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China's central banks continues to buy gold for the 17th consecutive month
Data from the 'People's Bank of China (PBOC),' showed on 'Tuesday that China's central banks stayed on 'course' on gold purchases for a 17th month in a row. Gold holdings in the country rose from 74.22 to 74.38 millions fine troy-ounces at the end of the month. PBOC data showed that the value of gold reserves fell to $342.76billion at the end last month. This is down from $387.59billion a month before. The value of China's gold reserves fell for the first time since May 2025. This was due to the steepest monthly decline in gold prices since 2008. Spot gold dropped 11.52%. Inflation and growth concerns, as well as higher interest rates expectations, have all contributed to the decline in gold, a traditional safe-haven investment during times of geopolitical unrest. Analysts at ING Economics noted that the steady purchases by central?banks around the world helped to limit gold's downside during periods of volatility. The PBOC, after a 18-month gold?buying spree ended in May 2024?returned to purchases six months subsequently.
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Japan's economy is slowing down, and there are early signs that war will cause pain
The 'index of the health of Japan’s economy' fell in February, according to a report released by the government on Tuesday. This reveals a weak spot - even before the Iran War. Recent private surveys also revealed an increase in bankruptcy in the house-painting sector. Small, mom-and pop operators, already struggling with severe competition and chronic labor shortages, have been affected by rising fuel costs and supply restrictions caused by the conflict. Data showed that the coincident index, which measures the state of the economy at the moment, fell 1.6 points in February, month-on-month, to 116.3. This was the first decline in two months. The decline was largely due to declining shipments of?semiconductor chips and chipmaking equipment as well as a decrease in?auto production, casting doubt on the Bank of Japan's belief that robust global demand would support exports. As hopes of a quick end to the conflict fade, countries like Japan are faced with increasing challenges. Analysts say that a shortage of naphtha will affect?factory production, causing the economy to suffer more damage in the current quarter. Tokyo Shoko Research, a private think tank, said that the number of bankruptcy filings by painting companies rose to the highest level since 23 years in the fiscal year ending in March. Tokyo Shoko Research reported that due to disruptions in naphtha supply, major paint manufacturers have increased thinner prices from March by up to 80%. This has been a serious blow to the small painting businesses, according to their report. It may be difficult for small operators, due to fierce competition, to pass on cost increases. It said that bankruptcy cases could increase in fiscal 2026.
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China cuts domestic fuel prices again to reduce the impact of rising oil prices
China has again reduced its gasoline and diesel price increases to half of what they usually are. This is to try to reduce the rising oil prices caused by the Iran War and the closure of the Strait of Hormuz. The oil prices continued to rise after Iran rejected the United States' ceasefire proposal and as a deadline for Tehran, set by U.S. president Donald Trump, to come up with a deal before he was "taken out", grew closer. The NDRC (National Development and Reform Commission) announced that the retail gasoline and diesel prices would increase by 420 yuan and 400 yuan, respectively, at midnight on Tuesday. A 50-litre tank containing?92-octane gas will now cost an average car owner $2.4 extra. According to the statement, under its scheduled pricing mechanisms, the increases would've been 800 yuan yuan yuan yuan yuan yuan yuan yuan 770 yuan yuan respectively. NDRC reported that the government continues to implement measures for controlling refined oil prices in order to reduce the impact of increasing international oil prices on domestic markets. Every 10 working days, the agency adjusts gasoline and diesel retail prices across the country. The adjustment rate is based on changes in crude oil prices, and includes average processing costs, taxes, distribution expenses, and profit margins. China raised the price of gasoline and diesel on March 23, by 1,160 and 1,115 Yuan per ton respectively. This was a reduction of about half the increase scheduled. Thanks to its oil reserves, rapid adoption and diversified supply, the world's second largest oil consumer has weathered oil scares better than other Asian countries. Official data from the manufacturing purchasing managers' index (PMI), showed that the impact of the war on the Chinese economy and its end users was minimal. This resilience has not been extended to the airline sector, where fuel surcharges have had to be raised. Economists have warned that the war may spark a "bad inflation" in China as a shock in input costs threatens to squeeze the margins of the largest manufacturing base on earth.
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CEE ECONOMY - Czech inflation rises in March, but remains below the central bank's target
The 'Iran War' sent fuel prices soaring in March, but the headline figure was still below?predictions and the 2% central bank target. According to preliminary data released by the statistics office on Tuesday, the?headline?figure increased 1.9% from a previous year in March, which is faster than February's 1.4%. According to a poll, analysts had predicted 2.0%. The data revealed that consumer prices increased 0.6% month-over-month, with a rise of 5.3% in energy prices, including motor fuels. After?the government took steps to reduce energy bills, the global oil price shock came at a time of low inflation in the Czech Republic. Last month, the Czech National Bank revised its forecasts to include higher oil prices. The Czech National Bank still expects inflation to be below 2% in this year. The UniCredit economist Pavel Sobisek stated that the consideration of higher interest rates would likely only take place in the fall, when secondary effects from the oil shock have an effect on inflation. At the last policymakers' meeting on March 19, they voted to keep 'their main interest rate? at 3.50%. According to the minutes of the meeting, Governor Ales Michl said that the bank should not undervalue the "cost shock" caused by the conflict in the Middle East. Michl stated in the minutes that the Board was ready to tighten the monetary policy if there was a risk of rising core inflation.
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Japan finance minister vows close G7 coordination as market volatility persists
Satsuki Katayama, the Japanese Finance Minister, said that the country would remain in close contact with other countries of the Group of Seven. The Middle East conflict has caused concern about Japan's fiscal expansion. The yield curve for Japan's government bonds has risen this week. The 10-year JGB yield reached a 27-year-high of 2.43%. Meanwhile, the yen hovered near the psychologically significant 160-per dollar mark, which analysts warn may trigger a government intervention. Katayama, a G7 Finance Minister and Central?Banker, said that the sharp changes in oil prices and developments in the Middle East are having an impact on markets. This was in response to a question about rising JGB yields. She added, "Our position has always been that we will continue to be in close contact with our G7 counterparts and make sure that we communicate clearly our message." Analysts claim that the JGB selloff reflects "growing unease" over Japan's increasing fiscal spending in order to cushion the rising energy costs. This strain is made worse by yen's decline. After a snap-election in January, the Japanese parliament will?pass on Tuesday an unprecedented 122.3 trillion-yen general-account (765.48 billion dollars) budget for the fiscal period that began in April. Japan's economy is vulnerable to fuel price increases due to its heavy reliance upon imports. The government could soon be under pressure to allocate an additional budget for stimulus. How to pay for fuel subsides to keep gasoline around 170 yen per litre is the immediate problem. The programme, which was launched on March 19, was estimated to cost 300 billion yen per month. This bill has now risen to 500-600 bn yen as the oil price rises due to a prolonged war in Iran. Reserve funds of 800 billion yen ($5billion) will be used to fund the subsidies. Even if Tuesday's budget unlocks another 1 trillion yen in reserves, the current pace of the program would exhaust these funds within months. A government official said privately: "Unless the structure of the subsidies is changed, a supplementary Budget will sooner or later be necessary." Sanae Takaichi, the Japanese Prime Minister, told lawmakers on Tuesday that she has 'no immediate plans' to ask businesses and households to reduce energy consumption in a way that would harm economic activity. This is despite concerns about supply triggered by war in Iran. $1 = 159.8100 Japanese yen (Reporting and editing by Sonali Paul, Shri Navaratnam and Makiko Yamazaki)
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Iron ore prices fall due to rising inventories and anti-dumping measures
Iron ore futures declined on Tuesday, as a result of?rising inventories?and fresh anti-dumping actions on Chinese finished steel products. However, hopes for a?stronger?demand after Beijing announced accelerated energy-related construction helped to limit losses. The May contract for the most traded iron ore on China's Dalian Commodity Exchange fell 0.44%, to 797.5 Yuan ($116.04), per metric ton. As of 0715 GMT, the benchmark May iron ore price on the Singapore Exchange had fallen by 0.22% to $106.4 per ton. Steelhome data shows that iron ore stocks at major Chinese ports have increased by?0.65% in the past week, despite a rise in hot metal production. This is a sign of difficulties to reduce stockpiles due to weakened fundamental support. Vietnam has imposed a temporary antidumping levy of up to 27,83% on certain Chinese hot-rolled steel coil products as of April 17, raising concern over the demand for steelmaking materials. The downside of the situation was tempered by the stronger demand, as Chinese President Xi Jinping urged for accelerated planning and construction of a brand new energy system in order to ensure the security of the country's power supply as the Middle East conflict continues. The price of raw materials like iron ore will be supported by the construction of the largest hydropower dam in the world on the eastern rim of?the Tibetan Plateau. The?DCE also fell Tuesday with coking coal down 1.16 % and coke down 0.72 %. The Shanghai Futures Exchange also saw a decline in steel benchmarks. Rebar fell by?0.29%. Hot-rolled coils dropped by 0.37%, and wire rod dropped 0.39%. Stainless steel declined 0.11%. (Reporting and editing by Subhranshu Sahu, Sonia Cheema, Ruth Chai)
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Ukraine's March diesel imports jumped 27% m/m despite war in Iran, consultancy says
Analysts at A95 Consulting Group reported late Monday that Ukraine's imports of diesel jumped 27% in March over February to a five-year-high of 577,000 tons, despite the difficulties associated with the war? in the Persian Gulf. After Russian missile attacks virtually destroyed Ukraine's refining capability, the country became?entirely reliant on imported fuel. It sourced supplies elsewhere in Europe. The consultancy stated in a report that "Importers operations in March were hindered by the effects of the war in the Middle East which made it extremely difficult to secure supplies." The report also stated that ORLEN, Poland's largest supplier, had suspended its shipments to Ukraine in early March. There was also uncertainty about supplies from suppliers in Romania and Greece. After a brief pause, the Polish shipments resumed and reached?244,000 tonnes in March. This was 51% more than one year ago. A-95 reported that Greece shipped 119.300 tons and 154,000 tons came from Romania. It was noted that Ukrainian traders built up an important carryover stock in April. A-95 stated that "there is every reason to believe" that April will be a tense month, because there are "few resources available in Europe, record high prices, and contracting terms which require double the amount of capital." (Reporting and editing by Ronojoy Mazumdar; Reporting by Pavel Polityuk)
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China's coal-based fertiliser protects its farmers against global fertiliser turmoil
China's unique dependence on coal to produce urea may have farmers around the world switching to less nutrient-hungry plants as the Iran War affects the supply of fertilisers. Analysts say that China could 'not?allow?exports of urea, the most widely-used fertiliser in the world, after spring planting, as it usually does, because this would drive up local prices. Beijing usually waits until May to determine if there's a surplus before deciding how much it can export abroad. China produces 78% of its urea with coal, a cheap and abundant resource. Other big exporters like Russia, Qatar, and Saudi Arabia produce urea using gas. Willis Thomas, CRU's head of fertilisers analyses, said that China is self-sufficient in urea. China's massive deployment of coal, which it?uses for oil, gas and to produce other products, has been particularly prescient, even though it is more pollution than natural gas. It reduces the need for imported energy that could be "cut off" in a war. Price increases outside China The benchmark price for urea has risen by 70% since February, as the war is preventing ships from crossing the Strait of Hormuz. This route is vital for 30% of global fertiliser trade. Last week, urea prices in Indonesia were around $700-780 a metric ton. Thomas of CRU said that in contrast, the price per tonne was around 1,760-1.840 yuan (about 255-$267) last week in northern China. The U.S. Department of Agriculture announced last week that U.S. Farmers plan to plant less of the nitrogen-intensive corn crop than they did last year and more soybeans. Australian farmers are expected to prefer barley in the coming season over nitrogen-intensive canola and wheat. In China, where the government has already restricted exports of other fertilisers and ordered an early release of commercial reserves of fertiliser, there is little chance of a switch. "I'm still sticking with corn this season because it's more profitable than soy beans," said a farmer named Guo, who lives in the north-eastern Heilongjiang Province. AMPLE UREA SUPPLIES According to the China Nitrogen?Industry?Association, China will produce 76.5 million tonnes of urea in 2018, an increase of 6.3% over last year. The domestic demand is estimated at 66 millions tons, including 43,000,000 tons for agriculture. Thomas stated that nine new plants will be starting production in the coming year. This will add 4.9 million tons of coal per year. According to StoneX, China's exports last year were?4.9 millions tons. This is below the historical norms of 5 to 5,5 million tons that would normally account for 10% of global trade. India, which imported over 40% of its DAP and urea, a mixture, from the Middle East last year, asked China to permit the sale of certain urea cargoes. Analysts said that China could continue to restrict exports over the next few months. If China exports, the local urea price will soon jump up to match the global market. StoneX analyst Josh Linville said that the government does not want this situation. The National Development and Reform Commission and China's General Administration of Customs did not respond immediately to requests for comment. India is among the few countries to have explored coal gasification for urea as an alternative feedstock. However, these projects are still in their early stages.
How can Milei unlock Argentina's copper riches? Fix the economy
Argentina has big aspirations for the untapped copper riches in its Andean north. It wishes to be a top 10 global manufacturer and has actually attracted investors such as Glencore, Lundin Mining and First Quantum Minerals.
However unlocking its prospective won't be easy. The nation, and new libertarian President Javier Milei, need to fix the economy first, with the majority of huge copper tasks being stalled by strict capital controls, near 300% inflation and high tax rates.
Even as copper costs struck record highs, that has actually taken some of the shine off optimism a year earlier, when regional officials told about the immense potential of the sector, tapping global demand for the metal that is required for building and energy improvement projects worldwide.
Our company believe the nation is immersed in a crisis of self-confidence, Franco Mignacco, vice president of Argentina's. Chamber of Mining Entrepreneurs (CAEM), said at a mining event. on Tuesday in San Juan, citing financial chaos holding projects. back.
We have the resources, we have actually performed the expedition. and preparing work, but we require to offer macroeconomic. certainty for these jobs to emerge.
Many advanced is Lundin's Josemaria task in northern San. Juan; then Glencore's $4.5 billion El Pachon; MARA, owned by. Yamana Gold, Glencore and Newmont; First. Quantum's Taca and McEwen Mining's Los Azules.
Alfredo Vitaller, VP of business affairs at Josemaria, told. that the mine, aiming to produce over 130,000 tonnes of. copper a year, required economic and legal certainty to specify a. set start date for moving ahead with the job.
If conditions for the sector were improved, addressing the. problems it deals with, at least 6 of the most innovative copper. projects in Argentina remain in a position to start investments for. their building in the medium term, he said.
We do not have a specific start date for building.
MILEI REFORM EXPENSE: NO MAGIC SERVICE
Milei, a wild haired financial expert and former television character, is. trying to improve financial investment in the nation after inheriting one. of the nation's worst ever recessions when he took office. in December.
He has actually vowed to reverse capital controls very soon however. requirements to restore financial stability initially and rebuild depleted. reserve bank reserves. Regular monthly inflation is boiling down however. stays among the highest worldwide.
Milei is also pressing a major reform bundle in Congress,. consisting of aiming to enhance financial investment for large jobs, which. would give tax advantages and reduce access to foreign currency for. investments over $200 million.
Ernesto Cussianovich, associate director at local. consultancy Poliarquia, said stalling progress with copper was. down to financial instability recently, and the reform. expense - if passed - could supply some short-term relief.
It is a beneficial tool, though it doesn't resolve the issue,. he stated. It's extremely challenging for a financier to consider. strategies to invest in the country with these capital controls, with. a reliable ban on exporting foreign currency.
Looking to stimulate jobs, city governments in the. copper-rich northern provinces of San Juan, Salta, Catamarca and. Mendoza are releasing a copper committee on Wednesday.
The objective is ... to establish jobs, to get them into. production, stated Juan Pablo Perea, mining minister in San Juan,. the province with the most jobs in the existing pipeline.
He stated his province's copper tasks could assist the local. government bring in more than $3 billion by 2030.
Romina Sassarini, the mining and energy secretary in Salta,. home to First Quantum's Taca job, hoped more. collaboration would assist draw in the big investments needed to. push forward stalled mine development.
Today Taca Taca, for instance, requires a financial investment of $3.6. billion, stated Sassarini, adding she hoped it would soon advance. to a pre-construction phase. We hope it will be developed when. the macroeconomic conditions enhance.
(source: Reuters)