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Gold drops on trade deal progress and tariff reprieve extensions
Gold prices fell on Monday as U.S. president Donald Trump announced progress on several trade agreements, and extended tariff exemptions for a number of countries. This dampened demand for this safe-haven precious metal. By 0232 GMT, spot gold had fallen 0.6% to $3314.21 an ounce. U.S. Gold Futures fell 0.6% to $3322. Trump announced on Sunday that the U.S. will be finalising a number of trade agreements within the next few days, and will notify the other countries about higher tariff rates before July 9. The higher rates are scheduled to come into effect in August 1. Trump announced a 10% tariff as a base on the majority of countries in April, with additional duties up to 50%. Later, he delayed the date of implementation for all tariffs except 10% until July 9, 2018. The new date gives most nations affected a three-week reprieve. Kelvin Wong, senior market analyst at OANDA, said: "This short term reprieve by the U.S. is causing the intraday weakness of the gold price in this moment." The top side will come in at $3.360 as a short-term support. Federal Reserve rate cuts are expected to be slower due to concerns about tariff-driven inflation. The rate futures market shows that traders are no longer expecting a Fed cut this month, and they only expect two quarter-point cuts by year's end. Trump signed a massive tax and spending package at the White House last week. According to unbiased analysis, this will add over $3 trillion to the $36.2 trillion national debt. Silver spot fell by 0.8%, to $36.61 per ounce. Platinum dropped 0.8%, to $1380.55, and palladium was down 1%, at $1123.31. (Reporting and editing by Sherry Phillips, Subhranshu Sahu and Anmol Choubey from Bengaluru).
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Iron ore futures fall on China steel production curbs and trade uncertainty
Iron ore futures fell on Monday, as new concerns about demand pressured the market. This was due to output restrictions at China's main steel production hub Tangshan. As of 0219 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was down by 0.68% to 731 yuan (US$101.96) per metric ton. The benchmark iron ore for August on the Singapore Exchange fell 0.1%, to $95.75 per ton. Tangshan Baochun Data, a provider of information in Tangshan City in northern China, posted a message on its WeChat page on Saturday. The note stated that steelmakers were given notices for production controls related to environmental protection. Tangshan Baochun, a local mill, said that some mills had undertaken maintenance work on their sintering machinery. Analysts noted that this move was expected to reduce demand for iron ore. ANZ analysts noted in a recent note that the markets are also on edge, as the deadline for U.S. trade agreements approaches. Donald Trump, the U.S. president, said on Sunday he was close to finalizing a number of trade agreements. He will inform other countries by July 9 that higher tariffs are coming into effect in August. Malaysia announced over the weekend that it had imposed anti-dumping provisional duties of between 3.86% and 57.90%, among other things, on certain imports of iron and steel from China. Iron ore prices have been held back by the strong steel margins and the resilient demand in near-term. Data from Mysteel revealed that despite signs of a slowdown, the average daily hot metal production, which is a measure of iron ore consumption, was still at 2,41 million tons as of July 3. This was higher than it had been a year earlier, and despite signs of a softening. Coking coal and coke, the other steelmaking ingredients, also recorded losses. The benchmarks for steel on the Shanghai Futures Exchange have fallen. Rebar fell 0.45%, Hot-rolled Coil dropped 0.59% and Wire Rod fell 0.81%. Stainless Steel lost 0.51%.
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Sources say that Nissan is considering Foxconn's EV production to save Oppama
Two people with knowledge of the situation said that Japan's Nissan Motor has been in discussions to allow Taiwan Foxconn use one the automaker's domestic plants to build electric cars. This could prevent the closure of the plant. In May, it was reported that Nissan considered closing its Oppama factory in Yokosuka, a port city south of Tokyo. Ivan Espinosa, the CEO of Nissan, announced massive restructuring plans to turn around its struggling automaker. These included closing seven out of Nissan's seventeen factories worldwide and cutting 15% off its workforce. The people, who declined to be named, said that allowing Foxconn to manufacture its own EVs in Oppama would prevent the closure of the plant, and reduce the impact of the restructuring on Oppama's 3,900 workers and suppliers. Nikkei, a Japanese business newspaper published the first report on this discussion late Sunday. Nissan said in a press release that the Nikkei article was not based upon information provided by the automaker. Foxconn did not reply to our request for comment. In May, Nissan’s junior partner Mitsubishi Motors and a Foxconn subordinate signed an agreement for the Taiwanese company to provide it with an electric vehicle model. (Reporting and writing by Maki Shraki, David Dolan, David Goodman, Christopher Cushing).
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Copper prices drop amid uncertainty about US trade talks
The Shanghai Futures Exchange (SFE) and London Metal Exchange (LME) saw copper prices fall on Monday due to concerns about U.S.-China trade negotiations, and the uncertainty around potential tariffs before President Trump's deadline of July 9. The LME's three-month contract for copper fell by 0.31% at $9,834 a metric ton as of 0103 GMT, and the SHFE's most traded contract lost 0.91%, to 79440 yuan (about $11,088.00). Donald Trump, the President of the United States, said that the U.S. was close to finalising a number of trade agreements. He will inform about a dozen other countries on Monday that they can expect higher tariffs to be implemented on August 1. ANZ reported that "Markets are worried about Trump's policies, which could cause a global slowdown and harm demand for industrial commodities." A Shanghai-based metals analyst from a futures firm said that "copper prices are expected to soften due to the recent rise in copper stocks on LME and SHFE and the diminished consumption enthusiasm as a result of higher prices." Copper inventories By July 4, SHFE-monitored storages had gained for the third week in a row, rising by 3.7% to reach 84,589 tonnes. This is 73.7% less than the previous year. Total Copper Stocks The LME registered warehouses saw a rise of 5% in four days, up to Friday. SHFE nickel dropped 1.05%, to 121.190 yuan per ton. Zinc fell 0.83%, to 22.165 yuan. Tin fell 0.82%, to 266,770. Yuan. Aluminium fell 0.68%, to 20,500. Yuan. Lead fell 0.29%, to 17.220. LME nickel fell 0.36% to $16,235 per ton. Zinc eased 0.24% at $2,717.5. Lead slid 0.17% at $2,055, and tin rose 0.07% at $33,725. Click or to see the latest news in metals, and other related stories. Data/Events (GMT 0600 Germany Industrial Production MM, Production Year-on-Year SA May 0600 Halifax House Prices UK MM,YY June 0645 France Total Reserve Assets June ($1 = 7,1645 Chinese Yuan) (Reporting and Editing by Sumana Niandy; Reporting by Hongmei LI)
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OPEC+ pumps more oil but is it necessary and at what cost? Russell
After OPEC+'s decision to increase crude oil production, two questions arise: Who will buy the extra crude and will they export the barrels that they claim to be producing? OPEC+ decided at a weekend gathering to increase production by 548,000 barrels a day (bpd). This is up from the 411,000 bpd that the group approved for May June and July and 138,000 bpd in April. Eight members of the group will boost production - Saudi Arabia (as well as Russia, Kuwait, Oman and Iraq), the United Arab Emirates (UAE), Kazakhstan, Algeria, Kuwait, Oman and Russia. The eight countries will have unwound the voluntary 2.2m bpd that they had imposed in an effort to support crude oil prices last year. OPEC+ cited "steady global economy outlook and current healthy fundamentals of the market" in its statement announcing increased August production, continuing a theme that it has been promoting in recent communiques: the oil market was in good shape. The reality is not as rosy, however, as OPEC+ portrays it, as the demand for oil in the major consumer countries like China, which is the top importer of the world, has been tepid. China's crude oil imports rose by just 0.3% or 28,500 barrels per day in the first five month of this year. The official data shows that the total was 11.1 million barrels per day. The growth rate is expected to increase when the June data are released next week. LSEG Oil Research expects imports to be 11,96 million bpd, up from customs numbers of 11,30 million bpd in June 2024. China's imports were likely strong in June. However, the reasons for this are not so positive. The reason why refiners bought more crude than intended is because the prices were lower when June's cargoes arrived. Brent futures, a global benchmark, hit a four year low of $58.50 per barrel on 5 May. They had been trending downwards since early April when cargoes due to arrive in June would have been purchased. In June, oil imports from Asia, which accounts for 60% of all seaborne crudes, increased. LSEG estimates arrivals at 28,65 million bpd - the highest since January 2023. The increased imports in June boosted Asia's arrivals to 27,36 million bpd during the first half 2025, an increase of 620,000 bpd compared with the same period the previous year. In a coincidence, this forecast is in line with the Organization of the Petroleum Exporting Countries' (OPEC) June monthly report which forecasts a demand growth of 630,000 bpd in Asia outside the OECD by 2025. Prices are key The question is if imports will increase in Asia in the second half or if momentum from June will fade. History shows that importers like China and India will tend to reduce imports when prices increase and use up their stockpiles. China's imports will likely be reduced in August or September due to the brief price spike in mid-June, triggered by Israel's attack on Iran. The United States joined Israel in this action. Lower oil prices will encourage buyers to buy and build up inventory to increase imports in the fourth quarter. The ball in this case is largely on OPEC+. Prices will likely continue to fall if the group produces what its quotas permit and exports it. According to a July 4 survey, the actual production has so far lagged behind the higher quotas. The five OPEC members in OPEC+ increased output by 267,000 bpd, which was short of the allowed 313,000 bpd. Saudi Arabia's actions will be crucial, as it is OPEC+’s largest exporter and has the capacity to increase output. You like this column? Check out Open Interest, your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of a columnist, who is also an author.
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Brickworks and Soul Pattinson of Australia secure funding for the $9.15 billion Topco Merger
Washington H. Soul Pattinson, an Australian investment company, and Brickworks, a building materials group from Australia said they had secured funding to merge their companies into a $9.15-billion ASX listed entity named Topco. The company has secured additional funding of A$220,000,000 ($143.81 millions) at the same price as Soul Pattinson’s last closing price, A$42.61. The proceeds from the sale will be used to pay off Brickworks' outstanding debts and other liabilities. Topco's debut is expected to be marked by a market cap of approximately A$14 billion (9.15 billion), supported by A$13.1 in diverse assets, including private equity, property and credit holdings. Brickworks shareholders will receive 0.82 Topco shares at a value implied of A$30.28 per share, which values the building products manufacturer at A$4.62billion. Mark Ellenor, CEO of Brickworks, said: "With equity in place, the combined company is ready to reap the benefits from the merger. We have a streamlined balance sheet, and a clear growth agenda." Topco, in conjunction with the capital raising announced in June and in July, has received commitments to buy 34 million shares. This will generate approximately A$1.4 billion. In a statement released on Monday, Topco and the other companies confirmed that the merger was now fully funded. No further shares were required. Corporate governance experts in Australia have long criticised the complex ownership structure of both companies, which has existed for more than 60 years. Brickworks' outstanding loan debt was A$721m at the end of the half-year period ending January 31. As of 0108 GMT shares in Soul Pattinson rose 0.6% while Brickworks remained largely flat. The benchmark index fell by a small 0.1%.
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South32, Australia's South32, will pay $130 million for the sale of Colombian nickel assets
South32, an Australian diversified mining company, announced on Monday that it would incur a $130 million impairment charge related to the sale to CoreX Holding B.V. of its Cerro Matoso Ferronickel operations located in northern Colombia. South32 anticipates receiving up to $100,000,000 in cash from CoreX. CoreX is a diversified industrial company with operations spanning the metals and mining sector, green energy and other sectors. In January 2024 the miner began a strategic review at Cerro Matoso, citing an important decline in nickel prices. Nickel producers are struggling with a price collapse fueled by a surge in production from Indonesia. This has forced some operators to cut spending, write off investments, and stop their mining operations. South32's Nickel production decreased by 6 percent in the nine months ended March 2025, due to lower nickel grades. They also cited structural changes on the nickel market as continuing to put pressure on nickel prices. BHP Group, world's biggest listed miner, announced in July 2024 it would cease its Western Australia nickel operations in October. It cited a drop in prices and an oversupply of metal in the global market.
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Oil falls as OPEC+ increases August output more than anticipated
The oil price dropped more than 1% Monday, after OPEC+ surprised the markets by increasing output more than anticipated in August. This raised concerns about an oversupply. Brent crude futures dropped 80 cents or 1.2% to $67.50 per barrel at 0010 GMT. U.S. West Texas Intermediate Crude was $65.68, which is down $1.32 or 2%. The Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed to increase production in August by 548,000 barrels a day. Tim Evans, of Evans Energy, said in a report that "the increased production clearly represents an aggressive competition for market shares and some tolerance for a resulting decrease in price and revenue." The August increase is a big jump from the monthly increases that OPEC+ approved in May, June, and July. And 138,000 bpd for April. OPEC+ cited a stable global economic outlook, healthy market fundamentals and low oil inventories as reasons to release more oil. In a note, RBC Capital's analysts led by Helima Crockt stated that the decision would bring back nearly 80% (2.2 million bpd) of the voluntary cuts made by eight OPEC producers. The actual increase in production has been less than expected so far, and the majority of the supply comes from Saudi Arabia. Saudi Arabia raised its August price of its flagship Arab Light crude on Sunday to a record high for Asia. Goldman analysts anticipate OPEC+ will announce a final increase of 550,000 bpd for September during the next meeting, on August 3. Separately Donald Trump, President of the United States, said that the United States was close to concluding several trade agreements and would notify other countries by July 9 about higher tariff rates. The higher rates are scheduled to go into effect on August 1, 2018. Florence Tan, Lisa Shumaker, and Christopher Cushing edited the report.
Plunging solar capture rates to test nerve of Europe's policymakers: Maguire
Wholesale power costs coming under pressure from rising solar output is not a brand-new concept in power markets, but looks set to become a. possibly dissentious concern across Europe as widespread expansions. in solar output overthrow market prices patterns.
Power produced by photovoltaic panels is the most inexpensive source of. electrical energy in a number of regions, and tends to drive down the. cost of wholesale power throughout peak solar output durations,. wearing down margins for power manufacturers.
The phenomenon, referred to as the renewables cannibalization. result, is especially severe in Europe's electrical power system. which prioritizes clean electrical energy products and where. politicians have set enthusiastic decarbonization objectives developed to. minimize dependence on imported fossil fuels.
Renewables-driven cost disruptions have gained extensive. attention in the United States due to the development of a. so-called 'Duck Curve' in Californian power rates, where. enormous volumes of solar output during the middle of the day. flood the marketplace simply as total power need is at a lull.
To accommodate that surplus power load, power rates tend to. plunge in such a way that resembles the shape of a duck's tummy,. before increasing again later on as solar output decreases.
Europe's integrated power markets need to brace for comparable. durations of rate disruption, following quick growths in solar. capacity throughout the continent.
These disruptions have the prospective to temporarily. undermine the economics of power production from all sources,. and might therefore discourage financial investments in more local. generation capacity at an important time.
For policymakers who support a rapid transition of energy. systems far from fossil fuels while guaranteeing ongoing power. sector stability, bouts of potentially loss-making power prices. due to surplus solar output might be unnerving.
But authorities can take heart from the reality that energy. consumers are currently seeing the benefits of higher renewables. output in the type of lower costs.
And in the longer term, consumers will also be much better. secured from future fuel cost shocks once the construct out of. home-grown sustainable power capability is complete.
But over the nearer term, policymakers, energy customers and. power producers alike need to get ready for further swings in power. costs as the generation mix in Europe continues to evolve from. mostly fossil fuel-based to being extremely operated on clean. fuels.
FAST LANE
After Asia, Europe has actually been the fastest growing market for. new solar capacity for the previous years, adding 172 gigawatts. ( GW) of capability in between 2012 and 2022, according to energy. believe tank Cinder.
That compares to nearly 600 GW of capability additions across. Asia, and around 110 GW of capacity growth in North America over. the very same period.
Capability information for 2023 has yet to be verified, but. eco-friendly industry analysts and experts approximate that Europe. will have set a brand-new installation record once again in 2015.
That fast growth speed has actually permitted solar energy to get a. growing share of Europe's overall electricity generation mix,. which has actually doubled from around 5% throughout the summertime of 2019 to. just under 11% last summer season, and the greatest of all areas.
On the other hand, solar's share of electrical power generation in Asia. topped out listed below 7% last summertime, while in North America peaked. at around 6.37%, Cinder information shows.
CAPTURING THE PRICES IMPACT
The effect of such a fast climb in solar output has currently. distorted Europe's power markets, and has led to energies. making shrinking profits from renewables.
As extra solar capacity has actually been brought online in. several nations, regional power prices responded by trending. broadly lower, particularly throughout high solar output periods.
Rate forecasting designs have actually likewise needed to be updated to. represent the growing share of sustainable power in generation. systems, with so-called capture costs and capture rates being. utilized to measure the impact of eco-friendly cannibalization.
The capture price is a weighted average cost during which. the power generation possession produces electricity, and is. revealed relative to the baseload agreement rate paid to fossil. fuel-based power manufacturers.
The capture rate is a procedure of the capture price divided. by market value readily available for the power produced, expressed as a. portion.
In the case of a natural gas plant that only produces power. during peak need periods, the common capture rate can be. 100%, as the plant can despatch maximum volumes to fulfil need. requirements at peak rates, and then lower or stop output when demand. and costs decline.
For renewables properties, the capture rate is generally less. than 100%, and can be far lower for solar possessions that just. produce electrical energy when the sun shines and typically struck peak. output simply when demand and rates may be near their lowest. throughout a normal day.
GERMANY AND SPAIN FEEL THE DISCOMFORT
Power price models in Germany and Spain clearly show the. impact of declining capture prices and rates due to broadening. solar output.
Due in part to rapidly increasing electrical power from solar farms,. the wholesale power cost from solar assets in Germany declined. to the most affordable in almost 4 years this month, according to. rates designs assembled by LSEG.
In turn, the lower solar-driven rates have actually dragged the. general German wholesale price lower.
The capture rate for German solar possessions has likewise declined. this month, plunging to as low as 50% of the baseload power. agreements, LSEG information shows.
The capture rate is even lower in Spain, where abundant. sunlight leads to a rise in solar output that can typically far. exceed system demand requires throughout the day.
Spain's solar capture rates are anticipated to typical around. 85% for the rest of 2024, however decline gradually over the coming. years to around 60% by 2030 and 45% by 2035.
Power designers concerned about the profit effect of such. capture rate erosion could slow their advancement pace, and. thereby potentially threaten nationwide or local energy. transition momentum.
However if policymakers keep a long-lasting view in mind of the. gain from a completely developed renewable resource system,. appropriate incentives for power developers might be produced to. make sure the speed of the area's energy shift is maintained.
<< The opinions revealed here are those of the author, a. writer .>
(source: Reuters)