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Aluminium and copper both hit a four-month low due to fund liquidation
Aluminum prices fell to their lowest level in four months Wednesday, and copper also lost ground as funds liquidated bullish 'positions due to concerns over rising?U.S. Interest rates and uncertainty about negotiations to end the Iran conflict. The benchmark three-month aluminum on the London Metal Exchange fell 0.9%, to $3,058 per metric ton, by 0930 GMT. It had previously reached its lowest level since February 19, at $3,045.50. Tuesday, metals used for transport, packaging, and construction saw their biggest quarterly and month-to-month declines in years. Ole Hansen is the head of commodity strategy for Saxo Bank, a Copenhagen-based bank. The continued strength of the dollar and the yields staying 'firm' adds weight to these markets. After hitting a six month low, the most traded aluminium contract at the Shanghai Futures Exchange closed daytime trading 1% lower, closing the daytime trade at?22.370 yuan (3,292.47) per ton. The dollar reached a record high against the Japanese yen as the yields on U.S. Treasury bonds rose sharply, while the dollar index remained steady. The dollar is stronger, making commodities priced in U.S. dollars more expensive to buyers using other currencies. The news that Iran refused to meet with U.S. top envoys, who had flown to the region following an outbreak of hostilities clouded the prospects for lasting peace between the two countries. LME 'copper' fell 1.6% to $13,165.50 per ton, after U.S. officials missed a June 30 deadline to announce whether or not tariffs would be applied to refined copper. The losses in 'base metals' were however limited after a survey revealed that the manufacturing sector of China, which is a major metal consumer, expanded for a seventh consecutive month in June, finishing its strongest quarter since late 2020. Other LME metals include zinc, which fell 2%, to $3,480 per ton. Lead also dropped 0.2%, to $1,871, Nickel was down 0.4%, to $16,355, and Tin, which was down 2%, to $50,550. ($1 = 6.7943 Chinese Yuan Renminbi)
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Norsk Hydro Slovak Aluminium Smelter to Partially Restart Production
Norsk Hydro announced 'on Wednesday that its Slovalco aluminum joint venture had reached an agreement with Slovak Government?to partly restart production after?a four-year shut down,?and 'the deal included a new long term power supply contract. Hydro stated that the pact will pave the way for a restart of smelting capacities of 75,000 tons per annum. Production is expected to resume by the fourth quarter of 2026. The remaining 100,000 tonnes of capacity would depend on the conditions after 2030 and any additional power contracts. The resumption of primary aluminium production in Ziar nad Hronom, central Slovakia, would be a huge boost for the European Market, which 'has been left short 'of metal due to the closures of the Mozal smelter, in Mozambique and the EU’s new carbon taxes, as well as the war-driven supply restrictions in the Gulf. Slovalco, owned by Norway's Hydro and Central Europe-focused Penta Investments Group (55.3%) was forced to cease primary aluminium production by September 2022 due to high electricity prices. Hydro stated that the deal outlines the "long-term frame conditions" for aluminium production. This includes a power purchasing pact with the state-owned hydropower utility Vodohospodarska Vystavba, and a compensation plan?for indirect costs of carbon under the EU Emissions Trading System (ETS). Slovalco said in a statement released after a signing event in Bratislava, on Wednesday, that it would invest 100 million euro ($14 million) in order to restart operations. This investment will support over 200 jobs. $1 = 0.8877 euros (Reporting and editing by Elaine Hardcastle, Clarence Fernandez, and Jan Lopatka)
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Gold drops as Fed rate hikes and higher Treasury yields weigh
On Wednesday, gold fell for the third session in a row as?U.S. Treasury yields, as well as growing bets on the Federal Reserve raising interest rates, weighed down on gold. As of 0849 GMT spot gold was down by 0.8% to $3,974.75 an ounce, after reaching its lowest level since November last year at $3942.99 in the previous session. U.S. Gold Futures for August Delivery lost 1.3%, to $3.987.70/oz. On Tuesday, the yellow metal recorded its first quarterly loss in 2024. The benchmark 10-year yield rose as high as 9 basis points on Tuesday, before easing off its peak. On Wednesday, yields were up again by 4 basis points at 4.465%. This was higher than the increase in euro zone bonds yields. Bullion is less affordable to overseas buyers due to a stronger dollar. The market is pricing in more rate increases for this year because of comments made by Fed's Hammack. Beth Hammack, the president of the Federal Reserve Bank of Cleveland, said Tuesday that she might advocate for higher interest rates if inflation continues to rise. CME FedWatch shows that traders expect a rate increase of 67% by September. Staunovo said that the expectation of more hikes is not helping investment demand. ETF holdings saw renewed outflows over recent days. The Fed may change its policy direction based on the June ADP employment report, which is due at 1215 GMT. The markets will also be watching the annual conference of the European Central 'Bank in Sintra on Wednesday. Fed Chair Kevin Warsh, and ECB -President Christine Lagarde both have speeches scheduled. Geopolitically, there are concerns about the prospects of U.S. diplomacy with Iran after Teheran announced it would not be meeting senior U.S. officials. Envoys travelled to the region following the recent outbreak of violence. Spot silver dropped 1.4% to $57.75 an ounce. Palladium fell 1.4% to $1,187.01, down from its lowest level since November. Palladium fell 1.4% to $1187.01. (Reporting and editing by Harikrishnan Nair in Bengaluru, Noel John from Bengaluru)
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Zelenskiy: Ukraine strikes Russian oil refinery, missile component factory
Ukraine has hit a Russian refinery in Ufa for the second consecutive time, Volodymyr Zelenskiy, the president of Ukraine, said on Wednesday. Kyiv is intensifying its strikes in Russia. "Our plan to impose Ukrainian long-range sanction is being implemented every day," Zelenskiy said, referring the Ukrainian attacks deep within Russian territory. "This is a completely just response to everything Russia does against us." Zelenskiy reported that a strike was also carried out on a Russian military-industrial complex he described as "strategic", located in the Penza area, which he claimed made components for missile weapons used by Moscow to attack Ukraine. He said that the site was located about 600 kilometers from the frontline. The Ukrainian General Staff identified the plant as belonging to Roscosmos, a Russian state-owned space corporation. The company said that it produces sensors for cruise missiles and ballistic rockets, components for aircraft electronics, and equipment to support reconnaissance satellites. General Staff reported that two?bridges were also struck in Russian-occupied areas of Ukraine's Donetsk, Luhansk and Donetsk regions as well as the logistics crossing in Donetsk. Analysts say that Ukraine's increased?attacks on Russian military supply lines is part of an ongoing campaign to target Moscow’s logistics behind the frontline. This effort has helped slow down its war machine, after more than four years of conflict. Ukraine's Defence Ministry said that Ukraine's troops hit 11 oil refineries as well as fuel logistic facilities, military factories and other targets in the month of June. Ukraine's SBU security service?also said it had struck hangars housing Russian jet fighters on an airfield in Crimea that?Russia annexed in 2014. Zelenskiy announced last week that he approved a campaign of 40 days to "influence" Russia into ending its five-year war with Ukraine. (Reporting and editing by Andrew Heavens, Sharon Singleton, and Anna Pruchnicka)
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Fuel prices in Nepal are reduced as global prices fall
Nepal has lowered fuel prices up to 17 percent, according to an official statement released on Wednesday. The Himalayan nation reacted to the fall in global prices after progress was made?towards a peaceful resolution of the war iin 'Iran. The sole distributor and importer of fuels in Nepal, the state-owned Nepal Oil Corporation, has reduced retail prices for petrol, diesel and cooking gas. It said that jet fuel prices have dropped by 14.8% for domestic flights from Kathmandu and by 14.47% for international flights from Pokhara. Prices have fallen sharply since recent highs, as fears of supply disruptions in the Middle East waned amid hopes that U.S. and Iranian peace talks would help maintain a fragile ceasefire. Brent and U.S. West Texas Intermediate are both close to the levels they reached on February 27, just before the U.S. and Israel war against Iran began. Brent closed that day at $72.48 a bar and WTI at $67.02. NOC stated that the'movement was a result of lower fuel supply prices received by Indian Oil Corp on Tuesday. Indian Oil Corp is?the lone?supplier to Nepal. It said that the improvement in fuel prices on the global market was to blame. New rates are effective as of Wednesday. Nepal raised petrol and diesel prices?in April,?and began rationing cooking gases in?March because of supply disruptions caused by the Iran War. Nepal, wedged between India and China is completely dependent on fuel imports. (Reporting and editing by Aftab Ahmad, Raju Gopalakrishnan and Gopal Sharma)
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Two killed after wildfire ravages house in Northern Greece
The fire brigade reported that two people died after a wildfire destroyed a house in a 'forested settlement' in northern Greece. Local media reported that the fire started in bushland Tuesday afternoon, and was fanned quickly by strong winds. It engulfed a house located near the village of Liti, about 25 kilometers (16 miles) north of Thessaloniki. Fire brigade reported that they found a dead man near the fire as they extinguished it and saw another body inside the home. The same area was also the location of a woman who suffered?burns. Authorities told residents to evacuate their'settlement' and move to a nearby playing area. Scientists consider Greece and other Mediterranean countries to be wildfire hotspots due to the fast-warming climate. Fires are more destructive in the summer months when it is hot and dry. (Reporting and editing by Elefterios papadimas, Angeliki Koutantou)
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Aluminium prices fall to four-month lows as Gulf risk premium declines
Aluminum prices fell to their lowest level in four months on Wednesday as investors unwound risk premiums associated with the Gulf, despite new uncertainty surrounding U.S. diplomacy towards Iran. As of 0715 GMT the benchmark 'aluminium' for three months on the London Metal Exchange was down 0.73% to $3,063 per tonne, after hitting a four-month-low at $3055.50 earlier during the session. On Tuesday, it posted its largest quarterly and monthly drops in years. The Shanghai Futures Exchange's most traded aluminium contract tracked the LME. It closed daytime trade at 22,370 Yuan ($3,292.47) per tonne, down 0.95% from its six-month-low of 22,245 Yuan. The London benchmark fell by almost 16% in the month of June as the risk premiums for metals?light?were reduced amid the Iran War, despite the fact that shipments through the Strait of Hormuz - a region which accounts for 9% of the global aluminium production - remained low. Iran announced on 'Tuesday' that it will not meet with senior U.S. representatives who have travelled to the area, thereby reducing the chances of a lasting peace agreement. Iranian officials said that both sides need to sort out the details of the ceasefire agreement signed two weeks earlier before they can move on to more difficult issues. The most traded SHFE contract fell 0.56%, while the LME three-month copper contract lost 1.10%. U.S. Job Openings reached a 2-year high in May, indicating that labour demand was resilient despite the softer hiring. Investors focused on inflation and the possibility of U.S. rates staying high for longer. This supported the dollar. Copper losses were capped by signs of a?continued growth in China's industrial sector. The RatingDog China General Manufacturing PMI slipped to 51.7 from 51.8 in may, but remained above the 50-mark that separates growth from contraction. The average PMI for the second quarter was the highest since the fourth of 2020. This was due to sustained growth in new orders and improved labor?market conditions. Nickel slid by 0.38%, tin fell by 2.30% and zinc dropped 1.30%. The SHFE saw zinc gain 0.64% while lead fell 1.09%. Nickel also declined 0.63%, and tin was a smidgen higher at 0.07%. ($1 = 6.7943 Chinese Yuan Renminbi)
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Dengue outbreak in Bangladesh as weather-related aids spread
Health experts have warned that dengue cases could increase sharply in Bangladesh over the next two month due to wet weather conditions and poor mosquito control. In recent weeks the spread of the disease has accelerated, raising concern after the country's deadliest outbreak ever in 2023. According to data from the health ministry, dengue deaths increased from one in May to 18 at the end June. Meanwhile, reported infections increased by more than eightfold from 714 to 5,924. Professor Kabirul bashar, an entomologist from Jahangirnagar University, said that he expects dengue cases to double in 'Dhaka in July compared to June and triple or quadruple by August. "But the biggest challenge will likely be outside of the capital where several districts face a?risk?of a much steeper increase in infections." In 2023, over 321,000 people will have been infected. 1,705 of them will die. In 2024, Bangladesh had 101,214 dengue infections and 575 fatalities. Dengue is a threat to the country as it deals with?its biggest measles outbreak in decades. More than 100,000 suspected cases, and more than 10,000 confirmed infections, have been reported since mid-March. The death toll has exceeded 700. This puts additional pressure on an already fragile healthcare system. Bashar stated that heavy rainfall, high temperatures, and humidity created the ideal conditions for dengue transmission. Mosquito control has not kept up with this growing threat. He called on the government to establish a national 'early warning system' to identify mosquito breeding areas and hotspots that are rising, so authorities could respond quicker and warn communities. He said that the window for containing the outbreak was closing. (Reporting and editing by Kevin Buckland; Ruma Paul)
Hengli, China's silk-to-petrochemicals empire, faces the chill of US sanctions
Hengli Group has been thrust in the middle of a geopolitical struggle. The group, which was built over 30 years by a husband-and-wife team from a bankrupt cotton mill to a Fortune Global 500 company and one of China’s largest private oil refineries, is now a Fortune Global 500 firm and one of China’s largest private oil refiners.
The United States imposed sanctions on its Hengli Petrochemical unit, which operates a 400,000 barrel per day refinery in Dalian (in the north-east), for purchasing Iranian oil. This was denied by the group.
Hengli, along with about 40'shipping 'firms and vessels were blacklisted as Donald Trump and Xi Jinping met and Washington looked towards Beijing to press Tehran into accepting a deal that would end the conflict which began when the U.S. attacked Iran and Israel in February.
Hengli, the largest Chinese refiner sanctioned in the U.S.
Beijing, which had long opposed such unilateral actions, has rushed to defend it, invoking, for the first, a law from 2021 to prevent companies from complying with sanctions imposed by foreign countries.
Since reimposing sanctions against Tehran in 2018, Washington has targeted peripheral players, including small Chinese independent refining companies known as teapots. These are the main Iranian crude purchasers.
"Hengli's not a teapot refinery. "Hengli is not a teapot refinery.
She said that this was probably the reason Beijing felt obliged to use its antisanctions law, which had been passed for the first.
Hengli, its billionaire founders Chen Jianhua, and his wife Fan Hongwei did not reply to a comment request.
Immediate Impact
The sanctions were immediately effective.
Hengli's major offshore unit, an Singapore trading arm with about 100 employees, will close this month. China's Wanhua Chemical, meanwhile suspended a long term agreement to purchase benzene by Hengli Petrochemical.
Traders said that the sanctions could put at risk a 2024 preliminary agreement with Saudi Aramco, a major oil company, to buy a 10% stake in Hengli Petrochemical. Aramco declined comment.
Hengli, with its primarily domestic focus and Beijing's support, can continue to operate largely as usual, despite the sanction. The company has stated that it will continue to purchase oil in Chinese Yuan, outside of the dollar settlement system.
Last year, Shandong Yulong Petrochemical, a rival, was sanctioned by the British and European Union for dealing with Russian oil. This led to it relying more on Russian crude.
Hengli will also be forced to depend more on oil sanctioned by the United Nations and it has already redirected all its petrochemicals sales to domestic markets, according to traders.
Trump was asked on his flight to Beijing on Friday if he would lift sanctions against Chinese companies that purchased Iranian oil. He said he might consider it.
He said, "We discussed that and I will make a final decision in the next few days."
There was no change as of Thursday.
The road ahead may not be smooth
Fan, the chairman of Hengli’s Shanghai-listed unit, took a cautious tone nine days before sanctions were imposed in a letter to shareholders after Hengli Petrochemical reported earnings for 2025 of 7.07 billion Yuan ($1.04billion) on revenues of 201 billion Yuan.
She wrote: "Great-power rivalry continues to develop and intertwine. Geopolitical turmoil has never stopped." "We know that the road ahead will not be easy."
Hengli has faced many challenges in the past.
Chen, 55, was raised in Suzhou, a district of Wujiang where many households used to raise silkworms. He dropped out of high school at the age of 14 and made his first fortune by trading scrap silk.
In a speech last year to the National Conference of Young Entrepreneurs, Chen Jianhua (whose name is translated as "build China") recounted how, at age 23, he purchased a textile mill that was bankrupt and had 27 employees.
It was 1994 when China's reforms under Deng's leadership were gaining momentum.
Chen's Hengli, in an effort to help China?break the foreign stranglehold? on synthetic fibre production, ventured upstream. They eventually moved into the state-dominated refinery sector, becoming a fully integrated petrochemical manufacturer.
Hengli was the model for a new generation of private, large petrochemical companies that produce materials for plastics and products for China's booming manufacturing sector.
Hengli made a bold bet and built an $11 billion complex at the remote Changxing Island off Dalian. This was a direct challenge to China National Petroleum Corp.'s refinery nearby.
"There was no power, no water and no mobile signal. There was just a mountain and a stretch of sea, with a tiny road. "I lived and ate at the construction site for four years," Chen recalled.
The time is now.
Hengli, the largest producer in the world of purified Terephthalic Acid (PTA), which is used to make synthetic fibres.
Hengli purchased an idle shipyard in Changxing Island, China, to meet Beijing's demand for infrastructure investments.
He said that at first, "all the shipowners did not trust us and would not place orders. So we placed our orders."?Building two 300,000 ton very large crude carriers, and an 82,000 ton bulk carrier.
Hengli Heavy Industry won orders worth over 100 billion yuan for 115 vessels last year, including Greek, Norwegian, and Japanese shippers.
In February 2025 Chen was invited by Xi to a meeting of leaders of the private sector, where Xi urged them to help China achieve its goals of self-reliance in technology and supply chain security.
Chen recalled Xi’s message, "Show off your talent now." $1 = 6.8012 Chinese Yuan Renminbi (Reporting and editing by Tony Munroe, Sonali Paul and Colleen Aizhu. Additional reporting and editing by Trixie Yap and Siyi Liu.
(source: Reuters)