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China's copper imports fell 18% from the April record in May
Customs data released on Monday showed that China imported 2.4 metric tons (mt) of copper concentrates in May. This is 18% less than the record set in April, even though smelters maintained production levels. Data from the General Administration of Customs revealed that imports increased 5.8% compared to the same period a year ago. Imports are up 7.4% for the year to date at 12,4 million tons. Analysts at a Beijing futures company said that the drop in the month-on-month was not unexpected, given the April record. However, the decline was greater than expected, as smelters did not reduce output. Four market sources said that the increased prices of sulphuric acids, a byproduct of smelting, helped to offset the negative Treatment and Refining charges (TC/RC), which is a barometer for smelter profits. The data shows that imports of copper unwrought and copper products dropped 16.9% over the year and 2.5% month-on-month to 427,000 tonnes. Imports have fallen 6.7% year-to-date to 2,17 million tons. Imports of unwrought copper products and copper products into China, which is the world's largest copper and aluminum consumer, include copper alloys, copper anodes and semi-finished goods. China exported 547,000 tonnes in May of aluminium unwrought and products including alloys, primary and semi-finished products. This is up 5.6% from the previous month, but down 3.2% from the year. Volumes for the year to date have fallen 5.1%, reaching 2.43 million tonnes. Hongmei Li, Christopher Cushing and Christopher Cushing (reporting)
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Oil prices drop but are supported by US-China trade talks
Oil prices fell a few pennies on Monday, but they held most of the gains made last week as investors waited for the U.S.-China talks to take place in London in the afternoon. Some investors were hoping that a deal would boost global economic growth and fuel demand. Brent crude futures fell 6 cents, to $66.41 per barrel at 0450 GMT. U.S. West Texas Intermediate Crude fell 4 cents, to $64.54. Three of Donald Trump's most senior aides are set to meet their counterparts at the first U.S. China economic and trade consultation mechanisms meeting. The announcement of the Saturday meeting followed a rare phone call between President Xi Jinping and Trump on Thursday. Both were under pressure to calm tensions, as China's export restrictions on rare earths are disrupting global supply chains. Last week, Brent gained 4% and WTI gained 6,2%. This was their first weekly increase in three weeks, following the news that both countries had been discussing their trade differences. Tim Evans, of Evans Energy, said that Brent crude oil has gained ground in the last week to the top of its trading range. This was due to increased buying in the equity markets and a reduced fear of tariffs. The fact that the unemployment rate in May was unchanged by the U.S. Jobs Report increased the chances of a Federal Reserve rate cut. This helped to support gains made last week. Data showed that export growth in China slowed in May to a three month low as U.S. Tariffs hit shipments. Factory-gate deflation also reached its lowest level in the past two years. Data also revealed that China's crude imports in May fell to their lowest daily rate for four months as both state-owned refineries and independent refineries underwent extensive planned maintenance. After OPEC+ announced another large output increase for July on May 31, the prospect of a China/U.S. Trade Deal that could boost economic growth and increase oil demand outweighed concerns about an increased OPEC+ Supply. HSBC said that it expects OPEC+ will accelerate its supply increases in August and Septembre, which is likely to increase downside risks for the bank's forecast of $65 per barrel Brent from the fourth quarter 2025. Capital Economics' researchers believe that this "new, faster pace (OPEC+), production rise is here to remain". WTI's Discount to Brent In a recent note, ING analysts lead by Warren Patterson noted that the gap has also narrowed on a combination between increased OPEC+ production, modest U.S. crude supply growth, and potential output declines in 2013. The U.S. benchmark rose on concerns about supply after wildfires disrupted Canadian production and on strong U.S. demand for fuel during the summer driving period. Baker Hughes, a provider of energy services, said that the number of U.S. operating oil rigs fell nine to 442 in the past week. Reporting by Florence Tan from Singapore and Colleen Waye from Beijing; editing by Himani Sarkar, Neil Fullick
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Rare-earths shortage causes panic among auto companies
Frank Eckard is the CEO of a German manufacturer of magnets. He has received a lot of calls over the past few weeks. Automakers and suppliers are desperate to find other sources of magnets due to the Chinese export restrictions. Eckard was told by some that their factories would be shut down without backup magnets as early as mid-July. Eckard, CEO at Magnosphere in Troisdorf in Germany, said that the entire car industry was in a panic. "They will pay anything." Car executives are once again crammed into war rooms because they fear that China's strict export controls on rare earth magnets, which are crucial to the production of cars, could cripple production. Donald Trump, the U.S. president, said on Friday that Chinese President Xi Jinping had agreed to allow rare earth minerals and magnets to flow into the United States. On Monday, a U.S. team of trade representatives will meet with Chinese counterparts in London for discussions. Industry experts are concerned that the situation with rare earths could lead to a third major supply chain shock within five years. From roughly 2021-2023, a semiconductor shortage caused automakers to cancel millions of vehicles from their production plans. The coronavirus epidemic in 2020 also shut down factories for several weeks. These crises led the industry to strengthen its supply chain strategies. The industry has prioritized backups for key components, and re-examined just-in time inventories that save money, but may leave them with no stockpiles if a crisis occurs. Eckard said that judging by the inbound calls he receives, "nobody's learned anything from their past." The industry is left with few options this time as the bottleneck for rare earths tightens. This is due to the dominance of China on the market. A small team of Chinese bureaucrats is deciding the fate of automakers’ assembly lines as they review hundreds of export permit applications. CLEPA, the auto supplier association for Europe, has reported that several European auto-supplier factories have shut down and more are expected to do so. Benjamin Krieger, Secretary General of CLEPA, said: "This will be a problem for everyone sooner or later." Rare-earth-based motors are used in dozens components of cars today - including side mirrors and stereo speakers. They also power oil pumps, wipers and sensors that detect fuel leaks and brake sensors. AlixPartners, a consultancy, said that China controls 70% of the global rare-earths mines, 85% refining capacity, and 90% of rare earths magnets and metal alloys. According to the International Energy Agency, an average electric car uses.5 kg of rare earth elements. A fossil-fuel vehicle uses only half as much. China has acted in the past, such as during a dispute with Japan in 2010, when it curbed exports of rare-earths. Japan was forced to look for alternative suppliers and, by 2018, China only accounted 58% of Japan's rare earth imports. Mark Smith, CEO at mining company NioCorp which is developing an rare-earth mine in Nebraska, said that China could play the rare-earth cards whenever it wanted. Automakers across the industry have tried to reduce their reliance on China for rare earth magnets or develop magnets without these elements. Most efforts, however, are still years away from reaching the necessary scale. Joseph Palmieri said, "It is really about identifying... and finding alternatives" outside China at a Detroit conference last week. Palmieri is the head of supply-chain management at Aptiv. GM, BMW, ZF, and BorgWarner and other major automakers are developing motors that contain low to zero rare-earth metals. However few have been able to scale up production to reduce costs. The EU launched initiatives, including the Critical Raw Materials Act, to boost European sources of rare-earth metals. Noah Barkin is a senior adviser at Rhodium Group in the United States, an organization that focuses on China. He said it had not moved quickly enough. Even those who have created marketable products find it difficult to compete on price with Chinese producers. David Bender, cohead of German metal specialists Heraeus magnet recycling business, stated that it was only operating at 1% capability and would have to close if sales did not increase next year. Niron, a Minneapolis-based company that has developed rare-earth-free magnets, has raised over $250 million in funding from investors such as GM Stellantis Magna and other auto suppliers. Jonathan Rowntree, CEO of Rowntree International Ltd., said that since China's new export controls came into effect "we've seen an increase in interest" from both investors and customers. The company plans to build a $1 billion facility that will begin production in 2029. Warwick Acoustics, based in England, has developed speakers that are free of rare earths. They will be used on a luxury vehicle later this year. Mike Grant, CEO of Warwick Acoustics, said that the company is in discussions with a dozen other automakers. However the speakers will not be available on mainstream models until about five years. Auto companies are scrambling as they search for longer-term solutions to avoid imminent factory closures. Automakers need to determine which suppliers, and even smaller ones just a few links above the supply chain, require export permits. Mercedes-Benz is, for instance, talking to its suppliers about building up rare-earth stocks. Analysts say that the shortage of parts could force automakers, like GM and other manufacturers during the semiconductor crisis, to build cars without certain components and store them until the parts are available. The automakers' dependence on China is not limited to rare earth elements. In a report from the European Commission, published in 2024, China controlled more than half of the global supply of 19 raw materials including manganese graphite, and aluminum. Andy Leyland is the co-founder and supply chain expert SC Insights. He said that any of these elements could be leveraged by China. He said, "This is just a warning shot."
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China and Hong Kong stock prices rise ahead of Sino-US Trade Talks
China and Hong Kong shares edged up on Monday as rare-earths and technology sectors led gains, while investors awaited high-level U.S. China trade negotiations to be held in London. At midday, both the Shanghai Composite Index and China's blue chip CSI300 Index gained 0.2%. Hong Kong's Hang Seng index advanced by more than 1%, and it reclaimed its key level of 24,000 for the first time since March 21, 2015. During the morning session of trading, the yuan was unable to find a direction and traded last at 7,1872 dollars. The mood was positive, but cautious. U.S. officials and Chinese representatives are set to resume their trade negotiations later that day. The top U.S. officials, including Treasury Secretary Scott Bessent, and China's Vice Premier He Lifeng are meeting in London to discuss a trade dispute. The meeting comes after a rare call between Chinese President Xi Jinping, and U.S. president Donald Trump. Both sides accused each other of violating Geneva's consensus. Analysts at China Securities wrote in a report that they believe there could be positive outcomes as Trump has shown some positive signs. They added that any progress would offer some relief to the markets. The strategically-important rare earth sector, which is expected to be a key focus of the talks, led onshore gains on Monday, up 1.6%. Hong Kong's Hang Seng Tech Index rose 2.3%, reaching a new high of about three weeks. Since the "Liberation Day" of April 2, when Trump announced massive reciprocal tariffs, which threatened to upset the global trading order, Chinese stocks have struggled for direction. The blue-chip CSI300 Index has barely moved from its April 2 level. Hong Kong's Hang Seng Index, the benchmark index, gained about 3% in the same period. Both markets are lagging behind the global recovery. China's consumer price fell for the fourth consecutive month in May, while deflation among producers grew, as trade tensions and an extended housing slump weighed on the economy. (Reporting and editing by Rashmi aich in Hong Kong)
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China's rare Earth exports rose 23% in May, despite export restrictions
China's rare earths exports to the world in May rose 23% over the previous month, reaching their highest level in a full year. However, Beijing's export restrictions on certain critical minerals have halted sales overseas, causing shortages that are affecting global manufacturing. China's April restrictions on exports of several types of rare Earths and rare-earth magnets closed parts of the auto industry worldwide. The issue was also a major topic in the rare phone call between leaders of China and the United States last week. Exports of rare earths, all types, from the largest producer in the world were up by 23% compared to April. They now stand at 5,864.60 tonnes. This is the highest monthly number in the past year. The restrictions do not apply to all types of rare earths that China exports. The data released on Monday does not differentiate between them. A full picture of their impact will be revealed in a more comprehensive data release scheduled for June 20. Last month, data showed that magnet exports had fallen by half between April and May. Last week, several European auto part plants had to cease production. Semiconductor firms in the continent also warned that they would be forced to do so within weeks. Customs data revealed that in the first five month of 2025 the exports of the 17-mineral group rose slightly to 24,827 tonnes from 24,266.5 tons one year earlier. (Reporting and editing by Beijing Newsroom)
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China's coal imports in May fell 18% due to cheap domestic coal and renewable energy
China, the largest coal importer in the world, reduced its imports by 18% on an annual basis, according to customs data released Friday. Low-cost domestic coal eroded overseas purchases, while renewables slowed down coal-fired electricity generation. According to the General Administration of Customs, imports were 36.04 millions metric tons for the month, down from 43.82million tons in May 2024. This was the third consecutive month that China's imports of coal fell year-over-year. They had increased previously every month from November 2022. January and February were excluded because they are affected by Lunar New Year holidays. The data shows that coal imports for the first five month of this year were 188.7 metric tons. This is down from 204.9 metric tons a year ago. The domestic coal price has remained flat for the past four years, reducing profits. According to the Bohai-Rim Bay Thermal Coal Price Index, the average price of medium-grade coal in May was 632 dollars. The domestic coal production is also on the increase, with a 7% rise to 1,58 billion tons in the first four month of the year. China's thermal energy generation, which is mainly coal and a little natural gas, dropped 4% between January and April, while the generation of renewables captured the increase of 3% in demand for power during those four months. (Reporting and editing by Himani Sarkar; Colleen howe)
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Iron ore prices continue to fall as China's deflation persists
Iron ore futures prices fell on Monday as investors' sentiment was dampened by weak data from China, the top consumer. However, hopes for progress in trade negotiations between the two world's largest economies helped to limit losses. As of 0215 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading little changed. It was 707.5 yuan (98.45 dollars) per metric ton. The benchmark July Iron Ore at the Singapore Exchange fell 0.22% to $95.3 per ton. China's consumer price fell for the fourth consecutive month in May, and producer deflation reached its highest level in nearly two years. The economy is facing headwinds due to trade tensions and an extended housing downturn. Three top U.S. aides to President Donald Trump will meet their Chinese counterparts on Monday in London for talks that aim to resolve a trade conflict between the two superpowers, which has been causing global markets to be on edge. The temporary agreement reached by both countries on 12 May in Geneva did not address the broader issues straining bilateral relations. The market is therefore eager to know if a final agreement will be reached, which would ease pressure on global growth. Coking coal and coke were both mixed on the DCE. The benchmark steel prices on the Shanghai Futures Exchange are rangebound. The price of rebar, hot-rolled coil and wire rod were unchanged. Stainless steel was down by 0.47%. $1 = 7.1862 Chinese Yuan (Reporting and editing by Amy Lv, Lewis Jackson)
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Gold prices drop as US-China trade hopes ease demand for safe-havens
Gold prices declined on Monday as optimism over easing U.S.-China trade tensions dampened safe-haven demand, while a stronger-than-expected U.S. jobs report tempered expectations of interest rate cuts by the Federal Reserve. As of 0214 GMT, spot gold was down 0.4% at $3,298.12 per ounce. U.S. Gold Futures fell 0.9% to $3317.40. Three top aides to U.S. president Donald Trump will be meeting with their Chinese counterparts later that day in London to discuss the resolution of the trade dispute, which has been a source of tension for global markets. Short-term traders are not interested in taking aggressive long positions at this time, pending the outcome of U.S. China talks, said Kelvin Woong, a senior analyst for Asia Pacific, OANDA. Wong added that tariffs will not disappear but that talks could lower the baseline. The cost of doing business in America would remain high and the growing U.S. deficit could lead to a double-feedback loop, which would exacerbate inflationary pressures. Labor Department reported that the U.S. economy created 139,000 new jobs in May, exceeding analysts' expectations. The unemployment rate remained unchanged at 4.2%. The wage growth was higher than expected, reducing the chances of rate cuts. Investors have lowered their bets for rate cuts, and expect one in October. They are also waiting to see the U.S. CPI numbers due on Wednesday. Trump also said that the Fed would announce its decision soon on who would become the next chair. He added that a good Fed chair would lower interest rates. On Monday, Trump's ban on citizens from 12 countries entering the U.S. will take effect. In a low interest rate environment, non-yielding gold bullion is often seen as a safe haven during times of economic and geopolitical uncertainty. The price of palladium remained unchanged at $1,046.18. Platinum fell 0.5%, to $1,163.64, and spot silver remained at $35.97. (Reporting and editing by Sumana Nandy, Harikrishnan Nair and Anmol Choubey from Bengaluru)
Dollar falls as Asian shares rise ahead of US-China discussions
The dollar lost some of its recent gains as Asian markets responded to the better than expected U.S. employment data, ahead of the London talks aimed at mending the trade rift between China and the United States.
Wall Street stocks closed strongly higher on Friday, after the jobs data eased fears about the damage that President Donald Trump's unpredictable tax regime could cause to the world's largest economy. Gold and other safe-haven assets fell after steep sales.
MSCI's broadest Asia-Pacific share index outside Japan rose 0.5% at the opening of trading on Monday. Hong Kong's Hang Seng Index soared by 1.3% and reached the 24,000 point level for the very first time since March 21, 2009. Japan's Nikkei stock index rose 0.9%.
A standoff in Los Angeles, which led Trump to call in the California National Guard in order to quell protests against his immigration policies, also weighed on the sentiment.
The dollar fell 0.3% to 144.39 yen, reducing its 0.9% rise on Friday. The euro was up by 0.2% at $1.1422.
Washington and Beijing's top trade representatives are expected to meet to discuss critical minerals whose production is dominated largely by China. The talks follow a rare phone call between Trump and Chinese president Xi Jinping last week.
Kyle Rodda is a senior analyst of Capital.com and he said that trade policy would remain the biggest macro-uncertainty. "Signs that the talks are moving forward could give the markets a boost to start the week."
Trump announced in a post on social media that Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, as well as Trade Representative Jamieson Greer, will represent Washington at talks with China. China's Foreign Ministry announced Vice Premier He Lifeng would be in Britain to attend the first meeting of China-U.S. Economic and Trade Consultative Mechanism.
Data released on Friday showed that U.S. employers created 139,000 new jobs in May. This is less than the 147,000 added in April but more than the 130,000 predicted by an economist poll. The focus now shifts to Wednesday's inflation data, which will influence expectations about the timing of rate cuts from the Federal Reserve.
Jeff Ng of SMBC, the Head of Asia Macro Strategy, stated that the markets are experiencing "mixed fortunes". They must balance the optimism about trade and the U.S. economic situation against the possibility of social unrest in California.
Ng added that markets might not have priced in much of a breakthrough from the trade talks. In the meantime, Ng said, "We are aware that there are protests taking place in L.A. in the U.S., and the National Guard has also been sent in. So we also have to keep an eye on event risk."
Spot gold dropped 0.2% to $3.303.19 per ounce. U.S. crude oil was barely changed at $64.56 per barrel following a two-day rise.
(source: Reuters)