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Iron ore fails due to Sino-US tariff concerns and a sluggish China economy
The price of iron ore futures fell on Wednesday, as investors worried about heightened tensions in trade between the U.S. As of 0316 GMT, the most traded May iron ore contract at China's Dalian Commodity Exchange slipped 0.62% to 804 yuan ($110.37). The benchmark March Iron Ore traded on the Singapore Exchange fell by 0.85%, to $104.15 per ton. Analysts at ANZ said that "Sentiment will likely suffer" as Chinese markets reopen, and they react to the tariffs on commodities. The additional 10% tariff imposed by President Donald Trump on all Chinese imports went into effect on Tuesday. China responded quickly to the new U.S. tariffs by imposing tariffs on U.S. imported goods, reigniting the trade war between two of the world's largest economies. ANZ also added that "The steelmaking raw materials will be in the spotlight... Chinese iron ore market are likely to come into pressure amid concerns about weaker export-driven demand." Beijing's latest measures include a 15% tax on U.S. Coal, a key ingredient in steelmaking. A private sector survey revealed that China's service activity expanded at a lower pace in January even though the business climate improved. A separate survey revealed that the growth of factory activity in the country also slowed. Rio Tinto said that on the supply side it has begun to clear iron ore vessels from two Western Australian port as two tropical storms off-shore complicate its attempts to repair infrastructure damage caused by a last month cyclone. Rio warned in January that disruptions to rail operations due to record rainfall could affect its first-quarter shipment. Coking coal and coke, which are both steelmaking ingredients, lost ground on the DCE. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell 1.36%, hot rolled coil dropped 1.7%, and wire rod was down 0.84%. Stainless steel, however, gained almost 1%. ($1 = 7.2844 Chinese Yuan) (Reporting and editing by Sumana Niandy; Reporting by Michele Pek)
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Gold reaches all-time-high on Sino-US Tariff War
Gold prices reached a record-high on Wednesday. This was boosted by fears of another trade war between China and the United States after Beijing imposed tariffs on U.S. goods in response to U.S. duties. As of 0253 GMT the spot gold price was up by 0.2% to $2,848.69 an ounce after reaching a session high of $2.853.97. U.S. Gold Futures rose 0.2% to $2.879.70. U.S. president Donald Trump said Tuesday he was not in a hurry to talk to Chinese President Xi Jinping about the trade tensions that exist between the two world's largest economies. In a measured reaction to Trump's tariffs, China imposed targeted duties on U.S. imported goods on Tuesday, and warned several companies including Google of possible sanctions. Ilya Spirak, global macro head at Tastylive, said that the next inflection point is likely to be $3,000 for gold. If the trade war escalates, China might feel more inclined to continue buying gold as a reserve. Three Federal Reserve officials said on Monday that the Trump administration’s plans to impose trade tariffs could lead to inflation. One of them argued that the uncertainty surrounding the price outlook would call for a slower rate cut than usual. Gold is considered a hedge against inflation, but higher interest rates may dampen its appeal to investors. Investors will be watching for the ADP Employment Report due on Thursday at 1315 GMT, and the Payrolls Report on Friday. Both reports could provide more insight into the U.S. economic health. Spivak said that "gold demand should be partially supportive of other precious metals, but their sensitivity towards risk appetite has led them to underperform." Spot silver increased 0.2% per ounce to $32.15; platinum rose 0.3% to $966.95 and palladium dropped 0.9% to $881.75.
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Shanghai copper reduces tensions between the US and China
Shanghai copper prices fell on Wednesday, as trading resumed following the Lunar New Year holiday. Fears of a deterioration in trade tensions with the United States and China, the world's largest metals consumer, dampened market sentiment. By 0201 GMT, the most active copper contract at the Shanghai Futures Exchange had fallen 0.4%, to 75,280 Yuan ($10,332.85) per metric ton. China's markets closed for Lunar New year from January 28 to February 4. China imposed tariffs Tuesday on certain U.S. goods in response to the new U.S. duties imposed on Chinese products. The move raised the stakes of a showdown in the global economic battle between the two largest economies, even as Donald Trump granted reprieves for Mexico and Canada. This means that China’s exports to America will be subjected to an additional 10% tariff. It should not cause any distortions, as only a little under 4.5% of China’s copper and aluminum exports are sent to the US," Commerzbank wrote in a report. China's package of retaliatory actions included tighter export regulations on tungsten, amongst other metals. The market will focus on whether China announces additional stimulus measures to boost the economy amid concerns over the tariff dispute with United States and persistent fears about demand in the second largest economy of the world. The price of three-month copper at the London Metal Exchange increased by 0.2%, to $9171.5 per metric ton. Aluminium for the three-month period fell by 0.3% to 2,630.5. LME zinc remained at $2,807.5 per ton. Tin increased by 0.3% to $30370. Lead rose 0.2% to 1,974 while nickel grew 0.7% to 15,370. SHFE aluminium increased 0.2% to 20,275 Chinese yuan per ton. Nickel fell 0.5% to 23440 yuan. Zinc eased 0.8% at 23,440 yuan. Lead gained 1.9% at 17,025 yuan. Tin advanced 1.4% at 251,660 yuan. ($1 = 7.2855 Chinese yuan) (Reporting by Anushree Mukherjee in Bengaluru; Editing by Subhranshu Sahu)
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Oil prices remain unchanged as the market ignores China's tariffs, but Iran's pressure is still a factor.
The oil prices were little altered on Wednesday, after volatile trading the previous session. Investors shrugged off China's tariffs against U.S. imports of energy. President Donald Trump's renewed efforts to eliminate Iranian crude exported provided some support. Brent crude futures fell 18 cents or 0.24% to $76.02 per barrel at 0210 GMT. U.S. West Texas Intermediate (WTI), a crude oil produced in the United States, lost 9 cents or 0.12% to $72.61 Oil traded across a range on Tuesday, with WTI dropping at one point to its lowest level since December 31, after China announced tariffs against U.S. imports for oil, natural gas liquefied and coal as retaliation for U.S. duties on Chinese exports. The prices rebounded after Trump reinstated the "maximum-pressure" campaign against Iran that he had enacted during his first term, which cut Iranian crude oil exports to zero. Goldman Sachs analysts said that the impact of China’s retaliatory duties on energy prices would be limited, "given that China’s tariffs do not change global supply or demand for these commodities," in a Tuesday note. The note stated that both countries would be able find other markets. Analysts at ANZ, citing data on ship tracking, said that while Trump had said he would be open to a possible deal with Iran, he also expressed a willingness for him to speak to the Iranian leader. The plan, they said, could have an impact on the 1.5 million barrels of oil per day the country exports. The U.S., which is the largest oil consumer in the world, also saw a rise in crude and fuel stocks. According to sources citing American Petroleum Institute data, crude stocks increased by 5,03 million barrels during the week ending Jan. 31. According to sources, API reports that gasoline inventories increased by 5.43 millions barrels and distillate stock fell by 6.98million barrels. The official U.S. Government oil inventory data will be released Wednesday.
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Andy Home: Aluminium is the base metal analysts' bullish pick for 2025
Analysts predict that the London Metal Exchange's (LME) pack of base metals will be the most successful in 2025. They also forecast a shortage of light metal this year. Analysts who participated in the base metals survey of January also expect higher cash prices this year for zinc, copper, and tin compared to 2024. Nickel remains the ultimate conviction, even though the average LME Cash price has fallen by nearly 22% in the past year. Nickel oversupply is expected to continue in both 2019 and 2020. Analysts are focusing on supply dynamics to determine the likely winners and losers for this year, but there is a gloomy macro-picture hanging over the industrial metals industry. Since the last quarterly survey in October, all median forecasts have been reduced for lead, copper, tin and nickel. This is due to concerns about the impact of a trade war on demand. ALUMINIUM BULLS According to the median forecasts of 33 analysts who participated in the January survey, the average LME cash aluminum price is expected to rise by 4.9% in 2024, and then another 6.3% in 2025 to $2,573.50 a metric ton. The result was not much different from October's poll, indicating a growing conviction in the metals' bullish prospects. The higher price forecast comes from a shift in the market dynamics towards a shortage of supply. Analysts have shifted their consensus from a surplus of 100,000 tons to a deficit of 8,000 tonnes in 2025. The average price per ton will increase to $2,626 in 2026. The recent tightness on the alumina markets has boosted the price of aluminium, but the greater structural constraint to supply is China's cap on smelter capacities. China's annualised production was close to 45.0 million tons by the end of 2024. It's not clear how the rest the world will fill in the gap if the largest producer of the world has reached the end of its expansion potential. ZINC PRICE Rally Sighted Fading Zinc, the second most valuable metal this year, is expected to see a 4.2% increase in the average cash price to $2.895 per ton. Analysts also raised their expectations for zinc prices from the poll conducted in October, compared to the general trend. You can see how the story of zinc has changed over the past three months. The market was expected to have a massive oversupply, but it has been surprisingly tight due to a shortage of mined concentrates that drags down the global metal production. Analysts expect that zinc prices will weaken in 2025 and 2026. Zinc is the only LME metal that analysts expect to see its price fall next year. Zinc's price premium will also decrease over lead, its sister metal. Lead prices are expected to remain steady at $2,050 this year and in the future. DIALING BACK COPPER Analysts have reduced their expectations of copper's potential growth. The median forecast for the cash price this year is lower by 4.8% than the poll from October. Copper is the LME Metal most sensitive to macro sentiment. The macro-economic outlook has become even more turbulent since U.S. President Donald Trump imposed 10% tariffs on Chinese imports. China's carefully calibrated response gives some hope for a successful trade negotiation. However, copper is especially sensitive to any negative effects on China as the largest buyer of red metal in the world. This year will be no different. The market spent a lot of time last year searching for signs of resurgence in China's massive manufacturing sector. Tariffs, and the possibility of further ones in the future, have muddied the waters. THINGS CAN ONLY GET BETTER FOR NICKEL Since October, the median nickel forecast has been downgraded to $16,265 a ton. This is due to the increasing LME stock levels. Analysts don't expect much more downside after the market has already dropped so dramatically over the past year. According to the consensus, LME cash nickel will average $15.550 per ton during the current quarter. It is expected to rise steadily to $16,750 by the fourth quarter. Price recovery is forecast to continue through 2026, with a cash median price of $17.637 per tonne. Indonesia, which is the dominant producer in the world, may slow down its production to stabilize prices. UNPREDICTABLE Tin The tin market has been particularly volatile over the past couple of years, and it's hard to predict what the future holds for this soldering material. Median forecasts indicate a modest 2,6% increase in the average price for this year compared to 2024. This masks an extremely wide range of expectations ranging from $23,750 per ton to $33,000. In 2026, the range is even larger at $21,000 to $37,000. This is a good example of how hard it is to understand this small, but deeply opaque market. These are the opinions of the columnist, an author for.
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Trump's tariffs are only going to make Nissan even more hurt
Nissan is the Japanese automaker most likely to suffer from Donald Trump's possible tariffs against Mexico and Canada. Nissan has the least financial resources. Although it is unclear if the U.S. president will actually follow through on his 25% levies, after agreeing to the 30-day pause Monday, the impact would be severe for Japan's third largest carmaker. The company is currently struggling to turn around and in merger talks with Honda. Nissan, Toyota, and Honda are all the biggest automakers in America. The three Japanese automakers produce some of the most popular U.S.-made models in Canada and Mexico. Analysts and industry experts claim that the tariffs will have a significant impact on all three. Toyota and Honda, however, are more prepared than other manufacturers to deal with the tariffs. They have the financial resources and the ability to raise prices and pass some of the tariff costs on to consumers. James Hong, Macquarie's head of mobility research, said that Nissan is barely profitable in the automotive industry. The majority of models that Nissan builds in Mexico to export to the U.S. is compact cars such as the Sentra or Kicks. These are aimed at consumers who are cost-conscious and can't afford higher prices. Nissan could be in serious trouble if the tariffs are not removed. If the merger is successful, it could be a burden for Honda too. Nissan did not respond immediately to a comment request. The company stated on Jan. 22, that it was unable to speculate on the impact of potential policy changes. However, it said it would continue to focus on producing quality vehicles. Hong estimates that Nissan's operating profit would be completely wiped out if it didn't take action to respond to the tariffs. For example, re-routing Mexican cars to other markets like Brazil, increasing prices or reducing production. According to S&P Global Mobility, Nissan gets 27% of their U.S. sales through Mexico, while Honda gets 13% and Toyota 8%, respectively. S&P Global Mobility estimates that 43% of Volkswagen's U.S. sales come from Mexico. FRESH BURDEN Trump's decision would make what was once a major advantage for Japan's automakers - a low cost production base close to the U.S. Nissan began manufacturing cars in Mexico in 1966 when it opened the first plant outside Japan. Toyota, Honda, and Mazda followed. Nissan opened its first U.S. plant in 1983, in Smyrna Tennessee. If the tariff is added to the cost of a car that's reasonably priced, the consumer will not want to purchase it. "So, for example, 10% is added to the cost of the car while the remainder is borne by the company," explained an executive from a Japanese automaker who was not Nissan. The executive said that since production in Mexico could not easily be stopped, another option was to sell cars produced there in Latin America and elsewhere. He declined to be named because the matter is sensitive. Hyundai, a South Korean automaker that does not have plants in Mexico or Canada, is aware of the problem facing Japanese automakers. Hyundai's CFO stated that even if Trump introduced duties on all markets outside of the U.S. the South Korean automaker does not expect to be as badly hit as its Japanese competitors, during a recent call. Nissan's planned partnership with Honda is also affected by the threat of tariffs. Christopher Richter, senior Japan automotive analyst at CLSA brokerage said: "This complicates a merger that is already hard to execute." Nissan and Honda will announce further details on their proposed merger by the middle this month. Both companies aim to join forces by 2026. This would be a pivotal moment for Japan's automotive industry, and highlight the danger that Chinese EV manufacturers pose to traditional carmakers. Nissan is also suffering from a slump in sales in China and the U.S. It announced in November that it would cut 9,000 jobs, and 20% of global production capacity. Toshihiro Mize, Honda's CEO, said that Nissan had to turn around its fortunes before the merger could take place. Honda would not be rescuing Nissan. Nissan's junior partner Mitsubishi Motors is considering whether to join the merger. This complicates the plan. The tariffs could not have come at a worse time for automakers, given the global disruption that the industry is facing. CLSA's Richter said that Mr. Trump does not seem to understand the fact that it is impossible to change auto production overnight. "In the interim, they will try to charge the consumer the most they can in order to offset this and eat as less of the tariffs as possible." Reporting by Daniel Leussink, Maki Shiraki. Hyun Joo Ji in Seoul has contributed to the reporting. David Dolan, writer. Mark Potter (editing)
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Trump appoints McKinsey attorney to be General Counsel at Commerce Department
According to U.S. Senate Records, President Donald Trump nominated Pierre Gentin as the general counsel of the U.S. Commerce Department. Gentin is currently chief legal officer at consulting firm McKinsey & Co. Trump nominated several other officials for the Department of Commerce on Monday. Neil Jacobs was named to lead the National Oceanic and Atmospheric Administration. Arielle Roth was named to head the Commerce National Telecommunications and Information Administration. This agency is responsible for a fund of $42,5 billion to ensure universal access to high-speed internet by 2030. Trump nominated Washington-based trade lawyer Jeffrey Kessler on Monday to head the Bureau of Industry and Security at the Commerce Department, a crucial post in the U.S. vs. China tech war. Kessler was a partner in the law firm WilmerHale and served as Assistant Secretary for Enforcement and Compliance during Trump's initial term. First reported that he was being considered. Wednesday, the Senate Commerce Committee will vote on Howard Lutnick’s nomination as head of the department. Commerce will be faced with a number key issues under Trump, including export control on U.S. AI chip and other efforts against Chinese tech companies. It will also have to oversee nearly $40 billion worth of subsidies for semiconductor manufacture. Jacobs, a scientist in atmospherics, was appointed to run NOAA on an interim basis during Trump's initial term after Barry Myers, then the CEO of AccuWeather, had been nominated. Myers later resigned citing health issues. Trump proposed to cut NOAA's funding by 17% during his first term. The agency produces daily and long-term forecasts to aid in agricultural planning, as well as emergency response for severe weather like hurricanes. The White House nominated Paul Roberti to lead the Pipeline and Hazardous Materials Safety Administration. Roberti was a U.S. Transportation Department employee during Trump's initial term and served as the chief economic and policy advisor at the Rhode Island Division of Public Utilities and Carriers. (Reporting and editing by Rod Nickel, Stephen Coates, and David Shepardson)
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ADM 2025 Outlook clouded by biofuel policies and trade tensions
Global grains trader Archer-Daniels-Midland is slashing costs and cutting staff to weather a commodity downturn made more challenging by uncertainty about U.S. biofuels policies and a brewing trade war, the company said on Tuesday. ADM's problems follow a scandal in accounting that occurred last year, which forced the company twice to revise its financial statements. A federal investigation was also launched. ADM posted its lowest fourth-quarter profit for six years on Tuesday and predicted that 2025 could see a third consecutive year of earnings decline. ADM announced that it will eliminate up to 700 positions and cut costs by up to $750,000,000 in the next 3 to 5 years. It is joining rival agribusiness Cargill to tighten its belt. CEO Juan Luciano stated that it was hard to predict the outcome of ADM's international trading business if President Donald Trump’s orders to increase tariffs on Canada and Mexico, or China, spark widespread retaliation by the top three purchasers of U.S. agricultural goods. China retaliated with limited tariffs against the new U.S. duties on Chinese products on Tuesday. Beijing's tariffs excluded crops. Trump has suspended tariffs on Canadian goods and Mexican products for a month. Luciano added that "the issue" is the retaliatory actions. He said that ADM was on a list of grain trading companies who could benefit from the current trade turmoil. ADM can still provide crops from Brazil to a market that has halted its imports of U.S. agricultural products. However, such interruptions may reduce the trading margins. ADM expanded its global grain distribution and origination footprint in 2018, when China cut its U.S. soya bean purchases. This prompted the company to tap into its Brazilian supply chain for that country. Luciano stated that ADM, along with other crop processors, were waiting for policy guidance on the size and scope tax credits available to U.S. producers of biofuels. These tax credits could boost oilseed crushing margins and biodiesel production. ADM, a pioneer in ethanol production and for many years the leading producer of ethanol in the United States, supplies biofuels to Marathon and other companies through its massive processing facilities.
Copper rallies to one-month peak on indications of improving need
Copper costs hit onemonth peaks on Monday on optimism about global growth and need, particularly in leading consumer China, which increased imports of the commercial metal last month.
Criteria copper on the London Metal Exchange (LME). was up 0.3% at $9,115 a metric ton by 1050 GMT after touching. its greatest since Dec. 12 at $9,150.
China's imports of unwrought copper and copper products hit. a 13-month high in December, rising almost 18% year on year to. 559,000 metric lots, custom-mades data showed.
Another indicator of stronger demand is the Yangshan. premium << SMM-CUYP-CN >, a carefully watched indication of China's. hunger for importing copper, which at $73 a load has actually acquired 70%. since early November.
The financial backdrop is fairly favorable and enhancing. said Dan Smith, head of research study at Amalgamated Metal Trading.
China's trade information revealed a good surplus. Part of that is. individuals rushing to send stuff to the U.S., however that's not the. whole story.
Experts say stress over tariffs on imports to the United. States after U.S. President-elect Donald Trump takes office this. month lag some of the increase in China's exports.
Likewise increasing belief was the month-to-month U.S. jobs report on. Friday, suggesting robust development worldwide's largest economy.
Looking ahead, traders are waiting on China's loan and. total social funding (TSF) numbers for December. Metals. experts use TSF as a gauge of commercial metals need.
Elsewhere, aluminium struck a four-week high at. $ 2,589.5 a lot on issue over moving stocks in LME-registered. warehouses, which have actually dropped 45% because May in 2015 to. 619,375 heaps. << MALSTX-TOTAL > Cancelled warrants--
metal marked for shipment-- at nearly. 60 %recommend more aluminium will
leave LME warehouses over coming. days and weeks. Fret about tight materials on the LME system have narrowed. the discount for the money aluminium over the three-month. contract to about$ 13 a ton from more than$ 40 acquired 1% to$ 2,896, lead slipped 0.7% to$ 1,962.
and tin increased 0.7% to$ 30,100 while nickel. sophisticated 0.7% to$ 15,770. (source: Reuters)