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Russell: Coal was Australia's top commodity exporter, but gold will soon be the king.
Iron ore has surpassed coal as the top commodity exported by Australia. This is due to the increase in shipments to China of steel raw materials. Gold is now threatening to surpass coal. According to the latest quarterly report of Australia's government commodity forecaster, earnings from precious metal exports are expected to increase to A$56 Billion ($36.6 Billion) in the fiscal period starting July 1. The Department of Industry, Science and Resources released data on Monday that showed this figure was higher than the A$39bn forecast for metallurgical and thermal coal. The combined export earnings of A$67billion for 2025-26 are still higher than those for gold. Here's where things get interesting. It's possible that by 2026-27, gold will surpass the combined total of metallurgical and thermal coal used for steel production. The government anticipates that gold exports will increase to 313 tons by 2026-2027, from 289 tons during 2025-26. It would be a major coup for Australia to become the world's largest net gold exporter and third-largest gold producer. The department is cautious about its gold price forecast, predicting that it will fall to $2.825 per ounce in 2026-27 from $3.200 in 2025-26. This is below the current spot rate of $3.273. Most analysts expect a price of $2.825 on average for 2026-2027, but the government forecaster has a history of being conservative. Gold could continue to rise 29% since Donald Trump was elected president of the United States for a second time in November. Trump has implemented a number of policies that have been deemed bullish by the precious metal. Tax and spending policies would increase the fiscal deficit of the federal government, placing pressure on U.S. Treasuries to be a store value. The sweeping tax cut and spending bill proposed is edging closer to being passed by the Republican-controlled Senate and House of Representatives, and if successfully signed into law it is estimated by the non-partisan Congressional Budget Office that it would add $3.3 trillion to U.S. debt over a decade. Trump's tariff and trade policies are also uncertain, as his July 1 deadline for the United States to make deals with dozens major trading partners is looming. Even if Trump announces lower tariffs in April than he did, imports to the United States are likely to face higher taxes under Trump's second term than during his first term and when Joe Biden was president. The gold price is likely to rise as investors continue to look for alternatives to U.S. Treasuries, and other assets. Central banks and investors alike are expected to keep buying. Price Assumptions If we assume a gold price of $4,000 per ounce in 2026-2027, this would result in export revenues of A$61.6billion, based on the current Australian Dollar exchange rate against the U.S. dollar. The price forecasts may be overly optimistic, given the dynamics of the seaborne coal market. According to the government's forecast, metallurgical coke will average $201 per ton by 2026-2027. Thermal coal benchmark at Newcastle Port is expected to be $110 per ton. The Singapore Exchange closed its metallurgical coal contract at $178.50 per ton of coal on June 27. GlobalCOAL valued Newcastle thermal coal at $108,87 during the week ending June 27. Both prices are close to recent 4-year lows. The government expects the price of both types coal to rise slightly in the coming years. This would require that seaborne demand on major Asian markets like China, India and Japan, as well as South Korea, at least remain stable, if it does not improve. China and India are the world's two biggest coal importers and producers. They want to increase domestic production and reduce imports. This may restrict their seaborne imports. Japan and South Korea want to use cleaner fuels, such as liquefied gas. This may end up costing less than coal due to the flood of capacity that is expected to enter the market in 2027. It is possible that Australia will become the second largest commodity exporter in 2026/27 if gold continues its current upward trend and seaborne coal remains under pressure. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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When asked by the Kremlin about US sanctions, they suggest that it could impact Ukraine peace efforts, if implemented
The Kremlin announced on Monday that they had taken note and noted the comments made by U.S. Lindsey Graham, who is sponsoring tough new sanctions against Russia and its supporters should consider the impact of its efforts to reach a peaceful deal in Ukraine. Graham told ABC News in an interview on Sunday that Donald Trump had informed him that the bill, which would impose tariffs of 500% on countries such as China and India who buy Russian oil, should be put to a vote. Graham called Trump's "big breakthrough". He said it was part of the efforts to get Russian President Vladimir Putin at the table to negotiate on Ukraine, and to give Trump "a weapon" to do so. He said that Trump has a waiver, and he can decide whether to sign the bill into law when it is passed by Congress. Dmitry Peskov, the Kremlin's spokesperson, said that when Graham's remarks were asked about on Monday, Russia had noted Graham's statement and was aware of Graham's position. "The senator's opinions are known to all of us. He is a member of a group that has a long history of anti-Russian sentiment. Peskov said that if it was up to him these sanctions would already have been in place. Would that have helped (the settlement) process (in Ukraine)? It is a good question to ask those who organize such events." Reporting by Dmitry Antonov, Writing by Andrew Osborn, Editing by Guy Faulconbridge
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The Russian rouble is flat against the US dollar, as the central bank announces further rate cuts
The Russian rouble was flat on Monday against the U.S. Dollar and the Chinese Yuan as a senior official of the central bank announced that more interest rate reductions would be made at a July 25 meeting. According to LSEG, based on quotes over the counter, by 1140 GMT the rouble was trading at 78.50 US dollars. Since the beginning of the year, the Russian currency has gained 45% in value against the US dollar. Alexei Zabotkin, deputy governor of the central bank, said that the board could consider a rate cut of up to 1 percentage point if inflation data shows that it will slow down to 4% by 2026. Most analysts believe that the rouble's value is too high. Zabotkin said to reporters that the exchange rate of the rouble will continue on a path consistent with the inflation returning to 4%, the target set by the central bank in 2026. The current level is just below 10%. The rouble is expected to continue to fall as the central bank continues its rate-cutting. The rouble, which is the most commonly traded currency in Russia, was flat against the Chinese Yuan at 10.92 per Chinese Yuan on Monday on the Moscow Stock Exchange. (Additional reporting from Elena Fabrichnaya, St. Petersburg; writing by Gleb Brianski; editing by Susan Fenton).
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At the Spain Summit, global leaders address poverty and climate goals
On Monday, a once-in-10-year summit began in Seville as world leaders are under increasing pressure to speed up progress on poverty reduction. Climate change The Sustainable Development Goals are at greater risk of failing. The U.N. Chief, Antonio Guterres said that the event was intended to "repair and rev up" an existing system of cooperation in which "trust is fraying, and multilateralism has been strained." The U.S. president Donald Trump was notably absent from the summit, which had been attended by more than 50 leaders of the world. This is because the leader of the largest economy in the world pulled out and refused to support a plan that has been hammered over the past year. Guterres said that the 2030 Agenda for Sustainable Development, our global promise to change our world for a more just and better future, is in danger, during the opening session of the conference, while the region was sweltering under a heatwave. He said that the Sevilla Commitment is a global commitment to change the way the world supports developing countries, even though many wealthy nations are cutting back on development aid. Two-thirds (or more) of the Sustainable Development Goals are not being met. To make this happen, the financial system must be upgraded even faster. Guterres also said that the world development banks need to be reformated to increase their lending and attract private capital. This was tied to the need to reform credit rating systems around the world to make them fairer for developing countries, as they try to invest in projects which will help improve their risk ratings with time. Guterres stated that "Countries deserve a system which lowers borrowing rates, allows fair and timely restructuring of debt, and prevents the debt crisis in the first instance." He cited a plan for a single debt register to increase transparency and efforts to reduce the cost capital by debt swaps. (Reporting and editing by Bernadettebaum; Simon Jessop)
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Guinean ships haul in 48.6 millions tons of bauxite, as China's demand increases
Official data from showed that Guinea's exports bauxite - a feedstock used to make aluminium - soared by 39% in the first quarter, reaching a new record of 48.6 millions metric tons, even though regulatory crackdowns forced major operators out of business. The majority of this bauxite has been shipped to China where the aluminium industry is recovering. China produced 18,59 million tons of bauxite in the first five month of this year, an increase of 4.0% over the same period of last year. Guinea, which is the second largest bauxite exporter in the world, has shipped 312 vessels, compared with 225 ships that carried 34.9 million tonnes in Q1, 2024. This was according to Guinea's Ministry of Mines and Geology. The number of shipments from Guinea increased despite an export ban that was still in place on Emirates Global Aluminium’s local unit, which had shipped 3.6 millions tons in Q1,2024. The current weekly exports, which are 3.7 million tonnes, indicate an annualized rate that will be 199 million tones in 2025. This is up from the 146 million tons of last year. Sanchez said that this shows the resilience of the sector, despite the continued strong Chinese demand for the military-ruled West African country since 2016. Societe Miniere de Boke, a Chinese-controlled company, led the export boom in Q1, with 18.4 million tonnes, up 41% on Q1 2024's 13.1 million ton. AGB2A/SDM, a subsidiary of China's state-owned Chalco, increased its shipments from 3.8 to 5.1 millions tons by 35 percent. Data shows China's increasing control over Guinea's bauxite as Beijing ramps-up aluminum production. Guinea accounted for nearly 70% of China's bauxite imports in 2024. Guinea has upgraded its port infrastructure in order to meet the bauxite boom.
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Markets in H1 - Down with the dollar and up with guns
Investors knew that after Donald Trump's radical election promises, markets would be bumpy in 2018, as he returns to lead the largest economy of the world. The dollar's dramatic drop was not predicted by anyone, but it has been a surprise to many. Many key markets will look calm if you simply run through the numbers of the year without tracking their journey. The VIX is barely moving, and world stocks are at records highs. Look closer, and you'll see that all these markets have experienced extreme swings in the last six-month period - including the dollar. The reserve currency of the world is down by over 10%. This is the biggest drop in the first half since the advent of free-floating currency in the early 1970s. Gold, on the other hand, has seen its largest rise in the last 25 years. Vincent Mortier is chief investment officer of Amundi Asset Management, Europe's largest asset management company. He attributes this to Trump's "Big Beautiful" fiscal plan, which will keep the U.S. debt at $36.2 trillion and the deficit at 6-7 percent. The U.S. dollar is expected to continue falling, but more slowly, according to Mortier. The struggles of the "Magnificent 7" tech giants have also been eye-catching. The "Magnificent Seven" have been the cash cows of portfolios for many years. However, this year they have been left in dust by a 20% rise in Chinese competitors and a nearly 70% increase in European weapon makers. Trump is also responsible for the latter action. Trump's signal that the U.S. would scale back Europe’s military protection forces the region, and other NATO member states to rearm. The $140 trillion global bonds market was initially intrigued by Germany's historic proposal to overhaul its self-imposed credit brake in order to allow higher defense spending, but long-term U.S. borrowing costs and record-high Japanese interest rates have driven the majority of moves since. Most people outside of the US will have lost money on benchmark U.S. bonds this year. In May, the 30-year Treasury yields soared to their highest level since 2007, but they are now back down at 4.8%. Switzerland's interest rates were also lowered to zero in this month. ARE YOU READY FOR A GREAT ROTATION? Dollar's fall has also led to a 12.5% increase in the euro, a nearly 8% rise in the Japanese yen and a 13.5% increase in the Swiss franc. The dollar's slump has given emerging markets the chance to shine. Trump's reengagement with Russian President Vladimir Putin helped the rouble soar by 40%. However, it is still heavily restricted by Western Sanctions and lags behind the cedi's 42% decline in Ghana's gold-producing country. Eastern Europe's currencies, such as the Hungarian forint, Czech crown, and Polish zloty are all 13-17% stronger. Taiwan's dollar rose 8% in two days only last month, and Mexico's peso as well as emerging market currency debts are all enjoying double-digit growth for the year despite the trade war trauma. Pramol Dhawan is PIMCO’s head of emerging markets portfolio management. He said that the capital shift from U.S. assets to emerging and other market assets was the largest in the past two decades. "We still believe we are at the beginning of this." The bottom of the FX list includes familiar currencies like the peso from Argentina and the lira from Turkey. The Turkish lira is down by nearly 11%, and a lot of this happened after the main political opponent of Turkish President Tayyip Erdoan was arrested in March. As usual, Bitcoin has been volatile. Bitcoin soared almost 20% after Trump's election, then fell nearly 30% as his plans to create a U.S. crypto reserve were not well received. It has now spent the past three months clawing back all of that money. The price of oil has also fluctuated. Oil prices have also fluctuated. In April, they fell 30% to under $60 per barrel after Trump's tariff plan fueled global recession fears. But this month, when Israel and the U.S. attacked Iran, it briefly rose above $80. Good as Gold Copper defied global economic worries and jumped 11%. However, it is the precious metals which have shone. Silver and gold are neck-and-neck, both up 24%. Platinum is up almost 50%, after a series of 10-year highs. It won't leave much time to take a breather in the second half. Trump wants his "Big Beautiful Bill", which he calls the "Big Beautiful Bill", to be passed through Congress before Independence Day, July 4, while his global trade war ceasefire ends five days later. As the deadline nears, and there has been little progress in establishing mutually agreed baseline levies, it is unclear how long the markets will remain numb.
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Bankers show appetite for megadeals
Investment bankers were disappointed by the lack of mergers and acquisitions in the first half of the year. However, a surge of large deals in Asia as well as renewed optimism on U.S. stock markets may be setting the stage for megadeals. Dealmakers report that market uncertainties stemming primarily from U.S. president Donald Trump's tariff war, high interest rate and broader geopolitical conflicts hampered, but not derail, what bankers had expected to be a record-breaking year for global M&A. Dealmakers say that Trump's tariffs, which were launched by his "Liberation Day," on April 2, sent a chill through the market and forced several deals and initial publicly-traded offerings to subsequent quarters. The expectation was that we would see lots of deal activity during the first half 2025. In reality, we did not see it," said Tommy Rueger. UBS, ranked by Dealogic as the No. According to preliminary data, from January 1 until June 27, UBS ranked No. 9 in equity markets revenue. More than a dozen interviews with top bankers indicate a growing confidence that market turmoil is behind us. Dealmakers report that the S&P 500 index and Nasdaq index have recently closed at record highs, which has renewed optimism about the strength of M&A activity in the second half. Ivan Farman said that many deals were put on hold and will return, according to Ivan Farman. He is the co-head of global M&A for Bank of America. In Dealogic's year-to-date rankings, Bank of America was ranked No. Dealogic's ranking for the year to date includes M&A at No. 5. "I'm confident about the second half." Dealmakers are optimistic, citing the market recovery and Trump's relaxed antitrust policies as reasons for optimism. John Collins, global head of Mergers & Acquisitions for Morgan Stanley (ranked No. 1), said that the probability of large transactions has increased compared to a year earlier. Morgan Stanley was ranked No.4 in total fee revenue for investment banks, and No.3 for M&A deals. M&A deals ranked No. From January 1 to June 27, there were 2,14 trillion dollars in transactions, up 26% compared to the same period last. A large part of the increase came from Asia where activity nearly doubled, to $583.9billion. According to preliminary Dealogic data, the deal activity in North America increased by 17% between January 1 and June 27 to $1.04 trillion. The VIX index measures market volatility and has fallen to levels where investors are more confident about investing today. It's clear that momentum is continuing to build and paving the path for larger transactions. People are more optimistic than they were one month ago, and have started to implement their plans," said Philip Ross. In the calmer markets, institutional investors have started to return to equities. More companies are also moving forward with IPOs that were delayed earlier in this quarter. Rueger explained that the combination of these factors has led to a strong new issue background over the past three to four week. Saadi SOUDAVAR, head of equity markets at Deutsche Bank for Europe, Middle East, and Africa, said: "Equity market volatility has been largely absorbed by the markets, despite tariffs and geopolitical issues." MORALE BOOSTERS Several big deals helped boost the market's morale during the peak of tariff turmoil. Global Payments, for example, acquired a firm that provides card processing and account management services in April for $24,25 billion. Charter Communications agreed in May to purchase privately-held rival Cox Communications, for $21.9 billion. Chart Industries, a U.S. equipment manufacturer, and Flowserve Corp. agreed to merge. The combined company is valued at approximately $19 billion. According to Dealogic, 17,528 transactions were signed in the first half of the year compared to 20,583 during the same period the previous year. The deals this year were larger, which pushed the value of all deals up. The data show that the number of deals worth $10 billion or more has increased by 62% compared to the same period in 2013. Dealmaking was strong in Asia. M&A activity in the first half of this year increased to $583,9 billion from $269.9 a year earlier. The region, led by Japan and China accounted for 27,3% of global M&A, an increase of more than 11 points from the same time last year. The Asia-Pacific region was home to some of the largest deals in the region. Toyota Motor announced on June 3, plans to privatize one of its suppliers for $33 billion. On June 16, Abu Dhabi National Oil Company's (ADNOC), a consortium headed by ADNOC, announced an all-cash $18,7 billion takeover of Australia’s second largest oil producer Santos. Asia helped to drive global equity issuance up despite market volatility. The overall volume rose nearly 8%, reaching $350 billion compared with the same period in the previous year. "There will be more Asia-to Asia activity," said Raghav Malieh, global vice-chairman of investment banking, Goldman Sachs. The firm was ranked no. "You will see more Asia-to-Asia activity," said Raghav Maliah, global vice chairman of investment banking at Goldman Sachs. The firm was ranked No. M&A revenue is No. "Japan is a major driver of all deal volumes in Asia and we believe this trend will continue."
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Copper prices slip on mixed Chinese data and tariff uncertainty
The copper price fell on Monday as investors digested mixed data from China, the world's largest metals consumer. They also took into account progress made in trade negotiations between Canada and United States. The price of three-month copper at the London Metal Exchange fell 0.3% to $9,848 per metric tonne by 0920 GMT after reaching its highest level in three months last Friday. "We're consolidating the gains we made last week, which was a good week for financial markets. We were very pro-risk," said Dan Smith of Commodity Market Analytics. China's manufacturing activity contracted for the third consecutive month in June. However, it did so at a slightly slower rate than previous months. This indicates that stimulus measures are starting to take effect. Smith stated that the economy in the United States is showing signs of being robust. The Shanghai Futures Exchange's most-traded copper contract increased 0.2%, to 79.870 yuan (11,150.36 dollars) per ton. The financial markets received a boost when Canada abolished its digital service tax to help advance the stalled US-Canada trade negotiations. This gave investors hope for more trade agreements to be reached, reducing uncertainty over tariffs imposed on the U.S. by President Donald Trump. The metals market also benefited from the weaker dollar, as the dollar index remained close to its three-year-low hit last week. The dollar is weaker, making commodities priced in U.S. dollars less expensive for buyers who use other currencies. U.S. Comex Copper Futures dropped 0.5% to $5.10 per lb. This brings the premium of Comex to LME copper down to $1,391 per ton. Other metals include LME aluminium, which rose 0.1% per ton to $2.598.50, and LME lead, which gained 0.2%, to $2.048.50. Zinc fell by 0.4%, to $2.767. Tin dropped 0.1%, to $33,725. Nickel was unchanged at $15,245. Click here to see the latest news in metals.
Australia's review of the market rules includes a gas reservation for the east coast
As part of an extensive review of the market rules, the Australian government announced on Monday that it would consider creating a reserve of gas on Australia's east coast.
The Competition Regulator has warned about looming shortages on the east coast of the country. According to the most recent forecast, a gap will be created by 2028 if no new investments are made. The majority of reserves are in the remote north-west.
The review will also aim to preserve Australia's reputation as an important reliable exporter of LNG.
The market regulations are being reviewed. They include export controls, an east coast mandatory code that governs sales of fuel and government agreements with the major producers.
In a press release, Climate Change and Energy minister Chris Bowen stated that it was important to use the review process to ensure we get the right settings in our gas markets, and secure affordable Australian gas for Australians, while also remaining a reliable exporter of energy and delivering long-term energy security in our area.
The centre-left government of Prime Minister Anthony Albanese believes that gas will play a major role in the future, as the country rapidly moves away from coal-fired electricity stations.
The review will look at the "effectiveness" and "coherence" (or consistency) of the existing rules. It will identify improvements, and consolidate rules in order to create a "stable regulatory climate" for investors.
The focus will be on supply security, pricing and transparency of the market, as well as the impact of regulation on the competitiveness in the Australian LNG export industry.
Bowen said at a press conference, when asked about the possibility of a gas reserve, that any new requirements were "prospective", without "ripping up current contracts".
Several government policies have been criticized by industry players. It introduced wholesale price caps in 2022, in part to lower energy prices after Russia's invasion of Ukraine. Since then, the price cap is now part of the industry code.
Japanese LNG importers - some of Australia's largest customers - have said that Labor's policies increased supply uncertainty and raised costs at gas plants in which they own stakes.
Shell, ExxonMobil, and other major gas producers such as Queensland Curtis LNG, who export gas from the Bass Strait project, have all expressed concern. Reporting by Christine Chen, Sydney; editing by Edwina gibbs
(source: Reuters)