Gold jumps to 10-month high as North Korea missile launch rattles markets – Gold prices rallied to their highest level in almost ten months on Tuesday, as investors piled into safe-haven assets after North Korea fired a missile that passed over northern Japan. Geopolitical risks can boost demand for safe-haven assets such as gold which is considered a good store of value during volatility in other markets. North Korea fired a missile early on Tuesday that flew over Japan and landed in waters off Hokkaido, in a sharp escalation of tensions on the Korean peninsula. The last time a projectile from the hermit state flew over Japan was 2009. The U.S., Japan and South Korea asked for a United Nations Security Council meeting to discuss the test, diplomats said. A meeting of the 15-member Security Council would be held later in the day, they said. Global markets were shaken earlier this month after President Donald Trump cautioned that North Korea would be met with “fire and fury” if it continued to make threats against the U.S. Pyongyang responded by saying it was considering a strike on Guam, a U.S. territory, although it later somewhat backed down. The escalating tensions prompted investors to dump assets seen as riskier, such as stocks and high yielding currencies, and flock to traditional safe-haven assets like the yen, Swiss franc and gold.
Oil rebounds, gasoline dips as markets continue to process Harvey impact – Oil prices rebounded from the prior session’s heavy losses on Tuesday, while gasoline futures eased back from their highest since July 2015, as energy markets continued to weigh the damage from Tropical Storm Harvey. Oil futures settled lower on Monday amid worries of reduced demand from refineries. Massive floods caused by Harvey forced several refineries to close along the U.S. Gulf Coast, while heavy rains were spreading into the greater Houston area, which has already been hit by catastrophic flooding. The storm, which made landfall on Friday, is poised to regain strength before crashing ashore again near the Texas-Louisiana border Wednesday. Texas is home to 5.6 million barrels of refining capacity per day, and Louisiana has 3.3 million barrels. Over 2 million barrels per day (bpd) of refining capacity were estimated to be offline as a result of the storm. Investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products. Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT) later on Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 2.1 million barrels, which would mark the ninth weekly decline in a row.
One Alumina Plant in Chongqing to Increase Output on Price Rises – One alumina producer in Chongqing decided to grow production in the face of strong price gains, Shanghai Metals Market learns. The producer has two different production lines, sourcing domestic and imported bauxite as raw materials, respectively. Its production line sourcing imported bauxite as raw material is unstable, as production condition at the line mainly depends on alumina price. Environmental Crackdowns Hurt Aluminum Consumption, SMm Survey With the latest round of rapid price gains, the producer planned to reopen its production line which feeds on imported bauxite, and its output is estimated to grow by 10,000 tonnes in September.
Lead-acid Battery Plants Cut Output on Shortages of Supplementary Materials, SMM Reports – Some small and medium lead-acid battery producers in Zhejiang and Shandong have cut output due to supply shortages of supplementary materials, Shanghai Metals Market learns. The latest round of environmental protection inspections hit Zhejiang and Shandong, and supply of supplementary materials, such as plastic shell and paper box, is falling short of demand, which negatively affected production at lead-acid battery producers in the two regions. However, the impact on lead consumption is expected to be small, SMM foresees, with the number less than 3 per cent.
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