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Palm oil prices fall due to a projected buildup of stocks and weaker rival oils
Malaysian palm futures fell on Wednesday, as the market anticipated that stocks would rise for a third consecutive month in the month of May. They were also pressured by the declines in edible oils on Chicago and Dalian. By midday, the benchmark contract for palm oil delivery in August on the Bursa Derivatives Market had fallen 8 ringgit (0.2%), to $3,926 ringgit (US$923.11) per metric ton. A Kuala Lumpur based trader stated that "if end stocks rise, this will pressure palm oil futures price, which is why the markets are down." A survey on Wednesday showed that Malaysian palm oil inventories will rise for the third month in a row in May. This is due to a modest increase in production, despite strong export demand. AmSpec Agri Malaysia, an independent inspector, estimated that exports of palm oil products from Malaysia had risen by 13.2% in the month of May. Cargo surveyor Intertek Testing Services predicted a 17.9% increase. Dalian's palm oil contract fell 0.88%, while the most active soyoil contract decreased 0.03%. Chicago Board of Trade soyoil prices fell by 0.45%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils. In May, India's imports of palm oil reached a six-month record. The price of oil fell in Asian trade due to concerns over rising OPEC+ production and tensions on tariffs, which threaten global economic prospects. However, worries about Canadian supplies provided a floor. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures. The palm ringgit's trade currency strengthened by 0.31% to the dollar. This made the commodity slightly cheaper for buyers who hold foreign currencies. Technical analyst Wang Tao stated that palm oil could retest the resistance level of 3,968 Ringgit per metric tonne. A break above this would lead to an increase to 3,998 Ringgit.
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Top sources of U.S. imports of steel and aluminum
On Wednesday, the U.S. tariffs on steel and aluminum imports doubled as President Donald Trump intensified a global trade conflict. Here is a list of major trading partners that will be affected. STEEL: About a quarter (25%) of the steel used in America is imported. The bulk comes from Mexico and Canada, or other close allies such as Japan, South Korea, and Germany. China is the largest producer and exporter of steel in the world, but it only sends a small amount to the United States. In 2018, tariffs of 25% were imposed on Chinese steel, which effectively shut the market out. Last year, China exported 508,000 tons of steel net to the U.S. This is 1.8% of all American steel imports. ALUMINUM: The U.S. relies more on imports for aluminum. Approximately half of the aluminum used in the U.S. comes from imports, the majority of which is Canadian. Canadian aluminum imports exceeded the combined total of nine other countries by 3.2 million tonnes last year. United Arab Emirates (UAE) and China are the next two largest importers, with 347,034 metric tons and 222,872 respectively. According to global standards, the U.S. aluminium smelting sector is relatively small. According to the U.S. Geological Survey, the total smelter capability in the country is just 1.73% the global total.
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Wall Street Journal, June 4,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. The Chinese government's stranglehold over rare-earth magnetic materials has led to the closure of many factories in Europe and North America. The White House on Tuesday sent Congress a $9.4 Billion rescission package that codifies some of the spending cuts made by Trump's administration. In essence, it asked lawmakers to reverse expenditures they had previously voted in law. Post Holdings has agreed to purchase 8th Avenue Food & Provisions, including assumed debts, for $880,000,000. This will reunite the company with private brands that it had previously owned. Elon Musk, SpaceX's CEO, said on X Tuesday that the Texas-based firm is expected to generate $15.5 billion of revenue by 2025. North Face and Cartier informed their customers in recent days that their names and emails had been stolen. Victoria's Secret was forced to close its website for 3 days after another cyber-attack and delay the announcement of quarterly earnings that had been scheduled for this week. - Meta is turning to nuclear power for the massive amounts of electricity it needs to fuel its artificial-intelligence ambitions.
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Dutch car-sharing firm adds Renault electric vehicles capable of powering the local grid
This week, MyWheels, a Dutch car-sharing company will add the first 500 Renault EVs that are grid-connected to its fleet. The technology is gaining traction in Europe and the number of cars capable of strengthening power grids has increased. The Vehicle-to Grid technology (V2G) allows electric cars to store energy and deliver it to the grid during times of high demand. It has been around for several years, but it was only recently that the technology became commercially viable. This was due to smart charging and batteries capable of sustaining intensive use. MyWheels' roll-out will be the biggest V2G car sharing scheme in Europe, and the addition of the most V2G enabled cars in the region. Kees Koopen, investor at We Drive Solar (the Dutch manufacturer of the chargers) said that the project was a response to the growing concern over grid stability following a major power outage in Spain and Portugal in this year and the sabotage of power supply during the Cannes Film Festival this year. Koolen said that it felt like the project in Utrecht, Netherlands had cost approximately 100 million euros (114 million dollars) to develop. Global Market Insights estimates that the global V2G market will reach $80 billion by 2034, up from $3.4 billion. The Netherlands has been a pioneer in the adoption of V2G due to its ambitious plans to electrify and heat their transport systems, while moving towards renewable energy. Nissan, a Japanese automaker, has recently delivered dozens of Leaf and Ariya models with V2G capabilities to France and Spain. MyWheels reports that 500 Renault V2G compatible cars, including the electric R5, will hit the roads by next year. The cars will be charged bidirectionally by We Drive Solar when not in use. Operators will receive payment for the electricity consumed and sold back to the grid. As grids become more electrified and renewable energy sources are added, they have become unstable. Our research shows that the vehicle-to grid technology could enable the electric vehicle fleet to be a significant asset for the grid. Electric vehicles have a vast storage capacity, said Madeleine Brolly. She is an advanced transport analyst with Bloomberg New Energy Finance. She added that standardisation will be a key challenge for manufacturers to adopt the technology at large scale. (Reporting and editing by Dominique Patton, Christian Schmollinger and Dominique Patton; Gilles Guillaume and Anna Hirtenstein)
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PMI data shows that the growth of non-oil businesses in the UAE slowed down in May.
A survey released on Wednesday showed that growth in the UAE’s non-oil sector has slowed down to its lowest pace in almost four years. Demand remained high but moderated from recent peaks. The S&P Global UAE Purchasing Managers' Index fell from 54.0 to 53.3, its lowest level since September 2021. However, it remained above 50.0, the threshold for growth. In May, the rate of growth in production was the lowest in 44 months. This reflects a softerening in the non-oil sectors despite the fact that demand conditions were still supportive. The sub-index for output dropped to 57.3 from 59.4 readings in April and was the lowest since September 2021. Although the pace of growth in new orders remained strong, the sub-index fell to 56.2 in may from April's reading of 56.9 and was the lowest in seven months. David Owen, Senior Economist at S&P Global Market Intelligence said that although businesses continue to be pleased with the strong demand they receive from clients, some reports indicate that competition pressures and a weaker trade due to US tariffs have weighed down on growth. In the survey, firms reduced their inventories to a record low as they streamlined their holdings in response to a slowing economy. Backlogs fell to their lowest level in 16 months, which indicates a slower pace of demand. The business outlook for the future is subdued. The optimism level has fallen to its lowest since January. The growth of Dubai's private non-oil sector remained stable, with the headline PMI in May at 52.9, the same level as in April. However, demand momentum increased, with new orders growing at a faster pace than ever before. (Reporting and Editing by Toby Chopra).
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Scientists in Japan have developed plastic that dissolves within hours in seawater
Researchers in Japan developed a plastic which dissolves in the seawater in just a few hours. This could be a solution to a problem that is destroying oceans today and harming animals. Researchers from the RIKEN Center for Emergent Matter Science at the University of Tokyo claim that their new material breaks up much faster and leaves no residue trace. The team showed that a piece of plastic vanished from a container of salted water after stirring it for an hour. The team's research, according to project leader Takuzo Aida, has drawn a lot of interest from the packaging industry. World Environment Day, which takes place on June 5, is a campaign that encourages awareness of the plastic waste crisis. UN Environment Programme predicts that plastic pollution will triple by 2040. This would add 23-37 millions metric tons to the oceans every year. "Children can't choose where they want to live." Aida stated that it is our responsibility as scientists to leave them the best possible environment. Aida says the new material has the same strength as petroleum-based materials, but it breaks down to its original components upon exposure to salt. These components can be further processed using naturally occurring bacteria. This avoids the generation of microplastics which can harm aquatic life or enter the food supply. He added that salt is present in soil and a five centimetre (two inch) piece will disintegrate on land in over 200 hours. Aida explained that the material can be coated to make it look like regular plastic. The team is currently concentrating their research on the most effective coating methods. He added that the plastic was non-toxic, not flammable and did not emit any carbon dioxide. Reporting by Irene Wang, Editing by John Geddie & Lincoln Feast.
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Oil prices fall on rising OPEC+ production, despite Canadian concerns
The oil prices fell in Asian trade Wednesday due to concerns about rising OPEC+ production and the threat of tariff tensions that could threaten global economic prospects. However, worries over Canadian supply kept them at a lower level. Brent crude futures fell 23 cents (0.4%) to $65.40 per barrel at 0318 GMT. U.S. West Texas Intermediate Crude was down 25 cents (0.4%), at $63.16 per barrel. The benchmarks rose about 2% to their highest level in two weeks on Tuesday, driven by concerns over disruptions to supply from wildfires in Canada and the expectation that Iran will reject a U.S. proposal for a nuclear deal which is key 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, the oil markets struggle to extend their gains. Ueno said that hopes of progress in U.S. - China trade talks had been overshadowed 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 will likely speak this week. This comes after Trump had accused China of breaking a deal to reduce tariffs and trade restrictions. The Organisation for Economic Co-operation and Development cut its forecast for global growth on Tuesday as the impact of Trump's trade conflict has a greater toll on the U.S. Analysts weighed up the impact on supply of OPEC+ and the Canadian wildfire situation. In a client note, BofA analysts explained that the current backwardation of the crude futures curve was due to low inventories since the start of the year. The contango farther out on the curve indicates that the market is anticipating future slack as a result of OPEC's planned increase in supply and a broader slowdown in the global economy. The markets were expecting wildfires to continue to affect supply despite the temporary respite of wet weather. In a note to clients, ING analysts warned that this relief might be short-lived due to forecasts of drier weather and warmer temperatures towards the end this week. Analysts expect that the decrease in Canadian supply will offset over half of the increase planned for next month by OPEC+. Ole Hvalbye of SEB, an analyst at the company, said that estimates suggest 350,000 barrels a day were affected by the fires and closed in. To put this into context, the disruption is more than three-quarters the volume OPEC+ had agreed to add to market in July." (Reporting and editing by Jamie Freed, Clarence Fernandez and Yuka Obayashi)
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Iron ore gains on short covering, but seasonal slowdown in demand limits gains
Iron ore futures prices rose on Wednesday as investors closed short positions in order to realize profits. However, the seasonal slowdown of demand limited gains. As of 0300 GMT on China's Dalian Commodity Exchange, the most-traded contract for September iron ore traded at 700 yuan (US$97.41) per metric ton after reaching a two-month-low the previous day. As of 0250 GMT, the benchmark July iron ore traded on Singapore Exchange was up 0.21% at $94.5 per ton. Steven Yu, Senior Analyst at Mysteel, stated that prices have dropped dramatically over the last few days. Futures prices are now lower than spot price, meaning there is limited downside for futures on the short term. Yu said that "some shorts have resigned their positions because hot metal production is expected to be around 2.4 millions tons in June. A more dramatic price drop will only appear until fundamentals worsen further." As of May 30, the average daily hot metal production, which is a measure of iron ore consumption, fell by 0.7% compared to the previous week. It was now 2.42 million tonnes. Mysteel data shows that this is 2.6% more than the same time last year. Pei Hao is a senior analyst with international brokerage Freight Investor Services. She believes that the recent rise in the ore price was partly driven by the overnight rally in the coal and coke markets. Coking coal and coke, which are used to make steel, rose by 3% in the first session, after hitting a low of nearly nine years on Tuesday. The benchmark steel prices on the Shanghai Futures Exchange have seen gains. Rebar gained 0.48%; hot-rolled coil 0.69%; wire rod 0.55%; and stainless steel 0.28%. Reporting by Amy Lv & Lewis Jackson. $1 = 7.1858 Chinese Yuan
The dollar rises and stocks advance after the latest tariff threat
Dollar rose for the third consecutive session on Monday, after U.S. president Donald Trump warned about more tariffs including steel and aluminium. A gauge of global stock prices advanced, shrugging aside concerns over another round of duties.
Trump is expected on Monday or Tuesday to announce 25% tariffs on U.S. imports of steel and aluminum, and will reveal other reciprocal duties shortly after.
China's retaliatory duties on certain U.S. imports will take effect Monday. There is no sign that Beijing and Washington are making progress towards a new trading arrangement.
The dollar index (which measures the greenback in relation to a basket of currency) rose 0.2%, reaching 108.30. Meanwhile, the euro fell 0.18%, at $1.0308.
Marc Chandler, Bannockburn Global Forex's chief market strategist in New York said: "This is very early days." The market is just choosy and not really directional at the moment.
The dollar gained 0.34% against the Japanese yen to 151.91, while the pound fell 0.37% to 1.2363.
Shigeru Shiba, the Japanese prime minister, expressed optimism Sunday that his nation could avoid a tariff war with the United States and higher U.S. duties.
The Canadian dollar fell 0.1% against the greenback, to C$1.43, and the Mexican peso was down by 0.2% versus C$20.607 as the greenback retreated from its earlier highs.
Wall Street closed with gains, led by the tech and energy sectors. The S&P 500 Materials index increased 0.5%. Steel companies like Nucor and Steel Dynamics, both up 5.6% each, were the main contributors.
After McDonald's reported its quarterly results, shares of the fast food restaurant rose 4.8%.
Investors are saying: 'Hey let's get back to the areas that have worked.' Sam Stovall is the chief investment strategist of CFRA Research. He believes that earnings are one reason why investors remain optimistic.
MSCI's global stock index rose by 4.16 points (0.48%) to 873.60. This is its fourth increase in five sessions.
The STOXX 600 Index for Europe rose by 0.58%, closing at a new record high of $545.92. This was mainly due to a 1.5% increase in the oil and natural gas sector.
Stocks of European steelmakers reversed their early declines. ArcelorMittal in Luxembourg, for example, closed 0.6% lower and Salzgitter in Germany, closed unchanged.
Analysts are worried that tariffs will rekindle inflation in the United States, which would reduce the flexibility of the Federal Reserve, to lower interest rates. This is a potential outcome, and has supported the U.S. Dollar since Trump's election.
According to CME's FedWatch Tool, the markets expect the Fed to keep rates unchanged at its meeting in March. Expectations for a rate cut of at least 25% basis points will not rise above 50% until June.
The Fed chair Jerome Powell will be speaking to the Senate Banking, Housing and Urban Affairs Committee on Tuesday. It is likely that his comments on inflation and tariffs will be closely watched.
Investors awaited new economic data, such as the latest consumer price reading and a wave of fresh supply.
Oil prices recovered despite persistent fears of a global trade war. U.S. crude oil settled at $72.32 per barrel, an increase of 1.86%. Brent crude rose to $75.87 a barrel, an increase of 1.62%.
(source: Reuters)