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Prices for EUROPE GAS rise and reverse earlier losses
Dutch wholesale gas prices increased on Wednesday. They reversed earlier losses due to concerns about liquefied gas (LNG) supply if tensions escalate in Iran. LSEG data shows that the benchmark Dutch front-month 'contract' at TTF hub is up?1.42 Euros?at 32.55 Euros per megawatt hour by 1213 GMT. This is the highest level recorded since October 7, last year. The Dutch March rate was 31.66 Euros/MWh, an increase of 1.28 euros. The British day-ahead contract was down 0.40 pennies at 82.80 pence/therm. Iran warned its neighbours that it could strike U.S. military bases if Washington interferes with protests, despite the fact that weather forecast revisions showed?milder temperature than before and a strong supply. Gas?traders said that the market was nervous about the situation in Iran and possible risks to LNG supply. The oil price also rose for the fifth consecutive session due to fears that Iranian supplies could be disrupted by a possible U.S. strike on Iran, and possible retaliation on U.S. interests in the region. Analysts at LSEG said that the gas storage levels in North-West are likely to fall below 100 terawatt hours on March 1. This would be a positive factor. Prices fell this morning due to increased LNG exports and Norwegian?exports as well as lower demand forecasts for the coming days. LSEG data shows that the local distribution zone gas demand for north-west Europe is expected to decrease by 296 gigawatt-hours/day (GWh/d), to 3,600 GWh/d, in the next day. Wind speeds that are stronger than normal will also reduce the gas consumption of gas-fired plants. The benchmark contract on the European carbon markets was up by 0.13 euros at 90.87 euro per metric ton. (Reporting and editing by Nina Chestney, Susanna Twidala)
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Caledonia will spend $132m on Zimbabwe's largest gold mine in this year
Caledonia Mining Corporation announced on Wednesday that it will spend $132m this year to launch the development of Zimbabwe's biggest gold mine once it is operational. The record gold prices are helping miners expand production. Gold spot prices reached a new record of $4,639.48 per ounce on early Wednesday. This was fueled by the escalating tensions in Iran, concerns over the Federal Reserve’s autonomy, and softer inflation data that boosted bets for rate cuts. Caledonia stated in a production report that the planned expenditure, which is part of an overall capital expenditure programme of $162.5 millions for 2026, was subject to approval by the board and funding availability. Caledonia, which already operates ?the 80,000-ounce-per-year Blanket mine in Zimbabwe, plans to develop the Bilboes mine at a projected total capital cost of $584 million. The new mine will begin production in late 2028. A steady-state annual output of 200,000 ounces is anticipated starting from 2029, for an initial 10 year period. The company has said that it will fund the Bilboes Project through a combination of senior non-recourse debt, contributions made by existing operations, and specialised financing methods, such as streaming. In this method, investors provide cash in exchange for future metal supplies. Caledonia’s expansion plans got a boost last month after Zimbabwe’s government reversed its plans to double gold royalty rates and change the taxation of capital expenditure. (Reporting and editing by Nelson Banya, Joe Bavier and Chris Takudzwa Muronzi)
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Copper falls from record highs due to physical demand
The copper price hit a new record on Wednesday, thanks to persistent demand by speculative funds. However, some investors were concerned that the high price would discourage industrial buyers from buying. The benchmark three-month copper price on the London Metal Exchange fell 0.1% to $13,176.50 per metric tonne by 1030 GMT after reaching a record high of $13,407. LME copper prices have risen by 44% in the last 12 months. This is due to disruptions at the mines and concerns about deficits for this year. Also, a large flow of metal has been sent to the U.S. before potential tariffs which could tighten supply elsewhere. "With all the?concerns? about debasement and financial risks, as well as Fed independence, these hard assets are just sensational," Ole Hansen, head commodity strategy at Saxo Bank, in Copenhagen, said. There's a limit to industrial metals, where we?hit a wall when it comes to potential demand destruction. I don't even know where this level is or if it's already reached. He said that if you look at the?technical signal, a closing below $13,000 will cause a downward reaction. Hansen stated that the copper demand in China appeared to be stable and there was a potential for stocking before the Lunar New Year holiday. After hitting a record high of 105.650 yuan, the most-traded contract for copper on the Shanghai Futures Exchange ended daytime trading 0.9% higher, at 104.120 yuan per ton ($14.931.88). Investors bet that demand for tin, which is used in semiconductors, will grow rapidly as a result of the artificial intelligence boom. SHFE tin rose 8%, reaching the upper limit of 413,170 Yuan. LME tin increased 4.1%, to $51,550. The fundamentals of tin have not changed dramatically. Jing Xiao said that the price rally was fueled by speculative trading. Tom Langston?at The International Tin Association?agreed that supply-demand metrics had not changed, noting the record interest rates on the LME. Other metals saw a 0.1% increase in LME aluminium to $3.200 per ton. Zinc rose 1% at $3.232. Lead added 0.4% at $2.069, and nickel climbed 1.7% to 17.995.
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Malaysia's state utility signs a deal to send energy from Laos and Singapore, revitalizing a cross-border project
Malaysia's state-run utilities firm signed a 2-year energy - agreement to transmit electricity from Laos into Singapore. This deal revives a Southeast Asian multilateral power trade - agreement that has been stalled since the year 2024. Tenaga Nasional Berhad, in a filing to the bourse on Wednesday, said that Energy Wheeling Agreement Phase 2 is part of a project to integrate power from Laos with Thailand, Malaysia, and Singapore. This will allow up to 100 megawatts in Laos to supply power via Thailand and Malaysia to Singapore using existing transmission links. The first phase was signed in 2022 with a validity of two years that ended June 22, 2024. Malaysia's Energy Minister in October last said that the delay was due to?local political changes in Thailand. According to an agreement signed Wednesday, the state utility Electricite?Du Laos pays TNB for wheeling?services in order to transmit energy produced in Laos from Singapore. The deal is part ?of the second phase of ?the Lao PDR-Thailand-Malaysia-Singapore Power Integration Project, which is a precursor to a ?broader ASEAN Power Grid initiative aiming to connect all ten member states and tackle the region's growing reliance on fossil fuels. (Reporting and editing by David Stanway; Ashley Tang)
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Gold and silver reach historic highs amid geopolitical tensions and Fed uncertainty
Silver broke through $90 for the first time and gold reached a new record on Wednesday. The escalating tensions in Iran, along with concerns about the Federal Reserve’s autonomy, fueled demand for safe havens, while lower inflation numbers boosted bets to cut rates. Gold spot rose 0.9%, to $4,627.72 an ounce, by 1001 GMT. This was after the gold price had reached a session high of $4.639.48. U.S. gold futures for delivery in February rose by 0.8% to $4 636. Jamie Dutta is the chief analyst at Nemo.money. He said that prices are rising because of "well-known haven characteristics" amid increased geopolitical risk, fiscal uncertainty and concerns over Fed independence. The Federal Reserve Chair Jerome 'Powell was backed by central bankers from around the globe on Tuesday. They issued an unprecedented statement of support after the Trump administration threatened to indict him, which could have a negative impact on the trust that people place in U.S. assets like the dollar. Dutta said that "protests in Iran maintain geopolitical tensions, resulting in a strong demand for bullion." HRANA, a rights group based in the United States, said that the death toll has reached 2,571, sparking threats from?U.S. intervention. The Bureau of Labor Statistics reported on Tuesday that the core Consumer Price Index in the United States rose by 0.2% from one month to the next and 2.6% over the course of a year. Powell, the Fed's chairman, has been urged by President Donald Trump to reduce interest rates "meaningfully". The traders expect?two rate cuts in this year. Low interest rates are usually in favour of non-yielding gold. Spot silver rose 4%, to $90.46 an ounce. This is down from a record high of $91.53. It has risen by nearly 27% within just 14 days of this year. Dutta stated that "long-term targets" are big numbers like $5,000 and $100 respectively for gold and Silver. After touching a session high of $2,406.75 per ounce earlier, spot platinum rose 3.5%. It hit a record $2,478.50/oz on December 29. Palladium increased 0.1%, to $1840.19 per ounce. (Reporting and editing by Clarence Fernandez in Bengaluru, with Pablo Sinha reporting from Bengaluru)
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TotalEnergies and Bahrain's Bapco Energies form Middle East Trading Venture
TotalEnergies, the French oil giant, announced on Wednesday that it had?formed BxT Trading a joint venture with Bahrain's Bapco Energies. The Middle East-focused venture is expected to trade products from Bapco’s Sitra refinery, which produces 267,000 barrels per day. The partnership builds upon a 2024 agreement?underwhich Total agreed to expand and modernise the?Sitra refinery to reach a throughput capacity 380,000 barrels per d?ay and to share its trading expertise. It also explored options to partner with Bahrain in projects involving renewable energy and liquefied gas. Bapco announced in December a new increase of capacity to 405,000 bpd. In a recent statement, Bapco Energies chairman Shaikh Nasser bin Hamad Al Khalifa said, "Through our partnership with TotalEnergies, we are strengthening our downstream value chain, and reinforcing Bahrain’s position as a trusted and competitive player on the international energy market." Patrick Pouyanne, CEO of TotalEnergies, said that the joint venture would strengthen Total's Middle East position Two executives signed a contract in Abu Dhabi on Tuesday. (Reporting by America Hernandez in Paris. Mark Potter (Editing)
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TotalEnergies sells its SPDC assets in Nigeria to a new buyer
By America Hernandez PARIS, January '14 - French giant TotalEnergies signed an agreement to sell its 10% non-operated stake in the Nigerian oil asset SPDC (renamed Renaissance JV) to Vaaris. This follows a failed sale to Mauritius based Chappal Energies last year. Total retains a 'full economic interest in the?deal, which includes stakes of three other licenses that produce mainly?gases for Nigeria LNG. The company did not provide any further information on the buyer. The inability of the buyer to pay the $860 million price tag was the reason why Nigerian regulators rejected Total's first deal with Chappal Energies for the SPDC stakes. This dealt a serious blow to Total's attempts to liquidate its mature and polluting assets, as well as to reduce debt. The SPDC was plagued by hundreds of oil spills due to theft, sabotage, and operational problems that resulted in costly repairs?and high profile lawsuits. Shell sold its 30% share in SPDC to a consortium made up of mostly local?companies last year for up $2.4 billion. Nigerian National Petroleum Corporation, or NNPC, holds a?55% stake in the joint venture while Eni of Italy has 5%. The Nigerian regulators must approve the deal. Reporting by America Hernandez, Editing by Jan Harvey & Tomasz Janowski
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Copper prices rise as concerns over supply outweigh dollar strength
The price of copper peaked on Wednesday as global supply concerns, mounting geopolitical risk and a stronger dollar outweighed the pressure. The Shanghai Futures Exchange's most-traded contract for copper closed the daytime trading session 0.85% higher, at 104120 yuan per metric ton, after reaching an all-time record of 105650 yuan. The benchmark three-month copper contract on the London Metal Exchange rose 0.58% at $13,240 per metric ton as of 0743 GMT after hitting a record high earlier. The price of copper has been supported by "disruptions" at mines, concerns about deficits in this year and an influx of red metal into the United States. Supply elsewhere is being squeezed by potential tariffs. Donald Trump, the U.S. president, said on Tuesday that help was on its way for Iranians. Analysts say that this fueled concerns about geopolitical risk, which led some investors to rush into commodities with "healthy fundamentals" such as copper or tin. A stronger dollar has capped the price increases. The tin price in Shanghai and London has also reached record levels, with gains so far this month of 23,6% and 30,4% respectively. Analysts say that more funds have been invested in the tin industry, as investors bet on the rapid growth of demand for this metal which is used to manufacture semiconductors and will?benefit the artificial intelligence boom'. SHFE tin increased 8%, reaching the upper limit of 413,170 Yuan. LME tin rose?more than 5 % to $52,495. Jing Xiao is an analyst with broker SDIC Futures. She said that she does not believe there has been a dramatic shift in tin fundamentals. The round of 'price rally' was driven by speculative trade. Xiao stated that the demand for tin in 'the AI sector was overestimated, while the consumption of traditional 'users were underestimated. The high prices of the products have dampened consumer demand, while this year's supply growth will probably exceed expectations. This points to potential downside risks." SHFE aluminium slipped 0.06%. Nickel slipped 0.11%. Lead dipped by 0.17%. Zinc grew by 0.51%. Aluminium, nickel, and lead are among the other metals traded on the LME.
Dollars slide on trade and tax concerns
As June began, the U.S. Dollar plunged to its lowest level since six weeks. Concerns about U.S. Tariffs were back in the spotlight after the legal confusion of last week and rising military tensions around the world.
The euro was the leader, unfazed by the prospect that the European Central Bank would cut interest rates again on Thursday. The new German chancellor Friedrich Merz will visit Washington on Thursday to meet U.S. president Donald Trump as trade negotiations between Europe and America continue to be closely watched.
The dollar is susceptible to fears of foreign capital flight as markets are still concerned about the U.S. Fiscal Bill that is currently being debated in the Senate. This bill gives the administration the ability to tax companies and investors who come from countries with 'unfair' foreign taxes.
On Monday, the focus was back on tariffs. It seemed that President Donald Trump would push for levies in some way despite last week's legal opposition.
After the weekend, Trump's plan of doubling duties on import steel and aluminum from Wednesday to 50% hit the greenback as Beijing retaliated against allegations that it had violated an agreement regarding critical minerals shipments.
The weekend was marked by geopolitical tensions of great importance and bellicose threats. Gold rose.
Pete Hegseth, the U.S. Secretary of Defense, warned his Indo-Pacific allies on Saturday to increase their spending on defence. Ukraine-Russian war continues to rage. Ukrainian drones continue to strike dozens of Russian aircraft deep within Russian territory. Gaza's conflict is not ending.
The major countries are building weapons at a rapid pace. Britain is expanding its fleet of nuclear-powered attack subs as part a review of defence, aimed at preparing the country for modern warfare and countering the Russian threat.
The oil price rose by about 3% Monday, after the producer group OPEC+ maintained its output increase in July at the level of the previous two month.
There was some good news on the interest rates front in a week that saw a lot of data from the U.S. Labor Market.
Federal Reserve Governor Christopher Waller stated on Monday that further rate cuts are possible in the second part of the year. Waller said that since the rise in inflation pressures linked to Trump's increased import taxes is unlikely to persist, he supports looking past any tariff effects to near-term-inflation in setting policy rates.
As expected, China's manufacturing sector shrank in May for the second consecutive month.
After Karol Nawrocki, the nationalist candidate of the opposition won the second round in the presidential elections, stocks in Poland fell by 1.4%.
Before Monday's bell rang, U.S. stocks futures were down by about half a percentage, and so too were stocks in Europe, Japan, and other parts of the world. The yields on U.S. Treasury bonds have risen again.
The column today looks at this week's major monetary decision made in Europe. It is widely expected that the European Central Bank will lower rates for an eighth time during the cycle, but the euro has risen regardless.
EURO CONUNDRUM: ECB FACES SURGING EURO DISCONNORDRUM
The euro continues to rise while the European Central Bank is cutting rates. This is because a capital reversal in the US has thrown off the relative rate shifts, and could force the ECB to further ease.
It is expected that the ECB will lower its main lending rate to 2% on Thursday, which would be half of what it was a year ago at its highest point and less than half of the Federal Reserve's equivalent. The central bank has also returned to a level it considers to be 'neutral,' meaning that the rate does not either stimulate or rein in the economy.
For the first time since almost two years, real, or inflation adjusted, ECB interest rates will return to zero.
It's amazing that the euro, after eight consecutive ECB rate cuts and the prospect of zero real rates or even negative ones in the future, has risen more than 10% against a dollar basket and 5% against a currency basket based on the major trading partners of the Euro Zone.
The nominal effective euro index has reached record levels, while the "real" version is at its highest level in over 10 years.
The euro/dollar rate has risen despite no change in the difference between the yields of two-year government bonds on either side. This is usually a reliable indicator for changes in the exchange rate. This trend is largely due to Donald Trump's trade wars, the fear of capital flight out of dollar assets because of a variety of concerns regarding U.S. institutions and policies, and Germany's historical fiscal boost.
The ECB is in a quandary if, as many believe, even a fraction (or fractions) of the trillions dollars of European capital invested in the United States are indeed returning home. How can it manage both the deflationary and domestic demand effects of a currency increase that is so rapid? The euro is not affected by the possibility of future rate cuts. The majority of ECB observers expect one or even two more rate cuts after Thursday, while money markets are predicting a 'terminal' rate of around 1.75%. This is the low end in the ECB range estimated as 'neutral. If the majority of capital repatriation is from equity investments in the U.S., lower ECB interest rates could even increase the outflows by boosting growth prospects for cheaper European stocks. Higher borrowing in Germany and across Europe should also sustain fixed income returns over the long term, increasing the pool of "safe" investments.
'GLOBAL EUROMOMENT'
The ECB may protest about 'excessive gains' in the euro, but the impact could be limited unless they are prepared to back up their words with actions. There is also a chance that it could backfire because of the reasons mentioned above.
The ECB is encouraging investment and the euro as a currency of reserve, in part, to meet the massive capital requirements for retooling the military, digital, and energy sectors.
Christine Lagarde, ECB head, said in a speech last week in Berlin that there is an opportunity for a global euro moment, where the single currency can be a viable alternative to dollars, bringing immense benefits to the region if the governments are able strengthen the financial and security infrastructure of the bloc.
A soaring currency rate during a trade conflict may seem like a good thing, but it will cause some concern among the major exporting countries in the region.
ECB hawks, doves, and others will have to decide whether the continued easing of monetary policy to counter disinflationary risks is only stoking domestic inflation in the long run. Not to mention the fiscal boost that's coming next year.
It is clear that the ECB will take into account in its new economic projections, due to be released on Thursday, the 7% increase in the euro/dollar rate and the near 10% decline in the global oil price since the last set of forecasts made in early March.
Morgan Stanley economists believe that even if central bank raises core inflation forecasts, headline inflation could still fall short of the 2% target between mid-2025 and early 2027. This is even though the GDP growth outlook for 2025 has been revised upwards.
At this point, it is impossible to make any predictions. Few central banks or major traders have any idea where the U.S. trade war or tariffs will lead.
The ECB is unlikely to be able to cap the Euro, as global trade and investments are a source of anxiety. The ECB is faced with a big dilemma: whether to maintain the status quo or ease up even further.
The chart of the day shows how tariff-related import distortions have distorted U.S. Gross Domestic Product readings this year. Last week, models that track GDP inputs were again jarred when a sharp contraction of the goods trade deficit in April occurred as the front-running imports to beat the tariffs in the 1st quarter faded. According to the Census Bureau of the Commerce Department, with many tariffs in effect, imports plummeted, helping to reduce the goods trade surplus by 46%, to $88 billion. Imports dropped $68 billion, to $276 billion. Exports rose $6.3 to $188.5. If the goods deficit shrinks, the net trade component in GDP calculations could spur significant growth in this quarter. It is similar to how it reduced Q1 GDP by a record-breaking 4.9 percentage points. The Atlanta Federal Reserve’s ‘GDPNow’ tracker is now boosted by the trade figures. It sees an impressive 3.8% real GDP increase in Q2. There is still caution. There is caution. Businesses don't appear to be restocking. Wholesale inventories were unchanged last month, and retail stocks fell by 0.1%. Stockpiles are expected to drop dramatically over the rest of the quarter.
Watch today's events
* US manufacturing surveys for May from S&P Global and ISM (0930EDT), as well as April construction spending (1000EDT).
* Federal Reserve chair Jerome Powell opens Fed event in Washington. Fed Board Governor Christopher Waller and Dallas Fed President Lorie Log speak. Chicago Fed President Austan Gollisbee also speaks. Bank of England policymaker Catherine Mann also speaks.
* US corporate earnings: Campbell's
The opinions expressed are solely those of the authors. These opinions do not represent the views of News. News is committed to the Trust Principles and therefore, integrity, independence and freedom from bias.
(source: Reuters)