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Minister says Australia will set a floor price for its critical mineral reserves
Australia will "no doubt", have a floor price in its strategic reserve of critical minerals. Resources Minister,?Madeleine King, said this?on Wednesday. The resource-rich nation is looking to consolidate its role as an important supplier to its allies. "We are building a strategic reserve." "There will also be a price floor," King said to delegates at the Minerals Week summit in Canberra. He added that the government would consult with the industry for the 'right price. It is about a new pricing mechanism that reflects the cost of producing these materials." Australia plans to become the world's leading supplier of rare earth minerals, which are vital to industries ranging from automotive to defense. This will be achieved in part by developing a strategic reserve, with funding of A$1.2billion ($793m). The project is expected to start up in the second half 2026. This will highlight the country's ambitions of becoming a major player on the global mineral market. Australia also supports private investment through entities like the Northern Australia Infrastructure Fund and the Export Finance Agency (EFA), which will contribute an additional A$4 Billion. King said that Australia needs to be financially prepared for such projects in the long term if it wants to establish itself as a reliable supplier of 'critical minerals' as global supply chains are rebuilt. "They're long-term investments" King stated, "I do think we will have to continue doing this for a while." China is the largest producer and refiner of critical minerals for industry. Last year, its restrictions on certain exports shook up the automotive and defense industries and drove a global drive to diversify supply.
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McGeever: It's time to reconsider the asset of a "safe haven"
The Iran War and the 'global energy shock' it unleashed could have put an end to the idea that there is a safe-haven investment for everyone. It's not a novel concept given the poor performance of U.S. Treasuries after Russia invaded Ukraine in 2004. The extraordinary fall in gold prices'since the U.S. and Israeli strike on Iran on 28 February' has brought it into the spotlight. In times of economic, geopolitical or financial instability, investors flock to assets like Treasuries. The dollar, Swiss Franc and especially gold. These are the assets that will most likely serve as a safe haven in times of crisis. Gold has been a safe haven for non-financial assets, especially in times of inflation. Gold has not only performed poorly in the current crisis, but it is also one of the most underperforming assets. It has lag behind high-yielding credit, emerging markets stocks, and frontier market stocks. Silver was the only asset that has performed better than it, and this is because of a speculative boom. Gold has fallen 17% in March so far, and is on course to have its worst month since 1982. This is astonishing in a month marked by the worst Middle East conflict, biggest global energy crisis, accelerating inflation, and $6 trillion worth of global stock value being wiped out. Around the middle of 2012, gold began to be untethered by whatever economic fundamentals were underlying it. Retail investors, momentum traders, and machines chased gold higher as central bank demand cooled. It culminated in a January high of $5 595 per ounce. This "fear of losing out" (FOMO), euphoria soon turned into widespread liquidation and drowned out any "FTQ", or flight to quality, demand sparked by this crisis. PLENTY OF REASONS TO SELL, FEW TO BUY The dollar and U.S. Treasuries are not much better. The dollar has risen but only by less than 2 percent. The Federal Reserve is not the only major central bank that will likely tighten its policy this year. Analysts at Deutsche Bank note that many central banks from Asia and the Middle East will likely look to reduce their FX reserves to cover their increased import costs, to prevent their currencies weakening excessively, and to cushion any inflation shock. This will cap dollar and could be a greater drag on U.S. Treasuries. This may have already begun. The amount of Treasuries that are held by the New York Fed for global central banks fell by around $75 billion over the past four weeks. Analysts at Deutsche Bank estimate that this is equivalent to around $60 billion in sales by the official foreign sector. This would be the second-largest net sale since the COVID-19 Pandemic. It's true that the Treasuries Market is the most liquid market in the world. But it is no longer considered the safest. The Swiss franc, and the Japanese yen are both affected by domestic problems. Both currencies have historically enjoyed current-account deficits and low rates of inflation. The Swiss National Bank has stated that it is more willing to intervene on the foreign exchange markets due to currency appreciation. The yen is already at multi-decade lows and doesn't hold much appeal, given that Japan imports most of its energy. Investors need to be flexible and more creative in the current turmoil. Trading strategies are often more effective than buying safe-haven assets. The response to each crisis depends on its origin, for example, buying energy stocks during an energy crisis, or buying defense stocks during a conflict. Cash is the one asset that seems to always do well during a crisis or even an inflationary supply shock. U.S. Money Market Funds have grown by about $60 billion since the 28th of February to a record $7.86 trillion. You shouldn't bet against the total exceeding $8 trillion within weeks. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Cuban crisis: International convoy brings tons of aid in the form of a convoy to Cuba
Cuba?received on Tuesday a shipment?of humanitarian aid from Nuestra America Convoy, a global effort organized by activists who are seeking to circumvent the?U.S. Cuba is under sanctions that severely restrict shipments of fuel, food and other goods to the island. A small ship, which left last week for the port of Progreso, Mexico, arrived early Tuesday morning in Havana Harbor, carrying 14 tons of food and medicine, as well as solar panels and bikes, to Cuban authorities. The ship was part of a flotilla that left Progresso with two other ships arriving later. The ship topped up the 6 tons of goods that activists had flown into Cuba over the last week. Last week, Cuban President Miguel Diaz Canel?received the members of the convoy to the presidential palace. This included European politicians like?former British Labour leader Jeremy Corbyn. Nuestra America is a coalition of nearly 300 non-governmental organizations, political parties, unions and legislators from over 30 countries. "This is only the first step." After disembarking, Brazilian activist Thiago Avila, who had sailed from Mexico, promised that much more support would follow. The delivery on Tuesday, which was delayed by several days due to poor sailing conditions in the Caribbean, is largely symbolic in a nation that is facing an economic crisis. This has seriously impacted transportation, healthcare, and electricity generation. The Trump administration cut off fuel to the island nation and threatened to impose tariffs on oil-supplying countries. The Trump administration has cut off fuel supplies to the island nation, and threatened to impose tariffs on countries that deliver oil to Cuba. The crew of the boat, which arrived in Havana, Cuba on Tuesday, renamed it "Granma 2," in honor of the yacht that Fidel Castro, historic leader of Cuba's revolution, landed on in 1956, to start the revolutionary struggle to overthrow Fulgencio Battista. Reporting by Ayose Naranjo in Havana, Editing by Dave Sherwood & Lincoln Feast
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Trump will ease smog regulations on summer gasoline in order to lower prices, sources claim
Two sources with knowledge of the situation say that the Trump administration will announce on Wednesday a temporary lifting of federal smog-cutting restrictions on summer-blend gas to 'curb rising fuel prices due to the war in Iran. This move will make gasoline more affordable by preventing refiners from switching to expensive summer blends. Fuel retailers will also be able to sell gasoline containing 15% ethanol (also known as E15) throughout the summer driving seasons, when more stringent rules would normally limit its use. Analysts believe the change will reduce retail prices by several cents per gallon and help both consumers and refiners who are struggling to meet fuel shortages. According to AAA, the average price of a gallon in the United States has recently risen above $3.97. This is a dramatic increase from less than $3 earlier this season. In order to reduce air pollution, the U.S. switches to summer gasoline to reduce pollution. These blends are less volatile, which can reduce evaporation and smog during warmer weather. The Iran conflict has caused a disruption in global supply. U.S. crude oil?topped $100 per barrel for the first since the Russia-Ukraine crisis of 2022. The U.S. Environment?Protection?Agency, which oversees these regulations, has said that it has worked hard to promote American dominance in energy and "monitors the supply" with federal and industry partners. The White House is expected to make the move as part of a larger effort to limit the political and economic fallout that will result from the rising cost of energy during the summer driving season. (Reporting and editing by Lisa Shumkaer; Jarrett Renshaw)
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US oil prices drop on prospects of Middle East ceasefire alleviating supply disruption
U.S. crude oil futures dropped about 4% in early trading on 'Wednesday,' on the prospect that a possible ceasefire would ease?disruption of a global?oil supply. This was after reports that Washington sent Tehran a fifteen-point plan for ending the Middle East war. U.S. West Texas Intermediate crude (WTI),?futures, dropped as low as $87.80 per barrel at the?open and were down $3.49 or 3.8% at $88.86 per barrel by 2305 GMT. WTI gained 4.8% on the Tuesday before paring its gains in volatile trading after settlement. U.S. President Donald Trump said on Tuesday that the U.S. is making progress in its negotiations to end war with Iran. This includes winning an important concession by Tehran. A?source confirmed Washington sent Iran a settlement proposal of 15 points. Israel's Channel 12, which reported the plan first, stated that a ceasefire of one month would be announced by a mechanism developed by the U.S. Steve?Witkoff, Jared Kushner and other Middle East envoys are currently working on the plan. Tehran denies that direct talks have taken place. Mohammad Baqer Qalibaf, the powerful speaker of Iran's parliament, dismissed these reports on Monday as "fake". (Reporting and editing by Christopher Cushing; reporting by Yuka Obaashi)
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Brazil is the leader in beef production, which accounts for 40% of all agriculture-related forest destruction.
According to a new study, beef production accounts for 40% of the?all clearing of forest done to 'open up?spaces for food production. The study found that Brazil, which is the largest exporter in the world of beef and soya beans, topped the list of nations who have cleared the greatest amount of forest to expand agriculture. Researchers at Chalmers University of Technion in Sweden used satellite data and agricultural statistics combined with a model to study 184 agricultural products across 179 countries between 2001-2022. They produced what they call the most comprehensive global assessment of agriculture-linked?deforestation?todate. The data shows that palm oil accounts for 9% global deforestation. Soybeans are at 5%. Maize and rice each account for 4%. Cassava is at 3%. Cocoa and coffee each make up 2%. Brazil was responsible for nearly a third of the global deforestation (32%) during this period. Indonesia, China, the Democratic Republic of Congo, the U.S., and Ivory Coast were all in the top five. Between 2001 and 2022 121 million hectares (or 299 million acres), of forest was lost, leading to emissions of 41.2 gigatons CO2e. The study found that staple crops, such as maize, rice, and?cassava, together account for more than 11% of agriculture driven deforestation. This is more than export products, such as cocoa, coffee, and rubber, combined. Their impact is also spread around the world, rather than concentrated on specific regions. Martin Persson is one of the researchers who worked on the project. He said that the problem "extends" beyond the trade. This means that there are also actions needed in the producer countries where the domestic agricultural markets cause significant forest loss. The study found that although deforestation is a major source of greenhouse gases, it only accounts for 5% of global carbon dioxide emissions. Researchers plan to extend the model to the mining and energy sectors.
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Oil prices rise as the war uncertainty increases, causing stocks to fall
Wall Street indexes dipped on Tuesday, and oil prices continued their recent gains. Worries persist over the?length of time that the U.S./Israeli war against Iran will continue. The U.S. was in contact with "the right people" to achieve an agreement that would end hostilities. Washington sent Iran a 15 point proposal aimed at ending war in the Middle East. Other media in the U.S., Israel and elsewhere reported this on Tuesday evening after the markets closed. Two people with knowledge of the matter said that the Pentagon was expected to send thousands more soldiers from the U.S. Army’s elite 82nd Airborne Division, to the Middle East. This would add to a large U.S. Military buildup. There's still confusion and lack clarity regarding Iran, how long military operations will last, and the implications for oil and the global trade. Oliver Pursche is the senior vice president at Wealthspire Advisors and he said that this was the main driver. He said: "Today, we're seeing more negative sentiment creep back into the markets." The Dow Jones Industrial Average dropped 84.41?points or 0.18% to 46,124.06; the S&P 500 declined 24.63??points or 0.37% to 6,556.37; and the Nasdaq Composite was down 184.86?points or 0.84% to 21,761.89. U.S. Treasury rates increased?after an auction of 2-year Treasury Notes that was weak,? and the dollar recovered lost ground. Monday, stocks rose after Trump announced that he had told the military to delay strikes against Iranian nuclear power plants due to "productive discussions" with Tehran. Iran has denied any talks with the United States. Brent futures closed higher at $104,49 per barrel. U.S. West Texas Intermediate rose 4.79% to $92.35. Oil prices are expected to remain high as the Strait of Hormuz is closed and only a fifth of the world’s oil and gas shipments pass through. The S&P 500's communication services and technology sectors were among the worst performing sectors on the day. The MSCI index of global stocks rose by 0.91 points or 0.09% to 985.82. The pan-European STOXX 600 Index rose by 0.43%. Data earlier showed that euro zone private sector growth almost stalled in this month, as inflation expectations rose and delivery times increased. This is adding to the mounting evidence that the bloc has already suffered a tangible drag from the U.S.-Israeli war on Iran. He said that the risk of inflation from the war in Iran was so great, it convinced him to support keeping interest rates at current levels rather than cutting them. The yield on the benchmark 10-year U.S. notes increased 2 basis points from?4.336% at close of business on Monday. The dollar index (which measures the greenback against a basket including the yen, the euro and the yen) rose by 0.06% at 99.24. Meanwhile, the euro fell by 0.09% to $1.1602. The dollar gained 0.18% against the Japanese yen to reach 158.72. Spot gold increased 1.34%, to $4464.66 per ounce.
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Valero shuts down Texas refinery following explosion, sources claim
Valero Energy Corp completed the temporary shutdown of ?its 380,000-barrel-per-day oil refinery in ?Port Arthur, Texas, on ?Tuesday ?following a Monday night explosion and fire in a diesel hydrotreater unit, people familiar with the plant operations said. The explosion of the diesel hydrotreater unit 243, which produces 47,000 bpd, did not cause any injuries. The date for the reopening has not been announced. Jefferson County Sheriff's Office said that the cause was unknown but they did not believe it to be an intentional act intended to?damage the refinery. Donta Miller said, "No, it's not that," when asked whether there was evidence of a deliberate act aimed at damaging refinery. Since the U.S. and Israel attacked Iran, oil, gasoline and diesel have been rising. People said that the blast could be heard up to 18 km (11 miles) away. In an email response on Tuesday, Valero confirmed that a fire had broken out in a unit of the Port Arthur refinery. The company also stated that all employees were accounted for. The people believed that shutting down the refinery would be necessary to put out the fire. As firefighters tried to extinguish the fire, they cut off water and steam supply. Hydrogen is used to remove sulfur from motor fuels in diesel hydrotreaters to meet U.S. environmental regulations. Port Arthur officials issued an order to shelter in place for residents of the west side of Port Arthur "to ensure the safety of all residents within the area in light of recent explosions at the Valero refinery." Shelter-in-place orders were lifted at 6 a.m. CDT (1100 GMT). Valero Port Arthur, its largest refinery, is located 86 miles (138 kilometers) east of Houston. (Reporting from Houston by Erwin Seba; Additional reporting in Bengaluru by Ishaan arora and Swati verma; Editing by Susan Fenton & Howard Goller).
Goldman raises Q2 aluminium forecast to $3.200 due to supply disruptions
Goldman Sachs has raised its LME aluminum average price forecast for the second quarter to $3,200 per tonne, up from $3,100. They cited a loss of supply due to 'Middle East disruptions' and the'shutdown of Mozal Smelter in Mozambique.
LME Aluminium traded at $3.260.50 as of 2215 GMT.
Goldman has removed approximately 850,000 tonnes of its supply forecast for 2026. This is due to the reduced production at Qatalum, in Qatar, which operates at 60% following a controlled shutdown.
The bank also assumed a 30 percent drop in Iranian production due to damage to the energy infrastructure?and reduced Mozal’s 560,000-tonne capability after it was placed into?care and maintainance.
Goldman has cut its outlook for 2026 by 600,000 tons due to higher energy prices weighing on the global GDP growth. It also reduced its forecast of aluminium demand growth from 0.9% to 0.1%.
It now anticipates a 550,000-tonne excess in 2026. This is a smaller surplus than the 800,000.00-tonnes previously predicted. And it forecasts a sharp 900,000.00-tonnes deficit in Q2 due to inventories falling to 'historical lows.
Goldman warned that the risks of price increases remain higher. They also said that disruptions in Strait of?Hormuz flow could lead to Middle East curtailments, and push up prices to $3,400 by 2026.
The'speculative' positioning, the potential upside of 'Chinese supply, and the reduced demand for copper could limit gains. Reporting by Anmol Chaubey, Bengaluru. Editing by Mark Porter & Cynthia Osterman
(source: Reuters)