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Iron ore gains are limited by a soft China data and resilient demand.
The price of iron ore futures rose on Tuesday, despite the fact that demand for steelmaking ingredients is expected to remain strong in the near term. However, gains were limited due to subdued data from China's largest consumer. The September contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 0.28% higher, at 725 Yuan ($100.39). As of 0704 GMT, the benchmark June iron ore traded on the Singapore Exchange had risen by 0.15% to $99.6 per ton. Mysteel, a consultancy, said that production among Chinese iron-ore mining companies continued to rise last week. This was due to the resumption of operations at more mines. According to Mysteel, the total volume of iron-ore concentrate produced has increased by 2% each week, averaging 498,800 tonnes per day. Everbright Futures, the broker, reported that hot metal production, which is typically used to gauge demand for iron ore, fell 0.35% on a month-to-month basis to 2,45 million tonnes. Galaxy Futures, a broker, stated that while hot metal production has decreased slightly, it is still high and demand for steel continues to increase. In a report, Hexun Futures said that iron ore shipments from Australia and Brazil, two major producers, increased by 9.53% on a month-to-month basis to 33.48 millions tons. Retail sales and factory output in China were below expectations, while new home prices continued to stagnate. Data released on Monday showed that China's crude-steel output fell 7% in April from March, but production was still high. China and Hong Kong shares rose on Tuesday as the market sentiment improved following China's first major rate cut since October. Coking coal and coke, which are used to make steel, also fell, by 1.47% each and 1.71% respectively. The benchmarks for steel on the Shanghai Futures Exchange have fallen. The Shanghai Futures Exchange saw a decline in steel benchmarks.
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London Copper Prices Fall on Tariff Uncertainty
The copper price in London was slightly lower on Monday as initial excitement over the 90 day tariff truce, between the U.S.A. and China (the top consumer of metal) began to fade. As of 0707 GMT, the benchmark copper price on London Metal Exchange was down by 0.7% to $9,461 per metric tonne. The U.S. has agreed to lower tit-fortat tariffs with China and to implement a 90 day pause in actions. Washington also announced that it would reduce the "de minimis tariff" for low-value shipments coming from China to 30 percent. BigMint, a consultancy, said that analysts project near-term support for prices at $9150/ton. However, spikes could reach $10,000/ton should inventory levels exceed the threshold of 100,000 tons. However, risks remain from U.S. China tariff implementations, smelter profit crises, and negative treatment charges. ANZ Research reported that Chinese buyers are rushing to import scrap copper from the U.S. after the pause in reciprocal tariffs. They said that traders are also concerned about trade disruptions due to the U.S. - China trade war. Separately the Shanghai Futures Exchange is looking at opening its domestic nickel contract to foreign investors in this year instead of launching a contract on their International Energy Exchange. Other London metals include aluminium, which fell by 0.7% to $2432 per ton. Zinc was down 0.3%, at $2667.5; lead rose 0.3%, to $1967.5; and nickel, which dropped 1.01%, to $15 405. Tin fell 0.01% to $22,895. The Shanghai Futures Exchange's (SHFE) most traded copper contract eased by 0.3%, to 77540 yuan per ton ($10,736.94). SHFE aluminium fell by 0.5%, to 20,075 Yuan per ton. Zinc dropped 0.1%, to 22,435 Yuan. Lead fell by 0.3%, to 16,845 Yuan. Nickel declined 0.8%, to 122 870 Yuan. Tin gained 0.3%, to 264 760 yuan.
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Ithaca Energy to purchase a $155 million stake in the Cygnus Gas Field from Centrica JV
Centrica, a British company, announced on Tuesday that Spirit Energy - its joint venture with German utility Stadtwerke Munchen GmbH - will sell to Ithaca Energy a 46.25 percent stake in the Cygnus field for approximately 116 million pounds (155.05 millions dollars). Cygnus is located in the Southern North Sea and is the UK's largest continental shelf gas field. It also contributes to the UK energy security. Ithaca Energy will increase its operating interest in Cygnus from 65% to 85%. This will position the company as a majority owner, and reinforces the strategic goal of becoming one the largest independent energy companies on the North Sea. Ithaca shares rose marginally, but Centrica shares gained 1.4%. Spirit Energy is expected to receive around 215 million pound from the deal. This includes 116 million pound in headline consideration, and 99 million pound in decommissioning obligations. Centrica's share of 69% amounts to 80 million lbs. Chris O'Shea said, "Through this sale we are taking another important step to reduce our exposure to the gas production industry while accelerating the delivery to enhanced shareholder value." The British utility is shifting its focus away from traditional oil and gas production to decarbonisation and renewable energy.
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North and Central China is hit by heatwave
On Tuesday, temperatures above 40 degrees Celsius (104 degree Fahrenheit), scorched northern and central China. Authorities issued heat warnings to farmers and offered assistance to protect their food production. The temperatures in China's Hebei Province, Henan Province, which is a major wheat-producing area known as China's Granary, and Shandong province (in the east) all reached 40 degrees Celsius on Tuesday. Authorities reported that in Zhengzhou and Shahe (both located in Henan Province), the mercury reached its highest level ever for May on Monday. National Meteorological Centre of the United States said that temperatures will continue to rise until Wednesday. Climate change is causing China to experience longer and hotter heat waves, as well as more unpredictable and frequent heavy rain. Authorities have stated that the country's large population makes it particularly vulnerable to global climate change. The Chinese meteorological data shows that 2024 is the warmest year since records started over 60 years ago. This is the second consecutive year where milestones have been broken. The warmer weather last year was accompanied with stronger storms, higher rainfalls and spikes in China's power consumption. The National Meteorological Centre issued a yellow alert for high temperatures on Tuesday. The National Meteorological Centre has a three-tiered colour warning system, with the most severe being red, followed by yellow and orange. CCTV reported that large sprinkler trucks were used in Zhengzhou to cool urban areas. CCTV reported that agricultural experts in Lanling County, Shandong Province, were teaching vegetable farmers how to ventilate plants by using sheds and spraying water, according to CCTV. Shanxi authorities have issued an orange heat alert and sprayed water to cool many areas of the north province known for its coal-producing industry. On Thursday and Friday, a cold air mass moving eastward will cool the north of China with temperatures dropping from 6 to 12 C (11-22 F). In southern Jiangxi, China, more than 100 mm of rain (3.94 in) was recorded throughout the province. Heavy rains last weekend in China's southern Guangdong province and Guangxi affected trains, power and other infrastructure. Alerts were issued for geological disasters and severe flooding in certain parts of the nation. Reporting by Farah master and the Beijing Newsroom; editing by Sonali Paul
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Research shows that the global steel industry is lagging behind in green transition, as coal-powered production increases.
New research shows that 303 million tons of high-emitting capacity of blast furnaces are under development. This is especially true in India and China which are major steel producers. It suggests this will still be the majority of production by 2030. Global Energy Monitor, a U.S. think tank, said that steel production accounts for 11% of the total greenhouse gas emissions responsible for climate change. By 2030, global steel demand is expected to reach 2 billion tons. GEM stated that while cleaner electric arc technology is projected to increase by 24%, blast furnace production is predicted to grow 7%, and will account for 64% total global output. The think tank said that India's efforts to "green" one of the most polluting industries in the world will depend on the measures it takes. India is responsible for 57% all the new coal-based capacity being developed. Astrid Grigsby Schulte, an author of the report, stated in a press release that "India is the bellwether for global steel decarbonisation". How close its steel sector comes to achieving the International Energy Agency's goal of switching 38% furnaces to electric-arc by 2030 will be determined by the actions taken in the sector. GEM data shows that China, the largest steel producer in the world, added around 21 million tonnage of blast furnace capacity during last year. India also added 10 million tonnage. (Reporting and editing by Saad sayeed; David Stanway)
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North and Central China is hit by heatwave
On Tuesday, temperatures above 40 degrees Celsius (104 degree Fahrenheit), scorched northern and central China. Authorities issued heat warnings to farmers and offered assistance to protect their food production. The temperatures in China's Hebei Province, Henan Province, which is a major wheat-producing area known as China's Granary, and Shandong province (in the east) all reached 40 degrees Celsius on Tuesday. Authorities reported that in Zhengzhou and Shahe (both located in Henan Province), the mercury reached its highest level ever for May on Monday. National Meteorological Centre of the United States said that temperatures will continue to rise until Wednesday. Climate change is causing China to experience longer and hotter heat waves, as well as more unpredictable and frequent heavy rain. Authorities have stated that the country's large population makes it particularly vulnerable to global climate change. The Chinese meteorological data shows that 2024 is the warmest year since records started over 60 years ago. This is the second consecutive year where milestones have been broken. The warmer weather last year was accompanied with stronger storms, higher rainfalls and spikes in China's power consumption. The National Meteorological Centre issued a yellow alert for high temperatures on Tuesday. The National Meteorological Centre has a three-tiered colour warning system, with the most severe being red, followed by yellow and orange. CCTV reported that large sprinkler trucks were used in Zhengzhou to cool urban areas. CCTV reported that agricultural experts in Lanling County, Shandong Province, were teaching vegetable farmers how to ventilate plants by using sheds and spraying water, according to CCTV. On Thursday and Friday, a cold air mass moving eastward will cool the north of China with temperatures dropping from 6-12 C (11-22 F). In southern Jiangxi, China, more than 100 mm of rain (3.94 in) was recorded throughout the province. Heavy rains last weekend in China's southern Guangdong province and Guangxi affected trains, power and other infrastructure. Alerts were issued for geological disasters and severe flooding in certain parts of the nation. Reporting by Farah master and the Beijing Newsroom; editing by Sonali Paul
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Wall Street Journal, May 20,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. TXNM Energy, a utility firm, announced that it will be acquired by Blackstone's infrastructure unit in a deal worth $11.5 billion. Cantor Fitzgerald, a Wall Street firm, said U.S. Secretary of Commerce Howard Lutnick had agreed to transfer his stake to his children and to a group investors. He also divested assets from two subsidiaries in compliance with his U.S. Government ethics agreement. Regeneron Pharmaceuticals announced that it would purchase 23andMe Holding, a genomics company, for $256M through a bankruptcy sale. The company also promised to prioritise the ethical use DNA data collected from customers who have used ancestry tests and other services. Wendy McMahon will step down as president and CEO at Paramount Global’s CBS News. She told her staff that the company and she have different views about the future. Paramount Group. A major office landlord in New York City and San Francisco is looking at strategic alternatives, including the sale of its company. Equinor of Norway, the developer of the project, announced that the Trump administration had lifted a stop-work order from a month ago on a major off-shore wind facility planned near the coasts New York and New Jersey.
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Australia's opposition coalition is split after losing the election
After a crushing defeat in a recent national election, Australia's National Party split with its conservative coalition partner, the Liberal Party. The National Party cited policy differences on renewable energy. David Littleproud, the Nationals' leader, told reporters Tuesday that it was time for a break. The split shows how the conservative parties in Australia are under pressure after Anthony Albanese’s centre-left Labor Party won an historic second term at the May 3 elections, fueled by voter anger against Donald Trump’s policies. The Liberal-National coalition, which has been in power for many years, had a long-standing partnership with state and federal governments. They shared the government's power, and the Nationals represented the rural interests and the Liberals the city seats. Littleproud, citing differences in policy, said: "We won't be reentering a Coalition Agreement with the Liberal Party following this election." Sussan Lee, the new leader of the Liberal Party, was appointed last week and had promised to review all policies following the loss in the elections. Labor's tally increased to 94 seats from 77 and it registered its largest ever majority in an Australian elections. The National Party held on to 15 seats. Independents who support gender equality and climate change won key seats in the city from the Liberal Party. Ley is a former outback-pilot with three finance degrees. She was elected the first woman leader of the party after Peter Dutton, the opposition leader, lost his seat at the election. Littleproud said, "She's a leader who needs to rebuild her party. They are on a rediscovery journey and this will give them the chance to do that." He said that the Nationals would "keep the door open" to more coalition talks until the next election. However, they would still defend the rural Australians' interests. Ley had not committed to continue the policy of her party that was adopted at the last election, which supported the introduction of nuclear energy. The Nationals also wanted to crack down on the market dominance of Australia's major supermarkets and improve telecommunications for the outback. Australia is the country with the largest uranium reserve in world, but it bans nuclear power. Littleproud stated that nuclear power is needed as Australia's shift from coal to "renewables" only under the Labor Government was not reliable. He said that wind farm turbines are "tearing up our landscape and destroying your food security". Michael Guerin said that the urban-rural divide is getting worse. He represents farmers in Queensland. He said that the Liberals and Nationals both needed to rebuild. Jim Chalmers, Labor Party Treasurer, said that the split within the opposition is a "nuclear meltingdown" and the Liberals will have a presence in parliament "barely larger" than a cross-bench consisting of 12 independents or minor parties. Reporting by Renju José, Kirsty Neeham and Peter Hobson from Sydney; Editing and production by Tom Hogue and Raju Gopikrishnan
How Trump's proposed tariffs may impact products and energy
Presidentelect Donald Trump on Monday promised tariffs on the United States' 3 biggest trading partners Canada, Mexico and China. The proposed tariffs would affect a wide range of markets, consisting of oil, natural gas, agriculture and production, potentially modifying longestablished trade patterns and supply chains.
Here are products and energy sectors which may be affected:
OIL
Canada exported some $177.19 billion in energy items to the United States in 2023, according to government information.
Unrefined imports from Canada comprise more than a fifth of all the oil that U.S. refineries process. About 70% of imported Canadian barrels go to Midwest U.S. refiners that provide a location that consists of Chicago and Detroit.
Many of those Midwest refiners are set up to run much heavier oil and would either struggle to discover a direct replacement for Canadian oil or face paying a higher rate if that oil is subject to tariffs. That could drive up fuel expenses in the Midwest.
The U.S. imported about 5.2 million barrels of crude and petroleum products daily (bpd) from Canada and Mexico in 2024, with more than 4 million bpd of that from Canada, data from the U.S. Department of Energy showed.
In 2023, Canadian crude oil exports to the United States were above $110 billion, according to the Canada Energy Regulator.
GAS
The U.S. imported about 8.5 billion cubic feet daily ( bcfd) of natural gas throughout the very first 8 months of 2024 from Canada and Mexico, according to the latest information available from the EIA.
Overall natural gas exports were about $6 billion in 2023, according to data from the Canada Energy Regulator.
The majority of this year's gas imports - about 8.4 bcfd - came via pipelines from Canada. That compares to an annual average of 8.0 bcfd of gas imports from Canada in 2023 and approximately 7.6 bcfd over the past five years (2018-2022).
The remaining approximately 0.1 bcfd of gas imports so far this year came from pipelines from Mexico, liquefied natural gas ( LNG) from Canada and Trinidad and Tobago, and compressed natural gas (CNG) from Canada.
The U.S., meanwhile, exported about 20.8 bcfd of gas throughout the very first eight months of 2024, including about 2.7 bcfd going to Canada via pipeline, 6.4 bcfd going to Mexico by means of pipeline and approximately 11.7 bcfd going to different nations through LNG, according to the EIA.
The worth of those U.S. gas exports during the very first eight months was around $11.0 billion, according to Reuters calculations utilizing the U.S. Henry Center << NG-W-HH-SNL > benchmark as the area price of the gas.
AGRICULTURE
The U.S. imported $40.1 billion of Canadian farming items last year, making Canada the second-largest origin of U.S. agricultural imports behind Mexico, according to data from the U.S. Department of Agriculture.
The United States imported almost $3 billion of Canadian beef last year, $1.1 billion of pork and another $2 billion of live animals as part of an incorporated, cross-border animals producing and processing industry.
Canada likewise supplies the United States with nearly half of its imports of veggie oils and lumber and other forest items.
In 2023, the U.S. imported $45.4 billion of agricultural items from Mexico.
About two-thirds of all U.S. veggie imports and half of fruit and nut imports originate from Mexico, according to the USDA: almost 90% of its avocados, as much as 35% of its orange juice, and 20% of its strawberries.
U.S. imports of Mexican tequila and mezcal - both utilized for making mixed drinks, such as margaritas - amounted to $4.66 billion in 2023, up 160% given that 2019.
Each year, Mexico exports more than 1 million cows across the border to become part of the U.S. beef supply.
SUGAR
The U.S. imported 521,000 short lots of sugar from Mexico in the 2023/24 season (Oct-Sept), under a bilateral trade deal that reduces the import taxes on sugar from Mexico. It was nearly 15%. of all U.S. sugar imports of 3.76 million brief loads in the last. season.
POTASH
The U.S. imported about 13 million lots of potash in 2015,. of which 85% originated from Canada, according to data from the USDA.
(source: Reuters)