The Brazilian mining giant Vale $VALE3.SA, renowned as one of the leading global suppliers of iron ore, closed 2024 with record-breaking production results. During this year, Vale produced approximately 328 million tonnes of iron ore, marking a 2% increase compared to the previous year. This growth was achieved despite a reduction in output during the fourth quarter, a period when Vale prioritized more profitable products.
Production Plans for 2025
With these accomplishments, Vale anticipates producing between 325 and 335 million tonnes of iron ore in 2025. This expectation reflects the company's commitment to sustaining growth and adaptability to market conditions.
Australian company Whitehaven Coal $WHC.AX has reported a substantial increase in its coal output. In the July-September period, production soared by 92.7% compared to the same quarter last year. This significant growth was driven by strong performance at its mines in New South Wales and Queensland.
Optimism Regarding Metallurgical Coal Prices
Whitehaven Coal remains optimistic about its future revenue streams. The company anticipates that supply constraints and increasing demand from India will lead to higher metallurgical coal prices, positively impacting its long-term financial outlook.
Lead and zinc, closely related metals in terms of geology and extraction, have recently shown stark contrasts in their market performance. This disparity stems from varying dynamics in supply, demand, and global inventory levels. Below, we analyze the key trends shaping each market and their interrelation, while also highlighting potential future trajectories.
Zinc Prices Surge Amidst Supply Shortages
In October 2023, zinc prices on the London Metal Exchange skyrocketed to a 20-month high, reaching $3,284 per tonne for three-month contracts. The market's bullish momentum has been fueled by a severe shortage of raw materials, spurring price premiums in key regional markets.
The CEO of Petrobras $PETR4.SA, a state-owned Brazilian oil company, announced plans to adjust diesel fuel prices following discussions with President Luiz Inácio Lula da Silva. The revision aligns with the company’s pricing strategies and is expected to be rolled out in the coming weeks.
Why the Adjustment is Necessary
Petrobras’ pricing adjustments are heavily influenced by global oil price trends and internal economic factors. The main reasons for the upcoming changes include:
- Volatility in the international crude oil market, significantly impacting production costs in Brazil.
Gold prices remained stable as investors awaited the outcome of the U.S. Federal Reserve's (Fed) meeting. The global financial market anticipates any signals on how President Donald Trump's policies have influenced the central bank's decisions on monetary policy.
Recent Trends in the Gold Market
By 02:30 GMT on Tuesday, spot gold prices were largely unchanged, staying at $2,738.90 per ounce. On Monday, gold experienced a sharp decline of over 1%, triggered by a sell-off across the broader market following the release of an affordable artificial intelligence (AI) model developed in China.
Oil prices fell by more than 1% in early trading on Monday, following a statement by former U.S. President Donald Trump urging OPEC to lower crude prices. Coupled with significant measures to boost oil and gas production in the United States during the first week of his presidency, this has introduced new dynamics to the global energy market. These developments highlight key factors influencing the industry's balance and their potential economic implications.
Key Drivers Behind Oil Price Decline
Several critical factors contributed to the downward shift in oil prices at the start of the week. Among these, Trump’s direct comments towards OPEC and the increase in U.S. oil production had the most noticeable impact.
1. Direct Pressure on OPEC. The call by Trump for reducing oil prices put notable pressure on OPEC members. Such statements fuel uncertainties about the group’s upcoming strategies and its ability to control prices effectively.
$GOLDUSD prices have been showing positive dynamics recently, supported by the weakening of the US dollar. On Monday, the spot price of the precious metal rose by 0.29%, reaching $2,709.26 per ounce. This growth reflects expectations tied to the potential return of Donald Trump to the White House and his upcoming inaugural address, which adds to the economic uncertainty. This article will examine the key factors influencing gold prices, as well as the impact of political and economic events on the markets.
Weak Dollar as a Factor Driving Gold Prices
One of the main factors supporting the recent rise in gold prices is the weakening of the US dollar. A weak dollar makes gold more accessible to investors using other currencies, thus increasing the demand for the precious metal.
Gold is traditionally used as a hedge against inflation and crisis situations, as well as a safe-haven asset in periods of economic instability. When the dollar weakens, gold attracts attention as a safer alternative to protect capital from inflationary risks.
The oil industry has once again captured the spotlight, as oil prices have surged to their highest levels since 2022. This significant development has not gone unnoticed by investors, who are closely monitoring major sector players such as $XOM , $COP, and $CVX. Under current market conditions, these companies are drawing increasing attention, even though they have yet to reach new all-time highs.
Analyzing Current Trends
This month, oil prices surpassed their May-June 2024 highs, signaling continued growth. Last week marked a pivotal moment: the 50-day moving average crossed above the 200-day moving average, a classic indicator of bullish momentum. This trend is a key signal that cannot be overlooked, as it often heralds further growth in stock value for industry leaders.
Financial Indicators of Oil and Gas Companies
Today, analysts from Goldman Sachs stated that there is a 50% chance of a 10% tariff being imposed on copper in the United States by the end of the first quarter. This statement, made in a client note and published by Yahoo, has generated significant interest among market participants.
Tariff Probability Assessment
Goldman Sachs analysts highlighted that they also estimate a 50% probability of a 10% tariff on copper by the end of the year. This assumption is based on current economic and political conditions. Imposing tariffs on strategically important metals like copper could significantly impact numerous industries, including construction and electronics.
Meanwhile, three-month copper futures on the London Metal Exchange fell by 0.3%, reaching $9,167 per metric ton at 0706 GMT. This decline followed a monthly high reached last week. The market remains volatile, and additional tariffs could intensify this instability.
US President-elect Donald Trump intends to appoint Chris Wright, the head of the Liberty Energy oil company, as energy minister. The Republican called him one of the pioneers in the "American shale revolution."
Wright is the founder of Liberty Energy, which serves energy companies. He denies the existence of a "climate crisis." The head of the company opposes such concepts as "clean energy" and "dirty energy". In his opinion, all energy sources have both positive and negative effects on the world.
Most likely, under Trump, the United States will increase production, including at the expense of places where it was previously believed that this would harm the environment.
The shale revolution will also continue.