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The weekly iron ore loss is a sign that China's stimulus has faded
The price of iron ore futures was little changed on the Friday, but they were headed for a loss for the week as the expectations for more stimulus by China, the top consumer, for its struggling property sector, faded. This dimmed demand prospects for this steelmaking ingredient. As of 1400 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was unchanged, trading at 784 Yuan per metric ton. This is down 2% for this week. As of 1300 GMT, the benchmark September iron ore traded on Singapore Exchange rose 0.64% to reach $100.4 per ton. The price has fallen 2.8% this week. The much-anticipated China's Politburo July meeting, which sets the economic direction for the remainder of the year, failed to provide stimulus for the beleaguered property sector. This remains a drag on the consumption of industrial material such as steel. Analyst Zhuo Guqiu at Jinrui Futures said that the meeting set a positive tone in the current economic climate, reducing the urgency to implement more stimulus policies. China's purchasing manager's index (PMI), which fell to 49.3 at the end of July, a level not seen since April, missed a median poll forecast of 49.7 and was down from 49.7 at the end June. This reflects a weakening in demand both at home and abroad. Zhuo, of Jinrui Futures, said that falling demand is also weighing on the prices of key steelmaking ingredients. The average daily hot metal production fell by 0.6% compared to the previous week, reaching 2.41 million tonnes in the week ending July 31. This was the lowest level for three weeks. Iron ore demand is usually gauged by the hot metal production. Coking coal and coke, which are both steelmaking ingredients, were down by 4.72% each and 0.18% respectively. The benchmark steel prices on the Shanghai Futures Exchange are mixed. Rebar fell by 0.68%. Hot-rolled coil, wire rod and hot-rolled sheet were unchanged. Stainless steel gained 0.43%. (Reporting and editing by Eileen Soreng; Amy Lv, Lewis Jackson)
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Oil prices rise as tariff concerns and Russian supply threats compete for attention
The oil prices remained unchanged on Friday, after dropping more than 1% the previous session. Traders were digesting the impact of the new U.S. higher tariffs which may curb economic activity and reduce global fuel demand growth. Brent crude futures were up 4 cents or 0.06% to $71.74 per barrel at 1201 GMT. U.S. West Texas Intermediate Crude rose by 1 cent or 0.01% to $69.27. Brent prices will still rise by 4.9% this week, while WTI prices will climb by 6.4%. This is after U.S. president Donald Trump threatened earlier in the week to impose tariffs on Russian crude buyers, particularly China, India and South Korea, to get them to stop their war against Ukraine. Investors were focused more on Trump's new tariffs, which are largely higher, that will be imposed on U.S. trade partners on August 1. Trump signed an Executive Order on Thursday that imposed tariffs of 10% to 41% for U.S. imports coming from Canada, India, and Taiwan. These countries failed to meet his August deadline to conclude trade agreements. Analysts have warned that the new levies could limit economic growth because they will increase prices and reduce oil consumption. There were signs on Thursday that the existing tariffs in the U.S. are already pushing prices up. The U.S. is the largest economy and the biggest oil consumer. Inflation in the United States increased in June, as tariffs increased prices of imported goods like household furniture and recreational products. The data supports the view that the price pressures will increase in the second half and the Federal Reserve won't cut interest rates until October. The higher borrowing costs could also limit economic growth. Trump's threat to impose secondary tariffs of 100% on Russian crude buyers has supported the price because there was concern that this would disrupt oil trade and remove some oil off the market. In a note published on Thursday, JP Morgan analysts stated that Trump's warnings of sanctions against China and India for their continued purchases of Russian crude oil could put 2,75 million barrels of Russian oil exported by sea at risk. Both countries are among the top three crude oil consumers in the world. Analysts said that the Trump administration will find it impossible to sanction the second largest oil exporter in the world without driving up oil prices.
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RPT-Indian state refiners pause Russian oil purchases, sources say
Industry sources claim that Indian state refiners stopped buying Russian crude oil last week, as the discounts have narrowed in this month. Donald Trump has also warned other countries against purchasing oil from Moscow. India, which is the third largest oil importer in the world, is the top buyer of Russian crude by sea. This revenue stream for Russia, as it continues to wage war against Ukraine, has been vital for the country. Four sources familiar with the refiners’ plans to purchase Russian crude have told us that the country's state-owned refiners, Indian Oil Corp., Hindustan Petroleum Corp., Bharat Petroleum Corp. and Mangalore Refinery Petrochemical Ltd., have not purchased Russian crude for the last week or so. IOC, BPCL HPCL MRPL, and the Federal Oil Ministry did not respond immediately to'comments. Sources said that the four refiners buy Russian oil regularly on a delivery basis, and they have also turned to spot markets as a source of replacement oil - mainly Middle Eastern grades like Abu Dhabi's Murban oil and West African crude. Reliance Industries, a private refiner, and Nayara Energy are owned in majority by Russian entities, including Rosneft. They have signed annual agreements with Moscow, and they are the largest Russian oil buyers for India. Trump announced 100% tariffs against countries that purchase Russian oil, unless Moscow agrees to a major deal of peace with Ukraine. Sources say that Indian refiners have withdrawn from Russian crude due to the decline in Russian exports, and a steady demand. This is because of the Western sanctions imposed against Moscow for the first time in 2022. Even buyers who adhere to the price cap are concerned that the latest EU curbs will complicate international trade, including fund-raising. India reiterated its opposition against "unilateral sanction". Trump announced on Wednesday that a 25% tariff would be imposed on all goods imported from India starting August 1. He also said that negotiations are ongoing. He warned against possible penalties for the purchase of Russian oil and arms. Trump reduced the deadline for imposing secondary sanctions on buyers of Russian goods to 10-12 from 50 days, if Moscow fails to agree to a peace agreement with Ukraine. About 35% of India’s total supplies are supplied by Russia. In the first half 2025, private refiners purchased nearly 60% of India’s average 1.8 millions barrels per day Russian oil imports, while state refiners, which control 60% of India’s total 5.2 million bpd refinery capacity, purchased the rest. Reliance bought Abu Dhabi Murban oil for loading in October of this month. This was an unusual move from the refiner.
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Sources say that Asia is increasing its imports of US WTI oil as Middle East prices increase.
Trade sources say that Asia will increase imports of U.S. West Texas intermediate crude in the fourth-quarter after Middle East oil price increased and opened arbitrage window. They said that the price gap between light-sweet U.S.WTI oil and Middle East crude benchmarks Dubai & Murban has narrowed this month due to strong demand in Asia for high-sulphur oils. WTI's Arbitrage to Asia has been open for the last week for cargoes that arrive in early November. This was stated by June Goh, senior analyst at Sparta Commodities. Sources said that U.S. oil producer Occidental sold WTI crude to Japanese refiner Taiyo Oil. One source said that the cargo was sold for a premium of $3.50 per barrel over October Dubai prices, and would be delivered in October. A Singapore-based trader stated that WTI crude oil could be sold at a price 50-75 cents per barrel less than Murban oil of similar quality to North Asian refiners, depending on the suppliers. Two other traders claim that WTI is 30 cents less expensive than Murban light-sour grade. The trade is also enabled by the falling costs of a large crude carrier that can send 2,000,000 barrels from the Gulf Coast in the United States to Asia. The daily tanker rates of SSY on LSEG Workspace show that the costs for a VLCC shipping U.S. crude oil to China, Singapore, and West Coast India dropped by $200,000 on Wednesday to $6.5, $5.5, and $5.35, respectively. Sources confirming the benchmark said that Murban's supplies have also been tightened as Abu Dhabi National Oil Co has reduced its exports of its flagship grades by diverting oil to its own refinery. Goh stated that "we anticipate more Asian buyers will secure WTI cargoes, especially as Murban looks expensive while taking the opportunity to diversify their portfolio against AG (Arabian Gulf crude)." She said that the threat of U.S. president Donald Trump to impose secondary duties on countries who buy Russian oil also supports Middle East crude price. Indian refiners will look to purchase oil from Gulf to replace Russian supply, she added. Trump shortened the deadline by which Moscow must make progress in a peace agreement with Ukraine or face secondary tariffs of 100 percent for its oil customers within 10 to 12 business days. This reflects his growing frustration over Russia's actions. China, India, and Turkey are the main importers of Russian crude. Reporting by Florence Tan in Singapore and Siyi LIu in Houston, Arathy Sommesekhar at Houston; editing by Tom Hogue and Philippa Fletcher
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Miner Vale Q2's net profit drops by 24%, but exceeds analyst expectations
The Brazilian miner Vale announced on Thursday that its net profit for the second quarter of 2014 was down 24% from a year ago to $2.12 Billion, but still exceeded analyst expectations. LSEG polled analysts who expected Vale to report a net profit of $1.44 billion for the June quarter. Vale's net income a year earlier was boosted due to the divestment by its PT Vale Indonesia subsidiary. The revenue of the miner in April-June this year was $8.8 billion, which is exactly what analysts expected. The key iron ore division of Vale saw revenue declines compared to the previous year, due to lower sales volumes and prices. However, copper and nickel revenues grew. The average realized iron ore price in the first quarter was $85.1/ton, down more than 13% compared to a year earlier. These lower prices led to a drop of 15% in adjusted earnings before taxes, depreciation, and amortization (EBITDA), totaling $3.39 billion. Due to increased output and efficiency measures, the total cost of each category decreased by 10%, 60%, and 30% from last year. Vale said that it also spent $200 million less in the third quarter of 2018 than it did a year earlier, allowing it to stay on track for its guidance of $5.9 Billion by 2025. The company announced that it had also obtained a preliminary license for the Bacaba Copper Project, which is intended to prolong the life of Sossego Complex. Vale also started commissioning this month a second onca Puma furnace, where it hopes to begin nickel production by the end of the year. (Reporting and writing by Andre Romani, Marta Nogeuira and Daina Beth Solon, editing by Natalia Siniawski and Brendan O'Boyle, Cynthia Osterman and Brendan O'Boyle)
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Tariffs increase US operations, but Gerdau's adjusted profits fall by nearly 9%.
The Brazilian steelmaker Gerdau reported a 8.6% drop in its adjusted net profit for the second quarter of 2018, compared to last year. This was slightly lower than analysts' expectations, despite a stronger performance by North American operations because of U.S. Tariffs. Gerdau, the largest Brazilian steelmaker in terms of market capitalization with mills throughout the Americas reported a net profit of 864 million reais (154.26 millions dollars) for the three-month period ending June 30. LSEG polled analysts who expected 847 million reais. Gerdau stated in its earnings report that the decline in profits was primarily due to the results of the company's operations outside Brazil and South America, which were partially offset by the currency effects. Gerdau's adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) was 2.56 billion reals, down 2.4%, and in line with analyst expectations of 2.57 billion reals. Gerdau has reported an improvement in its North American operations compared to first quarter. It attributes this to a decrease in imports in the U.S. as a result of higher tariffs, and the supply rebalancing that follows. More than half of the steelmaker's net income comes from North America. Analysts believe that the steel tariffs set by U.S. president Trump will benefit the Brazilian steelmaking industry. Gerdau's net revenue total rose by 5.5% on an annual basis to 17.5 billion reals, while steel sales increased by 4.1%. Analysts estimated a 17.7 bn reais net income. Analysts at JPMorgan, including Rodolfo Anglee, said that the results were mostly neutral. In a note to clients, they said that North America's continued strength in 2Q25 was more than compensating the challenges in Brazil and South America. ($1 = 5,6008 reais). (Reporting and editing by Brendan O'Boyle, Chris Reese and Andre Romani)
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Britain claims that the EU will remove tariffs on steel as part of a quota
As part of the recent agreement to reduce trade barriers and reset ties, Britain announced that the European Union would remove tariffs from key steel products as of Friday. In May, Britain reached the most significant reset in defence and trade relations with the European Union (EU) since Brexit. This included a “bespoke arrangement” to protect UK exports of steel from new EU tariffs and rules. The British government had previously stated that the European Commission will restore Britain's country-specific steel quotas to levels prior to 2022, but it had not specified a date for this action. Jonathan Reynolds, the UK's Trade Minister, said that the removal of tariffs is "yet another step forward" for the UK Steel Sector. The government intervened in order to save British Steel jobs and reached a deal with the United States to avoid their highest steel tariffs. He said that restoring the steel quota would give producers confidence to grow and compete in the market, as well as maintain important export relationships. The agreement allows Britain to export up to 27,500 tonnes of steel per quarter to the EU without having to pay an additional tariff. Gareth Stace said that the restoration of quotas was "excellent news" and added that companies were "plagued with problems" when shipping support beams. Britain has yet to complete negotiations with the United States, after both sides agreed to work together to eliminate steel tariffs for exports from Britain in May. British steel exports are subject to a 25% tariff in the U.S., although it avoided a 50% increase thanks to an agreement with the U.S. However, talks on removing the tariffs have been stalled because of discussions about supply chains and the location where British steel "melts and pours".
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Edison International's quarterly profits fall as L.A. wildfire investigation continues
Edison International announced a decline in its second-quarter profits on Thursday as it struggled to deal with increased operating costs and investigations related to wildfires that occurred earlier this year in Los Angeles. The Los Angeles area was devastated by multiple wildfires that scorched thousands of acres in January. It is estimated to be the costliest natural disaster in U.S. History. Electric utilities in the region have also come under increased scrutiny. Wildfires that originate on power lines can also cause power outages. Southern California Edison, a subsidiary of Edison International, faces multiple lawsuits alleging that its electrical equipment caused the Eaton Fire, one of the most significant wildfires to occur in the Los Angeles region. While investigations are underway into the cause of Eaton Fire, lawsuits point to SCE transmission equipment in the hills above Altadena for starting the fire. Edison CEO Pedro Pizarro stated on a earnings call that "SCE does not have any evidence pointing towards another possible ignition source." "In the absence of additional evidence, it is possible that SCE equipment was involved in the ignition," Edison CEO Pedro Pizarro said on a company earnings call. The company attributes the decline in earnings primarily to the higher operating and maintenance costs and the net effect of regulatory decisions made by Southern California Edison (SCE). The decrease was also attributed to higher interest costs at the parent company. SCE has said that it will invest $6,2 billion to stop wildfires from being caused or affected by its system. The company plans to also launch a compensation program for wildfires. California has a wildfire insurance fund to protect utilities such as SCE against wildfire liabilities. Bloomberg News reported on Wednesday that California Governor Gavin Newsom proposed legislation to boost the state's wildfire fund with an extra $18 billion. The report stated that electricity ratepayers will contribute half of the money via a monthly charge, while the remaining half will be funded by utility firms who benefit from the fund. This includes Edison International. The company confirmed its forecast of adjusted earnings between $5.94 and $6.34 for 2025. Analysts expect $6.06 per share. The Rosemead-based California company reported a second-quarter net profit of $343m, or 89c per share. This compares to $385m, or $1.14 a share, one year ago. Reporting by Khusbu Jennifer in Bengaluru, and Laila Kerney in New York. Editing by Leroy Leo.
Copper demand is soaring due to the expansion of global power grids
The copper demand is growing faster than expected, due to the billions of dollars invested in modernising and expanding power grids worldwide for the digital and renewable energy revolutions which require vast amounts of electricity.
A lack of investment into new mines is limiting the supply of major producers, including Chile and Democratic Republic of Congo, which will lead to a long period of high prices.
Analysts predict that copper prices will reach record levels above $12,000 per ton by the end of this decade. This is a 23% increase from the current level of $9,700 per ton.
Copper's superior durability, conductivity and versatility have made it difficult to replace.
According to the International Energy Agency, grid investment will reach $400 billion this coming year after reaching a record of $390 billion by 2024.
Copper is often an undervalued component of grid infrastructure. Many people understand the need for grid expansion, but underestimate the amount of copper that will be required. Michael Finch is the head of strategic initiatives of Benchmark Mineral Intelligence, a consultancy. He pointed out the investment needed especially in the U.S.A., UK, and China.
BMI's latest figures reveal that the global demand for copper to upgrade power generation and transmission systems will increase to 14.87 millions metric tons in 2030, up from 12.52million tons this year.
DATA CENTRES ELECTRIC VEHICLES DRIVE GRID ON DEMAND
Michael Widmer, an analyst at Bank of America, predicts that global copper demand will increase by 10% from this year to 30,32 million tons in 2030. Widmer predicts that the global copper market will be in deficit of 1.84 million tonnes by 2030.
In regions where artificial intelligence and machine-learning data centres are rapidly expanding, the need for resilient grids becomes even more acute.
Peter Charland, Global Information and Communications Technology Lead at AECOM (a global infrastructure consultancy company), said that "Artificial Intelligence and Machine Learning data centres require bigger, better and faster computing." This means more power.
CRU, a consultancy, said it expected copper demand in data centres to increase from 78,000 tonnes in 2020 to 260,000 tonnes this year and exceed 650,000 tons by 2030.
"The electricity grid infrastructure is a bottleneck, and it's not just for data centres." This includes onshore and off-shore wind power, solar, and electric vehicles," Egest Balla said, wire and cable analyst at CRU.
The copper content of electric vehicles is also significantly higher than that of traditional internal combustion engines.
BMI predicts that the demand for copper in electric vehicles will increase to 2.2 millions tons by 2030. This is up from just 204,00 tons in 2020.
Maria Cristina Bifulco is the chief investor relations officer and sustainability officer of Italian cable manufacturer Prysmian. Prysmian is the largest copper buyer in the world.
Prysmian purchases 2%-3% global refined copper production.
ALUMINIUM, FIBRE OPTIC CABLING CONSIDERED
The looming shortages of copper and the record-high prices have led to a wave innovation, including recycling and substitution in industries like construction and manufacturing. Copper costs make up a significant portion of production costs.
Aluminium has long been regarded as a cheaper option, but at a cost of about a third that of copper, it has been abandoned in the wiring of data centres.
Charland, from AECOM, said that there was a time when copper wasn't meeting the demand. Some people coated aluminum cables with copper. "That was short-lived due to the performance issues."
Recycling can help achieve sustainability goals as it uses 65% less energy to refine or produce secondary copper than primary production. Analysts predict that scrap copper will increase to 11 million tonnes in 2030, up from 10 million tons currently.
Fibre optic cables have already replaced copper in the data transmission industry. They are more efficient and offer a higher bandwidth.
Matt Miller, Global Networks Lead at AECOM said: "It is cheaper to make glass than to mine copper." "Silicon can be found in abundance on the beach. You can grab as much of it as you like."
Analysts say that it is unlikely that the copper supply shortage will be resolved anytime soon. This is especially true for structural projects on which governments base their economic growth plans.
"You can do green energy, but without a grid to support it, you will have a problem." CRU's Balla said.
(source: Reuters)