Latest News
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China moves to reduce industrial overcapacity, resulting in a rise in iron ore
Iron ore futures rose on Thursday as China redoubled its efforts to reduce industrial excess capacity and curb price wars triggered by increased competition. The September contract for iron ore on China's Dalian Commodity Exchange ended the morning trading 1.33% higher, at 725 Yuan ($101.19). As of 0440 GMT, the benchmark August iron ore traded on Singapore Exchange was down 0.05% at $95.1 per ton. Analysts from ANZ stated in a report that Beijing's commitment towards curbing low-priced competition and reducing surplus industrial capacity indicates the leaders' desire to combat the deflationary forces affecting the Chinese economy. ANZ stated that these measures should provide relief to the steel sector, which has struggled with overcapacity. Everbright Futures, in a recent note, said that despite the fact that molten-iron production continued to rise month-on-month, shipments of top producers Australia, Brazil, and China have all decreased. Hexun Futures reported that shipments from major iron ore producers such as Rio Tinto BHP, Fortescue Metals Group and Vale also declined from the previous months. The Chinese Yuan fell against the dollar as investors closely monitored the trade talks between the U.S. Dollar-denominated investments become more expensive to holders of other currencies when the greenback is stronger. Coking coal and coke, which are used to make steel, also increased in price, by 3.09% each and 1.87 percent respectively. The Shanghai Futures Exchange steel benchmarks gained a majority of ground. Rebar increased by 0.89%; hot-rolled coils rose 0.7%; stainless steel gained 0.44% and wire rod fell 0.09%.
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Oil prices fall as US tariffs loom, OPEC+ to increase output
Oil prices dropped on Thursday, after rising 3% the previous day, as investors were wary that higher U.S. Tariffs could be reinstated and cause a drop in fuel demand. Major producers are also expected to announce a production increase. Brent crude futures dropped 53 cents or 0.77% to $68.58 per barrel at 0536 GMT. U.S. West Texas Intermediate Crude fell 51 cents or 0.76% to $66.94 per barrel. The two contracts reached their highest levels in a week on Wednesday, as Iran suspended its cooperation with the U.N. Nuclear Watchdog, raising fears that the long-running dispute over the Middle East's nuclear program could again escalate into an armed conflict. Meanwhile, the U.S. signed a preliminary deal with Vietnam. There is still increasing uncertainty about U.S. Trade Policy, as the 90-day suspension of the application of higher tariffs ends on July 9, without any new deals being made with large trading partners like the European Union or Japan. OPEC+, the Organization of the Petroleum Exporting Countries, and its allies, such as Russia, will also likely agree to increase their production by 411,000 barrels a day (bpd) when they meet this weekend. ING analysts wrote in a Thursday note that, given the uncertainty surrounding both events and the upcoming Independence Day holiday on July 4th in the U.S. "market participants are unlikely to want to take too much risk over the long weekend in the U.S.," they said. A private sector survey on Thursday showed that service activity in China, which is the world's largest oil importer, had expanded at its slowest rate in nine months. In June, As demand declined, new export orders also decreased. surprise build The rise in U.S. crude oil inventories has also raised concerns about demand in the world's largest crude consumer. Energy Information Administration reported on Wednesday that domestic crude stocks rose by 3.8 millions barrels, to 419,000,000 barrels. In a poll, analysts had predicted a drop of 1.8 millions barrels. The weekly gasoline demand dropped to 8,6 million barrels a day, causing concern about the consumption during peak summer driving in the United States. Analysts said that the market will closely monitor the release of Thursday's key U.S. employment report to determine the timing and depth of Federal Reserve interest rate reductions in the second half this year. Lower interest rates would spur economic activity and, in turn, increase oil demand. Analysts caution that there is no correlation with the government data. A report of private payrolls on Wednesday showed the first contraction in two years. (Reporting from Siyi Liu and Nicole Jao, in Singapore; editing by Christian Schmollinger).
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Sources say that Shandong province in China has increased the fuel oil import tax exemptions for certain refineries.
Industry sources reported this week that the provincial government of Shandong in China, China's refinery hub, increased the fuel oil import tax exemptions for six independent refining companies to improve their profitability, as they struggled with low margins due to fuel demand and high fuel prices. Three sources who have direct knowledge of this matter confirmed that the Shandong provincial office of taxation increased the consumption tax refunds for independent refiners (also known as teapots) on gasoline and diesel refined using imported fuel oil from 75% to 95%. Sources said that the change is applicable to Chambroad Petrochemicals and Hongrun Petrochemicals. One of the sources said that the refiners had been notified two weeks prior. Requests for comments were not responded to by the Shandong Provincial Tax Service or the National State Taxation Administration. When crude oil prices are too high, the teapots will often process straight-run fuel oils or bitumen blends (a tar-like residue) into transportation fuels. They may also be subject to crude oil import quotas which can limit their purchases. China increased the import tariffs for fuel oil in 2025, and reduced the tax rebates at the end last year. Customs data shows that fuel oil imports fell to their lowest level ever between January and May. Mia Geng, FGE's associate director of the East of Suez Oil Service, said in a note dated June 27, that independent refiners were suffering from low profit margins and shut downs due to the rules. The provincial government also likely wanted refineries to be running more to boost economic output and industrial activity. Geng believes that the new tax laws will increase the demand for high-sulfur fuel oil and the run rates of refineries. The changes will not spur demand for fuel oil in the near future, as crude oil is cheaper at the moment, according to a trading source, and one of those with direct knowledge about the change. Shandong refineries are China's largest buyers of sanctioned Russian and Iranian oil.
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Morning bid Europe: Trade optimism is replaced by caution about US jobs
Stella Qiu gives us a look at what the future holds for European and global markets. The session in Asia has been pretty quiet, and for good reason. Payroll data from the U.S. due later that day could be the deciding factor in a rate cut in July and cause big movements in Treasuries or foreign exchange markets. Investors in Asia didn't seem to share President Donald Trump's optimism about trade, which pushed Wall Street overnight to record-high closes. Details are still unclear. Markets did not react significantly to the latest developments regarding Trump's "big beautiful bill" for tax cuts. The Republicans in the House of Representatives moved closer to advancing the tax package on Wednesday, seemingly overcoming the objections of a few party hardliners that raised concerns over cost. Trump announced that the U.S. would impose a tariff of 20% on all imports coming from Vietnam. This is lower than the tariff of 46% which was threatened but still higher than previous rates. Uncertainty surrounded the implementation of a 40% tax on all transshipments through Vietnam aimed at products made primarily in China, but labelled as "Made in Vietnam". Vietnamese shares rose a modest 0.5% - the most since April 2022. Vietnam's dong currency fell to a new record low of 26218 per US dollar. Other Asian countries complain that the U.S. is making it difficult to negotiate, partly because the White House's intentions are not very clear. South Korean President Lee Jae Myung stated on Thursday that he was unable to say whether tariff negotiations would be concluded by next Tuesday. Meanwhile, Japan invoked its national interests when talks with the U.S. were struggling. The Wall Street Futures have gained 0.1%, while the EuroStoxx 50 futures have gained 0.2%. The main risk for the markets is the release of U.S. payroll figures later that day. The stakes are high following a surprise drop in the private sector payrolls for the first time in over two years. Analysts predict that the unemployment rate will rise to 4.3% in June, with a 110,000 job increase. A weak report, given that the market only prices in a 25% chance of a Fed rate cut in July, could have a major impact on the markets, sending Treasuries higher and the dollar down. The sterling was unchanged at $1.3633. Sterling fell 0.8% overnight due to investor concerns about Britain's finances following the government's decision to reverse welfare reforms. This also caused gilt yields and prices to rise. The following are key developments that may influence the markets on Thursday. Payrolls for non-farm workers in the U.S. ISM Services PMI -- U.S. initial and continued jobless claims -- U.K. S&P Global services, composite PMIs The ECB has released its June Minutes (by Stella Qiu, edited by Edmund Klamann).
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China's North and West on Alert after Deadly Floods Caused by Sweeping Rains
China's west and north were bracing for flash floods on Thursday, as the annual "Plum Rains" left a path of destruction. This prompted thousands of rescue workers from across China to help pull people out of floodwaters. The red alerts traced the rains from the southwest province of Sichuan, through the northwestern provinces of Gansu and Liaoning to the northeastern region of the province. On Wednesday night and early Thursday morning, some Beijing-bound trains had been suspended. Meteorologists have linked climate change to extreme rainfall and severe floods. These events pose a major challenge to policymakers, as they threaten to overwhelm the ageing flood defences and displace millions of people, and wreck havoc on China’s $2.8 trillion agriculture sector. Natural disasters caused economic losses of over $10 billion in July last year, which is when the "Plum Rains" - so named because they coincide with plums maturing along China's Yangtze River at the time of the East Asia Monsoon – usually reach their peak. The state media reported that over 1,000 rescue workers had been dispatched on Wednesday to the town Taiping, in central China's Henan Province, after torrential rainfall caused a river nearby to burst it banks. Five people were killed in a flash flooding and three others are still missing. A separate report by state media said that two more people were killed in a landslide in the province of Gansu caused by heavy rainfall on Wednesday and Thursday. During a visit of two days to Hebei province, which borders Henan in the north, Vice Premier Zhang Guoqing urged officials to increase efforts to minimize casualties ahead of heavy rains by preemptively evacuating residents, according to a report from Xinhua, a state news agency. Scientists say that while China has a national severe weather monitoring system and a forecasting system for it, very localised forecasts remain a challenge. They test the ability of rural communities, with less forecasting resources, to evacuate their local population quickly before any extreme weather. Local media reported that in China's Guangxi province, further south, several buildings have slid off hillsides in the past two days, after their foundations gave in to waterlogged soil. Video footage verified by shows a five storey building in Xinzhou, China collapsing within seconds into a river nearby as the ground underneath it suddenly gave way. A separate report in local media cited the Ministry of Water Resources to say that between June 30 and 1 July, the Lengshui River, which runs through Xinzhou, experienced its worst floods since records began. The report also provided readers with information on how to recognize early signs of flooding. Other local media reported that in Pingliu Village (about 80 km west of Xinzhou), 21 people from 7 households were evacuated after a landslide damaged and destroyed four houses. The national meteorological center forecasts scorching heat along eastern coast of the country.
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PMI: UAE non-oil industry grows steadily as regional tensions impact demand
A survey on Thursday showed that the UAE's private non-oil sector grew steadily during June, even though regional tensions affected demand and firms increased output to clear backlogs. The S&P Global UAE Purchasing managers' Index (PMI), which is a seasonally-adjusted index, increased to 53.5 from 53.3 in June, indicating continued growth for the sector. However, new orders grew at their slowest rate in almost four years. The subindex of new orders dropped to 54.5 from 56.2 in may, the lowest reading since Sept. 2021. The tensions between Israel, Iran and other countries dampened demand. David Owen, senior economic analyst at S&P Global Market Intelligence, said that the impact of the conflict in Israel and Iran is mostly felt on demand, with some slowed down orders. Owen stated that the impact of this on business conditions overall was minimal. As firms reduced backlogs, output growth increased. The supply chain continues to face challenges, as delivery times improve at their slowest pace for 14 months and input costs rise at the slowest growth rate in two years. The survey found that non-oil companies in the UAE remained subdued about their business outlook despite the fact that the level of confidence has risen to its highest levels since November. Dubai's headline PMI fell to its lowest level for nearly four years, to 51.8 in June from 52.9 in the previous month. This was due to a sharp decline in sales growth amid competition pressures and weaker tourist numbers. Business activity increased sharply and the number of employees increased for a third consecutive month. (Reporting and Editing by Hugh Lawson).
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PMI data shows that Saudi Arabia's growth in the non-oil sectors accelerated in June due to strong demand.
A survey released on Thursday showed that the expansion of Saudi Arabia's private non-oil sector activity increased in May due to a strong client demand as well as a spike in hiring. The Riyad Bank Saudi Arabia Purchasing Managers' Index, which is adjusted for season, rose from 55.8 in May to 57.2 this month. This puts it above the 50 point line that indicates growth. The subindex rose to 64.3 from 62.5 in may, indicating a rapid acceleration in new order growth. This upturn was primarily driven by domestic sales, which were supported by client acquisitions that went well and improved marketing strategies. Export sales were marginally up. "Firms have largely attributed the improvement in activity to improved sales, new projects starting, and better conditions for demand, even though the pace of growth was slower than previous highs," Naif Al Ghaith said, chief economist at Riyad Bank. Private non-oil companies have hired more staff than ever since May 2011 as they expand their teams to handle increased workloads. The input prices rose as well, in line with the trend of the second quarter, which led firms to pass higher costs on to their customers. The output prices rose strongly, marking the biggest increase in over a year and a half, after months of declines. The survey revealed that despite cost pressures, Saudi firms in the non-oil sector remained confident about the future. In fact, the Future Output Index reached a record high of two years. The resilient economic conditions in Saudi Arabia and robust demand boosted confidence. The International Monetary Fund increased its forecast of Saudi Arabia's GDP growth in 2025 to 3.5%, from 3%. This was partly due to the demand for government-led initiatives and the OPEC+ plan to gradually end oil production cuts. Hugh Lawson, Editor (Reporting)
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RightBridge Ventures Agrees Reverse Takeover of Swemar
RightBridge Ventures Group has announced a proposed reverse acquisition of Swemar, which has entered into an agreement to acquire an offshore oil service company with operations across the Middle East, India, and South-East Asia.The company to be acquired by Swemar operates a fleet comprising Anchor Handler Tug Supply (AHTS) vessels and crew transportation vessels. It owns three vessels outright and operates an additional five to ten vessels under charter or management agreements.The acquisition marks a strategic first step toward establishing a strong maritime presence in Asia. It will provide RightBridge with a robust technical and operational platform, with the potential for further expansion into other segments of the maritime industry.The acquisition is immediately accretive, with an estimated EBITDA contribution of $11 million over the next 12 months, based on fixed employment contracts with blue-chip clients such as Saipem, NMDC Group, Larsen & Toubro, Aramco, and others.The transaction is firm from the seller’s side and conditional only on the buyer, subject to standard due diligence processes, which are currently underway.It is planned to be finalized in the third quarter of 2025 and is expected to have a positive impact on RBV’s EBITDA result for the 2025 financial year. The acquisition price will be announced in connection with the closing of the transaction.The acquisition will not change the price or the terms for the transaction with Right Bridge Ventures Group, the company noted.“This acquisition is the first step towards creating a strong maritime presence in Asia. It will provide us with a solid maritime technical and operational platform, with scope for expansion into other sectors of the maritime market.“The acquisition is convincingly accretive for RightBridge. Together with our ownership in U.S.-based shipbuilding and defense related industries we strive to become a full-service defense and maritime company with global operations,” said Dagfinn Lunde, newly appointed Chairman of RightBridge Ventures.
Fear of a 'deadly summer' fuelled by looming energy aid cuts
US Energy Aid Program Helps Six Million Low-Income Americans
Budget talks bring balance to future of programs
Increasing number of cities require working air conditioning
By Carey L. Biron
Experts warn that the combination of climate change and increased summer temperatures could be deadly for communities in poverty.
In April, the Department of Health and Human Services, which oversees the LIHEAP program, fired the staff of the federal Low-Income Home Energy Assistance Program.
Trump's budget plan for the following month recommended eliminating LIHEAP entirely, stating that it was "unnecessary" because states have policies to prevent utility disconnection of low-income families.
Residents are unsure of how to keep cool.
"My air conditioner is my top priority," said Venus Little who lives in an apartment complex for low-income families in Washington, D.C. where the windows only open a small crack.
Since her electricity was cut off, Little, 58 has used LIHEAP.
She is now the president of the tenants' association and she is worried about the effect of LIHEAP cutbacks at the complex of 284 units, where renters are already struggling with "sky-high utility rates".
She said, "That program made a big difference in the lives of many tenants." "I don't know what to say. It's cold-hearted."
As Trump's government shrinkage efforts expand, it is up to the federal legislators to decide whether or not to continue with the program.
HHS has not responded to a comment request.
This is not just about cutting LIHEAP. Mark Wolfe said, "You're destroying the financial infrastructure for low-income families."
"These are vulnerable families - the elderly, disabled, and families with young kids."
He said that utility rates are rising faster than the inflation rate. One in six U.S. homes is behind on their utility bills, and they collectively owe $21 billion, which is the highest amount Wolfe and colleagues have ever tracked.
In a report published in May, NEADA warned that the price of cooling could reach record levels in coming months. The summer season could be "deadly" for households with low incomes.
Heat does kill. According to the 2024 Heat Related Mortality Report, approximately 350 New Yorkers die every year from extreme heat.
It said that the greatest risk factor is the lack of air conditioning in homes. People in 'Danger'
The LIHEAP program was originally created in 1980 to provide assistance with heating during the colder months. However, since then, summers are more scorching.
According to federal data, heat waves in 2023 will cause more than 2,300 fatalities across the country, an increase of 117% since 1999.
According to federal statistics the share of low income families who use central air conditioning has increased from 8.5% in 1980 to more than 50% in 2020. Cooling expenditures have almost doubled from 1985 to 2022.
Local officials claim that the LIHEAP program was funded by about $4 billion last year, and they say it is impossible for states and cities to replace this money even though they are playing a larger role in energy efficiency and efforts to lower electricity prices.
Lorig Charkoudian is a Maryland General Assembly delegate. She said, "We need their support - otherwise it would be devastating."
She said, "People are at risk this summer."
If people cannot keep their air conditioners running, they will end up in hospitals, complicating their medications at a higher cost than LIHEAP.
According to the NEADA, although Washington and 17 other states prohibit utilities from turning off electricity in summer, 33 other states do not have such protections.
Washington lawmakers are also seeking to ban evictions in heat waves. This is similar to the rules that apply during freezing temperatures. TEXAS CITY MANDATES AIR - CONDITIONING
Austin, Texas residents will have a new rule this summer. They must ensure that their homes have air conditioning.
Austin is one of many cities that have taken this step in recent years. It has also seen record heatwaves and an increase in heat-related illnesses.
Vanessa Fuentes said that tenants pressured landlords into taking action to cool their properties. She is also a member of the Austin City Council and Mayor pro tem.
Fuentes was the driving force behind the new law. She said that renters can "report to the city, and file a complain about air conditioning not being installed or properly upgraded" when temperatures exceed 85 degrees Fahrenheit.
Some landlords are concerned about the cost of upgrading old buildings, and claim that existing laws are sufficient.
Fuentes explained that Austin is the only city in the state with a publicly-owned utility, and can provide help without relying on LIHEAP. However, the county surrounding Austin is part of the federal program. It is also home to some of the lowest-income households.
(source: Reuters)