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Iron ore to fall by a weekly loss due to softer China demand and trade uncertainty
The price of iron ore futures fell on Friday, and are set to lose money for the week due to a softer demand for this steelmaking ingredient. Traders brace themselves for more trade uncertainty. As of 0254 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.14% lower. It was 704 yuan (US$97.97) per metric ton. This week, the contract has fallen by 2.28%. The benchmark June ore price on the Singapore Exchange is 0.35% lower, at $96.55 per ton. This week it has lost 1.25%. The hot metal production, which is typically used as a gauge of iron ore demand to determine the market, has fallen for the third consecutive week. It was down by around 0.7% at 2.42 million tonnes on May 30, according to data from Mysteel. In a recent note, Galaxy Futures said that the seasonal demand for steel is at its peak and will continue to fall. Hexun Futures, a broker, says that iron ore prices remain somewhat stable as long as steel mills continue to make decent profits. The tariffs imposed by President Donald Trump in the U.S. will remain in place after a federal appellate court temporarily reinstated the tariffs on Thursday. This reverses a decision made on Wednesday by a trade court to block the most comprehensive of the duties. The weakening dollar was also a factor in the price rise, as it headed towards its fifth consecutive monthly drop on account of increased trade uncertainty. Dollar-denominated investments are more affordable for holders of currencies other than the U.S. Coking coal and coke, which are used to make steel, also fell, by 3.46% apiece. The benchmark steel prices on the Shanghai Futures Exchange were flat. Hot-rolled coil and rebar both lost 0.68% while stainless steel and wire rod gained 0.4%. The Chinese financial markets will close on Monday due to a holiday. Trading will resume Tuesday, June 3rd. The trading will resume on Tuesday, June 3.
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As the dollar strengthens, US tariff optimism wanes
The dollar strengthened on Friday, and the market's optimism waned after a court decision that reinstated some of the largest tariffs imposed in the United States by President Donald Trump. As of 0240 GMT, the London Metal Exchange reported that three-month copper was down by 0.2%, at $9,550 a metric ton. Red metal, which is used for power and construction, continues to gain 4.6% this month and looks set to have its best month since Sept. 2024. The Shanghai Futures Exchange's (SHFE) most traded copper contract fell 0.4%, to 77 680 yuan per ton ($10 807.50). LME aluminium dropped 0.4%, to $2.441 per ton. Zinc fell 0.7%, to $2.656, while lead fell by 0.4%, to $1.954, and nickel fell by 0.4%, to $15.310. Tin fell 1.1% to $30,00855. Metals traders in Singapore reported that "the market rose yesterday on the optimism that the court would be able to block Trump's tariffs. However, the rally faded as the appeals courts suspended this verdict." On Thursday, an appeals court in the United States temporarily reinstated Trump's most comprehensive tariffs. This came a day after the U.S. Trade Court ruled that Trump had overstepped his authority by imposing these duties and ordered a blockade. Investors digested court's decision to maintain Trump's tariffs. The dollar index increased by 0.2% in comparison to its rivals. This makes dollar-denominated investments more expensive for holders of other currencies. Investors are waiting for the Federal Reserve's preferred inflation indicator, the Personal Consumption Expenditures (PCE) Price Index Report due later that day. This could give them more insight into their policy direction. SHFE aluminium fell 0.4% to 20060 yuan per ton. Lead dropped 1% at 16,585 Yuan. Nickel rose 1% at 120,960 Yuan. Zinc lost 0.7% at 22,200 yuan. Tin fell 2.5% to 25,310 yuan.
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Valeura Concludes Eight-Well Drilling Campaign in Gulf of Thailand
Canada-based oil and gas company Valeura Energy has completed an eight-well drilling campaign in license B5/27 in Gulf of Thailand with Borr Drilling’s Mist jack-up drilling rig.At its 100%-operated B5/27 license, Valeura conducted drilling operations at Jasmine C, Ban Yen A, Jasmine D and Ratree developments.According to the company, the block B5/27 drilling programme was completed safely, on time, and under budget. As a result of the campaign, Valeura said it had maintained oil production rates approximately consistent with its first quarter performance, thereby offsetting the impact of natural declines.The company’s contracted drilling rig, Borr Drilling’s Mist-jack up, is now being mobilised to the Nong Yao field, where Valeura plans to drill a programme of approximately 10 development wells.“Block B5/27 is a prime example of how with ongoing drilling activity we can continue to commercialise new accumulations to maintain a stable and predictable stream of cash flow from each of our Gulf of Thailand assets.“At the same time, we have appraised several additional reservoir intervals which will form the basis of a future drilling campaign on the block. We expect to demonstrate further reserves adds at our next year-end reserves evaluation, giving rise to yet another extension in the economic life of the field,” said Sean Guest, President and CEO.Jasmine CValeura drilled two development wells from the Jasmine C platform. Both wells were successful and exceeded management’s expectation for total oil pay and are currently online as producers, the company informed.Well C-30ST1H was drilled as a horizontal lateral within the 400 sand reservoir and was completed as an oil producer. The well’s completion design includes an autonomous inflow control device, which has made it possible to complete the well as an oil producer despite being drilled into a mixed gas/oil transition zone.Well C-39 was directionally drilled to develop three separate reservoir intervals (the 330, 160, and 50 sands), and was successful with all targets. It was completed as a multi-zone producer, with the 330 interval now online.Ban Yen AThe company drilled three wells from the Ban Yen A platform. Two were primarily development wells with additional appraisal targets, and one was a dedicated appraisal well. The two development wells were successful, having exceeded expectations for total pay, and are online contributing to production.Jasmine DValeura drilled two deviated development wells from the Jasmine D platform. Both were successful and are now contributing to production.Well D-44 was drilled as a deviated development well with multiple targets. The well encountered its primary targets (the 500 and 600 series sands) as intended, successfully accessing remaining oil at the structure’s crest. In addition, the well verified upside in all of its secondary targets, covering five additional reservoir sands, which indicates the potential for further development of this fault block in the future.Well D-45 was also drilled as a deviated development well into the block’s main fault block. The well encountered oil in all three of its primary targets (the 250, 245, and 160 sands) and was completed as a multi-zone producer. In addition, the well encountered oil in its secondary 680 sand target, which will be developed by an additional well as part of a future development campaign.RatreeThe Ratree exploration well intersected its target sand reservoirs as prognosed but encountered only trace amounts of hydrocarbons. Results suggest that oil did not migrate to this particular reservoir trend, resulting in insufficient hydrocarbon charge. Further prospective trends within the B5/27 block are being evaluated for future exploration potential, Valeura noted.
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After the latest court ruling, Trump tariffs are still in place and stocks fall. The dollar also falls.
Investors digested the fact that an appeals court upheld President Donald Trump's tariffs, just a day after markets had rallied following a ruling that blocked most of them. The Nikkei index in Japan saw the biggest selling after the largest buying on Thursday. This was exacerbated by the fluctuation in demand for safe-haven currencies, such as the yen. The United States Court of Appeals for the Federal Circuit, Washington, temporarily reinstated Trump’s duties on Friday while it considered the government’s appeal. A little-known trade tribunal unanimously ruled on Wednesday that Trump had overstepped his authority and that tariffs are the responsibility of Congress, not the President. Senior Trump administration officials have said that they are undeterred by the situation and expect to either win on appeal or use other powers to keep tariffs in place. The Nikkei fell 1.7% during the morning Asian session, which brought it back to its closing level on Wednesday. The yen gained about 2% since its low of Thursday, and last changed hands at around 143.48 dollars. The value of overseas revenue is reduced by a stronger yen. Hong Kong's Hang Seng index fell 1.4%, while mainland China's blue-chip index slipped 0.3%. The KOSPI in South Korea fell by 0.5%. The broadest MSCI index of Asia-Pacific stocks outside Japan fell by 0.4%. Rodrigo Catril is a senior FX Strategist at National Australia Bank. He said that Trump's trade agenda was still alive and well, but the legal battle has added yet another layer to uncertainty. He said that the only thing more certain than uncertainty is further delays in hiring and investment decisions. Futures for the U.S. S&P500 fell by 0.2%. Cash index rose by 0.4% overnight. However, this was mostly due to the resilient Nvidia results that were released after the close of the market on Wednesday. Asian shares had already had time to react to these results. The price of the STOXX50 futures in Europe fell by 0.1%. The yield on the 10-year U.S. Treasury was unchanged at 4.42%, after a decline of 5.5 basis points on Thursday. Gold, the safe-haven, was unchanged at $3,311 an ounce after a 0.8% gain in the previous session. Bitcoin, a currency that is sensitive to risk, fell to a low of $104,714.35. Brent crude and U.S. West Texas Intermediate oil both fell 0.3% to $63.97 per barrel and $60.75, respectively, at the start of Friday. The Trump administration has said that despite the uncertainty created by the courtroom dramas, negotiations with the top trading partners are continuing unabated. Treasury Secretary Scott Bessent said in an interview with Fox News he was scheduled to meet with a Japanese delegation of high level later on Friday. Trump had already suspended his "Liberation Day' tariff rates for most trade partners until July 9, and in the interim set a 10% baseline rate to give some time to work out deals. Deals are still elusive, aside from the broad agreement reached with Britain. Bessent stated in an interview with Fox News, that the talks with China were "a little stalled" and could require the direct involvement of Trump or Chinese President Xi Jinping.
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Oil prices to drop by a weekly average with tariffs and legal battles in focus, OPEC+
The oil price is expected to drop more than 1% this Friday due to the U.S. tariff rulings and the potential OPEC+ production increase. Brent crude futures fell 26 cents or 0.41% to $63.89 per barrel at 0104 GMT. U.S. West Texas Intermediate Crude fell 27 cents or 0.44% to $60.67 per barrel. Brent's July futures contract expires on Friday. The tariffs imposed by President Donald Trump in the U.S. will remain in place after a federal court of appeals temporarily reinstated them Thursday. This reverses a decision made on Wednesday by a trade court to block the most comprehensive duties. As traders assessed its impact, the block sent oil prices down more than 1%. Analysts predicted that uncertainty would continue as tariff battles made their way through court systems. OPEC+ members, a group of oil exporting countries and their allies, will meet on Saturday to discuss a possible increase in July's oil production. OPEC is also trying to get some countries, like Kazakhstan, that are producing more than their agreed-upon levels, to reduce their output. Robert Rennie, Westpac's director of commodity and carbon analysis, said in a recent note that "the standoff between OPEC & Kazakhstan became more evident this week". According to a report published by Interfax on Thursday, citing Kazakhstan’s deputy energy minister, the country has told OPEC it doesn’t intend to cut its oil production. The Kazakhstani energy minister dismissed on Thursday the complaints of other countries about Kazakhstan's excessive production. He said that Kazakhstan's share in world oil production was less than 2%, and that a price for crude oil above $75 per barrel would be acceptable to all countries. Rennie stated that the stage was set for a bumper increase in production, possibly higher than the 411,000 barrels a day decision made at the two previous meetings. (Reporting and editing by Colleen Waye)
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CORRECTED OFFICIAL - Chevron to reduce 200 jobs in Texas
According to the Texas Workforce Commission, Chevron is laying off 200 workers in Texas. The U.S. oil company plans to reduce its global workforce to up to 20% by 2026. The layoffs will occur in Midland County where Chevron operates in the Permian basin, the largest oilfield in the United States. According to the notices, the layoff date will be July 15. Chevron announced in February that it would reduce its global workforce to cut costs. Chevron is under increasing pressure since then. Its license to operate in Venezuela has been revoked, and the planned $53 billion purchase of oil producer Hess, which was to be completed in February, hangs in limbo due an arbitration dispute. According to a March filing, the company had previously given notice that it planned to lay off at least 60 employees in California on June 1. Sheila Dang, Houston; Cynthia Osterman, editing.
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Barrick requests World Bank Court to intervene in Mali proceedings
Barrick Mining asked the World Bank arbitration tribunal to intervene in the legal proceedings in Mali as it faces the possibility that the Loulo-Gounkoto Mine could fall under the Mali government's control. Barrick made its move as a Mali court is set to rule on Tuesday, June 2, on the government request to place the Canadian miner’s gold mine in a temporary administration. In the event that the Mali court rules in the government's favor, an individual will be appointed to take control of the mine and reopen the facility. Barrick's Mali gold mine has been closed since January of this year, after Mali confiscated 3 tons of gold due to non-payment. Barrick denies the allegations. Barrick requested "provisional" measures from the arbitral tribunal in a Wednesday filing to the International Centre for Settlement of Investment Disputes. Timothy Foden of the international law firm Boies, Schiller, Flexner said that "provisional measures" means that Barrick applied to the tribunal to have an order that the Mali government refrain from further actions that could exacerbate the dispute. This includes Mali's attempt to place the mine under provincial administration. Barrick didn't immediately reply to an email from. Mali's Mines Ministry also did not reply to an email. Mali, Africa’s third largest gold producer, issued a new code of mining and tightened the grip on its gold mines. Most are run by Western companies. The military-led Government says it wants to increase revenue from the mining industry because it feels that current arrangements are unfair. Foreign multinationals will have to comply with the government's demands in order to continue operating in this gold-rich nation. Barrick is the exception. The company has said repeatedly that it has been investing heavily in the Malian economic system for over 20 years. The company accuses government officials of shifting the goalposts and demanding more money. It also claims that some of its executives have been unfairly detained in an effort to blackmail it. Barrick's Bamako corporate office has been closed by Mali's military government. The mine closure has also led to the layoff of Barrick's contractors. A Mali official said that international arbitration was not necessary and the issue is one of domestic taxation. Foden stated that Mali could ignore the World Bank's decision, even if it ruled in favor of Barrick’s request for a temporary measure. However, Mali might scare off more Western investors. (Reporting by Divya Rajagopal; Editing by Sandra Maler)
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IIR: Nigeria's Dangote Refinery will run at reduced rates until October.
The 650,000-barrel-per-day (bpd) Dangote oil refinery in Nigeria is expected to operate its gasoline-making unit at reduced rates through October after a string of issues in recent months, industry monitor IIR Energy told . About 70% of the capacity of the refinery's residual fluid catalytic (RFCC) unit, which produces 204,000 bpd of gasoline, is being used. IIR reported that the unit was closed from April 7 until May 11 due to damage to part of it, and again from May 15 through May 25 because of a mechanical problem. IIR stated that the full rate of production is not expected until October, when the refinery has completed a 40-day turnaround for reactor and catalyst repairs. IIR announced that the refinery's Continuous Catalytic Reformer will also be closed for seven days beginning June 2 in order to fix leakages. Dangote didn't immediately respond to an inquiry for comment. In January 2024, the refinery built by Nigerian billionaire Aliko Dagote in Lagos began to process crude oil into products such as gasoil and naphtha, and started producing petrol in September. The closure of smaller fuel plants in Europe, and elsewhere, is expected to have a major impact on the global fuel market. IIR stated that some downstream units have yet to begin commercial operations. These include a sulfuric alkylation unit which is scheduled to be operational by mid-June and a unit for polypropylene, which will come online at the end of the month. The industry monitor reported that the refinery's unit for crude processing has been operating at about 80% since mid-March. (Reporting from Shariq Khan, New York; editing by Sonali Paul).
MORNING BID EUROPE - Bright signs from Beijing and bad omens for Apple
Ankur Banerjee gives us a look at what the future holds for European and global markets
The possibility of a de-escalation in trade tensions between Beijing, Washington and other countries provided a boost to the markets on Friday. It boosted risk sentiment and lifted stocks worldwide just as Apple's earnings reminded investors of the true cost of a trade war.
China's Commerce Ministry stated that Beijing is "evaluating" Washington's offer to hold discussions over President Donald Trump's tariffs of 145% and that Beijing's doors are open for discussion. China also said that Washington should show "sincerity in negotiations" and be ready to drop its unilateral tariffs.
Investors were relieved by the prospect of trade negotiations, as tariffs had caused global markets to tremble and raised fears of a recession. The data for the two largest economies in the world has begun to show signs that they are weakening.
S&P 500 futures and Nasdaq were surging, and European bourses are set to open strongly ahead of an avalanche of corporate earnings led by oil giant Shell and German chemicals company BASF.
The current earnings season has shown the costs of the erratic U.S. Trade Policy and its back-and forth tariffs. This led many companies around the world to lower or even withdraw their profit forecasts.
Apple cut its share-buyback program by $10 billion on Thursday and warned that tariffs may add $900 million to costs in this quarter. This has dimmed some of the optimism following strong results from Microsoft Meta Platform.
Apple CEO Tim Cook explained how Apple has begun stockpiling products to ensure that most of the iPhones sold in the U.S. during this quarter won't come from China.
While the markets may have taken comfort in the comments made by Beijing on Friday, there has still not been any resolution to the trade discussions that the U.S. and its allies have held.
This was especially evident when Japan’s Finance Minister said on Friday that the country could use their $1 trillion plus holdings of U.S. Treasuries in trade negotiations with Washington. It raised explicitly for the very first time, its leverage as an enormous creditor of the United States.
The following are key developments that may influence the markets on Friday.
Economic events: April flash data on inflation for the eurozone, manufacturing PMI data in France and Germany
Earnings of ING, BASF NatWest, Shell
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(source: Reuters)