MARKET NEWS

MARKET NEWS

06 November 2018
DJ Global Commodities Roundup: Market Talk
DJ Global Commodities Roundup: Market Talk

   The latest Market Talks covering Commodities. Published exclusively on Dow Jones Newswires throughout the day. 
  2159 ET - China's palm-oil imports are forecast to rise further this season, to 5.6 million metric tons from the past 
one's estimated 5.2 million, amid lower soybean-oil production, says the USDA
. It notes that since July, Chinese 
officials have indicated plans to add palm-oil imports from both Indonesia and Malaysia. The market is closed today for 
a holiday in Malaysia. (lucy.craymer@wsj.com) 
  2152 ET - Tokyo rubber prices are lower amid ongoing weakness in commodities generally as demand questions persist. 
Tocom April ribbed smoked rubber sheets are down 1% at Y159.2/kilogram and May technically specified rubber sheets is 
essentially flat at Y146. (lucy.craymer@wsj.com) 
  2127 ET - London spot-gold prices are slightly lower in Asia as quiet trading continues amid scant movement in the 
dollar as investors await US election results in 24 hours. For Andy Farida at Metal Bulletin, the metal's short-term 
outlook remains "semi-bullish" with a potential target of $1,245-$1,265/troy ounce. But the potential 2019 interest-rate
 picture makes things hazy for next year. Spot gold is down 0.1% at $1,230.11. (biman.mukherji@wsj.com) 
  1919 ET - Regarding Australia's overhaul of its petroleum-resource rent tax, Credit Suisse sees 2 big risks hanging 
over energy companies amid the government's raft of proposed changes that it hopes will raise A$6 billion ($4.3 billion)
 in additional tax revenue the next decade. The investment bank contends a 12-to-18-month review of gas-transfer pricing
 could slug companies with a big bill if it leads to retrospective action. And then there's Australia due to have an 
election before the tax changes take effect next year, "so there remains risk that a new government could take a tougher
 approach on PRRT and suggest further changes," adds Credit Suisse. (david.winning@wsj.com; @dwinningWSJ) 
  1915 ET - Concerns about recent labor issues and production hiccups at Iluka's Sierra Rutile operations appear 
well-priced into the stock, says Morgan Stanley with shares trading at just 4 times projected 2019 enterprise 
value/Ebitda. The multiple's average the past 3 years has been 8.7. Shares have fallen by 1/3 since May, but the 
investment bank expects a comeback for the mineral-sands miner thanks to its strong balance sheet and growth plans. 
Morgan Stanley does trim its stock target 2.7% trim to A$11.35. Iluka is up 0.5% this morning at A$8.31. 
(rhiannon.hoyle@wsj.com; @RhiannonHoyle) 
  1903 ET -- Asian stocks have started higher following Monday's broad regional pullback and start-of-week gains in the 
U.S. But action is liable to be muted volume-wise today as elections in America occur Tuesday and at least one chamber 
of Congress potentially changing hands from Republicans to Democrats. Indexes in Japan, South Korea, Australia and New 
Zealand are all up about 0.5%--mirroring the U.S. rises. Markets in Singapore and Malaysia are closed today for a 
holiday. (kevin.kingsbury@wsj.com; @kevinkingsbury) 
  1847 ET - Newcrest Mining spent much of its recent analyst tour and investor day talking about its progress on 
technology. But Macquarie fears declining grades and uncertainty on growth options will overshadow any potential 
innovation gains. Though the investment bank agrees "with comments about the need for more technology and innovation in 
the industry, updates from asset general managers suggest to us that for Newcrest it is something of a necessity."  
(rhiannon.hoyle@wsj.com; @RhiannonHoyle) 
  1841 ET - Bottoming a week ago at half the level of January's 7-year high, Morgan Stanley sees the rebound in shares 
of Aussie miner Galaxy Resources continuing. The investment bank turns bullish on what it calls a well-managed company 
with good growth potential, highlighting the Sal de Vida lithium project. Its stock target edges up 2% to A$2.90 amid 
the upgrade to overweight. Shares are 2.7% higher this morning at A$2.64, putting the past week's bounce at 27%. 
(rhiannon.hoyle@wsj.com; @RhiannonHoyle) 
  1837 ET - The slide in oil prices just ahead of the New York settlement hasn't seen any reversal in early Asian 
trading. Futures rallied during European trading, but it started backtracking at lunch time on the East Coast even as 
the dollar eased and equities rallied. A fresh leg lower started minutes before settlement for oil and was extended 
afterwards. That's left December WTI down 0.4% at $62.84/barrel and January Brent off 0.6% at $72.71. Both are down some
 2% from Monday's high. (kevin.kingsbury@wsj.com; @kevinkingsbury) 
  1826 ET - Among Aussie energy stocks, Macquarie says Woodside seems hardest hit by the country's proposed overhaul of 
its petroleum-resource rent tax, Macquarie says. A big change would be to the tax shield that producers can build before
 they must pay levies. Essentially, the shield can't be built for as long, nor compound as much each year. Macquarie 
estimates the change could lop 15% off the value of Woodside's Scarborough gas project. "For Browse, we believe the 
impact could be even larger as the compounding effect of the tax shield will be diminished as the project is further 
away from first production." (david.winning@wsj.com; @dwinningWSJ) 
  1810 ET [Dow Jones] -- With buybacks now under way for 80% of Australia's top mining companies, Shaw wonders: Is 
mining coming to the rescue of the S&P/ASX 200? "It hasn't felt like it for the past 3 months, but the mining index 
looks set to carry the S&P/ASX 200 index into year-end," says the broker. Shaw says share buybacks are undoubtedly 
favorable, and that iron-ore prices are still well above consensus estimates despite giving up some recent gains. The 
ASX metals and mining index, up 3% so far in November, has nearly recouped all its October losses. That has helped 
steady the benchmark S&P/ASX 200, which is flat on the start of the month, after shedding more than 6% in October. 
(rhiannon.hoyle@wsj.com; @RhiannonHoyle) 
  1813 ET -- The latest snapshot of consumer confidence in Australia is bolstering a view that recent volatility was due
 to a ballot in former PM Turnbull's electorate rather than a more deep-seated malaise. The ANZ-Roy Morgan Australian 
Consumer Confidence gauge improved 1.9% in the week ending Nov. 4, meaning it has regained almost 2/3 of the drop in the
 week of the Wentworth electorate vote. "The economic backdrop, which has seen the unemployment rate drop to 5%, seems 
to be supportive enough to offset negative influences such as the weakness in housing," says David Plank, ANZ's head of 
Australian economics. (david.winning@wsj.com; @dwinningWSJ) 
  (END) Dow Jones Newswires
  11-05-18 2159ET
Copyright (c) 2018 Dow Jones & Company, Inc.

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