5.83 a bushel.

TOP STORY:

Fossil-Fuel Demand Likely to Peak Before 2030 as Renewable Uptake Rises, IEA Says

Global demand for fossil fuels is likely to peak before the end of the decade, with mounting shocks to the global energy system caused by geopolitical uncertainty hastening the move to renewable energy, according to the International Energy Agency.

The IEA, a Paris-based group of some of the world’s biggest energy users, said demand for coal, oil and natural gas should all peak this decade, with increasing use of electric vehicles and renewable energy offsetting demand for carbon-based fuel sources.

The IEA said this is the first time it has forecast that demand for all three major fossil-fuel sources would peak before 2030, with much of the shift hastened by energy shocks such as the war in Ukraine and the current conflict in the Middle East. It cited the latter as an example of why energy systems need to be diversified and strengthened. By 2050, half of Middle Eastern seaborne oil flows are likely to be sent to Asia, up from 40% today, it said. “The global energy crisis was not a clean energy crisis, but it has focused attention on the importance of ensuring rapid, people-centered and orderly transitions.”

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OTHER STORIES:

Green Steel Is Coming. Europe Is Leading the Charge Thanks to New Carbon Taxes.

Steel is one the world’s most polluting industries, but Europe is leaping forward in making the metal green.

By 2030, the continent is expected to be home to nearly 50 green and low-carbon steel projects, according to the Leadership Group for Industry Transition’s compilation of projects. In comparison, the U.S. only has two such projects.

“There is certainly more investment in European green-steel capacity, driven by the fact carbon has a cost in Europe,” said Colin Richardson, steel lead at Argus Media, a commodities-pricing agency. “EU policy is essentially designed to mean that cost rises over time, incentivizing polluters to reduce the amount of emissions [allowances] they need to purchase.”

Some of Europe’s push toward green steel is driven by policies, including the European Union’s Carbon Border Adjustment Mechanism, which entered a trial phase on Oct. 1. CBAM eventually will require importers to pay the bloc’s carbon tax on select imports, including steel, if they are from countries where emissions aren’t similarly taxed. Free carbon allowances for EU steel producers are being phased out as the carbon border tax on imports is phased in.

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Anglo American Lowers Copper Output View Despite Rise in Production

Anglo American said its third-quarter copper output jumped, offsetting sharp declines in both diamonds and coal, but that it has slightly lowered its full-year production guidance for copper due to a fall in its output in Chile.

The mining company said Tuesday that it produced 42% more copper in the third quarter, at 209,000 metric tons, versus the preceding quarter’s result, driven by a progressive increase in volumes from the Quellaveco mine. Total production rose 4% on quarter.

The Peruvian mine–one of the world’s largest undeveloped copper deposits–remains on track to produced the targeted 310,000 to 350,000 tons in 2023, the FTSE 100-listed company said.

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Norsk Hydro’s Renewables Company Gets $332 Mln Investment From Macquarie

Norsk Hydro said Tuesday that Macquarie Asset Management will invest $332 million in its Hydro Rein renewable energy company in return for a 49.9% stake.

The investment means Hydro Rein will be fully funded for its current projects under construction and development costs for projects in the pipeline in the coming years, it said.

Through the agreement, Norsk Hydro and Macquarie will form a joint venture where Norsk Hydro will own the remaining 50.1% stake with all of Hydro Rein’s assets in Brazil, Denmark and Sweden, and all energy solutions projects, included in the venture.

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MARKET TALKS:

Palm Oil Falls, Tracking Soybean Oil Weakness

1009 GMT – Palm oil prices fell in Asian trading, tracking declines overnight in soybean oil prices on the Chicago Board of Trade. The two vegetable oils often trade in tandem, as they are used in similar products. RHB Retail Research maintains a bearish trading bias on crude palm oil futures, based on technical charts, analyst Joseph Chai says in a report. The overall bearish setup is seen, where the contract is trading below the 50-day and 200-day simple moving averages, the analyst adds. The Bursa Malaysia Derivatives contract for January delivery closed MYR85 lower at MYR3,668 a ton. ([email protected])

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Anglo American Platinum on Track to Meet Guidance Despite 3Q Output Slip

0943 GMT – Anglo American Platinum’s 3Q production of platinum group metals–PGMs–beat estimates, while refined production fell short, Citi analysts write in a research note. The South African precious metals company produced 2% less PGMs in 3Q due to lower production at the Mogalakwena and Amandelbult mines, but still beat Citi’s estimates by 6%, largely on third party purchases, the analysts say. Refined PGM fell 9% on year, 13% below Citi’s forecast. As a result, “we expect [metal-in-concentrate PGM] production to reach towards the upper end of the guidance but refined production is likely to be towards the lower end,” the say, adding it could lead to inventory buildup. Citi keeps a neutral rating and a ZAR800 price target on the stock. Shares are down 3.8% at ZAR625.17. ([email protected])

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Anglo American’s 3Q Output Shows Its Production Recovery Has Started

0915 GMT – Anglo American booked a decent set of production results for 3Q, with output recovering ahead of Citi’s expectations, Citi analysts write in a research note. The analysts highlight platinum group metals volumes rising 15% versus the low-point in 1Q, with iron ore output from South Africa increasing despite power and logistics issues, and steelmaking coal in Australia jumping 30% on-quarter. The recovery in coal output is expected to continue in 4Q, the analysts say. “We expect production results to be well received by the market,” they say. Citi keeps a buy rating and a 2,900-pence target price on the diversified miner’s stock. Shares are down 0.1% at 2,030.50 pence. ([email protected])

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Metals Rise as Dollar Weakens

0723 GMT – Metal prices inch higher as a weakening dollar supports commodities backed by the greenback. Three-month copper is up 0.3% to $8,013 a metric ton while aluminum is up 0.2% to $2,181 a ton. Gold, meanwhile, is flat at $1,988.40 a troy ounce. “Macro money flows are choppy and volatile ahead of important dollar drivers later this week,” Peak Trading Research says in a note. Peak says the number-one change in macro mood has been a falling dollar, with investors looking elsewhere amid a rising U.S. deficit and gridlock over a new speaker of the house. Peak says markets will now be looking to Thursday, with U.S. GDP data and the European Central Bank’s policy decision due. ([email protected])

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Oil Prices Lift With Investors Nervous Over Israel-Gaza

0722 GMT – Oil prices are rising, as worries linger over the current situation in Israel and Gaza. Brent crude is up 0.6% to $90.32 a barrel while WTI is 0.5% higher at $85.92 a barrel, but the former slipped more than 2.5% Monday, and the latter 2.9%, as Israel looked to hold off its ground invasion of the Palestinian territory. “Although Israeli forces continued airstrikes and raids on Gaza on Monday, the delay of the broader invasion was read positively by the market,” Deutsche Bank says in a note. Elsewhere, the IEA in its latest World Energy Outlook says it expects fossil-fuels demand to peak before the end of the decade, with increasing solar power helping to meet demand. ([email protected])

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Iron Ore Futures Rise Amid Recovering Sentiment

0254 GMT – Iron ore futures rise in the Asian morning session amid recovering sentiment spurred by signs of easing tensions in the Israel-Hamas conflict. Israel continues to hold off on its planned ground assault on Gaza amid diplomatic efforts to keep the conflict from spreading, Tapas Strickland, head of Market Economics at NAB, says in a commentary. U.S. and European governments are urging Israel to delay its ground invasion to allow more time to secure the release of hostages held by Hamas, according to U.S. and foreign officials. The most-traded January contract on the Dalian Commodity Exchange is up 1.3% at CNY844.0 a ton. ([email protected])

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Syrah Could Benefit From China Graphite-Export Controls

0225 GMT – Australia-listed Syrah Resources could benefit from China’s plans to restrict graphite exports. The company is the only natural graphite producer outside China of scale, though current production at its Balama graphite operation in Mozambique is well below a 350,000-metric-ton annual capacity due to industry headwinds, Macquarie analysts say in a note. “We believe SYR could benefit from increased ex-China demand” and the ramp-up of its downstream active anode material facility in the U.S., the analysts say. China dominates natural graphite production, accounting for roughly 73% of global supply, according to Macquarie. Syrah is down 4.7% in Sydney at A$0.715, pulling lower after a surge earlier in the session and a 42% jump Monday. ([email protected]; @RhiannonHoyle)

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