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Prices of EUROPE GAS have fallen by over 10% following the news that Iran and Israel had reached a ceasefire
The wholesale gas prices for the Dutch and British front months fell by more than 10% Tuesday morning, following the news that Iran had agreed to a ceasefire with Israel. This removed the risk premium that the market had built in due to potential disruptions of oil and gas supplies. LSEG data shows that the benchmark Dutch front-month contract for the TTF hub dropped by 4.61 Euros to 36.63 Euros per megawatt hour (12.41/mmBtu) or 12.41 euros/MWh by 0818 GMT. The contract has fallen to its lowest price since June 12, the morning of the first Israeli strike on Iran. A trader explained that Tuesday's decline was due to the news from Israel that it had agreed to U.S. president Donald Trump's proposal of a ceasefire between Iran and the United States. The daily market report by consultancy Auxilione stated that "at the open today, we have seen a tremendous sigh relief as more than 10% of the price levels were eroded." They warned that any breach of the ceasefire by either party would immediately bring back concerns to the market. Israel said that Iran had already violated the ceasefire, and it would be responding. Gas prices were at an 11-week high before due to fears that hostilities would lead to the closure of the Strait of Hormuz and lock in 20% of the global supply of liquefied gas (LNG). The oil price also fell sharply on Tuesday. Arne Lohmann, GRM's chief analyst said that the talk of a Hormuz Strait closing and a broader war threat has faded completely for the moment. A trader stated that gas prices could fall even lower, to levels not seen before the war, due to the high LNG supply, and the need to unwind some long positions by market participants. The Dutch day-ahead contracts fell by 5.25 euros, to 35.92 euro/MWh. Meanwhile, the British contract dropped 10.75 pence, to 84.50 pence per therm. The benchmark contract on the European carbon markets was up 0.31 euros at 73.58 euro per metric ton. Nora Buli, OSLO, and Nina Chestney edited the story.
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China's demand for iron ore cushions the fall, despite a firm outlook on Australia's supply.
Iron ore futures ended a three-day rally Tuesday, despite a stronger outlook for supply from Australia's top producer. However, the resilient steel demand in China helped to cushion the fall. The September contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 0.42% lower, at 703 Yuan ($97.97). As of 0725 GMT, the benchmark July Iron Ore traded on Singapore Exchange fell 0.71% to $93 per ton. Rio Tinto, world's biggest iron ore producer enters a joint venture to develop the Hope Downs 2 Project in Western Australia. Rio announced in a press release that the two pits of iron ore will have an annual combined production capacity totaling 31 million metric tonnes. Chinese consultancy Mysteel reported that iron ore exports from Australia and Brazil increased by 8.8% during the week of June 16-22. This is the highest level since June 2024. Mysteel data showed that hot metal production, which is a measure of iron ore consumption, increased 0.24% week-on-week to 2.422 millions tons as of 20th June. Analysts at ANZ said that "volumes have remained around 2.4 millions tons since April. This suggests resilience on the largest steel market in the world." Hexun Futures says that the market has not yet priced in the expected lower seasonal demand. Coking coal and coke, which are used in steel production, fell by 1.94% each and 2.03% respectively. The benchmark steel prices on the Shanghai Futures Exchange have fallen. The price of rebar, hot-rolled coil and wire rod dropped by 0.5%. Stainless steel fell 0.28%. $1 = 7.1757 Chinese yuan (Reporting and editing by Lucas Liew, Michele Pek and Sherry Jab-Phillips).
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After the Iran-Israel truce, caution is prevailing.
The London Metals Exchange (LME) and Shanghai Futures Exchange (SFE) saw copper prices rise on Tuesday, as caution reigned following the announcement by U.S. president Donald Trump of the ceasefire between Iran and Israel. As of 0703 GMT, LME's three-month copper rose 0.52% to $9,717.5 a metric ton, and SHFE's most-traded Copper gained 0.4% to $78,640. Trump stated in a post to his Truth Social website that a "complete" and "total" ceasefire would be implemented between Israel and Iran with the aim of ending the 12-day conflict. The commodity market has been unpredictable this year, and traders and investors are likely to wait and see how things turn out. As news of a ceasefire eased fears of supply disruptions, the U.S. Dollar fell and oil dropped to its lowest level in over a week. The greenback price of commodities is cheaper for buyers who hold other currencies. LME Aluminium fell 0.6%, to $2573 per ton. On Monday, it had reached a three-month peak on fears that the conflict could push up energy costs and disrupt supply. SHFE aluminium fell 0.51% to 20 315 yuan. LME Nickel rose 0.48%, to $14,875 per ton. Lead grew by 0.37%, to $2.010.5. Zinc climbed 0.07%, to $2.689; tin fell 0.06%, to $32,675. SHFE nickel fell 0.44% to reach 117,450 Yuan. Zinc rose 0.73% to 22090 yuan. Lead increased 0.5% to 16955 yuan. Tin gained 0.3% at 263,800. Click or to see the latest news in metals, and other related stories. Data/Events (GMT 0800 Germany Ifo Business climate, current conditions, expectations New Jun 1400 US consumer confidence Jun ($1 = 7,1773 Chinese Yuan) (Reporting and editing by Sumana Niandy, Vijay Kishore, Hongmei Li)
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More storms are on the horizon
After days of rain, multiple rivers in China's flood hit province of Guizhou burst their bank. This is the southwest end of the seasonal rain belt which stretches from Japan to China. Congjiang, and Rongjiang, both riverside cities with populations of more than 300,000 people, told their residents to leave the low-lying and fast-rising areas and along the rivers' banks. Since last week, the East Asia monsoon has been bringing heavy rains to parts of China. This is breaking records for rainfall. Scientists warn that while China has experienced summer flooding before, climate change will bring more rain and heavier rainfall. Government officials warn that massive flooding could lead to "black swan events" with severe consequences, such as dam collapses. Local media reported that a viaduct fell on a highway leading to Rongjiang after a landslide knocked down concrete columns. One section of road was sent crashing into the hillside. Video shared on social networks showed a cargo truck whose driver was perched dangerously over the edge as the section in front of it collapsed. Many highway sections in Guizhou were affected by landslides and cave-ins. Flooded streets in cities like Rongjiang paralysed traffic, and low-lying zones including underground garages and basements of shopping malls were submerged. State meteorologists predict that more rain will fall in the coming days. They warn provinces including Guizhou which have been hit by storms that overlapped to be on guard. On Tuesday, temperatures in provinces to the north of the seasonal rainfall belt, such as Henan and Shandong, as well the capital Beijing were just below 40 degrees Celsius. In a report released on Monday by the World Meteorological Organization, under the United Nations, it was noted that Asia is warming twice as quickly as the average global rate, causing more extreme weather conditions and a heavy burden on the region. (Reporting and editing by Saad sayeed; reporting by Ryan Woo)
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Wall Street Journal, June 24,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. C&S Wholesale Grocers has agreed to purchase SpartanNash, for approximately $1.77 billion including debt. The company is looking to expand their supply chain while keeping grocery prices low, as inflation worries are on the rise in America. After the companies agreed not to collaborate on boycotts based on political motivations, the U.S. Federal Trade Commission has allowed Omnicom Group to purchase Interpublic Group. New York plans to build the largest nuclear power plant in the United States, marking its first new major facility for more than 15-years. It is also a test of Donald Trump's promise that he would expedite permits for such projects. U.S. Semiconductor Supplier Wolfspeed signed a restructuring agreement with top creditors in order to reduce debt of approximately $4.6 billion through bankruptcy. Hormel Foods announced that former CEO Jeffrey Ettinger would return to Skippy Peanut Butter as interim CEO for 15 months beginning July 14. The U.S. Supreme Court cleared the way on Monday for the Trump Administration to quickly deport certain migrants back to their home countries.
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Adani, the Indian billionaire, says that no one in his group has been charged with US FCPA violations
Adani Group chairman Gautam Adani denied on Tuesday any wrongdoing as a response to U.S. accusations of bribery. He told shareholders that no one from the group had been charged under U.S. Foreign Corrupt Practices Act. Adani stated at the annual general meeting of the company that "despite all the noise no one in the Adani Group was charged with violating FCPA or conspiring against justice." He said that the Adani Group had never given up, despite the constant scrutiny and storms. Adani, along with several other executives, were indicted by U.S. authorities on November 28, alleging that they had paid bribes for Indian power contracts, and misled U.S. investor. The Adani Group rejected the allegations and said that it was cooperating in legal proceedings. Since Hindenburg Research 2023, which alleged that the group was using tax havens in an improper manner, the Securities and Exchange Board of India has been investigating Adani Group and 13 of its offshore investors. The group has always denied any wrongdoing. The company is building the largest renewable energy park on earth in Khavda (western India) and aims to have 50 gigawatts of renewable power installed by 2030. Adani Group said it expects a combined total of 100 gigawatts in power generation by 2030 with its thermal, renewable, and pumped-hydro assets. Adani announced an unprecedented capital expenditure plan. The group said it expects to spend between $15 billion and 20 billion dollars annually in the next five-year period. Sethuraman NR in Bengaluru and Hritam Mukerjee, editor Anil D'Silva.
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How Trump's metals tariffs affect the packaging on shelves
Andy Russick sells cans of fruit and tomatoes to major U.S. supermarkets, such as Kroger, and hospitals and schools. He shares the stated goal behind U.S. president Donald Trump's war on trade - combating cheap Chinese imports. When U.S. tariffs were doubled on steel and aluminum imports to 50%, on June 4, Andy Russick's company, Pacific Coast Producers, was collateral damage. Since 2017, Chinese fruit cocktail, vegetables, and other canned food imports from Southeast Asia and Europe are flooding U.S. grocery shelves, undercutting comparable products made in the United States. Russick stated that this trend will accelerate due to the recent round of tariffs imposed on the metal. The cost of specialty steel, which is used to preserve foods, has risen by about 6% at Pacific Coast in Lodi, California, as a result of these tariffs. "We are getting caught in this brush fire," Russick said, Vice President of Sales and Marketing at Pacific Coast. Pacific Coast is a major supplier of long-life white label products in the U.S. Steel and aluminum, metals that are used to package food, beverages, and personal care products such as shaving cream, are now more expensive, and forcing companies to consider alternatives, like fiber-based, glass, or plastic containers. The manufacturers of alternative packaging also see an opportunity to increase their business. Russick plans to switch some packaging in the coming years to aseptic cartons like those made by Swedish-Swiss Tetra Pak or Swiss-listed SIG Group. They also plan to sell more sauces to restaurants in foil pouches that are cheaper to reduce costs. Coca-Cola's CEO James Quincey said to investors in February that if the price of cans increased, they could focus more on plastic. "The trade conflict is fueling the discussion that we need aluminum out of beverage packages," SIG Group CEO Samuel Sigrist said, whose firm offers aluminum-free Aseptic cartons. Campbell Co, whose soup cans have become famous works of art, said that it is working to reduce the cost increase from tariffs. It will also continue to use steel cans as packaging. Scott DeFife is the head of the U.S. Glass Packaging Institute which represents these manufacturers. Zak Stambor is an analyst at eMarketer. "In the long term, companies might have to rethink packaging strategies." Pacific Coast's Russick plans to pass on to its customers $8 to $10 million of new costs resulting from tariffs imposed on specialty steel used in cans. The company expects this figure to rise to $40 million by next year. Russick stated that the price of cans for the Pacific Coast harvest could increase by as much as 24% due to tariffs. HUDLES These possible transitions from steel and aluminum to aseptic boxes or glass are not without their logistical and financial challenges. Glass bottles still tend to be more expensive than aluminum bottles, mainly because they are heavier. Aluminum cans are also a popular choice for some beverages in the United States: according to The Beer Institute, 64% of beer will be sold in aluminum cans by 2023. These cans are common in other fast-growing categories of beverages: energy drinks such as Molson Coors Zoa, still water brands like the wildly popular Liquid Death and pre-mixed cocktail. Jack Buffington is the director of supply-chain and sustainability for First Key Consulting, which provides advice to the brewing, beverage and beverage industries. According to the Aluminum Association, the average beverage can in America contains 71% recycled material. This figure could rise if U.S. citizens practiced more diligent recycling. Fernando Tennenbaum was Anheuser-Busch InBev’s chief financial officer in May. Before aluminum tariffs were doubled, he said that the impact on the company's finances of the levies applied to cans "was not relevant". He said that AB InBev does not plan to change its packaging. The vast majority of cans are sourced in the U.S. The company declined comment for this article. Coke, for example, may be able to respond more easily to the aluminum tariffs because they already use different packaging. Buffington explained that brewers who have closed bottling lines in order to concentrate on cans will have to invest heavily to retool. According to Coca-Cola’s environmental report for 2023, plastic packaging already accounts for nearly half of the global packaging, compared with 26% aluminum and steel. According to the company, only 8% of PepsiCo products in 2023 were packaged with aluminum. Coca-Cola & PepsiCo have not responded to our requests for comment. Krones, a leading packaging technology company in Germany, which produces glass bottling systems, has said that it hasn't seen any major shifts towards glass. DeFife, of the U.S. Glass Packaging Institute, said that a rapid, widespread shift to other packaging forms is unlikely in an uncertain environment, as companies are reluctant to make major financial or strategic choices based on policies which they believe could change. He said: "I think that some people are waiting to see if anything sticks or not." "A 30-day period is not going to threaten your supply chain right away."
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MORNING BID EUROPE - Trump touts a 'forever ceasefire' and oil slides
Stella Qiu gives us a look at what the future holds for European and global markets. Donald Trump, the U.S. president, surprised the markets on Monday night by announcing that Israel and Iran agreed to an immediate ceasefire. This could end a 12-day conflict. According to his words, the ceasefire will last "forever". Investors will surely hope that it is real and holds. Only a few days ago, the U.S. began a military strike against Iran that could have drawn it into a costly war. The oil prices fell by almost 3% Tuesday after a drop of almost 9% overnight, as the immediate danger to the Strait of Hormuz shipping route appeared to be lessening. The U.S. Crude Futures have returned to $66.80 a barrel, the lowest price since about June 11, before Israel began its attacks against Iran. This is good news for the global inflation rate, and will help central banks to control inflation. The situation is fluid. Iran was still launching missiles towards Israel. Israeli media reported that a building was struck and three people died in the missile attack on Beersheba. A senior Iranian official confirmed earlier that Tehran had agreed on a ceasefire. However, the country's Foreign Minister said there would not be a cessation in hostilities until Israel stopped its attacks. S&P futures and Nasdaq Futures both rose by 0.7%. The EUROSTOXX futures are pointing to a strong recovery in European stock markets. The MSCI index for Asia-Pacific stocks outside Japan rose 2.1%, while Japan's Nikkei gained 1.1%. South Korean stocks hit their highest level since September 2021. Dollar, which was under pressure after the Middle East conflict and had been able to find some safe haven bids, fell again by 0.5%, falling from a six-week high of 148.45 yen. Investors are now focused on the upcoming appearance of Federal Reserve Chair Jerome Powell before Congress. Due to the inflationary effect of Trump's trade tariffs, the Fed hasn't moved on interest rates yet this year. Some Fed officials have broken ranks with Powell whose hawkish stance on rates has enraged Trump. Michelle Bowman, a Fed official, said that she is open to lowering rates in July. Governor Christopher Waller also said that he will consider doing the same next month. There will be more Fed officials speaking tonight. New York Fed president John Williams is scheduled to give a keynote speech in New York, and Cleveland Fed president Beth Hammack is due to speak about monetary policy at London. Central bankers in Europe are also busy. Bank of England Governor Andrew Bailey is scheduled to make public appearances at London's City Hall and a number of ECB officials are also set to give speeches. The following are the key developments that may influence Tuesday's markets: Fed Chair Jerome Powell makes a public appearance before Congress along with other Fed officials, including New York Fed president John Williams, Cleveland Fed president Beth Hammack, and Boston Fed pres. Susan Collins. The NATO summit is underway in Hague Andrew Bailey, Governor of the Bank of England and Huw Pill, Chief Economist of the Bank of England appear at a Conference on Britain's Return to Gold Standard in 1925. Germany IFO Business Survey Confidence in U.S. consumer spending, according to the Conference Board Canadian CPI for the month of May
REN21: Record renewables capacity is short of global target
The Paris-based think tank REN21 released a report on Tuesday that showed a record 740 gigawatts in renewable energy capacity added globally last year. However, this is still not enough to reach the global goal of triple renewable capacity by 2030.
Why it's important
At the COP28 U.N. Climate Conference in 2023, a target was set to triple the amount renewables like wind and solar so that a limit of 1.5 degrees Celsius (2.7 Fahrenheit), warming this century can be achieved.
Analysts who track progress say that the world isn't on track to triple its capacity. They also say that the 1.5C limit is out of reach.
By the Numbers
The REN21 report revealed that the trajectory shows a shortfall in the target of 6.2 terawatts, which is greater than the total amount of renewables installed to date.
Solar photovoltaics accounted for 81% new renewable energy capacity in the last year, as rooftop solar in developing countries increased and technology costs continued their decline. Solar PV is currently the only renewables technology that will be able to contribute to the global tripled capacity target.
CONTEXT
Many countries have rolled back climate change measures in the past year or will do so by 2025. The U.S. has withdrawn from the Paris Agreement and New Zealand reversed the ban on offshore oil exploration.
Banks and oil and gas companies have also reduced their investments in energy transition. Even before President Donald Trump's tariff actions this year, trade measures also limited renewable development by 2024, as the West sought to protect its industries from cheap Chinese competition.
KEY QUOTE
"We are deploying solar and wind in record numbers but we have not built the systems required to transition to a renewables based economy," Rana Adib said, executive director of REN21.
She added that "without coherent policies, coordinated plans, and resilient infrastructure, including grids, storage, and other components, even record deployments cannot deliver rapid and effective transformation." (Reporting and editing by Barbara Lewis; Nina Chestney)
(source: Reuters)