Rio Tinto Full-Year Profit, Dividend Down on Weaker Commodity Prices -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil falls 0.9% to $82.04 a barrel.

--European benchmark gas rises 4.6% to EUR 50.85 a megawatt hour.

--Gold futures edged up 0.2% to $1,845 a troy ounce.

--Three-month copper fell 0.7% lower at $9,111 a metric ton.

--Wheat futures fall 1.2% to $7.54 a bushel.

TOP STORY:

Rio Tinto Full-Year Profit, Dividend Down on Weaker Commodity Prices

Rio Tinto PLC reported a 41% fall in net profit for 2022 and cut its payout to shareholders, reflecting a downswing in iron ore and copper prices from elevated levels a year earlier.

The world's second-biggest miner by market value on Wednesday said it made a net profit of $12.42 billion last year, down from $21.09 billion in 2021.

Underlying earnings totaled $13.28 billion, compared with $21.38 billion the year earlier, as prices for iron ore--which accounts for most of Rio Tinto's profits--and copper fell. Analysts had expected underlying earnings of roughly $13.39 billion, according to 15 estimates compiled by Visible Alpha.

OTHER STORIES:

Ukraine Grain Shipments Slow as Export Deal With Russia Nears End

Grain exports from Ukraine have slowed markedly in recent weeks, pushing up global prices, amid shipping delays and concerns about the looming expiration of a United Nations-backed deal to give food cargoes safe passage.

Russia's invasion of Ukraine last year had initially trapped shipments of wheat, sunflower oil and other agricultural products, sparking concerns of a global food crisis. Shipments then recovered later in the year to near prewar levels after Moscow and Kyiv agreed to a U.N.-backed pact to resume food exports via Black Sea ports.

Now, with tensions high ahead of the first anniversary of the invasion, some traders are worried Russia won't extend the grain deal, which is due to expire on March 19.

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Chesapeake to Sell Shale Oil Assets to British Chemical Maker Ineos for $1.4 Billion

Chesapeake Energy Corp. CHK -2.56%decrease; red down pointing triangle said Tuesday that it has sold oil assets to a division of U.K. chemical maker Ineos Group AG for $1.4 billion.

The deal involves oil assets in the northern part of the Eagle Ford shale basin in South Texas. The sale marks the first foray of Ineos, one of the world's largest chemical producers, into U.S. oil and gas production, Ineos said in a news release.

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Iberdrola 2022 Profit Rose, Driven By U.S., Brazil Growth

Iberdrola SA reported a rise in full-year profit with results in line with its own guidance as growth in the U.S. and Brazil offset a negative performance in Spain.

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Kenya Mild Arabica Coffee Price Rises at Auction

Kenya's mild arabica coffee price rose by 3.2% at an auction on Tuesday, the Nairobi Coffee Exchange said.

Coffee beans were sold at an average price of $221.25 for a 50-kilogram bag compared with $214.40 a bag at the prior auction on Feb.13, the NCE said.

MARKET TALKS:

Stronger Dollar Keeps Pressuring Gold

1216 GMT - A strong dollar is likely to keep a cap on gold prices, with the currency key for the precious metal, according to Commonwealth Bank of Australia. In a note, CBA said that traditionally gold moves inversely to U.S. treasuries, but last year the dollar better explained its moves with the currency inversely tracking the precious metal. CBA's economists expect the dollar will continue to climb as the U.S. economy continues to show strength, amid this week's PMI figures. "We think gold prices could dip lower in the short term, possibly falling below $1,800 a troy ounce if U.S. economic data continue to surprise on the upside," they say. Gold today is up 0.1% to $1,845 an ounce, having slipped from $1,945 an ounce on Jan. 31. ([e-mail])

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Europe's Carbon Permits Boosted by EU's Climate Ambition, Economic Outlook

1116 GMT - An improved economic outlook, the expectations of a recovery in industrial activity and the step-up of the European Union's climate ambitions have helped drive the cost of carbon permits to a new high, said Yan Qin, analyst at Refinitiv Carbon Research. The price of carbon allowances under the European Union's Emissions Trading System rose to EUR100 for the first time on Monday. Investors will continue to see European carbon allowance as an attractive asset to invest in for hedging exposure to climate-related risks, the analyst says, adding that the expansion of the Emissions Trading System to the maritime sector and the introduction of the Carbon Border Adjustment Mechanism could have prompted proxy hedging by the new entrants into the EU ETS. ([e-mail])

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China's Reopening Having an Uneven Impact on Commodities

1021 GMT - China's reopening has been mixed for commodities but oil remains the most primed to benefit, says JPMorgan. "China's economic recovery will drive its demand for all commodities higher, but we still believe oil is positioned to benefit the most," the bank says. Travel has been the most impacted by the reopening, prompting China's refineries to snap up large amounts of oil. But, while other commodities such as metals have rallied in anticipation of extra demand, there have been few signs of it. "Outside of oil we so far see few signs of a stronger-than-normal demand recovery," the bank says, in a note. Brent is last down 1.4% at $81.62 a barrel. ([e-mail])

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Palm Oil Prices Edge Higher Amid Signs of Rising Demand

1005 GMT - Crude palm oil prices edge higher in late trade amid signs of rising demand during the holiday season. Strong export data from cargo surveyors shows that demand for Malaysian palm oil remains high before the Eid holidays, says a Kuala Lumpur-based trader. Indonesia has placed temporary export curbs on palm oil, which could also help drive demand for the commodity in Malaysia, he adds. The Bursa Malaysia Derivatives contract for May delivery closed MYR7 higher at MYR4,148 a metric ton. ([e-mail])

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Oil Slides on Fed Interest Rate Fears

0835 GMT - Oil slips as investors fret that the Federal Reserve will keep interest rates higher for longer. Brent crude oil is down 0.9% at $82.05 a barrel while WTI declines 1.1% to $75.52. The U.S. labor market has remained tight and retail sales have shown healthy growth. Investors are concerned that economic resilience will drive the Fed to be more aggressive on interest rates. "Markets continue to come to terms with expectations of a more hawkish Fed, following a raft of economic data suggesting the Fed still has quite a bit of work to do," says ING in a note. Later Wednesday, the release of the Federal Open Market Committee meeting minutes should give investors a peak at the Fed thinking. ([e-mail])

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Base Metals Slip, Gold Rise Amid Central Bank Hawkishness

0831 GMT - Base metals are falling in early trading, as hawkishness from central banks continues to keep a cap on prices. Three-month copper is down 0.8% to $9,102 a metric ton while aluminum is 1.1% lower at $2,433 a ton. Gold meanwhile is up 0.4%. A hawkish sentiment had spread across markets, with the European Central Bank President Lagarde reiterating its stance to look to hike rates amid persistent inflation, Marex's Rushi Hong in a note says. Strong PMI readings are also likely to help spur the Fed to keep tightening, Hong adds, with the S&P Global PMI reading of 50.2 against 48.6 last month raising the expectation of more rate hikes. ([e-mail])

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(END) Dow Jones Newswires

February 22, 2023 07:40 ET (12:40 GMT)

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