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Oil prices remain flat as traders evaluate U.S. Iran talks and the Hormuz closing
Investors assessed the prospects of renewed U.S. Iran talks, and the potential of releasing supply from the Middle East where exports are still restricted by the closure of the Strait of Hormuz. Brent crude futures rose 43 cents or 0.5% to $95.22 per barrel at 821 GMT after dropping 4.6% the previous session. U.S. West Texas Intermediate Crude was down 17 cents or 0.2% to $91.11. The contract fell 7.9% in the previous session. The war has largely closed the Strait of Hormuz. This is a major waterway that allows crude oil and refined products to flow out of the Gulf and be sold globally, especially in Asia and Europe. Donald Trump, the U.S. president, said that talks with Tehran to end the war may resume this week. They ended over the weekend in a deadlock. The U.S. also implemented a shipping blockade that, according to its military on Wednesday, has stopped all trade in and out of Iran by sea. Sources said that despite a two week ceasefire, the transit through the Strait is still uncertain. Only a fraction the number of daily crossings as before the war. The trajectory of oil will depend less on battlefield developments than on diplomatic momentum. "Markets are reacting more to headlines 'around negotiations than troop deployments", said Priyanka Sahdeva, Senior Market Analyst at Phillip Nova. Each signal of renewed dialog has been accompanied by price drops, suggesting that traders have systematically unwinded the "war premium" embedded in crude earlier this month." Refiners desperately seek alternative crude supplies, driving up the premiums that they will pay for oil coming from places such as the U.S. Gulf Coast or North Sea. On Tuesday, a cargo of WTI Midland to be delivered to Rotterdam was traded at a record $22.80 per barrel premium over benchmark European prices. An official from the United States said that a U.S. destroyer prevented two oil tankers leaving Iran on February 2. SEB analyst Ole Hvalbye said that it is not Trump alone who wants to reopen the Strait of Hormuz. "Iran is using its own calculations, and it may be strategically beneficial for the regime to restrict flows even after any peace deal. This could be to extract reparations, ensure security, or to simply inflict pain on the market ahead of the U.S. midterm election. Two U.S. officials said on Tuesday that the U.S. would not renew the 30-day waiver for sanctions against Iranian oil at sea, which expires next week. They also quietly allowed a similar waiver to expire on Russian oil over the weekend. The Energy Information Administration is expected to release official U.S. inventories at 10:30 am ET. ET (1430 GMT). A poll indicated that U.S. crude stockpiles were expected to have increased slightly last week while distillate and gasoil inventories are likely to have decreased. According to market sources who are familiar with American Petroleum Institute data, U.S. crude inventories rose for the third consecutive week on Tuesday. (Reporting from Stephanie Kelly in London; Katya Golubkova, in Tokyo; and Emily Chow, in Singapore. Editing by Christian Schmollinger & Kevin Buckland.
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Sources say that the $2.2 billion Hong Kong listing of Victory Giant is expected to be priced at the top, based on demand.
China's Victory Giant will price HK$209.88 each share at the top of a range, raising HK$17.5billion ($2.2billion) after?receiving a strong demand - from investors, if two sources are to be believed. One source said that the company, which manufactures printed circuit boards used in artificial intelligence servers, and other electronic devices, will also exercise an option to increase the amount of the offering by up to 15%, bringing the total proceeds up to HK$20.2billion. The information was not public yet, so they declined to identify themselves. Victory Giant did not respond immediately to a comment request on Wednesday. According to the prospectus, pricing will be announced on Friday. The deal, if priced at its highest end of range, would indicate that investor demand remains strong for large Chinese technology listings despite the volatility in the Middle East market. According to Dealogic, Victory Giant is expected to offer the largest equity offering in Hong Kong since Zijin Gold’s $3.5 billion deal last September. Huaqin Technology, a Chinese company, launched a Hong Kong stock sale on?Wednesday with a goal of raising HK$4.55billion. This is the latest in a series of large Chinese equity deals that have been made in Hong Kong. Victory Giant - which is already listed in Shenzhen, and whose market value is $39.6 billion, according to LSEG, - launched its offering Monday. Its prospectus stated that it planned to sell 83.35'million shares for up to HK$209.88 per share. The company will begin trading on 21 April. (1 Hong Kong dollar = 7.8357 dollars) (Reporting and editing by Yantoultra Ngui)
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Hancock Prospecting ordered to pay royalties by court
A court on Wednesday ruled that Hancock Prospecting owned by Australia's wealthiest person Gina Rinehart and Rio Tinto had to pay "what could be hundreds of millions" of dollars in royalties to the former business partners of her father. Since 15 years, Hancock Prospecting has been involved in a legal dispute with Peter Wright's family over the Hope Downs Mine Complex in the iron-ore rich Pilbara Region of the state. The court ruled that Rio Tinto, the world's largest iron ore mining company, is a joint venture operator and jointly responsible for the payments. In the 1950s, Rinehart's dad, Lang Hancock and Peter Wright, a former classmate, teamed up to secure the mineral rights of the area which became the Hope Downs mine. In 1969, the two men agreed to a contract with Don Rhodes in which they would receive a small royalty percentage on ore produced by the mine. Local media reported that the lawsuit was primarily about the partnership between Wright, Hancock and the division of their assets in an agreement they negotiated and amended before Wright died?in 1985. The ruling stated that Rhodes' descendants made a claim on the basis of the 1969 agreement. Justice Jennifer Smith, of Western Australia's Supreme Court, ruled that Wright Prospecting, DFD Rhodes and the companies representing descendants of Wright, Rhodes and Wright, should receive a share in past and future royalties from some mines located at Hope Downs. The amount of the royalties?will be determined in a separate court trial. "After many delays we are happy to receive a final result in our favor. This decision is complex and lengthy. Wright Prospecting spokesperson said that they would review the decision in depth before deciding if any further steps are needed. DFD Rhodes didn't immediately respond to our request for comment. Rio Tinto's spokesperson confirmed that the company had acknowledged the court decision and was going to review it in full detail. In a recent statement, Hancock Prospecting Executive Director Jay Newby stated that "Bringing Hope Downs into life required significant investments in exploration, evaluation, and development. This included securing thousands of government approvals and major project financing, as well as a joint-venture partner." He said that Rhodes would receive A$4,000,000 ($2,86,000,000) in royalties per year, and Wright Prospecting about A$14,000,000 per year.
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Appian names Paulo Castellari CEO of Critical Minerals Unit
Appian Capital?Advisory, a mining-focused private equity company, has named former Eramet CEO Paulo Castellari as the head of its critical minerals unit. The?firm announced this on Wednesday, while stepping up?investment into energy transition commodities. The appointment comes at a time when competition is intensifying for battery metals and rare Earths required for electric vehicles and renewable energy, as well as digital infrastructure. Castellari joined?after a sudden exit from French mining company Eramet, only a few months after his appointment, citing disagreements over "operating methods". He held senior positions at Anglo American, Emirates Global Aluminium and Emirates Global Aluminium. Appian said that he would oversee the existing investments in graphite and mineral sands while also pursuing new investment opportunities in commodities vital for energy security as well as future-focused technologies. The company manages assets worth around $5 billion. Castellari was previously Appian's Brazil -assets manager for six years, until 2025. Appian, in October, launched a $1billion fund with the International Finance Corporation of the World Bank to invest into critical minerals projects?in Africa & Latin America. The fund is anchored by an IFC commitment of $100 million and targets nickel, copper cobalt, and rare earths. Michael Scherb said that Paulo's expertise will "play a crucial role" in advancing our projects, and unlocking long-term values for all of our partners, as we continue to expand our critical minerals portfolio. Clara Denina reported. Mark Potter (Editing)
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Japan to invest $10 billion in Asia's oil security
Japan announced on Wednesday that it would establish a financial framework of about $10 billion dollars to assist?Asian nations secure?energy resources? as the Middle East conflict intensified competition for oil. Support, aimed at preventing negative effects on Japan's supply chains, will be?channeled primarily through state-backed institutions like Japan?Bank for International Cooperation? (JBIC), and Nippon?Export and Investment - Insurance (NEXI). The Prime Minister Sanae Taichi announced the plan and said that the assistance would be "equivalent" to '1.2 billion barrels of oil or roughly one year of crude oil imported by the Association of Southeast Asian Nations. She spoke after a meeting with the Asia 'Zero-Emission Community' (AZEC), a Japan-led project aimed at accelerating energy transition and decarbonisation in?Asia. Southeast Asian countries have smaller oil stocks than Japan. This means that supplies of petroleum products, such as naphtha, a vital feedstock for plastics, are becoming increasingly scarce. The disruption of Southeast Asian production is causing anxiety among Japanese healthcare providers who rely on Asia to supply critical supplies like containers, tubes, and gloves. Reporting by Makiko Yazaki and Chang Ran Kim
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Copper nears six-week high on hope of new US-Iran discussions
The copper price rose on Wednesday, extending gains to hover near a 6-week high as the prospect of renewed U.S. - Iran peace talks sparked hopes for a 'de-escalation of Middle East conflict. The Shanghai Futures Exchange's most traded copper contract closed the daytime trading session up 1.38% to 102,090 Yuan ($14.974.70) a metric ton. The contract reached its highest level since March 3, at 103130 yuan, earlier in the day. The benchmark three-month copper price on the London Metal Exchange rose 0.24% to $13,317 per ton, after reaching its highest level since March 2, at $13,392.5. U.S. president Donald Trump said on Tuesday that talks with Tehran to end the war may resume this week. This would send oil prices down and ease concerns about inflation and global economic recession, which could affect demand for industrial metals. The prospect of an improving demand in the top consumer China, while imports fell, also influenced the price of red metal, which is used in construction, power and manufacturing. A researcher at the state-owned China Minmetals Corp. said that refined copper consumption could increase by 3.7% annually on average over the next decade. Both benchmarks have lost some of their earlier gains since the U.S. announced on Wednesday that its military has completely stopped trade entering and leaving Iran by sea. The plan by China to stop exporting sulphuric acids has sparked fears that the acid could have a negative impact on copper and nickel processing. Nickel prices have also risen as disruptions caused by the Iran war forced Indonesian nickel producers to reduce their output by at least 10%. Shanghai nickel prices rose 2.51% while London prices increased 0.65%. SHFE lead climbed 0.36%. Tin?climbed 2.8%. Zinc?climbed 0.27. Aluminium?fell 0.24% due to easing supply concerns. Aluminium gained 0.45% on the LME, while lead and zinc both rose by 0.49%. Tin fell by 0.87%.
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Gold drops on increased risk appetite, US-Iran talks focus
Gold prices fell after reaching a one-month high earlier in the session on?Wednesday. Prospects of another round peace talks between Iran and the U.S. boosted risk appetite while rising oil prices contributed to inflation problems. As of 0731 GMT spot gold was down 0.6% to $4,811.19 an ounce after reaching its highest level since March 18. U.S. Gold Futures for 'June Delivery' fell by 0.3% to $4834.40. Donald Trump, the U.S. president, said that talks to end the Iran War could resume in Pakistan within the next two days after weekend negotiations failed. Marex analyst Edward Meir said that gold prices are reacting to headlines from the Middle East in the short-term with the hope that both countries will engage in dialogue. If things go wrong again, we could revert back to the 'pre-ceasefire' pattern, which was lower gold, a stronger Dollar, and lower stock prices. Bullion has risen by 1.3% this week. Investor optimism about the Iran War causing a possible end to it soon boosted Asian stock prices. Brent oil prices increased amid concerns over the supply of crude from the Middle East's key producing region. The Strait of Hormuz is still largely closed. Inflation is fueled by higher?crude oil prices because they increase transportation and production costs. Gold is a hedge to inflation but higher interest rates are affecting the demand for this non-yielding material. The U.S. Military announced late Tuesday that American forces have stopped all economic trade entering and leaving Iran via sea, through a naval blockade. In the U.S. traders now see a 29% probability of a rate cut by 25 basis points this year. This is up from 13% just last week. Prior to the war, two rate cuts were expected for 2026. Analysts at OCBC wrote in a report that "while gold and silver rallied strongly overnight, there was a broader message of 'decisive risk-on positioning rather than defensive positions. Silver fell by 0.3% per ounce to $79.31, while platinum rose 0.1% to 2,105.21 and palladium remained at $1,586.63. (Reporting by Noel John in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Harikrishnan Nair)
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Iron ore prices rise on the hope that a resolution to the Iran War will revive steel demand
The price of iron ore futures rose on Wednesday, as the prospect of peace talks?to end Iran's war quelled fears about Chinese steel disruptions in the Gulf. Meanwhile, the?rising production of hot metal?continued to?support demand for this steelmaking ingredient. The September contract for iron ore on China's Dalian Commodity Exchange traded 0.99% higher, at 764 Yuan ($112.06) per metric ton. As of 0704 GMT, the benchmark May iron ore was trading at $104.5 per ton on the Singapore Exchange. U.S. president Donald Trump announced on Tuesday that talks to end the Iran War could resume in Pakistan within the next two days. The collapse of the weekend negotiations prompted Washington, which had blocked shipping to and from Iran, to block the traffic. Zhuo Guqiu, a Jinrui Futures analyst, stated that the war had disrupted trade through 'the Strait of Hormuz. This has led to fewer shipments into the Gulf and a reduction in steel shipments each year in March. As other countries erected trade barriers, the Gulf became China's second largest steel export destination in 2013. It accounted for 16% of China's record-high steel exports. According to a Shanghai Metals Market note, iron ore demand is still near its peak in China and this is driving prices. The World Steel Association announced on Tuesday that global crude steel demand will rise by 0.3% to 1.72 billion metric tonnes this year. Coking coal and coke, which are both steelmaking ingredients, rose by 1.93% and 3.11 percent, respectively, on the DCE. Coking coal and coke are in high demand due to the rising production of hot metals. Steel mills report low levels of coke inventories, which leads to urgent purchases. The benchmarks for steel on the Shanghai Futures Exchange were mostly in positive territory. Rebar rose 0.26%; hot-rolled coils climbed 0.34%; and stainless steel grew 1.54%. Wire rod, on the other hand, lost 0.09%. ($1 = 6.8175 Yuan) (Reporting and editing by Sherry Jacobi-Phillips, Sonia Cheema).
US and European stocks fall after Iran war fuels oil rally and bond sales
The dollar rose on Thursday as oil prices surged amid supply concerns and intensifying combat on the sixth day in the U.S. and Israeli war against?Iran. Iran's campaign continued as Tehran fired a volley of missiles towards Israel and threatened to retaliate "wherever" they were after a U.S. strike. A strike was made on a ship that was far away from the battlefield. U.S. president Donald Trump claimed the right to decide who leads Iran next, as U.S. jets and Israeli planes bombarded areas in the country. Gulf cities also faced new attacks. Investors were encouraged on Wednesday when the U.S. announced that it would protect vessels in the Strait of Hormuz. This is where around one-fifth of all oil and LNG are shipped. As the conflict intensified, more oil tankers were attacked in Gulf waters. Iranian drones also entered Azerbaijan raising the possibility that the crisis could spread to other oil producing states. Initial assessments indicate that an Iranian remote-controlled boat loaded with explosives was targeting a Bahamas-flagged oil tanker anchored near Iraq’s Khor al Zubair Port. After a large explosion, a second tanker was anchored off Kuwait and taking in water. It also spilled oil. The Iranian crisis has created a cloud over our heads. Mona Mahajan is the head of Edward Jones' investment strategy and asset management. She said that there was no way to know how long this crisis would last or what its total impact would be. However, she did note that previous Middle East crises were usually short-lived. Mahajan cited the reports of attacks on tankers to say that investors were unnerved by the "very significant move higher in oil price" on Thursday. Stocks on Wall Street continued to fall in the afternoon trading. At 2:54 pm, the Dow Jones Industrial Average dropped 1,047.28?points, or 2.15 %, to 47692.13, while the S&P500 fell 82.82?points, or 1.21 %, to 6,786.42, and the Nasdaq Composite lost 241.42?points, or 1.05 %, to 22,567.15. MSCI's global stock index fell 8.65 points or 0.84% to 1,022.94. The pan-European STOXX 600 closed lower by 1.29% while Europe's FTSEurofirst 300 fell 33.00 points or 1.35%.
MSCI's Asia Pacific Price Index rose by 2%. South Korea's KOSPI closed almost 10% higher. The index, under pressure because of the country's dependency on imported oil has erased much of Wednesday's record decline after President Lee Jae Myung activated a $68 billion fund to stabilize the market.
There is more hesitation today because there are concerns about the possibility of the oil price going up. The bottleneck in the Strait of Hormuz is a hot topic, said Kristina Hooper, chief market strategist for Man Group.
Hooper noted that while traders are reacting to the latest headlines coming out of the Middle East, the current market "attention span" is only as long as a gnat. She warned investors of possible volatility following Friday's U.S. Non-Farm Payrolls Report, as investor concerns about labor-market risks due to artificial intelligence are growing.
You could change the mood in a matter of minutes with a single economic statistic. She said that we could see this tomorrow when the jobs report is released.
The dollar recovered from a short pullback in currencies on Wednesday, as investors sought out safe-haven assets. The dollar index (which measures the greenback against a basket including the yen, euro and yen) rose by 0.51%, to 99.31. The euro fell 0.52% to $1.1572. The dollar gained 0.5% against the Japanese yen to 157.81, while the pound fell 0.38% to 1.3321. Bitcoin fell by 3.23%, to $70,980.07. Ethereum fell 3.39% to 2,077.74. Bond yields in the U.S. Treasury rose for a 4th?straight?day on fears that higher oil prices may increase inflation and impact Federal Reserve policy. The yield of the benchmark U.S. 10 year notes increased 6 basis points from 4.082% to 4.142% on Wednesday. Meanwhile, the yield on 30-year bonds rose 3.1 basis point to 4.7508%. The yield on the two-year notes, which moves typically in line with expectations of interest rates for the Federal Reserve rose by 5.4 basis points from 3.543% to 3.597%.
As the war disrupted shipping and supplies, some Middle?Eastern major producers cut production. According to Vortexa and Kpler ship-tracking data, around 300 oil tankers remain inside the Strait of Hormuz. Traffic has been largely stopped since the weekend. U.S. crude ended the day up by 8.51% or $6.35 at $81.01 per barrel. Brent was up 4.93%, or $4.01, to $85.41 for a barrel.
Gold prices are reversing gains made on Wednesday due to higher Treasury yields, and a stronger dollar. Spot gold dropped 1.34%, to $5 066,39 per ounce. U.S. Gold Futures dropped 1.24% to an ounce of $5,056.60. Spot silver dropped 2.79% to an ounce of $81.08.
(source: Reuters)