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Copper prices rise as risk appetite increases after tariff relief
The copper price in London was stable on Wednesday. This was due to an improved risk appetite in the financial markets after President Donald Trump’s latest tariff relief. However, a strong dollar held gains in check. The London Metal Exchange's three-month copper price remained at $9,593.5 a metric ton as of 0214 GMT. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper edged up 0.1% to 78.390 yuan per ton ($10,886.29). Copper prices have traded in line with the overall sentiment on the global stock exchange in the past two weeks. The US stock market has been lifted by trade optimism, and this has had a ripple effect on copper prices, said Kelvin Woong, senior market analyst for Asia Pacific, OANDA. Trump reversed his decision to impose tariffs of 50% on EU imports next month. He restored the deadline of July 9 to allow time for negotiations. The risk-taking sentiment on the financial markets was boosted. Tuesday, data showed that U.S. consumers' confidence improved in May after five months of declines. This was due to a truce between Washington and Beijing in their trade war. The dollar index also added to the overnight gains. This made dollar-denominated investments more expensive for holders of other currencies. In its latest monthly bulletin, the International Copper Study Group reported that the global refined copper market had a surplus of 17,000 metric tonnes in March compared to a surplus of 180,000 metric tonnes in February. Other London metals include aluminium, which fell 0.3% at $2,478.50 per ton. Zinc also fell 0.1% to $2703, while lead declined 0.3% to 1,979.5, and nickel fell 0.3% at $15,370. Tin rose 0.1% to $22,630. The SHFE aluminium price rose by 0.5%, to 20,165 Chinese yuan per ton. Lead was down by 0.2%, at 16,765 Yuan. Nickel was 0.4% lower at 121,870 Yuan. Zinc was unchanged at 22,415 Yuan. Tin fell 0.3%, to 264440 Yuan. ($1 = 7.2008 Chinese Yuan) (Reporting and editing by Sherry Jacobi-Phillips in Bengaluru)
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Asian shares and the U.S. Dollar climb on positive data, technology optimism
The dollar gained on Wednesday, as the United States economy showed promising signs and speculation about strong tech earnings. The markets welcomed the apparent easing of trade frictions between Europe and the U.S., while global bond market settled after an alarming surge in long term yields. The U.S. consumer sentiment surprised to the upside before Thursday's closely watched employment figures. Nvidia's shares jumped by more than 4% on Tuesday and it will be the final of the Magnificent Seven tech giants in the U.S. to announce earnings after the close of U.S. markets. Chris Weston is the head of Pepperstone's research and said that there was renewed confidence in Nvidia to beat consensus estimates. He said that if Nvidia delivers better than expected sales and profit margins, "the rally will be on." According to LSEG, the chipmaker will report that its first-quarter revenues grew by 66.2% and reached $43,28 billion. According to two sources with knowledge of the situation, European Union officials are asking companies about their U.S. investments plans. MSCI's broadest Asia-Pacific index outside Japan rose 0.3% during morning trading, while Japan's Nikkei gained 0.6% for a fourth consecutive session. The dollar index (which tracks the greenback versus a basket currencies) rose by 0.1% on Tuesday, adding to the 0.6% gain of that day. The dollar rose 0.1% against the euro to $1.132. Australian shares rose 0.17% but the currency fell 0.2% as April consumer prices data exceeded expectations. The kiwi currency fell 0.3% as the Reserve Bank of New Zealand reduced rates, as expected. Japanese bonds fell, trimming an increase yesterday, in advance of a bid for 40-year-old securities and amid speculation that the Ministry of Finance would reduce the issue of long-dated instruments. Early trading saw oil prices rise as the U.S. banned Chevron CVX.N's export of crude from Venezuela due to a new authorization for its assets in Venezuela, raising the possibility of a tighter supply. Brent crude futures increased 0.4% to $64.37 per barrel while U.S. spot gold rose 0.1% following a drop of more than 1% Tuesday.
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France's Macron and Indonesia's Prabowo discuss strategic partnerships
On Wednesday, French President Emmanuel Macron and his Indonesian counterpart Prabowo Subito will meet in Jakarta to discuss defence ties. This is Paris' largest arms client in Southeast Asia. Indonesia is the second stop on Macron's regional tour after Vietnam where both countries signed deals valued at over $10 billion. He will fly to Singapore Thursday. The Indonesian foreign ministry stated that the two countries would discuss "existing partnerships" without providing specifics about the topics of discussion. In 2022 the two countries will sign an $8.1 billion deal in defence that includes an order for 42 Rafale jet fighters manufactured by France's Dassault aviation, as well a number of agreements, including sub-development and ammunition. "Some commitments require follow-up and Indonesia showed interest in other military hardware but there have been no advances yet," said Khairul FAHMI, a military specialist at the Institute for Security and Strategic Studies, an Indonesian-based institute. Rafale jets are not yet delivered to Indonesia. In February, Mohamad Tonny Harjono, the chief of Indonesian Air Force Mohamad Tonny Harjono stated that six jets will arrive in Indonesia by early 2026. In addition to the Rafale agreement, Indonesia has also announced that it will buy 13 Thales long-range air-surveillance radars in 2023 and two "Scorpene' submarines in 2024 from France. Prabowo was Minister of Defence when these deals signed. Paulo Castellari, the new CEO of Eramet, is part of Macron's delegation to Indonesia's mineral-rich Indonesia. Eramet Chairwoman Christel Bories said that they would be looking to discuss mining permissions in relation to Weda Bay Nickel Mine. Indonesia has the largest known nickel reserves and is the world’s leading producer. Eramet, among other companies, has complained about the reduction of volume allowances. Eramet is still interested in nickel processing, despite having dropped a plan last year to build a BASF plant. (Reporting and writing by Ananda Teresia in Jakarta and Stanley Widanto, in Paris. Editing and proofreading by John Mair.
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Oil prices rise as U.S. bans Chevron's export of Venezuelan crude
The oil prices rose in the early hours of trading on Wednesday, as the U.S. banned Chevron's exports from Venezuela due to a new authorization for its assets there. This raised the prospect of a tighter supply. Brent crude futures gained 47 cents or 0.73% to $64.56 per barrel at 0028 GMT. U.S. West Texas Intermediate crude rose 49 cents or 0.8% to $61.38 per barrel. Sources reported that the Trump administration had issued a new approval for U.S. giant Chevron, which would allow it to retain assets in Venezuela without allowing them to export oil or expand their activities. Robert Rennie, Westpac's director of commodity and carbon strategies, wrote in a report that the loss of Chevron Venezuelan barrels will lead refiners to rely more on Middle Eastern crude. The previous license had been revoked by the U.S. president Donald Trump on 26 February. The licenses granted to Chevron, and other foreign oil companies in recent years have helped to support a small recovery of Venezuelan oil production that was hit by sanctions. This has risen to around 1 million barrels a day. The European Union has begun to ask top EU companies about their U.S. investments plans. This is a sign that Brussels will be advancing trade negotiations with Washington. Trump's move comes after he backed down from his threat over the weekend to impose tariffs of 50% on European goods, which would have hurt demand for oil and economic activity. The gains on Wednesday have largely recovered the losses of Tuesday when prices fell by around 1% following signs of limited progress in the fifth round of Iran and U.S. nuclear negotiations. The market anticipates that any resolution between Iran and the United States could increase Iranian oil supply on the market. The Organization of the Petroleum Exporting Countries (OPEC+) and its allies will meet in full on Wednesday. However, no major policy changes are anticipated. Sources say that eight members of OPEC+ could decide on a July output increase when they meet this Saturday. Rennie stated that the most likely scenario for July would be a 411,000 barrel increase per day. This would "add to the rising inventory as we approach the summer driving season here in the U.S."
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France's Macron and Indonesia's Prabowo discuss strategic partnerships
On Wednesday, French President Emmanuel Macron and his Indonesian counterpart Prabowo Subito will meet in Jakarta to discuss defence ties. This is Paris' largest arms client in Southeast Asia. Indonesia is the second stop on Macron's regional tour after Vietnam where both countries signed deals valued at over $10 billion. He will fly to Singapore Thursday. Indonesia's Foreign Ministry said that the two countries would discuss "existing partnerships" without giving any specific details. In 2022 the two countries will sign an $8.1 billion deal for defence that includes an order of 42 Rafale jet fighters from France's Dassault. They also signed a number of agreements, including those relating to ammunition and submarine development. "Some commitments require follow-up and Indonesia showed interest in other military hardware but there have been no advances yet," said Khairul FAHMI, a military specialist at the Institute for Security and Strategic Studies, an Indonesian-based institute. Rafale jets are not yet delivered to Indonesia. According to Antara, the chief of Indonesian Air Force Mohamad Tonny Harjono stated in February that six aircraft would arrive in Indonesia by early 2026. In addition to the Rafale agreement, Indonesia also signed a 2024 agreement with the French shipyard Naval Group for the purchase of two "Scorpene", and announced in 2023 the purchase 13 long-range radars by France's Thales. Prabowo was Minister of Defence when these deals signed. Paulo Castellari, the new CEO of Eramet, is part of Macron's delegation to Indonesia's mineral-rich Indonesia. Eramet Chairwoman Christel Bories said that they would be looking to discuss mining permissions in relation to Weda Bay Nickel Mine. Indonesia has the largest known nickel reserves and is the world’s leading producer. Eramet, along with other companies, have complained about the reduction in volume allowances. The group has also been in discussions with Indonesia's newly established sovereign wealth fund Danantara about investments in the battery supply chain. Eramet is still interested to enter nickel processing, despite having dropped a plan last year to build a BASF plant. (Reporting and writing by Ananda Teresia in Jakarta and Stanley Widanto, in Paris. Editing and proofreading by John Mair.
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Sources say that the US has granted Chevron a narrow permission to retain assets in Venezuela
Three sources familiar with the decision confirmed on Tuesday that the Trump administration had granted a limited authorization to U.S. oil company Chevron, allowing it to retain assets in Venezuela. This included its stakes in joint ventures for oil with PDVSA. In recent weeks, Chevron and other European companies had been in discussions with Washington officials to get authorizations for their assets and stakes in Venezuela due to President Donald Trump’s restrictive policies. The guidelines were issued as the administration let the Chevron's license to operate in Venezuela expire Tuesday. Joe Biden, the former U.S. president, had granted that license over two years ago. Sources said that under the new authorization Chevron is not allowed to operate oilfields, export oil, or expand its activities in Venezuela. It also stated its intention to avoid paying any payments to the administration of President Nicolas Maduro. Chevron issued a statement Tuesday saying: "General License 41B expired and Chevron’s continued presence in Venezuela is in compliance with all laws and regulations applicable, including the sanction framework provided by the U.S. Government." PDVSA and the U.S. Treasury Department did not respond to comments immediately. It wasn't immediately clear whether the guidelines for Chevron will be extended to PDVSA's other foreign partners. Two sources say that executives from Chevron Venezuela notified Venezuelan authorities and contractors of the new instructions on Tuesday. The oil service and procurement contracts Chevron signed have been terminated. The wind-down period, which was set out in the previous license, to complete transactions including the export of Venezuelan oil into the U.S. has expired, despite the statement made by U.S. Special Envoy Richard Grenell, last week, that a 60 day extension would be granted following a meeting between Grenell and a Venezuelan official. Trump accused Maduro in February of not making progress in migrant return and electoral reforms towards the restoration of democracy. Maduro, his government, and other countries have rejected the sanctions imposed by the U.S., calling them an economic war. They also praised the resilience of the country. Venezuela is an OPEC country with the largest crude reserves in the world. Venezuela's oil production is only a fraction of its previous level due to a lack of investment, poor management at PDVSA, and U.S. sanction since 2019. The licenses granted to Chevron, and other foreign oil companies in recent years have supported a small recovery of Venezuelan oil production to around 1 million barrels a day.
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Executive says that the largest California utility has seen a 40% increase in interest in data centers.
PG&E's, California's biggest electric utility, saw a 40% increase in the number of requests from developers of data centers across the northern part the state for power supplies this year, a company executive said on Tuesday. California's Silicon Valley has one of the oldest and largest data center markets in the world. However, analysts say that the high cost of electricity and the price of land will prevent the state from capitalizing on the surge of artificial intelligence data centers currently being built across the nation. PG&E said, however, that it sees signs that the state has still room to grow. PG&E launched a new process last month for data center developers who are interested in connecting with the utility's network. PG&E supplies power and natural gases to 16 million people across northern and central California including Silicon Valley. Mike Medeiros is PG&E’s vice president for South Bay Delivery. He said that the so-called "cluster study" yielded 4.1 Gigawatts in interest on top of 8.7 Gigawatts previously announced by the company during its most recent earnings call, held late April. Medeiros stated that not only has the pipeline of data centers within PG&E grown, but also the size of these projects have increased since last year's study on clusters. The typical data center that PG&E wanted to power last year had a capacity of 50 to 100 Megawatts. Currently, proposals range from 500 megawatts up to 1,000 megawatts. Medeiros explained that "we're seeing a big change in the type of homes customers want. Some of this might be due to land availability, or simply scale and efficiency of building larger." Data centers for AI, unlike earlier ones, are used to train large language models like ChatGPT and can be located further from the city center. California's oldest data centers are located in Silicon Valley, in the western part, but many of the proposed new developments are in the inland areas, such as Contra Costa County and Fresno. PG&E is not expected to connect all data centers that make inquiries. This is due to the short timelines set by operators and developers, as well as the backlog of equipment required to build the grid.
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Polish utility PGE Q1 profits jump on lower CO2 emissions costs
PGE, Poland's largest energy utility, reported on Tuesday a core profit of 4,33 billion zlotys (about $1.16 billion), up 71% from the previous year. This was primarily due lower CO2 emissions costs and regulatory revenue increases. The results are in line with preliminary estimates that were reported by the company in mid-May. Why it's important PGE, along with other Polish utilities is experiencing structural changes in the energy landscape of Poland as renewables slowly replace coal, which has long dominated. According to data from the Forum Energii think tank, coal's share of Poland's electricity generation fell to 57.1% by 2024. Renewable energy sources, however, reached a new record at 29,6%. CONTEXT The rise in the company's core profits was driven primarily by lower CO2 emissions costs and higher government-regulated payment for grid stabilization and capacity mechanisms. The result was also positively impacted by the improved results of electricity sales to customers, and increased revenue from heat sales. By the Numbers The net profit of PGE for the first three months rose by over 170%, to 2,42 billion zlotys. Sales revenue increased by around 2%, to 17.17 billion Zlotys. This compares with 16.84 billion Zlotys one year earlier. Cost of goods sold for the company was 13.34 billion Zlotys during the quarter. This is down 11% compared to 15.05 billion Zlotys at the beginning of 2024.
China's gold imports through Hong Kong reached a record high in April
Data from the Hong Kong Census and Statistics Department showed that China's total imports of gold via Hong Kong almost tripled in April compared to March, reaching their highest level for more than a month.
Why it's important
China is the largest gold consumer in the world. Its buying activities can have a significant impact on global gold markets. The sharp rise in gold imports after months of net exports reflects a shift in economic sentiment as well as a renewed optimism among Chinese investors about the future for gold.
Hong Kong's data might not be a complete view of Chinese gold purchases as it is also imported through Shanghai and Beijing.
By the Numbers
The net imports from Hong Kong into China in April were 43.462 metric tonnes, up from 4.889 metric tonns of net exports for March. This is the highest level recorded since March 2024.
China's total imports of gold via Hong Kong in April reached 58.61 tons, an increase of 178.17% compared to 21.07 tonnes in March. This is a record high for more than a year.
KEY QUOTES
Soni Kumari, ANZ Commodity Strategy, stated that despite the overall strength of demand, gold imports via Hong Kong to China were relatively low during the first quarter. This was due to the lower premiums on the spot price.
"That caused a tightening of supply, which pushed up the spot premium." When the spot premium is high it encourages imports.
Dealers in China continue to charge premiums of up to $50 per ounce over global benchmark spot prices.
CONTEXT
Gold prices have reached multiple records this year. In April, they briefly broke the $3,500/oz mark. This was due to a combination of factors, including uncertainty over President Donald Trump's proposed tariffs, anticipation of rate cuts by the U.S. Federal Reserve, and central bank purchases.
Official data from the People's Bank of China showed that China's central banks added gold to their reserves for the sixth consecutive month in April.
Two people with knowledge of the situation said that, earlier this month, the central bank had approved some commercial banks' purchases of foreign currency to pay for imports of gold under newly increased quotas. (Reporting and editing by Emelia Sithole Matarise and Joe Bavier in Bengaluru)
(source: Reuters)