Edward Meir's Week in Review for AMU: Jan. 11, 2026

The big news in the metals space were reports out Monday that Glencore is in talks with Rio Tinto on a potential merger. The talks are preliminary at this stage. But if the deal does go through, it will be the largest mining merger on record.

Under UK takeover code rules, Rio has until Feb. 5 to either make an offer or back off, and so a decision will be made shortly. Glencore’s portfolio covers copper, cobalt, nickel, zinc, coal, ferroalloys, and lithium. Rio Tinto’s concentration is mainly in iron ore, although it does have a presence in copper and aluminum. It could theoretically benefit from Glencore’s trading mentality and marketing prowess

Making less of a splash, but significant nonetheless, Bloomberg reported that Mercuria Energy is lending $1.2 billion to help fund the buyout of Kazakh copper producer Kazakhmys. The financing will extend over eight years. In return, Mercuria will get 200,000 tons of copper cathodes per year for the first four years and a percentage of production thereafter.

Both these developments point to the fast-paced consolidation taking place in the metals industry. Companies are finding it more attractive to acquire or even finance suppliers as opposed to deploying capital into long-term mining projects.

Metals, energy, and equities

In the precious metal space, we saw a 10% week-over-week gain in silver. But gold and palladium were more restrained, up by about 4.5% each. Platinum ended the week only slightly higher. Nevertheless, there were significantly wide price ranges in all four complexes.

In energy, we thought that crude oil prices would fall in the wake of last weekend’s Venezuela news. Instead, they were up slightly last Monday. And they continued to work higher over the balance of the week. Widening Iranian protests added an additional layer of concern. Presumably, investors are unnerved by uncertain supply prospects from the two countries. Collectively, roughly 2.5-3 million barrels of crude exports are at stake. For the moment though, the market seems well supplied, with global inventories rising. For the week, Brent rose about 4%. WTI gained about 3%.

In the product complex, gasoline gained about $0.10 on the week. Diesel finished just about flat. Natural gas closed on Friday at $3.17/BCF, down by $1.55/BCF from the December 29 intraday high of $4.72/BCF. Prices have come under pressure on account of warmer weather forecasts for this week and next. As of Jan. 2, US inventories are +1% above their five-year average. European gas storage is running a little tighter though. It’s now at 58% full compared to the five-year seasonal average of 72% for this time of year.

Finally, US equity markets resumed their rally. All three indices posted fresh record highs. A sharp rotation into housing, retail, and defense names drove that strength. Traditional mega-cap leadership was spottier. The utilities sector finished as the lone losing sector (off by 1.6% on the week). It’s pressured by rising risk appetite and rotation away from defensive names. For the week, all three averages posted gains of between 1.6% and 2.3%.

Macro readings and other news from the past week

• The main release out of the US this past week was the December nonfarm payroll number. The figure came in at 50,000, well below the 73,000 expected by the Bloomberg consensus. Unemployment fell slightly, to 4.4% from 4.5%. The 50,000 increase was relatively insignificant, closing out an equally disappointing year in the labor market. In this regard, the economy added just 584,000 jobs over the course of 2025 — or about 49,000 a month. This is well below 2024’s average gain of 168,000 and marks the lowest average monthly number in more than two decades.
• The federal government swung from being a job generator to a job shedder. And that accounted for much of the drag last year. In fact, since reaching a peak last January, federal employment declined by 277,000 jobs, or more than 9%. The Wall Street Journal lists other contributing factors for mediocre job growth, including “uncertainty over President Trump’s tariff policies [that have] kept many companies from taking on new workers. [Other companies] decided they would first like to wait and see how artificial intelligence will allow them to do more with fewer people. High-profile layoff announcements [have also] spooked workers, who decided to stay with the jobs they have — leaving less room for new workers to get a foothold.”
• Health services drove employment gains in 2025. They added 713,000 jobs. The leisure and hospitality sector also grew, with a gain of 188,000 jobs. However, manufacturing lost jobs (down by about 68,000 on the year). In fact, manufacturing has now been shedding positions for eight straight months now.
• Separately, the ADP private-sector employment for December rose by 41,000, in line with estimates. But job openings fell to 7.146 million in November from 7.45 million in the prior month.
• The ISM manufacturing index checked in at 47.9 for December (consensus 48.4), down from 48.2 in November. This is the tenth straight month the index came in below 50 (meaning that activity remains in contraction mode). However, the ISM service index came in at 54.4 and was almost two points higher than the previous month. In fact, this was the best reading for services for all of 2025, with the employment index marking its first expansion since May 2025.
• The weekly MBA mortgage applications index dropped by 9.7% last week, adding to last week’s 5% decline.
• The US trade deficit shrank in October to its lowest level since 2009. Irish pharmaceutical imports being frontloaded into September accounted for much of the decline.
• The GDPNow tracker published by the Atlanta Fed suggests Q4 GDP growth of 5.1%, a pace not seen since late 2021.
• October factory orders came in at -1.3%, worse than last month’s 0.2% increase. However, there was a pickup in business spending reflected in the increase in new orders for nondefense capital goods (excluding aircraft).
• Demand for steel continues to show strength and is projected to remain resilient heading into 2026, executives at Commercial Metals reported in their Q1 2026 earnings call last week. “The business outlook for fiscal 2026 has been positive. Backlogs are at good levels, featuring solid volumes and attractive average pricing, which should support healthy shipment levels as we enter the spring construction season. The outlook for underlying demand is positive for our core Mid-Atlantic and Southeastern geographies, bolstered by the expected growth in data centers, manufacturing facilities, and stormwater management systems”.
• Australia’s largest steel maker, BlueScope Steel, rejected an $8.8-billion takeover by Steel Dynamics and conglomerate SGH, saying the offer “very significantly undervalued BlueScope.”
• With almost nine months of steel tariffs behind us, imports of key flat-rolled steel products — including carbon and alloy hot-rolled sheets, cold-rolled sheets, and hot-dipped sheets and strip — tumbled in 2025. Total imports of these products fell from 496,000 tons in January 2025 to just 183,000 tons by November 2025, according to the International Trade Administration.
• Domestic US steel production has stepped up to partly make up for the drop in imports. Overall, US domestic raw steel production from January to November stood at 82.4 million tons net tons, up from 79.74 million tons in 2024, according to data from the American Iron and Steel Institute (AISI).

This week’s US macro readings

It should be a fairly busy week on the US macro front. Nothing comes out Monday.

On Tuesday, we get consumer prices for December (expected at 0.3%, last 0.3%). The year-over-year reading is expected to come in at 2.7%, similar to last month. The core CPI is seen coming in at 0.3% (last 0.2%) with the core ticking up slightly (to 2.7%, last 2.6%). October new home sales come out Tuesday as well (expected at 709,000, last 800,000).

Wednesday brings us the delayed November US retail sales report (expected at 0.4%, last unchanged).The ex-auto number is expected to come in at 0.3% (last 0.4%). November producer prices come out Wednesday too, (expected at 0.3%, last 0.3%) as does December existing home sales (expected at 4.25 million, last 4.13 million).

Thursday brings us weekly jobless claims (expected at 220,000, last 208,000), the Empire State manufacturing survey for January (expected at 1, last -3.9), and the Philadelphia Fed manufacturing survey for January (expected at -4, last -10.2).

Finally, on Friday, we get December industrial production numbers (expected at 0.2%, last 0.2%).

We wish all our readers a pleasant week ahead.