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Aluminium prices fall to a three-month low due to Gulf supply prospects
The price of aluminum fell to its lowest level in nearly three months on Tuesday, as the United States granted Iran an?60-day sanction waiver following initial peace talks. This improved prospects for a resumed Gulf shipping through the Strait of Hormuz. By 0944 GMT the benchmark three-month aluminum on the London Metal Exchange had fallen 3.0% to $3,262.50 per metric ton after having hit $3,225.5 - its lowest level since March 26. Ole Hansen is the head of commodity strategy at Saxo Bank. He said that "aluminum prices have been impacted by expectations?that Middle Eastern supplies may gradually improve following recent geopolitical events." On Monday, oil and LNG tanker traffic through Hormuz began to?increase, raising expectations of disrupted aluminum deliveries from the Gulf, which normally account for 9%?of global supply. The LME Cash Contract for the Three-Month Forward has been lowered to ease concerns about the availability of?aluminium for immediate delivery. Swung to a discounted. On Tuesday, the discount was $8.5 per ton, down from a premium $105 three week ago. Other LME metals saw copper, zinc, and tin reach their lowest levels since June 11 while lead?and nickel reached their lowest level since mid-April. This was due to a general risk reduction in all asset classes, mainly because of a fall in global stock prices, primarily as a result of expectations that the Federal Reserve will take more aggressive measures?to combat inflation. Hansen stated that "the?weakness was particularly pronounced" in metals related to energy transition and increasing power demand as investors reduced their exposure to growth themes cyclical. The U.S. Dollar rose to its highest levels in over a year, adding to the pressure. A stronger ?U.S. The dollar makes metals priced in dollars more expensive for buyers who use other currencies. LME copper fell 1.7% to $14,410.50. Zinc lost 3.2% at $3,492.50. Lead eased by 1.2% to $2,941. Tin dropped 4.4% to $51,810. Nickel was down 2.5% to $17,315. (Reporting and additional reporting by Solomon Cefai, Editing by Eileen Soreng).
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Source: India will monitor Chinese imports of steel before deciding further curbs.
India will continue to monitor the?steel? imports until at least two more months, before deciding whether or not further measures are required to reduce the flow of shipments from China. A source with first-hand knowledge said that India would be monitoring the?steel? imports until at least two?more?months. New Delhi imposed an import tariff of three years on certain products in December to stop cheap shipments from China. India, which is the second largest crude steel producer in the world, was a net importer of finished steel for the?second consecutive month in May. Imports totaled 0.7 million metric tonnes, which was above the average over the past?six-month period, according to a government document. The government report stated that exports of finished steel were 0.5 million metric tons in May, which was below the average for the past six months. The source declined to identify herself due to the sensitive nature the issue. Source: There is no decision on whether anti-dumping dutys or other measures will be taken. The federal Ministry of Steel failed to respond to an email requesting comments. China's imports reached a two-year high in April. In April, China’s finished steel exports from India to China more than doubled. They were the highest they had been for at least two years. This led to concerns from India's steelmakers, who were concerned that the imposition of import duties had not been enough to protect them against cheap imports. Sources said that the steel ministry also requested that the finance ministry remove a provisional antidumping duty on low ash metallurgical coal, a raw material for steelmaking. However, no final decision had been made. India's steel ministry made the request, citing insufficient domestic supplies and high prices, according to a government report. The Finance Ministry did not reply to an email seeking comment. (Reporting and editing by Barbara Lewis; reporting by Neha Arora)
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Oil prices drop as stocks are hit by the Fed's rate reality check
Investors expect the Federal Reserve will take more aggressive measures to combat inflation even after a 16% decline in oil prices this month. STOXX 600 dropped 1.2% under pressure of 'declines by?European chip-equipment manufacturers, following declines in tech shares in Japan and South Korea. Seoul's KOSPI Index fell 10%, its biggest one-day drop since March. Futures on Nasdaq are down over 2.5%. This suggests that Monday's 1.3% decline could continue into the second day. SpaceX shares fell by nearly 17% on Monday after the company tapped the bond markets following its blockbuster IPO earlier this month. Alphabet, Meta Platforms, and Microsoft all also suffered losses. S&P 500 futures fell 1.5%. Chris Weston, research director at Pepperstone Group in Melbourne, said: "These markets are anything but dull." "The former generals in the market seem to have lost their momentum. Investors are now moving into areas that are more defensive and less AI-focused, with more predictable cash flow. Brent crude futures fell below $76 per barrel on Tuesday for the first since early March, as vessels continued to transit the Strait of Hormuz and oil prices were almost back at pre-war levels. Normally, a drop in oil prices would boost stocks, but now investors are focused on what the rise in energy costs will mean for the Federal Reserve and central bank policies. Kevin Warsh, the new chair of the Federal Reserve, is expected to be much more aggressive in his approach to inflation. The 2-year Treasury yields - which are most sensitive to changes in inflation expectations and interest rates - have risen to their highest level in 16 months, trading at 4.188%. Longer-dated yields also rose sharply. "The adjustment in U.S. Yields creates a more difficult backdrop for risk assets?near-term after strong gains made in recent months," MUFG Currency Strategist Lee Hardman said. Investors are almost ready to price in a rate hike by September, according to the money markets. In this context, the dollar has reached a one-year high against a basket of currencies. The Japanese yen has suffered a lot from this strength. On Tuesday, it was flat at 161.47 against the dollar after a volatile session on Monday. Satsuki Katayama, the Japanese Finance Minister, said that she met with U.S. Treasury Sec. Scott Bessent online a day before to discuss global financial markets. Analysts said this indicated an increased risk of Tokyo intervening in order to prop up the yen. On the 10th anniversary since the Brexit vote, which saw Britain leave the European Union and the euro, the pound is down 0.3% at $1.3215. Sterling fell on Monday after British Prime Minister Keir starmer announced he would "resign", paving the path for what will be an orderly transfer to Andy Burnham. Gold fell 2%, to $4,100 per ounce, as expectations of rate increases in the U.S. this year increased. Bitcoin fell by 3.1%, to just below $63,000. Ether dropped almost 5%, to $1,650. (Reporting from Singapore by Gregor Stuart Hunter; Additional reporting in Tokyo by Rocky Swift; Editing by Jacqueline Wong Jamie Freed Thomas Derpinghaus
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Copper falls due to fears of US rate hikes and a strong dollar
The price of copper fell on Tuesday due to concerns about potential 'growth headwinds' from anticipated Federal Reserve interest rate increases as?well? as a stronger U.S. dollar. dollar. Benchmark three-month?copper?on the London Metal Exchange?was down 1.36% to $13,463 per metric ton at 0701 GMT. The Shanghai Futures Exchange's most traded copper contract fell 1.07% to 103,580 Yuan ($15,277.29) per ton. Many banks predict that the Fed will increase interest rates in this year because of persistent inflation and the hawkish attitude of new chair Kevin Warsh. A higher rate?can dampen the outlook for industrial metals that are growth-sensitive by increasing borrowing costs, and stifling economy activity. A stronger ?U.S. Copper was also affected by a stronger dollar. A rise in the dollar makes greenback-denominated commodities more expensive for buyers using ?other currencies. National Bureau of Statistics data showed that the refined copper production in China increased 2.2% on an annual basis to 1.26 million tons. This added to the pressure. Aluminum prices fell 3.54% and 2.23% respectively on the LME, as traders weighed up the supply from the Gulf against the stronger output of China and the rising Chinese exports. The Iran war disrupted shipments across the Strait of Hormuz, and has cut Gulf production to levels well below those pre-war. IAI data show that global primary aluminum output increased 3.5% on a month-to-month basis to 6.2 millions tons in May, largely due to stronger Chinese production. China's exports?of?aluminium wire, which is increasingly used to ship aluminium overseas because it has a tax advantage over unwrought material, tripled in April to reach 50,224 tonnes. "However the?aluminium markets is expected to remain deficit this year," ING analyst wrote in a report. Zinc fell?2.16% among?other LME Metals. Lead lost 1.04%. Nickel dropped 2.25%. Tin dropped 3.87%. On the SHFE, lead fell 0.15%, tin dropped 4,1%, and nickel dropped 1.68 %.
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Gold drops over 2%, dollar remains firm in expectation of Fed rate hikes
The gold price fell by more than 2% on Monday, as a result of a stronger U.S. Dollar and expectations that the Federal Reserve will raise interest rates this year. Investors also assessed U.S. - Iran peace talks. Globally, stocks fell amid worries about AI-related valuations of shares and the threat of higher interest rates. The dollar was near an all-time high while crude fell by 1%, making gold more expensive for buyers holding other currencies. As of 0753 GMT, spot gold was down by 2.2%, at $4,099.84 an ounce. U.S. gold futures for August delivered fell 2% to $4117.70. Spot silver fell 5%, to $61,90 an ounce. Platinum lost 3%, to $1,628.55, and palladium dropped 2.9%, to $1,229.28. Tim Waterer, KCM Trade's chief market analyst, said that while gold had benefited from lower oil prices, it was not able to do the same for the U.S. Dollar, which is continuing to rise on expectations of Fed rate increases. According to the CME FedWatch Tool (a tool that helps traders price in the hawkish monetary policies of the new Fed Chair Kevin Warsh), there is now an 88% probability of a rate increase in December. This was up from 61% prior to the Fed meeting held last week. Chicago Fed President Austan Goolsbee stated that with the labor market stable, his focus is on determining whether the too-high level of inflation will remain the same or decline, as the effects from 'high tariffs' fade and if there is a resolution to the Middle East conflict. The United States has?waived sanctions on Iran for 60 days after the first talks under a nascent peace deal. The?U.S. has?waived its sanctions against Iran for 60-days after the first talks in a fledgling peace deal. Officials reported that the fighting in Lebanon had ceased under the agreement designed to end?hostilities throughout the region. JD Vance, the U.S. vice president, said that talks with Iranian officials had laid a "good foundation" for a final deal. Iran however denied having begun discussions about its nuclear program. Investors await U.S. The Fed's preferred measure of inflation, Personal Consumption Spending, is due Thursday. This data will provide further clues about monetary policy. (Reporting and editing by Subhranshu sahu in Bengaluru, and Mrigank dhaniwala.)
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UN Chief calls on AI companies to be transparent about environmental costs
On Tuesday, the United Nations urged major artificial intelligence companies to disclose their full environmental costs and use renewable energy in their data centres. He also launched a transparency project for the sector. Environmental groups have criticized the rapid growth of data centres to fuel AI for their excessive energy and water use and lack of transparency. In a speech at London Climate Action Week, U.N. Secretary General Antonio Guterres stated that by 2030 they could use enough power to satisfy the basic needs for all 1.3 billion sub-Saharan Africans for an entire year. As he launched the U.N. AI Environmental Transparency Initiative, he called on AI companies to measure and?disclose? their water, carbon and lands use impacts as well as commit to powering data centres with'renewable energy' by 2030. He said that if AI is going to be a part of building a better world, it has to be open about the costs it incurs now. AI firms currently rely on voluntary net zero commitments and targets for renewable electricity to decarbonise operations. Many are also turning towards gas or touting the nuclear power source as a new energy?source. Guterres stated that the world is still not on track to reach global climate goals, and criticized voices who call for increased fossil fuel use. He said that deploying more renewable power projects to electrify buildings, transport and industry was one of the fastest ways to reduce emissions and stop relying on imported fossil fuels. CALL FOR ACTION ON METHANE Guterres launched an action call on methane emission, which included asking fossil-fuel companies to fix any leaks and stop flaring routinely. He said that methane, a powerful greenhouse gas, is responsible for around a third of the current global warming. Guterres announced that he will convene world leaders ahead of the U.N. Climate Conference (COP31) in Turkey will help to drive forward a just transition away from fossil-fuels. (Reporting by Susanna Twidale, Editing by Raju Gopikrishnan).
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European shares fall on Fed hike bets and tech drag
European shares dropped at the opening of trading on Tuesday as fears about increased corporate spending in?AI and expectations for imminent rate?hikes from the Federal Reserve dampened sentiment. Most sectors in Europe are trading down, as the pan-European STOXX 600 fell by?0.89%? to 633.61 at 0721 GMT. The tech sector performed well in Europe, but the global trend was positive. As borrowing costs rise, companies that rely on debt to fund their spending will be under pressure. Asian stocks fell sharply as concerns about Middle East supplies eased and were overshadowed by the tech-driven weakness. South Korea's Kospi Index plunged almost 10% at closing. According to CME Group’s “FedWatch Tool”, traders expect the Fed to raise interest rates by 50 basis points total by the end this year to combat the inflation pressures caused by higher energy prices. According to LSEG data, markets are still betting that the European Central Bank (ECB) will increase borrowing costs another 25 bps this year. This is despite the fact that President Christine Lagarde had downplayed the possibility of a second-round effect on inflation? on Monday. Basic resources, which fell 3.3%, was followed by miners Fresnillo, and Hochschild, who each dropped more than 6%, following the decline in precious metal prices. European tech stocks fell 2.6% on Monday, following weakness in Asia. Aixtron, a semiconductor equipment manufacturer, and Infineon, a chipmaker, both fell by 3.8% and 4.8% respectively. Signify, the largest lighting company in the world, has dropped 15.6% since it updated its strategy. It now aims to achieve an adjusted EBITA of 10% by 2029. Heineken shares rose by 1.6% after the Dutch brewer named Rafael Oliveira as its new CEO. He replaces?Dolf Van den Brink who quit the company earlier in the year due to a slump in industry sales. Reporting by Utkarsh hathi and Johann M Cherian from Bengaluru, editing by Janane Venkatraman & Mrigank Dhaniwala
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Iron ore reaches multi-month lows due to rising supply and tepid China Demand
Iron ore fell to a'multi-month-low on Tuesday. This was due to the prospect of 'increased shipments by major suppliers as we approach the end of the second quarter, and the seasonally low slackening'steel demand. Iron ore, the most traded contract at China's Dalian Commodity Exchange ended daytime trading 0.54% lower than its previous closing price of 738.5 Yuan ($108.91). It reached its lowest level since July 9, 2025 at 734 Yuan during the session. By 815 GMT the benchmark July iron ore price on the Singapore Exchange had fallen 0.7% to $97.55 per ton. This was its lowest level since February 25. For a fourth consecutive session, the contract has been trading well below an important psychological level of $100. The miners will be increasing their shipments to meet the?guidance target this month. Analysts said that this coincides with a seasonally lower Chinese demand. This could lead to a 'pile-up' of portside inventories, which will put pressure on the price of steelmaking ingredients. Analysts at broker Maike Futures also said that the macroeconomic data from China was not encouraging, especially the retail sales which dropped for the first time since over three years. They expect the steel consumption to be affected, they added. Energy prices and freight rates have also fallen due to progress in the peace talks between the United States of America and Iran. Iron ore prices were resilient despite a lacklustre demand, due to rising?freight costs and input costs triggered by energy price spikes caused by the Middle East conflict. On gloomy demand outlooks, coking coal and other steelmaking components have extended their declines, falling by 1.85% and -4.13% respectively. The benchmarks for steel on the 'Shanghai Futures Exchange' were generally weaker. Rebar fell 0.35%; hot-rolled coils dropped 0.27%; wire rods lost 0.47%; and stainless steel dropped 1.49%.
What are the echoes of 2022? The markets look back at Russia's playbook for the Middle East conflict
The world markets are 'rocked' by a Middle East conflict that could cause another inflationary shock. They're looking to the past for clues as to what will happen next. The global economy was recovering from the COVID-19 epidemic when the surge in?energy prices exacerbated inflation. Equities were down and investors sought safety with the dollar. George Lagarias is the chief economist of wealth manager Forvis-Mazars. He said that there are parallels in the sense that the global economy has been weakening due to the trade war.
The trade war is a major inflationary factor that could be amplified by an increase in oil prices.
The markets' reaction to the Middle East conflict is similar to that of the Russia/Ukraine conflict at the beginning of February 2022.
The energy market has seen volatility that rivals the chaos after Russia invaded Ukraine. Brent crude oil is up around 40% since U.S.-Israel strikes a couple of weeks ago, and it was nearing $120 by Monday. Brent crude oil is expected to settle around 15% higher in 2022 at the 2-week mark after reaching its highest level since 2008. Richard de Chazal, William Blair's macro-analyst, said that the oil market "has moved from a world where supply was essentially frictionless for ten or twenty years before the pandemic to a world which is consistently being hit by supply shocks after supply shocks". Since the Middle East conflict began, the dollar has risen by 2.6%. This is the same as its gains in 2022?over the exact same number of days. SAFE HAVEN SHARP-UP Other assets have acted entirely differently. This time, European wholesale gas prices rose by a little over 58%, which is a much more muted response than the nearly four-fold increase in 2022, which reflects Russia's major role as a gas supplier. Germany's 10-year Bund has increased by 30 basis points, while it fell more than 10 basis points four years ago. The markets have been more willing to accept the expectation of higher inflation this time. In 2022, after a sharp fall in yields as pricing pressures became apparent, yields spiked. These fears are less pronounced this time, and the eurozone's five-year inflation swap, which spiked in 2022, is still well-anchored around 2.18%. This is near the ECB target of 2%. The underlying inflationary impulses, however, are the same as four years ago when price pressures following the pandemic forced global rates to rise aggressively. Lagarias, Forvis Mazars’s Lagarias, downplayed any likelihood of similar actions in the near future. He said that central banks would need to see inflationary pressures in core numbers for at least two to three months.
"That's unlikely, and if that does happen, it is probably not due to Iran." Gold, which soared by almost 8% after?Russia invaded Ukraine has dropped about 3% in the aftermath of the Iran War.
RBC strategist Christopher Louney stated that the clear link between the crisis and energy markets meant "there was less immediate need for a general purpose hedge", which contributed to gold's weakening along with higher bond yields, and the dollar.
EUROPEAN Shares Play Copy Cat Four years ago, European shares faced a steep selloff. They dropped about 10% in the first two weeks after war. They are now down 5%.
Europe was in the midst of a storm by 2022 due to its geographical location and energy dependence on Russia. Although the Middle East may be further away, Europe is still vulnerable due to its dependence on energy imports. Barclays equity analysts said Europe's STOXX 600 could reach 550 points, or a 13% drop from the closing level of February 27.
The market conditions in Europe prior to the conflict is one difference.
Stocks were already at record highs in 2022, in anticipation of Russian invasion.
BAD ENERGY
The CBOE Oil Volatility Index has reached its highest level in five years, 120%. This is higher than the peak of 102 % that was hit after Russia invaded Ukraine 2022. Beyond energy, volatility is nowhere near the level that's generally considered to be crisis territory. The?VIX equity volatility index is at a warm 25. This is below the highs in April 2025 of 60, and the COVID's 80.
In February 2022 it reached a peak of 38 before reversing.
The ICE BofA MOVE bond volatility index has risen to 95. This is its highest level since June 2025. It remains below a peak of 140 at the beginning of March 2022. The FX volatility is barely moving.
(source: Reuters)