The Federal government of Nigeria has disclosed that it is expecting an annual output of one million metric tonnes of steel from its $1.5 billion steel plant in Kaduna.

This was disclosed by the Minister of Finance, Budget and National Planning, Mrs Zainab Shamsuna Ahmed while inspecting the steel plant facility at the African Natural Resouces and Mines Limited in Kaduna.

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According to The Punch, Mrs Zainab Ahmed during the inspection of the facility said that the $1.5 billion steel plant which is now nearing completion, would produce one million metric tonnes of steel annually. She emphasized that the facility is critical to the nation as it is tactical to the looming steel revolution in Nigeria.

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What you should know

The $1.5 billion steel plant built by African Resources and Mines Limited, a subsidiary of African Industries Group (AIG) is at an advanced stage of completion.

The plant which is billed to commence the first phase of production in the mining of Iron ore, and production of Direct Reduced Iron in a matter of months is expected to produce one million metric tonnes of steel annually.

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Why this matters

This development is expected to resuscitate Nigeria’s steel industry which has been lifeless for a while, and help put an end to the importation of steel in Nigeria. This will also reduce the pressure on the Nation’s foreign reserve, and bolster the foreign reserve of the country.

It is expected to boost domestic steel production and attract foreign investors’ participation in the industry, especially auto producers around the world.

However, the facility will create employment opportunities for Nigerians both directly and directly and indirectly.

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What they are saying

Alok Gupta, the Group Managing Director of AIG, said the firm would be mining iron ore to produce direct reduced iron, which would enable the company to produce higher-grade steel more efficiently.

He explained that the investment by the company in the Nation’s steel industry will dramatically increase domestic production, and this will have multiple effects on the Nigerian economy.

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The Minister of Finance emphasized that the recent investment in the steel industry by AIG which is about to yield gains both for the company and the economy will attract the auto industries of the world to come into Nigeria and produce cars in Nigeria for Nigerians, and other countries in West Africa.

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Bottomline

The investment of AIG in the steel industry is expected to drive the country towards steel independence, and pave the way for Nigeria’s steel revolution and the development of the automobile industry in the nation.

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Gold remained under pressure at the pre-opening of London’s trading session on Monday. The pressure seen on the precious metal is largely attributed to the U.S dollar rebounding and expectations growing for the U.S. Congress passage of the latest stimulus deal ahead of the Nov. 3 presidential election.

At the time of writing, gold futures prices traded around 1,905/ounce remaining above the $1,900/ounce. The U.S dollar Index was steady in Asia’s trading, up 0.8%.

U.S speaker, Nancy Pelosi, has set a Tuesday deadline for its lawmakers in passing the deal and is hopeful that such a deadline could be met. President Trump also renewed an offer to increase the stimulus deal package.

READ: Gold prices up as U.S dollar value drops

Quick Fact: Global Investors buy the hard safe haven asset mainly to hedge against inflation and for wealth preservation.

• Humans are emotionally and physically drawn to gold.
• Gold traders, global investors also consider buying gold as a way of diversifying risk, via using futures contracts and derivatives

In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on major prevailing fundamentals affecting the precious metal’s prices.

READ: Gold prices shoot up, U.S dollar drops

“Gold prices were pushed down to US$1,900/ounce on Friday, primarily by good retail sales data, which showed sales rising 1.9% m-o-m, above expectations of 0.8%.

“That would seem to suggest that gold could be sensitive to the degree regarding more or less monetary accommodation from the US Federal Reserve, where more robust data will elicit a less dovish response from the central bank.

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Near term, direction defaults back to the US dollar and US equity market movement. Gold has found a friend in the Yuan, which is holding the US dollar “safe -haven “ambitions in check.

Fiscal policy support has been a critical support factor for gold, and if there is one sure thing, the stimulus is coming.”

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Crude oil prices ended the week mixed cumulatively amid surging Covid-19 caseloads, as oil traders pondered on what direction crude oil prices will go.

What we know: American-based oil contract, West Texas Intermediate closed at $40.88 per barrel, gaining 0.7% on the week, although it should be noted that it dropped 0.2%, on Friday.

READ: Oil prices drop, currently on anemic demand

• British-based oil contract, Brent crude, the popular standard for oil benchmark, however, dropped for both the day and week.
• Brent Crude prices settled on Friday to trade at $42.93 per barrel, down 0.5%. For the week, the global crude gauge lost 0.2%.

The mixed result in crude oil prices is coming amidst a spike in COVID-19 cases across emerged markets that continue to weigh down on oil traders, as it is believed that the virus has curbed demand in two of the world’s biggest crude oil consuming areas.

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OPEC+ plans to reduce its current supply cuts of 7.7 million barrels per day (bpd) by 2 million bpd in January, as OPEC Secretary-General Mohammed Barkindo admits that fuel demand is looking “anemic.”

A technical committee of the OPEC+ some days ago expressed their concerns over rising oil supply, since reduced human mobility aimed at limiting the spread of COVID-19 has also curbed fuel usage.

In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on his outlook for the fragile energy market.

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“But the tail risk is how lawmakers deal with this Covid-19 surge and the way consumers interact remains the wild card.

“While a return to draconian confinement measures is unlikely, the most prominent threat to the economic recovery is fear of the virus, not necessarily the soft lockdowns or social gathering restrictions.

“It is fear that could keep people hunkered down until the curve flattens or the vaccine is available. And It could sound a significant downbeat to the economy.”

That said, energy consumption is starting to kick up huge in the world’s second-largest economy China. Such macro is expected to keep crude oil prices far above levels seen in April.

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