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Sources say that China, facing a declining coal demand, has asked power plants to simply buy more coal.
Sources with knowledge on the matter say that China is urging its coal-fired plants to stockpile the fuel more and import less to try to stabilize domestic prices. However, traders are skeptical the measures will stop the slide. After a massive increase in production following shortages and blackouts, the coal industry in China is facing rising stocks of the fuel. Sources said that to support the miners who are facing a decline in profits, the state planner asked power plants prioritise the domestic coal, and increase thermal stockpiles of coal by 10%. The overall target was 215 million metric tonnes by June 10. Sources spoke under condition of anonymity as they were not authorized to speak with the media. Two sources, both coal dealers, stated that the guidelines were unlikely to encourage much buying or support the price, due to the accumulation of inventories along the supply chain. National Development and Reform Commission, a powerful state planner and policy maker, did not respond immediately to a request for comment sent by facsimile. China Energy Daily, a state-run publication, reported that mine stockpiles were up by 42% compared to a year earlier, and port inventories in the northern Bohai region had increased by 25%. Three sources stated that buyers are being asked to purchase coal from northern port to reduce the high stockpiles of ports. The NDRC has taken these steps after months of industry groups and companies calling for a reduction in coal production and imports. However, Chinese coal prices are steadily falling. The price of medium-grade coal, with a heat content of 5,500 kilocalories/kg, was 620 yuan (86 dollars) per metric tonne on Tuesday. This is the lowest price since March 2021. The prices have dropped so much that some buyers are opting to sell on the spot rather than sign long-term contracts. China is expected to import a total of 542.7 million tonnes of coal this year, despite the record-breaking amount imported in 2024. In April, coal imports fell 16% on the previous year. MINES CONTINUE TO WORK Chinese mine production is growing despite the price collapse, and a government that fears shortages and blackouts in 2021 and 2020 will not consider reducing output. Toby Hassall, lead coal analyst at LSEG, said: "I believe they are very careful to avoid a repetition of that." "They are willing to tolerate a period of low domestic production." China's coal output increased 6.6% year-on-year from January to April to 1.58 billion tonnes. Official data released on Tuesday showed that industry profits dropped 48.9% from the previous year for the same time period.
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Copper prices rise on signs of tightening supply
The London Metal Exchange's system showed signs of tightening supply, which helped to support the copper prices on Wednesday. However, ongoing U.S. - China trade tensions kept this growth-dependent metal at a narrow range. The benchmark three-month copper price on the LME rose 0.5% to $9,639 per metric tonne by 0950 GMT after reaching a two-week-high of $9,655. Copper used in construction and power is up 5.7% this month, as global trade tensions have eased since April, when U.S. president Donald Trump announced reciprocal duties. Stocks in LME registered warehouses are decreasing, which is helping to support the metal. The lowest level in nearly a year, with a drop of 43% from mid-February. Spread between cash LME and three-month copper contracts Last week, was at a premium price of $40 per ton compared to $3 a few weeks ago. This indicates a tighter supply in the near future. Washington continues to investigate whether it should impose new tariffs on copper imports. This will keep the premium for COMEX copper over the LME benchmark high and encourage more metal into COMEX owned warehouses. . BNP Paribas analysts said that if a tariff was applied, it would stop the incentive for copper to be moved to the U.S. This, they believe, will lead to more physical flows into the LME and a price downturn. It added: "If there's no tariff, or if the tariff rate is much lower than expected, we think CME will crash with negative effects on LME." BNP Paribas anticipates that the average LME price of copper will be $8,610 during the third quarter, before rising to $9,180 for the fourth quarter. According to the International Copper Study Group, from the perspective of global supply the copper market had a surplus in January-March of 289,000 tonnes compared to 268,000 tons one year prior. Aluminium and zinc, among other LME metals rose 0.1%, to $2,485.50 per ton and to $2,707 respectively. Lead fell 0.3% to $1979, while tin dropped 2.0% to $30,870, and nickel fell by 1.7% to 15,150. (Reporting and editing by Jan Harvey; Polina Devtt)
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Heidelberg Materials anticipates that the infrastructure boom will fuel profits by 2030
Heidelberg Materials, world's second largest cement manufacturer, announced on Wednesday that it expects the operating profit growth to be driven in the medium term to 2030 by five megatrends. These include higher defence expenditures and a growing need for data centres. The German company stated that the group's RCO (result from current operations) will grow on average 7-10% per year up until 2030. This was revealed at its Capital Markets Day held at Brevik, Norway, where it has a carbon capture and storage facility. The group stated that the return on capital invested is expected to increase to around 12% in 2030 from an estimated 10% in 2025. It also added that its net capital expenditure goal would be increased to average 1.3 billion euro ($1.5 billion) per year from 1.1 billion. Dominik von Achten, CEO of Heidelberg Materials, said that the profit growth would be driven not only by defence and data centres, but also by global energy needs, infrastructure requirements, as well as a forecast housing boom worldwide. The company is benefiting from these five waves. He said that the demand for heavy building materials like cement, aggregates and ready-mixed concrete was huge. The shares of the German construction firm have increased by over half this year, giving the company a value of about 33 billion euros. Investors are betting on the ability of the group to take advantage a 500-billion euro investment drive by the German government. Von Achten said that a second round capacity adjustment in Europe would take place by 2030, following the current efforts to close five clinker factories on the continent before the end of this year. The goal is to achieve a significant increase in margins across Europe. "We are removing the capacity in areas where production is cost- and CO2-intensive - namely clinker," von Achten stated. He added that the group could grow in cement through adding mills to their plant network.
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Exxon Mobil sells Esso, its French subsidiary, to Canadian energy group
ExxonMobil, the energy giant from Canada, announced on Wednesday that it had entered exclusive negotiations with North Atlantic's French unit to divest its French majority-owned subsidiary Esso. Esso announced that the sale would take place during the fourth quarter of 2018. The price per Esso Share before distributions is 149.19 Euros ($168.82), or 32.83 Euros after distributions. Esso stated that ExxonMobil wants Esso make an additional distribution up to 63.36 euro per share before the completion of the deal. ExxonMobil, the current majority shareholder of Esso with an 82.89% stake in which it intends to divest, plans to divest this entire stake. Around 0931 GMT the shares of Esso were down 9.2%, on course for their worst day since 2024. Esso announced that North Atlantic would then make a mandatory bid to buy the remaining shares in Esso at the same terms as their initial offer. The tender offer was expected to be submitted in the first quarter 2026. North Atlantic said it would maintain jobs and develop Esso Gravenchon into a green-energy hub. A spokesperson for North Atlantic said that there will be continuity of operations as ExxonMobil continues to supply crude oil which will be processed at the Gravenchon Refinery by North Atlantic using Exxon Technology. Located in the Normandy region, the Port-Jerome-Gravenchon facility is the second-largest refinery in France and one of the largest integrated chemical complexes in Western Europe. Esso sold its Fos-sur-Mer oil refinery, as well as two other terminals, to Trafigura's consortium company Rhone Energies in October last year. Esso has also reduced activity at its Port Jerome refinery, anticipating a planned closure. This measure led to strikes in protest of planned job cuts.
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Valterra Platinum makes bourse debut as Anglo exits S.African unit
Valterra Platinum, the largest miner by value of this metal in the world, completed a spinoff from its parent company Anglo American on Wednesday. The shares of the company opened lower on the Johannesburg Stock Exchange, before changing direction during a volatile session. Anglo has demerged the Johannesburg-based Platinum Group Metals (PGM) manufacturer, formerly called Anglo American Platinum. It is shifting its focus to iron ore and copper. Craig Miller, CEO of Valterra, said that the company would continue to focus on maximizing value within its portfolio and maintaining standards set during its time in the Anglo group. Miller stated that "part of our DNA" is to uphold those high standards, and to demonstrate who we are as PGM producers. Valterra's CFO Sayurie Naidoo stated that the company will maintain its capital allocation structure - which pays out 40% of earnings - and would only consider share buybacks in cases where metal prices increase and cash is available. Valterra's shares will be listed in London as a secondary market on the 2nd of June. Anglo, a London-listed company, is exiting its platinum mining business in a revamp of the business. This comes about a year after it survived a takeover bid from BHP Group for $49 billion. Anglo held a 19% stake in the South African Platinum Miner. The company is also looking to sell its nickel mines and coking coal assets located in Australia. It has also said that it is considering whether or not to list the loss-making De Beers unit. Reporting by Felix Njini, Additional reporting by Sfundo parakozov and Nelson Banya. Editing by Alexander Winning & Clarence Fernandez.
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UN Labour body reduces global job forecast amid slowing economy
The United Nations' agency for Labour cut its global employment projection for this year by 1.5%, due to an deteriorating global economy outlook and trade tensions. The International Labour Organization (ILO), in a recent report, said that 53 million new jobs would be created this coming year. This is seven millions fewer than was previously predicted, as the economic growth forecasts were reduced to 2.8% from 3.2%. The report stated that "economic uncertainty was high in 2025 due to ongoing conflicts, geoeconomic realignments and trade-related disruptions." ILO warned that trade tensions are putting 84 million jobs in 71 countries at greater risk. The ILO said that the most vulnerable jobs are in Canada and Mexico. Gilbert F. Houngbo, Director-General of the ILO, said: "If geopolitical conflicts and trade disruptions persist, and if fundamental questions are not addressed that are reshaping our world of work, they will have a negative impact on labour markets around the globe." (Reporting and editing by Madeline Chambers.)
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Investors buy gold dips ahead of Fed meeting minutes
Investors bought gold on Wednesday after it had fallen in the previous session. Markets awaited the minutes of the Federal Reserve’s latest policy meeting, as well as economic data to get an idea about the U.S. rate outlook. As of 0853 GMT, spot gold rose 0.6%, to $3,320.58 per ounce. Bullion dropped below $3,300 and reached a low level of $3,285.19 during the previous session. U.S. Gold Futures increased 0.6% to $3319.50. Jigar Trivedi is a senior commodity analyst with Reliance Securities. He said that the gold price has rebounded mainly because of bargain hunters after a sharp fall in the previous session. The markets are also in an "await-and-watch" mode, prompting adjustments to positions. The markets are waiting for the minutes of the Federal Reserve’s newest policy meeting, which is due in the afternoon, and then the U.S. PCE figures for April due on Friday. This week, a number of Fed officials will be speaking to provide further insight into monetary policies. Han Tan, Exinity Group's chief market analyst, said that gold could rise on the back of lower-than expected PCE prints which ease stagflation concerns and pave the way for further Fed rate cuts. John Williams, the New York Fed president, said that central banks need to "respond fairly strongly" if inflation starts to diverge from their target. The Fed's policy rate has been at 4.25% to 4.50% since the end of December. Officials are waiting for more clarity on the economy, while policymakers also deal with the market volatility brought about by President Donald Trump's changing remarks regarding negotiations with trading partners. Tan stated that gold may eventually break out of the range $3,000 to $3,500 once the Fed signals a greater willingness for it to resume the rate-cutting cycles. Silver spot rose by 0.1%, to $33.34 per ounce. Platinum gained 0.8%, to $1,087.97, and palladium climbed 0.1%, to $979.57. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Joe Bavier)
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Dalian iron ore falls, rebars slump to five-year low due to tepid China's steel production
The price of iron ore futures fell for the fourth session in a row on Wednesday, while rebar prices dropped to their lowest level since 2020. This was due to a slowdown in steel production by China, which is regarded as he biggest consumer. The September contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 0.14% lower, at 698.5 Yuan ($97.14). As of 0747 GMT, the benchmark June iron ore traded on Singapore Exchange was $96.15 per ton. Rebar, a product used in construction, fell 0.77% for the day. LSEG data show that prices fell to their lowest level since April 2020 earlier in the day, at 2,950 yuan. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Hot-rolled coils fell 0.55% while stainless steel fell 1.32%. Wire rod rose 1.96%. Mark Ferguson, Director of Metals and Mining Research at S&P Global Commodity Insights told a conference in Singapore on Wednesday that China's crude output is expected to drop to 968 millions metric tons in 2025, a 37 million ton decrease from 2024. Lange Steel, citing data from the China Iron and Steel Industry Association, said that daily crude steel production at key steel companies in May decreased by 0.3% on a month-to-month basis to 2.2 millions tons. Despite Beijing's previous announcement that it would cut crude steel production this year, traders are betting on the fact that these cuts will not be enforced due to improved industry profitability. The Brazilian government also dampened sentiment by renewing 25% tariffs, which were originally imposed on 19 steel products last year. Official data released on Tuesday showed that China's industrial profit accelerated in April. This gives policymakers reason to be optimistic about recent stimulus measures helping keep the economy afloat. Coking coal and coke, which are both steelmaking ingredients, were down by 2.2% and 1.99%, respectively. $1 = 7.1904 Chinese Yuan (Reporting and editing by Mrigank Dahniwala, Sherry Jacob Phillips)
London metals fall on weak China demand and soft dollar caps
London metals fell on Tuesday due to a decline in copper demand from the world's largest consumer, China. However, a weaker dollar helped cushion the fall.
By 0402 GMT, the London Metal Exchange's three-month copper price had fallen 0.31% to $9.580.5 per metric tonne.
Everbright Futures, a Chinese consultancy, says that copper demand may be weakening as the off-season approaches.
Galaxy Futures said that despite the 90-day suspension of tariffs, demand could remain strong. U.S.-China agreed earlier this month to reduce tit for tat tariffs, and implement a 90 day pause in actions. However, there is still uncertainty about what will happen after the temporary truce. Dollar index fell 0.1% for the third consecutive session. This makes dollar-denominated investments more accessible to holders of currencies other than dollars. Official data released on Tuesday showed that China's industrial profit grew at a faster pace in April. Ivanhoe Mines, on the supply side of the equation, announced Monday that it had suspended the production forecast for this coming year due to seismic activity at its giant copper mining operation in the Democratic Republic of Congo.
The Democratic Republic of Congo produces the most copper in Africa. The Shanghai Futures Exchange's most traded copper contract was down 0.04% to 78240 yuan. ($10,881.33) per ton. SHFE aluminium fell 0.6% to 20.035, lead dropped 0.09% to 16.825 yuan. Nickel decreased 0.37% to 122.3990 yuan. Zinc gained 0.47% at 22,300 yuan. Tin rose 0.06% at 264.600 yuan. Aluminium fell 0.63% to a ton of $2,448. Zinc eased 0.41% at $2,690.5. Lead dropped 0.4% to 1,983 while nickel declined 0.57% to 15,505. Tin fell 0.26% to $30,735.
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(source: Reuters)