Latest News
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Sources: China extends iron ore export ban to BHP's new product
China has increased its ban on BHP iron ore a second time in two weeks. This is a result of a contract dispute that's been ongoing for months with the world's third-largest supplier. Three sources familiar with the matter said that China Mineral Resources Group (CMRG), the state-run buyer of iron ore, told domestic steel mills on Thursday they were prohibited from taking Newman fines – a popular BHP type of?iron stored in ports – as of next week. According to two sources, however, customers will still be able to receive their cargos in 'the next five days'. Due to the sensitive nature of the issue, all sources asked for anonymity. Beijing has gradually tightened restrictions on local steel mills, traders and steelmakers buying BHP ore over the last six months as it negotiates the terms of the 2026 contract with steelmakers. China banned the purchase of Jimblebar fins, another form of iron ore in September. This was followed by the Jinbao product in November. Last week, traders were instructed to purchase fewer Newman fines and lumps?and Macfines. However, the directive also allowed the purchase of those grades of iron ore that are already in port. The ban this week restricts the allowed range of products to Newman lumps, Mac fines, and other stocks that are already stored in ports. In the afternoon of Thursday, benchmark April iron ore price on the 'Singapore Exchange' rose by more than 3%. BHP declined comment, and CMRG didn't immediately respond to a comment request. (Reporting and editing by Clarence Fernandez, Pooja Dasai).
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Ribera, the EU's antitrust chief, is open to granting state aid to heavy energy consumers in crisis
Teresa Ribera, Europe's Competition Chief said on Thursday that European Union governments could 'allow state aid for energy-intensive companies to offset the steep rise in electricity prices due to the increase in oil and gas prices caused by the Iran War. Ribera said at a conference organized by the German antitrust agency Bundeskartellamt that "for the moment we have untapped State Aid possibilities" which member states could still use to provide relief to the electricity prices of energy intensive?users. She said the European Commission is also prepared to provide support measures and longer-term plans for businesses to counter the impact caused by the war. This was based on the previous?measures taken to combat the COVID epidemic and the war in Ukraine. These programs allowed the government to give billions of Euros to companies. Ribera stated that "we are not yet there but in the event of a crisis, we must draw on our experience from previous crises." Ribera said that she is now evaluating the U.S. technology company's new attitude. She had earlier threatened to?temporarily block Meta Platforms? from excluding rival AI Chatbots? on its messaging service WhatsApp. "Last Week, Meta announced that it would reverse the decision to exclude AI chatbots of third parties from WhatsApp. However, it will start charging a charge. She said that we are?now evaluating if this change in policy has any impact on the need to act urgently by the?Commission." The rivals said that the fees were?too complex and too expensive and urged the EU enforcer of antitrust to issue a interim measure against Meta. (Reporting and editing by Louise Heavens, Foo Yunchee)
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IEA: Middle East conflict will cause the largest ever oil supply disruption.
The International Energy Agency announced on Thursday that the war in the Middle East has caused the largest oil supply disruption ever. This comes a day after the agency agreed to release record volumes from its strategic stockpiles in order to counter shortages and spikes in prices. The IEA stated in its latest monthly report that global supply is expected to fall by 8 million barrels a day in March due to the blockage of the Strait of Hormuz - a narrow 'channel' along the Iranian coastline - since the U.S. began an airstrike campaign against Iran on February 28, Middle East : Gulf countries, including Iraq, Qatar and Kuwait, as well as the United Arab Emirates, have cut their total oil production 'by at least ten million bpd – a volume equivalent to almost 10% world demand – due to the conflict. This agency said that if shipping flow does not resume quickly, the losses will continue to rise. The agency stated that it could take up to a month to restore production to pre-crisis levels, depending on how complex the field is and when workers, equipment, and resources return to the area. The IEA (which advises industrialised nations) agreed on Wednesday to release a record 400 mln barrels of crude oil from strategic stocks held by member countries to combat a rise in global crude prices after the start of the U.S. - Israeli war against Iran. Oil prices increased on Thursday as Iran intensified its attacks on oil and transportation?facilities in the Middle East. This sparked fears of a prolonged conflict, and the disruption of oil flow through the Strait of Hormuz. Brent crude, which reached $119.50 per barrel on Monday - its highest level since mid-2022 - was up over 6% at just under $98 a barge on Thursday. (Reporting and editing by Alex Lawler)
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After Gulf Shipping Attacks, oil prices and shares plummet
Global shares fell Thursday after attacks on oil tankers shattered prospects of an imminent de-escalation of the Middle East conflict. Oil prices rose above $100 per barrel, causing inflation fears to rise. The response shows 'how quickly bets were withdrawn on a quick end to the war. The contradictory?messages of U.S. president Donald Trump has left traders fearful that they will be caught off guard, causing them to stay away from the markets or seek refuge in safe-havens. Investors were not satisfied with the International Energy Agency’s announcement on Wednesday that it would release 400,000,000 barrels of crude oil from its reserve, which was the largest move in its entire history. Brent crude futures rose as high as 10.4%, to $101.59 per barrel, before trimming their gains. There was still doubt about whether the release of reserves would be sufficient to cushion the blow from the Middle East?supply shock. Crude futures for the United States were last traded at $91.82, up 5.2%. "Even though the reserves may be large, it is not known how quickly they will reach markets. Joel Hancock is an energy analyst with Natixis CIB. He said that a market 'balanced' via strategic stock releases would be less efficient logistically. The STOXX 600 index, which is the pan-European benchmark for equity, fell 0.5%. Futures that track the S&P?500 in the U.S. and the tech-heavy Nasdaq100 were both down by 0.5%. The MSCI All-World Index fell by 0.3%. The odds on Polymarket, a prediction market platform, indicated a 26% probability of a ceasefire by March 31, down from 45% earlier in the week. Attacks on Oil Shipments Continue Iraqi officials said that two fuel tanks in Iraqi waters had been struck by Iranian boats laden with explosives, and an Iraqi official told state media on Thursday that the oil ports there "have completely ceased operations." Bloomberg News reported Oman had evacuated its main oil export terminal, Mina Al Fahal, as a precautionary move. Rodrigo Catril is a senior FX Strategist at NAB. He said, "The market continues to be very concerned about what's happening in the Strait of Hormuz and the information we have received over the past 24 hours does not make for a good read." It's a way of reinforcing the idea that we should worry about it and that the oil prices will go up from here rather than come down. Iran had increased attacks against merchant ships in Strait of Hormuz. The number of ships that have been struck in this region since the fighting began has now reached at least 16. Tehran warned the world that oil could reach $200 per barrel. Inflation Risks The U.S. Consumer Price Index rose 0.3% last month, which was in line with expectations and above the 0.2% rise in January. However, the report was not considered particularly relevant, given that inflation has been fueled by the Iran War. Globally, bond yields rose as the rising inflation risk outweighed any concerns about safe havens. The yields on 10-year Treasury Notes?rose to 4.2257%, up 2 basis points from the previous day. Fed funds futures continued to fall as investors feared that higher inflation could make it difficult for the Federal Reserve policy to be eased. Markets bet on only one rate cut by the Fed in 2018. The markets have bet that the European Central Bank will raise rates in June, if not earlier, due to the threat of energy-driven inflation. Investors on edge sought out the dollar's liquidity, while shunning currencies of countries which are net energy consumers. This includes Japan and most of Europe. The euro fell 0.2% to $1.1548. The dollar held steady at 158.88 Japanese yen after a slight retreat from its highest level since January, when the U.S. Fed's rate checks spooked the yen bears. Reporting by Stella Qiu, Niket Nishant and Edwina Gibbs; Editing by Shri Navaratnam, Susan Fenton and Edwina gibbs
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Refineries run on China teapots to take advantage of lucrative fuel sales
China's independent smaller refiners maintain output to cash in on the surge in domestic fuel price, but may be forced into trimming runs as of late April, when cheap feedstocks from inventories are running out and new deliveries will cost more in this war-induced rally, industry and trade sources reported. The plants in Shandong Province, China, the hub of smaller refineries, known as teapots, that account for roughly a quarter or more of the country's output, keep their run rates constant to maximize fuel sales, which are 20%-30% higher than before Israel and U.S. launched an attack on Iran on February 28, 2008. "Runs have remained stable." "We're focused on raising?the refined petrol prices and maximising the sales at higher rates, with the aim of reaping profits in the entire month of March for 2026," said an official from the teapot. In Asia, many refiners have reduced their production to conserve feedstock. Teapots are leveraging the deep discounts on Iranian and Russian crude purchased before the war when Brent was at around $73 per barrel. Brent is now around $100 after reaching nearly $120 on Sunday. Another Shandong teapot executive said, "We have built up some inventory earlier so the pressure will not be as great in the near future." According to Shandong Dongming Petrochemical's postings, the ex-factory wholesale price for 0#diesel was 7,840 yuan per metric ton ($1,142.19), up 37% since February 28. The price of 92-octane gas rose 26% in the same time period. Hengli Petrochemical in Dalian, in the northeast maintains processing rates of around 105% of their nameplate capacity. Consultancy Oilchem assessed last week that Shandong Teapots were operating at 54.58% of their capacity for the week ending March 5. This is an increase of 2.89 percentage points on the previous week. They added?that runs could inch up even further this week due to improving margins. According to traders who deal with teapots and other products, crude oil purchased and delivered by many Shandong plants before February 28 will last for one and a half months. However, operators may feel the pinch of rising crude prices as the Strait of Hormuz is effectively closed. The Chinese market for gasoline and diesel is declining, as more and more cars, trucks, buses and motorcycles become electric-powered. Beijing's decision to ban fuel imports in order to prevent a war-induced supply shortage will also keep margins down, traders say. $1 = 6.8640 Chinese Yuan Renminbi (Reporting and editing by Tony Munroe, Raju Gopalakrishnan and Siyi LIu)
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UK gilts fall further as oil tankers burn and BoE rate hike betting rises
British government bond rates fell again in the early hours of Thursday's trading, continuing a dreadful performance for the entire month. This was due to news that two oil tankers had caught fire?in Iraqi water?on...Thursday following what appeared to have been Iranian strikes. At 0823 GMT the five-year and 10-year gilt rates, which move in the opposite direction to the prices, had risen 4-5 basis points for the day, and were on course to close at their highest level since the start of the U.S./Israeli war against Iran. Investors believe that Britain is more vulnerable to an energy price spike than other Western countries due?to the stretched public finances of Britain and its heavy dependence on imported gas. The five-year rate, which is sensitive to changes in interest rates over the medium term, has risen 58 basis points in this month. This is the largest increase since September 2022, when the former prime minister Liz Truss unveiled her disastrous economic agenda. Before her tenure, October 2003 marked the last time that 5-year yields increased by such a large amount. Oil prices rose on Thursday, reaching $100 per barrel. Interest rate futures were pricing in a 40% chance that the BoE would increase borrowing costs by a quarter point?in December. This was compared to Wednesday's expectations for no change. Investor appetite for sales on the primary market remains strong despite the drop in gilt prices. The next test for demand will be an auction of index-linked gilts due in 2049, which is due to take place on Thursday at 1000 GMT. Suban Abdulla, Suban Bruce and Andy Bruce report.
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The German IfW Institute lowers its economic growth forecast due to high commodity prices
The IfW Institute in Germany lowered its '2026 economic forecast' on Thursday, based upon the expectation that commodity prices - driven up by?the war? in Iran - will only remain high for a few more months. The Institute said that the conflict in Iran has caused commodity prices to rise. The Kiel-based Institute said that in this scenario, the?loss in purchasing power is expected to be 0.6% of the annual 'gross national product. This will 'noticeably reduce economic activity, but won't cause it to collapse. The GDP will grow by 0.8% in this year. This is 0.2 points less than the forecast made by IfW for its winter outlook. The economy will gradually regain its footing throughout the year, according to the?institute. It has also raised its growth projection for next year from 1.3% to 1.4%. IfW, who had previously predicted 1.8%, said that inflation 'this year will be driven by higher energy prices and rise much more than expected in winter. It will reach 2.5%. The inflation forecast is unchanged for 2027 at 2.1%. (Reporting and editing by Thomas Seythal, Miranda Murray)
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Aluminum gains continue despite supply concerns amid Mideast conflict
Aluminum prices continued to rise on?Thursday. They were boosted by lingering fears about a tightening of global?supply in the midst of the Middle?East Conflict that shows?no sign?of easing. The Shanghai Futures Exchange's most traded aluminium contract closed the daytime trading up 0.38% to 25,240 yuan (US$3,669.56) a metric tonne. The benchmark three-month aluminum contract on the London Metal Exchange rose 1.32%, to $3,502.50 per ton. This is close to a four-year high of $3,544 that was reached earlier this week. Supply fears have been sparked by the war in the Middle East. This?region accounts for around 9 percent of global aluminum supply. U.S. and Iran are not rushing to end their war. U.S. president Donald Trump said it was "necessary" to complete the job. Iran warned that the world would be prepared for oil priced at $200 per barrel if they hit tankers and other vessels near the Strait of Hormuz. ?ING analysts stated in a report that the situation is unstable and aluminium remains highly sensitive to geopolitical headlines, keeping volatility high. Commodity traders Mercuria have cancelled or earmarked to deliver nearly 100,000 tons aluminium at?LME approved warehouses in Port Klang in Malaysia On Monday. The analysts at Benchmark Mineral Intelligence raised their price forecasts for aluminium to $3,100 per ton in 2026 from $2,900 as recent developments increased the likelihood of an even more severe supply squeeze. Other SHFE metals, such as copper, lead, tin, zinc, and?nickel, all fell 0.49%. Meanwhile,?nickel rose 0.59%. Copper slipped 0.23% on the LME, while?nickel fell 0.27%. Lead edged up 0.8%, tin increased by 0.9% and zinc rose 0.32%.
United States stocks hit record highs, dollar pares losses after CPI, Fed choice
The S&P 500 and the Nasdaq scored record closing highs for the third successive session on Wednesday and U.S. Treasury yields pared earlier declines as investors weighed a marketpleasing inflation report against lowered interest rate cut expectations.
The dollar shed some weak point after the U.S. Federal Reserve concluded its two-day policy conference by leaving interest rates unchanged, and released its accompanying policy declaration and Summary of Economic Projections (SEP).
The S&P 500 and the Nasdaq ended dramatically higher, while the blue-chip Dow turned a little negative toward completion of the session.
The more-hawkish-than-expected SEP seemed to oppose the Labor Department's carefully watched CPI report launched earlier in the day, which showed core prices growing at their slowest yearly pace in over 3 years.
It's a little frustrating to see this continued hawkishness, specifically on the very same day where you get one of the softest inflation reports in most likely a number of years, said Ross Mayfield, financial investment method expert at Baird in Louisville, Kentucky. The market is going to struggle a bit with how hawkish the Fed is in light of all of not only this morning's data, however last week's as well.
In his interview following the decision, Fed Chair Jerome Powell acknowledged that inflation has reduced significantly but stays too expensive and rate-cut expectations have been pressed out due to slower-than-expected progress in bringing cost development to the central bank's 2% goal.
I think the main takeaway will be that the marketplace was most likely expecting the Fed to shift the dot plot from three cuts to 2 cuts, Mayfield included. Instead it was shifted from three cuts to one cut, which on margin is a hawkish surprise.
Still, monetary markets are pricing in a 61.5% probability of a 25-basis-point rate cut in September, up from 46.8% on Tuesday, according to CME's FedWatch tool.
The Dow Jones Industrial Average fell 35.21 points, or 0.09%, to 38,712.21, the S&P 500 got 45.71 points, or 0.85%, to 5,421.03 and the Nasdaq Composite added 264.89 points, or 1.53%, to 17,608.44.
European shares closed dramatically greater after the CPI report and prior to the Fed's rate choice.
The pan-European STOXX 600 index increased 1.08% and MSCI's gauge of stocks around the world acquired 0.86%.
Emerging-market stocks rose 0.39%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.5%. higher, while Japan's Nikkei lost 0.66%.
U.S. Treasury yields moved after the data, however retraced a bit. after the SEP release.
U.S. benchmark 10-year Treasury notes last rose. 19/32 in rate to yield 4.3277%, from 4.402% late on Tuesday.
The 30-year bond last increased 27/32 in price to. yield 4.4846%, from 4.535% late on Tuesday.
The dollar pared its losses against a basket of world. currencies after the reserve bank cut its 2024 rate-cut. expectations.
The dollar index fell 0.46%, with the euro up. 0.61% to $1.0804.
The Japanese yen enhanced 0.14% versus the greenback at. 156.88 per dollar, while Sterling was last trading at. $ 1.2793, up 0.42% on the day.
Oil costs settled higher, supported by simmering tensions. in the Middle East, and by forecasts that global inventories. will fall in the latter half of the year.
U.S. crude rose 0.77% to settle at $78.50 per. barrel, while Brent settled at $82.60, up 0.83% on the. day.
Gold picked up speed but lost some shine in the wake of the. Fed's updated economic forecasts.
Area gold included 0.2% to $2,320.76 an ounce.
(source: Reuters)