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LME copper reaches a new high in a week after Trump's tariffs pause
LME copper prices reached a one-week peak on Tuesday after recovering from a sharp decline in the previous session. This was due to President Donald Trump delaying tariffs against Canada and Mexico by a month. This eased concerns about a possible trade war. As of 0425 GMT the benchmark copper price was up by 0.5% to $9,145 per metric tonne, its highest level since January 27. On Monday, the metal hit a four-week high. Dollar index dropped 0.2% Tuesday, making commodities priced in greenbacks cheaper for holders other currencies. Trump has backed down from his threat of imposing steep tariffs against Mexico and Canada, but U.S. Tariffs on China were due to go into effect very soon. China is the biggest consumer of industrial metals. He is expected to speak with Chinese President Xi Jinping this week. This will set up a major exchange of diplomatic information as the two world's largest economies try to reach a deal which could avert a wider trade war. The focus is on whether the U.S. tariff of 10% proposed against Chinese imports will be implemented. This will have a significant impact on the copper market due to the implications for Chinese demand, said Kyle Rodda senior financial markets analyst for Capital.com. If they need to avoid tariffs in the future, U.S. firms will turn to the Middle East and India to get more aluminium, and to Chile and Peru to get copper. Recent data revealed that China's manufacturing activity increased at a slower rate in January. Caixin/S&P Global Manufacturing PMI fell to 50.1 from 50.5 in January. Aluminium for the three-month period rose by 0.1% to 2,625.5. LME zinc rose 0.7% to a ton of $2,817.5, while tin increased by 0.1% to $29,945, and lead increased by 0.2% to $1949; nickel fell 0.4% to 15150. Shanghai Futures Exchange will be closed on February 5th for Lunar New Year. The markets will resume trading on Wednesday, February 5.
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EIB, EBRD Grant $620M for Poland’s Largest Offshore Wind Farm
The European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) have granted a total of $623.6 million to support the development of 1.5 GW Baltica 2 offshore wind farm, the second and the largest offshore wind farm in Poland.EIB signed an agreement with Poland’s largest utility Polska Grupa Energetyczna (PGE) to provide $415.7 million for the design and construction of Baltica 2 offshore wind farm in the Baltic Sea, being developed by PGE Ørsted.The loan represents the first part of a $1.45 billion package approved by the European Union’s climate bank to support PGE and Ørsted in constructing two new, large-scale offshore wind farms in the Baltic Sea.EBRD also contributed $207.9 million to support the buildout of the offshore wind farm, with the financing provided through a consortium of international and local commercial lenders, EIB, Bank Gospodarstwa Krajowego and the Export and Investment Fund of Denmark.Once operational, Baltica 2 will be the largest wind farm in the Baltic Sea, with a capacity of up to 1.5 GW. It is expected to generate about 5,000 GWh of electricity annually, which equates to approximately 3 per cent of Poland’s current electricity generation.Baltica 2 offshore wind farm is due to be completed as early as 2027.It will comprise of 107 turbines located some 40 km north of Poland’s Baltic shore. Together with its sister project Baltica 3, they are to have total capacity of 2.5 GW and double PGE’s existing renewable energy portfolio.“As the climate bank of the European Union and a leading partner of multidimensional energy transition in Poland, the EIB is keenly supporting Baltica 2. The EIB’s investment of $415.7 million is the largest own resources contribution to this transformative project by a financial institution.“Baltica 2 is the biggest offshore wind farm under construction in the European Union. It will increase the share of renewables in Poland’s energy mix and help reduce greenhouse gas emissions. It will strengthen Poland’s energy security and support economic competitiveness by harnessing innovative technologies,” said Teresa Czerwińska, EIB Vice-President. “Scaling up renewables and accelerating decarbonisation of the Polish economy are key strategic priorities for the Bank’s investments in Poland. We are delighted to support this milestone project, which will contribute to Poland and the European Union’s drive to net zero, and provide a solution to energy security concerns,” added Andreea Moraru, the EBRD’s Head of Poland and the Baltic States.
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Guyana to Greenlight Two Oil and Gas Projects This Year
Guyana's government plans to issue two licenses this year for oil and gas projects, one for Exxon Mobil's seventh development in the country, Hammerhead, and one for the nation's first natural gas development, Energy Minister Vickram Bharrat told Parliament on Friday.The gas license is conditional on a green light to Exxon and Fulcrum LNG for an ambitious project that could involve exports of liquefied natural gas. The license plans were included in the country's 2025 public budget.(Reuters - Reporting by Kemol King; writing by Marianna Parraga; Editing by Leslie Adler)
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PMI data shows that Saudi Arabia's private non-oil sector grew at a decade-high rate in January.
A survey revealed that Saudi Arabia's non oil business sector expanded in January at its fastest pace in over a decade, thanks to a surge of new orders and robust activity. The Riyad Bank Saudi Arabia Purchasing Managers' Index, which is adjusted for season, rose to 60.5 in January from 58.4 last December. This was its highest level since Sept 2014. Readings above 50 denote growth. The New Orders Index increased to 71.1 in January, up from 65.5 in the previous month. The survey found that the surge in demand is due to favorable economic conditions, new infrastructure projects and a boost in export sales and customer orders. Naif Al Ghaith is the chief economist at Riyad Bank. He said that "the rise in exports further complemented domestic demands, especially from GCC countries (Gulf Cooperation Council), reflecting effective marketing strategies and competitive pricing." This expansion is a testament to the continued efforts of the country in economic diversification. Government estimates show that non-oil growth soared to 4,6% in the fourth quarterly of 2024. This outperformed overall GDP growth at the time as the government pressed on with initiatives and investments to achieve Vision 2030 economic goals. In January, employment levels increased, but rising inflation in input prices contributed to the firms' increasing output prices faster than they have in a year. The business outlook for 2019 is the best since March 2024, with companies still confident about the future. Hugh Lawson, Editor and Reporter (Reporting)
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Gold prices near record highs amid US tariff concerns
The gold price rose on Tuesday as the lingering U.S. inflation and tariff concerns increased demand for safe haven assets. Key jobs data are due this week. Gold spot was up 0.3% at $2,820.69 an ounce as of 0252 GMT after reaching a record-high $2,830.49 during the previous session. U.S. Gold Futures dropped 0.2% to $2.852.70. On Monday, U.S. president Donald Trump suspended tariffs against Mexico and Canada. He agreed to a 30 day pause as a result of concessions made by the two countries on border enforcement and criminal justice. Meanwhile, levies will be imposed on Chinese products later that day. Markets perceive Trump's policies on tariffs as inflationary. The gold price may remain supported in the current dynamic environment where policy changes and market volatility are likely to be dominant, according to IG's market strategist Yeap Jun Rong. "With a near-term target price of $2,874, followed by the psychological level $3,000." Bullion has traditionally been considered to be a hedge both against inflation and geopolitical unrest. Global bullion banks, such as those in Dubai and Hong Kong that cater to Asian consumers are now flying gold to the United States to take advantage of the high premium on U.S. Gold Futures over the spot price. Investors will also be watching a number of U.S. employment data this week, including the U.S. Job Openings Data due later that day, ADP Employment Report on Wednesday, and Payrolls Report on Friday. Silver spot edged up 0.2%, to $31.61 an ounce. Platinum rose 0.7%, to $970.80. Palladium rose 1%, to $1,019.31. The top gold-consuming markets in China were closed on Tuesday for the Lunar New Year and will resume trading on Wednesday. (Reporting from Rahul Paswan, Bengaluru; Ashitha Shivaprasad added reporting and editing by Subhranshu and Rashmi Sahu)
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Japan's food exports in 2024 will reach a record high despite China’s seafood import bans
Japan's agricultural, forest and fishery exports rose by 3.7% in 2024 to reach a new record, despite China banning seafood imports after the Fukushima nuclear plant water discharge. The Ministry of Agriculture, Forestry and Fisheries said that exports in 2018 totaled 1.507 trillion yen, up from 1.454 billion yen by 2023. Kazuyoshi Nakasugi, deputy head of MAFF’s export policy planning department, noted that it was the 12th consecutive year of growth and a new record. He also pointed out that exports from China and Hong Kong were down, but exports in other parts of Asia and the United States increased. Nakasugi stated that the increase in foreign tourists to Japan and the increasing popularity of Japanese food, fueled by an increased number of Japanese restaurants, contributed to the growth. Tepco began to release treated radioactive waters from the Fukushima Daiichi Nuclear Power Plant wreckage in August 2023. This prompted China to ban all imports of seafood of Japanese origin. Exports of agricultural, forestry and fisheries products to China fell by 29.1% in 2024 to 168.1 billion dollars, while exports to the United States grew 17.8% to 242.9 million dollars, making it the top destination for Japan's exports for the first 20-year period. Exports to Vietnam, Thailand, South Korea, and Europe increased between 11-20%, largely due to the strong demand for green tea and seasonings. MAFF's Nakasugi stated that Japan's scallop exports have been among the hardest hit by China's trade ban. However, increased sales to the U.S.A., Taiwan, and Vietnam have helped offset this impact. By developing commercial channels in Asia and the U.S., the government is promoting diversification in export destinations for scallops. Nakasugi stated that "we will continue to encourage China's seafood imports to resume as soon as possible, while supporting efforts to increase sales channels for Japanese foods worldwide."
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As US tariffs are paused, stocks jump and the dollar is on a rollercoaster.
Hong Kong shares reached a two-month high, U.S. equities rose and currencies fluctuated in large ranges. Investors scrambled in order to keep pace with sudden changes to U.S. Trade Policy. S&P futures rose 0.4% on February 2, and the dollar reversed gains against the Mexican peso and Canadian dollar after President Donald Trump, who had promised to improve border enforcement, suspended imminent tariffs. The euro took a wild ride up to $1.0125 before rocketing back down to $1.0320 within 24 hours, as Trump's deals seemed to show that anything was negotiable. Hong Kong's Hang Seng rose 2.5% despite an additional 10% tariff that was to be imposed on Chinese goods at 0501 GMT. Electric vehicle makers led the way. Li Auto, the largest gainer in Hong Kong with an 8% increase in shares, was followed by semiconductor maker SMIC which rose over 7% and reached a new record high. Steven Leung is the institutional trading manager at UOB-Kay Hian, based in Hong Kong. He said: "It makes us feel like it's still not a firm policy." "There's no need to worry." European equity futures increased by a cautious 0.2%. Oil prices, which had previously risen, have now fallen and Brent crude futures at $75.46 are near a month-low. Bitcoin, which was trading at around $102,000 a day before it had fallen to close to $91,000. Ross Mayfield is an investment strategy analyst with Baird, based in Louisville, Kentucky. He said, "I believe you can see the rollercoaster ride of public negotiations around tariffs and policy." The Australian and Japanese stock markets both rose by 0.4%, but the gains were less than Monday's losses due to trade war fears. Trump's Press Secretary said he would speak with Chinese president Xi Jinping within the next few days. Chinese markets are closed for Lunar New Year, but the offshore yuan is back up to 7,3112 per US dollar after falling as low as 7,3765. The Australian dollar was $0.6206, after falling as low as $0.608 on Monday. The yen, a currency seen as a haven of safety, fell 0.3% to $155 per yen. On Monday, gold reached record highs as investors sought safety amid fears of a global trade war. On Tuesday, it traded at $2,813 per ounce, close to the previous record high. Markets were divided over whether or not there would be two rate cuts in the United States this year. Michael Feroli, J.P. Morgan’s U.S. chief economist, said that the increase in policy uncertainties will be difficult to reverse. The weekend's events will probably reinforce the Fed's tendency to stay on the sidelines, and to be as low-profile as possible.
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LME copper recovers after Trump pauses tariffs
LME copper prices rose on Tuesday after recovering from the four-week low reached in the previous session. This was due to President Donald Trump delaying tariffs against Canada and Mexico by a month. This eased concerns about a possible trade war. As of 0201 GMT, the benchmark copper price was up 0.6% to $9,155 per metric tonne. On Monday, the metal fell to its lowest level since January 6. Trump has backed down from his threat of imposing steep tariffs for a whole month on Mexico and Canada, but U.S. Tariffs on China - the biggest consumer of industrial metals - were still set to go into effect in a few hours. He is expected to speak with Chinese President Xi Jinping this week. This will set up a major exchange of diplomatic information as the two world's largest economies try to reach a deal which could avert a wider trade war. The dollar index dropped 0.3% on Monday. The dollar is weaker, which makes commodities priced in greenbacks cheaper for those who hold other currencies. If they need to avoid tariffs in the future, U.S. firms will turn to the Middle East and India to get more aluminium and Chile and Peru to get copper. Data released on Monday revealed that China's manufacturing activity increased at a slower rate in January. Caixin/S&P Global Manufacturing PMI fell to 50.1 from 50.5 in January. Aluminium for the three-month period rose by 0.2% to $2628.5. LME zinc rose 0.5% to a ton of $2,812.5, tin increased 0.1% to $29,950 and lead climbed by 0.2% at $1,949.5. Nickel fell 0.2% to $14,175. Shanghai Futures Exchange will be closed on February 5th for Lunar New Year. The markets will resume trading on Wednesday, February 5.
Oil drops as Trump agrees pause tariffs against Mexico and Canada
Tuesday, oil prices fell after U.S. president Donald Trump agreed not to impose steep tariffs against Mexico and Canada, two of the United States' largest foreign oil suppliers, for one month.
Brent futures dropped 41 cents or 0.5% to $75.55 per barrel at 1:49 GMT. U.S. West Texas Intermediate crude fell 75 cents or 1% to trade at $72.41.
Justin Trudeau, the Canadian prime minister, and Claudia Sheinbaum, president of Mexico's government said that they agreed to increase border enforcement in response to Trump’s demands to crackdown on illegal immigration and drug trafficking.
This would stop for 30 days the 25% tariffs on imports of energy from Canada. A 10% tariff was also to be imposed on these imports.
Despite the agreement to pause tariffs ING analysts stated that Canada would still be vulnerable to trade conflicts unless it expanded export options outside the U.S. by adding more pipelines to transport oil from fields to ports.
ING stated that it would take several years for this infrastructure to be built, but would give Canadian oil producers more flexibility as well as the possibility of more destinations for Canadian crude.
The White House announced that Trump will speak to Chinese President Xi Jinping this week. A 10% tariff on all China-made goods is due to go into effect on Tuesday.
Three Federal Reserve officials said on Monday that the Trump administration's plans to impose trade tariffs could lead to inflation. One of them argued that the uncertainty surrounding future prices would require a slower rate cut.
Low rates usually spur economic growth as well as oil demand.
The Organization of the Petroleum Exporting Countries (OPEC+) and its allies discussed Trump's call to increase production on Monday, but decided to continue with its policy of increasing oil output gradually from April.
Investors will be watching for data on the weekly U.S. stockpiles for the week ending January 31. The analysts polled expected that crude inventories would rise, but gasoline and distillate stocks were likely to fall.
The American Petroleum Institute's industry group is due to submit its inventory report at 4:30 pm. The U.S. Energy Information Administration will release its inventory report at 10:30 am (1530 GMT), Wednesday, and the American Petroleum Institute industry group by Tuesday (2130 GMT). (Reporting and editing by Lincoln Feast, Sonali Paul, and Katya Glubkova from Tokyo)
(source: Reuters)