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Palm oil prices fall on the back of increased production and stock levels
Malaysian palm futures declined for the third consecutive session on Wednesday, as concerns about higher production and stock levels continued to weigh heavily on market sentiment. At midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange had fallen by 24 ringgit (0.61%) to $3,919 ringgit (908.86 dollars) per metric ton. David Ng is a proprietary trader with Kuala Lumpur's Iceberg X Sdn Bhd. He said that the weakness in the market was mainly caused by concerns about production and an expectation of higher stock levels over the next few weeks. Palm oil stocks are likely to have risen for the first six-month period in March according to a poll, while production has soared by 10.3% compared with the previous month. Dalian's palm oil contract, which is the most active contract, fell 0.44%. Chicago Board of Trade soyoil prices were down by 0.32%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price movements of competing edible oils. Oil prices fell as President Donald Trump's tariff policies raised concern about a weakening of global economic growth. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures. The palm ringgit's currency has strengthened by 0.39% compared to the U.S. Dollar, increasing the price of the commodity for buyers who hold foreign currencies. A trade regulation revealed that Indonesia has lowered the crude palm oil price reference to $924.46 a ton in May. Data from the European Commission revealed that the imports of soybeans by the European Union in the 2024/25 crop season, which began in July, had reached 11,46 million tonnes by April 27. This was an increase of 8% compared to a year ago, while imports palm oil were down by 19%. Technical analyst Wang Tao stated that palm oil could revisit its low of 3,863 Ringgit per metric tonne, which was reached on April 21, as it has now surpassed the last barrier, at 3,931 Ringgit.
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WGC expects India's jewellery sales to decline, but investment demand will increase.
The World Gold Council (WGC), a global organization that promotes gold, said the share of investment demand will rise in India by 2025 as the price rally reduces jewellery demand, but attracts investors who are looking to diversify portfolios in the face of geopolitical tensions. Sachin Jain said on Wednesday that the correction in stock markets amid fears of a global trade conflict has driven investment demand. This is especially true for gold exchange-traded fund (ETFs), whereas jewellery demand has taken a hit. In the quarter of January-March, jewellery demand fell by 25% over the previous year to 71.4 tons. This is the lowest level for this period since 2009. The WGC reported that the investment demand grew by 7% to reach 46.7 tons. The WGC data revealed that the share of investment demand within total gold demand soared to 39.5% during the first quarter 2025. This was the highest level in over a decade. Jain stated that many potential jewellery buyers have been putting off purchases due to the volatile price of the products. Once prices stabilize, they will likely enter the market. In the first week of this month, domestic gold prices reached a new record of 99.358 rupees for 10 grams. The price of gold has risen by 25% in 2025, after rising 21% in 2024. The WGC, despite the recent price rise, maintained its forecast of gold demand for India between 700 and 800 tons by 2025. This is down from the 802.8 tons last year, which was highest since 2015. The data revealed that scrap supplies in the quarter of March fell by 32% compared to a year earlier, reaching 26 tons. WGC reported that the Reserve Bank of India increased its gold reserves by 3 tons during the quarter ending March, but the buying activity has been less constant in recent months than it was in 2024. (Reporting and editing by Rashmi aich; Rajendra Jadhav)
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Aperam anticipates a recovery of earnings in the second quarter
Aperam, a Luxembourg-based steel company, said on Wednesday that it expects to see its adjusted profits grow and its debt decline sequentially in its second quarter after a quarter affected by lower shipments from Brazil and price pressures. The group stated that the purchase of Universal Stainless in January should support this. Universal strengthens and stabilises our earnings It also means that generating cash to pay dividends and reduce leverage is now our top financial priority," CEO Timoteo Di Maulo said in a press release. Aperam reported adjusted earnings before taxes, depreciation, and amortization (EBITDA), of 86 millions euros ($97.80) for the first quarter. Analysts expected an average of 84 million euro, according to company-compiled consensus. Aperam announced earlier this month that its first-quarter earnings would be lower than last year due to seasonal increases in Europe, the consolidation of Universal and pricing pressures in Europe.
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ArcelorMittal's top views on the first-quarter core profits
ArcelorMittal reported a first-quarter profit that was above the market's expectations on Wednesday. This was largely due to a strong performance by Liberia. The Luxembourg-based firm reported quarterly earnings before taxes, depreciation, and amortization (EBITDA), of $1.58billion, exceeding analysts' estimates of $1.55billion provided by the company. "A measure of caution is necessary in the short term." Uncertainty around the Aditya Mittal, CEO of Aditya Mittal Group, said that the terms of global trade are hurting business confidence. If not resolved quickly, this could lead to further economic disruption. The group warned that delays in resolving the trade disruptions may have an impact on its steel consumption forecasts for 2025, especially for the U.S. The group predicted a global steel demand increase of between 2.5% and 3.5% by 2025, excluding China as the top consumer and producer. ArcelorMital's comments on steel market outlook echoed those of its Swedish counterpart SSAB. SSAB said that it expected a more Uncertain outlook for its Steel Divisions Tariffs are the main reason for this. (Reporting and editing by Christopher Cushing, Kim Coghill, and Anna Peverieri)
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Mercedes profits drop in Q1 due to tariffs
Mercedes-Benz reported lower profits in its car business for the first quarter on Wednesday and warned that tariffs may impact its earnings in the full year, as trade tensions forced it to change its outlook. The German luxury automaker reported a profit of 7.3% for its segment, down from 9% during the first quarter last year. In the first quarter of 2025, group earnings before interest and tax (EBIT), which is what we call EBIT in short, fell by 41% on an annual basis to 2.3 billion euro ($2.62 billion). The company stated that the current volatility in tariff policies, mitigations measures, and the resulting direct and indirect effects on customer behavior and demand is too high for a reliable assessment of business development in the rest of the year. The unpredictable and massive tariff regime of Donald Trump puts pressure on European automakers who are already struggling with a host of challenges including fierce competition from China, and high costs. Mercedes said that if current trade policies continue, it expects to see its margins for cars and vans "negatively affected".
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London metals drop as strong dollar clouds hopes for tariff easement
London metals declined on Wednesday, as a stronger US dollar overshadowed optimism about improving U.S. China trade relations. Investors are now looking forward to the U.S. Economic Data for clues regarding the Federal Reserve’s policy direction. As of 0408 GMT, the benchmark copper price on London Metal Exchange (LME), fell by 0.5% to $9397.5 per metric ton. As of 0408 GMT the US dollar index increased 0.2% to 99.355, making commodities priced in dollars more expensive for buyers who use other currencies. Investors await the release of U.S. This week's Personal Consumption Expenditures data is a closely-watched inflation gauge, which could have an impact on Fed policy and metals prices. U.S. president Donald Trump signed two orders to reduce his auto tariffs. This was in response to Treasury Secretary Bessent's comment that key U.S. traders had presented promising proposals for avoiding tariffs. Bessent noted that China’s recent exemptions of certain U.S. goods from retaliatory duties showed a willingness for de-escalation. The trade war tensions seem to have stabilized this week, without any major developments. There is some optimism in the meantime about a possible de-escalation of tensions between China and the U.S. "Our attention is now focused on U.S. Economic Data," said a trader. Other London metals saw aluminium fall 0.2% to $2460 per ton, while zinc fell 0.1% at $2647.5; lead declined 0.1% at $1975; tin dropped 0.1% at $31,890, and nickel increased 0.3% to 15,595 per ton. The Shanghai Futures Exchange's (SHFE) most traded copper contract fell 0.3%, to 77 390 yuan per ton ($10 647.9). Shanghai copper prices were supported a massive fall in inventories In warehouses monitored the SHFE, that dropped 32% weekly to 116.753 tons in April. SHFE aluminium rose 0.2% to 19.965 yuan per ton. Zinc fell 0.5% to 22430 yuan. Lead dropped 0.4% to 16.875 yuan. Nickel lost 0.6% to 123,750 yuan. Tin slipped 0.1% to 268,870 yuan. $1 = 7.2681 Chinese Yuan Renminbi (Reporting and editing by Violet Li, Lewis Jackson and Rashmi aich).
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Sources: Chinese sovereign fund CIC will sell US private equity investments worth $1 billion, according to sources
Two people familiar with the matter have confirmed that China Investment Corporation (CIC), a sovereign Chinese investor, is selling its PE investment portfolio worth about $1 billion on the secondary market. According to the sources, assets were held by a number funds, which are managed by eight U.S. managers, such as Blackstone Inc. and Carlyle Group. CIC has hired U.S. Investment Bank Evercore to provide advice on the sale. They aim to complete the divestments before the end of June. A third party with direct knowledge said that the total value and deadline for the sale of assets are not set and may change depending on the market and pricing. Blackstone and Carlyle declined comment. CIC and Evercore have not responded to requests for comments. Due to the sensitive nature of the issue and the need for confidentiality, all sources declined to make any comments. The first two respondents said CIC began discussing the sale in late 2024 with asset managers and advisers as part of its efforts to optimize its investment portfolio. The $1 billion of assets, which was initially invested in PE funds in 2016 and 2017 is nearing the end its investment cycle. However, the move comes at a time when geopolitical tensions and trade tensions have caused market volatility and uncertainty, particularly between Beijing and Washington. Both countries have intensified their scrutiny of certain investments made by each other's financial institutions. Financial Times reported, last week, using unidentified sources that Chinese state-backed fund, CIC included, had cut off new investments in U.S. PE companies in response to Beijing's pressure. CIC hasn't commented on the FT piece. Beijing-headquartered CIC, founded in 2007, is mandated to diversify China's giant foreign exchange holdings via overseas investments. According to previous public disclosures, the U.S. was the Chinese sovereign fund’s largest investment destination. CIC took a minor stake in Blackstone and invested in Morgan Stanley during the global financial crisis. It sold this minority stake to Blackstone in 2018. CIC is a major investor in U.S. PE Funds. Nearly half of the portfolio is made up by so-called alternative investments. PE funds have a typical investment cycle of 10 to 15 years. However, since the COVID-19 epidemic it has become more difficult for PE funds to sell their investments through initial public offerings (IPOs), or via trade sales. The person declined to provide further details. Other sovereign funds, asset managers specializing in secondary markets, and private investors, such as family offices are also potential buyers of the CIC portfolio. According to them, the portfolio can be sold in different tranches or all at once, depending on the price negotiation. CIC's most recent annual report indicates that the sovereign fund managed $1.33 trillion in assets as of December 31 2023. About 64% are managed by external managers. The annual report reveals that U.S. stocks accounted for 60.29% CIC's overseas equity market holdings at the end of 2023. The total portfolio was made up of 33.13% public equities. CIC's cumulative annualised net return over the past 10 years was 6.57% by 2023. Its cumulative annualised net return since its inception is 6.23%. (Reporting and editing by Sumeet Chaterjee, Neil Fullick and Kane Wu)
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LS Marine Solution Gets Cabling Job at Taiwanese Offshore Wind Farm
LS Marine Solution has secured $15.8 million subsea cable laying contract for work at an offshore wind farm being developed by Taiwan Power Company (Taipower), off Taiwan.The contract marks LS Marine Solution’s first international power grid project and is also the first overseas venture by a Korean subsea cable installation company, representing a significant turning point for expanding into the global market.The project is part of Taipower’s ‘TPC Offshore Wind Phase 2’ initiative, a 294.5 MW wind farm project. It is a core component of Taiwan’s Phase 1 offshore wind development plan, which aims to build 5.6 GW of capacity between 2020 and 2025.“As Korea’s first-generation subsea cable installation company, we’ve successfully taken our first step into the overseas power grid market based on decades of technical expertise and experience. This Taiwan project will be a springboard for further expansion into the global market,” said Kim Byung-ok, CEO of LS Marine Solution.
As tariffs fuel global growth concerns, shares sway and oil prices fall.
On Wednesday, oil prices and shares were in a state of confusion as the relief from a possible easing of trade tensions around the world was countered by a worsening economy outlook and gloomy signals coming from corporations affected by Donald Trump's new tariffs.
Data earlier that day in China showed that factory activity in April contracted at its fastest rate in 16 months, as U.S. tariffs halted two months' recovery, and fueled calls for Beijing to provide further stimulus.
The impact of the high U.S. import tariffs has caused the index to drop back to its lowest point, COVID-19 disruptions included, since August 2012. This was said by Zichun Hua, an economist for Capital Economics in China.
The sharp fall in PMIs may overstate the impact of tariffs because negative sentiments are at play, but they still suggest that China's economic growth is under pressure due to the cooling external demand.
The CSI300 index rose only 0.07%, a paltry amount. Hong Kong's Hang Seng Index rose 0.2%.
The yuan onshore was not much changed, at $7.2686 per US dollar.
Details are scarce despite Trump's efforts to ease the impact of his auto tariffs, and signs of progress on broader trade talks. Commerce Secretary Howard Lutnick said he had made one agreement with a foreign country.
Investors were also concerned about deteriorating U.S. statistics as Trump's tariffs had a ripple effect on businesses and consumers in the United States.
David Kohl, Chief Economist at Julius Baer, said: "We increase the probability of an extended economic stagnation, which meets the criteria for recession, up to 50%."
The rising likelihood of economic stagnation is due entirely to exogenous factors such as an erratic economic policy, disruptions in public spending, changes in incentives, and a fiscal position that cannot be sustained.
The data released on Tuesday revealed that the U.S. goods trade deficit reached a new record in March, as businesses stocked up ahead of Trump's proposed tariffs. This suggests trade was the main drag on the economy in the first quarter. The first quarter GDP is expected later today.
In April, U.S. consumer sentiment also fell to its lowest level in nearly five years.
Wall Street Futures struggled to maintain gains made overnight during the cash session due to the precarious economic outlook in the United States and globally.
In Asia, Nasdaq Futures declined 0.6% while S&P500 futures dropped 0.5%.
The futures for the EUROSTOXX50 index fell 0.2% while MSCI's broadest Asia-Pacific share index outside Japan rose 0.4%.
Nikkei gained 0.2%.
The impact of Trump's trade conflict has been felt in the corporate world. UPS, a delivery giant, announced it would cut 20,000 positions to reduce costs. General Motors, meanwhile, canceled its investor call and lowered its forecasts.
"You see companies... making statements about low transparency, the unwillingness to sign long-term agreements, or to make long-term planning - that is a slippery slope," Fabiana Fedeli said, M&G’s chief investment officer for equities and multi-asset at a Monday media roundtable.
Worries about global economic growth and the impact it has on demand also contributed to the steep decline in oil prices from previous sessions.
Brent crude futures fell 1% to $63.61 per barrel after falling 2.4% overnight. U.S. crude fell 1.16%, to $59.72 a barrel after a 2.6% decline on Tuesday.
DATA DUMP
The release of the core PCE Price Index - the Fed’s preferred measure for inflation - will also be due on Wednesday. This is before the jobs data, which are expected at the end the week.
Payrolls will rise by 130,000, and inflation will ease. However, there is more uncertainty regarding GDP growth with a median forecast of a paltry 0.3% annualised.
The Fed is expected to cut rates by 97 basis points in December, up from 80 bps as early as last week.
This has pushed yields in the U.S. down. The two-year Treasury rate is now at its lowest level in three weeks, 3.6400%. The benchmark 10-year rate was last at 4.1580%. This is also its lowest level since early April.
The dollar's performance on the foreign exchange market was set to be its worst since November 2022, with a loss of 4.65%, as Trump's erratic trade policies left the greenback vulnerable.
The yen, a safe-haven currency, was on track for its biggest monthly gain since July 2024, at more than 5%. The euro is also on track for its biggest monthly gain in two years, and bought $1.1369 last.
The Australian dollar last traded 0.27 percent higher at $0.6401.
Data released on Wednesday revealed that core inflation in Australia had slowed down to its lowest level in three years in the first quarter. This supports the argument for another interest rate cut in the coming weeks.
Spot gold dropped 0.4% elsewhere to $3,303.53 per ounce.
(source: Reuters)