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EU will increase carbon tax on imports with high emissions and crackdown on those who try to avoid it
EU pushes forward with carbon border tax despite opposition Draft plans to expand levy to include imported washing machines, car parts The first of its kind CO2 policy will be implemented in January By Kate Abnett BRUSSELS - According to draft proposals from the European Commission, which are due for publication on Wednesday, the 'European Union' will extend its carbon border levy – a fee levied on imports of goods with high emissions – to include car parts and washer machines. The proposals aim to close loopholes, that could be used by foreign firms to avoid the fee. This is currently in the pilot phase and costs will begin to be imposed from January. The EU's Carbon Border Tariff - the first of its kind in the world - will charge fees for the CO2 emissions from imported goods, including steel, aluminum, cement, and fertilisers. CBAM is a policy designed to protect European industries from cheaper imports coming from countries that have weaker climate regulations. It has, however, angered trading partners such as China, India and South Africa who claim that it unfairly penalises the economies of their countries. EU SEEKS WORKAROUNDS TO AVOID Draft EU legal proposals, seen by?by?on Tuesday, showed that the bloc would double down on carbon border fees: expanding them to cover downstream products which use a large share of steel and aluminum, such as construction products, components for power grids and machinery. Leon de Graaf is the acting president of "Business for CBAM Coalition", a group of?companies, industry groups and other stakeholders. He welcomed the 'EU plans which he described as focusing on "products with the greatest risk of carbon leaked" - that is, the risk that manufacturing companies will relocate overseas to avoid Europe’s strict climate policies. The EU will also take action against foreign companies who are found to be underreporting emissions in order to avoid the tax. According to sources familiarized with the plans which could still be changed before publication, in this scenario the EU would impose "default values" for emissions on the products of that country. This is to alleviate concerns from EU officials about foreign companies, especially those in China, strategically adjusting by sending low-carbon products into Europe while continuing to produce high-carbon goods in other markets. They could avoid the EU levies without making their production more 'green'. Un spokesperson for the Commission declined to comment on these draft plans. CBAM will begin charging importers for emissions associated with their imports in 2026. Companies will have until September 2027 to purchase and surrender CBAM certification to the EU. China, India, and Brazil have all developed or expanded their carbon pricing systems since Brussels announced its carbon border levy for 2021. "They have changed their behaviour." Totis Kotsonis is a partner with Pinsent Masons and specializes in trade issues. Brussels plans to use 25 percent of the revenue generated by the border tax to compensate European manufacturers who face higher costs due to the carbon border tax. The support would be limited to those industries that invest in low-carbon manufacturing. (Reporting and editing by Frances Kerry, Kate Abnett)
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Russell: China's steel production will slump to a 7-year-low as iron ore exports reach record levels.
China's steel output in November was its weakest in almost two years, and it will ensure that the world's largest producer of metal will post the lowest annual production since 2018. Imports of iron ore, steel's key raw material, are expected to reach a new record in 2025. This will surpass the previous all-time high of 1,24 billion metric tonnes set in 2024. Iron ore stocks were restocked amid low seaborne prices, and there was optimism that Beijing’s stimulus measures would eventually increase steel demand. While the iron ore sector may be experiencing a positive sentiment, it is still facing the reality of a weakening demand for steel in the important property construction sector as well as in manufacturing. According to data released by the Chinese government on December 15, China's steel output fell to 69.87 millions tons in November. This is a?10.9% drop from the same period a year ago. It was the sixth consecutive month of declines and the lowest output since December 2023. The steel production for the first 11 month of this year was 891.67 millions tons, a 4% decrease from the same period in 2024. If the December steel production is at the same level as November's, then total 2025 production will be around 964 million tonnes. This would be the lowest production since 2018, when 928.3 millions tons were produced. It would also represent a drop of approximately 4% from 1.005 billion tonnes in 2024. Steel prices are largely reflecting the weakening of production. On Tuesday, Shanghai Exchange rebar contract ended at $3,081 ($437) a ton. This is down 10.1% from the previous close of $3.429 on July 30 when the current downward trend began. IRON STRENGTH The price of iron ore has taken a different path. Singapore Exchange contracts have been rising since July 1, when they hit a low of $93.35 per ton, a 10-month-low. The price of a ton closed at $106.25 on Tuesday. This is a slight drop from the previous high close for this year, which was $107.90 in December. Prices have risen in tandem with the strength of imports during the second half. November arrivals were 110.54 millions tons, an 8.5% increase from a year ago. Iron ore imports for the first 11 months were up by 1.4%, to 1,139 billion tons. This means that they need to surpass 98 million tonnes in December to beat the record of 1.237 billion tons set in 2024. The analysts at Kpler estimate that China's iron ore imports in December will be around 121,000,000 tons. How long will iron ore imports outperform steel production? It depends on the amount of inventory that Chinese steel mills are willing to increase. They have seen their stockpiles rise in recent weeks. SteelHome monitors stockpiles in Chinese ports The week ending December 12 saw a rise to 143.8 millions tons, up from 142.4 million in the previous week. The price of corn has risen by 10.5% since the 18-month-low of 130.1 millions tons in early august, and is now approaching the 27-month high of 151.8 from July last year. Iron ore imports are likely to be reduced in the next few months, as inventories have a limited capacity for growth. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of a columnist who writes for.
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Silver reaches $65 for the first time, gold increases as US unemployment rate rises
On Wednesday, silver jumped above the $65 per ounce mark?for the first time. Gold edged up after a?U.S. The jobs data revealed a softening of the labour market. This rekindled expectations for further rate cuts in 2019. It also boosted demand for precious metals. Silver spot was up by 3.2% to $65.80 per ounce, after reaching a session high of $65.99. Gold prices at the spot price rose by?0.5%, to $4322.93 per ounce as of 0407 GMT. U.S. Gold Futures rose 0.5% to $4.352.60. Kunal Shah is the head of research at Nirmal Bang Commodities. He said: "There's a major short squeeze (so, speculative trading) in silver...and we don't see the supply side reacting?the right way after the U.S. included silver on the critical minerals list." Shah noted that the current trend could push the price of silver to $70.00 in the short term. The rally came after U.S. data showed that the unemployment rate increased to 4.6% in December, exceeding a polled forecast of 4.4%. GoldSilver Central MD Brian Lan stated that the unemployment data had definitely helped precious metals, and weakened the dollar. This has led investors to seek out other asset classes with higher returns in order to hedge against risk. Investors are now awaiting the U.S. Consumer Price Index on Thursday, and the Personal Consumption Expenditures -index, Federal Reserve's preferred measure of inflation, on Friday. The Fed announced its final quarter-point cut in rates last week. Chair Jerome Powell’s comments were perceived to be less hawkish that expected. The traders still expect two 25-basis-point cuts each in 2026. In low-interest rate environments, non-yielding investments?such as bullion? tend to perform well. Palladium, which had been at a record high for two months, fell 0.8% after a 2.1% increase to $1,591.0. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich, Ronojoy Mazumdar and Subhranshu Sahu)
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Copper prices increase as the market evaluates US job data
Copper prices rose on Wednesday. The latest US labour market data revealed a rebound of?job creation but a higher unemployment rate in November. As of 0330 GMT, the most traded?copper contracts on the Shanghai Futures Exchange increased?0.30%, to?92550 yuan (about $13,139.40) per ton. The benchmark copper for three months on the London Metal Exchange rose 0.97%, to $11,704 per ton. Data showed that the U.S. job growth recovered in November despite unemployment being at a record high. Copper prices, on the other hand, have remained above $11,600 per ton. This is due to?supply concerns and prospects of a boom in demand from data centres, as well as energy transition. Shanghai aluminium rose 0.83% per ton to 21,975 Yuan, while London's benchmark aluminium?rose 0.42%, to $2,888.50. After failing to reach a power agreement with the government, the Australian mining company South32 announced on Tuesday that it would put its Mozal Smelter under care and maintenance in March. Analysts at ING Economics wrote in a report that the decision by South 32 to close its smelter "should keep long-term global inventories low while prices will?see further upside next year". Nickel has recovered after a sell-off since Monday. The benchmark three-month Nickel?rose by 1.07% and the most traded nickel on SHFE rose by 0.67%. On Tuesday, the Shanghai nickel reached a low of 40 months while on Monday, the London benchmark hit a low of?eight months. Zinc fell 0.86% on SHFE. Lead dropped 0.77%. Tin rose 1.42%. Wednesday, December 17 DATA/EVENTS (GMT) 0700 UK CPI, Core CPI YY Nov 0700 UK Services MM, YY Nov 0900 Germany Ifo Business Climate New Dec 0900 Germany Ifo Curr Conditions, Expectations New Dec 1000 EU HICP Final MM, yy Nov ($1 = 7.0437 Chinese renminbi) Wednesday, December 17, DATA/EVENTS, (GMT) 0700 UK CPI Core CPI YY, Nov 0700 UK CPI Services, MM, Nov 0900 Germany Ifo Business climate New Dec 0900 Germany Ifo Currency Conditions, Expectations, New Dec 1000 EU HiCP Final MM YY, Nov (1 Chinese Yuan = 7.0437 Renminbi). (Reporting and Editing by Dylan Duan, Lewis Jackson, Ronojoy Mazumdar.
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Silver reaches $65 for the first time, gold increases as US unemployment rate rises
Silver soared above the $65 mark on Wednesday for the first time, while gold edged up a bit as 'weaker U.S. labor data rekindled expectation of interest rate cuts, pressing the dollar and boosting the demand for precious metals. Spot silver rose 2.8%, reaching a new record of $65.63 per ounce. Gold spot prices rose 0.4%, to $4,321.56 per ounce, by 0230 GMT. U.S. gold futures gained 0.4% to $4350.50. Many of the end-of-year reports have stated that precious metals are the best performing asset class. "I would attribute the silver appreciation of today to speculative flow," GoldSilver Central's MD Brian Lan stated. The rally was a response to U.S. data that showed the Unemployment rate The percentage of respondents who said they were satisfied with their lives has risen to 4.6%, higher than a recent poll Forecast The 4.4% figure is a good example. Lan said that the unemployment data had definitely benefited precious metals, and weakened the dollar. This has led investors to look at other asset classes with higher returns in order to hedge against risk. Dollar index was near the two-month-low touched on Tuesday. This made greenback priced bullion attractive to foreign buyers. The U.S. Federal Reserve announced last week that it would be reducing interest rates by a quarter-point for the rest of the year. Chair Jerome Powell’s comments, however, were not as hawkish as expected. Traders still expect two cuts Each 25 basis points in 2026. In a low-interest rate environment, non-yielding investments like gold typically perform well. Investors are now awaiting key U.S. Inflation readings. The Consumer Price Index is due Thursday, and the Personal Consumption Expenditures -index, which is the Federal Reserve's preferred measure of inflation - due Friday. Meanwhile, ?U.S. Treasury Secretary Scott Bessent On Tuesday, Trump said that Kevin Warsh and Kevin Hassett are both qualified to be the head of the Federal Reserve. He added that Trump's picks should have an "open mind." Palladium, which had earlier reached a session high of $1,602,60, was unchanged at $1,602.60. (Reporting and editing by Rashmi aich in Bengaluru, Ronojoy Mazumdar, and Ishaan arora from Bengaluru)
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Iron ore at a one-week high, supported by improved spot market liquidity
The price of iron ore futures rose to an all-time high on Wednesday. This was due to the accelerated buying in the spot market, as steelmakers restocked feedstocks in preparation for consumption during 'the Lunar New Year holidays in February. By 0212 GMT, the most traded iron ore contract at China's Dalian Commodity Exchange rose 1.05% to reach 766.5 Yuan ($108.84). It reached its highest level since December 11, at 769 Yuan, earlier in the session. As of 0202 GMT, the benchmark January 'iron ore' on the Singapore Exchange had risen by 0.59% to $103.15 per ton. The price of iron ore in January was up 0.59% at $103.15 a ton, as of 0202 GMT. Analysts said that improved liquidity on the spot market has lifted the mood. Mysteel, a consultancy, reported that iron ore transactions?in both the portside and maritime markets jumped by 18,2% and 76.8% respectively on Tuesday. There seems to be less pressure to cut further in December in order to meet a national goal set earlier this year. Beijing pledged to restructure the giant steel industry in March by cutting output. Prices of seaborne iron ore Goldman Sachs predicted $95 for the fourth quarter. Coke and coking coal, the other ingredients used in steelmaking, both grew by 0.33% % respectively. The majority of steel benchmarks at the?Shanghai Futures Exchange rose. The rebar price rose 0.1%. Hot-rolled coil was up 0.03%. Wire rod increased 1.64%. Stainless steel was unchanged. (Reporting and editing by Subhranshu Sahu; $1 = 7.0422 Chinese Yuan)
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US orders TransAlta coal unit in Washington State to remain open
The U.S. energy secretary signed an executive order on Tuesday that will 'keep a unit at TransAlta coal power?plant open for most of the winter in Washington State, the latest step taken by the Trump Administration to support fossil fuels. The order instructs the unit 2 at Centralia Generating?Station, to remain open. The order says that it is to close at the end of 2025. However, it will remain in force until March 16, 2026. Chris Wright, Energy Secretary of the United States, said in September that he expected that many coal plants would delay their retirement to provide electricity for artificial intelligence. Wright stated that the U.S. Government had held discussions with utilities across the country and expected the majority of coal plants in the United States nearing retirement will delay their closure. When coal is burned, it releases more carbon dioxide than any other fossil fuel. The U.S. coal-burning power plants have increased their output this year due to the demand for electricity from manufacturing and artificial intelligence. Last month, the administration of President Donald Trump reordered for the third time the J.H. Campbell The Michigan coal-fired power plant will remain open, even though its majority owner claims that it has already cost him tens and millions of dollars. This plant will continue to operate until mid-February.
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Trump orders blockade on sanctioned oil tankers entering or leaving Venezuela
U.S. president Donald Trump on?Tuesday?ordered the blockade of sanctioned oil tankers that enter and leave Venezuela. He also?added?that he now regards the nation's leaders as a terrorist foreign organization. Trump said on Truth Social that the Venezuelan regime has been designated a FOREIGN TERRORIST?ORGANIZATION for terrorism, drug smuggling and human?trafficking. "Therefore today, I am ordering a TOTAL AND COMPLETE BLOCKING OF ALL SANCTIONED OIL TANNKS going into and out of Venezuela." Trump's remarks came just a week after the U.S. The United States seized an oil tanker sanctioned by the U.N. off the coasts of Venezuela. This was the latest in a campaign to pressure the Venezuelan government led by Nicolas Maduro whom Trump blamed for 'drugs entering the U.S. At an event held on Tuesday night, before Trump's post, Trump's campaign included an increased military presence in the region, and over two dozen military attacks on vessels in the Pacific Ocean and Caribbean Sea near Venezuela that have killed at least ninety people. Trump has also said that U.S. land attacks on South American countries will occur. Soon start . (Reporting from Washington by Jasper Ward, with additional reporting by Julia Symmes Cobb. Editing by Scott Malone.
The final hurdle to BoE's verdict is the MORNING BID EUROPE - UK inflation
Rae Wee gives us a look at what the European and global markets will be like tomorrow.
The Bank of England will announce its rate decision on Thursday, which is expected to be a razor-thin vote.
The expectation is that 'the headline and core consumer price indexes will have decreased on a month-to-month basis. This would allow policymakers to feel more comfortable about lowering rates on Thursday.
In October, headline inflation eased to 3.6% annually - still far above the BoE target of 2% but its first decline since May.
The UK's high inflation rate has divided policymakers on the issue of whether inflation or job losses are the greatest threat to the economy.
The data released on Tuesday shows that the unemployment rate in Britain has reached its highest level since the beginning of 2021, and the private sector's pay growth is at its lowest in five years.
Even though markets are convinced that the BoE will reduce rates this week, a major surprise in the inflation data on Wednesday is more likely to affect policymakers' future rate outlook.
Investors will scrutinise the data to see if and when another cut is likely.
Oil prices rose on Wednesday, after U.S. president Donald Trump ordered a "total and complete" ban on all oil tankers sanctioned by the U.S. entering or leaving Venezuela. This sparked new geopolitical tensions in a period of concern over demand.
This is the latest move by Washington to put pressure on Nicolas Maduro’s government and target its main source for income.
Stocks were in a lurch on the broader market as the long-awaited U.S. jobs report was not greeted with much enthusiasm. The focus is now on the rate decisions of the BoE, the European Central Bank, and the Bank of Japan, which will be announced later this week.
In China, the story was a tale of diverging fortunes. Shares of AI chipmaker MetaX integrated?Circuits surged 700% on their debut on the market, with investors eagerly attempting to profit from a government initiative to reduce reliance upon AI chips made in?U.S. majors.
Property developer China Vanke wants to extend grace period of a 2 billion Yuan ($283.6 Million) bond payment from five trading days to 30, underlining the persistent challenges facing the country's struggling property sector.
The following are key developments that may influence the markets on Wednesday.
UK inflation rate (November)
Fed's Waller Williams and Bostic talk
(source: Reuters)