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Sino-US trade talks yield iron ore benefits
Iron ore futures prices rose on Wednesday amid hopes for a longer-term extension of the tariff truce, but caution before a high level meeting in China, the top consumer, limited gains. As of 0211 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.69% higher. It was 798 yuan (US$111.23) per metric ton. As of 0205 GMT, the benchmark September iron ore traded on Singapore Exchange was trading at $102.9 per ton. U.S. officials and Chinese officials have agreed to extend their 90-day trade truce after two days of constructive talks between both parties in Stockholm. The goal was to defuse an escalating global trade war that is threatening the growth of the two largest economies. Treasury Secretary Scott Bessent has quashed any expectations that Donald Trump would reject the extension. The International Monetary Fund, in an effort to boost market sentiments, raised its forecast of China's economic expansion this year from 4.0% to 4.8%. Analysts at Everbright Futures stated in a recent note that the iron ore market is now more influenced by macro sentiment. Iron ore prices rose, but were then capped off by fears that Beijing might not announce more stimulus measures by the end of July. This meeting is expected to determine the economic policy of the country for the remainder. Coking coal and coke, which are used to make steel, have recovered from two sessions in which they fell. They rose by 5.66% and 5.33% respectively. The Shanghai Futures Exchange steel benchmarks gained due to higher raw material costs. Rebar climbed by 1.48%. Hot-rolled coils jumped 2.11%. Wire rod grew 1.62%. Stainless steel ticked up 0.58%. ($1 = 7.1741 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
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Asian stocks hold steady as investors prepare for the tariff deadline and Fed
Investors were cautious on Wednesday after the U.S.-China trade talks ended without a substantive agreement, and before the Federal Reserve policy announcement. MSCI's broadest Asia-Pacific index outside Japan rose 0.3% led by gains in Taiwanese shares, after U.S. stock markets ended their previous session with modest losses, as traders prepared for a flood of corporate earnings. Australian shares rose 0.7%. The Nikkei index in Japan fell 0.03% and the Hang Seng Index in Hong Kong dropped 0.4%. The euro rose from its one-month low to $1.1564 as the markets assessed the EU's deal with Trump. The next few days will be filled with several key central bank decisions and economic reports, as well as corporate earnings. This culminates in the August 1 deadline for tariffs set by U.S. president Donald Trump. Federal Reserve officials are expected to keep interest rates the same at their policy meeting on Wednesday. However, some may be in favor of lowering borrowing costs. Tom Kenny is a senior international economist with ANZ, Sydney. He said in a podcast that some officials were concerned about tariffs leading to higher inflation expectations and more persistent pressure on prices, rather than just a one-time hit. "Our expectation is the Fed will be in a good position to reduce rates at its September meeting." Treasury bonds in the United States advanced ahead of the Fed meeting. The yields fell to their lowest level in nearly four weeks after a successful auction of notes with a maturity of seven years, which helped calm fears about dwindling demand for government debt. Last week, the yield on 10-year Treasury Notes was 4.328%. This is the lowest since July 3. The yield on two-year Treasury notes, which increases with traders' expectation of higher Fed Fund rates, was unchanged at 3.873%. Tariffs, corporate earnings Bank of Japan will likely hold steady Thursday. The focus will be on the comments it makes to determine when the next rate hike will occur. A trade agreement between Japan and the U.S. has cleared the way for BOJ to continue its rate-hike journey. Some countries were preparing to negotiate with the U.S. until the last minute before Trump's deadline for a deal that would avoid the imposition of "Liberation Day tariffs". On Tuesday, U.S. officials and Chinese officials agreed that they would seek to extend their 90-day truce in tariffs. However, no major breakthroughs had been announced. U.S. officials stated that it was up President Trump to decide if he would extend the trade truce, which expires August 12, or if he would allow tariffs to rise to triple-digit numbers. Two Indian government sources say that India will also face higher U.S. duties -- between 20 and 25 percent -- on certain exports, as it delays new trade concessions before the deadline of August 1. Three South Korean Cabinet-level Officials met with U.S. Secretary of Commerce Howard Lutnick to try and finalize a deal. Prices of oil rose after Trump set a short deadline for Moscow to end the conflict in Ukraine. Brent crude futures increased 14 cents or 0.19% to $72.65 per barrel. Microsoft and Meta, two of the biggest U.S. technology companies, are expected to release their earnings on Wednesday. This will set the tone and pace for the rest the week and earnings season. Chris Weston is the head of research for Pepperstone. He said, "It has been a good reporting season in the U.S., but now that the bar has been raised, these megacaps need to go all out and make a splash." The Singapore dollar strengthened 0.2% after Singapore's central bank kept its monetary policy settings unchanged on Wednesday following stronger-than-expected economic growth in the second quarter.
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After Trump's Russia-Utterance, oil prices remain steady
The oil prices rose in early trading Wednesday, after rising by more than 3% the previous session. This was due to the potential shortages that could arise after U.S. president Donald Trump gave Moscow a short deadline for ending the conflict in Ukraine. Brent crude futures rose by 14 cents or 0.19% to $72.65 a barge at 0048 GMT, while U.S. West Texas intermediate crude climbed by 2 cents or 0.03% to $69.23 a barge. On Tuesday, both contracts settled at their highest level since June 20. Trump announced on Tuesday that he would begin imposing measures against Russia, including 100% secondary duties on its trading partners if the country did not end the war in 10-12 days. This was a move up from an earlier deadline of 50 days. "Secondary 100% tariffs in effect would cause a dramatic change on the oil market." ING analysts stated that a number of major buyers of Russian crude oil, especially large U.S. traders, would be reluctant to keep buying it. While this allows OPEC+ to begin unwinding further tranches of the supply cuts, a worst case scenario would still see a market deficit. Treasury Secretary Scott Bessent said that the U.S. warned China, which is the biggest buyer of Russian crude oil, it would face large tariffs if they continued to buy. The U.S. and the EU were holding trade negotiations in Stockholm. Analysts from JP Morgan said that India had signaled its willingness to comply with U.S. Sanctions, putting at risk 2.3 million barrels of Russian oil per day. The U.S.-EU avoided a trade conflict with a deal which included 15% U.S. Tariffs on European Imports. This eased concerns over the impact of trade tensions and economic growth, and offered further support for oil prices. After talks last week on the topic, foreign partners of Venezuela's state oil company PDVSA still await authorizations from the U.S. This could bring some supply back to the market and ease pressure to increase prices. (Reporting and editing by Muralikumar Aantharaman; Colleen Howe)
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Bloomberg News reports that US Fermilab was hit by a cyberattack against Microsoft SharePoint.
Bloomberg News, citing an official from the Department of Energy, reported that one of 17 national laboratories of the U.S. Department of Energy was targeted by hackers in a recent hacking campaign to exploit vulnerabilities in Microsoft's SharePoint. A spokesperson for the Department of Energy told Bloomberg that "attackers did try to access Fermilab’s SharePoint servers", referring to U.S. Fermi National Accelerator Laboratory. The impact of the attack was minimal. No sensitive or classified information was accessed, the spokesperson added, Fermilab servers are now back online and operating normally. Microsoft, Fermilab, and the U.S. Department of Energy have not responded to our requests for comment. Microsoft's security patch, released last month, failed to fix a critical vulnerability in its SharePoint server software. The flaw was identified by the U.S. technology giant in May. This opened the door for a global cyber-espionage campaign. According to its website, Fermilab was established in 1967 and is "America's accelerator and particle physics laboratory". A spokesperson for the U.S. Department of Energy said last week that on July 18, a security flaw in SharePoint affected its systems, including the National Nuclear Security Administration which oversees the nation’s nuclear weapons inventory. The department has stated that all affected system are being restored. Reporting by Abu Sultan from Bengaluru, Editing by Sandra Maler, Muralikumar Aantharaman
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Petrobras oil production rises 7.6% during Q2 due to increased production vessels
Petrobras, the state-owned oil company in Brazil, reported that it produced 2,32 million barrels per day of oil in Brazil during its second quarter. This represents a 7.6% increase over the same period the previous year. New production vessels have increased the output. The firm reported that four floating production ships increased their output in the second quarter. One reached its peak production, and another began operations before schedule. This boosted the output for the entire period. Petrobras totaled 2.91 million barrels equivalents per day (boed), up 7.8% on the year before, while sales of oil and gas, as well as derivatives, reached 2.98 millions boed. This represents a 1.6% rise. Petrobras said that its exports of crude oil and derivatives increased by 2.7%, to 874,000 barrels a day. China received 54% of all the oil exported by the company during the period. This is four percentage points more than the same period in the previous year. Around 8% of the oil exported to the United States in 2024 will be received by this country, up from around 5% in second quarter 2024. Magda Chabriard, Petrobras' Chief Executive, spoke to the media earlier this month. The firm could redirect oil sold to the U.S. to Asia and Pacific if the U.S. imposes higher tariffs on the South American nation. Reporting by Fabio Téixeira and Marta Nogueira, Rio de Janeiro. Additional reporting by Andre Romani, Sao Paulo. Editing by Kyrry Madry and Chris Reese.
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The Indonesian nickel slump puts pressure on coal miners hit by declining exports
The Indonesian coal producers find themselves in a difficult situation, as their exports are falling and the demand for fuel from nickel smelters is at an all-time high. This creates a conundrum of growth. Indonesia's largest export is coal, which will generate $30.49 billion by 2024. A decline in revenues would have an adverse effect on Southeast Asia's largest economy, which is heavily dependent on commodities. Lower profit margins and falling share prices point to coal's future woes, which include a reduction in workforce, a slowdown in production, and less money going into government coffers, at a time that President Prabowo is launching ambitious spending plans. The fastest-growing demand for Indonesian coal has been from electricity-hungry smelters that process nickel. According to the Indonesian Coal Miners Association, (ICMA), the demand for nickel will reach a peak of 84.2 million tonnes by 2026, and then fall to 78.6 millions tons in 2027 due to overcapacity of the nickel industry and possible implementation of stricter emission regulations. Kpler data showed that Indonesian coal exports were down 12.6% by volume compared to a year ago, while government data indicated a 19.1% drop in value. Chinese data show that exports to China, which is the largest coal buyer in the world, dropped by 30% compared to a year ago. The country relies more on its domestic production and uses low prices to import coal of higher quality from other countries. Manish Gupta is a senior analyst at Wood Mackenzie for Asia thermal coal. He said that Indonesian coal miners were diversifying their businesses to protect themselves against the steeply declining demand for low to mid-grade coal. He said that he did not expect to see the increase in the number of captive plants, which are power plants linked to nickel smelting facilities. According to Global Energy Monitor's coal plant tracker, Indonesia's nickel smelting sector has led to a threefold increase in Indonesian coal-fired power capacity from 5.5 gigawatts in 2019 to 16.6 GW by 2024. As nickel prices fell due to increased overcapacity, and China's lower stainless steel imports, some Indonesian smelters idled their facilities. Data from geospatial analysis firm Earth-i revealed that in June, Indonesian nickel pig-iron operations experienced a 9% increase in smelting activity compared to a year ago, which was the highest level in the past two years. This is primarily because the country's largest nickel producer, Tsingshan, likely stopped production at its joint-venture plants in Morowali Industrial Park. H. Kristiono is the deputy chairman of ICMA which includes Adaro Bayan Bukit Asam and foreign traders Adani Global Trafigura. He still expects that the coal-fired capacity of the smelter sector will grow despite underutilisation. The nickel industry will continue to use coal as its primary power source due to difficulties in switching to alternative sources, the slow progress of connecting sites to national grids and Indonesia's opposition to more stringent regulations. Global Coal Monitor reports that the Global Coal Monitor estimates that Central Sulawesi, North Maluku and Central Sulawesi provinces are expected to have a combined capacity of 6 GW, or 46%, of all coal-fired plants currently under construction in Indonesia. These two provinces are where the nickel processing industry is concentrated. Companies are squeezed Indonesian coal producers are being squeezed by a combination of lower exports, slower growth in captive power demand and higher government payments. LSEG data revealed that the profit margins of Bayan, a major miner in Indonesia, have been falling for three years. Bukit Asam has also seen its first-quarter margins fall below averages every year since 2010. This is due to higher royalty payments and increasing machinery costs. The shares of Indonesia's five largest coal producers by production are down between 1% and 18% in this year. This is below the broader market growth rate of almost 7%. Adaro has fallen 18% while Golden Energy Mines, Bukit Asam and Bukit Asam lost over a tenth since the start of this year. Requests for comment from the companies were not answered. Indonesia announced in April new rates of royalty for nickel, coal and other minerals, to help Prabowo increase his spending. Some coal miners experienced a drop in their royalty rates, while others saw an increase of 1 percentage point. According to the Energy Shift Institute, based in Australia, by 2024 royalties will account for 16% of average coal producers' cost structures, making them the most expensive among the major commodities produced in Indonesia. Jakarta also considers export duties on coal for certain price levels in order to bolster state coffers. This is at a moment when miners are already facing higher fuel prices due to the removal biodiesel subsidy. Analysts say that some coal miners are looking at diversification as a way to survive the current downturn, but they have made little progress. Bukit Asam said, for instance, in May that it was considering an investment of $3.1 billion in a facility to convert coal into synthetic natural gas. Gupta, of Wood Mackenzie, said that producers are looking at a combination of downstream options, renewables, or investment in alternative commodities. (Reporting and editing by Christian Schmollinger, Ashitha Shivaprasad, Hongmei LI, Fransiska Nanangoy; Additional reporting by Sudarshan Varadhan).
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Sources say that the head of TotalEnergies' trading arm for Americas gasoline has left for a hedge fund.
Three sources with knowledge of the matter said on Tuesday that the head of Americas gas for TotalEnergies trading arm Atlantic Trading & Marketing Inc has left to join a hedge-fund. Two sources confirmed that Gregory Galimberti resigned in the last few days from his position at ATMI to join Verition Fund Management. This hedge fund is based in Greenwich, Connecticut. Sources requested anonymity in order to discuss personnel matters. Galimberti didn't immediately respond to an inquiry on LinkedIn. TotalEnergies ATMI and Verition did not respond immediately to comments. According to his LinkedIn profile, Galimberti has been the manager of ATMI's Americas light fuels division since January 2020. This includes gasoline and naphtha. His LinkedIn profile indicated that he had worked for rival trading firms Mercuria Energy, and Glencore before joining ATMI. Commodities traders made record profits over the past few years. They rode a wave volatility that was induced into the market by Russia's invasion of Ukraine in 2022. This has sparked interest from hedge funds, financial speculators and others in the commodities sector. Verition was founded in 2008. It has experienced rapid growth in the last few years. To strengthen its ranks, it has added senior traders in its different focus areas such as equities and credit. According to public records, the hedge fund managed assets worth around $12 billion as of April. Reporting by Shariq Khan in New York, Georgina Mcartney in Houston and Liz Hampton, Denver; editing by Ni Williams
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UN emergency talks on COP30 costs
According to diplomats, and a document viewed by, the United Nations climate bureau met urgently on Tuesday due to concerns that high accommodation costs for this year's COP30 Climate Summit in Brazil would price out poorer countries from participating in negotiations. Brazil is gearing up to host the U.N. Climate Summit in November this year in the rainforest city Belem. Nearly every government will be present to discuss their efforts to combat climate change. Preparations for COP30 have been plagued by concerns about logistics. The COP30 has been plagued by concerns about logistics. Richard Muyungi (chair of the African Group of Negotiators) called an emergency meeting of "COP Bureau" of the U.N. Climate body on Tuesday. Brazil agreed to address the concerns of countries about accommodation, and report back on another meeting on 11 August. After the meeting, Muyungi said: "We have been assured that on November 11th we will review the situation to confirm whether or not the accommodations will be sufficient for all the delegates." He said that African countries did not want to reduce their participation due to the costs. "We're not ready to reduce the numbers. Brazil has a number of options to have a better, good COP. We are therefore pushing Brazil to give better answers rather than tell us to limit our delegaiton," Muyungi stated. One diplomat who attended the meeting reported that both wealthy and poor nations complained about the cost of living. The agenda of Tuesday's meeting was seen by and confirmed that it was convened in order to discuss "operational and logistics preparations for Climate Change Conference at Belem", and the African Group of Negotiators concerns about the matter. The Brazilian Foreign Ministry didn't immediately respond to a comment request. Brazilian officials who organized the summit repeatedly assured that countries with lower incomes would have access to affordable accommodation. UNFCCC spokesperson refused to comment about the meeting. CRUISE SHIP HOTELS Brazil is in a race to increase the number of hotel rooms available to accommodate the 45,000 expected attendees at COP30. Normally, there are 18,000 beds available. Belem has a population of 1.3 millions. This month, the government announced that it had booked two cruise ships for an additional 6,000 beds. The government also offered to open bookings for developing countries to provide more affordable accommodation with daily rates up to $220. This is still more than the "daily Subsistence Allowance" that the U.N. provides to some of the poorer countries in order to support their participation in COPs. Belem's figure is $149. Two U.N. Diplomats presented quotes that they received from hotel and property managers at Belem, Brazil for rates around $700 per person/night during the COP30. Six governments, including wealthy European nations, said that they have not yet been able to secure accommodation due to high prices. Some officials also stated that they were planning on reducing their participation. The Dutch government spokesperson said that the delegation may have to be halved compared to recent COPs. In the past, the Netherlands sent 90 people for the two-week long event, which included envoys and negotiators, as well as youth representatives. Krzysztof Blesta, Poland's deputy minister of climate change, said earlier this month that "we don't have accommodations." We'll have to reduce the number of delegates to a minimum. He said that in an extreme case, he might have to cancel the meeting.
Carney: Canada-US talks in a high-intensity phase; some tariffs are likely.
Mark Carney, the Prime Minister of Canada, told reporters that talks between Canada and United States regarding a trade agreement are in a very intense phase. He reiterated that an agreement with no tariffs was highly unlikely.
Both sides are working to reach an agreement before August 1, when U.S. president Donald Trump threatens to impose 35% tariffs on certain Canadian imports.
The negotiations are in a very intense phase. "It's a complicated negotiation... We will only sign the deal that is right."
Carney said.
He said in a televised news conference that a landing area is possible. But we need to get there first, and then we'll have to see what happens.
The United States has struck a
The framework for a better understanding
On Sunday, the United States and European Union signed a trade agreement that imposed a 15% tariff on imports of most EU products.
Carney stated earlier this month, that Canada, which exports 75% to the United States, would likely be forced to accept tariffs.
When asked if Canada would be hit, he replied that it was unlikely there would be any deals made without tariffs. "But it's a question of the level and the size of the tariffs." Reporting by David Ljunggren, Promit Mukherjee and Chizu Nomiyama; editing by Chizu nomiyama
(source: Reuters)