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US signs loan agreement with Energy Fuels worth $725 million to boost domestic rare-earth production
The U.S. government signed a $725 million conditional loan commitment with Energy?Fuels on Thursday to boost domestic?processing of 'rare -earth elements as part of its efforts to reduce reliance on China. The?U.S. Energy Fuels will expand operations in rare earth separation and metalization. This is a crucial step for permanent magnet production. The Office of Strategic Capital of the Department of War (OSC) released a press release. Donald Trump has renamed the U.S. Department of Defense to "Department of War". In the past?year several countries have increased their investments in rare-earth mining and processing after China decided to restrict exports of rare-earth magnets. Magnets like these are used in?electrical vehicles, windmills, hard disks and medical devices, such as MRI machines. Energy Fuels must meet financial, legal and technical due diligence requirements as part of the conditional lending agreement, according to the OSC, without going into detail about the requirements. OSC stated that the company's increased production will "directly support permanent magnets across the U.S. industrial base" and improve supply chains for other specialized defense and industrial products. Reporting by Mike Stone from Washington, and Nandan Mandayam from Bengaluru. Editing by Shinjini Ganuli.
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China will open its lithium futures market to foreign traders in the next month
China's Guangzhou Futures Exchange (GFEX), will begin opening its?lithium-carbonate futures and options for overseas traders on July 3. This gives global investors direct access in the largest lithium market of the world and strengthens China's control over pricing. The announcement of Thursday follows that made in April by the Shanghai Futures Exchange, which internationalised the main Chinese futures contracts for nickel, another battery metal. The domestic launch of the lithium contract was in July 2023. China's securities regulator has designated both contracts as internationalisations at the start of this year. Beijing is pushing for a wider use of yuan, and wants to have a greater influence on commodity prices. RELEVED PRICE The exchange announced that overseas traders would be able post U.S. dollars as margin on the?yuan denominated lithium futures. However, they will have to pay a 5% cut, which means only 95% will count as collateral. Foreign investors will have access to contracts for delivery starting in July, as well as options based on those contracts. GFEX is quickly becoming a?reference price for the market of lithium, since China is the largest consumer and producer in the world. Tiger Shi, CEO of Bands Financial, said that the opening up of the lithium 'carbonate contract not only strengthened (GFEX)'s role as a benchmark for global pricing, but it also gave international companies the opportunity to hedge their exposure directly on the largest market in the world. Bands is one of the overseas intermediaries which allows overseas investors to trade on GFEX. The London Metal Exchange and the U.S. COMEX offer lithium hydroxide contracts that are based on price assessments from Fastmarkets. COMEX has a contract for lithium carbonate. (Reporting from Dylan Duan and Lewis Jackson. Tom Daly contributed additional reporting. Mark Potter and Philippa Fletcher edited the article.
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Kevin who? MoU trumps Federal
Anna Szymanski is the Editor-in Charge of Open Interest. The markets reacted to the Federal Reserve's hawkish stance - but for a short time. As expected, the U.S. central banks kept interest rates at 3.5%-3.75%. However, their messaging indicated a tightening of monetary policy, which initially drove up bond yields and sparked a Wall Street'selloff' that Elon Musk's SpaceX could not escape. But global equities shrugged off that news on ?Thursday ?morning, as the signing of the memorandum of understanding between the U.S. and Iran sent oil prices tumbling to a three-and-a-half-month low. Below, I'll go into more detail. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. KEVIN WHO MOU TRUMPS THE FED On Wednesday, the S&P 500 closed down by more than 1% and Nasdaq fell over 1%. Short-term Treasury yields also rose to their highest level in 16 months. Both the Fed's policy statement and its press conference appeared to indicate a hawkish stance, which prompted futures markets price in an increased chance of a rate increase as early as September. Warsh said that the central banks would "deliver price stability", and new quarterly projections, which he didn't participate in, showed that nine out of 19 policymakers expect a rate increase by the end 2026. Donald Trump, who had previously criticized former Fed Chair Jerome Powell's refusal to lower rates, seemed to be taking this news in stride. He said on Wednesday that Warsh would guide him. Trump has signaled in recent weeks that he will give Warsh some breathing space. The markets also got a glimpse of the more relaxed Fed that we can expect under Warsh with a streamlined?Fed announcement, which did not include any forward guidance. Investors' expectations of what will happen in the Middle East are what ultimately drives the markets. The U.S. released their 14 point memorandum on Wednesday. It was signed by both President Trump and Iranian president Masoud Pesekhkian. The MoU calls for an immediate end to all wars, including in Lebanon, the full resume of maritime traffic “without charge” in the Strait of Hormuz and the lifting of the U.S. port blockade, the removal of U.S. sanction on Iran, unfreezing its assets, as well as a $300 billion fund of investment for the reconstruction of the Islamic Republic after the war. Although it is unclear whether the Strait of Hormuz will remain free after the 60-day period, the energy markets appear to think that energy shipments are soon to flow at high levels along the narrow waterway. Brent crude dropped early on Thursday, to around $78 per barrel. The positive investor sentiment was evident on Thursday as major Asian stock indices reached record highs. Wall Street futures are also up before the bell. Bank of England will likely hold its rates at 3.75% as it evaluates the impact of the U.S./Iran agreement on inflation in the UK. UK May CPI?surprised yesterday to the downside. Chart of the Day UK CPI held steady at 2.8%, a low for 13 months. Lower food prices offset higher airfares. The BoE policy decision is due on Thursday and rates are expected to remain at 3.75%. Watch today's events * U.S. Weekly Jobless Claims (8:30 a.m. ET), Philadelphia Fed?Business Index (8:00 a.m. ET), 5-year TIPS Auction (1 p.m. *?Bank of England's interest rate announcement (7 am EDT) Want to receive a copy of the Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent the views of News. News is committed to independence, integrity and freedom from bias, as outlined in the Trust Principles. (By Anna Szymanski, Additional Writing by Al Reed and Editing by Jan Harvey.)
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Russian regulators demand explanations after a Moscow petrol retailer raises prices by 19%
The Russian 'anti-monopoly' watchdog asked for an explanation on Thursday from a major petrol retailer in Moscow after they raised prices by 19% for 95-octane fuel in the past week. FAS, the watchdog sent the request?to Neftmagistral a company that runs about 100 petrol stations in the Moscow area and the capital. The price hike was a result of Ukrainian drone attacks against a Moscow oil refining facility, which supplies fuel to the Moscow region. Neftmagistral declined to comment on the regulator's request. On Thursday, the price of 95-octane gasoline at Neftmagistral was around 95 roubles per litre ($1.30), up from about 80 per litre in June. After recent Ukrainian drone attacks against refineries, the?Moscow area has escaped fuel disruptions that have affected other regions. On their websites, Russian oil majors that operate petrol stations in Moscow have posted prices much lower than Neftmagistral. Rosneft reported that 95-octane gasoline at its own 'Moscow fuel stations cost 73.6 rubles on Thursday. $1 = 73.3500 Roubles (Reporting and Writing by Gleb Brynski, Editing by Andrew Osborn).
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The global oil price is falling and could continue to fall.
Technical analysis suggests that oil prices could fall a little more, though it may be a bumpy road. Click here for a detailed chart. Brent, the benchmark crude oil price for the world, hit a low of $77.75 Wednesday, according to LSEG data. Brent, the global benchmark for crude oil prices, fell to a three-month low of $77.75 on Wednesday, according to data provided by LSEG. Imagine a support level as a 'floor.' It is a price where buyers historically have stepped in to prevent a further decline. If that floor is broken, it means that the sellers are in full control. Technically, the 10-week average, which smooths price fluctuations for the last ten weeks, is at $97.02. It acts as a ceiling and keeps any recovery in check. If selling pressure continues, the next?downside goal is the 100-week moving avg. at $74.78. A rally above the 10-week average would indicate?that this sell-off is over and revive the chances of a recovery. The chart below shows: Brent crude falls below the key support levels of $86.09 and $79,46, reaching a three-month low at $77.55. The 10-week moving average at $97.02 acts as resistance and caps any rebound. The next target is $74.78, as determined by the longer-term moving average
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Gold prices rise as oil prices fall and the dollar is bolstered by hawkish Fed
Gold prices rose on Thursday, as a lower oil price following the?U.S. Iran ceasefire agreement countered pressures from a stronger US dollar and hawkish Federal Reserve language. Gold spot was up 0.2% to $4,264.67 an ounce by 0913 GMT following a 1.7% drop on Wednesday. U.S. Gold Futures dropped 2.2% to $4285.00. Oil prices dropped after the U.S. signed an interim deal with Iran that would 'end their conflict,' reopen Strait of Hormuz, and lift U.S. sanctions against Tehran oil. This boosted the outlook for oil supplies. Han Tan, Bybit's chief market analyst, says that gold is on the rise, as bulls are looking to squeeze even more out of the U.S.Iran interim peace deal. However, the upside potential remains limited by market expectations of at least one Fed interest rate hike before the end of the year. Tan continued, "The hawkish Fed will leave'spot gold' with a greater bias to dip back into the sub-$4,000 water rather than reclaiming $5,000 in the second half 2026." The Fed kept interest rates unchanged on Wednesday. However, policymakers are expecting a rise in borrowing costs by the end of this year due to growing concerns over inflation that is above the 2% target set by the U.S. Central Bank. Kevin Warsh, Fed Chair, announced at a press conference that he would be launching a number of task forces in order to look more closely at central bank operations. According to CME FedWatch Tool the markets have now priced in an approximately?84% chance of a U.S. interest rate hike in December. In a high interest rate environment, gold is less appealing because it has no yield. The U.S. Dollar Index rose 0.5%, adding?pressure to prices. The dollar index is stronger, making metals denominated in dollars more expensive to holders of other currencies. ANZ stated in a report that "physical demand, particularly from China, 'and central bank purchases are underpinning market." Silver spot rose by 0.2% per ounce to $68.10, while platinum dropped 1.2% to $1715.60, and palladium fell by 1.9% to 1,288.07.
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Stocks fall as Fed rate outlook offsets optimism about Iran deal
The global stock market was torn Thursday between optimism and concern over the possibility of an increase in U.S. interest rates?this coming year following the Federal Reserve meeting. The United States and Iran released their agreement on Wednesday, which extends the ceasefire that was announced in April for another 60 days. This will allow both sides to negotiate a peace. The agreement also calls for the full resume of maritime traffic in the Strait of Hormuz "without charge". Oil dropped 2.8% more to $77 per barrel. This is the lowest price since early March. Futures and shares fell in Europe, causing global stocks to drop by 0.1%. This was a reaction to the record-high shares that were set in Tokyo and Seoul overnight. Yoshimasa M. Maruyama is the chief market economist of SMBC Nikko Securities. He warned that there were still uncertainties. Donald Trump, the U.S. president, has threatened to resume his attacks on Iran and to kill Iranian officials in case they fail to honor their commitments. Maruyama stated in a letter that "the current toll-free period is only 60 days and the future framework is uncertain. This leaves lingering questions." In Europe, the STOXX 600 dropped 0.5% as energy stocks such as Shell and BP were offset by gains in tech shares like?ASML and Infineon, and AI-exposed industrial company Schneider Electric. The European economies are more susceptible to inflation due to higher oil prices. However, the weighting of energy shares across national markets has kept the pan-regional indicator slightly in the negative. U.S. Stock Futures edged up, with S&P500 E-minis as well as Nasdaq100 E-minis both up around 1%. Dollar rose for the second day in a row after the Fed left rates at a range of 3.50% to 3.75% in its first meeting as a new chair, Kevin Warsh. As inflation concerns grow, nearly half of the Fed's policymakers now expect an increase this year. Warsh, for his part opened the new era by a comprehensive policy review. He did not add his forecasts to the "dot chart" which is a visual representation where each member anticipates rates will be in the future. Money markets indicate that traders are now expecting a rate increase by October. This is up from an 80% chance of a rise by the end the year, earlier in the week. "We expected Warsh would be critical of 'forward guidance. But he was even faster than we anticipated in introducing his leadership style to the Fed. Some worry that a Fed that does not provide guidance could cause financial markets to be confused. We think the opposite is true. "The laser focus on price could make it easier to forecast what the Fed will do next", XTB research director Kathleen Brooks stated. The dollar index (which tracks the U.S. currencies against six other currencies) was slightly stronger at 100.46. This is near its highest level in two months. The euro fell?0.1% to $1.15 while the pound dropped 0.2%. Both currencies were down ahead of a Bank of England Meeting later that day, where rates are expected to be left unchanged. The benchmark 10-year note yielded 4.45% at the end of the day. This was down by 1 basis point. Two-year notes are also down, with a yield of 4.168%. They had posted their worst performance for three months on the previous day. (Additional reporting from Satoshi Sugyama in Tokyo, Editing by Jamie Freed and Neil Fullick)
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China defends crucial minerals export controls following G7 statement
China defended its export controls on 'critical mineral supplies' and called on the Group of Seven nations to respect market economy principles and international trading rules, rather than favouring a "small clique", said its Foreign Ministry on Thursday. The comments follow an agreement made by G7 leaders Wednesday to increase coordination in order to reduce their countries' dependence on China for essential minerals, including plans to align stocks and to?expand? the role of International Energy Agency. Lin Jian, spokesperson for the foreign ministry, said that China's efforts to improve and standardise its export control system were in line with international practice. He added that the goal was to "better safeguard" world peace and regional security and to fulfill international commitments related to nonproliferation. He urged the G7 leaders not to "impose rules of small groups" which undermine international economic and trading order. Western powers are racing to diversify metals essential to defence, technology, and renewable energy, and reduce their dependence on China. Last year, Beijing's export restrictions?on permanent magnetics?had a disruptive effect on various industries, and revealed the reliance of these industries on one source. The G7 leaders, without mentioning China, said that they hoped to reduce their dependence on one particular supplier for permanent magnets and rare earths, to less than 60% by 2030. They also aimed to achieve a 50% reduction "as quickly as possible."
Singapore's oil products stockpiles recover, but hover at a 13-year low
Singapore's oil product inventories, Asia's main trading hub, remained near 13-year lows for a second consecutive week, mainly due to softer distillates and stable residual stocks. Official data on Thursday showed that middle distillates inventories had risen.
Enterprise Singapore's data shows that onshore oil product inventories totaled around 35.26 millions barrels for the week ending 17 June, a slight increase from the 34.41million barrels of the previous week. Since the U.S. - Iran war began, oil stocks have been dwindling globally due to a lack of cargo shipments from the Strait of Hormuz as well as a reduction in existing inventories.
LIGHT DISTILLATES, RESIDUES STEADY
Singapore's light distillate stocks, which include naphtha, gasoline and other products, have fallen to their lowest level in two weeks, at about 12 million barrels. Exports of gasoline were far greater than imports. Strong outbound flows into Indonesia, Australia and Malaysia drained stocks.
The total gasoline exports in the past week were 572,000 tons. This was far more than imports, which were roughly 233,000 tons. Indonesia accounted for about 320,000 tons. India and Taiwan both contributed 118,000 metric tons each, but this was not enough to counteract the decline.
Imports of 155,000 tons of naphtha exceeded exports by 20,000 tonnes. Cargoes from Russia and Norway, at 54,000 tons each, outweighed outbound shipments of Malaysia at 20,000 tons.
The residual fuel stockpiles were not much different from the week before, when they had fallen to a near-eight-year low. Stockpiles increased by 1.0%, to approximately 15 million barrels (2.36 millions tons), which is still below average.
The volume of imports for heavy distillates fell by 1.3%, to 517,000 tonnes, from the previous year. The majority of imports came from the United States due to strong arbitrage arrivals across Asia in recent weeks.
Exports rose 66.2%, to over 481,000 tons. Bangladesh and Sri Lanka were the two main export markets.
Middle Eastern fuel oil supplies have remained constrained up to now, but Asian markets for fuel oil have fallen as traders anticipate a gradual resumption in 'Hormuz flow. This week, spot fuel oil premiums returned to levels seen before the war.
MIDDLE DISTRILLATES SURGE
Middle distillates, which include jet fuel and diesel, rose by more than 1.3m barrels in a week, despite a rise in net exports.
Net exports of diesel and gasoil rose by?21% compared to a previous week.
South Korea, Malaysia and Taiwan were the main importers, while the exports mainly went to regional destinations such as Australia, Malaysia?, New Zealand?and Vietnam?
Kpler data predicts that June imports will reach a two-month record. Two'swing cargoes' from the Middle East, and India, are expected to arrive this week.
Net exports of jet fuel increased by over 80% from week to week, following the decline of 25% in imports.
(source: Reuters)