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China imports US rare earth ore at a record high in July
It is likely that the sharp increase in China's imports from the United States of rare earth ore in July was the result of the last customs accounting for shipments made by U.S.-based MP Materials. The General Administration of Customs released data on Wednesday showing that imports of U.S. rare earth ore rose to 4,719 tons in July, after dropping to zero in June. This sparked speculation in the market about the origin of the shipments. Shenghe Resources, a minority shareholder of MP Materials and the owner of the U.S.'s only rare earth mine, has been processing ore in China since long. In April, MP announced that it had halted shipping critical minerals to China due to the dispute between the U.S. On Thursday, MP said that its final exports had been sent during the second quarter. "Shipments over water, storage and other factors may contribute to reporting delays." The increase coincided with the recovery of China's rare earth magnet exports, which are vital for electric vehicles, windmills and defence industries. Customs data revealed that China's exports of rare earth magnets to the U.S. increased by 75.5% compared to the previous month, to 619 tonnes, which is 4.8% more than in the same month 2024.
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China's steel production rises despite a soft demand, causing iron ore to fall for the second week in a row.
Iron ore futures slid on Friday as they extended their weekly losses for a second consecutive week. Steel margins and input costs were pressured by rising steel production despite the sluggish Chinese demand. The January contract for iron ore most traded on China's Dalian Commodity Exchange was 0.71% lower, at 770 Yuan ($107.25). This week, it fell by 0.97%. As of 0717 GMT, the benchmark September iron ore traded on the Singapore Exchange fell 0.71%, to $100.45 per ton. This is a loss of 1.42% this week. Atilla Winnel, Navigate Commodities' managing director in Singapore, said that the latest weekly data onshore released on Thursday showed that certain steel mills had begun to increase production of steel products. This is consistent with trends we observed over two weeks by using daily thermal satellite images and readings. Atilla said that the relatively higher output of steel in an environment with weak demand puts downward pressures on steel margins, input costs and iron ore. According to Mysteel, the total stockpiles of iron ore across Chinese ports increased by 0.2% on a weekly basis to 138.5 millions tons as at August 21. This further pushed down prices. China also requested consultations with the World Trade Organisation regarding Canada's steel and aluminum quotas and surtaxes. The announcement follows that of Canadian Prime Minister Mark Carney, who announced last month a 25% duty on imports of steel from any country that contains steel melted and cast in China prior to the end of July. This was part of an effort to protect Canada's domestic industry. Coking coal and coke, the other steelmaking ingredients, fell by 0.17% each and 0.03% respectively. The benchmarks for steel on the Shanghai Futures Exchange have mostly fallen. Hot-rolled coils fell 0.86%, while stainless steel fell 0.51%. Wire rod climbed 0.24% ($1 = 7.1792 Chinese yuan).
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Private Chinese firm producing oil in Venezuela under rare 20-year pact, source says
China Concord Resources Corp. has started developing two Venezuelan oilfields. The company plans to invest over $1 billion into a project that will produce 60,000 barrels of crude oil per day by the end of 2026. The project is a rare investment made by a Chinese private firm in an OPEC nation that has been struggling to attract foreign capital because of international sanctions against the Maduro administration. This is the first time that the investment amount and production plan have been reported. Beijing is a major ally of Maduro, as well as his predecessor, late President Hugo Chavez. It currently purchases more than 90% the total Venezuelan oil exports. CNPC, the Chinese state-owned oil company, was one of the biggest investors in Venezuela's petroleum sector before U.S. sanctions on Venezuela were first imposed in 2019. China was also one of Venezuela's biggest lenders. The executive said that CCRC started negotiating their participation in two oilfields – Lago Cinco, and Lagunillas Lago – in early last year. In May 2024, they signed a 20-year contract for production sharing with Venezuela. In 2020, the Venezuelan government introduced the Anti-Blockade Law, which allows investors to take on the role of operators in exchange for a share of production. PDVSA, Venezuela's oil minister and the PDVSA did not respond to comments. The oilfields of Venezuela's second-largest oil-producing region, Lake Maracaibo are part of the group of blocks for which PDVSA is seeking partners in recent years. According to a PDVSA report, the majority of the partners who are being considered are small companies that have no experience in oil production. CCRC, which had no prior experience in oil drilling, has sent around 60 Chinese personnel skilled in oilfield developments and a Chinese drill rig since September last year, with the aim of quickly reopening about 100 wells to recover crude production, according to an executive. The executive said that production at both fields has increased to 12,000 bpd. This is a significant increase from the largely stagnant levels of recent years, due to a lack of investment and expertise. CCRC aims at developing 500 wells to increase output up to 60,000 bpd, he added. He said that the oil is a mixture of heavy and light crude, with lighter crude going to PDVSA, and heavier crude heading to China. The executive stated that because of U.S. sanctions against Venezuela's oil industry, "no big names would dare to operate there." This gave opportunities to smaller companies such as Concord. The state oil company PDVSA controls joint ventures, contracts and has stabilised oil production at 1 million barrels per day, partly because U.S. licensing allows a limited number foreign partners to export oil and operate in the country. Since the U.S. placed energy sanctions against Venezuela in 2019 most Chinese state oil companies have stopped lifting crude oil. Chinese independent refiners continue to purchase oil through traders.
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ASIA GOLD - Volatile prices dampen gold demand in major Asian hubs
This week, physical gold demand remained low in major Asian hubs as volatility in prices kept buyers away. However, jewellers in India recommenced purchases in advance of the festival season. The price of gold in India was around 99,300 rupies ($1,135.77) for 10 grams last Friday, after reaching a record-high of 102 250 rupies earlier this month. Jewellers have started to buy again after a price drop, as they are more confident of the festival demand. In October, Indians celebrate Dussehra (Diwali) and Diwali (Diwali), when gold is considered auspicious. Indian dealers quoted between a discount and a full price this week. The discount last week was up to $6. This week, the price is $2 per ounce, with a premium of about $3 over official domestic prices. Amit Modak said that retail buying was still low, at about 60% of its normal level. Bullion changed hands in China's top consumer between $3 and $8 per ounce Over the global benchmark spot rate, which has traded in a price range between $3,311 and $3,358 so far this week. Ross Norman, a independent analyst, said: "With gold in a rut, it is possible to exaggerate moves on the news from Jackson Hole. This reflects the thin conditions that are currently gripping the markets." In Hong Kong, gold In Singapore, the price was $1.70 plus a parity premium. Gold traded at par prices with a premium of $2.50. "We have seen some retail purchases, but nothing substantial." The jewellery market has seen a low level of demand due to high prices, said Brian Lan, the managing director of GoldSilver Central in Singapore. Lan said that while there is more interest in investment bars it's nothing too unusual. In Japan, bullion The spot price was $0.50 higher than the par value. $1 = 87.4300 Indian Rupees (Reporting and editing by Anmol Chaubey, Bengaluru; Rajendra Jadhav, Mumbai)
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IRNA: Iran and European powers discuss sanctions and nuclear talks
Iran's foreign minister Abbas Araqchi is scheduled to speak with his French and British counterparts and German counterparts Friday about nuclear talks and sanctions. This was reported by the state news agency IRNA. Three European powers have warned that they will activate United Nations sanctions against Iran under a "snapback mechanism" if Iran doesn't return to the table to negotiate over its nuclear program. Together with the United States they claim that Iran uses its nuclear program to develop weapons. Tulsi Gabriel, the U.S. director of national intelligence, testified before Congress in March that there was no evidence that Iran had moved toward developing a nuclear weapon. Iran's State Broadcaster reported that Araqchi, the British and European Foreign Ministers and other officials will discuss the trigger of the snapback mechanism. After the U.S. & Israel attacked Iran's nuclear sites in June, Tehran suspended its nuclear negotiations with the U.S. IAEA inspectors are unable to gain access to Iran's nuclear facilities, despite the fact that IAEA chief Rafael Grossi stated that inspections were still essential. Iran's State-Broadcasting said that a delegation from Iran is scheduled to visit Vienna on Friday, to meet IAEA officials. The broadcaster did not provide any further information. Reporting by Nayera Abedallah; editing by Jacqueline Wong Christian Schmollinger Michael Perry
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Asian shares are choppy as dollar increases ahead of Powell's speech
The stocks in Asia mostly held to their safe ranges as traders awaited the key speech by Federal Reserve Chair Jerome Powell, who will be speaking at the annual Jackson Hole Symposium this weekend. This speech could shed some light on the direction monetary policy. The financial markets are waiting for Powell to give them clues about the possibility of a rate cut in September, following recent signs of weakness on the job market. MSCI's broadest Asia-Pacific share index outside Japan has lost early gains, and is now down by 0.1%. This brings its gain to 1.3% for the month. Investors are most concerned about what central bankers say about U.S. Tariffs, their impact on the economy and inflation and which factor will have more influence on interest rates policy as central banks struggle with the risk stagflation, said Vasu Menon. China's blue chip CSI 300 Index jumped by 1.8% on Thursday, a day that saw gains for the third straight day. Tech shares were the first to rise after DeepSeek upgraded its flagship V3 AI and Foxconn reported that Nvidia asked Foxconn not to work on the H20 AI chips. This boosted the shares of Chinese competitors. China's technology-focused STAR 50 Index rose by almost 8%. The Nikkei was fluctuating between gains and losses and last fell by 0.1%. Data from Japan showed that core consumer prices fell for the second consecutive month in July, but they remained above the central banks' 2% target. This kept alive expectations of a rate increase in the near future. The yen was still on track for a 1% drop for the week, despite the data. BOJ Governor Kazuo Ueda is also scheduled to speak in Jackson Hole, Wyoming this weekend. The dollar index (which tracks the greenback versus a basket currencies of major trading partner) advanced 0.2% to 90.796 as traders analyzed speeches by Fed officials who seemed lukewarm about the idea of a rate cut next week. S&P futures fluctuated between gains and losses, and last traded down by 0.1%. Cash gauges on Wall Street are on a losing streak of five days, which puts them on course for their biggest weekly decline in this month. After a weaker-than-expected payrolls report earlier this month and consumer price data showing limited upward pressure due to tariffs, traders had increased their bets on a September reduction. The market's pricing has retreated slightly since the minutes of the Fed meeting in July were released. According to CME Group’s FedWatch, traders now price in a 73.3% chance of a September cut, down from an 82.4% probability on Thursday. Kong says that the most likely scenario for Powell is to not provide "any definitive hints" about what the Fed's next move will be ahead of crucial non-farm payrolls data and CPI figures. "Given the current state of the market, the risk is that the U.S. Dollar will strengthen, especially if the challenge the current pricing on the market for a 25 basis-point reduction." The PMI data of S&P Global shows the fastest growth in manufacturing orders for 18 months. The labour market has also revealed pockets of weakness. Last week, the number Americans who applied for unemployment benefits increased by the most since about three months and the number receiving unemployment relief rose to its highest level in almost four years. The euro fell, falling 0.2% to $1.1585 - a low for two weeks - as the EU and U.S. revealed details of the framework trade agreement they struck in July. Brent crude prices have stabilised. They last traded up 0.1% to $67.73 a barrel after strong gains on Friday as Russia and Ukraine both blamed eachother for the stalled peace processes and U.S. Data showed signs of a strong demand in America, the largest oil consumer nation. Gold spot fell 0.3% to $3,329.40 an ounce.
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UN: 'Urgent Action' is needed to protect workers against heat stress as the world warms.
The United Nations stated on Friday that governments and employers must take immediate action to protect workers' health who are exposed to extreme heat. Heatwaves are becoming more frequent and intense due to climate change, and workers around the world are experiencing health effects. The agencies stated this in a major update that was "much-needed" of a 1969 report and guidelines. The report stated that worker productivity decreases by 2-3% for each degree above 20degC. Half of the global population is already experiencing the negative effects of high temperatures. According to the World Health Organization, and the World Meteorological Association, the health risks are heatstroke, dehydration and kidney dysfunction, as well as neurological disorders. They said that manual workers in agriculture, construction, and fishing, as well vulnerable populations such as children and older adults living in developing countries were at particular risk. Ko Barrett, WMO's Deputy Secretary General, said: "Protecting workers from extreme heat not only is a health necessity but also an economic one." The agencies responded by calling for heat action plans that are tailored to specific regions and industries and developed in collaboration with workers, employers and experts on public health. The agencies noted that unions in certain countries had pushed for maximum working temperatures. However, the agencies also said this was a possibility, but it would vary globally depending on context. Heat stress is often misdiagnosed by health professionals and first responders. According to the International Labour Organization, more than 2,4 billion workers worldwide are exposed excessive heat. This leads to more than 22,85 million workplace injuries every year. Rudiger Krech said at a WHO press conference held ahead of the release of the report, "No one should be forced to risk kidney failure, or even collapse, just to make a living." (Reporting and editing by Hugh Lawson; Jennifer Rigby)
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As peace in Ukraine continues to elude, oil prices are set to snap a two-week losing streak
The oil prices did not change much on Friday, as the hope of an immediate peace between Russia & Ukraine dwindled. This increased the risk premium that oil sellers demanded and put prices on course to end a two-week loss streak. Brent crude futures dropped 12 cents, to $67.55 per barrel at 0415 GMT. West Texas Intermediate crude futures also fell 10 cents, to $63.42. Both contracts rose more than 1% the previous session. Brent has risen by 2.7% in the past week, and WTI is up 1.1%. As traders lose hope that U.S. president Donald Trump will be able to broker a quick deal to end Russia-Ukraine conflict, which sparked a drop in oil prices over the past two weeks, they are now pricing in more risks. In a Friday client note, analysts at ING stated that it was difficult to organize a Putin-Zelenskiy meeting. Discussions about potential security guarantees also face obstacles. The risk of more severe sanctions (by the U.S.) against Russia increases the less likely it looks that a ceasefire will occur. The three-and-a-half-year war continued unabated on Thursday as Russia launched an air attack near Ukraine's border with the European Union and Ukraine said it hit a Russian oil refinery. While U.S. planners and European planners have said that they have developed military alternatives by allied national-security advisers. The first talks between U.S. leaders and Russians since Russia invaded Ukraine took place at the weekend. However, they have made little progress in bringing about peace. Sources say that Vladimir Putin, the Russian president, demanded Ukraine to give up the entire eastern Donbas region and renounce NATO aspirations, while also keeping Western troops out. Trump has pledged to protect Ukraine in any deal that ends the war. The Ukrainian President Volodymyr Zelenskiy has dismissed the idea that Ukraine could withdraw from its internationally recognized land. The oil prices were also supported last week by the fact that U.S. crude stocks had been reduced more than expected, which indicates strong demand. The U.S. Energy Information Administration reported on Wednesday that stocks fell by 6 million barrels during the week ending August 15. Analysts expected 1.8million barrels. Investors also waited for signs of a Federal Reserve rate cut at the Jackson Hole Economic Conference in Wyoming. The annual meeting of central bankers starts on Thursday. Fed Chair Jerome Powell will speak on Friday. Lower interest rates could stimulate the economy and increase oil consumption, which would lead to a possible rise in prices. (Reporting and editing by Christopher Cushing; Sudarshan Varadhan)
MORNING BID EUROPE-One last summer hurrah?
Gregor Stuart Hunter gives us a look at what's ahead for the European and Global markets. It may be that Jerome Powell is the cure to those summertime blues.
As the Federal Reserve chairman prepares to speak at the annual symposium of the central bank in Jackson Hole (Wyoming), lethargic traders still needed a boost.
The financial markets continued to drift as they waited for Fed officials' clues about the direction of monetary policies and the likelihood that a rate cut in September would be implemented after recent signs of weakness on the job market.
S&P futures are flat. They show little interest in breaking the cash index's five-day loss streak on Wall Street. This has put it on course for its largest one-week drop this month.
After a disappointing payroll report earlier this month and consumer price data showing limited upward pressure due to tariffs, traders had increased their bets on a September reduction.
The market's pricing has retreated slightly since the minutes of the Fed meeting in July were released. According to CME Group’s FedWatch, traders now price in a probability of 75.3% for a September cut, down from an 82.4% estimate on Thursday.
The euro fell 0.2% to $1.1589 after the EU and U.S. released details of the framework trade agreement they struck in July.
The yen also weakened. The greenback gained 0.2%, to 148.45 dollars per yen. This was after data revealed that Japan's core consumer price in July exceeded both analysts' expectations and the Bank of Japan inflation target. This weekend, Governor Ueda is also scheduled to speak at the Jackson Hole Forum.
MSCI's broadest Asia-Pacific index outside Japan was flat as well, supported by a gain of 1.2% for China's blue-chip CSI 300 Index. It is on course for its third day in a row of gains.
Brent crude oil prices fell, last trading at $67.54 a barrel after strong gains Thursday, as Russia and Ukraine blamed one another for the stalled peace, while U.S. statistics showed strong demand in America, the world's largest oil consumer.
The following are key developments that may influence the markets on Friday.
Germany Q2 GDP
Business Climate Indicator (août)
UK: Government debt auctions for 1-month, 3-month, and 6-month terms
(source: Reuters)