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Russell: Iron ore is a very different story from the China tariffs pain narrative
The United States has imposed massive tariffs on Chinese goods, and the Chinese economy faces a huge blow. However, the commodity that is most vulnerable is not affected. China is most exposed to iron ore, as it buys over 70% of the seaborne volume, which it uses for just under half of the global steel. Iron ore prices have remained relatively stable since U.S. president Donald Trump began his trade war with China. The United States now imposes tariffs of up to 145% on China, its biggest trading partner. On Wednesday, iron ore contracts on the Singapore Exchange closed at $99.35 per metric ton. This is after they had risen from a low of $96.20 per metric ton that was reached on May 1. Since October, the price has traded in a relatively small range. The high was $110.55 at the beginning of that month and low was at the beginning of May. China's iron ore imports have also slowed slightly. Customs data shows that first quarter arrivals were down 7.8% compared to the same period last year, at 285.31 millions tons. While this figure may seem low, it is largely due to weather conditions in Australia that cut off shipments by China's largest supplier. China's port stocks are a clear indication of the supply disruption SteelHome data shows that they dropped to a 14 month low of 133.8 millions tons during the week ending April 25. Stockpiles reached 147.5 million tonnes in mid-February. This shows that steel mills are using their inventories to continue production during the period when supply from Australia is disrupted. Analysts Kpler expect China's imports to have recovered from March, when they recorded 93.97 millions tons. China's steel production is also stable, with the 92.84 millions tons produced in March representing a 10-month-high and a 4.6% increase from the same period in 2024. Overall, the iron ore market has been relatively stable this year. Any import weakness can be attributed to disruptions in supply. China's demand is also fairly steady. Iron ore imports should also be expected to continue beyond April if China's stocks are to reflect the normal seasonal build-up leading into the summer steel peak in the north. DEMAND FOR STEEL If there is such concern over the negative impact on China of U.S. Tariffs, then why are iron ore, and steel, holding up? Are they about to decline in price? Answer: A large part of China's demand for steel is found in industries less exposed to international trade. Property and infrastructure are the two largest steel-consuming industries, accounting for almost 60% of total demand. The property market has been struggling in recent years. However, early signs suggest that Beijing's stimulus measures are beginning to stabilize it. Machines, automobiles and household appliances are the trade-exposed segments of steel demand, accounting for almost a third. Even here, China's exports are not primarily destined for the United States. Instead, the majority of vehicles and machinery is shipped to Asia, Europe and South America. The United States is more exposed in the manufacturing of toys, clothing, and other items that do not use much steel, but rely more on chemicals, plastics, and rubber. The official purchasing managers' (PMI), which measures the level of activity in the private sector, fell to 49.0 in April from 50.5 in march. Beijing's recent stimulus measures were likely also influenced by the PMI slump, as they announced on Wednesday a reduction in interest rates and an increase in liquidity. It's clear that some parts of China are feeling the pain from the tariffs, but other parts are doing well. Beijing's message is geared towards positives, but the U.S. administration is more likely to hear the story of pain. These are the views of a columnist who writes for.
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Chairman of VEB Development Bank, Russia, says that the bank will invest $42 billion for projects in China.
Igor Shuvalov, the head of VEB's Russian state-owned development bank, said that VEB will provide funding worth around 3.5 trillion Russian roubles (42.74 billion dollars) for joint projects between Chinese companies and Russian businesses. The two countries held discussions in Moscow on Thursday. China is Russia's largest trading partner. The increased trade between both countries has given Moscow an economic lifeline as it navigates the sweeping Western sanctions over its war with Ukraine. China has been increasing its exports, especially of cars and machinery to Russia. Vladimir Putin, Russian president, said that the comprehensive cooperation between Moscow and Beijing was continually strengthened during a meeting on Thursday with Chinese President Xi Jinping. Putin stated, "We are pleased with the transfer of Chinese expertise and production facilities to our country." "We will continue to create favorable conditions for Chinese firms to operate in Russia," said Putin. Shuvalov, on the sidelines the Putin-Xi summit, said that the 3.5 trillion roubles of funding were earmarked for shipbuilding, metallurgy and timber processing projects. $1 = 81.9000 Rubbles (Reporting and editing by Andrew Osborn, Alexander Marrow, Darya Corsunskaya)
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Rosatom, the Russian nuclear company, has sued Finnish companies for $2.8 billion in relation to a nuclear plant contract
Rosatom, a Russian company, has filed a suit in Moscow against Finland’s Fortum and Outokumpu. The lawsuit demands 227,8 billion roubles (2.8 billion dollars) as compensation for losses resulting from the termination of the contract for the Hanhikivi-1 Nuclear Power Plant in Finland. The dispute between Rosatom and the former Finnish partners over the cancelled contract dates back to May 2022. This was when the Finnish partner terminated the contract shortly after the conflict in Ukraine 2022 began. They cited significant delays, risks of political nature, and doubts regarding the feasibility of the project. Rosatom, which announced its intention to seek compensation on Monday, said it was seeking compensation "for losses caused by the unlawful termination" of the EPC contract for the construction of a nuclear power plant as well as "violations of shareholder agreements, fuel supply contracts and the refusal of repayment of the loan". Outokumpu has stated that it was not a party to any agreement, whether EPC or otherwise, with Rosatom in relation to the Hanhikivi-1 Project. The contract for the 1.2 gigawatt power plant, with estimated investments of 6.5-7 billion euro, was signed with Fennovoima in 2013. This joint consortium included Outokumpu and Fortum, as well as SSAB, who initially controlled two thirds via a joint venture. And the Russian side had one third. Fennovoima ceased its entire operation after the project was terminated and now only engages in the legal dispute. Outokumpu stated in a press release that "this is a complex international contract matter and Moscow is not an appropriate venue for addressing the related disputes." Outokumpu, Fortum and Fortum all said that they have not received an official notification from Rosatom regarding this new claim. Fennovoima had sought the return of over 1.7 billion euro in advance payments. Rosatom has filed counterclaims totaling 3 billion euros. Arbitration is being conducted in international courts. Fortum stated that the matter is in arbitration proceedings at the International Chamber of Commerce. The court ruled in February against Rosatom's subsidiary's request for Fortum to be a party in this proceeding. Fortum stated in an email that "the arbitral tribunal's ruling on this matter is definitive." Fortum, a major investor in Russia's Energy Sector, lost its Russian assets in 2023 when Russia took control of seven thermal power plants and a joint venture portfolio of wind and Solar Plants under a presidential decree. (Reporting and writing by Anastasiyalyrchikova in Helsinki, Gleb Stolyarov and David Evans and Louise Heavens).
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Ambani's Reliance withdraws trademark application for codename "Pakistan strikes"
After a social media backlash, the film studio of Asia's richest person Mukesh Ambani retracted its trademark application for the codename used to describe India's military strike against Pakistan. Reliance, the conglomerate owned by billionaire Ambani, said in a statement that the trademark application had been filed accidentally and without authorization by a junior employee at Jio Studios. It added that "Operation Sindoor," as a symbol of Indian courage, was now "part of the national consciousness." India claimed it had struck "terrorists infrastructure" in Pakistani Kashmir and Pakistan earlier this week, after militants in Indian Kashmir killed 26 men - mostly Hindus. The attack on the Hindu widows was referred to by the term Sindoor (red vermilion powder) worn by married Hindu woman. Reliance made its statement after social media users published screenshots from the Indian government's website, which showed that Reliance and some other individuals had applied for trademark registration. "This isn’t branding, this is blatant mockery... it's disturbing to watch something so serious be reduced to a laugh," posted a X user identified as Archana pawar. Aniruddh Sharma - a spokesperson of India's main Opposition Congress Party - questioned Ambani about why he was trying to register a trademark in order to gain business benefits. Reliance stated in its application that it is for "provision, production, presentation, and distribution of audio-visual entertainment". Bollywood films about India's past military operations are hugely popular. In 2019, the film "Uri", which is based on India’s previous "surgical attacks" on alleged Islamist terrorist launchpads on Pakistani territory was released in sixteen countries, including India. Islamabad claimed at the time that there had not been an Indian incursion on its territory, and no Pakistani forces had retaliated. Reliance merged with Walt Disney last year its Indian media assets to create an entertainment empire worth $8.5 billion. The company runs multiple channels and a streaming service. (Reporting and editing by Aditya K. Kalra, Aidan Lewis and Arpan Chaturvedi)
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ConocoPhillips announces retirement of CFO after beating first-quarter profit targets
ConocoPhillips surpassed Wall Street expectations for the first-quarter profits on Thursday. Chief Financial Officer Bill Bullock, who has worked at the Texas-based oil producer for 39 years, will retire. ConocoPhillips has increased its presence in the Permian and Eagle Ford basins and Bakken Basins with the $22.5 billion purchase of Marathon Oil. It also added new operations to the Anadarko Shale Formation and Equatorial Guinea. ConocoPhillips produced 2.38 million barrels equivalents per day in the first quarter, an increase of 487,000 boepd over the previous quarter. The increased output helped to offset the effect of low oil prices. The price of crude oil fell through the first quarter after hitting a high of $82 per barrel in January. This was due to fears about future economic growth. The average total realized price per barrel for the company was $53.34 during the third quarter. This is 6% less than the realized price from a year ago. CEO Ryan Lance said, however, that the company was confident in its "competitive edge" despite the "volatile macro-environment". According to LSEG, on an adjusted basis the company reported a net profit of $2.09 for the three-month period ended March 31 compared to the analysts' average estimate $2.06 The company has lowered its forecast for full-year expenditure output and expects that it will be between $12.3 and $12.6 billion, compared to its previous estimate of around $12.9 billion. ConocoPhillips has announced that Bullock's successor will be Andy O'Brien. The new appointment is effective June 1. Bullock, a 1986 company employee, was named finance director in 2020. During his tenure at the company, he completed several major deals, including the sale to Santos Limited of assets in Australia in 2020, Concho Resources' $9.7 billion purchase in 2021 and the latest Marathon Oil acquisition.
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Former US adviser: Trump is taking a harder line towards Russia
Former special representative of Donald Trump said that the president is taking a more aggressive approach to Russia in order to achieve the ceasefire he had promised when he assumed office, after becoming "really allied" with Ukraine. Kurt Volker was Trump's Ukraine advisor in his first term, and a former U.S. The ambassador to NATO, who is also the military alliance's ambassador, said that the U.S. president had begun his second term by challenging Russian President Vladimir Putin either to "secure peace the easy way" or "the hard way". After 100 days in office, and with Putin showing no willingness to end the conflict against Ukraine, Trump has taken a "harder" approach, Volker stated on the sidelines a security summit in Kyiv. "I believe it's in Ukraine's best interest to put an end to fighting and now that the U.S. is really aligned with Ukraine, it exposes the fact that Putin is not willing to stop the war," said Volker. He resigned in 2019 as his advisor after being named in whistleblower complaints about the Trump Administration. He replied "Exactly" when asked if Trump now took the hard road, instead of the easy route. He added that Congress should strengthen Trump's hand by approvating secondary sanctions against major Russian entities. The two men have made great strides in repairing the damage caused by a disastrous February meeting between Trump, and Ukrainian President Volodymyr Zelenskiy. Last month, their two countries signed an agreement in Washington that gives the United States priority access to new Ukrainian mineral deals. This was important to Trump because it showed his supporters that Ukraine paid its own way, rather than using U.S. tax payers' money. Trump, who is trying to convince Putin to stop the fighting, does not want to discuss the "military side" of the deal. However, this does not mean that military aid will not continue to be provided. Volker said, "What it does, from a national security perspective, it gives the U.S. an interest in Ukraine's economic development, security and survival." It doesn't specify what obligations or commitments would be made by the U.S. to Ukraine's safety. "But that also doesn't stop anything." Reporting by Elizabeth Piper Editing Alexandra Hudson
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Acerinox: 'Deglobalisation is an opportunity'
Acerinox, a Spanish steelmaker, said it expected to benefit from the "deglobalisation", and increased trade barriers. However tariff-related uncertainty hurt its first-quarter results. Acerinox is unique in the industry. Chief Corporate Officer Miguel Ferrandis stated on a conference phone that it has an advantage in taking advantage of "regionalisation" issues. In the first quarter, the company's net income fell by 81% from the same period of 2024 to just 10 million euros ($11.28m) due to a downturn in the steel market exacerbated the trade war. At 1028 GMT the shares were down by 1.3%, partially recovering from an earlier 5% drop. Steel has been the focus of international trade wars since U.S. president Donald Trump introduced steel tariffs in his first term. In 2021, Trump's successor Joe Biden lifted the tariffs on metals from the European Union, but in 2016, the second Trump administration reinstituted 25% tariffs on both steel and aluminum, giving U.S. mills a competitive advantage over European steel mills. Acerinox's Chief Executive Bernardo Velazquez said that the U.S. steel tariffs are a positive thing for Acerinox. The company produces more steel in the U.S. now than it does in Europe. He also sees greater stability and guarantees for the steel industry in the U.S. in the future. Velazquez stated, "The U.S. provides us with stability and allows us to look more into the future. That is why we grow there." He estimated that the energy costs of Spanish mills were about half as much. Velazquez demanded that European steel producers take additional measures to prevent production from North America flooding the European Union, causing harm to their business. Reporting by Javi Larranaga and editing by Inti landauro, Philipp Fletcher, and Inti Landauro.
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EU makes it easier to hunt wolves in Europe
The European Parliament approved on Thursday plans to make it easier for wolves to be hunted in the EU. They cited their increasing numbers and the danger they pose to livestock, as reasons to downgrade the animals' status of protection. The Bern Convention on the Conservation of European Wildlife and Natural Habitats has changed the status of wolves in EU law from "strictly" protected to "protected". It means that EU countries will be able to allow wolf hunts, but must take measures to prevent the animals from becoming endangered. For example, they can limit hunting seasons. Since 1979, Bern Convention has prohibited wolves being intentionally hunted or trapped unless they pose a serious risk to livestock or human health. Herbert Dorfmann, a member of the European People's Party (EPP), a centre-right party, said: "Farmers are now able to breathe sighs of relief." It's time for us to adapt to the realities of today. He said that this means finding a balance between our conservation efforts and protecting farmers. Some EU legislators and campaigners have accused European Commission Chief Ursula von der Leyen of targeting wolves for personal reasons. Her pony had been killed by a wild wolf in the year 2022. JuttaPaulus, a Green EU legislator, said: "This is not helpful to livestock farmers and damages forestry and the nature." By controlling game populations, wolves can help forest ecosystems. The Commission made the proposal for a change in the status of the wolf under EU law. It said that it was based upon an in-depth study and reasoning, including the fact wolf populations were increasing in the EU with approximately 20,300 animals in 2023. This has caused increased damage to livestock. The EU was opposed to a proposal made by a non-member Switzerland, in 2022, that would have lowered the protection status of wolves under the Bern Convention. The European Parliament approved this proposal with 371 votes for, 162 votes against and 37 abstentions on Thursday. The final vote is expected to be passed by the EU countries. (Reporting and editing by Gareth Jones.)
TSX futures dip ahead of Canada inflation data
Futures linked to Canadian stocks were subdued on Tuesday, hurt by a decline in unrefined prices, while investors turned mindful ahead of the domestic inflation data that might even more strengthen expectations from the Bank of Canada (BoC) to cut rate of interest further.
September futures on the S&P/ TSX index were down 0.07% at 6:19 a.m. ET (1019 GMT).
All eyes will be on the Customer Cost Index (CPI) numbers at 08:30 a.m. ET that might offer guarantee to Canadian policymakers before they slash the loaning expenses in July.
Traders are pricing in a 65.6% possibility of a 25-basis-points rate cut by the Canadian reserve bank in its next policy conference on July 24.
BoC Governor Tiff Macklem on Monday said there is enough slack in the Canadian labor market to enable development and task creation even as inflation slows.
On the products front, oil prices, slipped after increasing in the previous session, as financiers wait for U.S. consumer cost information due later on this week.
Copper was partially up as the U.S. dollar reduced somewhat however subdued demand in China kept gains in check. On the flip side, gold rates stayed soft ahead of crucial U.S. inflation data.
Wall Street futures were combined, with S&P and Nasdaq futures increasing, as AI chipmaker Nvidia recuperated in premarket trading after falling about 13% in the last three sessions.
In corporate news, French sustainable power producer Neoen SA signed a share purchase contract for the acquisition of a bulk stake by property management company Brookfield .
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(source: Reuters)