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IAEA chief: return to Iranian sites top priority
Rafael Grossi, the U.N.'s chief nuclear inspector, said that his priority was to get his inspectors to Iran to assess the effects of U.S. military strikes on Iran and to verify its stock of enriched Uranium. Grossi, the head of the International Atomic Energy Agency (IAEA), told a press conference during an Austrian cabinet meeting on security that "this is our number one priority." He wants his inspectors to return to Iranian sites, including the three facilities where it enriches uranium before Israel's strikes on June 13th. When asked if Iran informed him about the status of its stocks, especially its uranium that was enriched up to 60% purity and close to weapons grade he referred to a June 13 letter from Iran, which stated Iran would take “special measures” to protect its nuclear equipment and materials. They did not elaborate on what they meant, but it was clear that this was the implied meaning. Grossi suggested that much of the material may have survived the attack. Francois Murphy reports.
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China braces itself for a second tropical cyclone within two weeks after flooding
Meteorologists warned that a tropical depression could hit southern China on Thursday. It will bring rain and gales in a region still recovering after the Typhoon Wutip. China's National Meteorological Centre published an online bulletin Wednesday that the tropical depression may land between the island provinces of Hainan on the mainland and Guangdong in the south on Thursday morning. The flood defences in densely populated Guangdong, as well as Guangxi or Hunan farther inland will be tested by the storm. Wutip, which ravaged the region between June 13 and 15, dropped record rainfall and damaged roads and crops. Five people died. China has been fighting summer flooding for millennia. But some scientists claim climate change is leading to heavier rains and more frequent floods. Chinese officials warn that massive flooding could trigger "black swans" with disastrous consequences, such as dam failures. Chinese meteorologists predict that heavy rains caused by typhoons from June through July will cause more flooding than expected. Rongjiang, in the southwest Guizhou Province, was hit by unusually heavy rains on Wednesday. The city, which has a population of 300,000, was half submerged as floodwaters rose quickly and swept cars away, damaged underground garages, malls, power grids and other vital infrastructure. State media reported that rivers in Guangxi downstream were still swollen Wednesday due to the rain in Guizhou. One waterway was more than nine metres (30 feet), above what is considered safe. China's Economic Planning Agency in Beijing announced on Wednesday that it had allocated urgently 100 million Yuan ($14million) for disaster relief in Guizhou and another 100 million Yuan to Guangdong, Hunan and other provinces.
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India's biofuel campaign eats into chicken farmer profits
In India, maize prices are rising sharply due to the ethanol push Feed price hike squeezes poultry farmers After years of exporting maize, India now imports it Bhasker Tripathi India's rapidly expanding biofuel program, designed to reduce oil imports and emissions, has intensified competition for maize. Small poultry producers, like Prajapati, are feeling the effects. By the year 2025, the Indian government aims to have 20% of the petrol sold in the country be ethanol. Sugarcane and maize are the main feedstocks for biofuel. The increase in ethanol production diverts the food crop away from traditional uses such as livestock feed, impacting millions small poultry farmers that rely on maize for their birds. Cleaner Fuel According to Indian government statistics, India saved about 1,06 trillion rupees (12.37 billion dollars) between 2014 and 2024 in crude oil imports by blending ethanol with petrol. Government data revealed that it also prevented 54.4 million tonnes of carbon dioxide emissions that are harmful to the planet in the same decade. According to the U.S. Environmental Protection Agency's calculator, this is the equivalent of 12 million gasoline powered cars per year. The document shows that ethanol production uses about one-third of the maize produced in India. This puts it in direct competition with India's poultry industry, which consumes around 60% of India’s maize. Rajeev Ranjan is a maize seller to both ethanol mills and poultry feedmills. He said that prices had risen by more than 20 percent in the last year. Suresh Deora is the former chairman of India's Compound Livestock Feed Manufacturers' Association. Egg prices are set by the market, so small farmers can't easily pass on higher costs. Reports state that India, once a net exporter of maize, is now forced to import grain in order to stabilize the domestic supply. India's current maize demand, which includes fuel, liquor and other industrial uses, exceeds the production, according to Ramya Natarajan, an Indian research scientist with CSTEP, a think tank. According to CSTEP, to meet the 20% ethanol goal will require land seven times as large as New York City for biofuel crops. FEW CUSHIONS Prajapati says spiraling costs and lower production of eggs have forced him to use cheaper, lower-quality feeds, further reducing the number of egg laying chickens. The small poultry farmer and others are already struggling with disease, lack of credit and heatwaves which reduce the egg production and increase bird death. Prince Rajput of Varanasi said that the maize price increases have also reduced his profit margins. He warned small farmers that they have limited room to cushion shocks and that rising costs could squeeze them out completely. They cannot negotiate deals or hedge against inflation like large producers. Rajput stated that "Poultry does not seem to be a government priority sector." "Even getting loans is difficult." Farmers and feed manufacturers urge the government, for now, to increase maize production and limit its use in ethanol. Requests for comments from the departments responsible for biofuel, poultry and maize production were not answered. New biofuel technologies could be a solution, say experts. While most biofuels come from maize or maize second generation, ethanol is made using crop residues, non-food biomass and other crops. This could help reduce the pressure on the food system. Natarajan stated that if 2G ethanol is commercially viable it will help India achieve its blend targets without compromising land use or food security.
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The gold market is watching US economic data.
The gold price stabilized on Wednesday, after it had fallen in the previous session. This was due to an improved risk appetite after a truce reached between Israel and Iran. Meanwhile, attention turned towards upcoming U.S. Economic Data. Gold spot was unchanged at $3,326.89 an ounce as of 0823 GMT. Prices had fallen to their lowest levels in more than two weeks on Tuesday. U.S. Gold Futures rose 0.2% to $3341.40. Gold's earlier gains were wiped out yesterday due to the de-escalation in tensions in the Middle East and a reduced need for safe haven assets. Investors will likely continue to prefer to hold gold despite the uncertainty surrounding Iran's future nuclear program, said Giovanni Staunovo. On Wednesday, the ceasefire between Iran and Israel brokered by U.S. president Donald Trump appeared to have held on the day after both countries had signalled their air war was over. Investors decided to increase their risk after the truce, and this caused the dollar index to struggle to recover lost ground. The dollar's weakness makes the greenback price of bullion attractive to holders of other currencies. A report revealed that global central banks are looking to move their reserves away from the US dollar and into gold, euro, or the Chinese yuan in the face of geopolitical turmoil. Gold tends to do well when interest rates are low and is a good investment during times of turmoil. Markets are now focused on the first-quarter GDP data for the United States, due Thursday. This will provide insights into economic growth. The Federal Reserve's preferred inflation indicator, Personal Consumption Expenditures report (PCE), is the focus of Friday's attention. Staunovo stated that if the PCE data is lower, it will put more pressure on the Fed and gold to reduce rates. On Tuesday, Fed chair Jerome Powell warned members of Congress that increased tariffs may start to raise inflation in the summer. Data showed that U.S. consumers' confidence unexpectedly declined in June. Silver spot fell by 0.2% to $35.85. Platinum dropped 0.6% to $1,308.60. Palladium was down 0.5% to $1,061.25. (Reporting and editing by Kevin Liffey in Bengaluru)
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Dollar steady, stocks up as ceasefire boosts confidence
On Wednesday, stocks rose and crude oil remained close to multi-week lows as investors viewed a ceasefire agreement between Israel and Iran and reinvested in riskier assets. They also brushed aside any immediate concerns about an energy crisis. Lower oil prices lowered the inflation risk for bonds. Israel has said it will take strong action against Iranian missile attacks that followed after U.S. president Donald Trump declared an end to hostilities. According to an initial U.S. Intelligence Assessment, the U.S. airstrikes didn't destroy Iran's nucleonic capability, but only pushed it back a few months. This contradicts Trump's previous comments that Iran’s nuclear program had been "obliterated". Early trade saw the Stoxx 600 index in Europe rise 0.2%, while S&P futures and Nasdaq Futures were flat. The Nikkei soared 0.4% in Japan, while the Hang Seng rose 1.3% in Hong Kong, and blue chips on mainland China gained 1.44% to close at their highest levels since March 20. The MSCI global stock index remained stable after hitting a new record overnight. Analysts at Frankfurt's Metzler stated that "if the still-tense Middle East situation continues to calm, then the stock markets may have a pleasant month of July in front of them in line with the usual seasonal pattern." This would lead to new highs for the U.S. and could be further fueled by renewed expectations that the Fed will cut interest rates. The latest U.S. macroeconomic statistics, including consumer confidence data, released over night suggest that the economy may have grown slower than expected in the largest oil-consuming country. This has boosted expectations for Federal Reserve rate reductions this year. Brent crude rose by 2%, to $68.43 a barrel. This is a slight rebound after a drop of up to $14.58 in the two previous sessions. U.S. West Texas Intermediate Crude was up to $65.60 a barrel. In a client note, analysts at ING stated that "while concerns regarding Middle Eastern supplies have diminished, they haven't entirely disappeared and there is still a strong demand for immediate supply." The yield on the two-year U.S. Treasury bond was the lowest since May 8, at 3.7848%. The euro fell 0.1% to $1.1594. This is still near the overnight high, $1.1641, which has not been seen since October 20,21. Meanwhile, the U.S. Dollar Index, which measures currency against six other major counterparts was only marginally higher at 98.079. Gold prices rose slightly to $3,328 an ounce. Investors continue to be most concerned about U.S. money policy, aside from geopolitics. Federal Reserve Chair Jerome Powell stated on Tuesday that increased tariffs may begin to raise inflation this summer. This period will be crucial for the U.S. Central Bank when considering rate cuts. According to CME FedWatch, the markets continue to price in an approximate 19% chance of the Fed cutting rates by a quarter-point in July.
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Sources say BYD has slowed production and delayed capacity expansion in China factories.
Two people familiar with the matter said that BYD, the Chinese electric vehicle leader, has slowed down its production and growth pace by reducing shifts in some factories in China. It also delayed plans to add more production lines. These decisions could be a sign of BYD's sales growth slowing down, even though it has offered deep price reductions in China's fierce auto market. BYD has reduced production by at least one third at its factories and cancelled night shifts, according to sources who declined to name themselves because it is a private matter. One person said that BYD also had suspended plans to build new production lines. BYD has seven factories in China and sold 4,27 million vehicles last year. It has set a target of a nearly 30% increase in sales this year to 5.5 millions. It was not possible to determine the exact size of the reduction in production and the suspension of expansion, nor how long the measures might last. One source said that the measures were taken to save costs while another said that they were implemented after sales did not meet their targets. BYD didn't immediately respond to an inquiry for comment. After announcing its production reduction measures, shares of Hong Kong listed BYD lost up to 2.6% of their earlier gains and dropped by nearly 1% on Wednesday afternoon. The China Association of Automobile Manufacturers reported that BYD’s production growth had slowed in April and May to 13% and 0.2 percent year-on-year, respectively. This was the lowest pace since February 20, 2024, when factory operations were disrupted for a week by the lunar New Year holiday. The data revealed that BYD began increasing monthly production in the second quarter of 2023 and 2024. The trend is different this year. Average output in April-May was 29% lower than the fourth quarter in 2024. BYD became the largest EV manufacturer in the world within a few short years, by increasing production and accelerating the release of new models that are more affordable. The recent price reductions, which brought the price of its lowest model down to 55,800 Yuan ($7.800), led to a wider sell-off in Chinese automobile stocks, and new price cuts by rivals. In a survey conducted by China Automotive Dealer Association, in May, BYD dealers had an average of 3.21 months' worth of inventory, the most among all Chinese brands, while the industry-wide inventory level was 1.38 months. Last month, the government-owned media reported that a large BYD dealership in eastern Shandong province had gone out of business. At least 20 of their stores were found deserted or closed. Early in June, as inventory levels increased, the China Auto Dealers Chamber of Commerce called on automakers not to dump too many vehicles on dealerships but to set "reasonable production targets" based on performance. The group claimed that intense price wars are causing cash flow to be squeezed and driving profits down. Chinese auto dealers on Sunday urged automakers that they pay cashback incentives to their customers within 30 days in order to ease financial pressures. In recent months, Chinese regulators have increased their scrutiny on the auto industry due to the intensifying price competition. This practice, which has been going on for years, has caused suppliers and automakers to suffer. Chinese automakers now look to overseas markets in order to boost sales and counter the weakening momentum of their home market. BYD has sold around 1.76 million cars in the first five months this year. Around 20% of these vehicles were exported. $1 = 7.1684 Chinese Yuan Renminbi (Reporting and editing by Zhuzhu cui, Zhang Yan, and Brenda Goh.
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Iron ore prices continue to fall on the back of rising supplies and a slowdown in demand
The price of iron ore futures fell for the second consecutive session on Wednesday. This was due to a combination of a slowdown in China's demand and an increase in shipments from Australia. The day-end price of the most traded September iron ore contract at China's Dalian Commodity Exchange was 702.5 yuan (US$97.97). As of 0728 GMT, the benchmark July Iron Ore traded on Singapore Exchange had fallen 0.25% to a ton price of $92.75 Mysteel, a Chinese consultancy, said that the total volume of iron-ore shipments by top suppliers Australia, Brazil, and South Africa increased to 30,1 million tons between June 16-22. This is a record for ONE YEAR. In a recent note, ANZ analysts stated that iron ore prices continued to decline due to signs of stable supply. ANZ has also noted that the construction industry typically slows down during summer. This will likely lead to a further decline in Chinese imports of Iron Ore. Rio Tinto, the largest iron ore producer in the world, received approval from Australian government for its Hope Downs 2 Project. The joint venture project between Rio Tinto, Hancock Prospecting and others will have a production capacity of 31 millions tons per year. Rio Tinto expects to spend more than 13 billion dollars on new mines and plant over the next 3 years. Meanwhile, the British government is expected to impose tougher-than-expected trade caps on steel as the country attempts to support its domestic industry amid a global oversupply. Coking coal and coke both rose in the DCE, by 0.75% each. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Wire rod and hot-rolled colums fell 0.58% while stainless steel rose 1.25 percent.
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Copper prices rise on weaker dollar and tentative Middle East truce
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw copper prices rise on Wednesday. This was due to a weaker dollar and an apparent ceasefire between Iran & Israel. As of 0701 GMT the LME's three-month contract for copper increased by 0.6%, to $9,728.5 a metric ton. The SHFE's most-traded contract for copper also rose by 0.47%, to 78,810 Yuan ($10990.56). Israel has said it will take strong action against Iranian missiles that were launched after U.S. president Donald Trump declared an end to hostilities. The U.S. Federal Reserve chair Jerome Powell has said nothing about the interest rate reduction, but the traders and investors have been waiting for some clear signals. Even after Powell testified before the U.S. Congress, he said that many Fed officials expect inflation to accelerate soon and that the central banks is currently not in a hurry to ease borrowing rates. Dollar-priced materials are more appealing to buyers who use other currencies because of the softer U.S. dollar. The SHFE lead price reached 17,200 yuan per ton on Wednesday and the LME lead price touched $2,030. Both were at a three-month peak. In preparation for the summer months' better demand for lead, China's lead-smelters are increasing their offers for used electric bicycle batteries. This helps to boost primary lead prices, according to a Shanghai metals analyst. In China, e-bikes tend to have their batteries replaced more often in the summer because of the shorter lifespan. LME aluminium dropped 0.39% to a price of $2,569 per ton. Tin gained 0.78%, reaching $32,570. Zinc gained 0.71%, reaching $2,700.5. Nickel rose 0.6%, to $15,010. SHFE Nickel gained 1.17% at 118,600 Yuan. Zinc gained 0.57% at 22,045 Yuan. Aluminium gained 0.12%, and tin fell 0.07%, to 263,000 Yuan. Click or to see the latest news in metals, and other related stories. Data/Events (GMT). 1000 France Unemp SA Class-A May 1400 US new home sales-units May ($1 = 7,1707 Chinese Yuan) (Reporting and Editing by Sherry Phillips, Rashmi aich and Hongmei Li)
Investors assess Iran-Israel ceasefire and oil prices rise
The price of oil rose on Wednesday, as investors weighed the stability and potential for a ceasefire agreement between Iran & Israel. However, it remained near its multi-week lows due to the expectation that crude oil flow would not be interrupted.
Brent crude futures gained 85 cents or 1.3% to $67.99 per barrel at 0341 GMT. U.S. West Texas Intermediate crude (WTI), however, rose 87 cents or 1.4% to $65.24.
Brent settled at its lowest level since June 10, and WTI, since June 5. Both were before Israel launched an attack on Iranian nuclear and military facilities on June 13,
After the U.S. attack on Iran's nuclear facility over the weekend, prices had risen to five-month highs.
The global energy prices have moderated following the Israel/Iran ceasefire. Our oil strategists' base case is still anchored in fundamentals that indicate a sufficient global supply of oil, according to JP Morgan analysts.
According to an initial U.S. Intelligence assessment, U.S. Airstrikes didn't destroy Iran's nuke capability, but only pushed it back a few months. This was as a fragile ceasefire between Iran and Israel, brokered by U.S. president Donald Trump, took hold.
Both Iran and Israel announced earlier on Tuesday that the air conflict between the two countries had ended - at least temporarily - after Trump publicly reprimanded them for breaking a ceasefire.
Both countries claimed victory as they lifted civil restrictions after 12 days war, which the U.S. also joined by attacking Iran's uranium enrichment facilities.
The Israel-Iran ceasefire will likely prove fragile. As long as both sides are unwilling to attack energy export infrastructure or disrupt shipping through the Strait of Hormuz we expect the bearish fundamentals of the oil market to continue.
Investors were worried by the direct U.S. involvement. The Strait of Hormuz is a narrow waterway that connects Iran and Oman. It carries between 18 and 19 million barrels of crude oil per day, or bpd, which represents nearly a fifth of the global demand.
Investors were awaiting U.S. government statistics on crude oil and fuel stocks due Wednesday.
Market sources cited American Petroleum Institute data on Tuesday to show that U.S. crude stocks fell by 4,23 million barrels during the week ending June 20.
(source: Reuters)