This Morning in Metals: Oil prices fall by nearly 3% Monday

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This morning in metals news: Oil price fall nearly 3% on Monday. Chinese steel exports rise in July. Copper and cobalt production to double at Tenke Fungurume mine in the DCR with a $2.5 billion investment from a Chinese firm.

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Oil prices fall by nearly 3% Monday

Oil prices fell by nearly 3% with WTI crude dropping to its lowest since May on Monday. This continues the prior week’s losses amid renewed coronavirus restrictions in China and a stronger US dollar. China, which is the second-largest oil consumer, recently imposed travel and transportation restrictions in an effort to combat rising infection rates due to the Delta variant, raising concerns about a decline in global oil demand.

Meanwhile, Saudi Aramco reported a 288% jump in Q2 profits. Compared to $6.6 billion for the same period of 2020, this totals a $25.5 billion net income. Such a rebound reflects a continuing global recovery as vaccine access rises and restrictions have been largely eased.

Chinese steel exports rise in July

According to customs data, finished steel exports from China rose by 36% in July. As China aims to cap steel production and prices domestically, such export data could suggest an uncertainty in future Chinese demand or lead to additional taxes on such exports.

China announced last month, beginning Aug. 1, increased export tariffs would be levied on pig iron and ferrochrome alongside the removal of export tax rebates for 23 steel products, including some cold-rolled coils. China is currently the world’s largest steel producer, and such changes have been part of a larger campaign to reduce carbon emissions.

Copper and cobalt production to double at Tenke Fungurume mine

With a $2.51 billion investment from China Molybdenum, copper and cobalt production is expected to double at the Tenke Fungurume mine in the Democratic Republic of Congo. Although the project is not anticipated to be completed until 2023, output is expected to rise by 200,000 tons of copper and 17,000 tons of cobalt.

Year to date, copper prices rose by 23% on the LME, with a 3.9% month-over-month increase from July to August.

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