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Iron ore to suffer second weekly loss due to higher supply and concerns about demand
Iron ore prices began on a shaky footing?on Friday. They were poised to fall for a second consecutive week amid expectations?of rising supplies and a?seasonally weakened demand. However, resilient 'near-term' consumption in the top buyer China, curbed large losses. The Dalian Commodity Exchange's most traded iron ore contract closed the daytime trading down 0.13% to 792 yuan (116.51 dollars) per metric ton. This represents a 2.5% weekly drop. At 0700 GMT the benchmark June Iron Ore at the Singapore Exchange was 0.25% higher, $106.05 per ton. This represents a 2.8% decline so far this week. Earlier in the session, the?contract reached its lowest level since April 28, at $105.45. The sudden increase in the number of shipments arriving at Chinese ports from Australia and Brazil, two major suppliers, suggests that more shipments will arrive there over the next few weeks. Analyst Guiqiu zhuo at Jinrui Futures said that there is a general expectation that the steel demand will be seasonally lower, while the ore supply will increase in the second quarter. Zhuo stated that the combination of rising supplies and weaker demand would pressure iron ore price, although solid consumption for this key ingredient in steelmaking is currently limiting losses. Data from Mysteel revealed that the average daily hot metal output, which is a measure of iron ore consumption, increased by 0.6% compared to the previous week, reaching a record high of 2.41 million metric tons on May 21. Coking coal, and coke - the other ingredients in steelmaking - fell by 3.69% and 2% respectively. Galaxy Futures analysts said in a recent note that "coking coal inventories at some coking plant have recovered to a reassuring level after several rounds of restocking." They added that "some buyers were reluctant to accept higher coal prices and replenished only hand-to mouth, exerting downward pressure on coking coal prices." Steel benchmarks at the Shanghai Futures Exchange have lost ground. Hot-rolled coils fell by 0.73%. Wire rods dropped 0.12%. Stainless steel dropped 0.64%. ($1 = 6.7975 Chinese Yuan) (Reporting and editing by Shri Navaratnam, Mrigank Dhaniwala and Lewis Jackson)
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Document shows that the Indian steel ministry is pushing to eliminate metallurgical coal tariffs
According to a document reviewed by, India's Ministry of Steel asked the Ministry of Finance to remove?anti-dumping duties on low-ash coke imports. They cited inadequate domestic supplies and higher prices. India, the second largest crude steel producer in the world, imposed an anti-dumping provisional duty on imports of low-ash metallurgical coal - also known as metcoke – for a period of six months. India imports met-coke primarily from China, Indonesian, Poland, Japan and Switzerland. Industry?experts claim that import volumes have dropped sharply since curbs were implemented. In a memo dated May 18, the Steel Ministry referred to anti-dumping duty acronyms as ADD. Emails seeking comments from the ministries were not responded to. The Steel Ministry has highlighted the problems faced by the state-run Rashtriya Ispat Nigam Ltd. (RINL), stating that the company was unable to obtain adequate quantities of met coke from the domestic market at reasonable prices, resulting in a 20 percent increase in input costs. The Steel Ministry memo stated that RINL's?operational viability and competitiveness?has been adversely affected due to inadequate met coke supplies. RINL didn't respond to an email asking for comment. The 'Steel Ministry' also raised concerns about small and medium-sized companies that rely heavily on met coke merchant suppliers. The report stated that "the domestic market has not been able?to ensure adequate availability of met-coke at competitive prices to meet the needs of the steel industry." (Reporting and editing by Mayank Bhahardwaj, Tom Hogue and Neha Arora)
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Kenya cuts diesel prices after protests over soaring energy prices
William Ruto, Kenya's President, said that the government will cut the price of diesel in the country to provide relief to the consumers. This comes after protests against the rising energy prices caused by the Middle East conflict. Kenya's public transportation workers staged a two day strike this week, which left four people dead and around 30 injured. The protests were prompted by anger over sky-high fuel costs that have pushed the cost of living up. Ruto stated in a televised address that he has directed the cost of diesel to be reduced by 10 kenyan shillings (US$0.0772) during the June-July price cycle, to stabilize pump prices and to provide additional relief for consumers. Ruto stated that "through the government-to-government fuel supply framework we have guaranteed fuel supplies despite global supply chain disruptions, ensuring fuel supply availability throughout the country." He stated that his government had spent at least 28 billion Kenyan Shillings (about $28 billion) on reducing fuel prices, such as tax reliefs between April and June. Kenya raised retail fuel prices last week by up to 23.5% in the May-June price cycle due to a squeeze on global crude supplies and high energy prices resulting from 'the Middle East conflict.
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Vucic, Serbian President, says he's not optimistic about a deal being reached in time over the NIS oil company
Aleksandar Vucic, Serbia's president, said that he was not optimistic about the possibility of reaching an agreement over the Hungarian oil firm 'MOL's bid for a majority stake in NIS, operator of the Balkan country's only refinery. The deadline is Friday. Gazprom and Gazprom, two Russian oil companies, agreed to sell their majority 56% stake in NIS in January to?MOL after the United States demanded that Russian shares be divested due to sanctions imposed by the United States over Moscow's conflict in Ukraine. Washington has given MOL and the Russian companies until May 22th to complete the sale. This requires the Serbian government's consent due to the 29.9% stake that NIS holds. Vucic told Serbia's RTS TV late Thursday that it was unlikely that a deal would be struck between MOL, the Russian companies and Friday. "We've had countless meetings" with MOL. "I hope we'll end successfully but I am not optimistic," said he. He said that Washington was expected to give more time to the parties involved to reach a settlement. In October, the U.S. sanctioned?NIS due to its Russian ownership. This was part of broader?measures that targeted Moscow's energy industry. The Office of Foreign Assets Control of the U.S. Treasury has granted a number of waivers to?NIS. (Reporting by Angeliki Koutantou; Editing by Kirsten Donovan )
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ASIA GOLD - Price volatility dampens India's demand, while China's premiums are easing
This week, gold prices in India continued to be at a steep discount, due to price volatility, which dampened demand, while premiums in China were reduced. Dealers in India quoted discounts This week, you can save up to $78 per ounce on official domestic prices, including 15% import duty and 3% sales tax. That's a significant drop from the previous week when you could save up to $207 per ounce. Retail buyers are confused by the recent price fluctuations after the government increased import duty earlier in the month. "Most of them are waiting for the prices to come down," said a jeweller in Kolkata. This month, the South Asian country raised import duties on gold and silver from 6% to 15% in an effort?to curb overseas purchases and reduce pressure on foreign exchange reserves from rising oil prices. A Mumbai-based bullion seller with a private banking firm said that jewellers are reluctant to build up stocks as wedding season approaches and retail demand remains uncertain. Bullion is traded at a premium in China, the world's largest consumer. The premiums were between $10 and $20 per ounce above the global benchmark, compared to the $15 to $20 that was charged the week before. Bernard Sin, Regional Director of Greater China for MKS PAMP, said that "fed rate hike anxiety, rising bond rates, and dollar strength continue weighing on gold in China." The stronger dollar increases the price of greenback-priced gold for holders of other currencies, while higher bond yields increase opportunity costs associated with holding the metal. He said that "near-term physical demand is caught between conflict-driven demand for safe havens and policy-driven headwinds." Spot gold prices fell to a two-month low Wednesday, due to higher Treasury yields as well as a stronger dollar. In Hong ?Kong, gold In Japan, the premiums are $2. Gold was sold for $0.25 off. In Singapore Gold was sold with premiums ranging from $1 to $3.
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Briton makes record Everest climb by foreigner, two die on mountain
Hiking officials reported that two Indian climbers had died on the mountain this season, bringing the total to five. Kenton Cool, 52, had climbed to the summit of 8,849 metres (29,032 feet) before dawn, and was now descending towards lower camps. His expedition organizers predicted that he would reach base camp by the weekend. Nivesh?Karki, the organiser of their expedition Pioneer?Adventure, confirmed that an Indian climber had died at Camp II while another was killed at Hillary Step. He said that both had reached the summit of Mount Everest on Thursday, but they died on their descent. The "death zones" is the area below the summit of Mount Everest, and it's where Hillary Step is. It's called this because the oxygen levels are dangerously low. The details of their death were not disclosed. Karki said, "one body is at a very high altitude. We are trying to bring the second corpse from camp II." Cool, the British 'climber is "quietly" rewriting record books,?said Lukas Furtenbach, four-time Everest organiser and climber of the Austrian-based Furtenbach Adventures. "More Everest summits that any non-Sherpa has ever achieved... and yet, they still make it seem like a walk in the mountains. Furtenbach said from base camp, "absolute legend." Cool climbed on one of Furtenbach’s teams. Cool, who has climbed Everest every year since 2004, except for the years that authorities have closed the mountain because of various reasons, says it is not a routine thing to do. It never gets easier or less frightening. Cool stated that the?mountain is the tallest in the world, and it brings with it an incredible feeling of majesty. "I'm relying on every bit of experience that I have to be able to move safely around this environment." "Standing on the summit of the mountain for the 20th time is an incredibly special experience." Kami Rita is a 32-year-old?Nepali sherpa who holds the record for most summits at Everest. Since 1953, when Sir Edmund Hillary of New Zealand and Sherpa, Tenzing Norgay, first climbed Everest, more than 8,500 people have climbed it, some multiple times. Reporting by Gopal sharma; editing by Raju Gopalakrishnan
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Dollar at six-week-high as US-Iran discussions in focus. Stocks soar, dollar surges.
Investors were hopeful of a breakthrough at the U.S. Iran peace talks. However, both sides remain at odds on key issues. Investors are worried about the possible closure of the Strait of 'Hormuz. This is a vital artery that supplies energy to the world. The oil price has soared and the outlook for global interest rates has changed due to inflationary fears. Marco Rubio, the U.S. secretary of state, said that there were "some positive signs" in the talks to end the U.S. and Israeli war against Iran. However differences still remain regarding Tehran's stockpile of uranium and the control of the Strait. MSCI's broadest Asia-Pacific share index outside Japan rose 0.8%, a modest increase for the week. Japan's Nikkei rose by 2.8%, barely missing a record high. Taiwan stocks also increased by 2.3%. U.S. Stock Futures rose by 0.36%, and European Futures gained?1%. Investor sentiment improved this week after Nvidia's earnings, which capped a solid set of results for big tech companies. Chris Weston, the head of research at Pepperstone said that news is moving towards tangible items which markets can now price with more conviction. Weston stated that "although confidence levels are not particularly high, they still remain low." Oil prices rose on Friday, after a sharp drop as investors were left guessing by conflicting messages about the Iran negotiations. Prices are still well above prewar levels, and it is expected that they will remain high even if there is a resolution. Brent crude futures were up 1.9% at $104.56 per barrel, but are set to drop 6% for the entire week. U.S. West Texas Intermediate Futures rose 1.35% to $97.64. Energy disruptions that continue to persist as the war drags out will have a ripple effect on prices around the world, leading traders to increase rates in both developed and emerging markets. The markets are pricing in a possible rate increase from the U.S. Federal Reserve before the end of this year, compared to expectations of two rates cuts before the war. Mitch Reznick is the head of Fixed Income at Federated Hermes. He said, "We are seeing an unusually strong correlation between oil prices, and global rates. This shows how wide-ranging and borderless, this shock, has become." "What at first appeared to be a change in inflation expectations now feeds directly into actual inflation, reinforcing that central banks need to maintain tighter policy for longer to restore price stability." This has helped to?lift Treasury yields, and boost the dollar. The euro is at $1.1614. This is close to its six-week low, which it reached on Thursday. It will drop 1% this month. The dollar stood at 99.247 against a basket. The Japanese yen was last sold at 159.11 per dollar. This is dangerously close to the 160 mark that traders fear will bring Japanese authorities back into the market. Tokyo's intervention to support the currency, estimated at $65 billion, was made just a few weeks earlier. Data released on Friday revealed that Japan's core rate of inflation fell to a four-year-low in April. This complicates the Bank of Japan’s path of raising rates. ING senior economist Min Joo Kang said the stronger-than-expected first quarter GDP and firm April exports data earlier this week showed the resilience of the Japanese economy despite the energy shocks, which supported a Bank of Japan hike. (Reporting and editing by Kim Coghill, Thomas Derpinghaus, and Ankur Banerjee from Singapore)
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Morning bid Europe-Markets grab on to peace hope
Ankur Banerjee gives us a look at what the future holds for European and global markets The markets are once again hoping for an end to the Iran War, despite the fact that both Washington and Tehran have said they are still 'far apart' on critical issues such as nuclear enrichment and the control of the Strait of Hormuz. Stocks rose on Monday after U.S. State Secretary Marco Rubio stated that there were "some positive signs" in the talks to end a war lasting nearly three months. He also said that any deal?that included Iran imposing an toll system on the vital strait was unacceptable. And Iran's?Supreme leader ordered that the country’s near-weapons grade uranium shouldn't be sent abroad. Investors are pricing in higher rates around the world due to inflation, as a result of conflicting messages from the U.S. The bond yields were relatively stable on Friday, after spiking earlier in the week across the globe due to changing interest rate expectations. The markets are pricing in the possibility of hikes from the U.S. Federal Reserve this year. Central banks in Asia have started to move. Indonesia surprised markets this week by announcing a massive hike, which temporarily helped the rupiah. Its governor said that the central bank of the Philippines is considering a hike off-cycle as its April move "didn't feel?enough". The calendar of events in Europe is full of economic data, including a German sentiment survey that could give investors a better idea about the impact the Middle East war has had on the world. Walmart's earnings showed that bargain-hunting consumers are flocking to its low-priced essentials and groceries. U.S. retailers have flagged a growing pressure on consumer spending this year. The following are key developments that may influence the markets on Friday. * Economic events: Germany Q1 Gross Domestic Product, UK retail sales in April, Germany Ifo Business Sentiment Survey for May
Sources say that China's June fuel exports are set to increase slightly as restrictions remain in place
Three trade sources familiar with the issue said that China will only see a small increase in refined fuel exports from May to June, because Beijing plans to maintain export restrictions for a fourth month in order to protect domestic supply.
Two sources said that June exports were estimated to be around 550,000 metric tonnes or slightly more than expected, compared to about 500,000 tons in May. The two sources and another person said that state oil firms must now seek approval from the government on a regular basis for every shipment they export. This is because China, the world's largest oil importer, has been dealing with disruptions to crude supply due to the closure of the Strait of Hormuz as a result of the war in Iran.
National Development and Reform Commission and Ministry of Commerce didn't immediately respond to comments. According to two people, details?on the countries that will receive fuel from China have not yet been finalised. In April, China shipped small amounts of jet fuel, gasoline and diesel to Southeast Asia, Australia and other areas.
One source said that diesel and jet-fuel will make up the bulk of exports for June, excluding Hong Kong. The remainder is gasoline.
The same source said that fuel supplies to Hong Kong will be around 800,000 tons. This is compared to estimates of 910,000 tons in May.
China's current export regime is a departure from previous years when the government issued a?second?batch? of refined fuel quotas, usually around April or may after the first batch?was issued in December of the previous year?. Beijing only issued one batch of a 19 million metric ton quota in December this year.
According to two industry sources in China, diesel and gasoline export margins are still high, at nearly 3,000 Yuan ($441.11) per ton, respectively.
(source: Reuters)