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Market for iron ore consolidates while it awaits China data
Investors and traders waited for more economic data to be released by China, the world's largest consumer of iron ore. This would provide clarity on demand and potential stimulus. As of 0316 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was 0.85% higher. It was 712 yuan (US$97.41) per metric ton. As of 0310 GMT, the benchmark May iron ore price on the Singapore Exchange had fallen 0.29% to $97.85 per ton. On Wednesday, China will release more data on industrial metals and economic indicators. Market signals are mixed, obscuring the demand outlook for this key ingredient in steelmaking. Prices have been fluctuating within a small range. A relatively high hot metal production supported near-term ore demands, preventing a price drop amid the escalating tensions in trade between the two world's largest economies. Analysts at Maike Futures wrote in a report that it is difficult to imagine hot metal production exceeding 2.45 million tons if there are no significant positive developments for the steel industry. Analysts said that while China's exports of steel in March exceeded expectations by exceeding 10 million tons, the outbound shipments during the second half will be affected by the increasing trade frictions caused by President Donald Trump's increased tariffs. UBS has lowered China's GDP forecast for 2025 to 3.4%. The potential for slower economic growth could indicate a weaker demand in industrial metals. Coking coal and coke, which are used to make steel, also advanced on the DCE. They both increased by 0.17% and 0.72 %, respectively. The majority of steel benchmarks traded on the Shanghai Futures Exchange declined. Rebar fell 0.26%, while hot-rolled coils dropped 0.28%. Wire rod remained 0.24%, and stainless steel grew 0.12%.
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Gold prices rise as US tariffs cause uncertainty in the markets
The price of gold rose on Tuesday, despite the uncertainty surrounding President Donald Trump's proposed tariffs and their effect on the global economic climate. As of 0245 GMT, spot gold rose 0.4%, to $3,221.70 per ounce. Bullion reached a record-high of $3,245.42 Monday. U.S. Gold Futures increased 0.4% to $3237.60. "Gold continued to firm today... due to ongoing investor demand for defensive assets in order to mitigate portfolio volatility, as the U.S. appears to be setting up for more tariffs," IG Market Strategist Yeap JunRong said. Federal Register filings from Monday show that the U.S. has begun an investigation into the importation of semiconductors and pharmaceuticals in a bid for tariffs to be imposed on both sectors. The U.S. argues that a heavy reliance on foreign-produced medicine and chips poses a threat to national security. Trump announced on Sunday that he will announce the tariff rate for imported semiconductors in the coming week. This has kept market participants on their toes. Yeap stated that despite the recent increase in gold prices, the upward trend is still intact. As long as tariff uncertainty continues, bullion could remain supported. Raphael Bostic, President of the Atlanta Federal Reserve Bank, said that the uncertainty around tariffs and other policy issues has caused the economy to "take a big pause." He suggested the U.S. Central Bank should remain on hold until more clarity is available. Gold that does not yield acts as a hedge against inflation and global uncertainty. It also thrives in an environment of low interest rates. World Gold Council data shows that the inflows of Chinese gold ETFs have exceeded those registered for the entire first quarter, and even surpassed U.S. listed funds. Spot silver fell 0.4% to 32.22 an ounce. Platinum rose 0.1% at $952.60, and palladium slipped 0.7% to 949.92.
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LME copper firms rely on US tariff relief, China stimulus bets
London copper prices rose on Tuesday. They held near the highs of the previous session. This was due to recent U.S. exemptions from tariffs, and the optimism that China, the world's largest consumer, will introduce additional stimulus measures in order to boost economic growth. As of 0252 GMT, the benchmark three-month contract on the London Metal Exchange was up by 0.1% to $9,192.5 per metric tonne. The contract reached its highest level in the previous session since April 4. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper rose by 0.3%, to 76.050 yuan per ton ($10,402.42). U.S. excluded phones and other electronic devices from its tariffs against China over the weekend. And after U.S. president Donald Trump added new wrinkles in his vacillating policy by suggesting that he could grant exemptions for auto-related levies which are already in place on Monday. The White House has announced that it is investigating whether the importation of semiconductors and pharmaceuticals could threaten national security. This could lead to tariffs being placed on these products. Trump's exemptions from his reciprocal tariffs helped copper gain. The pause in import fees for consumer electronics gave markets a temporary reprieve after Trump's policies created deep uncertainty. Data from the General Administration of Customs revealed on Monday that China's imports of copper, both unwrought and wrought, in March fell by 1.4%, to 467,000 tonnes, compared with a year ago. 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. Goldman Sachs reduced Monday its forecast for aluminum prices in this year, after its economists lowered global growth estimates. This included the U.S. SHFE aluminium fell 0.6% to 19.600 yuan per ton. Zinc lost 0.4% to 22385 yuan. Lead retreated by 0.8% to 16.780 yuan. Nickel was up by 0.8%, at 123.960 yuan. Tin dropped 0.2% to 259.170 yuan. LME aluminium rose by 0.3%, to $2,381.5 per ton. Lead fell by 0.4%, to $1,909.5. Tin was up 0.6%, at $31,450. Zinc was unchanged at $2,635 while nickel increased 0.4%, to $15,365. ($1 = 7.3108 Chinese yuan). (Reporting and editing by Alan Barona, Sherry Jacob Phillips.)
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Asia shares are up, but bonds remain steady despite some tariff relief
Asia shares were slightly higher on Monday, with gains made by automakers after U.S. president Donald Trump said he may grant exemptions to auto-related taxes already in place. U.S. Treasury Bonds steadied after staging a recovery over night following last week’s historic selloff. Meanwhile, the dollar continued to lose favour with investors. Trump said Monday that he is considering a change to the 25% tariffs on imports of foreign autos and auto parts from Mexico, Canada, and other countries. These tariffs can increase the cost of a vehicle by thousands of dollars. Trump stated that car companies need "a little time" to manufacture cars in the United States. This followed Trump's Friday decision to exempt some electronics, including smartphones, computers and other electronic devices from his "reciprocal tariffs" in the U.S. His administration stepped up investigations into semiconductor imports after Trump announced on Sunday that he would announce the tariff rate in the coming week. Illiana Jain is an economist with Westpac. She said, "When we see these exemptions flowing through, it helps the markets to think that tariffs aren't going to be something that will be all-encompassing and that they may actually be reprieved." After last week's massive selling, investors took any good news and drove shares higher. The broadest MSCI index of Asia-Pacific stocks outside Japan rose 0.3%. Japan's Nikkei index rose by 1%. Shares of automakers Toyota and Denso, which makes auto parts, were among the biggest gainers. Gains were modest as the uncertainty surrounding Trump's trade policy and his back and forth on tariffs continued to cloud markets and global economic outlook. U.S. Futures fluctuated between losses and gains, closing the last trades lower following an overnight gain in Wall Street. Nasdaq and S&P futures both fell by close to 0.2%. In Europe, EUROSTOXX futures dropped 0.14% while FTSE Futures rose 0.25%. Bank of America, Citigroup and other big banks will be reporting earnings this week. The numbers from chipmaker TSMC will be a highlight later in the week. The Shanghai Composite Index and China's CSI300 blue chip index each fell more than 0.4%, while Hong Kong’s Hang Seng Index reversed its early gains to drop 0.16%. Bharat S. Sachanandani is the head of flow strategies and solutions in Asia Pacific for Societe Generale. The asset markets seem to indicate that the higher prices of U.S. consumer goods will lead to a reduction in demand, and the probability of a recession is increasing. U.S. RATE After a wild selloff that resulted in the biggest weekly rise in borrowing costs for decades, U.S. Treasuries managed to hold onto their overnight gains on Monday. Bond yields are inversely related to bond prices. The benchmark 10-year rate was unchanged at 4.3564% after falling nearly 13 basis points the previous session. The yield on the two-year bond was also little changed, at 3.845% after slipping 12 basis points on Monday. Analysts have also cited comments made by Federal Reserve Governor Christopher Waller as contributing to the decline in yields. He said that on Monday, the Trump administration’s tariff policies were a major shock for the U.S. Economy and could cause the Fed to lower rates in order to avoid a recession even if the inflation rate remains high. Raphael Bostic of the Atlanta Fed Bank, on the other hand, suggested that U.S. Central Bank should remain on hold until more clarity is available. The markets are pricing in an easing of about 85 basis points by December. Most expect the Fed to keep rates at their current level next month. The dollar was near its three-year low against the euro, at $1.13245. It was also not far off from the decade-low it had reached against the Swiss Franc. Sachanandani, of SocGen, said that the U.S. Dollar's behaviour has changed recently. It now ignores rate differentials and responds more to capital flow. The U.S. Dollar does not like the prospect that U.S. companies will be less profitable and U.S. consumers will face higher inflation. Foreign investors' appetite for U.S. assets is also declining. assets." The latest exemptions from tariffs announced by Trump boosted oil prices. Brent crude futures rose 0.2% to $65.01 a barrel, while U.S. oil was up 0.24% at $61.68. Gold spot was nearing a record price of $3,221.45 per ounce.
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Scientists say that in 2024 Europe experienced the most extensive floods over a period of more than 10 years.
Scientists said that Europe experienced its worst flooding since 2013 last year, with 30 percent of the continent's rivers being affected by major floods. Climate change caused by fossil fuels continues to cause torrential rainfall and other extreme weather. In a report jointly published by the European Union's Copernicus Climate Change Service (ECCS) and the World Meteorological Organization on Europe's Climate, they said that flooding in Europe would kill at least 335 and affect more than 410,000 people. Western Europe was the hardest hit, with 2024 being one of the ten wettest seasons in region's records dating back to 1950. Last year, storms and flooding caused damage of over 18 billion euros in Europe. Globally, the year 2024 was one of the hottest on record, and it was also the hottest for Europe, the continent that is warming the fastest. Climate change is largely responsible for the planet being 1.3 degrees Celsius hotter than it was in pre-industrial days. Celeste Saulo, WMO Secretary General said: "Every fractional increase in temperature is important because it increases the risk to our lives and the economy as well as to the environment." The report highlighted some positives, such as the fact that renewable sources of energy will produce a record-high 45 percent of Europe's electricity in 2024. Most European cities also have plans to adapt better to climate change. But extreme weather conditions were observed across the continent. Southeastern Europe experienced its longest heatwave on record of 13 days. Meanwhile, Scandinavia's glaciers shrank the fastest rates ever recorded, and heat stress was felt across the continent. In western Europe, floods and drought plagued much of Eastern Europe. In 2024, nearly a third (32%) of Europe's river network will have exceeded the "high" threshold for flooding. Meanwhile, 12% will be at "severe flood" levels. Valencia's devastating floods of late October, which killed 232 people, accounted for the majority of deaths and economic damages in Europe caused by flooding. In September, Storm Boris dumped the most rain recorded in Central Europe, including Austria and Czechia. Scientists confirm that climate change is causing more intense downpours, as a warmer atmosphere can hold more moisture. In 2024, atmospheric water vapour surpassed all previous records. The management of rivers and the planning of urban areas can also influence flooding. (Reporting and editing by Aurora Ellis; Kate Abnett)
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LME copper gains from relief of US tariffs and China stimulus
London copper prices rose on Tuesday. They remained close to the highs of the previous session. Recent exemptions from U.S. duties and the hope for further stimulus from China, the top consumer, will help to boost the economy. As of 0106 GMT, the benchmark three-month price for copper at the London Metal Exchange was up by 0.2% to $9,206.5 per metric tonne. On Monday, it reached its highest level since the 4th of April. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper rose by 0.4%, to 76.170 yuan per ton ($10,417.27). The U.S. has excluded smartphones and electronics from its tariffs against China. On Monday, President Donald Trump revealed new wrinkles in his trade policy by indicating that he may grant exemptions for auto-related levies. The White House has announced that it is investigating whether the importation of semiconductors and pharmaceuticals could threaten national security. This could lead to tariffs being placed on these products. Trump's exemptions from his reciprocal tariffs helped copper gain. The pause in import fees for consumer electronics gave markets a temporary reprieve after Trump's policies created deep uncertainty. Data from the General Administration of Customs revealed on Monday that China's imports of copper, both unwrought and wrought, in March fell by 1.4% compared to a year ago, totaling 467,000 tonnes. 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. SHFE aluminium fell by 0.2% at 19,675 Yuan per ton. Zinc also declined 0.2%, to 22,415 Yuan. Lead retreated 0.5%, to 16,830 Yuan. Nickel was up 0.5%, at 123 590 Yuan. Tin dropped 0.1%, to 259 530 Yuan. LME aluminium rose by 0.4% to $2382.5 per ton. Lead fell by 0.2% to $1913, while tin rose 0.6% to $31,450. Zinc rose 0.1% at $2,638.5, and nickel increased 0.2% to reach $15,330. ($1 = 7.3119 Chinese yuan renminbi) (Reporting by Anushree Mukherjee in Bengaluru; Editing by Alan Barona)
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Australian shares rise as energy and mining firms outweigh consumer weakness
The Australian share market posted marginal gains Tuesday, supported mainly by energy stocks and mining companies. However, the gains were limited, as consumer discretionary firms suffered due to U.S. China trade tensions, and domestic political uncertainties. The S&P/ASX 200 Index held steady, with a 0.2% gain at 7,766.80 by 1232 GMT. The iron ore price and metals prices have been strong, helping to extend gains for a fourth straight session. Shares in industry giants Rio Tinto BHP and Fortescue increased between 0.5% to 1.5%. Energy stocks gained more than 1% on the back of higher oil prices due to tariff exemptions. Viva Energy led with gains between 3.4% and 2.0%, while Santos was second with gains of 2.1% and 3.4%, respectively. Consumer discretionary companies were the worst laggards. They dropped as much as 1%, and snapped a two-day streak of gains. Breville Group, Aristocrat Leisure and other companies in the subindex suffered the most losses. Both fell by 1.5%. The political uncertainty before the May 3 elections weighed heavily on consumer stocks. With the possibility of a divided parliament, despite Labor's improved polls, caution was felt around sectors that were vulnerable to shifts in household spending. Shares of Collins Foods fell as much as 2,7% in company news after the fast-food chain operator announced its plans to exit Taco Bell, which was underperforming. Investors remain cautious after Donald Trump, the U.S. president, exempted semiconductors and electronics from new duties. Beijing has retaliated against Washington in every way, but says it will not respond to any further U.S. duties. The Reserve Bank of Australia minutes of its latest policy meeting are due at around 1300 GMT on Thursday, along with the quarterly inflation data for New Zealand and the jobs data. The benchmark S&P/NZX 50 Index fell by 0.2% in New Zealand to 12,082.43 point.
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Prices of oil rise due to potential US exemptions from tariffs on automobiles, and a pickup in crude imports from China
The oil prices rose in the early hours of trading on Tuesday. This was due to new tariff exemptions proposed by President Donald Trump, and an increase in crude oil imports from China in anticipation that Iranian supply would be tighter. Brent crude futures rose 27 cents or 0.42% to $65.15 a barrel at 0046 GMT. U.S. West Texas Intermediate crude also gained 26 cents (0.42%) to $61.79. Trump said that he is considering a change to the 25% tariffs on imports of foreign autos and auto parts from Mexico, Canada, and other countries. The vacillating U.S. policies on trade have created uncertainty in global oil markets, and OPEC reduced its demand forecast for the first time since Dec. On Friday, the Trump administration announced that it would exempt some electronic goods from tariffs, including smartphones, computers, and other electronic products, which are mostly imported from China. This led to both oil benchmarks settling up slightly higher on Sunday. Trump announced on Sunday that he would announce tariff rates on imported semiconductors in the coming week. A Federal Register filing on Monday showed that the administration began an investigation on imports of semiconductors as early as April 1. Data released on Monday showed that China's crude imports were up nearly 5% in March compared to a year ago, with arrivals of Iranian crude oil surging in anticipation of stricter U.S. sanction enforcement. Kazakhstan confirmed on Monday its oil production fell 3% from March to the average in the first two week of April, although it still remains above its OPEC+ quota. (Reporting Colleen Waye; Editing Sonali Paul).
UK energy regulator to reject penalty exemptions for National Grid and SP Energy joint venture
Ofgem, the British energy regulator, said that it did not think an electricity transmission project by National Grid Electricity Transmission & SP Energy Networks qualified to be exempted from penalties related delays.
A joint venture between National Grid units and Iberdrola, a Spanish company, had asked for a 480 day exemption from penalties in relation to delays in the completion of the Eastern Green Link 1 due to global supply-chain issues and capacity shortages.
The project includes subsea cables and underground cables that link Scotland with north-east England. It is an important part of Britain’s goal to decarbonise the electricity sector by 2030.
Ofgem, however, said that it would consider denying the request because supply issues were not present at the time the EGL1 bid was made and the companies had taken measures to reduce the impact of these constraints.
Ofgem approved a funding package of 2 billion pounds ($2.57billion) for the project back in November.
The regulator stated that construction of EGL1 started in March, and now expects it to be completed in April 2029. This is 16 months behind schedule, which will result in penalties of four months for Output Delivery Incentive.
Financial incentives are used to promote timely and efficient delivery of projects. If projects are not delivered on time, a fine of up to 10 percent of the total project cost can be imposed.
The joint venture will be exempted from penalties for delays if approved until April 25, 2020. Currently, it is exempted until December 31, 2020.
EGL1 will be providing further evidence during Ofgem’s consultation period on supply chain issues, including the impact of delivery times. Raechel Thankam Job in Bengaluru and Shashwat awasthi, editing by Janane Venkatraman, Saad sayeed.
(source: Reuters)