MARKET MOVEMENTS:
-- Brent crude oil is up 0.2% at $74.28 a barrel.
-- European benchmark gas is up 1.8% at EUR33.83 a megawatt
hour.
-- Gold futures are 0.1% higher at $2,022.30 a troy ounce.
-- LME three-month copper futures are up 0.9 % at $8,317 a
metric ton.
-- Wheat futures are 1.2% higher at $6.43 a bushel.
TOP STORY:
The World's Biggest Gold Miner Bets Big on Copper
Newmont said it has agreed to acquire Australia's Newcrest
Mining for $17.5 billion, concluding weeks of talks over a
sweetened offer by the U.S. company that wants to complete the
largest-ever merger and acquisition deal in the gold-mining
industry.
Newmont's pursuit of Newcrest illustrates how gold producers are
seeking to make deals as the industry is struggling to make large
discoveries of the precious metal. It also extends a battle for
control among miners for commodities essential for making electric
vehicles and renewable-energy infrastructure, as Newcrest's gold
mines also produce significant amounts of copper.
The global mining sector is experiencing a wave of deal making
not seen for years, contrasting with a lull in overall global
M&A activity. While gold producers, including Newmont, had been
active seeking mines that could replace aging operations and lower
costs, the industry's hunger for deals has broadened out to
encompass many of the world's biggest mining companies, such as BHP
and Glencore.
OTHER STORIES:
$14 Billion Deal to Create Mega-Pipeline Company
Pipeline operator Oneok agreed Sunday to buy smaller rival
Magellan Midstream Partners for about $14 billion, a deal that
would form one of the biggest U.S. companies involved in
transporting and storing energy.
The deal's price tag, including $8.8 billion in equity and $5.1
billion in cash, amounted to a 22% premium over Magellan's common
units as of Friday. Oneok said it would assume Magellan's $5
billion in net debt. The deal was expected to close in the third
quarter, pending the approval of regulators and investors.
The proposed tie-up would be by far the biggest U.S. energy deal
announced so far this year. Some analysts have said the U.S.
oil-and-gas sector is ripe for major corporate transactions this
year, after energy prices surged last year and left companies with
a large windfall of cash. In Oneok's case, much of the cash portion
would be financed through a debt offering, it said.
--
RIP to the Lumber-Futures Contract That Jumped During
Covid-19
The lumber-futures contract that soared during the pandemic and
heralded the Covid-19 building boom, broken supply chains and
inflation will trade in its final session on Monday.
The longtime barometer of wood prices and building activity is
being retired and replaced with a new lumber-futures contract in an
effort by exchange operator CME Group to boost trading.
Lumber-futures trading dwindled as prices and volatility surged
and risk ballooned. By early last year they were so thinly traded
and prices so wild that on many days buying and selling was nearly
impossible. The price would race up or down at the open by the most
allowed by exchange rules and trading would be frozen for the
day.
--
Platinum Market to Move to Near Million-Ounce Deficit on Tight
Supply, Higher Demand
The platinum market is forecast to move to a nearly one million
ounce deficit in 2023, amid stronger demand from the investment
sector and constrained supply from South Africa.
The market is now expected to see a deficit of 983,000 ounces
this year, a shift of 1.8 million ounces from the 854,000 ounce
surplus seen in 2022, according to a new report from the World
Platinum Investment Council released on Monday.
Much of the move has come from demand strengthening for the
precious metal, WPIC said, with demand rising in the first quarter
of 2023 to 2 million ounces--up from 1.691 million ounces in the
fourth quarter of 2022--due to an upswing from the investment
sector as well as continued improved buying in the auto and
industrial sectors.
MARKET TALKS:
Grains Higher After Turkey Election Appears to Head to
Run-Off
0739 GMT - Grain markets are pushing higher after Turkey's main
candidates for president said they were both ready to accept a
run-off election later this month. Wheat futures in Chicago are up
1.1% to $6.42 a bushel while corn is up 0.4% to $5.89 a bushel. The
Black Sea Grain Initiative is due to expire Thursday and Turkey has
been one of the key brokers so far in ensuring food has passed out
of Ukraine. Negotiations around the corridor will be the main focus
this week in agricultural markets, according to Dave Whitcomb, head
of research at Peak Trading Research. "Wheat markets will follow
Grain Corridor headlines all week," he says in a note.
(yusuf.khan@wsj.com)
--
Oil Weakness Continues on Demand Worries
0735 GMT - Oil prices edge lower, adding to sharp losses this
month, as demand signals look weak while supplies have remained
strong. Brent crude oil declines 0.4% to $73.88 a barrel, while WTI
weakens 0.3% to $69.81 a barrel. Both have fallen over 8% so far
this month. "The sell-off in the market has been unrelenting over
recent weeks, with negative sentiment rising following concerns
over the macro environment and what it could eventually mean for
oil demand," ING says in a note. Oil supplies could also get a
boost in the coming days if a pipeline linking them to Turkey
restarts as suggested by Iraqi officials last week.
(william.horner@wsj.com)
--
Metals Are Mixed Ahead of Light Data Week
0722 GMT - Metal prices are mixed with concerns about the
macroeconomic outlook still weighing on investors, ahead of what is
a light data week for policy makers. Three-month copper is up 0.4%
to $8,276.50 a metric ton while aluminum is down 0.2% to $2,239.50
a ton. Gold meanwhile is up 0.1% to $2,021.70 a troy ounce. Last
week, copper fell more than 4%--the largest weekly fall since
February for the red metal. "China's uneven recovery has weighed on
sentiment in the base metals market," ANZ Research says in a note,
but adds that physical demand indicators are showing signs of
improvement. "Stockpiles held on exchange are down, while operating
rates of downstream processors in China have bounced sharply."
(yusuf.khan@wsj.com)
--
Chinese Lithium Producers' Outlook Likely Brightening
0525 GMT - Chinese lithium producers' earnings outlook is likely
brightening, as EV battery makers are likely to start restocking
their lithium supplies soon, Citi analysts say. Lithium sales and
prices have been under pressure in recent months as China's EV
sales slowed after the expiry of a government purchase subsidy
program. The EV industry is a major source of demand for lithium,
which is widely used in batteries. Citi notes that major battery
manufacturer CATL has recently noted sequential order improvement,
a sign that "an inflection point" may be emerging for EV battery
production rebound and the consequent lithium demand recovery, Citi
says. (yifan.wang@wsj.com)
Write to Yusuf Khan at yusuf.khan@wsj.com
(END) Dow Jones Newswires
May 15, 2023 05:43 ET (09:43 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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