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Dalian Iron Ore gains for the fourth week in a row on optimism
Dalian iron-ore futures rose on Friday, reaching their highest closing in four and half months. The market also recorded a fourth weekly gain as a result of a positive demand outlook. The contract for September iron ore most traded on China's Dalian Commodity Exchange rose by 0.38%, to 785 Yuan ($109.34), per metric ton. This contract has gained 3.66% in the last week. As of 0740 GMT the benchmark August iron ore price on the Singapore Exchange had fallen 0.18% to $100.65 per ton but was up 1.38% over the past week. Analysts from ANZ stated that traders are optimistic about improved steel margins after Beijing's signal to tackle overcapacity. Hopes for new stimulus in the property sector have also lifted market sentiment. ANZ stated that lower inventories of both iron ore, and steel, are fueling expectations for a restock in the months to come. SteelHome, a consultancy, says that total iron ore stockpiles across Chinese ports fell by 0.76% in a week to 130.9 millions tons on July 18. This has further supported prices. Galaxy Futures, a broker, reported that the current demand for iron is strong, while steel consumption remains high in the manufacturing industry. Galaxy stated that the prices are further supported by expectations of reforms to supply-side policies. Hexun Futures, a broker, said that despite the fact that it's off-season, steel demand is up due to lower supply as some blast furnaces are undergoing maintenance in mid-year. Coking coal and coke, which are used to make steel, also rose on the DCE. The increases were 2.55% and 1.23 %, respectively. The benchmark steel prices on the Shanghai Futures Exchange have gained ground. Rebar grew 0.74%, hot-rolled steel grew 0.91% and stainless steel grew 0.39%. ($1 = 7.1792 Chinese yuan). (Reporting and editing by Rashmi Liew, Subhranshu sahu, and Lucas Liew)
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Boliden's earnings fall short of expectations due to the weakening dollar
Boliden reported Friday that its operating earnings in the second quarter were lower than expected, due to the stronger US dollar. Boliden's operating profit for the quarter fell from 4,81 billion Swedish crowns to 1,09 billion Swedish Crowns ($112,11 million), on a reported-basis. This was below the analysts' average estimate of 1,48 billion crowns, according to LSEG. In an interview with Chief Executive Mikael Stas, Staffas cited the depreciation of the US dollar as a reason for the indirect effects. He said, however, that over time, the current volatile climate could be positive for the company, as many companies are cutting back their investment in mining. This could lead to higher prices. Boliden sells metals in U.S. dollars. When the dollar falls, the value of the products sold will fall when converted to Swedish crowns. Maintenance planned at the group's smelters also affected its results. The company warned that the planned maintenance would have a 500-million crown impact in 2025. This includes 400 million crowns in the period April-June. The copper and zinc producer, while maintaining its capital expenditure forecast of 15.5 billion crowns for 2025, delayed the update to 2026 to early December in order to include all mines including Somincor, Zinkgruvan and Lundin Mining, which it purchased last year. Boliden shares were flat at 0815 GMT after falling 5% on the opening. $1 = 9.7228 Swedish Crowns
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Copper prices rise on positive US data and China demand prospects
Copper prices rose on Friday, supported by stronger-than-expected U.S. economic data and expectations of increased buying from top consumer China after the recent price dip. The price of three-month copper at the London Metal Exchange rose 0.36% by 0700 GMT to $9,701.5 a metric ton, a rise of 0.49% this week. The Shanghai Futures Exchange's most traded copper contract increased by 0.65%, to 78.410 yuan (10,922.74) per ton. However, it was still down 0.28% this week. The U.S. data is encouraging and has boosted the hopes for better demand for copper. This also reduces the likelihood of immediate interest rate reductions, according to a metals analyst in Beijing at a futures firm. Retail sales in the United States increased by 0.6% in June, after a 0.9% decline in May that was not revised. The number of Americans who filed new unemployment benefit applications fell last week. This indicates that job growth has been steady so far this month. The LME copper stock has been increasing, especially at its Asia warehouses, as traders are betting that China will buy more with the recent price drop, but it is unclear whether or not this will happen. The total copper stock at LME registered warehouses As of Thursday, the number of tons of coal in Asian warehouses, such as Gwangyang, Taiwan, and Gwangyang, had risen by 34.8%. Focus is also placed on the looming U.S. Tariffs, as the deadline of August 1 approaches and the details regarding the 50% import levies for copper. LME tin rose by 0.68%, to $33,240 per ton. Zinc advanced by 0.42%, to $2,748.5. Lead increased 0.2%, to $1977. Aluminium rose 0.19%, to $2,583, while nickel climbed 0.09%, to $15,110. SHFE tin rose the most, by 1.07%, to 264.540 yuan per ton. Zinc grew by 1%, to 22.300 yuan. Nickel climbed 0.73%, to 120.500 yuan. Aluminium grew 0.42%, to 20.510 yuan. Lead dropped 0.3% to 16.820 yuan. Click or to see the latest news in metals, and other related stories.
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Valterra Platinum Flags' first-half profits fall for South Africa
Valterra Platinum, a South African company, expects to see its first-half profit fall by up to 88% as a result of lower sales and output as well as special costs relating to the demerger with Anglo American Plc Group. Valterra, previously Anglo American Platinum said it expected headline earnings of between 800 million rand to 1.6 billion rand (44.97-$89.94) for the six months ending June 30. This is down from 6.5 billion in the same period the previous year. The company reported that the sales of platinum group metals (PGMs) fell by 25% following heavy rain and flooding at Valterra’s Tumela Mine within its Amandelbult Complex. Demerger costs totaled 1.4 billion rand in the first half. Valterra separated from Anglo Mining in June. It is now listed separately in Johannesburg and London as the global mining company restructures to focus primarily on energy metal copper. Valterra stated that cost savings of approximately 2.1 billion rands helped offset the declines in earnings during the period. The company's refined production guidance for the year of 3,0 million to 3.4 million PGM-ounces remains unchanged. Valterra will announce its half-year results on the 28th of July, its first as an independent company. Reporting by Nelson Banya, Editing by Elaine Hardcastle.
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Sources say that India will issue climate risk disclosure regulations for banks within the next few months.
Three sources familiar with the situation said that India's central banks is nearing finalising regulations for banks and financial institution to disclose and manage climate change risks. This move is in direct opposition to the actions of several major global banks, including JP Morgan Citibank Morgan Stanley, and HSBC. These banks have scaled back their climate commitments following Donald Trump's re-election as U.S. president, a climate-sceptic. Global efforts to transition to a low carbon economy are centered on gaining a better understanding of the money flowing into green investments. Countries from the UK to Japan have made such disclosures compulsory. Sources said that the Indian central bank norms have been in development since 2022. They are expected to require banks and financial institutions, to disclose regularly climate-related risks within their loan portfolios as well as mitigation strategies and goals. Disclosures will likely be voluntary from the fiscal year of 2027, and mandatory starting in fiscal year 2028. India's fiscal year runs from April to March. Sources said that banks will be required to perform periodic stress tests in order to assess the impact adverse climate events, such as heatwaves, floods and cyclones, have on borrowers and on the economy. This is based on an advisory note, which the central banking institution is likely to release soon. The three sources have requested anonymity because they are not authorized to speak to media. The RBI didn't respond to an email sent by. It has never been reported that the central bank decided to implement new rules. Reserve Bank of India had previously acknowledged climate change as being a major source of financial concern. In February 2024, a draft disclosure framework was released for public feedback. The first source stated that "the central bank's signal based on the recent meetings is the detailed norms have almost been finalised and will be expected very soon." Source: Many banks have already begun collecting data and setting goals to meet disclosure standards. Public documents show that some large banks have invited bids from climate consultants who can help with disclosure. Assessing Borrowers for Climate Risk The RBI has decided to proceed with the climate disclosures required by its banks, shortly after India published a draft framework designed to facilitate a greater flow in resources to climate-friendly industries. India is also preparing to announce a new national target for reducing emissions ahead of the November round of climate talks in Brazil. India, behind China and the United States as the third-largest polluter in the world, aims to reach a net-zero emissions target by the year 2070. According to draft standards, as part of central bank climate disclosure rules banks will have to calculate the gross emissions of their borrowers, and then disclose this information based on asset classes and industries. Financial statements are required to include such disclosures. Separately the central bank also shared with large banks a 52-page note, which a copy has been reviewed. The note prescribes a method to forecast and analyze the impact of adverse weather events, as well as the transition risks, on the ability of borrowers to repay their loans. According to the note, transition risks arise from changes in consumer behaviour, policies and technologies as the world moves toward a low carbon economy. Banks are preparing to reveal climate risk in their loan portfolios but do not expect this disclosure to have an immediate impact on loan pricing. The second source is a banker from a state-owned lending institution. (Reporting and editing by Ira Dugal, Kim Coghill, Ashwin Manikandan)
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Thames Water crisis prompts UK water reforms
On Monday, Britain will announce measures to fix the broken water sector. Thames Water is on the verge of collapse and needs to "reset" its regulations to avoid nationalisation. The biggest water company in the country has been fighting to survive for 18 months. If the company fails, the government will have to step in and add billions to already stretched public finances. Last year, Britain ordered a review of the privatised water sector in England and Wales. The industry needs massive investments to fix its aging infrastructure and stop sewage spills that angered public. The review is being led by former Bank of England deputy Governor Jon Cunliffe. He has made several recommendations, including a restructuring of regulation to reduce investment risk, combining regulators in order to provide companies with clearer guidance, and new standards for river bathing. In his June interim report, he stated that "water companies need to be more attractive for stable and long-term investors." To attract long-term, committed investors who are willing to invest in the future, we must also lower risks than they currently are. This means, in large part, restoring the confidence of investors and regulators. Thames Water has been offered a rescue package worth approximately 5 billion pounds ($6.7billion) by its creditors. They, along with the company in crisis, are currently in discussions with Ofwat. Ofwat is the financial regulator for the water industry. In return, they are seeking a regulatory reset. This could include flexibility in pollution targets, clemency with penalties, and more time for improvements. Chris Weston, the chief executive of Thames Water, told lawmakers that his company was "extremely under stress and operating in extremely difficult circumstances" following its annual loss of 1.65 billion pounds. Thames Water suffered a major blow in June after U.S. Private Equity firm KKR – its preferred bidder – pulled out of a previous rescue plan. KKR said in a letter to lawmakers published on Tuesday, that regulatory risk was a factor in its decision. It would have not been able "to manage and meet the understanding expectations on the timeline of improvements and risk falling short in front of the public and stakeholder's eyes". Thames Water, with 16 million customers throughout southern England, predicts that it will be facing 1.4 billion pounds of pollution fines and penalties in the next five year. The government is trying to reduce water pollution but it cannot afford to have Thames Water declare bankruptcy. This would put the 17 billion pounds of debt on the government's books at a time that the Finance Minister Rachel Reeves has already come close to violating her fiscal rules. The government has said that it will be keeping a close watch on Thames Water. Steve Reed, the Environment Minister said that his department "stepped up" its preparations for a special administration regime. This is a temporary nationalisation.
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As prices rise, the discount on ASIA GOLD in India increases.
The gold demand in India was subdued during this week as the near-record high prices discouraged buyers and caused dealers to offer larger discounts to attract them. Meanwhile, rates were also elevated across other major Asian hubs. Indian dealers are offering a discount The discount is now up to $10 per ounce compared to official domestic prices, including 6% import duties and 3% sales taxes. Jewellery stores across the country have seen a decrease in customers. The people aren't quite ready to purchase yet... The people are waiting for prices to drop, said a jeweller in Kolkata. The domestic gold price was around 97.500 rupees per gram on Friday, after reaching an all-time high of 101.078 rupees in the previous month. A Mumbai-based dealer for a private bank said that gold discounts may have increased due to a weakening demand. However, supplies are limited as a result of the sharp drop in imports. India's gold exports fell by 40% in June compared to a year earlier, reaching 21 tons. This was their lowest level for more than two-years, due to a sluggish market. Dealers in China, the top gold consumer in the world, have quoted discounts of up to $10 per ounce on spot prices, down from premiums of between $10 and $25 last week. Due to the summer holidays, I do not see much interest in physical purchases at this time. Peter Fung of Wing Fung Precious Metals, the head of trading, said that you might see a demand increase in October. In Hong Kong, gold Dealers in Singapore sold the product at a premium of $1-$2 Gold sold at a parity with global benchmarks, up to a $2.20 premium. In Japan, bullion The price of the stock fluctuated between $0.50 and $1. Reporting by Brijesh and Anushree Patel in Bengaluru; Rajendra Jadhav, Mumbai; editing by Eileen Soreng
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Investors suggest alternatives to YPF in dispute between US and Argentina
The U.S. Government sided with Argentina in its effort to temporarily suspend a court order requiring it to turn over its 51 percent stake in the oil and gas company YPF as part of a $16.1-billion judgment won by two investors. In a late-night filing, the U.S. government informed the 2nd U.S. The 2nd U.S. Circuit Court of Appeals stated that it is in the public's interest to resolve the dispute on its merits "free of the rushed compulsion of a non-stayed turnover order, and any negative impact on U.S. Foreign Relations with Argentina." Petersen Energia Inversora, Eton Park Capital Management and other investors urged the Manhattan appeals court, to reject a stay on U.S. district judge Loretta Preska’s June 30, 2013 turnover order, while Argentina appeals. The appeal was likely to fail and Argentina's "strategy" of delaying and obstructing the collection of the $16.1 billion judgement, against which it is also appealing, justifies the turn-over. Investors said that if the court of appeals is not inclined to simply deny the stay, then it should return the matter to Preska so Argentina can propose alternative collaterals or set conditions in order to avoid "irreversible results" during the appeal. The investors' attorneys said that "Plaintiffs do not want to have their shares rendered unrecoverable if Argentina wins on appeal and they are not interested in running an oil firm." They would therefore accept reasonable conditions so the transfer of the shares can be unwound easily if needed. Outside of business hours, Argentina's representatives had no comment to make. Argentina said that it would suffer irreparable damage and its economy might be destabilized if they gave up their stake in YPF - the country's biggest energy company. You have until the 22nd of July to reply to the Investor's filing. Burford Capital, a litigation funding company, represents Petersen and Eton Park. Burford Capital has stated that it expects to receive between 35% and 73% respectively of the damages. The lawsuit arose out of Argentina's decision in 2012 to take the YPF stake away from Spain's Repsol, without making a bid to minorities shareholders. Preska will award the $16.1 billion verdict in September 2023. The U.S. Government expressed its position through a proposed friend of the court brief. This echoed a position that it took in November last year during the Biden Administration. Petersen, Eton Park and the U.S. government were said to be against its motion for filing a brief. Reporting by Jonathan Stempel, New York; editing by Raju Gopikrishnan
Morning bid Europe-stocks are buoyant, but Japan's vote is a risk
Stella Qiu gives us a look at what the future holds for European and global markets.
The share markets continue to defy the laws of gravity. Wall Street closed yet another record-high as investors seized on positive economic signals. This sparked a rally that has continued in Europe and most Asian markets.
A new worry has emerged in Japan. An upper house election this Sunday could threaten the majority of Prime minister Shigeru Shiba's ruling alliance. Japanese stocks, bonds and yen are all falling due to the increased political risk.
The broadest MSCI index of Asia-Pacific stocks outside Japan reached its highest level since late 2021, but Tokyo's Nikkei fell 0.3%. Meanwhile, the yen is headed for a third straight week of losses. It's down 0.7% at 148.45 to dollar, near a 2-month low.
The yields on 10-year JGBs fell 1 basis point on Friday to 1.545%, but are still not far off the 17-year-old high of 1.585% that was reached earlier in this week.
The opening of the European stock markets is expected to be higher, with EUROSTOXX futures rising by 0.3%.
The Sunday elections in Japan could be the most important upper house elections in many years. They may add to the political instability in a period of rising concerns over fiscal sustainability, uncertainty about interest rates and lack of progress in trade negotiations with the U.S.
Japan's core rate of inflation fell in June, but it remained above the central bank target of 2%. This highlights the high cost-of living that is plaguing Ishiba.
Investors are also happy about the robust earnings of U.S. corporations and the resilient U.S. economic situation. Wall Street futures have firmed up a bit, while Netflix's results exceeded expectations, partly due to the weaker dollar. This could be good news for export earnings.
For the rest of today, the economic and events calendars are mostly empty. Fed Governor Christopher Waller reiterated support for a cut in interest rates at the end this month. He cited mounting risks to the economic.
Fed funds futures indicate that there is little chance of any movement on the 30th July, while a rate cut in September is about 60% priced-in. This year, a total easing of 45 basis points is expected.
The following are key developments that may influence the markets on Friday.
Germany PPI for the month of June
The German Finance Minister Lars Klingbeil, and the Bundesbank President Joachim Nagel spoke on the sidelines at the G20 in Durban
U.S. University of Michigan consumer Sentiment survey
(source: Reuters)