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Russell: Coal was Australia's top commodity exporter, but gold will soon be the king.
Iron ore has surpassed coal as the top commodity exported by Australia. This is due to the increase in shipments to China of steel raw materials. Gold is now threatening to surpass coal. According to the latest quarterly report of Australia's government commodity forecaster, earnings from precious metal exports are expected to increase to A$56 Billion ($36.6 Billion) in the fiscal period starting July 1. The Department of Industry, Science and Resources released data on Monday that showed this figure was higher than the A$39bn forecast for metallurgical and thermal coal. The combined export earnings of A$67billion for 2025-26 are still higher than those for gold. Here's where things get interesting. It's possible that by 2026-27, gold will surpass the combined total of metallurgical and thermal coal used for steel production. The government anticipates that gold exports will increase to 313 tons by 2026-2027, from 289 tons during 2025-2026 and 250 tonnes in 2024-2025. It would be a major coup for Australia to become the world's largest net gold exporter and third-largest gold producer. The department is cautious about its gold price forecast, expecting that it will fall to $2.825 per ounce in 2026-27 from $3.200 in 2025-26. This is below the current spot rate of $3.273. Most analysts expect a price of $2.825 on average for 2026-2027, but the government forecaster has a history of being conservative. Gold could continue to rise 29% since Donald Trump was elected president of the United States for a second time in November. Trump has implemented and is planning a number of policies that are considered bullish for gold. Tax and spending policies would increase the fiscal deficit of the federal government, placing pressure on U.S. Treasuries to be a store value. The sweeping tax cut and spending bill proposed is edging closer to being passed by the Republican-controlled Senate and House of Representatives, and if successfully signed into law it is estimated by the non-partisan Congressional Budget Office that it would add $3.3 trillion to U.S. debt over a decade. Trump's tariff and trade policies are also uncertain, as his July 1 deadline for the United States to make deals with dozens major trading partners is looming. Even if Trump announces lower tariffs in April than he did, imports to the United States are likely to face higher taxes under Trump's second term than during his first term and when Joe Biden was president. The gold price is likely to rise as investors continue to look for alternatives to U.S. Treasuries, and other assets. Central banks and investors alike are expected to keep buying. Price Assumptions The current Australian dollar to U.S. dollar exchange rate would result in export revenues of A$61.6billion if a higher price of gold is assumed in 2026-2027, of $4,000 per ounce. The price forecasts may be overly optimistic, given the dynamics of the seaborne coal market. According to the government's forecast, metallurgical coke will average $201 per ton by 2026-2027. Thermal coal benchmark at Newcastle Port is expected to be $110 per ton. The Singapore Exchange closed its metallurgical coal contract at $178.50 per ton of coal on June 27. GlobalCOAL valued Newcastle thermal coal at $108,87 during the week ending June 27. Both prices are close to recent 4-year lows. The government expects the price of both types coal to rise slightly in the coming years. This would require that seaborne demand on major Asian markets like China, India and Japan, as well as South Korea, at least remain stable, if it does not improve. China and India are the world's two biggest coal importers and producers. They want to increase domestic production and reduce imports. This may restrict their seaborne imports. Japan and South Korea want to use cleaner fuels, such as liquefied gas. This may end up costing less than coal due to the flood of capacity that is expected to enter the market in 2027. It is possible that Australia will become the second largest commodity exporter in 2026/27 if gold continues its current upward trend and seaborne coal remains under pressure. You like this column? Open Interest (ROI) is 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. These are the views of a columnist, who is also an author.
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Dalian iron ore to gain for the first time in four months on strong near-term demand
Dalian iron ore prices rose on Monday, and they were expected to record their first monthly gain in four months due to strong near-term demand from top consumer China. However, a prolonged property crisis held back gains. The September contract for iron ore on China's Dalian Commodity Exchange ended the morning trading 0.21% higher, at 715.5 Yuan ($99.87). The contract has gained 1.71 % so far in June. As of 0346 GMT the benchmark July iron ore traded on Singapore Exchange was down 0.16% at $94.4 per ton. This is a drop of 1.3% for this month. According to Mysteel, hot metal production, which is a measure of iron ore consumption, was stable at 2.42 million tonnes as of 27th June. In a separate report, Mysteel stated that the average rate of blast furnace capacity utilization rose by 0.04 percentage points, reaching 90.83% for the period from June 20 to 26. A survey found that manufacturing activity in China fell for the third consecutive month in June. Analysts say that a weak domestic demand, combined with a long-lasting property crisis, causes factory owners in China to hold onto their inventory while they wait for Beijing to strike deals to ease tensions between the U.S. Investors expected rate cuts following comments by Federal Reserve Chair Jerome Powell last week, who said that rate cuts would be likely if tariffs did not cause inflation to spike. Dollar-denominated investments are cheaper for holders of currencies other than the greenback. Coking coal and coke, which are used to make steel, also rose, by 1.14% and 0.8%, respectively. The Shanghai Futures Exchange steel benchmarks have mostly increased. Rebar gained 0.43%; hot-rolled coil gained 0.22%; stainless steel gained 0.488%; and wire rod fell 0.21%.
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MORNING BID - Risks flow as trade discussions unclog
Wayne Cole gives us a look at what the future holds for European and global markets. In Asia, the start of the week was already risky when the news broke that trade talks between Canada and the United States were back in action after Prime Minister Carney agreed not to implement a digital tax demanded by Trump. The new deadline is July 21. This extends Trump's original date of July 9. Treasury Secretary Bessent suggested last week that they could be completed by Labor Day, September 1, if the talks are extended. Wall Street futures have risen by around 0.4% to record highs, as investors pile in for megacaps ahead of the new quarter. European and German stock-futures are also up around 0.3%. The majority of Asian markets are in the black as well, thanks to a continued decline in oil prices due to the Mideast ceasefire. Investors keep a close eye on the progress made by a massive tax-cutting bill and spending bill that is slowly making its journey through the Senate. There are signs that it may not reach Trump's July 4th deadline. In a bid to save time, Democrats have clerks read every line of the 940-page bill. They are likely the only people who know what it contains. The Congressional Budget Office estimates that the bill will add $3.3 billion to the nation's national debt over a ten-year period, a test of foreign appetites for U.S. Treasury bonds and another blow to U.S. exceptionalism. The dollar has seen the most impact, while the euro saw gains of 1,7% last week. James Reilly, a Capital Economics analyst, said that the dollar has fallen more this year than any other year since 1973, when the U.S. switched to a freely-floating currency. This slide is forcing foreign investors to hedge against the dollar, which leads to more selling and a downward cycle of the currency. Investors' expectations of Federal Reserve policy ease to 65 basis points over the remainder of the year have not helped either. It's still a long shot that a move in July will happen, but this could change if Thursday's payroll report is a disappointment. A rise in the unemployment rate to above 4.3%, for example, would bring it up to levels that have not been seen since the end of 2021. This would certainly alarm the Fed. Market developments on Monday that may have a significant impact The European Central Bank Forum in Sintra, Portugal begins - German, Italian CPI data Fed's Bostic & Goolsbee talk
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Gold recovers from over a one-month low due to weaker dollar
Gold reversed its course on Monday and increased, supported by the weaker dollar. It had previously hit a record low after easing U.S. China trade tensions lowered demand for safe haven assets and boosted risk appetite. Gold spot rose 0.3%, to $3,281.65 an ounce at 0216 GMT after reaching its lowest level since May 29, earlier in the session. U.S. Gold Futures rose 0.2% to $3,293.30. Tim Waterer, KCM Trade's Chief Market Analyst, said that there is less of an 'all is doom' outlook regarding both tariff talks as well as events in the Middle East. This is making gold play second fiddle behind risk assets. The dollar index dropped 0.2%, but Wall Street futures rose. The greenback price of bullion is less expensive when the dollar falls. Treasury Secretary Scott Bessent announced on Friday that the U.S.-China have settled issues relating to shipments of magnets and rare earth minerals into the U.S. He also said the Trump administration could complete its various trade agreements with other countries by Labor Day, September 1. Donald Trump, the U.S. president, abruptly ended trade talks with Canada over Canada's tax that targeted U.S. tech firms on Friday, claiming it was an "attack" and he will set a new rate of tariff on Canadian goods in a week. After a 12-day conflict, the ceasefire between Israel and Iran also seemed to hold. This further reduced demand for safe havens. The dollar is still under pressure, which limits the decline of gold. The $3,250 mark is a crucial support level for the gold price. Waterer warned that if this level is breached, losses could accelerate to the $3200 level. Gold's appeal as a safe haven is often reduced by stable geopolitical or economic conditions. Silver spot was down by 0.1%, at 36.02 per ounce. Platinum was up 1%, at 1,353.13, and palladium rose 0.2%, at $1135.48. (Reporting and editing by Harikrishnan Nair, Rashmi aich and Anmol Choubey from Bengaluru)
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At least one gunman is still active in Idaho shooting that killed two firefighters
The Kootenai Sheriff reported on Sunday that two firefighters were killed while responding to an ensuing fire in northern Idaho. Law enforcement officers are still under sniper fire, as they continue their hunt for one or possibly more gunmen. Sheriff Bob Norris urged the public to avoid the area surrounding Canfield Mountain. This is a popular nature zone for hikers in Coeur d'Alene (about 260 miles / 420 km east of Seattle). Norris said at a press briefing that "we are prepared to neutralize the suspect who is actively shooting public safety personnel" and added that civilians could have been trapped in the incident. Sheriffs said that the shooter was using high-powered sporting guns to fire quickly at first responders and were "not, at this point, showing any signs of surrendering." He said that shots were coming in multiple directions. This was a clear indication of multiple shooters. He added that the perpetrators had chosen a location "with thick brush, and are well-prepared and blend in with their environment." Norris stated that if these individuals were not neutralized immediately, it would likely be a multi-day mission. ABC News reported that Kootenai Sheriff's Lieutenant Jeff Howard is investigating the possibility that the fire was intentionally lit to attract first responders. ABC News reported that Kristi Noem, the Department of Homeland Security secretary, was briefed about the Idaho shooting. The video footage showed that armed responders were preparing and smoke was billowing up from heavily forested hillsides. Ambulances and emergency vehicles could be seen entering the hospital. FBI deputy director Dan Bongino posted on X that "FBI tactical assets and technical teams are currently on scene providing support." It is still a very active and dangerous scene. Norris reported that firefighters received their first call about a fire at around 12:21 p.m. local. About 40 minutes later they heard reports of gunfire. Brad Little, the Governor of Idaho, said that this was a direct attack on brave firefighters. I ask all Idahoans, as we await further information, to pray for the firefighters and their families. Little didn't give any further details about the incident or casualties. Little said, "Please stay away from the area as this situation is still evolving to allow law enforcement to do their job." The U.S. Constitution guarantees the right to "keep and carry arms" for all Americans. Gun violence is a common cause of death. According to the latest data available from the Centers for Disease Control and Prevention, 17,927 Americans were killed by a firearm in 2023. Reporting by Brad Brooks from Colorado and Costas Pitas from Los Angeles. Editing by Humeyra Pamuk and Diane Craft; Lincoln Feast, Stephen Coates, and Humeyra Pamuk.
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Copper prices are high as the market waits for US tariff clarification and trade talks.
On Monday, copper prices traded at a range of levels on the London Metal Exchange (LME) and Shanghai Futures Exchange as investors awaited clarity about potential import tariffs and progress in U.S. Trade talks. The LME's three-month copper fell 0.15%, to $9,863 a metric ton, as of 1105 GMT. Meanwhile, the SHFE's most traded copper contract gained 0.13%, to 79840 yuan (11,132.03 dollars) per ton. After President Donald Trump abruptly terminated negotiations with Canada, on Friday, he left the talks in a cloud of uncertainty. He called Canada's tax on U.S. technology firms a "blatant" attack and promised to impose tariffs on Canadian products within a week. While metal has been diverted to the U.S. due to expectations that it will be taxed on imports, there are shortages in other countries. "The continued squeeze on the LME also supported prices," ANZ stated. "Spot contracts for copper continue to trade at a huge premium to futures with a later date." The LME's warehouses are partly empty due to record-breaking shipments to the U.S. in anticipation of tariffs. Copper Stocks In LME-registered storages, Friday's total dropped by 1,800 tonnes to 91.275 tons, the lowest level since August 2023. Inventories In the SHFE monitored warehouses, the weekly average for the week ending Friday was 81,550 tonnes, the lowest level since May 9. LME tin dropped 0.41% to $33,625 per ton. Lead fell 0.34% to $2,000, zinc shed 0.32 % to $2770, nickel declined 0.23% at $15,210, and aluminium eased by 0.19% to $1,590. SHFE tin dropped by 0.63%, to 268,030 Yuan. Lead fell by 0.29%, to 17,145 Yuan. Aluminium fell 0.22%, to 20,530 Yuan. Nickel gained 0.13%, to 79840 Yuan. Click or to see the latest news in metals, and other related stories. Data/Events (GMT 0600 UK GDP QQ YY Q1 1220 Germany CPI prelim YY June 1200 Germany HIPCP prelim YY Juni ($1 = 7.1721 Chinese Yuan) (Reporting and Editing by Sumana Niandy; Reporting by Hongmei Li)
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Trump says that the US could purchase more oil from Japan if it were to be deemed unfair.
In an interview broadcast Sunday, Donald Trump stated that Japan engaged in "unfair trade" in automobiles with the United States. He also said Japan should import more energy and other goods from the United States to reduce the U.S. deficit. Tokyo is trying to find a way to convince Washington to exempt Japan’s automakers from the 25% tariffs that are specific to the automobile industry and which hurt Japan's manufacturing sector. Japan will also face a reciprocal tariff of 24% starting July 9 unless a deal can be reached. They won't accept our cars and yet we import millions of cars from them into the United States. Trump stated that Japan understood what he meant when he said it in an interview with Fox News' "Sunday Morning Futures With Maria Bartiromo". "And they also understand that we have a large deficit with Japan. We have oil now. They could take lots of oil and other things. Last year, the automobile industry accounted for 28% of Japan's total exports to the U.S. of 21 trillion yen (roughly 145 billion dollars). (1 dollar = 144.4800 Japanese yen). (Reporting and editing by Stephen Coates; Reporting by Chang-Ran Kim)
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Demands for debt cancellation and climate action by protesters ahead of UN summit
On Sunday, activists marched through Seville, southern Spain, in scorching heat, demanding debt cancellation, climate justice, and taxing super-rich people on the eve a UN summit about financing development, which critics claim lacks ambition. The four-day summit, held every ten years, promises to tackle poverty and disease by defining the global framework for sustainable development. The United States' decision not to attend the summit and the shrinking appetite of wealthy countries for foreign aid has dampened expectations that it will lead to significant changes. Greenpeace members sat on a globe and carried a float that depicted Elon Musk, the billionaire, as a baby holding a chainsaw. Other banners read "Make Human Rights Great again", "Tax Justice Now" or "Make Polluters Pay". Beauty Narteh, of Ghana's Anti-Corruption Coalition, said that her group wanted "dignity and not handouts" in the tax system. Sokhna Nidiaye of the Africa Development Interchange Network called on public and private sector to "show more solidarity and less selfishness" towards developing countries. The Spanish Prime Minister Pedro Sanchez had said earlier that the fact that this event is taking place while conflicts are raging around the world is reason for hope. Sanchez, speaking at an event organized by the non-profit Global Citizen reaffirmed Madrid's commitment of reaching 0.7% GDP in development assistance and encouraged other countries to follow suit. Jason Braganza of the pan-African advocacy organization AFRODAD, who participated in the yearlong negotiations on the final outcome document for the conference, claimed that countries such as the U.S. and the European Union, along with Britain, had blocked efforts to organize a UN convention regarding sovereign debt. He added, "It is a shame that these countries chose to protect themselves and their creditors' interests over the lives of people who are dying." Reporting by David Latona, Silvio Castellanos and Andrea Ricci
Iron ore prices fall on increased Sino-US tensions and China stimulus uncertainty
The price of iron ore futures fell on Wednesday as the trade tensions between China and America escalated, causing concerns about demand prospects. Meanwhile, doubts grew over stimulus prospects after a series of positive Chinese data.
The September contract for iron ore on China's Dalian Commodity Exchange recovered some of its earlier losses and ended daytime trading 0.14% lower, at 708 yuan per metric ton.
As of 0717 GMT, the benchmark May iron ore traded on Singapore Exchange fell 1.28% to $97.35 per ton.
Data released on Wednesday showed that China's economy grew by 5.4% in the first quarter of this year, exceeding estimates. This growth was largely due to solid industrial output and consumption.
China's new-home prices were also unchanged from the previous month in March, indicating a slight improvement over February when prices dropped 0.1% on a month-to-month basis.
The hopes that Beijing would launch an aggressive stimulus program to counter U.S. Tariff shocks in order to achieve its annual target of growth have somewhat dimmed. This has put downward pressure on ferrous markets.
Prices fell despite signs that supply was lower and demand was resilient.
Rio Tinto has reported its lowest iron ore shipment in the first quarter since 2019. The company also warned that further weather disruptions may lead to an unmet forecast for 2025.
Brazilian miner Vale has produced 67.7 millions metric tons iron ore during the first quarter 2025. This is down 4.5% compared to a year ago.
China's crude output of steel in March increased 4.6% compared to the previous year. This was due to higher margins and robust international exports.
Coking coal and coke, the other steelmaking ingredients, were both mixed.
The benchmarks for steel on the Shanghai Futures Exchange have lost ground. Rebar dropped 1.06%, while hot-rolled coils fell 1.05%. Wire rod also lost 0.72%, and stainless steel was down by 0.08%.
Analyst Zhuo Quqiu at Jinrui Futures said that the steel demand showed signs of easing from last week. The impact of trade tensions in May will likely be seen.
The focus is on the potential stimulus, its timing and size. (Reporting and editing by Amy Lv, Colleen Waye and Mrigank Dhaniwala).
(source: Reuters)