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MORNING BID EUROPE - "Tariffs, please use this version"
Stella Qiu gives us a look at what the future holds for European and global markets. The deadline for tariffs has passed and Donald Trump has imposed new levies on imports, including from countries that have not yet signed a trade agreement. Canada was set at 35%, India at 25%, Taiwan at 20%, and Thailand, 19%. Switzerland received a staggering 39%, one of the highest rates. This raises the question: What does Trump have against the Swiss people? You're not buying enough American watches or chocolate? After months of posturing and meetings, delays, and truces that prompted investors to wonder what was real and what was just a bluff, the big day finally arrived. There is much left to be done. Most levies, it could be argued, are lower than the ones that were threatened on April 2 which sent the markets into a tailspin. Plus, the major trade agreements with Japan and the European Union were reached and talks with China and Mexico continue. This is likely why the market's reaction has been so muted. Most Asian shares did fall, but not by much. South Korea, however, is the exception. Its shares fell over 3% due in part to the rollback of domestic tax cuts. Taiwan's President said that the 20% tax is only temporary, and it is expected to reduce further once a deal has been reached. Wall Street and European stocks did not seem too concerned by the tariff news. The EuroStoxx 50 futures fell by 0.3%. Nasdaq and S&P futures both fell by 0.2% due to Amazon's 6% drop after it failed to meet expectations. After the news on tariffs is out of the picture, the euro zone's flash CPI will be released later that day. Expectations are for a slight reduction in July to 1.9% from 2.0%, in annual terms. The markets have only priced half of a reduction from the European Central Bank for early next year. Then it will all be about the payrolls. This is crucial for hopes of a Federal Reserve rate cut in September. It's now priced at 40%, a far cry from 75% one month ago. Forecasts point to a rise of 110,000 in July. The unemployment rate is expected to increase from 4,1% to 4,2%. If there are any positive surprises, they could reduce the likelihood of a change next month. This would give dollar bulls a reason to rally. The greenback has had its best week in three years - gaining 2.5% compared to its peers. This is a continuation of its recent upward trend from a low point three years ago. The Fed has remained hawkish and has not eased policy on the issue of tariffs. The Fed's preferred inflation gauge was a little hotter over night, showing some impact from tariffs. The following are key developments that may influence the markets on Friday. Eurozone flash CPI for the month of July ISM Manufacturing Survey: U.S. Payrolls for July Want to stay up-to-date with the latest tariffs? Our daily news digest provides a quick overview of the most important headlines that impact global trade. Tariff Watch is available here.
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Shell's Second Quarter Profit Tumbles by Almost a Third
Shell's second-quarter adjusted earnings, its definition of net profit, tumbled by almost a third on Thursday, dragged down by a drop in oil prices, but still easily beat analysts' forecasts.The oil major said it would maintain the pace of its share buyback programme at $3.5 billion over the next three months, the 15th consecutive quarter of at least $3 billion.Shell has, meanwhile, achieved $3.9 billion in cost cuts compared with 2022, part of a cost-cutting programme aimed at saving between $5 billion and $7 billion by the end of 2028.It recorded cash flow from operations of $11.9 billion in the quarter, down from $13.5 billion a year ago.Together with $2.1 billion in dividends, that brings shareholder distributions to 46% of operating cashflow, within its 40% to 50% guided range.Shell's adjusted earnings reached $4.264 billion in the second quarter, smashing the $3.74 billion average in an analyst poll provided by the company but down 32% from a year ago.Global benchmark Brent crude prices LCOc1 averaged around $67 a barrel during the April-to-June quarter, compared with $75 a barrel in the first quarter and $85 a year earlier.Crude oil prices fell in the quarter as OPEC+, made up of the Organization of the Petroleum Exporting Countries and allies such as Russia, began unwinding self-imposed production cuts aimed at supporting the market.Their most recent decision calls for an oil output increase of 548,000 barrels per day in August.Shell had guided in a trading update that it expected earnings to be hit by weaker trading in its integrated gas division and losses at its chemicals and products operations after an outage at its U.S. Monaca polymer plant.(Reuters - Reporting by Shadia NasrallaEditing by David Goodman and Joe Bavier)
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Nexans, Crowley Wind Services to Build Cable Lay Barge for US Ops
French subsea power cable maker and services provider Nexans has formed partnership with Crowley Wind Services to develop and operate a Jones Act compliant cable lay barge. The cable lay barge will be dedicated to supporting the installation of subsea transmission lines necessary for offshore wind energy, telecommunications and other major industrial applications.The 300-foot, U.S.-flagged vessel, built in Louisiana and tested in the U.S. Gulf to Nexans specifications, will be crewed by American mariners under Crowley’s operation.The vessel will play a critical role in laying and burying the subsea cables needed to deliver energy from offshore to the grid onshore. The barge is the first to have vertical injectors along with a dynamic positioning system and a multiple-anchors positioning system, which allow for accurate and efficient cable placement, even in challenging conditions. The barge boasts a 3,500-ton capacity carousel to lay and bury subsea cable using burial tools such as a vertical injector, a jet sled, or a jetting ROV, with the potential to be upgraded to 7,000 tons with two carousels for bundle cable lay and burial.The barge is positioned to support Equinor’s Empire Wind offshore wind farm for New York and can be configured to lay or repair cable for a multitude of other subsea applications."This barge will support our existing fleet of cable laying vessels, the Nexans CLV Aurora, Nexans C/S Skagerrak and Nexans CLV Electra, and we are pleased to be working with Crowley on developing the capability to lay nearshore subsea cable in the U.S.," said Pascal Radue, executive vice president of Nexans' PWR-Transmission Business Group, highlighting the significance of the partnership.“The cable lay barge will provide a productive supply chain solution for offshore energy, telecommunications and other sectors.“Coupled with our U.S. maritime fleet and mariners providing feedering services and other logistics and project management capabilities, we could not be better equipped to serve the needs of industries seeking subsea cable solutions,” added Graham Tyson, vice president of operations, Crowley Wind Services.The vessel will be operated by a crew of U.S. mariners, supporting maritime investment and employment goals.“AMO is proud to be the leading source for United States Coast Guard licensed officers in the wind farm space. Our long-lasting partnership with Crowley, and our new relationship with Nexans, will help to provide clean, affordable and sustainable energy to millions of Americans and will open the door to future offshore projects,” added Willie Barrere, American Maritime Officers National President.
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Gold losses on stronger dollar
Gold prices were flat on Friday but on course for a loss this week as the pressure of a stronger dollar overshadowed support from trade uncertainties caused by U.S. Tariffs. As of 0242 GMT, spot gold remained unchanged at $3,287.65 an ounce. Bullion has fallen 1.5% this week. U.S. Gold Futures declined by 0.3% to $3337.20. Gold is now more expensive to other currency holders due to the dollar index reaching its highest level since 29 May. "Gold has been trading in the $3,250-$3,450 range for the past two months and we expect it to move towards the lower end of this range, and possibly break it," said Marex Analyst Edward Meir. He added that the Federal Reserve’s hawkish position was also driving the strength of the dollar, which weighed heavily on the bullion. On Wednesday, the Fed kept interest rates at 4.25% to 4.50% and dampened expectations for a rate cut in September. Trump signed a executive order Thursday that imposed "reciprocal tariffs" ranging from 10 to 41% on imported goods from dozens countries and foreign locations. This was done ahead of the Friday deadline for a trade agreement. He raised duties on Canadian products to 35%, up from 25%, for all goods not covered by the U.S. Mexico-Canada Trade Agreement. But he gave Mexico 90 days to negotiate a wider deal. If trade tensions rise, prices could move up again if various countries are unable to renegotiate lower tariff rates. In June, the U.S. inflation rate increased as import tariffs began to increase the price of certain goods. The focus now shifts to U.S. employment data, due later today for more clues on the Federal Reserve's path of rate cuts. In a low interest rate environment, gold is an asset that does not yield any income. Spot silver dropped 0.6%, to $36.53 an ounce. Platinum was down 0.2%, to $1,291.55, and palladium remained at $1,191.95. All three metals are headed for losses this week. Reporting by Anmol Chaubey in Bengaluru and Brijesh Patel; editing by Harikrishnan Nair
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The weekly iron ore loss is a sign that China's stimulus has faded
The price of iron ore futures was little changed on the Friday, but they were headed for a loss for the week as the expectations for more stimulus by China, the top consumer, for its struggling property sector, faded. This dimmed demand prospects for this steelmaking ingredient. As of 1400 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was unchanged, trading at 784 Yuan per metric ton. This is down 2% for this week. As of 1300 GMT, the benchmark September iron ore traded on Singapore Exchange rose 0.64% to reach $100.4 per ton. The price has fallen 2.8% this week. The much-anticipated China's Politburo July meeting, which sets the economic direction for the remainder of the year, failed to provide stimulus for the beleaguered property sector. This remains a drag on the consumption of industrial material such as steel. Analyst Zhuo Guqiu at Jinrui Futures said that the meeting set a positive tone in the current economic climate, reducing the urgency to implement more stimulus policies. China's purchasing manager's index (PMI), which fell to 49.3 at the end of July, a level not seen since April, missed a median poll forecast of 49.7 and was down from 49.7 at the end June. This reflects a weakening in demand both at home and abroad. Zhuo, of Jinrui Futures, said that falling demand is also weighing on the prices of key steelmaking ingredients. The average daily hot metal production fell by 0.6% compared to the previous week, reaching 2.41 million tonnes in the week ending July 31. This was the lowest level for three weeks. Iron ore demand is usually gauged by the hot metal production. Coking coal and coke, which are both steelmaking ingredients, were down by 4.72% each and 0.18% respectively. The benchmark steel prices on the Shanghai Futures Exchange are mixed. Rebar fell by 0.68%. Hot-rolled coil, wire rod and hot-rolled sheet were unchanged. Stainless steel gained 0.43%. (Reporting and editing by Eileen Soreng; Amy Lv, Lewis Jackson)
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Oil prices rise as tariff concerns and Russian supply threats compete for attention
The oil prices remained unchanged on Friday, after dropping more than 1% the previous session. Traders were digesting the impact of the new U.S. higher tariffs which may curb economic activity and reduce global fuel demand growth. Brent crude futures were up 4 cents or 0.06% to $71.74 per barrel at 1201 GMT. U.S. West Texas Intermediate Crude rose by 1 cent or 0.01% to $69.27. Brent prices will still rise by 4.9% this week, while WTI prices will climb by 6.4%. This is after U.S. president Donald Trump threatened earlier in the week to impose tariffs on Russian crude buyers, particularly China, India and South Korea, to get them to stop their war against Ukraine. Investors were focused more on Trump's new tariffs, which are largely higher, that will be imposed on U.S. trade partners on August 1. Trump signed an Executive Order on Thursday that imposed tariffs of 10% to 41% for U.S. imports coming from Canada, India, and Taiwan. These countries failed to meet his August deadline to conclude trade agreements. Analysts have warned that the new levies could limit economic growth because they will increase prices and reduce oil consumption. There were signs on Thursday that the existing tariffs in the U.S. are already pushing prices up. The U.S. is the largest economy and the biggest oil consumer. Inflation in the United States increased in June, as tariffs increased prices of imported goods like household furniture and recreational products. The data supports the view that the price pressures will increase in the second half and the Federal Reserve won't cut interest rates until October. The higher borrowing costs could also limit economic growth. Trump's threat to impose secondary tariffs of 100% on Russian crude buyers has supported the price because there was concern that this would disrupt oil trade and remove some oil off the market. In a note published on Thursday, JP Morgan analysts stated that Trump's warnings of sanctions against China and India for their continued purchases of Russian crude oil could put 2,75 million barrels of Russian oil exported by sea at risk. Both countries are among the top three crude oil consumers in the world. Analysts said that the Trump administration will find it impossible to sanction the second largest oil exporter in the world without driving up oil prices.
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RPT-Indian state refiners pause Russian oil purchases, sources say
Industry sources claim that Indian state refiners stopped buying Russian crude oil last week, as the discounts have narrowed in this month. Donald Trump has also warned other countries against purchasing oil from Moscow. India, which is the third largest oil importer in the world, is the top buyer of Russian crude by sea. This revenue stream for Russia, as it continues to wage war against Ukraine, has been vital for the country. Four sources familiar with the refiners’ plans to purchase Russian crude have told us that the country's state-owned refiners, Indian Oil Corp., Hindustan Petroleum Corp., Bharat Petroleum Corp. and Mangalore Refinery Petrochemical Ltd., have not purchased Russian crude for the last week or so. IOC, BPCL HPCL MRPL, and the Federal Oil Ministry did not respond immediately to'comments. Sources said that the four refiners buy Russian oil regularly on a delivery basis, and they have also turned to spot markets as a source of replacement oil - mainly Middle Eastern grades like Abu Dhabi's Murban oil and West African crude. Reliance Industries, a private refiner, and Nayara Energy are owned in majority by Russian entities, including Rosneft. They have signed annual agreements with Moscow, and they are the largest Russian oil buyers for India. Trump announced 100% tariffs against countries that purchase Russian oil, unless Moscow agrees to a major deal of peace with Ukraine. Sources say that Indian refiners have withdrawn from Russian crude due to the decline in Russian exports, and a steady demand. This is because of the Western sanctions imposed against Moscow for the first time in 2022. Even buyers who adhere to the price cap are concerned that the latest EU curbs will complicate international trade, including fund-raising. India reiterated its opposition against "unilateral sanction". Trump announced on Wednesday that a 25% tariff would be imposed on all goods imported from India starting August 1. He also said that negotiations are ongoing. He warned against possible penalties for the purchase of Russian oil and arms. Trump reduced the deadline for imposing secondary sanctions on buyers of Russian goods to 10-12 from 50 days, if Moscow fails to agree to a peace agreement with Ukraine. About 35% of India’s total supplies are supplied by Russia. In the first half 2025, private refiners purchased nearly 60% of India’s average 1.8 millions barrels per day Russian oil imports, while state refiners, which control 60% of India’s total 5.2 million bpd refinery capacity, purchased the rest. Reliance bought Abu Dhabi Murban oil for loading in October of this month. This was an unusual move from the refiner.
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Sources say that Asia is increasing its imports of US WTI oil as Middle East prices increase.
Trade sources say that Asia will increase imports of U.S. West Texas intermediate crude in the fourth-quarter after Middle East oil price increased and opened arbitrage window. They said that the price gap between light-sweet U.S.WTI oil and Middle East crude benchmarks Dubai & Murban has narrowed this month due to strong demand in Asia for high-sulphur oils. WTI's Arbitrage to Asia has been open for the last week for cargoes that arrive in early November. This was stated by June Goh, senior analyst at Sparta Commodities. Sources said that U.S. oil producer Occidental sold WTI crude to Japanese refiner Taiyo Oil. One source said that the cargo was sold for a premium of $3.50 per barrel over October Dubai prices, and would be delivered in October. A Singapore-based trader stated that WTI crude oil could be sold at a price 50-75 cents per barrel less than Murban oil of similar quality to North Asian refiners, depending on the suppliers. Two other traders claim that WTI is 30 cents less expensive than Murban light-sour grade. The trade is also enabled by the falling costs of a large crude carrier that can send 2,000,000 barrels from the Gulf Coast in the United States to Asia. The daily tanker rates of SSY on LSEG Workspace show that the costs for a VLCC shipping U.S. crude oil to China, Singapore, and West Coast India dropped by $200,000 on Wednesday to $6.5, $5.5, and $5.35, respectively. Sources confirming the benchmark said that Murban's supplies have also been tightened as Abu Dhabi National Oil Co has reduced its exports of its flagship grades by diverting oil to its own refinery. Goh stated that "we anticipate more Asian buyers will secure WTI cargoes, especially as Murban looks expensive while taking the opportunity to diversify their portfolio against AG (Arabian Gulf crude)." She said that the threat of U.S. president Donald Trump to impose secondary duties on countries who buy Russian oil also supports Middle East crude price. Indian refiners will look to purchase oil from Gulf to replace Russian supply, she added. Trump shortened the deadline by which Moscow must make progress in a peace agreement with Ukraine or face secondary tariffs of 100 percent for its oil customers within 10 to 12 business days. This reflects his growing frustration over Russia's actions. China, India, and Turkey are the main importers of Russian crude. Reporting by Florence Tan in Singapore and Siyi LIu in Houston, Arathy Sommesekhar at Houston; editing by Tom Hogue and Philippa Fletcher
Outokumpu Finland beats earnings expectations in challenging environment
Outokumpu, a Finnish stainless steel manufacturer, reported Thursday a core income that was above the market expectation for the second quarter. It also said that it has increased its target of short-term savings to 60 million euro ($68.6 millions) by 2025.
Outokumpu's consensus forecast had analysts expecting 69 million euros.
In an earnings report, CEO Kati Ter Horst stated that "we continued to benefit from the strong market positions we have in Europe and the U.S."
She did say, however, the quarter was marked with uncertainty and increased geopolitical tensions. This led to an increase in caution among customers.
The tariffs imposed by President Donald Trump on U.S. imports will be a challenge for European steelmakers who are already facing a weak demand, high prices and fierce competition from Chinese imports.
Trump's tariffs, which were first introduced at 25% and then increased to 50%, divert shipments intended for the U.S.
Outokumpu stated that "Asian imports into Europe remain high in comparison to the low demand on the stainless steel market."
It said that the company's deliveries of stainless steel rose to 483,000 tonnes during the second quarter but will decline between 5-15% due to seasonality and the market's weakness in the third. (1 euro = $0.8744) (Reporting and editing by Milla Nissi-Prussak, Gdansk)
(source: Reuters)