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Iron ore is confined to a limited range as fears of a possible supply disruption offset weakened demand
Iron ore prices remained 'range-bound' on Thursday as investors weighed a potential'supply risk stemming from a threat of strike by some workers at BHP’s iron ore operation versus a seasonally weakened demand in China, the top consumer. The day's most traded iron ore contract at China's Dalian Commodity Exchange closed 0.27% higher, closing the daytime trade at 745.5 Yuan ($109.72). As of 0800 GMT, the benchmark August iron ore traded on Singapore Exchange was down?0.13% to $98.9 per ton. BHP's iron ore mines in Western Australia, Port Hedland, could see hundreds of workers walk off their jobs next week. This would be the largest industrial action in the past decade. This has led to concerns from traders and steelmakers about a possible supply disruption at the world's largest bulk port. Analysts also expected that the supply from major manufacturers would decline as the rush to ship to meet quarterly targets ended. Some mills began equipment maintenance due to a seasonal decline in steel demand. This led to a reduction in steel production and reduced feedstock demand. China's daily crude-steel output fell by?3,6% in the 10 days following the previous 10-day period to 2,66 million?tons. The prices of coke and other steelmaking materials, such as coking coal, have not changed much. This is despite the fact that energy prices are rising due to renewed supply concerns after the United States launched its latest strikes against Iran. The benchmarks for steel on the Shanghai Futures Exchange were mixed. Rebar rose 0.1%, while hot-rolled coil edged up by 0.12%. Wire rod fell 0.51%. Stainless steel dropped 1.34%.
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Sources say that Indian BPCL, and Japan's Taiyo Oil purchase US crude through tenders.
According to sources in the trading world, India's Bharat Oil Corp and Japan's Taiyo Oil purchased 'crude' from the United States this week, as refiners sought to diversify their supplies amid the Middle East conflict. Four sources claim that BPCL purchased West Texas Intermediate crude oil from Vitol. The refiner has booked an Aframax Tanker that can?carry up to 600,000.0 barrels of crude oil, according to two of the witnesses. They added that the oil was purchased at a price premium of?around 6 per barrel over dated Brent. A separate trader reported that Taiyo Oil purchased 2 million barrels for delivery early in October at a price premium of about $6 per barrel over ICE Brent. Companies do not normally comment on commercial issues. Asian refiners?reduced their purchases?of U.S. oil following the U.S. Iran ceasefire agreement. Supply risks have increased this week after fresh attacks by both sides, and Donald Trump's announcement on Wednesday that he believes the ceasefire agreement is "over".
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Gold prices fall as inflation fears are rekindled by Middle East hostilities
Gold prices dropped?on Friday, hovering around a 'one-week low,' as renewed U.S. - Iran hostilities lifted crude, and re-ignited fears about inflation and longer-term interest rates. The U.S. Military said Wednesday that it had launched new strikes against Iran in order to keep the Strait of Hormuz available for shipping. This triggered Iranian attacks on Kuwait, and Bahrain. By 0522 GMT spot gold had fallen 0.2% to $4.068.77 an?ounce, after Wednesday's drop to its lowest level since July 1. U.S. gold?for August was down 0.1% to $4,077.60. The Federal Reserve is expected to reprice a second rate hike as early as Q1 of next year, according to Kelvin Wong. After yesterday's skirmishes, the temporary ceasefire between U.S.A. and Iran could be in a shaky position right now. Things could become very fluid again. The CME FedWatch tool shows that the markets are pricing in a 68% probability of an interest rate increase?in September and an 87% likelihood of an increase by January 2027. The Fed's Kevin Warsh led the way to a more streamlined policy statement, despite concerns about price increases spreading and requiring interest rate 'hikes'. Gold is often seen as a hedge against inflation, but high interest rates can weigh down on this non-yielding investment. Bank of America has reduced its 'average gold forecast for 2026 by 14%, to $4,360 per ounce. This is due to a more hawkish Fed. Palladium rose 0.9% to 1,224.12, while palladium fell 0.5%. (Reporting and editing by Subhranshu Sahu and Harikrishnan Nair in Bengaluru.
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China and Taiwan prepare for Typhoon Bavi - possibly the strongest storm ever.
Typhoon Bavi, which blew near 124 mph and had winds of?200 kph on Thursday in the southeast of Taiwan, was causing havoc for China and Taiwan. Parts of China are still recovering from Typhoon Maysak. Authorities in Taiwan warned residents to prepare for the strongest typhoon since 2024. According to China's National Meteorological Centre, Bavi will pass north of Taiwan and skirt the eastern Fujian Province before landing in China on Saturday night. China is still in shock after Typhoon Maysak ravaged the southwest region of Guangxi. Local officials said that the flooding in Guangxi caused by the storm killed at least 39 people. They added that nine people remain missing in the entire region. Taiwan's Central Weather Administration Forecaster Jason Chang said that Bavi will be the biggest storm to hit Taiwan by size since 1987. He added that storms this size are "fairly uncommon in recent years". Scientists attribute climate change to the increasing frequency and intensity of destructive weather events in China, Japan, and Taiwan. This year, the emergence of El Nino is expected to increase temperatures and fuel more intense and frequent typhoons. According to AccuWeather's commercial weather forecast service, if Bavi keeps its predicted intensity, it will be the strongest typhoon (as hurricanes are called) in the Asia-Pacific since Super Typhoon Kong Rey, which hit the region in 2024. According to AccuWeather's international forecasting expert Jason Nicholls: "Some loss in wind intensity will be expected starting Thursday. However, Bavi is still a dangerous storm that will impact Taiwan and eastern China later on Friday or Monday." SEEKING SHADOWS FROM THE STORM Residents queued up for sandbags and farmers harvested rice as the weather remained good. Chen Ming-hui (60), captain of a 3 metric ton fishing vessel, expressed his hope that the typhoon will track further north, avoiding a direct strike. He recalled how storms in the past had sunk vessels and flooded a fishing town. Don't be fooled now by the calm and pleasant weather. Chen, looking at the ropes on his boat, said that a storm such as this one could be terrifying. The Japanese Meteorological Agency warned residents in the Okinawa Prefecture about 111 km (68 mi) southwest of Suao to be on high alert for violent winds, landslides and flooding on Friday and Saturday. In central Hubei Province, China, the remnants of Typhoon Maysak caused at least two inland typhoons and major flooding. According to Chinese state media, during the floods, more than 100 animals, including two zebras and four porcupines as well as dozens of parrots of various types, a few North American raccoons and eight pheasants, were able to escape from Guigang Zoo. Global Times reported that three lions died at the zoo in floodwaters caused by Maysak. Wang Liyuan was quoted by the zoo operator as saying that a sika deer had been rescued from drowning in floodwaters. Brown bears and wolves were also rescued, but they were in poor shape after almost drowning. BRACING for?IMPACT Japan Airlines announced that it cancelled 48 domestic flights for Friday due to the typhoon. This affected an estimated 7,610 people. ANA announced that it would cancel 34 domestic flights on Friday, affecting approximately 1,800 people. We should pay attention to Bavi, as it has?spent a very long time intensifying in the open Pacific. It is absorbing energy from the warm ocean, and accumulating a large amount of moisture," Xiangbo, Xiangbo, Xiangbo, Xiangbo, Xiangbo, a research scientist at Imperial College London, specializes in tropical cyclones. The damage that could occur if it made landfall, or got close to coastal areas, would be catastrophic. Feng said that a small change in Bavi’s track could have an important impact.
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Palm oil falls due to continued uncertainty in Indonesia biodiesel allocation
Malaysian palm oil futures declined on Thursday as a result of the?uncertainty about Indonesia's allocation of biodiesel, but the stronger crude oil prices capped the losses. By midday, the benchmark?palm-oil contract on Bursa Derivatives Exchange for September delivery had shed 20 ringgit (0.43%) to 4,589 Ringgit ($1,125.58). Anilkumar bagani, commodity researcher at Mumbai-based Sunvin Group, says that the lack of clarity regarding Indonesia's B50 allocation has caused palm oil to lose its upward momentum. The allocations of participants who are subsidised or not, and the volumes involved in total, will be key factors for determining the increased demand for palm oil from the B50 program. Bagani said that a surge in energy prices, linked to renewed tensions in Middle East, and some 'palm oil purchasing interest' from India and China in this week helped cushion losses. Dalian's palm oil contract, which is the most active contract, increased by 0.33%. Chicago Board of Trade soyoil prices rose 0.04%. As it competes to gain a share in the global vegetable oil market, palm oil closely tracks the price fluctuations of competing edible oils. Oil prices rose by more than 1% following the U.S.'s?new strikes against Iran. This has dented hopes for talks that would?end the?war, and the full reopening of Strait of Hormuz - a chokepoint of one-fifth of global oil supplies before the war. Palm oil is a more attractive feedstock for biodiesel due to the stronger crude oil futures. The palm ringgit's currency has weakened by 0.07% compared to the dollar. This makes?the commodity more affordable for buyers who hold foreign currencies. Technical analyst Wang Tao stated that palm oil could extend its?gains up to 4,664 Ringgit per metric tonne, riding a wave c.
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Malaysia's Perak mills are overwhelmed by palm production, despite fears of El Nino.
Malaysia has seen a rise in palm oil production as mills struggle to process the influx of fresh fruit bunches. The surge has?commenced despite earlier concerns that?El Nino might curb production in the country. A survey predicts that June production will increase 8.9% compared to the previous month to reach 1.65 million tons. The highest June inventory level ever recorded is likely to be reached. Sin Chew Daily reported earlier that the palm oil mills in Perak could not absorb the bumper harvest of the state because the crude?palm?oil storage tanks were full. David Lim Lian Keong is the president of the Palm Oil Millers Association. He said that the issue in Perak was caused by a seasonal, localised spike in FFB production, which?temporarily surpassed the processing and logistical capacity of mills within that catchment area. He stated that the state "doesn’t have many refineries" to begin with. Lim stated that some mills in Perak were temporarily congested, with trucks queuing up. Some mills also limited the purchase of FFB from smallholders?in specific areas. Lim, however, said that this was only a local problem and did not occur across the entire country. He said that "other?key regions" such as Kedah and Selangor have not yet reached their peak production cycle and their mills have enough excess capacity at the moment to process all FFB incoming. Malaysia's crude oil palm production amounted to 20.28 millions metric tonnes last year, with Perak accounting for 2,030,201 tons or 10% of the total. He said that once the 'local peak' passes and the FFB volumes normalise, he believes things will return to normal. (Reporting and editing by Thomas Derpinghaus; Ashley Tang)
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London copper firms' market gauges the macro impact of Mideast strikes
The price of copper in London rose on Thursday as the market assessed the impact of the latest threats to calm in the Persian Gulf on macroeconomic conditions. Benchmark three-month copper on the London Metal Exchange rose 0.62% to $13,247.5 per metric ton at 0300 GMT. The Shanghai Futures Exchange's most traded copper contract fell by 0.78%, to 102200 yuan (about $15,035.38) per ton. This was a reduction from the 1.32% drop earlier in the day. In a recent note, Chinese broker Everbright Futures stated that the resurgence in Middle East conflict had?led to short term trading based upon inflation and interest rates logic. Copper prices fell on Wednesday, after U.S. president Donald Trump declared that the Memorandum of Understanding?signed with Iran for the end of the Gulf Conflict was "over", and the two countries exchanged attacks. The fighting has pushed up oil prices and raised concerns about macroeconomic conditions, particularly inflation and the possibility of higher interest rates in the U.S. for a longer period. Metals dependent on growth have been impacted by fears that interest rates will rise, reducing economic activity. The manufacturers have been squeezed by higher input costs. Data released on Thursday revealed that the?inflation rate of Chinese producers reached a record high in June. Minutes of the U.S. Federal Reserve meeting in June, released overnight, showed that policymakers were increasingly concerned about inflation. Aluminium prices fell slightly in other places. The price of aluminium on the LME fell by 0.11% while the price on the SHFE dropped by 0.76%. Aluminum was supported by a waning inventory and fears about disruptions to the return of supply from Middle East. This region accounts for around 9 percent of global aluminum refining capacity. Zinc?added 0.4 %, lead fell 0.19%, Nickel?lost 0.72 % and Tin gained 0.72%. On the SHFE, tin fell 1.56%, while lead dropped 0.34%. Nickel also lost 0.77%. $1 = 6.7973 Chinese Yuan Renminbi (Reporting and editing by Ronojoy Mazumdar).
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Gold drops as Middle East hostilities resurrect inflation woes
Gold?fell? on Thursday and hovered?near a?one-week-low set in 'the?previous?session, as renewed U.S. - Iran hostilities raised oil prices, reigniting concerns about inflation, and longer-term interest rates. Gold spot fell by 0.4%, to $4,060.46 an ounce, at 0343 GMT. It had dropped to its lowest level since July 1, on Wednesday. U.S. Gold futures for delivery in August were down?0.3% to $4,069.80. The U.S. Military said Wednesday that it had launched new strikes against Iran in order to keep the Strait of Hormuz accessible to shipping. This triggered Iranian attacks on Kuwait, Bahrain and Kuwait as the latest escalation of the war. The oil price continued to rise on Thursday. The Federal Reserve is expected to reprice a second interest rate hike as soon as the first quarter of next year. Kelvin Wong is a senior analyst at OANDA. After yesterday's skirmishes, the temporary ceasefire between U.S.A. and Iran could be in a weakened position right now. Things could become very fluid again. The CME FedWatch tool shows that the markets are pricing in a 68% probability of an interest rate increase in September and an 87% likelihood of one in January 2027. The U.S. Central Bank's last meeting was also marked by concern about 'high inflation'. Officials followed Fed Chairman Kevin Warsh to issue a more streamlined policy statement despite concerns that prices were increasing and might require an interest rate increase. Gold is often viewed as an inflation hedge. However, high interest rates can weigh down on this non-yielding investment. Bank of America has reduced its 2026 gold average forecast by 14%, to $4360 per ounce. This is due to a more hawkish Fed. The price of spot silver dropped 0.9%, to $57.77 an ounce. Meanwhile, platinum increased 0.8%, to $1591.13, and palladium rose 0.8%, to $1223.95. (Reporting and editing by Subhranshu Sahu, Harikrishnan Nair and Swati verma from Bengaluru)
Oil prices soar on renewed Gulf hostilities, sending Asian stocks into a tailspin
Asian shares shook on Thursday, as a rally for semiconductors lost momentum. Meanwhile, oil prices soared after a resumption in hostilities in Gulf sparked inflation fears and hammered bonds.
The U.S. military has completed another round against Iran, causing oil prices to rise for the third consecutive session. The President Donald Trump announced on Wednesday that the interim agreement to end the conflict with Iran was "over". He later clarified, however, that he does not expect to return to full-blown war.
Brent crude futures rose by 1%, to $78.85 per barrel. They were up 9% in the past week and crossed above $80 per barrel for first time since June 22,
Fed funds futures indicate that policy will be tightened by 38 basis points this year. This is back to the level they were a week earlier.
Wall Street fell initially on Trump's remarks, but recovered from session lows. The Nasdaq managed a 0.2% gain. Nvidia, the chip giant, rose 3.6% after media reports that China will allow its top AI companies to purchase a limited amount of Nvidia's H200 chips.
Stock futures for the entire region rose 1%. Wall Street futures are about 0.2% higher.
The MSCI broadest Asia-Pacific index outside Japan reversed gains earlier and was last down 0.5%, as the rally of chipmakers failed. Japan's Nikkei rose 1.3% to end a three-day loss streak.
South Korea's KOSPI rose as high as 4%, before turning 1% lower. Gains in Samsung and SK Hynix waned.
Chris Weston is the head of research for Pepperstone. He said: "At this point, the market appears to be skewed in favor of the idea that the conflict (with Iran) will de-escalate and negotiations around the memorandum begin again."
Traders understand that they must remain open-minded. The situation is fluid and it's difficult to make a decision about timing.
The minutes released by the Fed revealed that policymakers were concerned about rising inflation. Some participants stated that there was already a good case for?raising borrowing costs before agreeing to keep rates the same last month with their colleagues.
Asia has been hit by the global bond crisis. The yield on Japanese 10-year government bonds reached?2.9% - the highest level since 1996 - while Australia's 10-year bond yields hit a monthly peak of 4.933%.
After rising by 4 basis points overnight, the benchmark 10-year U.S. Treasury bond yields rose 1 basis point on Thursday to 4.5772%. The yields are up by 10 basis points this week.
The currency markets were largely muted. The dollar failed to hold onto its yield support and fell 0.1%, to 162.41 Japanese yen. The dollar was only 0.1% away from its 40-year high of 162.84 yen, as speculators continue to be wary of Japanese interventions.
The euro rose 0.1% to $1.1426 while the pound sterling held steady at $1.3396. This is just below its three-week high of $1.341.
Gold fell 0.2% to $4,067 per ounce. Reporting by Stella Qiu, Sydney; Editing and production by Lincoln Feast & Kim Coghill
(source: Reuters)