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Gold held at a narrow level as the spotlight turns to US employment data
The gold price was stuck in a range on Thursday, as investors waited for the non-farm payrolls report from the United States that could affect when Federal Reserve will cut interest rates. By 0801 GMT, spot gold had fallen by 0.1% at $3,352.59 per ounce. U.S. Gold Futures increased 0.1% to $3363.10. Nitesh Nitesh, commodities strategist at WisdomTree, said that gold is searching for new triggers. The non-farm payrolls may be the trigger later. ADP released data showing that private payrolls in the United States fell by 33,000 positions in June. This was the first drop in over two years. According to a survey, the non-farm payroll report, due on Thursday at 1230 GMT, is expected to show a decline from May's 139,000 jobs to 110,000 in June. The U.S. stock market reached record highs following President Donald Trump's announcement that the U.S. had struck a deal with Vietnam. This included a 20% tariff for exports into the United States. He also expressed optimism regarding a deal with India. ANZ analysts wrote in a report that "more trade deals with lower tariffs can build confidence that inflation will be benign and allow the Fed to ease monetary policies." Gold that does not yield a return tends to do well during low interest rates and times of financial and political uncertainty. Other precious metals saw spot silver rise 0.1% to $36.93 per ounce, platinum remained steady at $1.417.85 (near a 10-year high reached last week), and palladium rose 0.1% at $1.155.97.
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Nippon Steel will raise $5.6 Billion in Subordinated Loans to Fund U.S. Steel Deal
Nippon Steel, Japan's steel giant, announced on Wednesday that it will raise 800 billion yen (5.6 billion dollars) via two subordinated loan to partially finance its recent $14.9 Billion acquisition of U.S. Steel as well as refinance existing loans. The largest steelmaker in Japan will partially repay the 2 trillion yen loan it secured for this deal by using a subordinated 500 billion yen loan. Separately, a 300 billion yen refinancing loan will be used to refinance an earlier 450 billion subordinated loan. Nippon Steel's spokesperson confirmed that the 500 billion yen loan would be covered by Japan’s three major banks – Mitsubishi UFJ Financial Group Sumitomo Mitsui Financial Group Mizuho Financial Group – as well as Sumitomo Mitsui trust group and Development Bank of Japan, by September 18. On July 22, the 300 billion yen will be divided among four banks, including Sumitomo Mitsui Trust and three megabanks. According to the spokesperson, the remaining 1.5 trillion yen will be financed using a variety of methods based on interest rates, market conditions, and other factors. The spokesperson stated that "although additional capital-based funding is one of the options being considered, any such move will be based on avoiding earnings per share (EPS) diluting." Nippon Steel’s debt-to equity ratio increased to around 0.8 as a result of the acquisition. It was 0.35 on March 31, but it rose to 0.8 after the bridge loans were made and the loss from the sale of a joint venture in the U.S. with ArcelorMittal. Nippon Steel sold its joint venture stake in order to get approval for U.S. Steel's acquisition. The company wants to reduce the ratio to 0.7 by the end March 2026 using measures like cash flow from earnings or asset sales.
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US court recommends Dalinar’s $7.38 Billion bid for Citgo parent
According to a filing in court and a statement from the company, a U.S. court official overseeing the auction of PDV Holdings - the parent company of Venezuelan owned U.S. refiner Citgo Petroleum - has recommended that Gold Reserve subsidiary Dalinar Energy submit a bid for $7.38 billion. Two sources familiar with the bid told us on Wednesday that a group led by commodities trading company Vitol submitted a bid in excess of $10 billion during the last hours of an auction organized by a U.S. federal court. In the second round of bidding for PDV, the court chose an offer of $3.7 billion from Red Tree Investments, a Contrarian Funds affiliate. The bid included an agreement with holders of Venezuelan defaulted bonds to be paid. According to court documents, Robert Pincus, the court officer, said that he thought Dalinar's offer was the best of all those submitted. The filing stated that "Dalinar’s proposed sale transaction" was approximately $3.576 Billion higher than Red Tree's stalking horse transaction, and that Dalinar’s bid was "the highest offer that meets the requirements". Gold Reserve reported that Dalinar’s revised $7.38 billion offer relies on equity and debt funding and is backed by a consortium consisting of Rusoro Mining and two units of U.S. company Koch, as well as Germany’s Siemens Energy. Dalinar initially bid $7.1 billion for PDV. A judge must approve the sale.
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Prices of copper remain near their multi-month highs due to supply constraints and US tariff fears
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) both held copper near its highest level since late March. This was due to concerns about a tight supply in the region and an increase in shipments to the U.S., as traders rush to avoid potential import tariffs. The most traded copper contract on SHFE fell 0.07%, to 80,560 Yuan ($11246.37) or its highest level since March 27, and three-month copper on LME fell by 0.35%, to $9,978 per ton at 0703 GMT. The United States may decide to deal with the copper tariff later. This has given traders more time to transport copper to the United States, when prices are higher. The SHFE copper stocks are too small in absolute terms, which is more supportive of prices. The SHFE monitored warehouses had copper stocks totaling 81,550 tonnes by June 27. This was down 69.6% on the highest day of the year on February 28, or 74.5% on the previous year. U.S. Comex Copper Futures rose by 2% on Wednesday to $5.199 per pound, with a premium of 14% over the LME Copper futures. Total Copper Stocks As of Wednesday, the total amount of copper in LME registered warehouses was 93 250 tons, a 65.6% drop from the highest level of the year in mid-February. This is because cargoes have been rushed into the United States after its investigation of copper imports, and due to the threat of new tariffs. SHFE nickel rose 0.8% to 121 790 yuan per ton. Lead gained 0.5%, to 17,245 Yuan. Zinc was up 0.5%, at 22,325 Yuan. Aluminium edged higher by 0.07% to 20,680 Yuan. Tin fell 0.33%, to 268,420 Yuan. LME nickel rose 0.44%, to $15,370 per ton. Lead grew 0.34%, to $2.066.5. Tin climbed 0.05%, to $33,730. Zinc fell 0.49%, to $2.744, while aluminium declined 0.34%, to $2.611. Click or to see the top news stories about metals, and other topics. ($1 = 7.1632 Chinese Yuan) (Reporting and editing by Sherry Jab-Phillips; Vijay Kishore and Hongmei Li)
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China moves to reduce industrial overcapacity, resulting in a rise in iron ore
Iron ore futures rose on Thursday as China redoubled its efforts to reduce industrial excess capacity and curb price wars triggered by increased competition. The September contract for iron ore on China's Dalian Commodity Exchange ended the morning trading 1.33% higher, at 725 Yuan ($101.19). As of 0440 GMT, the benchmark August iron ore traded on Singapore Exchange was down 0.05% at $95.1 per ton. Analysts from ANZ stated in a report that Beijing's commitment towards curbing low-priced competition and reducing surplus industrial capacity indicates the leaders' desire to combat the deflationary forces affecting the Chinese economy. ANZ stated that these measures should provide relief to the steel sector, which has struggled with overcapacity. Everbright Futures, in a recent note, said that despite the fact that molten-iron production continued to rise month-on-month, shipments of top producers Australia, Brazil, and China have all decreased. Hexun Futures reported that shipments from major iron ore producers such as Rio Tinto BHP, Fortescue Metals Group and Vale also declined from the previous months. The Chinese Yuan fell against the dollar as investors closely monitored the trade talks between the U.S. Dollar-denominated investments become more expensive to holders of other currencies when the greenback is stronger. Coking coal and coke, which are used to make steel, also increased in price, by 3.09% each and 1.87 percent respectively. The Shanghai Futures Exchange steel benchmarks gained a majority of ground. Rebar increased by 0.89%; hot-rolled coils rose 0.7%; stainless steel gained 0.44% and wire rod fell 0.09%.
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Oil prices fall as US tariffs loom, OPEC+ to increase output
Oil prices dropped on Thursday, after rising 3% the previous day, as investors were wary that higher U.S. Tariffs could be reinstated and cause a drop in fuel demand. Major producers are also expected to announce a production increase. Brent crude futures dropped 53 cents or 0.77% to $68.58 per barrel at 0536 GMT. U.S. West Texas Intermediate Crude fell 51 cents or 0.76% to $66.94 per barrel. The two contracts reached their highest levels in a week on Wednesday, as Iran suspended its cooperation with the U.N. Nuclear Watchdog, raising fears that the long-running dispute over the Middle East's nuclear program could again escalate into an armed conflict. Meanwhile, the U.S. signed a preliminary deal with Vietnam. There is still increasing uncertainty about U.S. Trade Policy, as the 90-day suspension of the application of higher tariffs ends on July 9, without any new deals being made with large trading partners like the European Union or Japan. OPEC+, the Organization of the Petroleum Exporting Countries, and its allies, such as Russia, will also likely agree to increase their production by 411,000 barrels a day (bpd) when they meet this weekend. ING analysts wrote in a Thursday note that, given the uncertainty surrounding both events and the upcoming Independence Day holiday on July 4th in the U.S. "market participants are unlikely to want to take too much risk over the long weekend in the U.S.," they said. A private sector survey on Thursday showed that service activity in China, which is the world's largest oil importer, had expanded at its slowest rate in nine months. In June, As demand declined, new export orders also decreased. surprise build The rise in U.S. crude oil inventories has also raised concerns about demand in the world's largest crude consumer. Energy Information Administration reported on Wednesday that domestic crude stocks rose by 3.8 millions barrels, to 419,000,000 barrels. In a poll, analysts had predicted a drop of 1.8 millions barrels. The weekly gasoline demand dropped to 8,6 million barrels a day, causing concern about the consumption during peak summer driving in the United States. Analysts said that the market will closely monitor the release of Thursday's key U.S. employment report to determine the timing and depth of Federal Reserve interest rate reductions in the second half this year. Lower interest rates would spur economic activity and, in turn, increase oil demand. Analysts caution that there is no correlation with the government data. A report of private payrolls on Wednesday showed the first contraction in two years. (Reporting from Siyi Liu and Nicole Jao, in Singapore; editing by Christian Schmollinger).
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Sources say that Shandong province in China has increased the fuel oil import tax exemptions for certain refineries.
Industry sources reported this week that the provincial government of Shandong in China, China's refinery hub, increased the fuel oil import tax exemptions for six independent refining companies to improve their profitability, as they struggled with low margins due to fuel demand and high fuel prices. Three sources who have direct knowledge of this matter confirmed that the Shandong provincial office of taxation increased the consumption tax refunds for independent refiners (also known as teapots) on gasoline and diesel refined using imported fuel oil from 75% to 95%. Sources said that the change is applicable to Chambroad Petrochemicals and Hongrun Petrochemicals. One of the sources said that the refiners had been notified two weeks prior. Requests for comments were not responded to by the Shandong Provincial Tax Service or the National State Taxation Administration. When crude oil prices are too high, the teapots will often process straight-run fuel oils or bitumen blends (a tar-like residue) into transportation fuels. They may also be subject to crude oil import quotas which can limit their purchases. China increased the import tariffs for fuel oil in 2025, and reduced the tax rebates at the end last year. Customs data shows that fuel oil imports fell to their lowest level ever between January and May. Mia Geng, FGE's associate director of the East of Suez Oil Service, said in a note dated June 27, that independent refiners were suffering from low profit margins and shut downs due to the rules. The provincial government also likely wanted refineries to be running more to boost economic output and industrial activity. Geng believes that the new tax laws will increase the demand for high-sulfur fuel oil and the run rates of refineries. The changes will not spur demand for fuel oil in the near future, as crude oil is cheaper at the moment, according to a trading source, and one of those with direct knowledge about the change. Shandong refineries are China's largest buyers of sanctioned Russian and Iranian oil.
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Morning bid Europe: Trade optimism is replaced by caution about US jobs
Stella Qiu gives us a look at what the future holds for European and global markets. The session in Asia has been pretty quiet, and for good reason. Payroll data from the U.S. due later that day could be the deciding factor in a rate cut in July and cause big movements in Treasuries or foreign exchange markets. Investors in Asia didn't seem to share President Donald Trump's optimism about trade, which pushed Wall Street overnight to record-high closes. Details are still unclear. Markets did not react significantly to the latest developments regarding Trump's "big beautiful bill" for tax cuts. The Republicans in the House of Representatives moved closer to advancing the tax package on Wednesday, seemingly overcoming the objections of a few party hardliners that raised concerns over cost. Trump announced that the U.S. would impose a tariff of 20% on all imports coming from Vietnam. This is lower than the tariff of 46% which was threatened but still higher than previous rates. Uncertainty surrounded the implementation of a 40% tax on all transshipments through Vietnam aimed at products made primarily in China, but labelled as "Made in Vietnam". Vietnamese shares rose a modest 0.5% - the most since April 2022. Vietnam's dong currency fell to a new record low of 26218 per US dollar. Other Asian countries complain that the U.S. is making it difficult to negotiate, partly because the White House's intentions are not very clear. South Korean President Lee Jae Myung stated on Thursday that he was unable to say whether tariff negotiations would be concluded by next Tuesday. Meanwhile, Japan invoked its national interests when talks with the U.S. were struggling. The Wall Street Futures have gained 0.1%, while the EuroStoxx 50 futures have gained 0.2%. The main risk for the markets is the release of U.S. payroll figures later that day. The stakes are high following a surprise drop in the private sector payrolls for the first time in over two years. Analysts predict that the unemployment rate will rise to 4.3% in June, with a 110,000 job increase. A weak report, given that the market only prices in a 25% chance of a Fed rate cut in July, could have a major impact on the markets, sending Treasuries higher and the dollar down. The sterling was unchanged at $1.3633. Sterling fell 0.8% overnight due to investor concerns about Britain's finances following the government's decision to reverse welfare reforms. This also caused gilt yields and prices to rise. The following are key developments that may influence the markets on Thursday. Payrolls for non-farm workers in the U.S. ISM Services PMI -- U.S. initial and continued jobless claims -- U.K. S&P Global services, composite PMIs The ECB has released its June Minutes (by Stella Qiu, edited by Edmund Klamann).
Prices of copper remain near their multi-month highs due to supply constraints and US tariff fears
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) both held copper near its highest level since late March. This was due to concerns about a tight supply in the region and an increase in shipments to the U.S., as traders rush to avoid potential import tariffs.
As of 0103 GMT the LME's three-month copper contract was unchanged at $10,05 per metric tonne, but it hovered close to its highest level since March 26. The SHFE's most traded copper contract gained 0.27%, to 80,840 Yuan ($11285.77). This is its highest level since March 27.
The United States may decide to deal with the copper tariff later. This has given traders more time to transport copper to the United States, when prices are higher.
U.S. Comex Copper Futures climbed 2% on Wednesday to $5.199 per pound, with a premium of 14% over the LME copper contracts.
The total copper stock in LME registered warehouses is still near its lowest level since August 2023 despite a small rebound over the past two days. Stocks have fallen 76% since the middle of February, due to cargoes being rushed into the United States after its investigation on copper imports.
SHFE lead rose 0.7%, to 17,290 Yuan per ton. Zinc was up 0.7%, at 22,370 Yuan. Nickel climbed 0.6%, to 121550 Yuan. Aluminium edged higher by 0.2%, to 20,710 Yan.
LME lead rose 0.2% to $2.064.5 per ton. Nickel climbed 0.15% to $15.325, tin grew 0.15% to $33,765, aluminium slid 0.1% to $2.622.5 and zinc fell 0.11% at $2.754.5.
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DATA/EVENTS - (GMT 0750 France HCOB Services Composite PMI 060755 Germany HCOB Services Composite Final pmi 060800 EU HCOB Services Composite Final pmi 0830 UK Reserve Assets June 0830 US Non Farm Payrolls Unemployment Rate Average Earnings YY Jun 1230 US International trade $ May 1400 US Factory orders MM May1400 US ISM N Manufacturing PMI june
(source: Reuters)