A Futuristic Plan to Make Steel With Nuclear Fusion — Commodities Roundup

— Gold futures are down 0.5% at $1,911.10 a troy ounce.

— LME three-month copper futures are down 0.3% at $8,081.50 a metric ton.

— Wheat futures are down 0.3% to $5.88 a bushel.

TOP STORY:

A Futuristic Plan to Make Steel With Nuclear Fusion

America’s largest steel company is betting nuclear fusion can help it eliminate carbon emissions and power one of the world’s most energy-intensive manufacturing processes.

In a first-of-its-kind partnership between a major industrial company and a fusion startup, Nucor and Helion Energy plan to develop a 500-megawatt fusion power plant that would be placed at one of Nucor’s U.S. steel mills by 2030, the companies said.

That amount is enough electricity to power a few hundred thousand homes, about as much as a conventional power plant. Nucor is investing $35 million in Helion, which is backed by OpenAI Chief Executive Sam Altman.

The deal is a bet on fusion, a technology that can seem more science fiction than science and hasn’t yet produced electricity.

OTHER STORIES:

Samsung SDI to Invest $2 Billion in Second Stellantis Battery JV Plant

South Korean battery maker Samsung SDI plans to invest almost $2 billion in a second U.S.-based plant for the joint venture with carmaker Stellantis.

Samsung SDI said Wednesday that it will invest 2.656 trillion won ($1.98 billion) to secure a 51% stake in the new plant for StarPlus Energy, a JV with Stellantis.

The planned investment will be made over three years from April 2024 through November 2027, the South Korean company said in a regulatory filing.

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Japan Can Keep Importing Russian Oil Above Price Cap Through June 2024, US Says

Japan has said it has won authorization from the U.S. to continue importing Russian crude oil at a price above the $60-a-barrel cap observed by other U.S. allies.

The exception granted to Japan will last until June 28, 2024, after previously having been scheduled to expire on Sept. 30, 2023. It covers oil exported to Japan from the Sakhalin-2 project in Russia’s Far East, in which Japanese trading companies have invested.

A U.S. Treasury Department license dated Sept. 14 authorized the extension.

Japanese officials have said the country needs to import a small amount of Sakhalin-2 oil that is extracted alongside much larger quantities of natural gas. Russian liquefied natural gas, or LNG, accounts for nearly 10% of Japan’s total LNG imports under long-term contracts.

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UK’s Rosebank Oil Field Gets Green Light

An oil field northwest of Shetland, off the coast of Scotland, has been given the go-ahead to start pumping oil and gas, despite concerns from environmental groups about starting new fossil-fuel projects.

The Rosebank oil field was given the green light by the North Sea Transition Authority on Wednesday for owners Equinor and Ithaca Energy to start drilling, though this is not expected to start until the second quarter of 2025 with production expected between 2026 and 2027. London-listed Ithaca said the parties will jointly invest $3.8 billion in the field, with Equinor owning 80% of the project, and the remaining owned by Ithaca.

MARKET TALKS:

Surging Oil Prices a Concern For Central Banks

1030 GMT – Rising crude oil prices are likely to become of increasing concern for central banks, with inflation expected to rise on the back of tighter supply. Brent crude is up 0.9% to $93.30 a barrel with some analysts expecting $100 a barrel to be breached in the near-term. “The recent surge in oil prices will make things even more complicated as it will both worsen the economic slowdown but also push up inflation,” ING says in a note. For central banks, balancing growth and inflation will likely become even harder and could even threaten their credibility, ING says. “Central banks most concerned about their credibility and the longer-term impact on inflation expectations could end up continuing to hike interest rates,” it added. ([email protected])

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Palm Oil Gains for Third Straight Day, Tracking Soybean Oil Rise

1025 GMT – Palm oil prices closed higher for a third consecutive day, tracking soybean oil’s gains overnight on the Chicago Board of Trade. Soybean oil is likely consolidating in a key support zone, while crude oil prices have been in overall bullish trend, said Anilkumar Bagani, the commodity head of Sunvin Group. The Bursa Malaysia Derivatives benchmark contract for December delivery ended MYR81 higher at MYR3,773 a ton. ([email protected]; @ivy_jiahuihuang)

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Interest Rates Remaining High Likely to Keep Pressure on Gold

0855 GMT – Interest rates remaining higher for longer is likely to keep the pressure on gold prices, with uncertainty driving investors to other haven assets. Gold prices are currently sitting at $1,913 a troy ounce–a six-month low for the precious metal. This pressure is likely to continue, according to Nicky Shiels, Metals Strategist at MKS PAMP. “The narrative is collectively turning bearish for gold and with a risk-out mentality across markets,” Shiels says in a note. “It doesn’t matter, now, that rates will likely be lower next year than this year, as broader macro markets don’t like the uncertainty the ‘higher for longer’ narrative brings and that has implications for gold.” Shiels adds that higher oil prices were also a headwind, given $100-a-barrel oil could fuel inflation. ([email protected])

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Metals Waver on Lingering Demand Worries

0749 GMT – Metal prices are holding steady, as worries over demand and higher rates of inflation are keeping prices capped. Three-month copper is edging 0.1% higher at $8,112 a metric ton while aluminum is 0.3% lower at $2,234.50 a ton. Gold meanwhile is down 0.2% at $1,915.60 a troy ounce. “Tepid demand has led to a significant increase in exchange inventories,” ING analysts say in a note. “LME copper inventories increased to a fresh one-year high of 164,000 tons with inflows of around 110,000 tons since mid-July,” they say, noting that net longs for copper in London have fallen to a three-month low amid weak demand in China. ([email protected])

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Oil Rises on Shortage Concerns

0732 GMT – Crude oil prices are rising, as worries over supply, stemming from Saudi-led production cuts, provide support to energy markets. Brent crude is up 0.5% to $92.86 a barrel while WTI is 0.8% higher at $91.11 a barrel. “The likelihood of $100 a barrel has certainly increased following Saudi Arabia and Russia’s decision to extend cuts to oil production and exports earlier this month,” according to Vivek Dhar, analyst at Commonwealth Bank of Australia. Dhar says in a note that both OPEC and the IEA forecast of deficits should mean prices are well supported, with the only major caveat being worries over global economic growth. “We continue to believe though that global growth concerns will weigh more materially on global oil demand when labor markets loosen.” ([email protected])

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Lithium Prices Likely to Drift Lower, Says Jefferies

2310 GMT –With global and Chinese demand for electric vehicles stalling, and continued supply growth in the market, Jefferies expects lithium prices to drift lower into the year-end. In a note, analyst Mitch Ryan says a forecast for lithium carbonate to average US$38,397/ton this year is 22% lower than what he had projected before. That reflects deep cuts to price forecasts for 3Q and 4Q. The bank “would need to see a strong resurgent demand in auto sales for lithium prices to recover which may be a multi-year boom/bust trend,” Ryan adds. Jefferies drops its price target for Pilbara Minerals by 9% to A$5.00/share. Pilbara Minerals ended Tuesday at A$4.10. ([email protected])

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