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Dalian iron ore drops as tariff woes overshadow Beijing's stimulus promises
Iron ore futures fell on Thursday, as reports of steel production reductions and trade concerns outweighed the additional stimuli measures designed to boost Chinese consumption. The May contract for the most traded iron ore on China's Dalian Commodity Exchange closed at 773 Yuan ($106.78), a decrease of 0.45%. As of 0708 GMT, the benchmark April iron ore traded on Singapore Exchange was up 0.49% to $100.25 per ton. Analysts at ANZ said that a trade war could be a problem for the market as a decline in export-driven Chinese demand would hurt demand for iron ore. China released more fiscal stimuli on Wednesday. It promised to increase efforts to support the consumption and soften the impact of a escalating US-China trade war. Washington has added 20% to existing tariffs on Chinese goods. The latest 10% increase was implemented on Tuesday and prompted Beijing's response. Some economists are not impressed by the policy measures taken to increase household demand, despite Beijing's renewed focus on consumption. Hexun Futures, a broker, said that the daily average molten output in China is expected to rise to 2.329 millions tons in March. The demand for steelmaking materials has also recovered, he added. Hexun stated that the news of a reduction in steel production intensified downward pressure on prices. China will restructure the giant steel industry by cutting output, despite not announcing any targets in its latest intervention to reduce overcapacity. Coking coal and coke, which are used in the steelmaking process, have both fallen by 0.42% and 0.58 percent, respectively. The Shanghai Futures Exchange also saw gains in other steel benchmarks. The rebar price rose by 0.4%. Hot-rolled coils were up 0.35%, stainless steel climbed 1.28% and wire rod was up 0.09%. $1 = 7.2390 Chinese Yuan (Reporting and editing by Sherry Phillips, Eileen Soreng and Michele Pek)
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Japan's Seven & i announces restructuring, names Dacus as new CEO
Seven & i Holdings announced a new CEO and plans for a restructure of its business after a $47 billion takeover bid from a foreign company. The company announced that Stephen Dacus, a lead outside director, will succeed Ryuichi isaka as CEO, putting a first-time foreign executive at the helm of Seven & i. A press conference will be held by the company at 5 pm (0800 GMT) to discuss this plan. Seven & i, which has faced investor criticism for its capital allocation over the past few years, received a buyout bid from Circle-K operator Alimentation Couche-Tard in August. The offer was eventually raised to $47 Billion, a premium of 35% to its current market value. A group led by the founding Ito family of Seven & i made its own buyout proposal, and management at the company said that they could chart their own path to recovery. Dacus has led a committee that reviews takeover bids. He previously held executive positions with Walmart and Fast Retailing. Ito family group was unable to secure funding of $58 billion for their bid, which led to the cancellation of the deal in late November. Reporting by Ritsuko Shimimizu and Rocky Swift, Editing by Neil Fullick & Muralikumar Aantharaman
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Russell: China's modest stimulus does not have a big impact on commodities.
Beijing has largely promised to continue the mild stimulus policy seen last year. The news that the United States and Canada have agreed to a 5% economic growth goal and promised to increase consumption as well as deal with any negative effects of the trade war, were positive. The parliament meeting of this week was also far short of any sort of announcements of stimuli that could have given commodity markets confidence that China, as the largest buyer of natural resources in the world, will see a meaningful increase in imports by 2025. What's likely to happen is that the same trends as in 2024 will continue, with some commodities performing better than others, but overall, the story remains one of modest growth. Data from the first half of this year suggests that China's imports are continuing on their recent path. LSEG Oil Research estimates that China's crude oil imports in February were 10.75 million barrels a day (bpd), up from the January figure of 10.1 million bpd but down from customs figures of 11.04 millions bpd. The government has encouraged consumers to switch to new energy vehicles, which can be either hybrids or full-electric vehicles. The subsidy program for switching to NEVs as well as more efficient appliances in the home was expanded this year. This means that NEVs will continue to grow rapidly, and now account for more than half of all new car sales. The news isn't good for those who hoped that the increased focus on consumer spending would lead to a stronger demand for steel. In a draft report by the state planner, China revealed for the first time in the last five years a plan to reduce crude steel production in 2025. The report did not specify the steel production target, but it is likely to be less than 1 billion tons. This is the level at which China's output has fluctuated around since 2019. China's imports will be affected if steel production drops from the 1,005 billion tons in 2024. These are the two main raw materials. COAL, IRON ORE China imports a small percentage of the global seaborne ore. However, they are expected to grow in 2025. Kpler estimates that February arrivals will be 83.92 millions tons, the lowest total since April 2019. This is down from 104.34 in January. Imports may have been affected by the Lunar New Year holidays in February, but adding them to Kpler's estimate for January gives an average daily of 3,19 million tons over the first two month of the year. This is down from the 3.39 million tons of 2024. Kpler estimates that China's seaborne coal imports have fallen to 29.82 millions tons in 2025. This is the lowest level since February 2024, and is down from 35.9 millions tons in January. It is likely that the decline in coal imports reflects lower domestic fuel prices which have led to a rise in inventories, and a reduction of demand for imported fuel. The announcements made by China this week were positive for commodities, especially those that are associated with energy transition. In a Wednesday statement, the National Development and Reform Commission announced that China would develop new offshore wind farm and accelerate construction of "new energy bases" in the western desert areas of the country. China's continued focus on renewable energy is good for its demand for metals like copper, aluminum and silver which are used in the manufacturing of solar panels. The Shanghai exchange's copper contracts rose as early as Thursday morning, rising as much as 1.1%, to 77990 yuan (10,757) per ton. They are now up by 5.2% from the end of the last year. Aluminium futures also gained 0.5%. The ongoing commitment to build renewable energy capacity in China and increase the share of NEVs is a reason for some optimism. However, the residential real estate sector continues to be a source of concern. The potential impact of trade wars launched by Donald Trump's administration, which could slow down global growth and increase inflation, is a greater concern. These are the views of the columnist, who is also an author. (Editing by Stephen Coates).
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LME copper reaches near 3-week high due to dollar drop and China stimulus expectations
London copper prices reached a three-week high in London on Thursday. This was boosted by the sharp drop of the dollar, and expectations that China will provide more stimulus to boost economic growth. The price of three-month copper at the London Metal Exchange was up 0.3% to $9,610.5 per metric tonne by 0443 GMT. This is its highest level since February 14. The Shanghai Futures Exchange's most active copper contract jumped by 1.8%, to 78470 yuan (10,830.47) per ton. This is the highest level in over two weeks. Market participants expect more stimulus measures to be taken by the Chinese government in order to boost consumption and reduce the impact of a escalating US-China trade war. Daniel Hynes is a senior commodity analyst at ANZ Bank. He said that the prospects of more China stimulus measures boosted base metals in Asian trade. Dollar index fell to its lowest level in four months on Thursday. This made commodities priced in greenbacks cheaper for buyers who hold other currencies. The European defence spending measures also boost (metals's) growth outlook, while simultaneously lowering the U.S. Dollar," said Kyle Rodda. He is a senior financial market analyst at Capital.com. Rodda said that the Trump administration's move to reduce some tariffs has raised hopes for a world free of the worst effects of a global trade war. The White House announced on Wednesday that President Donald Trump would exempt U.S. automakers from 25% tariffs against Canada and Mexico during the first month, as long as they adhere to existing free-trade rules. SHFE aluminium gained 1.5%, to 20,920 Yuan per ton. Zinc gained 1.7%, to 24,040 Yuan. Nickel gained 0.4%, to 128,620 Yuan. Lead advanced by 0.5%, to 17,415 Yan, and tin gained 0.5%, to 258,110 Yuan. LME aluminium rose 1.1% to $2688 per ton. Zinc jumped 0.6% to 2,897. Lead rose 0.1% at $2,036, Nickel climbed 0.4% at $15,970. Tin advanced 0.6% at $31,900. ($1 = 7.2453 Yuan) (Reporting and editing by Rashmi aich and Sonia Cheema in Bengaluru)
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Investors see the beginning of a tectonic move away from US markets
The global money flows are being upended by a historic trade war, the proposed European fiscal bazooka of $1.2 trillion and China's rise as the leader in the tech race. This could be a turning point, with investor capital moving away from the United States. China released more stimulus on Tuesday and pledged to make greater efforts in order to mitigate the impact of a escalating U.S. Trade War. The likely next German government had agreed to the largest overhaul of fiscal policy since the reunification. The U.S. trade war, which began this week, is hurting the mood both inside and outside of the world's largest economy. Investors have bet heavily on the "U.S. exceptionalism" for the past three years. The country has been ahead of other countries in terms of economic growth, stock market prices, artificial intelligent and many other areas. Tim Graf, State Street Global Markets' head of macro strategy in EMEA, said: "The U.S. has changed, and the world is now saying that we must adapt, as the U.S. no longer is a reliable trade partner. We have to look after our own defence needs." A rare divergence on global stock markets has been fueled by the change in sentiment. The S&P 500 index has fallen 1.8% in the past year. However, European shares have risen almost 9% to a new record high. Tech stocks in Hong Kong are up nearly 30%. The euro has soared above $1.07 for the first time in four months, and many banks have backed away from their calls to drop it to parity with the dollar. According to weekly data released by the Commodity Futures Trading Commission, investors have cut their bullish dollar bets in half since the inauguration of U.S. president Donald Trump in January. Dario Perkins is the managing director of global macro for TS Lombard. The aggressiveness and threat of tariffs by Trump has forced other countries to spend even more. In his first 44 working days, Trump has completely rewritten the playbook of foreign relations that had been in place since 1945. He's also launched a trade war with his largest trading partners, and forced European leaders into a radical rethinking of how they fund security. The U.S. economic growth is slowing down due to tariffs and trade uncertainties. Companies that are more susceptible to a slower rate of growth are beginning to show cracks. In the past month, an index of U.S. bank stocks has dropped 8% while its European counterpart has increased 15%. Investors are diversifying away from the U.S. markets by pouring money into Europe. Spending Big The dollar looks less attractive as Europe and China are poised to spend large amounts. "We were long the dollar versus the euro, and we closed this position more than a week back. Mark Dowding is chief investment officer of RBC's BlueBay Fixed Income team. The behaviour of Trump has reduced the appeal for U.S. investments in general. The government has taken several steps to encourage spending at home after investors sold Chinese assets in the past year. As the economy slowed, and wealthy consumers closed their wallets, it took action to stimulate domestic spending. Many still saw China as an uninvestable country in the absence a jumbo-stimulus plan, as tensions from the real estate bubble burst that hit companies and homeowners lingered. Lipper data shows that the almost uninterrupted outflows of China-focused funds following Trump's victory in the November election reversed themselves in early February. Lipper data indicates that about $3 billion has been redirected since then. Megacap tech stocks are a major draw for the U.S. Stock Market. Nvidia has been a leader in the AI investment revolution, and is one of the most valuable companies on the planet. It was not until late January that a low-cost Chinese AI model, previously unknown, made a serious impact on the AI arms race. DeepSeek's appearance has not only challenged assumptions about AI costs and efficiency, but also revealed how far behind Western companies China was. Hong Kong tech stocks are up 24% since January 27. A basket of U.S. megacaps is down 12%. Yang Tingwu is vice general manager at asset manager Tongheng Investment. He said that China's stock markets are already immune to increased U.S. Tariffs, as the growing strength of China is supporting domestic assets. Yang stated that "China's technological clout has expanded if you look at TikTok or Xiaohongshu, as well as DeepSeek." In response to the imminent sale of rival social media platform RedNote, American users are moving rapidly to Xiaohongshu. TikTok's U.S. operations. For some, the dollar's appeal will last over time due to a resilient U.S. economic climate and higher interest rates. Nate Thooft is the CIO of Multi-Asset Solutions & Global Equities for Manulife Investment Management. He said: "I think there's a change in play. We view it as a tactic versus a major secular shift." Recently, he upgraded his maximum underweight position on European stocks to neutral.
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Ørsted Opens Applications for Offshore Wind Technicians Training Program
Ørsted has opened application process for its expanded 2025 Wind Turbine Technician Apprenticeship Program, a four-year training program that equips individuals with technical skills and hands-on offshore experience for jobs in the U.K.’s offshore wind industry.The program will provide successful candidates with practical experience at Ørsted sites across East Coast, Barrow-in-Furness, and Birkenhead sites.Ørsted’s apprenticeship provides a foundation for aspiring technicians to gain the skills and experience needed to play a vital role in this transformation, contributing to the UK’s green energy future.Now in its ninth year, the apprenticeship kicks off with a year of classroom-based learning at North Lindsey College.For the final three years, apprentices gain practical offshore experience at one of Ørsted’s 12 wind farms, working alongside industry experts and on-site projects.Upon completion of the apprenticeship, successful candidates will achieve a Maintenance & Operations Engineering Technician (MOET) qualification, along with a BTEC Level 3 in Engineering. As the U.K. accelerates its transition to cleaner and more secure energy sources, the demand for skilled wind turbine technicians continues to rise.With the government setting an ambitious target of 43–50 GW of offshore wind capacity by 2030, the sector is expected to triple its workforce to over 100,000.“As demand for skilled wind turbine technicians continues to rise, we are expanding our apprenticeship program to develop the next generation of renewable energy technicians. If you enjoy problem-solving, working outdoors, and being part of a close-knit team, this apprenticeship will provide the foundation for a rewarding and exciting career,” said Rob Howes, Ørsted’s Operations Apprentice Manager.“Joining Ørsted’s apprenticeship program has been an incredible experience. After leaving the RAF I knew I wanted to go into a company that felt like a family. Being only one year in, it’s already been challenging but really rewarding, and I’ve gained the skills and confidence to build a solid career in the industry,” added Sean Hopkins, a first-year Apprentice Wind Turbine Technician based in Grimsby.Applications are open until March 21, 2025. Candidates aged 16 and above with a minimum of three GCSEs (grade C/4 or above) in Maths, English and Science are encouraged to apply. The process includes submitting an application, completing standard maths and English tests and undertaking project work before receiving an invitation to an onsite assessment day.
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The price of oil has risen from a multi-year low as rising supply and tariffs weigh.
The oil market rose on Thursday, after heavy selling drove it to a multiyear low. However, tariff uncertainty and an increasing supply outlook limited gains. Brent futures rose 39 cents or 0.56% to $69.69 a bar by 0416 GMT. U.S. West Texas Intermediate crude futures (WTI) also rose 39 cents or 0.59% to $66.70 a bar. Brent fell 6.5% over the last four sessions to its lowest level since December 2021, while WTI dropped 5.8% to its lowest level since May 2023. The sharp drop in oil prices below $70.00 may cause a slight breather today as the technical conditions try to stabilize from oversold terrain," said Yeap Jul Rong, market analyst at trading platform IG. "However the recovery momentum remains fragile. Unfavourable supply-demand dynamic is a key overhang to bullish sentiment," added he. Prices dropped after the U.S. enacted a tariff on Canadian and Mexican products, including energy imports. At the same time, major producers decided to increase output quotas. As the U.S. announced it would exempt automakers of 25% tariffs, optimism grew that the impact of trade disputes could be reduced. A source familiar with these discussions also said that President Donald Trump could eliminate the 10% tariff for Canadian energy imports such as gasoline and crude oil that are compliant with existing trade agreements. Trump's trade actions threaten to reduce global demand for energy and disrupt trade on the global oil markets. The rise in U.S. inventories exacerbated the situation, according to Daniel Hynes senior commodity strategist, ANZ. The market sentiment is still negative due to the double impact of the tariffs, and the decision of OPEC+ (Organisation of Petroleum Exporting Countries) and its allies, including Russia, to increase output. The Energy Information Administration reported on Wednesday that crude oil stocks in the U.S. - the world's largest oil consumer - rose more than anticipated last week due to seasonal refinery maintenance. Meanwhile, gasoline and distillate stockpiles fell because of a rise in exports. The EIA reported that crude inventories increased by 3.6 millions barrels, to 433.8 million in the past week. This was far more than analysts expected in a survey, who had predicted a rise of 341,000 barrels. According to data from ship tracking, there are more signs of weakness among American oil consumers. U.S. crude oil imports dropped to a 4-year low in Feburary, due to a drop in Canadian barrels sent to the East Coast. Refinery maintenance, such as a lengthy turnaround at the biggest plant in the area, also slowed demand. The United States continues to impose tariffs on imports of Mexican crude. This is a smaller source than Canadian crude, but it is still important for refineries in the Gulf Coast.
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Sources: Global Aluminium Producer seeks premium of $260/t from Japan buyers in Q2
Two sources involved directly in the pricing discussions said that a global aluminium manufacturer has asked Japanese buyers to pay a premium of $260 a metric tonne for primary metal shipments between April and June, an increase of 14% over the current quarter. Japan is the largest Asian importer and the premiums it pays for primary metals shipments over the London Metal Exchange Cash Price set the benchmark in the region. Japanese buyers have agreed to pay $228 per ton as a premium for the quarter January-March The highest level in almost a decade, and up by 30% from the previous quarter. Sources at Japanese trading houses said that the increase in premium was due to concerns that new U.S. Tariffs on Canadian Aluminium could divert supplies from the Middle East, Australia, or other regions which typically serve Asia towards North America and tighten availability in Asia. The new tariffs of 25% on imports to the United States from Mexico and Canada went into effect on Tuesday. Trump announced last month that he would impose 25% tariffs for all steel and aluminum imports to the United States. This will take effect on March 12. The source stated that "the jump in the price was surprising, as spot premiums are hovering around $180 a ton in Japan due to sluggishness in demand and the efforts to reduce inventory by March's fiscal year end." She added that the talks could drag on because of the large gap between the buyer and seller expectations. It took a little longer than usual for the last round of quarterly talks to be concluded. Due to the sensitive nature of the issue, the sources refused to identify themselves. Japan's influence on price negotiations has diminished as primary aluminum imports have almost halved in the last two decades due to weak domestic demand. This has caused producers to prioritize the interests of larger volume buyers. (Reporting and editing by Kim Coghill, Subhranshu Sahu.)
Recession risks creep onto the radar of markets
Financial markets are once again concerned about global growth as weakening U.S. data and rising trade tensions have a negative impact on consumer confidence and business activities.
Recent data has alarmed investors, and President Donald Trump's 25% tariffs against Mexico and Canada have exacerbated growth concerns.
The mood music has changed across the market.
Oil prices have fallen to their lowest level since October. Stocks from New York and Tokyo are reversing recent multi-year highs. Two-year U.S. Treasury Yields are also at their lowest levels since October. Bond investors are predicting a rate cut in the near future.
"Confidence is essential to an economy, and it has been hit," said Francois Savary. He was referring to the deteriorating consumer and business sentiment in the United States.
"I do not think that it is (recession) already a done deal, but it is a reason for us to reduce (U.S. equity exposure)."
Retail sales in the U.S. dropped the most since nearly two years in January, while the manufacturing data released on Monday showed a big drop in both new orders and employment.
Van Lanschot Kempen Investment Management, Amsterdam's senior investment strategist Joost van leender said that he did not expect a U.S. recession, but he does see a moderate growth slowdown. He added that consumers felt uncertain due to the "chaotic" U.S. policies.
Van Leender stated that he has reduced his U.S. equity positions in late January, and is overweighting Treasuries because yields will likely fall with the slowdown of the economy.
The Atlanta Fed's estimate of annualised growth for this quarter, based on its GDPNow model, fell from 2.3% to -2.8% a week earlier.
Analysts point out that the recent U.S. statistics are likely to be skewed due to one-off factors, such as the cold weather and high imports for the Atlanta Fed model. They also point out that, due to a trade conflict, the focus has shifted from inflation to growth risks posed by U.S. Tariffs.
China responded to the doubling of duty on Chinese products to 20% by adding additional tariffs between 10%-15% to certain U.S. imported goods from March 10. The U.S. is also targeting Europe with higher tariffs. Trade-vulnerable stocks in the auto industry, which are mostly made in Mexico and Canada and sold to the U.S., dropped by 4% after Tuesday's tariffs.
Morgan Stanley estimates the new U.S. Tariffs on China Mexico and Canada will reduce U.S. Economic Growth by 0.7 to 1.1 percentage points in the coming quarters. It could also cause a Canadian economic decline of 2.2 to 2.8% percentage points and send Mexico into recession.
Candace Laing, CEO of the Canadian Chamber of Commerce, warned that U.S. Tariff policy would force Canada and the U.S. into "recessions and job losses as well as economic disaster".
SEB economist Marcus Widen wrote in a recent note that it was time to add the word 'Trumpcession,' to the lexicon.
RATE CUTTING PRESSURE
On Tuesday, the Canadian dollar and Mexican Peso briefly reached one-month lows. The dollar, which had generally benefited from the trade tensions, is also weakening as U.S. economic growth concerns weigh.
Some think the U.S. could be in danger from a mix of slow growth and persistent inflation.
Analysts say a global trade war puts pressure on central bankers to continue cutting rates in order to boost growth. The traders are now pricing 75 basis points in U.S. rates cuts by the end of the year, compared to just one in mid-January.
The 10-year U.S. Treasury Yields are aiming for 4% after ending February with the biggest monthly decline since late 2023.
George Lagarias, Forvis Mazars' chief economist, said that the bond market was moving toward pricing a period of softness and perhaps a recession.
Morgan Stanley expects a further rate cut by the European Central Bank on Thursday, as economic data and inflation continue to weaken.
Analysts said that even if U.S. data improved, the cloudier outlook is reason enough to stay cautious about equities.
Goldman Sachs' note from Monday revealed that hedge funds who had bought global stocks have now backed away from bullish bets, and are betting on a decline in the stock market.
The note revealed that consumer discretionary stocks were the U.S. sector with the worst performance last month. These stocks are an economic bellwether as well as an indicator of consumers' buying power for nice to have products.
The growth risks that are a focus of the closely watched U.S. job report on Friday have added significance.
Samy Chaar, chief economist at Lombard Odier, said that the economic cycle was consumption-driven and could only end with the employment market. "The Fed must be aware of that."
(source: Reuters)