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Iron ore prices rise on account of high freight rates and energy prices
Iron ore futures rose on Monday due to higher freight rates. Other steelmaking ingredients such as coking coal and coal also gained a lot of ground. This is because countries have been booking coal cargoes in order to meet their energy needs. The May contract for iron ore on China's Dalian Commodity Exchange traded at 819 Yuan ($118.57), a difference of 0.92%. As of 0706 GMT, the benchmark April iron ore price on the Singapore Exchange had increased by 0.02% to $108.25 per ton. Shanghai Metals Market reported that despite the Middle East conflict?iron ore, coke and coal substitution energy have held up well. This is due to rising ocean freight costs and the?transmission of coal-coke energy. The note stated that the market was cautious as BHP negotiated with China Mineral Resources Group - a state-backed iron ore buyer – and some investors took advantage of this. Steelhome, a consultancy, reported that the inventory of iron ore at major Chinese port cities fell by 0.74% on a weekly basis as of March 20. This is due to heightened hot metal production. The severe tropical cyclone Narelle, which swept Australia's northeast coast in the past few days, has stoked fears that iron ore supplies could be disrupted. According to Australia's Bureau of Meteorology, Port Hedland is a major iron ore hub and will experience strong winds during this week. South Africa has imposed steep import duties on structural steel imported from China, after finding evidence that dumping had occurred. This is according to a government notification dated March 19. According to the South African Iron & Steel Institute, imports account for about 36% (or 73%) of South Africa's total steel consumption. DCE coking coal &?coke increased by 10.97% & 6.92% respectively. Benchmarks for steel on the Shanghai Futures Exchange rose. Hot-rolled coils rose 0.97%; wire rods grew 1.86%, and stainless steel firmed by 0.25%.
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South Korean stocks tumble and the won hits a 17-year low due to Mideast conflict
South Korean shares dropped more than 6% Monday, closing at their lowest levels in two weeks. The won also fell to a 17-year low as Middle East tensions dampened the appetite for riskier investments. U.S. president Donald Trump and Iran have threatened to escalate the war by attacking energy installations in the Gulf. This could lead to a wider range of hostilities, which would deepen regional crises and increase concerns on global markets. The benchmark KOSPI closed at 5,405.75, down 375.45 or 6.49%. This is the lowest it has been since March 9, and also the largest daily percentage drop since March 4. Even after the trading limit was activated earlier in the session, the index continued to lose even though it had been a loss-making index. This was the fourth sidecar curb triggered this month because of the increased volatility caused by the Middle East conflict. The dollar was trading at 1.517.3 won, a drop of 0.83%. This is the lowest rate since March 2009. Huh Jaehwan, analyst at Eugene Investment & Securities said that "hopes are fading" for a quick end to the war. "We do not have to be too pessimistic, because Asian countries enjoy a better position now than ever before due to their robust tech industries. The government has also planned an additional budget. Huh stated that the market has lost patience. Budget Minister nominee Park Hong Keun announced on Monday that the South Korean government will draft a supplementary buget as soon as it is possible. This comes a day after both the government and ruling party had agreed to?extra expenditure of around 25 trillion won (16.58 billion dollars) in order to help those affected by the surging oil price. Shin Hyun Sung, the new head of the Bank of Korea appointed on Sunday, stated that he would pursue a balanced policy, taking into consideration inflation, growth, and financial stability, given the increased market volatility, and economic uncertainty, following the Iran War. Only 53 of the 927 issues traded on the stock exchange advanced, while 864 declined. Among the index heavyweights chipmaker Samsung Electronics dropped 6.57%, and SK Hynix fell 7.35%. Battery makers and automakers were also down. The largest single-day investment by retail investors was 7 trillion won worth of shares. Foreigners led the loss on the index as they sold shares worth 3.7 trillion Won, and institutional investors were also net sellers. KOSPI has dropped 13% in the first month of this year. The KOSPI is still up by 28% for the year. The benchmark yield on the 10-year note in the country jumped 22.2 basis points, to 3.880%. This is its highest level since November 2023.
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Fortescue warns that the Iran war could increase fuel prices by billions of dollars for iron ore miners.
A senior executive at Australia's Fortescue warned that diesel prices could continue to rise and iron ore miner costs could increase by billions. The U.S. and Israeli war?on 'Iran? has almost stopped shipments across the Strait of Hormuz. This has sent oil and gas prices up and tightened the supply of diesel fuel, a key transport fuel in the mining industry. Dino Otranto is the metals and operations CEO at global miner Fortescue. He said in an interview that a 10-cent increase in diesel prices would cost us $70 million. If you look at the top four competitors, each 10-cent change has an impact of?half a billion U.S. dollars on their cost structure. He said that the company sources most of its fuel in 'Southeast Asia', but he was "comfortable with" current fuel stock, so long as war in 'Iran doesn’t escalate. Otranto, the world's fourth largest iron ore supplier, has set some of Australia's biggest miners' most ambitious targets for decarbonization. This Otranto claims helped them save on fuel costs. Fortescue will save $100 million in diesel costs over the next year, he said. The company plans to reduce consumption by one billion liters equivalent of diesel over the next several years. He said, "We announced an aggressive decarbonization agenda a few years ago." Otranto said that the plan had been criticized for a long time, but now, things are changing. "Our shareholders have told us to move faster," he added. Otranto said that Fortescue was in contact with China's iron ore state buyer, China Mineral Resources Group. He described the discussions as "dynamic" and not confrontational. He refused to comment on the negotiations regarding supply terms for this coming year.
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MORNING BID EUROPE - Of course Trump would have COUNTDOWN
Wayne Cole gives us a look at what the future holds for European and global markets. Now we have a Middle East war, Iran with ballistic missiles and a terrifying deadline. How very reality television. There will be a red timer in the corner of some news channels screen, counting down the seconds. On Saturday evening, Trump announced on social media that Iran had 48-hours to open the Strait of Hormuz or the U.S. was going to "obliterate' Iran's nuclear power plants. Trump gave Iran a deadline for Monday evening of 7:45 pm EDT (2345 GMT), ruining the morning of Tuesday in Asia. It appears that the nuclear power plant would be the first target, as it is the largest. This would be?usually prohibited by international law, and could cause a major ecological disaster. Iran threatened to "completely close" the Strait of Hormuz and to target water and energy infrastructure in neighboring countries. Desalination plant strikes would be devastating. Brent has been fluctuating between higher and lower levels, but is currently up 0.5% after a very turbulent trade. This could be due to the U.S. allowing the sale of more Iranian oil and Russian oil on tankers already, which is meeting the immediate demand. The growing threat of long-term shortages is pushing oil futures downwards. September Brent is $1 higher at $92.90, indicating that high prices will continue. It's the same story for LNG. Reports indicate that seven tankers are at sea carrying cargoes. However, once these are delivered, there will no longer be any new supplies from Qatar. Already, there are global shortages in jet fuel, bunker for ships, and fertiliser. This will make travel, shopping, and eating more expensive. Fatih Birol, the boss of the International Energy Agency (IEA), is currently in Australia and is warning that the crisis is "very serious" and worse than both oil shocks from the 1970s combined. Bonds are being impacted by inflation, as 10-year Treasury yields have reached a?eight-month peak of 4.150%. This has increased borrowing costs in developed countries already grappling with budget deficits and debt. The higher?yields also stretch equity valuations. Meanwhile, rising petrol and diesel costs will act as brakes on corporate profits and consumer demand. Investors also have 'aggressively re-priced' for central bank tightening. In some cases, this has been done dramatically. The Fed is no longer expected to cut rates this year. Instead, the ECB and BoE are forecasting rate hikes of 75 basis points each. The Nikkei has fallen more than 3%, and South Korea has lost almost 6%. European stock futures have fallen between 1.1% and 1.3%. S&P 500 Futures are down about 0.4%. Market developments on Monday that may have a significant impact ECB Chief Economist Philip Lane and ECB Board Member Piero Cipollone will be making appearances. - EU March consumer confidence US construction spending in January
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India Coca-Cola Bottler SLMG warns that the Middle East War could push up prices
SLMG Beverages could increase some of its prices if packaging costs 'linked to war - in the Middle East' are hard?to _absorb. Some packaged water producers have already raised prices. In an interview with SLMG earlier this month Rahul Kumar, the deputy CEO, said that if the war continued, packaging materials costs could continue to rise. He added that price increases would depend on a number of factors, including the response from competitors and the reaction of consumers to increased prices. Cost?pressure is a result of Mukesh Ambani, a billionaire, reviving a local cola, Campa in 2023. Reliance Industries used its retail network and nationalist sentiments to spark a price war. Kumar stated that there is limited room to increase prices in the highly competitive soda industry, which includes both national and local players. He added that no portfolio-wide price increases have been made in the last 7-8 years. He said SLMG would review its prices in April. SLMG RAMPS INCREASE CAPACITY According to?Kumar, competition will increase India's soft drinks market by bringing new consumers. Redseer Strategy Consultants estimate that the non-alcoholic beverages market in India could double by 2030 to $40 billion. To capitalize on this growth, SLMG plans to invest between '10 billion rupees (106.58 millions) and 12 billion rupees for each of the four new plants that it will build in five years. According to Tofler, the bottler's revenue grew by 49% in fiscal 2025 to 67.73 bn rupees. The?net profits jumped 76% to 2.06 bn rupees. SLMG now targets net revenue of 100 billion rupees by 2026-27 as it expands into populous, but lower-income Indian States such as Bihar, and Uttar Pradesh. It is counting on the low initial consumption levels, and rising incomes, to drive more demand for its product there. Reporting by Praveen Parmasivam, Chennai; Editing and proofreading by Ronojoy Mazumdar.
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Asia shares fall, but yields increase as Gulf War intensifies
As the United States and Iran exchanged escalating threat, and Israel planned "weeks" of more fighting, oil prices went on another roller-coaster. Iran warned on Sunday that it would attack?the water and energy systems of its Gulf neighbors if the?U.S. President Donald Trump acted on his threat to strike Iran's power grid within 48 hours. This ended any hope for an early conclusion to the war now in its fourth weeks. Trump warned Iran that it had only two days to open up the Strait of Hormuz. The Strait is currently closed for all vessels and there are few prospects of naval protection. Nikkei, the Japanese stock exchange, fell by 3.5%. This brings March's losses to more than 12%. South Korea's stock market fell 5.8% in March, a drop of 13%. The MSCI broadest Asia-Pacific index outside Japan fell 3.2% while the?Chinese blue chip index dropped 2.4%. Brent crude oil prices have been choppy again. Brent was last up 0.6% to $112.89 per barrel and is 55% higher than the previous month. U.S. crude rose 0.9% to $99.98. The U.S. has allowed Iranian and Russian oil from tankers to be sold in the near-term, but the risk of shortages over the longer term is pushing futures prices down. Brent for September, for example, was up $2 to $93.90, suggesting that high prices are here to stay. Shane Oliver is the head of investment strategy for fund manager AMP. He said that oil prices could rise to $150 a barrel in upcoming weeks. "And because of the destruction to energy infrastructure, it will be longer before supply returns to normal." It's worth noting, too, that previous oil shocks were spread out over many months as the full impact of rising oil prices became more apparent - about four months in 1973 and one year in 1979. Analysts from HSBC reported that Singapore jet fuel prices rose 175% in this year, reaching a record high. Asian liquefied gas also increased 130%. Bunker fuel, which is used to transport goods by ship, has been blown out. This will increase the cost of transportation, and food prices are likely to rise. Fatih Birol, the head of the International Energy Agency, warned that the crisis is "very severe", and worse than both oil shocks in the 1970s combined. SEND OFF RATE CUTTINGS In Europe, EUROSTOXX50 futures and DAX Futures both fell by 1.5% while FTSE futures dropped by 1.2%. S&P futures on Wall Street fell 0.4% while Nasdaq's futures dropped 0.5%. Energy inflation has caused markets to abandon their hopes of further monetary ease globally, and instead price in rate increases across the majority of developed nations. Futures have erased expectations of?50 basis point easing by the Federal Reserve in this year. There is even a slight chance that the next move will be upward. The hawkish sea change has caused bonds to fall and yields to rise, increasing borrowing costs for governments who are already facing deficits and debt. While the rise in yields has made equity valuations look more stretched, the prospect of higher costs as well as softer consumer demand have clouded corporate profit outlooks. Last week, bond yields increased by double digits around the world due to the energy shock and pressure on fiscal budgets caused by higher defense spending. The yield on ten-year U.S. Treasury bonds has reached a high of 4.415% after a steady climb of 44 basis points. As a result of the increased volatility on the markets, the U.S. Dollar has become a more reliable store of 'liquidity. The U.S. also is a net exporter of energy, giving it a comparative advantage over Europe and most of Asia which are 'net importers. The euro fell a little to $1.1545 but was still a long way off major supports of $1.1409 or $1.1392. Investors are wary of Japan intervening if the dollar breaks 160.00. Gold fell 2.6% on the commodity market to $4,371 per ounce, as investors bet on rising interest rates worldwide. (Reporting and editing by Lincoln Feast; reporting by Wayne Cole)
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As Middle East tensions grip the markets, Indian shares drop and the rupee reaches a record low.
Indian equities fell and the rupee slid to a new record low on Monday. This mirrored a 'broad risk off move across Asia, as escalating Middle East conflicts?kept up oil prices and exacerbated concerns about growth and earnings outlook. As of 10:00 a.m. IST, the?Nifty was down by 2.2% to 22,605.50 and the BSE Sensex fell by 2.13%, falling to 72,942.20. All 16 major sectors declined. Small-cap and midcap indexes both fell 3%. India's equity volatilty index, which measures the expected volatility of the market over the next 30 days, has risen to 26,1. This is its highest level since early June 2024. The rapid rise in risk aversion is reflected by the broad selloff. As tensions in Middle East increased, Asian markets dropped 3.3%, 'undermining hope of a near term de-escalation' in the U.S. and Israel conflict with Iran. Since the beginning of the Iran war, the total market value of NSE-listed shares has fallen by $365 billion. Ajit Mishra is senior vice president and head of research at Religare Broking. He said that renewed geopolitical tensions, as well as the resulting?movements in crude prices, will continue to be key external drivers this week, dictating market trends. Brent crude's price hovering around $113 per barrel is a challenge for India. It is one of the largest oil importers in the world. The rupee was under pressure due to the soaring crude oil prices and the constant outflow of foreign currency from domestic markets. It sank to a new record low on monday, surpassing its previous low set on Friday. Foreign portfolio investors sold $9.57 Billion worth of Indian equities in March. This is on pace to be the largest monthly outflows from foreign portfolio investors since October 2024. HDFC Bank, India’s largest private bank – and the heaviest weighted stock on the benchmark index – fell 2.5% after sliding 7.4% over two sessions in response to the sudden resignation of Atanu Chakraborty, the part-time chairperson. Shares of the State Bank -of- India dropped 3.6% after it received a tax demand from the Income Tax Department. The amount was 63.37 billion rupees ($675.39 millions) for the assessment year 2020. Metals sub-index dropped 4% in line with a decline in global prices.
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New Zealand allows fuel imports that meet Australian standards amid supply shortage
New Zealand's government announced on Monday that it would temporarily allow fuel to be imported from Australia for up to 12 months. The move is to reduce supply risks related to the Middle East conflict as well as the soaring price of petrol. Shane Jones, the Associate Energy Minister, said that the alignment of fuel standard would allow importers to have more choices and reduce disruptions. Jones stated in a press release that "this?is an?adequate, limited-time step" which gives importers access a wider range of fuels, including those already present in our region. He added that the country would not "follow Australia" in lowering its own standards for allowing access to fuels with higher sulphur levels. According to figures from the Ministry of Business, Innovation and Employment, New Zealand has 49.9 gallons of petrol, 45.5 gallons of diesel and 44. 7 litres of jet fuel stored in reserve. Christopher Luxon, Prime Minister of Canada, said that there are "healthy stocks" of aviation fuel and diesel in the country. He added that more were on the way. The market was operating normally. "However, our government is planning for scenarios in which future fuel supplies could be disrupted." Nicola Willis, Minister of Finance, said that the government would implement temporary'measures' on Tuesday to help households impacted by the recent spike in fuel costs. (Reporting and editing by Jacqueline Wong, Thomas Derpinghaus, and Christine Chen in Sydney)
Grain prices in Chicago are rising as investors assess the impact of US-Iran War
Chicago soybean futures rose on Monday, as investors considered?U.S. Iranian threats of targeting energy facilities could escalate the war, adding further pressure on the global commodities markets.
Futures for wheat and corn edged higher. As of 0340 GMT, the most active soybean contract at?the Chicago Board of Trade (CBOT), was up 0.34% to $11.65-1/2 per bushel. CBOT corn rose 0.8% and wheat gained 1.1%. Iran has warned that it will strike water and energy infrastructure in the Gulf region if U.S. president Donald Trump follows through with his threat to attack Iran's?electricity network. U.S. president Donald Trump threatened on Saturday to "obliterate Iran's" power plants if Tehran didn't reopen the Strait of Hormuz in 48 hours. This was a significant step up from the day before when he spoke about "winding down" the war.
Oil markets opened choppy early in Asia trading due to the prospect of tit for tat attacks on civilian infrastructure.
The price of grains and oilseeds has closely tracked the fluctuations in crude oil during the U.S. Israel war on Iran. This is due to the use of corn and soybean oil in biofuels, and the interest investors have shown in these crops as a hedge against inflation. Claire Adams, agricultural analyst at Bendigo Bank Agribusiness said that wheat futures firmed due to concerns about drought conditions in the US Plains. Vaisala, a weather forecaster, said last week the continued dry weather in the central and southern Plains will maintain low moisture levels for winter wheat during next 30-60 days. The Rosario grains exchange reported on Friday that Argentina is shipping grains out at a rapid pace, as record sunflower exports, and booming corn sales, help absorb one of Argentina's largest harvests in recent years. Local media in Brazil reported that China had eased the rules regarding the presence of weeds on?Brazilian soya bean cargoes. This was based on a document issued by the local government. China is not going to implement a ?zero-tolerancepolicy for weed contamination in shipments, ?according to the report. According to Patria AgroNegocios, Brazilian farmers harvested 66.79 percent of the soybeans expected for 2025/26, a lower percentage than the 73.84 percent seen this time last season, but still close to the five-year median of 66.96%.
(source: Reuters)