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Iron ore prices rise as supply disruptions offset Trump tariff threats
Iron ore futures prices extended gains for the second consecutive session on Tuesday as fears over weather-related disruptions to supply in Australia, a major supplier, outweighed discontent with new tariffs announced by U.S. president Donald Trump. As of 0214 GMT, the most-traded contract for May iron ore on China's Dalian Commodity Exchange was trading 0.79% higher. It was 827.5 Yuan ($113.24), per metric ton. Earlier in the session, the contract reached its highest level since 10 December at 830.5 Yuan per ton. As of 0211 GMT the benchmark March iron ore traded on the Singapore Exchange had risen by 0.35% to $107.55 per ton. This was the highest price since October 10, 2024. After a Bureau of Meteorology weather warning, the operator of Australia's port of iron ore export Port Hedland which is used by BHP Group and Fortescue as well as billionaire Gina Rinehart’s Hancock Prospecting started clearing ships from the Port. This came after the top supplier Rio Tinto cleared two ports in Western Australia last week. This had led to a sharp drop in shipments over this period, according to traders. The unrest caused by Trump's new tariff threats has tempered gains. Trump raised the tariffs on imports of steel and aluminum on Monday from a flat rate of 25% to a 25 percent rate "without any exceptions or exclusions". This was done to help struggling industries, but it also increased the risk for a multi-fronted trade war. Tariffs will be applied to millions of tonnes of steel and aluminium imports from Canada and Brazil. They also apply to South Korea, Mexico and other countries. ANZ analysts wrote in a report that the tariffs may weaken demand for ore if China's steel export markets are affected. Coking coal and coke, which are used to make steel, also fell, by 0.44% each and 1.06% respectively. The benchmarks for steel on the Shanghai Futures Exchange have lost ground. Rebar fell 0.66%, while hot-rolled coils dropped 0.41%. Wire rod also declined 0.72%, and stainless steel slipped 0.71%.
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Investors weigh Trump's latest tariff threats as they assess the gold price and stock market.
The dollar was stable and Hong Kong stocks advanced to a 4-month high on Tuesday, as investors navigated changes in U.S. Trade Policy and waited for Federal Reserve Chair Jerome Powell to speak on tariffs and inflation. Oil prices held on to an overnight surge. Hong Kong's Hang Seng index has risen more than 12% over the past month, as Donald Trump's government threatened and then suspended blanket tariffs against Canada and Mexico. This seems to confirm investor assumptions that all is negotiable. Trump raised tariffs on imports of steel and aluminum to 25% on Monday, which pushed up the share prices of U.S. Steelmakers. The tariff on Chinese imports was 10% earlier this month. Chinese retaliatory duties on U.S. goods and energy were imposed on Monday. Although there has been little progress in a trade agreement between Beijing and Washington so far, expectations remain high. Prashant Bhayani is the chief investment officer for Asia at BNPParibas Wealth Management. He said that because he's a natural businessman, there will be deals made at some point. "So, that's why we've measured the market." The Chinese Yuan, in currency trading, has fallen below the level of 7.3 dollars and was trading at 7.3071 Tuesday morning. The Australian dollar was unchanged at $0.6273. Trump said he would "greatly consider" Australia's request to be exempted from steel tariffs. Gold reached a record high just above $2.935 an ounce. Marc Chandler, Bannockburn Global Forex's chief market strategist in New York said: "This is very early days." The market is just chopping about rather than being really directional at the moment. The dollar was stable against the Japanese yen at 152.01 and was $1.03 to the euro. Both the Canadian dollar and the Mexican peso were down as these countries are bearing the brunt from Trump's tariffs on metals. Wall Street closed with gains, led primarily by the tech and energy sectors. The S&P 500 Materials index increased 0.5%. Steel companies like Nucor and Steel Dynamics gained 4.9%. After McDonald's reported its quarterly results, shares of the fast food restaurant rose 4.8%. Investors are saying: 'Hey let's get back to the areas that have worked.' Sam Stovall is the chief investment strategist of CFRA Research. He believes that earnings are one reason why investors remain optimistic. The STOXX 600 Index for Europe rose by 0.58% on Monday to a new record high of 544.92, led by the 1.5% increase in oil and gas prices. Dutch and British wholesale prices of gas rose on Monday to two-year highs as the colder weather increased gas demand and storage withdrawals increased. The Fed Chair Powell will be speaking Tuesday at the semi-annual testimony on monetary policy before the Senate Banking, Housing and Urban Affairs Committee. It is likely that his comments on inflation and tariffs will be closely watched. According to CME's FedWatch Tool, the markets expect the Fed to keep rates unchanged at its meeting in March. Expectations for a rate cut of at least 25% basis points will not rise above 50% until June. The benchmark 10-year Treasury yields were closed at 4,495%. There was no trading in Asia due to a holiday in Japan.
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Indian oil companies are in talks with U.S. LNG suppliers to purchase their supplies
Pankaj Jain, the Oil Secretary of India, said that Indian oil companies were looking to purchase U.S. LNG. This was a result of Trump's administration lifting its ban on new export permits. India, the world's fourth-largest LNG importer, aims to increase its gas share in its energy mix from 6.2% to 15% by 2030. Jain stated that Indian oil companies were in talks with U.S. firms to source additional LNG. Among these companies, he said, were GAIL (India) Ltd., Indian Oil Corp. and Bharat Petrol Corp. Jain, a reporter, said that Indian companies will discuss gas supply with U.S. LNG suppliers on the sidelines the India Energy Week four-day conference starting Monday. He added that Indian companies might consider purchasing stakes in U.S. LNG Projects if the deals are attractive. Sandeep Kumar Gupta said that GAIL would revive plans to purchase a stake in an American LNG plant or secure long-term US gas deals. GAIL imports 5,8 million tons of U.S. Liquefied Natural Gas (LNG) annually, under long-term agreements. The LNG is split between Berkshire Hathaway Energy’s Cove Point facility and Cheniere Energy’s Sabine Pass plant in Louisiana. Qatar supplies the bulk of India's LNG under long-term deals, and prices are linked to crude oil. Jain suggested that India's gas sourcing should be a mixture of U.S. Henry hub and crude oil-linked prices. Indian companies are especially keen to purchase LNG from the U.S., as crude oil can be bought from multiple sources. Hardeep Singh Puri, the Indian Oil Minister, said that energy imports will be discussed this week when Prime Minister Narendra Modi and President Donald Trump meet. At least six Asian nations, including Japan, Taiwan and South Korea, have expressed an interest in purchasing U.S. LNG. Some are looking to reduce their trade deficits due to Trump's tariff threats while others want to diversify and expand supplies. Clarence Fernandez edited this article.
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Australian shares rise on the back of gold stocks
Australian shares rose Tuesday as gold miners reached a record high following the bullion’s record rally. Other sectors also gained from broad-based purchasing and investors were focused on earnings reports of several heavyweight corporations. S&P/ASX 200 Index rose 0.2%, to 8,502.9 at 0008 GMT. The benchmark index fell 0.3% Monday. Gold miners on the broad market gained up to 2.6%, reaching a new record high. The safe-haven market drove gold prices to a record high and they broke the $2,900 barrier for the first. Northern Star Resources increased by 3.1% while Evolution Mining grew by 2.5%. Financials increased by 0.1%, with Westpac up 0.5%. Macquarie, the country's biggest asset manager, rose by 1.7% following a profit that was largely flat for nine months. Investors are now awaiting the earnings of Commonwealth Bank of Australia due on Wednesday. Oil prices soared nearly 2% Monday, after a third consecutive week of declines. Brent crude futures settled $1.21 or 1.6% at $75.87 per barrel while U.S. West Texas intermediate crude rose $1.32 or 1.9% to $72.32 per barrel. The healthcare sector rose 0.4%. This was mainly due to biotech giant CSL which grew 1.7% following a growth in its half-year profits. The Dow Jones Industrial Average in the United States rose 167.01 or 0.38% overnight, to 44,470.41 on Monday. The S&P500 gained 40.45, or 0.67, and Nasdaq gained 190.98, or 0.98%. Diversified investor SGH, among individual stocks rose as high as 9.4% after its first-half earnings easily exceeded analysts' expectations. The benchmark S&P/NZX50 index in New Zealand rose by 0.2% to 12,898.8.
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Trump's latest trade war salvo includes tariffs on steel and aluminum imports
On Monday, President Donald Trump raised the tariffs on imports of steel and aluminum to a flat rate of 25% "without any exceptions or exclusions". This was done to help struggling industries. However, it increased the risk that a multi-fronted trade war would occur. Trump signed proclamations increasing the U.S. aluminum tariff rate to 25%, from 10%. He also eliminated country exceptions, quota agreements and hundreds of thousands product-specific exclusions. An official at the White House confirmed that these measures would go into effect on March 4th. Tariffs will be raised to 25% for millions of tons imported steel and aluminum from Canada, Brazil Mexico, South Korea, and other countries, which had previously entered the U.S. without duty. Trump told reporters that the move would simplify tariffs for metals, "so everyone can understand what it means." "It is 25%, without exemptions or exceptions." All countries are included, regardless of where they come from. Trump said that he would "consider" Australia's request to be exempted from the steel tariffs. These proclamations are extensions of Trump’s Section 232 Tariffs from 2018. They were made to protect domestic aluminum and steel producers on the basis of national security. An official at the White House said that the exemptions have weakened the effectiveness of the measures. Trump will also impose a North American standard that requires steel imports be "melted, poured", and aluminum imports be "smelted, cast" in the region. This is to reduce U.S. metal imports from China and Russia. A White House official confirmed that the order extends tariffs on downstream products using foreign-made steel. This includes fabricated structural steels, aluminum extrusions, and steel strands for pre-stressed cement. Trump signed the order in the White House and announced that he would announce reciprocal tariffs for all countries who impose duties on U.S. products over the next two business days. He also said he had his eye on tariffs for cars, semiconductors and pharmaceuticals. When asked about the threats of retaliation from other countries in response to his new tariffs Trump replied: "I'm not bothered." Peter Navarro, Trump's adviser on trade and commerce, said that the new measures will help U.S. producers of steel and aluminum and strengthen America's economy and national security. He told reporters that the steel and aluminium tariffs 2.0 would put an end foreign dumping and boost domestic production, as well as secure America's steel and Aluminum industries. This isn't about just trade. It's to ensure that America will never have to depend on foreign countries for critical industries such as steel and aluminum." In 2018, Trump began imposing tariffs on steel and aluminum under an anti-Cold War national security law. Later, he granted exemptions to several countries, including Canada and Australia. He also struck duty-free deals with Brazil, South Korea, and Argentina, based on their pre-tariff volume. Joe Biden, the former president of the United States, who succeeded Trump, negotiated a similar duty-free tariff for Britain, Japan, and EU. "We applaud President Obama for instituting the 25% tariffs on imports of steel and eliminating exclusions, carving outs, and quotas based on outdated data," said Philip Bell of the Steel Manufacturers Association. Bell explained that these figures were based upon import levels from 2015-2017, which no longer reflect the current dynamics of the market. Shares of U.S. and European steel and aluminum producers soared before the announcement, while those of European and Asian steelmakers declined. According to data from government and industry, the top three sources of U.S. imports of steel are Canada, Brazil, and Mexico. South Korea, and Vietnam follow. In the first eleven months of 2024, Canada's extensive hydropower resources, which aid its metal production and manufacturing, accounted 79% of U.S. imports of primary aluminum. U.S. Trade Partners warned that the new barriers will hurt U.S. Automakers, Shipbuilders and Other Industries. Don Farrell, Australian Trade Minister, said that Australian steel and aluminium create thousands of American jobs and are vital to our common defense interests. The U.S. Distillers warned the EU that steel tariffs may prompt them to increase duties on American whiskey. Chris Swonger is the CEO of the Distilled Spirits Council of the United States. He said that a 50% tariff on America’s native spirit would have catastrophic consequences for the 3,000 distilleries in the United States. The European Commission stated that it did not see any justification for these tariffs. President Ursula von der Leyen will meet U.S. vice president JD Vance on Tuesday in Paris during an AI Summit. The South Korean Industry Ministry invited steelmakers to South Korea to discuss ways to minimize tariffs' impact. RECIPROCAL TARIFFS Trump has also promised to provide detailed information about his reciprocal tariff plan on Tuesday or on Wednesday. He has complained for years about the EU's tariff of 10% on auto imports. This is much higher than the 2.5% U.S. rate. The U.S., however, applies a tariff of 25% on pickup trucks. This is a major source of profit to Detroit automakers such as General Motors. According to World Trade Organization statistics, the average U.S. tariff rate, weighted by trade, is 2.2%. This compares to 12.0% for India, 6.7% in Brazil, 5.1% in Vietnam, and 2.7% within the EU. Indian officials claim that Indian Prime Minister Narendra Modi has been preparing tariff reductions ahead of his meeting with Trump on Wednesday. These could increase American exports. Trump called India "a very big abuser" of trade in the past, and his top economist Kevin Hassett referred to India as having "enormously" high tariffs during a CNBC interview. Trump had threatened to impose 25% tariffs on all imports coming from America's largest trading partners Canada and Mexico. He said they needed to do more to stop the flow of migrants and drugs across the U.S. Border. Trump suspended the tariffs on March 1 after making some concessions in border security. Data from the United States showed that last year, demand for aluminum far exceeded production in the country. This left it largely dependent on imports.
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Trump announces reciprocal tariffs in the next two days
Donald Trump, the U.S. president, said on Monday that he will announce plans to impose tariffs against other countries in the next two weeks. This is a confirmation of comments he made Sunday. In the Oval Office, the Republican President spoke with reporters as he signed proclamations that ended all exemptions from steel and aluminum tariffs imposed in his first term. He also raised duties on both metals by 25%. Trump also said that he would be looking into tariffs on automobiles, semiconductor chips, and pharmaceuticals. An official in the United States said that under former president Joe Biden, the exclusion process started under Trump had become out of control. This resulted in hundreds of thousands specific product exclusions being approved. When asked about the possibility that other countries could retaliate against U.S. Tariffs, Trump replied: "I don’t mind." In an interview given to Fox News, Trump claimed that other countries have been imposing duties on US imports for years. He said, "It is not fair that we have been exploited by other countries for so long, and suddenly, we are not allowed to charge tariffs." Trump said in an interview with Fox News that he will announce a "very complex plan" to deal with the reciprocal tariffs on Monday or Tuesday. Steve Holland, Andrea Shalal and Leslie Adler edited the story.
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Trump will consider an exemption for Australia in steel tariffs, Prime Minister says
After what Prime Minister Anthony Albanese called a constructive telephone call with Trump, U.S. president Donald Trump agreed to look into exempting Australia of his steel and aluminum tariffs. Trump announced on Sunday that he would impose new tariffs of 25% on all imports of steel and aluminum into the U.S. on top of metals duties already in place. This is another major step up in his trade policy overhaul. Albanese, a reporter, said: "I presented Australia’s case for an exception and we agreed on the wording to be publicly stated which is that President Obama agreed that an exemption would be considered." "But we will continue to engage in a constructive manner... It was another very warm and constructive discussion with President Trump." Albanese and Trump's conversation comes just a day after Australia’s trade minister claimed that Australia’s exports of steel and aluminum to the U.S. create "good-paying American Jobs" and are key to shared defense interests. Albanese said that he was confident that a deal with Trump could be reached. Albanese stated, "If you look at what we have achieved so far, it has been an incredible start to our relationship." Penny Wong, the Foreign Minister of Hong Kong, attended Trump's inaugural ceremony. Richard Marles, the Defence Minister of Hong Kong met with U.S. Secretary Pete Hegseth last week in Washington. Hegseth has hosted Marles as the first foreign counterpart since he was confirmed in his role. According to the United Nations Comtrade Database, Australia, which is a major U.S. ally for security in the Indo-Pacific region, exported $237 million in steel and iron to the U.S. by 2023 and $275 millions in aluminium to the U.S. by 2024. The Australian government announced last year that the largest U.S. shipbuilder purchased Australian-processed metal as Australia, Britain, and the U.S., partners in the AUKUS defense pact, seek to integrate supply chains for defence.
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US Judge says Trump Administration violated order to lift spending freeze
A U.S. Judge on Monday said that President Donald Trump’s administration had violated an order of the court Lifting a wide freeze U.S. district judge John McConnell of Providence, Rhode Island had already blocked funding with a temporary restraint order on January 31, but a number of Democratic state attorneys who sued to stop the move Last week The government is still holding back funds. This ruling appears to be the first time a judge has found that the Trump administration violated an order from a court halting a new policy. On Monday, the Trump administration announced that it would appeal. McConnell stated on Monday that the broad categorical freeze of federal funding is likely unconstitutional, and it has caused irreparable damage to a large portion of the country. "These pauses of funding violate the plain language of the TRO." McConnell stated that all funding should be restored, at least until McConnell can hold an hearing on the motion of the states for a more long-term order. A lawyer from the office of Democratic New York attorney general Letitia James informed McConnell on Feb. 6 that state agencies still had difficulty accessing federal funding, including billions for infrastructure projects funded under the Inflation Reduction Act. The Trump administration told the states that it did not believe the order applied to certain infrastructure and environmental spending and that payments were being delayed due to "operational and adminstrative reasons." McConnell, however, said that his order was "clear and unequivocal" when it came to the funding frozen as a result of Trump's executive orders. Originally, the states sued the White House over a memo from the Office of Management and Budget that announced a broad freeze on federal spending. OMB quickly rescinded the memo shortly after the lawsuit. The memo is part of an effort by the Trump administration to reduce federal spending and reform the federal bureaucracy. This has led to a spate of lawsuits. Federal employee unions accuse the Trump administration in a separate case of violating an order by a court to reinstate USAID employees who had been placed on administrative leave. Reporting by Brendan Pierson, New York. Editing by Mark Porter and Alexia Garamfalvi.
The dollar edged up and stocks rose as the latest tariffs swirled
The dollar rose slightly after U.S. president Donald Trump warned about additional tariffs including those on steel and aluminum. Meanwhile, a global stock index shook off worries over more duties to advance.
Trump told reporters aboard Air Force One that he will announce 25% tariffs on steel and aluminum imports to the U.S. on Monday, and other reciprocal tariffs shortly thereafter.
China's retaliatory duties on certain U.S. imports will take effect Monday. There are no signs of progress in a new agreement between Beijing and Washington.
The dollar index (which measures the greenback in relation to a basket of currency) rose 0.13%, reaching 108.23. Meanwhile, the euro fell 0.13%, at $1.0312.
Marc Chandler, Bannockburn Global Forex's chief market strategist in New York said: "This is very early days." The market is just sort of moving around, rather than being really directional at the moment.
The dollar gained 0.17% against the Japanese yen while the pound fell 0.16%, to $1.2386.
The Canadian dollar fell 0.27% against the greenback, to C$1.43, and the Mexican peso dropped 0.37% in relation to the dollar, at C$20.642. This was due to the greenback retreating from its earlier highs.
Wall Street saw gains on U.S. stock markets, mainly in the tech and energy sectors. The S&P 500 Materials index rose by 0.2%, boosted by gains of over 5% at steel companies Nucor Steel Dynamics.
After the fast food restaurant announced its quarterly results, shares of McDonald's rose as well.
MSCI's global stock index rose by 4.77 points or 0.55% to 874.21, and is on course for its fourth increase in the last five sessions. Europe's STOXX 600 Index rose 0.63%, hitting an intraday record value of 546.34.
The STOXX 600 Index for Europe rose by 0.5% on Saturday after falling 0.38% the previous day.
Stocks of several European steelmakers rose, reversing declines earlier. These included Luxembourg's ArcelorMittal, and Germany's Salzgitter.
Analysts are worried that tariffs will rekindle inflation in the United States, and remove flexibility for the Federal Reserve to reduce interest rates. This is a potential outcome which could help support the U.S. Dollar since Trump's election.
According to CME's FedWatch Tool, the markets expect the Fed to keep rates unchanged at its meeting in March. Expectations for a rate cut of at least 25% basis points will not rise above 50% until June.
Morgan Stanley's chief U.S. economic Michael Gapen stated in a client note that the recent tariffs had raised the bar and the firm expects to only make one rate cut this year at its June meeting.
The Fed chair Jerome Powell will be speaking to the Senate Banking, Housing and Urban Affairs Committee on Tuesday. It is likely that his comments on inflation and tariffs will be closely watched.
The yield on the benchmark 10-year U.S. notes dropped 1.8 basis points, to 4.469%. This was in response to comments made by Trump on Sunday indicating that his administration might examine Treasury debt payments looking for fraud.
Oil prices recovered despite persistent fears of a global trade war. U.S. crude oil rose by 1.49%, to $72.06 per barrel. Brent was up by 1.29%.
(source: Reuters)