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As trade uncertainty increases, Asian stocks are up and the dollar is softening.
The dollar dipped to six-week lows on Wednesday as traders prepared for the impending increase in U.S. tariffs on steel and aluminum. This is the latest chapter of the trade war that has roiled the markets throughout the year. South Korea's stock market and currency rose as the liberal presidential candidate Lee Jae Myung won his election. This raised hopes for a rapid economic stimulus, reforms of the markets and an end to policy uncertainty. The benchmark KOSPI rose more than 2%, reaching its highest level since August 2024. The MSCI broadest Asia-Pacific share index outside Japan was 0.6% higher. The Nikkei soared 0.8% in Japan, while Taiwanese stocks rose 1.6% overnight after Nvidia, the artificial intelligence giant that boosted U.S. stock prices overnight. The data released on Wednesday shows that U.S. jobs opened in April but layoffs increased, which indicates a slower labour market due to tariffs affecting the economy outlook. Investors have been watching a potential phone call between U.S. president Donald Trump and Chinese leader Xi Jinping this week, as tensions simmer between the two world's largest economies. Trump accused China on Friday of violating the Geneva Agreement to reduce tariffs and trade barriers. Beijing has said that it will protect its interests, and that this accusation is unfounded. Early trading in China saw little change, with the blue-chip index only up 0.09%. Hong Kong's Hang Seng Index rose by 0.27%. The Trump-Xi negotiations remain the focus of attention, even though markets may have become numb to headlines about trade. "A grand deal seems unlikely, but any escalation may still cause a bout risk aversion," Charu Chanana said, chief investment strategy at Saxo, Singapore. The pace and lack of progress in trade negotiations has also been a focus. The deadline for U.S. trade partners to submit proposals for deals in order to avoid Trump's "Liberation Day", hefty tariffs, is Wednesday. Trump has signed an executive order that will take effect at 0401 GMT, Wednesday. This follows his announcement last week to increase the 25% tariff on imports of steel and aluminum from March to 50%. Thierry Wizman is a global FX & Rates Strategist at Macquarie. He said: "We think that the steel & aluminum tariffs are a good example of other strategic tariffs which are likely to'stick.'" "There's little incentive for a U.S. Dollar rally to take root." DOLLAR WEAKNESS Investors have fled U.S. assets in search of safe havens this year, including gold, as they anticipate trade uncertainty to have a negative impact on the global economy. The Organisation for Economic Cooperation and Development (OECD) has revised its March estimates, due mainly to the impact of the Trump administration’s trade war. On Wednesday, the dollar was in a downward trend. It fell 0.17% to 143.72 yen and 0.1% to 0.8227 Swiss Franc. The euro increased by 0.15%, to $1.1388. The dollar index (which measures the U.S. currency against six major currencies) was 99.11 on Monday, not too far away from the six-weeks low of 98.58 that was reached the previous day. The index has fallen 8.5% in the past year. Oil prices fell in commodities due to a loosening of the supply-demand equilibrium following an increase in OPEC+ production and lingering worries about global economic prospects because of tariff tensions. Brent crude futures fell 0.06%, to $65.59 per barrel. U.S. West Texas Intermediate crude crude dropped 0.09%, to $63.35 a barrel. The gold price rose by 0.5%, to $3,369.59 an ounce. This brings its year-to-date gains to a staggering 28%, thanks to safe-haven flows. (Reporting and editing by Jamie Freed in Singapore, Ankur Banerjee)
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London copper prices decline; US tariff concerns remain
The price of London copper fell on Wednesday, as the uncertainty surrounding U.S. tariffs kept prices in check. The three-month copper contract on the London Metal Exchange fell 0.2%, to $9.615.5 per ton at 0102 GMT. The Shanghai Futures Exchange's most traded copper contract rose 0.5% to $10,979.24 per ton. The U.S. doubled the tariffs on imports of steel and aluminum to 50% starting Wednesday for all trading partners, except Britain. Britain's steel and aluminum exports are taxed at a 25% rate until July 9. Copper found some support amid concerns that the metal could also be subjected to U.S. Tariffs. The Trump administration is reviewing the impact U.S. imports of copper on the local economy," ANZ reported. Dollar fell as traders awaited the U.S. Employment Data for May to provide immediate trading signals, and also waited for developments in President Donald Trump’s tariff negotiations with important trading partners including China. After the delivery of 4,600 tonnes, inventories dropped to 143.850 tons. This is the lowest level in nearly a year. Other LME metals saw aluminium rise 0.4% to $2472, tin fall 0.3% to $11,275, and zinc drop 0.2% to 2,702.50. SHFE aluminium rose by 0.4%, to 20,010 Yuan per ton. Lead increased 0.5%, to 16,660 Yuan. Zinc grew 0.6%, to 22,370 Yuan. Tin advanced 1.4%, to 253,600 Yan, and nickel was up by 0.3%, to 121950 Yuan. Click or to see the latest news in metals, and other related stories. DATA/EVENTS: (GMT) 0750 France HCOB Services Composite PMI, May 0755 Germany HCOB Services Composite Final Final PMI, May 0800 EU HCOB Services Composite Final Final PMI, May 0830 UK S&P GLOBALPMI: COMPOSITE OUTPUT, May 0830 UK Reserve Assets total, May 0830 UK May 1345 US S&P GLOBAL Comp, Svcs Final PMI, May 1400 US N-M
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The outlook for oil prices is bleak as rising OPEC+ production and tariffs weigh on the outlook
Early Asian trade on Tuesday saw oil prices fall, weighed by a loosening of the supply-demand equilibrium following an increase in OPEC+ production and lingering worries about global economic prospects due to tensions over tariffs. Brent crude futures fell 5 cents or 0.1% to $65.58 a barge by 0040 GMT, while U.S. West Texas intermediate crude was $63.32 a barge, down 9 cents or 0.1%. The benchmarks rose about 2% to their highest level in two weeks on Tuesday, boosted by concerns over disruptions to supply from wildfires in Canada and the expectation that Iran would reject a U.S. proposal for a nuclear deal that is crucial to easing sanctions against the major oil producer. Tsuyoshi Ueno is a senior economist with the NLI Research Institute. He said that despite fears about Canadian supply, and the stalled Iran/U.S. nuclear talks, oil markets struggle to extend their gains. Ueno said that hopes of progress in U.S. - China trade talks had been overshadowed due to profit-taking as investors remained cautious about the broader economic impact from tariffs. White House Press Secretary Karoline leavitt announced on Monday that U.S. president Donald Trump and Chinese President Xi Jinping would likely meet this week. This comes after Trump had accused China of breaking an agreement to reduce tariffs and trade barriers. The protracted negotiations, and the shifting deadlines have caused economists to lower their growth predictions. The Organisation for Economic Co-operation and Development cut its global forecast for growth on Tuesday as the impact of Trump's trade conflict has a greater effect on the U.S. Scores of wildfires swept through Canada at the beginning of May, forcing thousands to evacuate and disrupting crude production. Market sources cited American Petroleum Institute data on Tuesday to report that U.S. crude stock levels fell by 3.3 millions barrels during the week ending May 30. Gasoline stocks increased by 4.7 millions barrels, and distillate stock rose by approximately 760,000 barrels. Nine analysts polled estimated that crude stockpiles would be reduced by an average of 1 million barrels. The U.S. Energy Information Administration is expected to release official inventory data on Wednesday. (Reporting and editing by Jamie Freed; Yuka Obayashi)
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Andy Home: Rio Tinto is betting lithium will remain the battery metal of choice.
The lithium market is a difficult one to be in as the metal has been weighed down by an excess of supply. The price of lithium hydroxide has fallen by 90% since its peak in 2022 and shows no signs of recovering. According to Wood Mackenzie, multiple producers now operate at negative or zero margins. Albemarle is the world's biggest producer of battery metal. They have cut costs and delayed new projects in order to survive the supply crisis. Rio Tinto is not deterred. Rio Tinto, the global mining company, remains "consistent" in its belief that lithium will have a long-term future. The company has put its money where it speaks, acquiring U.S. producer Arcadium at a cost of $6.7 billion. It also partnered with Chilean state entities for two projects. Rio believes that despite the current market dejection, demand will be sufficient to absorb current excesses and bring the market back into deficit by the end of the decade. In a rapidly changing landscape, it's a good bet to say that lithium will continue to dominate the battery metal market. Low Price, High Demand Lithium prices are weak because of the oversupply on the market. According to the International Energy Agency, global lithium production will grow by more than 35% per year in 2024. Chinese companies are not interested in cutting production and new mines continue to ramp up. However, the supply tsunami masks the strength in lithium demand. According to the IEA, global consumption grew 30% last year. This is equivalent to the global market size in 2018. Electric vehicles (EVs) are in good health. They are the largest users of lithium-ion battery technology. According to Rho Motion, the sales of new energy vehicles increased by 25 percent last year and by 29 percent in the first three months of this year. The use of lithium in energy storage systems has increased even more as the global power system pivots towards cleaner, but intermittent energy sources like solar and wind. Rio Tinto expects the demand to increase at a rate of 10% or more annually through 2040. DOMINANT METAL This scenario is primarily threatened by a change in battery chemistry, as manufacturers strive to make batteries that are cheaper and more efficient. The use of more expensive metals in batteries, such as nickel and cobalt, has declined dramatically. However, lithium remains the most dominant element. Adamas Intelligence reports that the amount of nickel and copper deployed in new energy cars in March was only up by 12% and 2% respectively year-on-year. The deployment of lithium was up 30%, which is the same as overall EV growth. But the battle for battery materials is not over. The Chinese company CATL is leading the way in developing sodium-ion battery technology. The latest iteration, Naxtra, will almost match in efficiency the lithium iron phosphate (LFP) batteries that are displacing nickel-manganese-cobalt (NCM) chemistries. Robin Zeng, the billionaire founder of CATL, believes that sodium-ion battery could replace up to 50% of the LFP market. The IEA, however, is less certain, stating that the sodium-ion battery is most competitive when lithium prices are high, which is not what we have at present. Lithium’s low cost may be the best way to fight off competition from other materials. The battery price is also falling, resulting in new energy vehicles being cheaper. MARKET ACCELERATOR According to the IEA, battery pack prices have fallen by 20 percent to a new record low of $115 kilowatt hours in 2024. This is the biggest annual decline since 2017. Prices across the spectrum of battery metals have soared to record levels, resulting in a drop in the share of cathode materials in battery pack prices from 20% in 2023 to just 10% in 2024. LFP batteries are 30% cheaper in China than NCM batteries, which are popular on Western markets. European automakers have taken notice. Volkswagen has adopted LFP technology to create a 20,000 euro entry-level electric vehicle for the European market. The price of electric vehicles has been a major barrier to consumers switching, but that gap is closing. Market forces can be a powerful counterbalance to tariffs, and the fact that President Donald Trump has scrapped his predecessor's green agenda. SAFE BET The metal crown of lithium's battery looks secure for the time being. The impact of the global EV Revolution and the growing demand for grid-storage solutions will mitigate the impact of sodium-ion battery market share. The IEA also points out that despite interest in new chemistries the main driver for battery innovation is still the conventional chemistries based upon lithium. Both NCM and LFP technology are constantly improving. The demand for lithium is growing at a phenomenal rate and all indications are that it will continue in the coming years. How long it takes for the current surge in supply to translate into a deficit on the market and higher prices depends on how long this current surge continues. Do not hold your breath. It may take some time. These are the opinions of the columnist, an author for.
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Metals tariffs increase as the deadline for 'best offers' approaches
On Wednesday, the U.S. tariff rates on steel and aluminum imports will double as President Donald Trump intensifies a global war of trade. He also expects his trading partners to make their "best offers" to avoid harsh import tax rates for other goods taking effect early in July. Trump signed an executive order late Tuesday that will take effect on Wednesday. Last week, Trump surprised the world by announcing that he would increase tariffs from 25% to 50% on imports of steel and aluminum. "We began with 25 and after studying more data, we realized that this was a great help but more assistance is needed." Kevin Hassett, White House economist, explained the decision at a conference on the steel industry in Washington. The increase will take effect at 12.00 am (0401 GMT). The tariff increase is applicable to all trading partners, except for Britain. This country has been the only one that has reached a preliminary agreement with the U.S. in the 90-day period of a pause from Trump's other tariffs. The tariff rate on steel and aluminum imported from the UK, which is not among the top exporters to the U.S. of either metal, will remain at 25% at least until July 9. Census Bureau data show that the levies are likely to hit U.S. trading partner Canada and Mexico the hardest. The two countries are ranked No. They rank No. Canada, as the largest exporter of aluminum to the U.S., is more vulnerable to the aluminum levies than any other country. It exports roughly twice as much aluminium to the U.S. About half of the aluminum in the United States comes from overseas sources. This week's unexpected rise in levies has shaken the markets for both metals, but especially aluminum. Aluminum prices have more than doubled this year. Import volumes will likely not be affected by the current price hikes if there is no capacity to increase production at home. Date for 'BEST OFFER ' The White House also wants trading partners to submit proposals on Wednesday that could help them avoid Trump’s "Liberation Day", hefty tariffs, from going into effect in just five weeks. Since Trump announced the pause in tariffs on April 9th, administration officials have been actively engaged in talks with several countries. However, only one deal has materialized. Even the agreement that provided the basis for the exemption from metals tariffs is more of an initial framework for further talks. The Trump team wants to close more deals in the remaining weeks. Reports on Monday stated that the U.S. trade representative was asking countries to submit their best proposals for a variety of areas including tariff and quota plans for purchases of U.S. agricultural and industrial products, and plans to remove any non-tariff obstacles. The letter also promises to provide answers "within a few days", and a "landing area" that includes the tariff rates expected for countries after the 90-day suspension of tariffs ends on July 8th. Most trading partners are concerned about whether or not they will continue to apply the 10% baseline tariff on all exports to the U.S. following that date. Karoline Leavitt, White House spokesperson confirmed the report Tuesday. She said: "USTR sent the letter to all our trading partners to remind them that the deadline was approaching." According to the letter, the Trump administration also requested any commitments regarding digital trade, economic security and country-specific commitments. (Additional reporting from Alexandra Alper, Washington; Writing and editing by Dan Burns.
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Brazilian prosecutors try to block $180 Million carbon credit deal
By Manuela Andreoni & Ricardo Brito SAO PAULO - Brazilian prosecutors have filed a lawsuit to cancel a $180m carbon offset scheme that was signed by the state of Para last year, with the support of a coalition of large corporations and wealthy governments. The lawsuit is a strong blow for the government of Para which will host the next global summit on climate change, COP30. It also strikes the carbon credit industry in general, who had been struggling to reposition themselves after years of being accused of fraud and abuse. Para is home to one of the most fragile sections of the Amazon Rainforest, the largest rainforest in the world. The prosecutors claimed that the state had not informed and consulted the affected communities. The prosecutors also claimed that Brazilian law does not allow the pre-sale carbon credits. In this case, the carbon in the trees is what the project claims will prevent them from being cut down. The state's carbon credit plan, according to the prosecutors, was approved "before COP 30" which put pressure on Indigenous Peoples and Traditional Communities in Para. Amazon.com Inc. and at least five companies have agreed to buy the credits via the LEAF Coalition for forest conservation, an initiative that the ecommerce giant, along with other firms and government, helped found in 2021. This group includes the United States, United Kingdom, and other countries. Requests for comments were not immediately answered by the Para government or Emergent, an organization that coordinates LEAF Coalition. This project is one of the first jurisdictional carbon credit schemes in the world, as it covers whole countries or states. This new design aimed to ease concerns about private projects by simplifying the accounting of credits. The company aimed to sell 12 million carbon credits for $15 each, based on the amount of carbon stored in trees it would prevent from being deforested. (Reporting, writing and editing by Manuela Andreoni. Additional reporting by Ricardo Brito. Editing by Leslie Adler.)
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US Skips UK Steel and Aluminum Tariffs as Both Countries Eye Quick Trade Deal
The United States announced on Tuesday that it would not double steel and aluminum tariffs on Britain. This announcement came hours after the UK Government said that the two countries had agreed to a deal on tariff relief as soon as possible. The U.S. announcement that exempts British aluminum and steel from a 50% tariff increase came in a Tuesday proclamation by U.S. president Donald Trump. The U.S. trade representative Jamieson Greer and British Trade Minister Jonathan Reynolds met on Tuesday in Paris during an OECCD meeting. A spokesperson for the UK government said: "The UK was first to secure a deal with the U.S. in the last month, and we are committed to protecting British businesses and jobs in key sectors." We're happy that, as a result our agreement with the U.S. steel in the UK will not be subjected to these additional duties. We will continue working with the U.S. in order to implement our agreement which will remove the 25% U.S. steel tariffs. On May 8, British Prime Minister Keir starmer and Trump agreed to lower tariffs for UK steel and car imports to the U.S. Britain also agreed to lower tariffs for beef and ethanol. However, the implementation of the agreement has been delayed. UK Steel, the industry body for British steel, had warned earlier that doubling tariffs would cause a "body-blow" to British steel. Greer and Reynolds, Britain's Trade Ministry said Greer met with Reynolds to discuss the pace at which the bilateral trade agreement of May 8 was being implemented. Both sides agreed that consumers and businesses in each country had to begin to feel its benefits. The British trade ministry released a statement following the meeting that said "The two discussed their shared desire for the Economic Prosperity Deal to be implemented as soon as possible, including agreements on sectoral duties." Greer's office did not immediately comment on the meeting. Starmer's spokesperson stated that once the deal was implemented, it would eliminate tariffs for the "majority" of steel products exported to the United States. "We'd continue to anticipate that this will be the case," regardless of Trump's 50% tariff. Sarah Jones, the minister of industry, was also reported to be meeting with steel industry representatives on Tuesday. Greer replied, in French, to reporters in Paris when asked earlier if 50% tariffs on Wednesday would be implemented, "We'll have to see." Reynolds is in Paris and Brussels for a three-day visit. He will meet with counterparts from the Group of Seven, OECD and other countries in Paris. Then he'll talk to EU Trade Commissioner Maros SEFCIOVIC. Last month, Britain signed deals with both the U.S., and the European Union, its two largest trading partners. However, these are not formal trade agreements and details have yet to be set. Plans to reduce red tape in the food industry are still being finalised with the EU agreement. Before the EU deal came into effect, Britain announced on Monday that it would eliminate border checks for fruit and vegetables imported to the EU. These were due to take place in July. Reporting by Alistair Smout, Leigh Thomas, Andrea Shalal, and Jasper Ward, in Washington, and Tomaszjanowski, Lisa Shumaker, and Bill Berkrot in London.
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BlackRock is removed from Texas' boycott list following its withdrawal from climate groups
Texas removed BlackRock on Tuesday from a list that was seen as boycotting energy companies. The New York asset manager only won this step after it drastically reduced its climate goals. Texas Comptroller Glenn Hegar stated that the decision was a reflection of BlackRock's withdrawal from climate-related industry groups such as the Net Zero Asset Managers Initiative. Hegar also pointed out that the firm had lowered its support of shareholder environmental resolutions, and supported a new Texas Stock Exchange. BlackRock has "acknowledged the real social costs and economic costs that are incurred by limiting investments in the oil and natural gas industry, both in Texas and worldwide," Hegar stated in a press release. Delisting will allow Texas state agencies, funds and other entities to easily do business with BlackRock. This could help BlackRock respond to claims made by Texas Attorney-General Ken Paxton regarding its environmental record. BlackRock's representatives have not yet commented. Hegar added BlackRock, and a number of European managers, to his list by 2022, under a law passed in the state the year before in response to Wall Street’s embrace at that time of environmental and social investments priorities. Faced with political pressure, BlackRock's rivals also quit industry climate groups, and reduced their support for shareholder proposals that called for change, such as emission limits or cuts. Climate activists and Democratic leaders have accused companies of lowering their standards in terms of environmental support. (Reporting and editing by Lisa Shumaker; Ross Kerber)
Goldman, hedge funds step up activity in physical uranium as rates spike
Financial investment banks Goldman Sachs and Macquarie as well as some hedge funds are positioning themselves to reap the benefits of a recently resilient uranium sector as costs of the nuclear fuel ingredient spike.
While many other financial investment banks are still avoiding uranium, Goldman and Macquarie are improving trading in physical uranium and in Goldman's case trading its options as well, five market and hedge fund sources with knowledge of the deals stated.
The heightened activity comes as utilities seek brand-new supplies in the middle of deficiencies that have lifted rates to 16-year highs.
A couple of hedge funds are also stepping up participation in both equities and physical uranium, a sign that the metal is starting to widen its appeal to financial institutions after a decade in the doldrums following the Fukushima nuclear catastrophe.
With the headings and positive momentum in nuclear more typically, hedge funds and other product financiers are back in the (uranium) sector. A great deal of it is done through physical funds, the most convenient way to get direct exposure to uranium prices, said Bram Vanderelst at trading firm Curzon Uranium.
The metal has captured financiers' attention after costs folded the past year to $102 a pound as top producers Kazatomprom and Cameco cut Since resumed mines that had been, production guidance mothballed had a hard time to increase production to fulfill restored demand.
It likewise features the revival of nuclear energy to help nations cut their carbon emissions, which was highlighted in the December 2023 Group of Seven most industrialised nations' statement that visualized tripling nuclear energy capability from 2020 to 2050.
Goldman Sachs has started composing alternatives on physical uranium for hedge funds, the first time it has actually produced a. derivative for the metal.
Goldman has been increasing their exposure, they've been. increasing their book gradually, a source who dealt with the. bank said, declining to offer information of the transactions since. they are private.
Goldman is mostly dealing with financial customers like hedge. funds while Macquarie's primary focus is boosting trading and. marketing output from miners, another source who handled both. banks said, also decreasing to elaborate because the data is. personal.
All five sources talked to declined to be called. due to the fact that they did not wish to talk about openly personal trading. information.
Both banks declined to comment.
NUFCOR'S URANIUM INVENTORIES
Goldman has been involved in the uranium market because 2009,. when it purchased Nufcor, a London-based nuclear fuel trader.
5 years later, however, in the wake of Japan's Fukushima. nuclear plant catastrophe in 2011 when uranium prices plummeted,. Goldman intended to unload Nufcor, however was unable to find a buyer. and said it planned to unwind business.
Business never closed and Nufcor held $356 million worth. of uranium inventories at the end of 2022, the most current. regulative filings revealed.
That suffices uranium to sustain 17 big nuclear reactors for. a year, based on calculations and information from the World. Nuclear Association.
Investor purchasing of physical uranium by publicly-traded funds. and hedge funds represented almost 15 million pounds of uranium. oxide concentrate (U3O8), or about 26% of the total traded on. the area market in 2023, according to consultancy UxC.
This was down from 22 million pounds of investor purchasing in. 2022 as greater prices in 2023 indicated each dollar purchased less. pounds of uranium.
We have actually specifically seen large volumes bought by financiers. in 2021-2023, said Jonathan Hinze, president of UxC. See factbox.
U3O8 or yellowcake is a fine powder packaged in steel drums. that is produced when uranium ore is chemically processed.
While the greatest quantity of investor-held physical uranium. is by exchange-listed funds, a few hedge funds have actually been. investing in shares of uranium miners and other nuclear-related. firms for a number of years and are also now purchasing physical. uranium.
Sachem Cove Partners, a uranium-focused investment strategy. with about $250 million in properties under management, started. buying the sector in 2018 with equities and proxies for. physical uranium, like the Sprott Physical Uranium Trust .
It began buying physical uranium last year.
It offers us a look into both markets, the physical market. itself and the equity markets, said Mike Alkin, chief. investment officer.
(source: Reuters)