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MORNING BID EUROPE - Hope and Hormuz
Ankur Banerjee gives a look at what the day will bring for the European and global markets. The conflicting messages?from Iran & the U.S. about a possible ceasefire?in the Gulf have left investors reluctant to make major bets, as 'cautious optimism' around an end of the conflict is met with the sobering reality of?higher energy prices. Stocks have been fluctuating between gains and losses in Asian hours due to the uncertainty. European futures suggest a lower opening, but much depends on the rapidly-evolving Middle East. Here's the current situation: Iran has said that it is reviewing a U.S. ceasefire proposal but "has no intention" of holding negotiations to end the conflict. Donald Trump of the United States said that Iran was 'desperate to reach a settlement to end almost four weeks worth of fighting. The Strait of Hormuz is effectively closed and countries around the world are dealing with fuel shortages, supply shocks, and rising prices. South Korean President Lee Jae Myung urged the public to conserve electricity on Thursday, while the Philippines' energy regulator announced that it had suspended wholesale electricity spot markets across its three grids. Oil prices over $100 per barrel cast a shadow on the global economy. However, certain countries are more vulnerable and less equipped to handle rising prices. Investors have been doing the same thing all month. Sell stocks and bonds. What is the only safe haven? The dollar. The dollar. Since the U.S., Israel and Iran began their attacks on Iran on 28 February, foreign?investors sold $50 billion of regional stocks.?Tehran launched its own attack and a new front opened in Lebanon. Since the beginning of the war, Europe's dependency on oil imports is weighing on equity prices. The pan-European STOXX 600 has been under pressure. The broad index is down by more than 7%, while the S&P 500 is down by just over 4%. The following are key developments that may influence the markets on Thursday. GfK Consumer Sentiment in April France: Consumer Confidence in March Earnings: Porsche and Delivery Hero
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The sale of used EVs in Europe is on the rise as a result of the Iran War and higher petrol prices
Online car platforms report that the spike in petrol prices caused by the war in Iran is driving consumers to switch from combustion engines. Terje Dahlgren is an analyst for?Norway’s largest used-car marketplace Finn.no. She said that there's currently a 'electric car bonanza' in the used market. The conflict, which began on February 28, disrupted an important shipping route that transports roughly 20% of the world's oil supply. The European Commission's data shows that the cost of gasoline in the European Union increased 12% between February 23 and March 16 to $1.84 ($2.12) a litre. Aramisauto, a French online used car retailer, said that its share of EVs sales nearly doubled between the week beginning February 16 and?the week commencing March 9 rising from 6.5% to 12.7%. The company, which is majority owned by Stellantis and was a major player in the auto industry, saw a similar change when Russia invaded Ukraine, and energy prices increased, said CEO Romain Bocher. He said that "as soon as the price of petrol passes 2 euros per litre, it leaves a lasting impact on people's mind." "We're seeing an increase in interest, which is translating into orders for EVs and Hybrids." In the same three-week period, Aramisauto's petrol models fell from 34% to 28%, and diesels from 14% to 10%. New-car buyers will also gravitate to EVs and Hybrids if fuel prices in the U.S., Europe and Asia remain high. In their marketing, EV manufacturers are already emphasizing the price of petrol. In France, MG owned by China SAIC is running a series of?social media ads stating that "it might be time to rethink your driving style". The consumers seem to be responding. Olx, based in Amsterdam, said that customer inquiries for EVs jumped on its marketplaces across France (50%), Romania (40%) Portugal (54%), and Poland (39%), while growth was "accelerating consistently across all markets". Christian Gisy, Olx's CEO, said that the interest in electric vehicles was already on the rise before recent events. The instability seems to have accelerated the transition that was already in progress. The used-EV market in Europe has also expanded. The proliferation of battery-health certifications and a wider variety of models have addressed buyer concerns regarding second-hand EVs. This has helped to support sales before the war even began. Used EVs are often sold quickly in response to changes in the market or sudden increases in fuel prices. They can be up to 40% less expensive than new models, and they're available for immediate driving off of the lot. Alastair Campbell is vice president for growth at British automotive data firm Marketcheck. Marketcheck provided data to? Marketcheck's data shows a "clear, sustained increase" in the sales of used EVs since the start of war. The largest used car websites in the Nordics - owned by Norway's Vend- also see a sharp increase in EV sales. Blocket in Sweden saw EV sales increase by 11% compared to the previous two-week period, and views of EV models rose 17%. Marcin Stepman, Blocket's car expert, said: "We are seeing a clear trend where people are actively searching for fuel-efficient alternative cars." Denmark follows a similar trend. The local used car platform Bilbasen reported an increase in searches for 'EVs. Car analyst Jan Lang cited higher petrol prices as the main reason. Mobile.de, Germany's largest online?market for cars, reported that the number of EV searches has tripled from 12% in March to 36%. Car dealers also received 66% more enquiries about used EVs compared to February. Mobile.de stated that "high gasoline prices currently lead to an increase in demand for electromobility."
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Rising inventories of copper outweigh Mideast ceasefire hope
After a brief dip in prices, copper prices fell on Thursday. This was due to rising'stocks' and weakening consumer demand, particularly in China, the world's largest consumer. Investors were also waiting for clarity about the possibility of ceasefire?in the Middle East. Benchmark 'three-month' copper on the London Metal Exchange dropped 1.17% to $13,177 per metric tonne by 0341 GMT, after finding some help from a weaker dollar the previous day. The Shanghai Futures Exchange's most traded copper contract was down by 0.03% to?95.160 yuan per ton ($13.789.31), after reaching its highest price since March 19, at 96.590?yuan. The red metal, used in construction and power plants, was under pressure as stocks in LME approved warehouses were increasing. The market reached an eight-year high of 361,075 tonnes on Wednesday. This is a 153% increase since the start of this year. After a flurry of dip-buying, traders said that some Chinese consumers had entered the market to restock. Investors are also closely following developments in the Middle East conflict, which has caused turmoil on energy markets and threatened economic growth worldwide. Iran's Foreign Minister said that the country is reviewing the U.S. proposal to end the war. This suggests that Tehran may be willing to negotiate, even though its initial response was negative. Other LME metals saw a?0.45% drop in aluminum, a 0.55% fall in lead, tin fell 1.2%, and zinc dropped 0.7%. Nickel also slipped 0.34%. Other SHFE metals, such as aluminium, lead, and tin, declined by 0.46% each, while zinc fell 0.22%. Nickel outperformed the other metals with a 0.5% gain as concerns about supply grew after Australia's Nickel Industries announced?on Thursday that it had?suspended its Hengjaya Mine in Indonesia following an accident this week.
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Iron ore is a major concern for supply disruption in Australia
Iron ore futures rose Thursday on concerns about disruptions in Australian'supply due to ports being closed in the Pilbara area following a cyclone. As of 0226 GMT, the most-traded contract for?May?iron ore on China's Dalian Commodity Exchange was trading 0.31% higher. It cost 818 yuan (US$118.45) per metric ton. The benchmark April Iron Ore on the Singapore Exchange rose by 2.15% to $107.45 per tonne. Pilbara Ports announced on Thursday that the ports at Ashburton and Cape Preston West were closed due to Tropical Cyclone Narelle. This has led to concerns about iron ore supplies from Australia, which is the top exporter. The gains, however, were limited?due?to production restrictions in China's iron ore hub?of Tangshan which could?result in a lower demand. Local authorities reported that the city activated an emergency level-2 response on March 25 due to heavy air pollution. Mysteel, a consultancy, said that steel mills in Tangshan also face restrictions on scrap trucks entering their facilities. High energy prices are causing concern about global inflation and a decline in expectations of U.S. rate cuts. A note from Shanghai Metals Market said that the 'broader caution' has increased the risk of price corrections across bulk commodities. Coking coal and coke, which are used to make steel, fell by 0.96% each on Thursday. The benchmarks for steel on the Shanghai Futures Exchange were mixed. Rebar,?hot-rolled?coil and wire rod all traded at the same price. Stainless steel rose 0.66%. ($1 = 6.9058 Yuan) (Reporting and editing by Sonia Cheema; Ruth Chai)
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Sources say that the sale of Jindal Steel to Thyssenkrupp has been stalled over pension and energy costs.
Four?people with knowledge of the matter have said that discussions about a possible sale of Thyssenkrupp Steel Europe to Jindal Steel International may be called off because of differences regarding pension liabilities, energy costs and investments. Despite the fact that?talks are still ongoing over a possible sale of 'Thyssenkrupp - Steel Europe (TKSE), and an agreement could still be reached, a deal now seems less likely. One person said that the companies may decide to stop official negotiations as early as next month. Thyssenkrupp tried to sell TKSE'several times over the last decades. If TKSE is not sold, it would be a blow to the plan of Thyssenkrupp's CEO Miguel Lopez who wants to transform the storied German Engineering Group into a holding. This will involve divesting stakes from all its business divisions ranging between car?parts and clean-tech. The people who spoke to us said that a number of factors are complicating the talks, including 2.4 billion euro ($2.8 billion) in pension?liabilities linked to TKSE. These liabilities have posed a challenge for past sales attempts, and there is also disagreement over the amount of future investment needed. The second source also said that Jindal Steel International has become increasingly uneasy over the rising costs of energy in Europe. The energy costs in Europe are already higher than those in the United States or Asia. However, they have increased further due to the Iran War. Thyssenkrupp announced on Wednesday that confidential talks continued with Jindal Steel International, and representatives of the labour movement. The parties will need to agree on valuation, obligations and future investments. Jindal Steel International (the?international steel?arm?of the Naveen Jindal Group) had no comment immediately. Juergen Kerner's, Thyssenkrupp’s deputy supervisory Board chairman, said last week that talks have stalled. Lopez also stated that EU plans to protect the underperforming steel industry in the EU had increased investor confidence and strengthened Thyssenkrupp’s position in negotiations. Jindal Steel International made a preliminary offer to TKSE in September. This included the completion of a new green steel production facility in Duisburg, and a commitment for more than $2.31 billion in order to increase electric arc furnace capacities.
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Stocks are on edge after Middle East ceasefire negotiations take centre stage
Investors treaded carefully amid the dizzying Middle East developments, as Iran said it would consider a U.S. proposal to end the Gulf Conflict. The escalating war has jolted the global markets. Oil prices have soared, rekindling inflation fears, and causing global interest rate expectations to be thrown into chaos. In early Asian trading, the Nikkei was up 0.6% and South Korean stocks were down by 1.2%. MSCI's broadest Asia-Pacific share index outside Japan edged down 0.23%, setting up for an 8.7% drop in the month. This is its largest monthly decline since October 2022. The dollar remained near its recent highs, and was on track for a monthly gain of 2%. This cemented the dollar's status as a safe haven. Iran's latest remarks suggest that Tehran is willing to "negotiate" an end to war, if their demands are met. The U.S. has sent Iran a 15 point ceasefire proposal that was initially brushed aside by Iranian officials. Chris Weston is the head of research for Pepperstone. He said: "While headlines indicate a more positive tone, markets are unsure about which signals they can trust and act on." Price action indicates that participants are expecting further twists and turn, even though the likelihood of a negotiated result is increasing. The 'war' that lasted for nearly a month, triggered by the joint U.S. and Israeli strikes against?Iran late in February, has effectively closed the Strait of Hormuz. This is a conduit used to transport a fifth of all global oil and liquefied gas. Prices have soared above $100 per barrel due to the disruption. Brent crude futures are at $103.35 a barrel, up by 1% for the day and on track to see a 42% increase in the next month. It will be difficult to reconcile all of these points if you consider what the U.S., Israel, and Tehran want to achieve," said Matthias Scheiber. He is a senior portfolio manager at Allspring Global Investments and head of their Multi Asset Team. "We think that there are still arguments to be made for higher energy prices?for the time being." Fears that soaring oil prices could cause an inflationary shock have led traders to discount any chance of a Federal Reserve rate cut this year. This has helped boost the dollar. The dollar has been boosted by traders who have priced out any?chance of a Federal Reserve?rate cut this year. The European Central Bank's Christine Lagarde said on Wednesday that she would consider raising interest rates if the war in the Middle East continues to push up inflation in the region. Lagarde said in Frankfurt that if the shock leads to a large but not too persistent overshoot, a measured adjustment of policy may be warranted. The euro was little altered at $1.1562, while sterling purchased $1.3358. The yen was hovering at 159.43 dollars, clinging to the 160 level traders are watching as a possible trigger for intervention. Gold was up 0.66% at $4,537 an ounce. However, it has been largely selling off in this month. It is now on track for a 14 percent drop, the steepest since October 2008. (Reporting and editing by Shri Navaratnam in Singapore)
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Investors reassess Middle East peace prospects as oil prices rise
Oil prices rose?on Friday, recovering some?previous-day's losses, as investors reexamined the prospects for a?deescalation of conflict in the Middle East. Iran also said that it was still evaluating a U.S. plan to end the conflict, which had disrupted the energy flow. Brent futures increased $1.13 or 1.1% to $103.35 a bar by 0051 GMT. U.S. West Texas intermediate crude futures were also up $1.08 or 1.2% at $91.40 a bar. Both benchmarks fell more than 2% Wednesday. Iran's Foreign Minister?said that despite reviewing the proposal, it has no intention to hold talks in order to end the growing conflict in the Middle East. Karoline Leavitt, White House press secretary, said that Donald Trump would hit Iran harder if Tehran refused to acknowledge that it had been "defeated military" Tsuyoshi ueno, senior researcher at NLI Research Institute said that optimism regarding a possible ceasefire had faded. He said that Washington's 'barrier of expectation' was high and the oil price could be volatile if both sides do not negotiate or take military action. According to three Israeli sources who are familiar with Trump's plan, the '15-point' proposal sent via Pakistan calls for Iran's highly enriched uranium stocks to be removed, enrichment halted, its ballistic missile programme curtailed, and funding cut off for regional allies. The conflict has almost completely stopped shipments through Strait of Hormuz. This is the route that carries one-fifth of all crude oil and natural gas shipped around the world. The International Energy Agency called it the largest oil supply disruption ever. Sources said that India has purchased its first cargo of liquefied gas from Iran in many years, after the U.S. lifted temporary sanctions on Tehran's refined fuels and oil. During talks on Wednesday, the Japanese prime minister Sanae Takaichi requested that Fatih Birol 'coordinate an additional release of oil stocks. Tokyo is seeking to protect itself against a long-term Middle East conflict. Three Iraqi energy officials stated on Wednesday that the production of Iraqi oil has dropped, and that storage tanks have reached critical levels. According to market data, calculations show that at least 40% of Russia’s oil export capability is halted following Ukrainian drone strikes, a disputed assault on a major pipeline, and the seizure or tankers. The U.S. crude oil inventories increased by 6.9m barrels, to 456.2m barrels during the week ending March 20. This is the highest level since June 2024. It also far exceeded analysts' expectations based on a poll that predicted a 477,000 barrel increase. (Reporting and editing by Edmund Klamann, Kevin Buckland and Yuka Obayashi)
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Worker sues Valero over Texas refinery explosion
A man who claimed to have been injured in an explosion at Valero Energy’s Port Arthur, Texas refinery Monday night filed a suit on Wednesday with a state district court, alleging that the?company?failed?to properly maintain the refinery. The lawsuit filed at the Jefferson County District Court of Beaumont, Texas, is seeking more than $1,000,000 in damages. A Valero spokesperson had no immediate comment on Wednesday night. Valero filed a report with the Texas Commission on Environmental Quality (TCEQ) on Tuesday. The company stated: "An unexpected release of fluid from Complex?2 caused an ignition event, and multiple process units were upset." Jonathan Jaimes, who was working at the Port Arthur refinery in east Texas near the Louisiana border, was present when a diesel hydrotreater explosion shook homes up to 18 kilometres away. "(Jaimes played no role in the tasks or events that led to the explosion. According to the lawsuit, "the blast and heat of the fire from the explosion caused him to be injured as a result." The lawsuit stated that Jaimes suffered injuries to his back, neck, spine, and other parts. He is also suffering from a?post-traumatic stress disorder. In an emailed message, Kyle Findley, an lawyer at Arnold & Itkin who represents?Jaimes said, "This wasn't an unavoidable incident - it was a result of gross negligence, and a flagrant disrespect for worker safety." Findley stated that Valero was aware of the risks in this facility but chose to ignore them. "If a company shows such a disregard for the safety of their workers and the community around them, they must be held responsible." Jaimes refused to comment when contacted by a representative of the law firm Arnold & Itkin.
Grain futures-Chicago soya rises as Trump plans a May meeting with China’s Xi
Chicago soybeans rose on Thursday as U.S. President Donald Trump’s plan to visit Chinese President Xi Jinping this May boosted hopes for stronger Chinese demand for U.S. supply.
Wheat and corn gained as well.
As of 0425 GMT, the?most active?soybean contracts on the Chicago Board of Trade climbed 0.2% to $11.74-1/4 per bushel. CBOT wheat rose 0.4% to $6.00-1/4 per bushel. Corn increased 0.1% to $4.67-1/4 a bushel.
Originally scheduled to travel next Monday, Trump will visit Beijing May?14-15. He said on Truth Social Wednesday that he would be hosting Xi?for a return visit to Washington later in the year.
Analysts in Beijing said that some traders were optimistic that the meeting would increase the prospects of China purchasing U.S. soya beans. However, it is worth noting that China now purchases most of its soybeans directly from Brazil.
China is expected to increase its imports of Brazilian soyabeans in the first half 2026 as record production and low prices drive shipments.
Chinese state-owned companies have purchased about 12 million metric tonnes of U.S. soya beans since late October. This fulfills a U.S. pledge. However, volumes are still well below China’s purchase?of approximately 23 million tons for the 2024/25 harvest year.
According to Agroconsult, an agribusiness consulting firm, Brazil is the world's biggest soybean exporter and producer. Farmers are expected to harvest 184.7 millions tons of soybeans during the 2025/2026 season. This estimate was raised by 0.9% following the completion of the Rally da Safra survey.
Agroconsult?said that Brazil's soybean planting area is likely to remain the same in the coming?2026/27 growing season. However, the outcome will depend on the duration of the U.S. and Israeli war against Iran.
The reports of a U.S. 15-point plan to end the Iran war, in response to Trump's remarks this week regarding talks with Tehran, have also raised hopes for a de-escalation of the Middle East conflict. (Reporting and editing by Subhranshu sahu, Sumana nandy and Daphne Zhang)
(source: Reuters)