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Iron ore prices rise as traders celebrate Sino-US trade progress
Prices of iron ore futures rose on Wednesday as progress was made in trade negotiations between the two world's largest economies. However, uncertainty about a final deal and a softening of steel demand limited further gains. After two days of intense negotiations in London, officials from the United States, the largest iron ore buyer in the world, and China, which is the second-largest consumer, have agreed on a framework that will put their trade truce on track. This has helped to support the prices. China buys over two thirds of the global seaborne supply. The day-time closing price of the most traded September iron ore contract at China's Dalian Commodity Exchange was 707 yuan (98.39 dollars) per metric ton. The contract lost nearly 1% Tuesday. As of 0720 GMT, the benchmark July iron ore traded on Singapore Exchange was up 0.87% at $95.2 per ton. Coking coal and coke, which are used to make steel, have gained 1.1% and 1.31% respectively. Steel benchmarks at the Shanghai Futures Exchange rose on higher raw material costs, but soft downstream demand capped gains. Rebar grew by 0.67%. Hot-rolled coils climbed 0.78%. Wire rod grew 0.43%. Stainless steel grew 0.48%. Galaxy Futures analysts said that "Steel consumption is rapidly declining as we enter the off-peak season." The state-backed China Iron and Steel Association, amid growing concerns about market stability and the spillover effect of fierce price wars among domestic automakers on steel markets, called for a boycott on Tuesday. ($1 = 7.1860 Chinese Yuan) (Reporting and editing by Sherry Jackson, Amy Lv)
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Israeli strikes kill 35 people in Gaza; many are near a medical aid site, say medics
Local health officials reported that Israeli military strikes in Gaza killed at least 35 Palestinians on Wednesday. The majority of the victims were at a Gaza Humanitarian Foundation aid site in central Gaza. At least 25 people died and dozens of others were injured as they approached a site for aid near the former settlement Netzarim. Medical officials from Shifa Hospital and Al-Quds Hospital confirmed this. They added that ten other people died in Israeli airstrikes in Khan Younis, in the southern part of the enclave. The Israeli military has not yet commented. The army claimed that it had fired warning shots on Tuesday when Gaza officials reported 17 deaths near another GHF aid station in Rafah, in the southern Gaza Strip, to keep "suspects", who were approaching troops, at a distance. Benjamin Netanyahu, the Israeli prime minister, said that there had been "significant" progress in the efforts to free the remaining hostages from Gaza. However, it was still "too early" to hope that a deal will be reached. Despite the efforts of the United States and Egypt to restore a Gaza ceasefire, neither Israel or Hamas have shown a willingness to compromise on their core demands. Each side blames the other for not reaching a deal. Hamas has denied any knowledge of new ceasefire proposals. In an attack on October 7, 2023 that was Israel's deadliest day, Hamas militants killed 1,200 people - most of whom were civilians - and took 251 hostages. According to Gaza's health authorities, Israel's campaign has killed more than 55,000 Palestinians since its beginning, the majority of whom were civilians. It also flattened a large part of this coastal enclave. (Reporting and editing by Michael Perry; Nidal al Mughrabi)
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South African macadamia growers look to new markets following US tariff shock
Gene Likhanya, who built his macadamia-nut farm in South Africa's Madimbo Valley over the past two decades with his personal savings, is now facing a new challenge due to U.S. tariffs on imports. This has forced him to find other markets. South Africa is the top producer of macadamia nut, which is known for its distinctive buttery flavor and is coveted by many for their perceived health benefits. The U.S. ranks second behind China as the largest market for the nuts. Likhanya is ambitious for his business, which he has grown to 78 employees and has produced just 25 tonnes of nuts in the past year. He wants to triple production over the next 4 years. However, President Donald Trump’s desire to increase tariffs may disrupt this. Likhanya and other macadamia nuts farmers are already searching for alternative markets. I feel there is so much more that we can do to explore international markets. We are talking to certain markets. "We're talking with India," Likhanya told an interviewer at his farm. India has a population of 1.5 billion who are also interested in macadamia. There's always a plan B. Other South African farmer associations have warned about the potential destruction caused by U.S. Tariffs. Citrus growers whose $100 million annual exports into the U.S. could be affected by tariffs. Likhanya is a member of the board at Macadamias South Africa. The main industry body representing growers. She described the tariff standoff as "loss-lose" and expressed hope that it could be resolved. "America imports kernels which are further processed by them. These (processing jobs) are under threat. It's either a win-win situation or a lose-lose one, and I don't want to be in that kind of situation," he said.
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Low grade Australian iron ore changes global benchmark
Platts, a pricing service, said that the long-standing global benchmark price for iron ore cargoes traded globally will be adjusted by 2026 in order to reflect the declining quality of ore supplied by Australia as its top supplier. The global price reporting agency, PRA, announced on Tuesday that Platts (part of S&P Global Commodity Insights) proposed a revision to its benchmark index specification to reduce the iron content to 61% from 62%, due to the decreasing quality of Australian ore fines. In an announcement on its website, it stated that the updated baseline specifications would more closely reflect those of major medium grade fines traded on the market. Since decades, the benchmark 62% Iron Ore Index has been used as a contracting tool between international buyers and miners. Rio Tinto's flagship product, Pilbara Blend fines, now contains less iron than 61% of the original, according to multiple sources. Rio Tinto didn't immediately respond to a request for a comment sent via email. The Platts Benchmark Prices Futures, Options and Swaps on the Singapore Exchange is one of the largest iron ore futures market in the world. Pei Hao is a senior analyst at Freight Investor Services, an international brokerage based in Shanghai. Platts also proposes to reduce the iron content of its benchmark 62.5% Fe China Iron Ore Spot Lump Premium to 62%. According to the notices, both changes will come into effect on January 2, 2026. Platts published a daily basis spread of 62%/61% on Tuesday to reflect the calculated value difference between current and proposed specs. Recently, other price reporting agencies, including Mysteel and Argus, launched new iron ore indices of 61%.
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Outokumpu targets a 250-million-euro increase in earnings between 2026-2030
Outokumpu, a Finnish stainless steel manufacturer, said that it aims to increase its long-term profits by 250 million euros (285 million dollars) between 2026 and 2030. This was announced ahead of the company's Investor Day on Wednesday. The company's stainless steel products, which are used for tanks, facades, and consumer goods like washing machines, will also invest around 200 million euros into a new annealing-and-pickling line in Tornio in Finland and plans to close two less efficient lines in Krefeld in Germany. Outokumpu stated that once the new line was operational, it would result in annual EBITDA improvements of 70 millions euros over the period. The company will drive growth through investments in either the foundational or transformational categories. The foundational businesses are to be used to generate cash to fund growth in other areas. Capex is limited to maintenance, targeted investments and targeted investments. The company stated that the transformative strategy targets high-value growth with an internal rate of returns of at least 20% and expansion into markets with lower cyclicality. This includes expanding into the global market for advanced materials and alloys and assessing opportunities to grow beyond stainless steel standard in the U.S. Outokumpu also targets a ratio of net debt to EBITDA, an important measure of a company’s financial health, at 1.0x for the same time period. It stated that it would pay a "stable, growing" dividend in the future.
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Andy Home: Demand destruction could help China break its rare earths shackles
Beijing's export restrictions have exposed the West's dependence on Chinese supplies of these exotic metals, and the permanent magnets that they power. It's not like we've never been in this situation before. China did the exact same thing in 2010. Western automakers chose to ignore historical precedents and double down on a techniqe that is almost completely beholden Beijing's export whims. Many of them have now entered a panic mode and several have already been forced to stop production lines. This shows the huge economic impact that niche metals like dysprosium (used in neodymium iron boron (NdFeB), magnets) can make. China's willingness weaponise its dominant position in the metals which power our modern world, will accelerate the West’s drive to develop its own supply chain. The solution lies in using less rare earths. The West cannot control the supply but can change demand. The past is not for those who forget it. Beijing said that its 2010 imposition of rare Earth export quotas was only to clamp down on illegal domestic mining. The incident happened after a collision in disputed waters between a Chinese coast guard vessel and a Chinese trawler. The entire West was affected by the skyrocketing prices of rare Earths if Japan were the target. According to Adamas Intelligence, the price of dysprosium oxide increased 26-fold between 2009 and 2012. China only reversed its position after a panel of the World Trade Organization ruled against them in 2014. Several automakers have learned the lesson. Nissan Motor Co. of Japan launched in 2012 a new LEAF electric car with a motor that contained 40% less dysprosium. Renault developed an alternative motor for its ZOE in the same model year, without permanent magnets or rare earths. Adamas estimates that the number of EVs with rare-earth free motors grew from a little over 1% in global sales in 2010, to 12% by 2017. This was the peak. BUCKLE UP Prices of rare earths fell in late 2010 and remained steady. Western automakers have largely switched back to permanent magnetics. According to Adamas, around 97% of the EVs sold each year since 2017 have rare-earth motors. The rapid growth of the EV market, especially in China (which for obvious reasons does not have a rare earths phobia), is reflected in the number of magnets that are used in new vehicles, whether they be pure battery or hybrid. Magnets are also used to control heating, entertainment, braking, and remind the driver of their seat belt. This has increased the dependence on a single country, which not only produces 95% of all NdFeB magnetic products in the world but also controls supply chains for the metals needed to produce them. PEACE TALKS China's rare earth exports may have been pushed too far this time, possibly because of an overzealous bureaucracy in the Ministry of Commerce that is responsible for segregating military from civilian applications. The talks between Chinese and U.S. officials entered their second session on Tuesday, in an effort to find a compromise between China's restriction on rare earths versus U.S. restrictions regarding advanced semiconductors. Background: Tariffs are a major factor. The automotive industry will remain dependent on rare earths even if Beijing eases up its restrictions. It may take a while for Western supplies to catch up. Even though Western governments pour money into new projects to build a mine-to magnet supply chain, it will take years. Civil sectors will also be a second priority. The U.S. Department of Defense is the largest investor in rare earths, with a stated goal of supporting "all U.S. Defense requirements by 2027". The speakers in your car radio are not as powerful as the magnets required for an F-35 fighter. This aircraft requires over 900 pounds worth of rare earths. DEMAND DESTRUCTION Does the technology used in non-critical applications really need to be deployed on new vehicles? A bigger question is if they need a rare earth magnet in the engine. Renault and BMW, which have learned from their past mistakes, have developed alternatives for their EV motors to reduce the impact of this current supply crisis. Many other automakers have also been interested in the same technology, but it is not yet ready for commercial production. China's recent restrictions on rare earths should serve as a powerful motivation to speed up the redesign process. When it comes to breaking free of China's chokehold over rare earth magnets, automakers may find that engineered demand destruction is faster than creating a new supply network. It's not like they've never done it before. These are the opinions of the columnist, an author for. You like this column? Check out Open Interest, your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X and X. Editing by Jan Harvey
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German nuclear fusion company Proxima raises development funding of 130 million Euros
Proxima Fusion is a Munich-based company that specializes in nuclear fusion technologies. It announced on Wednesday that it had raised 130 million Euros ($148.8 Million) to move it closer to its goal to develop a novel power station. Why does it matter? Around the world, dozens are exploring nuclear-fusion technology, which is a newer form of energy generation that harnesses the same intense process that powers our sun. There is fierce competition between private and public companies, governments of European countries, United States, and China and technology options such as Plasma confinement used by Proxima or lasers. The new conservative government in Germany supports Proxima's technology as part of its energy agenda. This puts Proxima, and other domestic rivals such as Gauss Marvel and Focused Energy, on the map. List of Investors Proxima has listed the venture capital firms Cherry Ventures from Berlin and Balderton Capital from London as its lead finance partners. KEY QUOTES "Fusion energy has entered a new age - it is moving from laboratory-based science to engineering at industrial scale," said Proxima's CEO Francesco Sciortino. This investment validates the approach we have taken and provides us with the resources necessary to develop hardware to help make clean fusion energy a reality. Cherry Ventures Founding Partners Filip Dames and David S. Smith said that Proxima Fusion combines Europe’s scientific edge with its commercial ambition. This is deep technology at its finest, and a bold message that Europe can lead the world stage. WHAT'S NEXT? Proxima will use the funds to finish a major hardware demo while continuing to build its teams in Munich and near Zurich, Switzerland, as well as at a campus in Britain near Oxford.
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Industry group claims that China's coal imports may drop up to 100,000,000 tons by 2025.
An official from a major industry association said that China's coal exports could fall by as much as 100 million metric tonnes in 2025. This could put global benchmark prices, which are already at multi-year-lows, under even more pressure. The world's biggest consumer, producer and importer of fossil fuels increased imports to a new record of 542.7 millions metric tons by 2024 as lower international prices prompted buyers to substitute imported coal for domestic supply. Xuegang Li (Vice President of China Coal Transportation and Distribution Association) told Coaltrans China on Wednesday that imports could drop by between 50 and 100 million tons. Official data revealed that imports fell by 8% in the five-month period ending May. The decline in 100 million tons would be equivalent to an annual drop of 18.4%. Li did not indicate how much he anticipated thermal coal and steelmaking coal imports to drop. Thermal coal is used primarily in power generation while metallurgical is used for steelmaking. China's increasing dependence on thermal coal has been reduced as a result of the rising output from renewable sources. Thermal coal accounts for the majority of the coal consumed in the second largest economy. Li added that China's coal consumption would peak in 2027 or 2028. The time period for near-peak levels of consumption will be spread over three to five year. (Reporting and writing by Sam Li and Lewis Jackson; editing by Himani Sarkar, Rachna uppal and Sudarshan Varadhan)
Vietnam decides to temporarily impose anti-dumping tariffs on China steel products
The trade ministry announced on Friday that Vietnam would levy a temporary antidumping tax of up to 27,83% on certain hot-rolled coils steel products from China.
In a statement, the Ministry said that the tariff would be effective on March 7, and it will last for 120 days.
Baoshan Iron & Steel, Maanshan Iron & Steel are among the companies affected by these duties
Vietnam launched an investigation into anti-dumping in July after complaints by Vietnamese producers.
After business hours, the Chinese ministries of foreign affairs and commerce did not respond to faxed comments.
Hanoi's decision comes after the U.S. government announced 25%
Tariffs
All its steel imports, earlier this month. This would take effect March 4.
The U.S. has already imposed anti-dumping duties, sometimes even exceeding 25%, on a number of Vietnamese steel exports.
There is no indication whether U.S. steel duties will be added to existing anti-dumping actions. Reporting by Amy Lv, Lewis Jackson and Phuong NGuyen in Beijing; editing by Sharon Singleton
(source: Reuters)