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China's May aluminium production rises for the ninth consecutive month due to strong export demand
China's aluminium production rose by 1.7% in May compared to a year ago, marking the ninth consecutive month of gains. This was aided by higher overseas prices. Prices have since eased and may even fall further now that Washington and Tehran have signed a ceasefire. The National Bureau of Statistics reported on Tuesday that China's aluminum output reached 3.89 million tons in May. The first five months of this year saw a 3.5% increase in output to 19.22 millions metric tons. There was still a lot of uncertainty in May about a U.S. - Iran peace deal. The Strait of Hormuz was a major waterway used by the Gulf's aluminum manufacturing industry, which produced 8% of world output before the conflict started in late February. In May, the price of three-month benchmark aluminium rose for a third month in a row by 5.5%. It has fallen 8.6% so far in June. The preliminary customs data showed that China's exports unwrought aluminum and products grew by 5.7% in May, and by more than 10% during the first five months in 2026. Exports of 'aluminium wire', which is used for power transmission and distribution in China, are also strong, thanks to the price rises caused by the Iran war and tax benefits compared with exports aluminium ingots. China's production grew by?2.2% in the past year to 6.98 metric tons of nonferrous metals, including copper, aluminum, lead, zinc and nickel. The year-to-date production was up 3.1% to 34.38 millions metric tons.
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Iron ore miners look to India and ASEAN for growth as they seek alternatives to China
Iron ore miner's in Australia stressed on Tuesday that a?growing demand for steel in India and Southeast Asia?would offset the stagnating markets in China and other top customers. India, already the second-largest steel producer in the world, plans to double its current output from 168 million to 400 million ton by 2035-2036. The new targets, while still only a fraction of China’s production of almost 1 billion tons, will require huge additional quantities of metallurgical coal and iron ore, both of which India imports in large amounts. Michiel Hovers, BHP's group sales and marketing officer, said at a conference on the industry in Singapore, Tuesday, that BHP is among the largest producers of met coal in India. The miner has long predicted that South?Asia would be a major growth market. Bold Baatar, Rio Tinto's chief commercial officer, said at the same conference, that the new steel demand from India and Southeast Asia would offset the stagnation in China. The crisis in China's property sector, which was once its biggest steel consumer, has been going on for five years. China Mineral Resources Group, a state-run buyer that uses 'hardball tactics', including purchasing bans, to negotiate better conditions for steelmakers, has slowed down the production of steel in China to a 7-year low by 2025. China's situation is unlikely to improve in the coming year. The Chinese steel market is'set to decline again', Jinkui Zhao, the deputy secretary-general of the conference said. CMRG launched a new campaign against iron ore mining company Fortescue last month, following a long-running effort this year against BHP. (Reporting from Amy Lv in Singapore, Ruth Chai in Beijing and Solomon Cefai)
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Australia declares El Nino that could be the strongest El Nino for decades in Pacific
Australia's weather bureau warned on Tuesday of an El Nino weather pattern forming in the tropical pacific and that it could 'intensify' to become one of the strongest in 70 years. The Bureau of Meteorology said that sea surface temperatures in the area exceeded El Nino thresholds, and atmospheric indicators were all aligned to the phenomenon which brings extreme weather. In a press release, it stated that "based on the degree of warming in central tropical 'Pacific", forecasts point towards an El Nino event strong to very powerful. Around half of the models suggest that this event could reach levels comparable to the highest recorded?since 1950." El Nino, a periodic?warming sea surface temperature in the central and east Pacific Ocean, is linked with less rainfall during winter and spring in Australia's east and southern coasts, and higher daytime temperatures. This weather phenomenon has a particularly negative impact on Australia, as it impacts agricultural production. Australia is one of the largest exporters in the world for wheat, sugar and beef. The last El Nino that Australia experienced from 2023-2024 was the driest period of three months on record. In 2015 and 2016, one of the strongest events in recent memory caused widespread drought, and reduced grain and oilseed production. Climate change, according to scientists, will exacerbate the effects of El Nino this year. Reporting by Renju José and Christine Chen, Sydney; Editing and production by Christopher Cushing & Clarence Fernandez
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WGC survey: More central banks plan to increase gold reserves
The World Gold Council said on Tuesday that a record 45% (up 2 percentage points) of reserve managers, who were surveyed, expect to increase the gold held by their institutions over the next 12 months. The majority of central banks -- 54% -- who responded to WGC's survey conducted between February 5, 2005 and May 19, 2005, said that their holdings will remain the same, while only 1% expect a decrease. The majority of responses came after the Middle East conflict began in late February. This triggered an increase?in the price of oil and drove down the gold price. Shaokai fan, the head of the WGC's central banks sector, stated that the recent price drop has not influenced their decision. Over the weekend, the U.S. & Iran reached an agreement to end the war and reopen?of Hormuz Strait. This led to a 3% increase in the gold price on Monday. According to Metals Focus consultancy, gold demand from central banks is expected to slow down by 15% in tonnage in 2026, but will remain above levels of pre-2022, which has been a consistent factor supporting the market. WGC reported that 93% of respondents already own gold. This is up from 81% one year ago. Gold's performance in times of crisis was cited by a record 90 percent of respondents as a reason for owning it. Top answers included portfolio diversification and long-term storage of value. Gold's role in geopolitical risk mitigation was a favourite among respondents from emerging markets and developing economies (85%). 9% of respondents reported that they have increased their domestic storage over the last 12 months. This is up from just 5% in the previous year. And 10% stated they have diversified overseas storage locations, which is up from only 2%. In the next 12 months, 7% of companies plan to expand their domestic storage and 9% to diversify their overseas locations. The WGC didn't ask central banks to provide details of where the gold was sourced in repatriation cases. The Bank of England is still the most popular vault location. It's followed by domestic storage, and the Bank for International Settlements. (Reporting and editing by Aurora Ellis; Polina Devtt)
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Scientists find 64,000 sq. miles of coral reef that can survive climate crisis
Researchers have found that scientists are able to identify a coral reef of 166,000 square kilometers (64,000 square miles) which is capable of recovering from climate change. This is three times greater than what was previously thought. Scientists have warned that the world's coral reefs, which support a quarter of all marine life on earth, are under extreme stress due to violent tropical storms and pollution, as well as mass "bleaching events" caused by rising ocean temperatures. A combination of decades of climate and ocean data and 45,000 coral surveys has revealed climate-resilient coral reefs in 71 countries. This includes parts of the Caribbean, Pacific and Atlantic Oceans and other areas that were not previously recognised. Emily Darling is the director of coral conservation at the Wildlife Conservation Society and one of the authors of the report. "This research shows that we are wrong: We?know the place where hope lies and we only need political will now." The countries are currently drafting action plans to protect 30% of their marine and land environments by the end of this decade. This target is known as "30 By 30". With the new research, governments will be able to take into account the location of corals reefs when planning. Darling stated at a press briefing that only 28% of reefs are currently protected or conserved. The opportunity and urgency is therefore clear, especially as we prepare for a super El Nino. Stacy Jupiter is the co-author of the report and the executive director of WCS Global Marine Program. She said that the data could provide governments with the information they need to make decisions about where funds should be spent and how best to give more resilient coral reefs a chance at survival. She said that in certain cases where reefs fall below certain benchmarks of ecosystem function, we might need to triage and leave these places. (Reporting and editing by David Stanway.
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Oil prices fall as markets assess return of supply after US-Iran peace agreement
Oil prices continued to fall on Tuesday as markets weighed the prospects of a resumption of oil supply through the 'Strait of Hormuz, against the shaky market conditions and the lack of information from the preliminary agreement to end the Iran War. Brent crude futures were down 25 cents (0.3%), or $82.92 per barrel, and U.S. West Texas Intermediate was down 9 cents (0.1%), or $80.66 per barrel, by 0436 GMT. Oil prices dropped nearly 5% on Monday to their lowest level since March 4 after U.S. president Donald Trump announced that a memorandum was signed for the U.S. and Israel to end its war with Iran. Full details, however, have not yet been released. Before the conflict, the Strait of Hormuz was a major oil transport route that carried a fifth of the world's supply of oil. Other factors are weighing on the physical market price. Some analysts predict a return of supply via the Strait in a short time. Morgan Stanley analysts stated in a note to clients that "it will likely take several weeks" for the tanker flow of oil to be restored. We expect to see 50% of the production returned by September and 80% by December. This is a little faster than previously. They added that a wide range of indicators indicated weakness on the physical oil market in recent weeks. In the short-term (i.e. Next weeks, they don't seem to be ending just yet." China's crude oil imports fell 29% in May, to the lowest level in eight years. This is a continuation of a dramatic drop for the world's largest importer. Its liftings from Saudi Arabia are expected to fall again in July. Early indications suggest that the U.S. and Iran deal will reopen blockaded Strait of Hormuz, extend a 60-day ceasefire, and allow negotiators the opportunity to address difficult?issues like the future of Iran’s nuclear program. The Iranian president Masoud Pezeshkian said on Monday that the U.S. and Iran pact was an "important step" towards stopping the fighting, but warned that a final agreement to create a lasting ceasefire "has not yet taken shape". The overall price decline is limited, but?until full details are revealed and a permanent truce has not been reached. Suvro Sarkar is the head of DBS Bank’s energy research. He said that the first phase of the deal, which included the signing in Geneva of a 60-day ceasefire extension, was simple, and would buy time, as well as push the “nuclear tin”?down to the future. The second phase is the reopening of Strait of Hormuz in phases and the gradual winding down of the US naval blocksade against Iranian ports and ships. This will be closely watched by the markets because of its physical impact. "Anything less than a?simultaneous?unlock will result in renewed volatility of oil prices," said?Sarkar. It will be interesting to see what happens over the next few weeks, given the current trust deficit. A senior Iranian official announced on Monday that Iran would cease its nuclear activities until there is a final deal, and will not enrich uranium or expand nuclear facilities. Reporting by Pranav Mathur in Bengaluru, and Trixie Yap from Singapore. Editing by Christian Schmollinger & Clarence Fernandez.
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Gold prices rise as US-Iran agreement eases concerns about rate hikes
Gold prices rose on Tuesday, extending gains to a fourth session. Investors awaited more details about the deal, which was a result of a preliminary U.S. peace agreement with Iran. As of 0431 GMT spot gold was up by 0.4% to $4,322.99 an ounce after a rise as high as 3.6% on Sunday, when it reached its highest level since the 5th of June. U.S. Gold Futures for August delivery were down by 0.2% to $4,343.50. U.S. president Donald Trump announced on Monday that the U.S. had signed a preliminary agreement with Iran to end the war in the Persian Gulf, but details are yet to be made public. Both countries have also said a permanent ceasefire is still to be negotiated. Since late Thursday, the Iran news has boosted gold prices. Edward Meir is an analyst with Marex. He believes that this euphoria rally could last for a few more days, culminating on Friday in the signing ceremony. The U.S. Dollar held near its 10-day lows before the Bank of Japan announced their interest rate decision. Investors will also be watching the Federal Reserve's policy announcement and remarks on Wednesday. This is the first time that Kevin Warsh has been the chair of the Federal Reserve. Rates are expected to remain the same. Markets expect no rate reductions this year. Meir stated that if Warsh indicates at least one rate cut may be on the table this year, then the dollar could?decrease even further and we might see another rally in the gold. Gold could be under pressure if he comes across as "hawkish" on rates. CME FedWatch shows that traders have reduced their expectations of a U.S. interest rate increase in December to 57%, from 70% last week. In a high interest rate environment, gold is not attractive as it does not yield. The Bank of Japan has raised its interest rates for the first time since December, a move that aligns it with other central bankers who are pursuing tighter policies to combat inflation. Silver spot fell by 0.4%, to $69.76 an ounce. Platinum dropped 0.3%, to $1.761.95, while palladium fell 1.2%, to $1.331.86. (Reporting and editing by Subhranshu sahu, Ronojoy Mazumdar and Noel John from Bengaluru)
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The morning bid for Europe-Japan is a big hit!
Tom Westbrook gives us a look at what the future holds for European and global markets. The central bank moves in Asia were as expected on Tuesday, with Japan increasing its short-term rate to 1% (the highest since 1995) and Australia keeping its?rates at 4.35%. The?yen and the Australian dollar did not react sharply at first. Investors are expecting hawkish views at the press conferences to be held in Sydney and Tokyo. They have priced in another hike for Japan this year, and a 66% chance of an additional hike in Australia. Reserve Bank of Australia Governor,?Michele Bullock, is expected at 0530 GMT, and Bank of Japan Vice Governor Shinichi Uchida is expected an hour later. Uchida is filling in for Kazuo Ueda who is hospitalised. The hike in Japan brought the rates down to the "bottom" of what policymakers believe the neutral rate for the economy is. However, it also came with a pause that had been previously signaled - the central bank was stepping back from the bond markets. The company will cut its bond buying by 200 billion yen ($1.25billion) per quarter until April 2027, when it will stop. JGB purchases will be around 2 trillion yen per month. Traders elsewhere were reluctant to push markets higher despite the tentative agreement reached between the U.S.A. and Iran over the weekend. Details of the deal, which kept oil prices above $80 per barrel, were scanty and shippers warned that it would take weeks for them to regain confidence in order to safely navigate through the Strait of Hormuz. SoftBank's shares remained steady following the news that the chief financial of Vision?Fund, the company's investing arm, is leaving after a decade. The Chinese data for May was mixed. Retail sales fell in Hong Kong, the first time they had done so in over three years. This weighed on market sentiment, and stocks were down. Overnight, Wall Street had notched gains. After-hours trading saw SpaceX's value surpass $2.6 trillion, as the stock surged to 48% over its listing price. Nvidia surprised the debt markets with its surprisingly large $25 billion bond issue, which they say will be used for refinancing as well as general purposes. The following are key developments that may influence the markets on Tuesday. - Economy: German ZEW Survey
Asia markets temper Iran deal optimism, BOJ hikes rates
Asian stocks gained modestly on Tuesday, following a rally on Monday on the news of a U.S. - Iran peace pact. Investors also assessed a widely anticipated Bank of 'Japan 'rate increase that reached a new high of 31 years. The Nikkei index rose 0.6% and briefly crossed the 70,000-mark to reach a new high after the Japanese central banks voted to raise its benchmark policy rates to 1%. This was the highest level since 1995. The yen was unchanged at 160.31 against the dollar. The Australian dollar, which was 0.3% weaker at $0.70515, was also little changed. This is because the Reserve Bank of Australia held interest rates as expected. S&P 500 futures are trading lower by 0.1%, after fluctuating in gains and losses. MSCI's broadest Asia-Pacific index outside Japan is up 0.4% with Korean shares rising by 2%. Hong Kong stocks weighed down the benchmark index after China's retail sales and fixed asset investment figures were weaker than expected. The markets have settled into a measured tone on Gulf developments, as initial excitement about the preliminary agreement between Washington & Tehran has begun to fade. Brent crude futures fell 0.3% overnight to $82.96 per barrel, reflecting the cautious approach. Oil prices finished at their lowest level in three months. Shipping companies in Asia and Europe say it could take several weeks to rebuild confidence in the resumption of transit through the Strait?Hormuz. The announcement by U.S. president?Donald Trump of a deal to end the Iranian nuclear program on Monday brought relief to investors, but it also put Washington at odds with Israel.
Westpac analysts said in a research report that while the deal was an important diplomatic achievement, its durability would be tested in future. Many sticking points were left for future negotiations, such as the fate of Iran’s nuclear program.
WALL STREET RALLY Overnight, stocks and bonds on Wall Street rallied due to optimism about the deal. The Nasdaq Composite jumped 3.1% and the S&P 500 rose 1.7%, while both the Dow Jones Industrial Average (DJIA) and STOXX 600 closed at new records. Beyond geopolitics and the Bank of Japan's decision to rescind its monetary policy, traders will also be waiting for a press briefing by Deputy Governor Shinichi Uchida, who will explain it to the media. Governor Kazuo Ueda is unable to attend due to medical treatments.
In a research note, analysts at Mitsubishi UFJ stated that they did not expect any major changes in the Bank's assessment on current conditions.
The note stated that "We expect the Deputy Governor Uchida press conference and the reasoning he will?present for the rate hike decision to be largely based on Governor Ueda’s speech of June 3," Mr. Uchida will also follow the governor's comments when discussing future policies. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, rose 0.1% at 99.75. It remained firmly in the trading channel that it has been stuck within for the last three sessions. The yield on the 10-year Treasury Bond in the United States increased by 0.8 basis points to 4.475%. Gold rose 0.4% to $4,324.32 per ounce. Early European trades saw a flat market, with DAX futures in Germany down 0.2% and FTSE Futures down 0.1%. Bitcoin fell 1%, to $65,799.61. Ether dropped 2.9%, to $1,762.15. (Reporting and editing by Gregor Stuart Hunter, Jamie Freed, and Shri Navaratnam).
(source: Reuters)