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Lynas, Australia's automaker, surges after warnings from Chinese export restrictions on rare earths
Shares of Australia’s Lynas Rare Earths rose to their highest level in over two years on Thursday, after automakers warned China’s export restrictions could cause production delays. Lynas, the largest rare-earth manufacturer outside of China, is expected to profit from global supply concerns. Analysts believe that the rising geopolitical tensions and the demand for essential minerals could be favorable for the Australia listed company. Lynas stock rose 11.8% to A$9.2, reaching its highest level since the 8th of February 2023. This was also the biggest intraday percentage increase for the stock since October 24, 2023. Hebe Chen is a market analyst with Vantage Markets. She said: "Lynas rally...is a powerful representation of the dual forces at work today: escalating global tensions and surging green technology demand." As China tightens its rare-earth export restrictions, the markets price in supply risk -- positioning Lynas as a strategic hedge. In April, China, which produces 90% of the world's rare-earth minerals, implemented export restrictions on strategic minerals as a response to tariffs imposed by U.S. president Donald Trump. This move has raised alarms in industries that rely on 17 rare earth elements. These are essential for advanced electronics, defense systems, and electric vehicles. German automakers have emphasized the urgency of their concerns this week by warning that China's restrictions on exports of rare-earth minerals pose a serious threat to production and local economies. The European auto supplier association CLEPA reported that several production lines had shut down due to a lack of supplies. Mercedes-Benz, on the other hand, said it was in talks with top suppliers to build "buffers", such as stockpiles, to protect against possible threats to supply. China is the world's largest supplier of rare-earth metals, despite the fact that these elements are common in the earth crust. This is because China has mastered the environmentally difficult and complex refining process. Lynas, a non-Chinese producer, is a key player in the U.S. rare-earth industry.
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Asian shares continue to rise, while the dollar languishes in front of the ECB
The U.S. Dollar remained stagnant as the European Central Bank released its outlook on a turbulent global economy. Dollar fell in the previous session due to weak U.S. data on jobs and services. Friday will bring more important employment data. The damage to the U.S. economic system is becoming more evident as a result of President Donald Trump's erratic trade policies, and bilateral agreements remain unrealised. The European Union and Canada reported progress in their trade negotiations with Washington. In this context, the market will be paying greater attention to any signals that Christine Lagarde gives about her future plans. Kyle Rodda is a senior analyst for Capital.com. He said that there's uncertainty regarding the guidance given by the central bank, due to the uncertain outlook of U.S. global trade policy and U.S. Trade Policy. If the central bank fails to provide sufficiently dovish advice, it could disrupt the equity markets and give the euro upward momentum. Trump's doubled tariffs on imports of steel and aluminum took effect on Wednesday. They were aimed at Canada and Mexico. On the same day, Trump's administration asked trading partners for "best offers" to prevent other import levies from taking effect in July. Ryosei Acazawa, Japan's top trade negotiator, will be in the U.S. for another round on Thursday. Friedrich Merz is due to travel to Washington as well. The broadest MSCI index of Asia-Pacific stocks outside Japan rose by 0.4%. Japan's Nikkei index fell 0.5%. South Korea's benchmark KOSPI stock index surged by 0.9%, reaching a new 11-month high due to the extended optimism following the election of Lee Jae Myung as president. Hong Kong's Hang Seng index rose 0.5% on the back of tech shares. Chris Nicol is the Australia equity strategist for Morgan Stanley. He said that the markets are complacent in the sense that they expect to continue with the resolution of issues and the closing of deals. "The policy has yet to be set in stone, and the impact on growth and inflation is still uncertain." The dollar index (which measures the greenback versus a basket currencies) rose by 0.1% to 98.879 and reversed its 0.5% decline on Wednesday. The dollar increased by 0.2%, to 143 yen. The euro was mostly flat at $1.1411, after a 0.4% increase in the previous session. Gold lost its gains of the previous day, while oil fell after an increase in U.S. stocks and Saudi Arabia slashed its July crude prices for Asian buyers. Spot gold fell 0.2% to $3,367.30 an ounce. U.S. crude fell 0.5% to $62.58 per barrel. The S&P 500 futures as well as the Euro Stoxx 50 pan-region futures were not much changed.
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Ukraine and the US discuss ways to make the minerals fund operational within a year
Ukraine's Yulia Shvyrydenko said that the United States and Ukraine have discussed ways to make the minerals fund operational before the end of this year. The fund's initial meeting is scheduled for July. Svyrydenko signed the agreement in Washington, after months of hard negotiations, which made the terms more favorable for Kyiv. The agreement was heavily promoted by U.S. president Donald Trump. The Ukrainian parliament ratified this agreement. Svyrydenko met with U.S. Treasury Sec. Scott Bessent on Wednesday and the Development Finance Corporation which will be the partner of the Minerals Fund. "We discussed very concrete steps to make this fund functional during this year," Svyrydenko told reporters. We will have our first board meeting in July to discuss the seed capital needed to operate this fund. We should also adopt a strategy for investing in this fund over the next few decades. Negotiations leading to the signing of the Mineral Fund deal were preceded by a heated discussion between Trump and Ukrainian president Volodymyr Zelenskiy at the White House about how to end Ukraine's war with Russia, which has lasted for three years. Zelenskiy's ability to repair his relationship with Trump was dependent on the agreement. In April, the two men briefly met at the Vatican during the funeral for Pope Francis in order to get their relationship back on track. Reporting by Gram Slattery, Costas Pitas and SonaliPaul; Editing by Ron Popeski & SonaliPaul
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China's coal power plant approvals grow after 2024 decline
China approved 11.29 gigawatts (GW) of new coal power plants in the first three months of 2025, already exceeding the 10.34 GW approved in the first half of 2024, a new Greenpeace report showed on Thursday. WHY IT'S IMPORTANT Last year, Chinese approvals of new coal-fired power capacity fell 41.5% year-on-year to 62.24 GW, the first annual decline since 2021. The new data suggest approvals are tracking higher this year. While all the approved projects may not be built, the growing pipeline signals a continued reliance on coal. Reducing coal use to cut emissions is key to China's goal to hit peak carbon emissions by 2030 and carbon neutrality by 2060. KEY QUOTE "The year 2025 marks a pivotal moment in the country's energy transition. There is already enough existing capacity to meet today's peak demand. Approving a new wave of large-scale coal projects risks creating overcapacity, stranded assets, and higher transition costs," said Gao Yuhe, Greenpeace's climate and energy project manager for East Asia. State planner, the National Development and Reform Commission, and the National Energy Administration did not immediately respond to faxed requests for comment. BY THE NUMBERS This year marks the last in China's 2021-2025 five-year plan, in which China has approved 289 GW in new coal capacity, around double the 145 GW approved for the 2016-2020 period. CONTEXT China has said it will start to phase down coal during the 2026-2030 five-year plan, but Beijing has not committed to any specific targets. WHAT'S NEXT Greenpeace called for more ambitious carbon emissions goals from China and a clear timeline for phasing out coal. It also said China's power sector emissions could peak this year as growth in wind and solar outpaces coal. (Reporting by Colleen Howe; Editing by Tom Hogue)
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Tullow Oil Lines Up Production Extension for Jubilee and TEN fields off Ghana
Tullow Oil and its partners have signed a memorandum of understanding (MoU) with the Government of Ghana to extend the West Cape Three Points (WCTP) and Deep Water Tano (DWT) licenses to 2040, which cover the Jubilee and TEN fields off the West African country.The MoU has been signed between the Government of Ghana, Tullow Oil, Kosmos Energy, PetroSA, Ghana National Petroleum Company (GNPC) and Explorco.It includes approval to drill up to 20 additional wells in the Jubilee field, representing investment of up to $2 billion in Ghana over the life of the licenses.As a result of the extension the JV partnership expects to realize a material increase in gross 2P reserves.A number of principles are covered within the MOU that will help underpin the continued development of the Jubilee and TEN fields, including a commitment to work to increase in the supply of gas from the Jubilee and TEN fields to c.130 mmscf/d, a reduced gas price for Jubilee associated gas, and a guaranteed reimbursement mechanism for gas sales.Also, it provides for investment in Ghana National Petroleum Corporation (GNPC) and the Petroleum Commission's capacity with a focus on the use of advanced technologyAll terms and conditions of the existing WCTP and DWT Petroleum Agreements remain in place and continue unchanged.The next steps, following this MOU, are the submission for approval of a Jubilee Plan of Development (PoD) Addendum, entering into new fully termed gas sales agreements (GSA), and the submission for parliamentary approval of the payment security mechanism and license extensions planned before the end of the third quarter of 2025."This Memorandum of Understanding between the Republic of Ghana and the DWT and WCTP partners marks a significant step forward in our nation's energy sector. Extending the licenses to 2040 demonstrates our commitment to fostering a stable and attractive investment climate.“This MOU will not only ensure the continued production of oil, supporting our economic growth, but also allow us to further develop our infrastructure and create more job opportunities for our citizens. We are dedicated to responsible resource management and look forward to a prosperous future fuelled by sustainable energy practices,” said John Abdulai Jinapor, Ghana's Minister for Energy and Green Transition."This is a valuable step forward for the Government of Ghana, Tullow and our JV partners, highlighting the collaborative and constructive relationship we all have in reaching our shared goal of building a better future for the people of Ghana, through responsible oil and gas development. "This extension and the fiscal stability of our contracts emphasizes the opportunity Ghana represents to deliver additional value through production and reserves additions, providing greater long-term optionality and materiality to these core assets,” added Richard Miller, Chief Financial Officer and Interim Chief Executive Officer of Tullow.
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Iron ore prices fall as the focus shifts from China's steel demand to a softening of iron ore.
Iron ore futures fell on Thursday as the focus returned to a softening of steel consumption during China's off peak demand season. As of 0238 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.14% lower. It was 701 yuan (US$97.61) per metric ton. As of 0228 GMT, the benchmark July Iron Ore traded on Singapore Exchange fell by 0.69% to $94.8 per ton. Galaxy Futures analysts said that due to the lack of driving forces, the price of the main steelmaking ingredient is expected to fluctuate despite the seasonal weak demand. The iron ore market is not changing fundamentally. "The wave of upward momentum caused by the price rally of coal has faded so ore prices have also weakened," said Zhuo Guqiu, a broker at Jinrui Futures. Zhuo said that the downside potential of hot metal production is limited by its relatively high output despite reductions in production and declining inventories at ports. Iron ore demand is usually gauged by the hot metal production. Galaxy's analysts noted that despite a recent trade truce, the steel exports are showing signs of a slump, which is dragging down demand. A weak steel demand is also a risk to feedstocks. Following Wednesday's rally of more than 6%, other steelmaking ingredients coking coal, and coke, have also seen gains, albeit slower. They rose by 1.01% and 0.11 %, respectively. The benchmark steel prices on the Shanghai Futures Exchange are range bound. Hot-rolled coils fell 0.19% while wire rods and stainless steel gained 0.2%. ($1 = 7,1820 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
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Gold prices remain stable as US payroll data is awaited for direction
Gold prices were stable on Thursday, as investors looked at weaker than expected U.S. economic data and global economic and political uncertainty. They also anticipated U.S. employment data to provide further economic signals. As of 0210 GMT, spot gold remained unchanged at $3,372.82 per ounce. U.S. Gold Futures fell 0.1% to $3395.50. Matt Simpson, senior analyst at City Index, said that gold is in a holding pattern, and it's at the mercy of Trump's headlines on trade. It's supported but hesitant to move above this week’s high. The volatility is also suppressed as we wait for the comments of FOMC members, and Friday's NFP Report. It could be a sign of a more positive jobs report, which would weigh on gold. In May, the U.S. service sector contracted for the first month in almost a year as businesses were faced with higher input costs amid fears of stagflation. The Federal Reserve announced a slowdown of U.S. Economic Activity, citing increased costs and prices due to tariff increases since the previous policy meeting. Bullion has gained momentum since U.S. president Donald Trump reiterated on Wednesday his call for Fed chair Jerome Powell to reduce interest rates. Investors are awaiting the nonfarm payrolls data on Friday for more information about the labor market. Trump's doubled tariffs on imports of steel and aluminum took effect. His administration is seeking "best offers from trade partners" to avoid additional levies scheduled for July. Trump said that Xi Jinping, the Chinese president, was "extremely difficult to deal with", highlighting tensions before a long-awaited phone call between two leaders scheduled for this week. In a low interest rate environment, gold, which is a safe haven during periods of economic and political uncertainty, tends thrive. Other than that, silver spot fell by 1.3%, to $34.51, platinum increased 0.9%, to $1,093.07, and palladium remained at $1.001.70.
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Asian shares continue to rise, while the dollar languishes in front of the ECB
The U.S. Dollar remained stagnant as the European Central Bank released its outlook on a turbulent global economy. Dollar fell in the previous session due to weak U.S. data on jobs and services. Friday will bring more important employment data. The damage to the U.S. economic system is becoming more evident as a result of President Donald Trump's erratic trade policies, and bilateral agreements remain unrealised. Canada was preparing possible retaliations against new U.S. tariffs on metals, while the European Union announced progress in its trade negotiations with Washington. Market watchers will therefore pay more attention to the signals that Christine Lagarde gives about future decisions. Kyle Rodda is a senior analyst for Capital.com. He said that there's uncertainty regarding the guidance given by the central bank, due to the uncertain outlook of U.S. global trade policy and U.S. Trade Policy. If the central bank fails to provide sufficiently dovish advice, it could disrupt the equity markets and give the euro upward momentum. Trump's doubled tariffs on imports of steel and aluminum took effect on Wednesday. They were aimed at Canada and Mexico. On the same day, Trump's administration asked trading partners for "best offers" to prevent other import levies from taking effect in July. Ryosei Acaza, Japan's top trade negotiator, will be in the U.S. for a second round of negotiations on Thursday. Friedrich Merz is due to travel to Washington as well. MSCI's broadest Asia-Pacific share index outside Japan rose 0.7% in the early trading, while Japan's Nikkei index fell 0.2%. The dollar index (which measures the greenback versus a basket currencies) was flat at 98.85, after a 0.5% decline on Wednesday. The dollar gained 0.1% to 142.92 yen. The euro traded at $1.1416, unchanged from the previous trading session when it had gained 0.4%. Gold lost its gains of the previous day, while oil fell after an increase in U.S. stocks and Saudi Arabia slashed its July crude prices for Asian buyers. Spot gold was down 0.1% to $3,372.7 an ounce. U.S. crude fell 0.2% to $62.75 per barrel. The Euro Stoxx futures for the entire region were not much changed, while U.S. stocks futures, S&P 500 E-minis were down by 0.1%.
Dollar slips, shares cautious as trade concerns persist
The dollar hovered around a 6-week low on Tuesday as the erratic U.S. policies of trade clouded the market's sentiment. Investors also took a defensive stance ahead of important developments in the coming week.
The White House announced on Monday that U.S. president Donald Trump and Chinese President Xi Jinping would likely speak this week. This comes after Trump had accused Beijing of breaking an agreement to reduce tariffs and trade barriers.
Markets will closely monitor the call between the leaders, as tensions in trade between the two world's largest economies continue to simmer due to tariffs.
Data released on Monday revealed that U.S. manufacturers contracted for the third consecutive month in May, and that suppliers were taking longer than ever to deliver inputs due to tariffs.
A private sector survey released on Tuesday showed that China's factory activities in May were also down for the first eight-month period. This indicates that U.S. Tariffs are beginning to affect manufacturers.
U.S. Futures fell, failing to maintain the gains made overnight on Wall Street during the cash session.
Nasdaq and S&P futures both fell by about 0.5%. The STOXX 600 fell by 0.45% in Europe while London's blue chip FTSE 100 dropped by 0.36%.
Matt Simpson, City Index's senior analyst and market strategist, said that Trump has the sentiment of the country in his palms once more.
He said that he expected to hear Trump and Xi talk about a "really great call" or something to that effect.
We'll have to wait until China confirms, as they tend to be slow on this matter. Price action may be unstable until we receive concrete confirmation. We also need to consider the June 4, deadline for "best trade deals" from U.S. Trading Partners.
The Trump Administration wants all countries to submit their best offers on trade negotiations before Wednesday. Officials are trying to speed up talks with several partners in order to meet a deadline they set themselves of five weeks.
PAYROLLS ON DECK
The dollar dropped to its lowest level in six weeks against a basket currency early on Tuesday. This was ahead of U.S. data on job openings later that day, and the U.S. nonfarm employment figures on Friday, which will provide a timely read on the state of the U.S. economic health.
The Federal Reserve could ease policy again if unemployment increases, for example, despite investors' largely giving up on any cut in this month or the next.
The Treasury market would benefit from a softer U.S. employment report. 30-year yields are still flirting with the 5% mark as investors continue to demand higher premiums to offset the growing supply of debt.
This week, the Senate will begin considering a tax and spending bill that would add $3.8 trillion (approximately) to the $36.2 trillion federal debt.
The dollar index closed the session marginally higher, at 98.89. This was a slight improvement from its earlier losses.
After the Swiss inflation rate fell to zero in May, the currency rose to 0.8181 Swiss Francs. This was the first time in more than four-years that consumer prices had fallen. The Swiss National Bank is now under pressure to reduce its interest rates by a large amount later in the month.
Kenneth Broux is the head of corporate FX and rates research at Societe Generale.
Broux explained that if countries like Switzerland, where the inflation rate is falling and the differentials between rates are increasing, this could prompt an intervention to reduce the depreciation and appreciation of the Franc.
A currency's value will usually increase if the rates in its home country are higher than elsewhere.
The euro reached a six-week high before falling to $1.1416 on the day, while sterling fell 0.2% to 1.3525.
Data released on Tuesday showed that euro zone inflation fell below the European Central Bank target in December, confirming expectations of another rate cut this coming week.
Brent crude futures rose 0.34% to 64.885 per barrel while U.S. Crude gained 0.46% at $62.81 a barrel.
Spot gold fell from its four-week high to $3,361 per ounce.
(source: Reuters)