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After an accident at a Chinese steel mill, iron ore prices fall due to concerns about demand
Iron ore futures declined for a 4th session on Tuesday as concerns about?demand? for the steelmaking component were sparked by an accident at a Chinese factory. The May contract for iron ore most traded on China's Dalian Commodity Exchange ended the day trading 1% lower, at 789.5 Yuan ($113.43). As of 0705 GMT, the benchmark February iron ore traded on Singapore Exchange was down 0.39% at $104.2 per ton. Inner Mongolia Baotou Steel Union's subsidiary, which owns the steel plate factory, reported earlier in the day that an explosion occurred at its factory on Sunday, killing six people and leaving 84 others injured. Investors were alarmed by the news of the accident, as they feared a drop in the production of 'hot metals' and that government safety inspections of steel mills would be conducted soon, which could impact the demand for feedstocks. The Shanghai Metals Market stated in a report that it is possible the accident will affect two blast-furnaces, which produce an average of 16,000 mt per day. BHP Group said that it had accepted lower prices on some iron ore in its annual contract negotiations with China. BHP, world's biggest listed?miner?, announced on Tuesday a 9% increase in its iron ore production relative to the first quarter. China Mineral Resources Group, a state-owned buyer of iron ore, has been ordering steel mills and traders to stop buying multiple grades BHP 'iron ore since September. It is seeking better terms for domestic manufacturers. Coking coal and coke, which are used to make steel, also fell, by 4.5% and 3.54 % respectively. The benchmarks for steel on the Shanghai Futures Exchange are mixed. Rebar fell by 1.18%; hot-rolled coils dropped by 0.97%; and wire rod weakened by 0.95%. Stainless steel, meanwhile, rose by 0.46%. $1 = 6.9605 Yuan (Reporting and editing by Rashmi aich, Janane Venkatraman).
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Malawi increases fuel prices for the second time in four months
Malawi's energy regulator raised the price of diesel and petrol?for a second time in four month?on Tuesday, to avoid?fuel shortages and preserve scarce foreign currency. In a recent statement, the 'Malawi Energy Regulatory Authority' said that petrol prices were increased by nearly 42%, to $4,965 kwacha, or $2.90 per litre. Diesel prices rose by?about 41 percent, to $4,945 kwacha, per litre. Peter?Mutharika is trying to change the economic fortunes of this donor-dependent country in southern Africa. As part of its turnaround efforts, his government is trying to negotiate with the International Monetary Fund a new assistance programme, restructure debt and boost international reserves. Fuel shortages were a major cause of frustration for the public under Lazarus Chakwera. Fuel prices were not adjusted upwards under Chakwera’s government. This meant that insufficient fuel was imported and that levy payments to maintain rural roads and electrify them had not been made. It said that artificial?fuel prices provided arbitrage opportunities to smugglers and depleted the country's forex resources.
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Gold reaches $4,700/oz despite Trump's threats
Gold reached $4,700 an ounce for the very first time on Tuesday, as President Donald Trump threatened to impose extra tariffs against European allies. This shook global sentiments and caused a rush towards safe-haven assets. Spot gold rose 0.7% by 0514 GMT to $4699.93 an ounce, after hitting a record high of $4701.23 earlier. U.S. Gold Futures for February Delivery climbed 2.4%, to $4.706.50 per ounce. Silver spot fell by 0.4%, to $94.27 per?ounce after reaching a session high of $94.72 an?ounce earlier. Trump is intensifying his efforts to 'wrest Greenland sovereignty from NATO member Denmark. This has prompted the European Union (EU) to consider retaliatory measures. Tim Waterer is the chief market analyst at KCM Trade. He said that Trump's "disruptive" policy and desire for lower interest rates are ideal for precious metals. Trump's unconventional approach to politics has played into the hands for gold and silver. Since Trump's second term began a year before, gold prices have risen by more than 70%. Gold also gained support on Tuesday as concerns about the Federal Reserve's autonomy lingered. The U.S. Supreme Court is expected to hear the case this week regarding Trump's attempted to fire Fed Governor Lisa Cook. It is expected that the Fed will maintain interest rates during its meeting on January 27-28, despite Trump's call for reductions. Gold, which does not pay interest, usually performs well when there are low interest rates. Kelvin Wong is a senior analyst at OANDA and expects that the Fed will continue to cut rates into 2026. He cites a weak labour market, as well as a lackluster consumer sentiment. The next rate reduction has been priced in for either June or August. (Reporting by Swati Verma in Bengaluru; Editing by Subhranshu Sahu) (Reporting by Swati Verma in Bengaluru; Editing by Subhranshu Sahu)
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MORNING BID EUROPE - Sell America, sell Japan
Tom Westbrook gives us a look at what the future holds for European and global markets. Investors in Tokyo are waiting to see how U.S. market's react to the transatlantic tension over?Greenland. The U.S. market resumes trading after a long holiday. During that time, the rest of world sold its stocks and dollar as a response to President Donald Trump's threat to impose tariffs on European Allies who opposed his efforts to "control the Danish Arctic territory". Trump told Norway's prime minister by text that he does not feel obliged to think "pure peace" anymore because he did not receive this year's Nobel Peace Prize. The 10-year Treasury yields increased by 2.4 basis points during the Asia session. Equity markets suggest a drop at the opening. Investors are 'tired' of a year of policy shocks. They're now waiting for Europe's response. This will be decided on Thursday at an emergency EU leader's meeting to determine how frightening Trump's threats might be. Citi downgraded European stocks on Tuesday on the basis of?uncertainty clouding the earnings outlook. In Japan, yields soared and demand for a 20-year bond auction slowed as Prime Minister Sanae Takaichi called an early election. Debt investors worry that tax cuts and spending mandates don't bode well for future government finances. The yen missed out on a lot of the gains from this week’s dollar selling and is hovering near 158 per dollar. The following are key developments that may influence the markets on Tuesday. Markets in the U.S. return after holiday World Economic Forum in Davos - German ZEW Survey
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Shanghai snowfall is rare due to a wave of low temperatures
Shanghai residents were delighted to see rare snowfall on Tuesday, as a wave of cold weather swept through southern China. Authorities warned that the frigid temperatures could last at least three more days. Last time the city on China's East Coast experienced heavy snowfall was in January 2018. Last week, Shanghai basked in temperatures as high as 20 degrees Celsius (68 degrees Fahrenheit) which caused osmanthus to bloom. Yu Xin, a 30-year-old'resident' said: "This year the weather has been strange." She said that "in general, there have been significant temperature fluctuations, which may make some people feel uncomfortable." Chinese state media reported that other areas, such as Jiangxi province and Guizhou, south of China's Yangtze and Huai Rivers, also experienced sharp temperature drops. The Zhejiang News reported that temperatures in Guizhou are expected to drop by 10-14 degrees Celsius. CCTV reported that in China, the authorities have also closed 241 sections of main roads across 12 provinces, including Shanxi and Inner Mongolia, due to snowfall. (Reporting and editing by Thomas Derpinghaus; Xihao Jiang and Brenda Goh)
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Oil prices are boosted by a weaker dollar, while investors look to Greenland for developments
The price of oil?increased on Tuesday due to a weaker US dollar. Meanwhile, the markets were watching President Donald Trump threaten higher U.S. Tariffs against European nations because he wants to buy Greenland. Brent futures were up 15 cents or 0.2% to $64.09 per barrel at 0430 GMT. The U.S. West Texas Intermediate contract for February that expires Tuesday was up by 14 cents or 0.2% to $59.58. WTI March gained?6 Cents or 0.1% to $59.40. WTI contracts were not settled on Monday because of the U.S. Martin Luther King Jr. Martin Luther King Jr. Day was observed in the United States on Monday. Tuesday, ING commodities strategists said that a weaker dollar helped oil and commodities in general. The weaker dollar makes dollar-denominated contracts of oil cheaper for holders other currencies. ING said that prices have held relatively well despite a broader move away from risk in the markets. This was prompted by the resurgence of trade tensions 'between the U.S. Fears of a new trade war grew over the weekend after Trump announced that he would increase import taxes by 10% on goods from Denmark, Norway and Sweden as well as France, Germany, The Netherlands, Finland, and Britain. These levies will rise to 25% if a deal is not reached on Greenland. CHINA DATA SUPPORTS OIL Tony Sycamore, IG's market analyst, says that the oil market also finds support from the better than expected fourth-quarter Chinese GDP data released on January 28. He said that "this resilience of the world's largest oil importer gave a boost to?demand sentiment". The data revealed that China's economy grew by 5.0% in the past year. This was in line with the government's goal, which was to counteract the weak domestic demand through a record-breaking share of the global market for goods. This strategy has helped to offset the negative impact of U.S. Tariffs, but it is becoming increasingly difficult to maintain. Government data released on Monday showed that the country's crude oil production grew by 1.5% and its refinery output rose 4.1% in 2025. Both were at record highs. The markets are also keeping an?close watch on Venezuela's petroleum sector, after Trump stated that the U.S. will run the industry in the wake of the capture and imprisonment of President Nicolas Maduro. Multiple trade sources reported that Vitol had offered Venezuelan crude oil at a discount of $5 per barrel compared to ICE Brent, for delivery in April. (Reporting and editing by Jamie Freed in Singapore, Jeslyne Lerh from Bengaluru; Anushree mukherjee of Bengaluru)
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Gold nears record high as trade tensions threaten to sour global sentiment
On Tuesday, gold and silver traded at record levels as U.S. president Donald 'Trump's threats to buy Greenland soured the global mood and led investors to rush into safe haven assets. As of 0336 GMT spot gold was up by 0.1% to $4,675.32 an ounce after reaching a record high of $4689.39 the previous session. U.S. Gold Futures for February Delivery climbed 1.9% per ounce to $4,680.30. Silver spot fell by 1.4%, to $93.33 an ounce. It had earlier reached a session high of $94.72. Tim Waterer is the chief analyst at KCM Trade. He said that gold was waiting for today and consolidating its recent gains. Traders are waiting to see how Trump will handle his latest spat with the EU over Greenland. Waterer added that "if European Union leaders were able to reach an agreement with Trump in Davos, this week, the risk premium for gold might diminish." Trump's renewed efforts to take Greenland away from NATO member Denmark has prompted the European Union (EU) to consider retaliating with its own measures. After tariff threats caused a selloff in U.S. government bonds and stocks, the dollar fell to its lowest level in a week. Concerns lingered over the independence of the Federal Reserve, which is a part of the United States. This week, the Supreme Court is expected to hear an appeal regarding Trump's attempts to fire Fed Governor Lisa Cook for alleged mortgage fraud. Despite?Trump’s calls for a cut, the Fed is expected to keep interest rates steady at its meeting on January 27-28. Gold, which doesn't yield interest, performs well during low interest rate periods. Kelvin Wong is a senior analyst at OANDA and expects that the Fed will continue to cut rates into 2026. He cites a weak labour market, as well as a lacklustre consumer mood. The next rate reduction has been priced in for either June or even July. Other precious metals also fell, with spot platinum falling 1.8% to $2331.20 per ounce and palladium dropping 2% to $1804.15. (Reporting by Swati Verma in Bengaluru; Editing by Subhranshu Sahu)
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Copper prices are soaring as investors look for new catalysts
On Tuesday, copper prices were rangebound as investors waited for new catalysts that would push the price in either direction. As of 0330 GMT, the?most active copper contract at the Shanghai Futures Exchange increased 0.35% to 101,000 yuan (US$14,596.22) a metric tonne. The benchmark three-month copper price on the London Metal Exchange fell 0.50%, to $12,901 per ton. It is still below the $13,000 mark. Investors remained cautious amid geopolitical risk, and favored safe-haven assets like gold, which has been holding near record highs. The dollar's weakness was a major factor in the Monday rebound. After U.S. president Donald Trump threatened to impose additional tariffs on Greenland as part of his campaign, data revealed that China's economy had shown resilience by meeting its growth targets by 2025. Copper, the most popular?base metal last year, gained more than 41%?in London and 33% in Shanghai. This was a record-breaking?rally. Nickel policy in Indonesia remained a major topic on the base metals markets. Nickel miner PT Vale Indonesia announced on Monday that it is unlikely to be able to meet the demand of the smelters whose pipeline the company has in this year, due in part to the production quota received. The announcement came after the Indonesian government said?last weekend that it may approve a nickel ore production quota in 2026 of around 260 millions tons. This was seen as a decrease from the volume approved in 2025, and would fall short of demand. The most traded nickel contract retreated after rising by 2.36%, to 144180 yuan per ton. It only posted a?a gain of 0.08%. The benchmark nickel for three months fell 1.45% to $17.870 per ton. Other base metals in the SHFE fell by 0.31%. Zinc lost 0.45%. Lead dropped 0.32%. Tin gained 2.26%. Aluminium fell 0.78% on the LME, while zinc slipped 0.14%, lead dropped 0.27%, and tin remained unchanged. Tuesday, January 20, DATA/EVENTS - (GMT) 0700 UK HMRC Changes in Payrolls Dec 1000 Germany Economic Sentiment Jan 1,000 Germany ZEW Current Situation Jan ($1 = 6,9609 Chinese Yuan Renminbi). (Reporting and Editing by Lewis Jackson & Dylan Duan)
Australian stocks fall sharpest since mid-December due to financials and miners
On Tuesday, Australian shares recorded their worst session for over a week as rate hike fears shook heavyweight financials. Meanwhile, miners dropped after BHP warned that long-running negotiations with China's largest iron ore buyer are putting pressure on prices.
The S&P/ASX 200 index closed at 8,815.90, a 0.7% decline. This is the steepest drop in a single day since December 15, 2025.
Financials dropped by 1.1%. The four largest banks declined between 0.9% and 1.8%.
According to Philip Pepe?, senior equities analysts at Shaw and Partners, the sector is losing momentum as investors are rotating out.
He said that lower reinsurance premiums are pulling down?domestic rates and that rising expectations of rate hikes have undone the gains made by banks when markets priced in?cuts.
The Reserve Bank will be focusing on the December quarter?inflation data and the domestic labour force data due Thursday.
According to LSEG, the RBA will meet on Wednesday, February 3. The market is now expecting a 30% probability of a rate increase.
BHP Group fell 2%, resulting in a new one-week low. The mining index declined by 1.1%.
Rio Tinto and Fortescue both fell by 2% and 0.6% respectively, before their respective quarterly production reports due on Wednesday and Thursday. Gold miners' gains, however, provided some relief as investors piled into the metal of safety after President Donald Trump threatened tariffs against several European countries at the weekend.
Gold miners climbed 0.4%, a new high. Ausgold and Aurum Resources topped the charts with gains of 6.3% and 5.6%.
The utility index rose 1.6% and technology stocks climbed?0.9%, the sharpest intraday gain in a whole month. The New Zealand benchmark index?S&P/NZX50 ended 0.05% down at a three-week low point of 13,573.93. The market is now awaiting the local quarterly inflation report, which will be released on Thursday. The markets are indicating that there is little chance of an increase in the cash rate to 2.25% on February 18. (Reporting and editing by Sonia Cheema in Bengaluru, Anjali Singh from Bengaluru)
(source: Reuters)