BHP Group, Vale Agree on Compensation Payment in U.K. for Brazil Dam Failure — Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is up 0.8% to $86.07 a barrel

--European benchmark gas is up 1.1% at EUR31.45 a megawatt-hour

--Gold futures are down 0.6% to $2,406.70 a troy ounce

--LME three-month copper futures are up 0.4% to $9,817.50 a metric ton

TOP STORY:

BHP Group, Vale Agree on Compensation Payment in U.K. for Brazil Dam Failure

BHP Group said Friday that it agreed on a compensation payment along with Vale in the U.K. over the failure of Brazil's Samarco dam in 2015.

Under the agreement both companies each agreed to pay 50% of any potential amounts due to the claimants in the English, the Netherlands and other proceedings in Brazil, without admitting liability.

In April, BHP's Brazilian subsidiary, mining peer Vale and the companies' joint venture Samarco proposed a nonbinding indicative settlement worth around $25.7 billion relating to the dam failure.

OTHER STORIES:

Gold Prices Hold Above $2,400 an Ounce After U.S. Inflation-Driven Rally

Gold prices pared some gains after a rally on softer-than-expected U.S. inflation data, but the precious metal looks set to keep its fresh highs in the short-term.

August gold futures on the New York Mercantile Exchange recently fell 0.6% to $2,407.4 a troy ounce after touching as high as $2,430.4 an ounce on Thursday, but remain firmly above the $2,400 mark for the first time since late May. The all-time record was $2,477, set on May 20, before a sharp sell-off followed.

--

Aker Solutions Lifts Guidance After Earnings Beat

Aker Solutions posted a second-quarter profit rise, beating analysts' expectations, and lifted its full-year revenue guidance amid increased market activity in the sector.

The Norwegian energy-industry service provider reported Friday a second-quarter net profit attributable to shareholders of 535 million Norwegian kroner ($49.9 million), compared with NOK528 million a year earlier. Revenue fell 10% to NOK12.83 billion.

--

Why Can't Houston Keep the Power On?

Across this city's famous suburban sprawl, drivers for the fourth straight day are inching through intersections without working traffic signals.

With a brutal heat wave settling over the region, residents are piling into "cooling centers" to charge their phones and soak up air conditioning they no longer have at home.

--

FMC to Sell Non-Crop Business Global Specialty Solutions to Envu for $350M

Agricultural sciences company FMC agreed to sell Global Specialty Solutions to Environmental Science US, known as Envu, for $350 million.

GSS serves non-crop markets such as golf courses, sports stadiums, lawn care and pest control. In November, FMC said it would review non-core assets and potentially sell GSS.

MARKET TALKS:

Palm Oil Falls Amid Concerns of Rising Stockpiles -- Market Talk

1023 GMT - Palm oil closed lower as markets weighed concerns about increasing supply. Stockpiles in Malaysia climbed to a four-month high in June, which has been putting pressure on the price, AmInvestment Bank writes in a note. Markets will be watching production in Indonesia and Malaysia, which hasn't been as high as initially expected, and that will likely keep prices between MYR3,800 and MYR4,200 unless output increases in July and August, it adds. The Bursa Malaysia Derivatives contract for September delivery fell MYR21 to MYR3,914 a ton. (kimberley.kao@wsj.com)

--

Gold Futures Slip After Thursday Rally But Hold Above $2,400 Mark -- Market Talk

0812 GMT - Gold futures fall 0.5% to $2,410.2 a troy ounce, giving back some gains from Thursday's rally but holding above the $2,400 mark on softer-than-expected U.S. inflation data. Thursday's U.S. Consumer Price Index print of 3% beat analyst expectations of 3.1%, signaling further progress on inflation and raising the probability of an interest-rate cut in September, says Nicky Shiels, head of research and metals strategy at MKS PAMP, in a note. Non-interest bearing bullion typically has an inverse relationship with interest rates, with higher rates damping investor enthusiasm for gold. Federal Reserve Chair Jerome Powell is pivoting and with inflation data now supporting interest-rate cut bets, U.S. jobs are now the market's new big focus, Shiels says. Elsewhere, copper rises 0.1% to $9.790 a ton. (joseph.hoppe@wsj.com)

--

Oil Gains After U.S. Inflation Data Raises Hopes of September Rate Cut -- Market Talk

0750 GMT - Oil prices are rising after the latest U.S. CPI reading showed inflation cooled more than expected last month, fueling hopes for a September rate cut and providing support to the commodities complex. Brent crude is up 0.8% to $86.08 a barrel, while WTI trades 0.9% higher at $83.39 a barrel. "Growing expectations of a rate cut from the Fed along with a constructive oil balance suggest that prices will remain well supported," ING analysts say in a note. "We continue to hold onto our view that ICE Brent will average $88 a barrel in the current quarter." However, price gains are capped by concerns over the demand outlook in top consumer China, after crude imports reportedly fell in June and the IEA said oil demand contracted in April and May. (giulia.petroni@wsj.com)

--

Iron Ore Rises; Markets Anticipate Reforms at China's Third Plenum -- Market Talk

0238 GMT - Iron ore rises in early Asian trade. Iron ore has been rallying on improved broader sentiment for Chinese assets as markets are anticipating economic reforms at China's upcoming Third Plenum, analysts at StoneX Market Intelligence writes in a note. However, volatility in the iron ore market is still expected due to the pessimism over the construction sector, and the government is expected to focus on property policies to revive home sales, they add. The most-traded iron-ore contract on the Dalian Commodity Exchange is 0.4% higher at CNY827.5 a ton. (kimberley.kao@wsj.com)

--

Copper Edges Lower Amid Rising Inventories -- Market Talk

0219 GMT - Copper prices edge lower in early Asian trade as rising inventories continue to weigh on sentiment. Stockpiles of the red metal in London Metal Exchange warehouses rose 5.8% on Thursday to the highest level since October 2021, ANZ Research analysts say in a research note. However, softer-than-expected U.S. inflation data has buoyed rate cut hopes, they say. Any further strength in China's imports of commodities could support markets, the analysts add.The benchmark three-month LME contract is down 0.2% at $9,770.00 a ton. (sherry.qin@wsj.com)

Write to Barcelona Editors at barcelonaeditors@dowjones.com

(END) Dow Jones Newswires

July 12, 2024 08:28 ET (12:28 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.