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After US extended ceasefire with Iran, gold rises and oil falls
Gold prices increased?on Wednesday, as lower oil prices following an extension of a?ceasefire by the U.S. with Iran eased fears about inflation and high interest rates. As of 0809 GMT, spot gold was up 1% at $4,759.63 an ounce after Tuesday's decline to its lowest level in over a year. U.S. Gold Futures for June Delivery gained 1.3% to $ 4,778.30. Donald Trump, the U.S. president, said that he would extend indefinitely the ceasefire agreement with Iran so as to facilitate further peace talks. This was just hours before it was due to expire. Trump's unilateral announcement was confusing, as it wasn't immediately clear if?Iran, or the U.S. ally Israel, would agree to extend a ceasefire that began two weeks earlier. Edward Meir, Marex analyst, said that the markets perceive a reduction in the level of the crisis with this extension. If the ceasefire is broken and hostilities are resumed, the dollar will strengthen, and oil and interest rates will rise, which should put pressure on gold prices. Following the extension of the ceasefire, stocks rose, the dollar weakened and oil prices fell. Inflation can be fueled by higher crude oil prices, which increase transportation and production costs. Gold is seen as an inflation hedge but high interest rates can make yield-bearing assets more appealing, which reduces the appeal of bullion. Standard Chartered analysts said in a recent note that "price action is still at the mercy Middle East ceasefire headlines, and liquidity requirements." While we acknowledge that the recent increase in prices is fragile and at risk of a correction in the short term, we still expect prices (of precious metals) to recover. We also continue to anticipate gold to "retest" record highs. Kevin Warsh, the nominee to be the Federal Reserve's chief, said on Tuesday that he made no promises about interest rate cuts to Trump. He was trying to assure U.S. Senators who were deciding whether to confirm him to lead a central bank, that he would work independently from?the White House and pursue broad reforms. Silver spot rose by 1.9%, to $78.15 an ounce. Platinum gained 2.2%, to $2,082.15, while palladium rose 2.4%, to $1,570. (Reporting and editing by Eileen Soreng in Bengaluru, Mrigank Dahniwala, Ronojoy Mazumdar).
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Water reporting standards are being pushed for by the rise in water-related risks
A lack of a global accounting system that tracks water usage in the same way across the globe makes it difficult to assess risk as climate change and population increase strain freshwater resources. This has prompted a new initiative aimed at promoting a standard approach. Water use, unlike carbon emissions, is reported using a patchwork system of standards and definitions that makes it difficult to compare companies, sectors, and regions. Lauren Enright is the programme manager for water services at SCS Global. She's helping to bring the group together. Investors, auditors and communities who are trying to figure out what companies do with water face real challenges. The initiative, which is backed by the World Resources Institute (WRI), WWF, and the U.N. CEO Water Mandate will launch in April. It's expected to be named Corporate Guidance on Assessing Water Scopes 1 - 3?in Value chains. It is not intended to replace existing reporting regimes, such as the European Union Corporate Sustainability Reporting directive. Instead, it is meant to sit below them and provide a set of common definitions?and core concepts. Water stress is affecting sectors like?technology where data centres have sparked protests in communities around the world. Ida Hempel, a climate-focused investment firm's Ida Hempel, said that the framework would allow investors to turn narrative or qualitative disclosures into "very useful" data. It would enable us to compare specific interventions and companies on a more like-for-like base." Reporting by Simon Jessop. Mark Potter edited the article.
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BHP and China complete supply talks; iron ore firms restock before the holidays
Prices of iron ores rose on Wednesday as steelmakers in China rushed to replenish their stocks before the holiday season. This was despite concerns about a possible increase in'supply' following a resolution of a contract dispute that lasted for months between BHP Group, and China. BHP, world's third largest iron ore supplier said that it had completed iron ore contract negotiations with China Mineral Resources Group, the state buyer of iron ore. Last week, it was reported that CMRG lifted a ban on BHP's procurement of the key ingredient for steelmaking after its top?executives had visited China. Iron ore, the most traded contract at China's Dalian Commodity Exchange closed daytime trade 0.32 percent higher than its previous closing price of 786.5 Yuan ($115.32). The contract reached its highest level since 'April 8' at 790 Yuan during the session. By 0706 GMT the benchmark May iron ore traded on the Singapore Exchange had risen 0.28% to $107.2 per ton. This was its highest price since March 30. Analysts at Yongan Futures wrote in a report that "bearish factors are largely priced in" as the term contract negotiations (between BHP & CMRG) have been finalized. Prices will stabilize in the near term as demand is strong in the lead-up to the holidays. Chinese steelmakers usually replenish feedstock before the May Day holiday, which is from?May 1-?5. BHP stated that it expected seaborne ore demand to remain at its current level for the next few years, with a slight decrease in China being offset by growth in emerging economies and recovery across Europe. Coking coal, coke and other steelmaking components gained respectively 1.07%?and 0.63%. The benchmarks for steel on the Shanghai Futures Exchange have been moving sideways. Rebar gained 0.31%, hot rolled coils advanced 0.62%, and wire rod slipped 0.06%. Stainless steel fell 0.5%.
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Japan's FY2025 crude output drops to its lowest level since 1968 due to weak demand
Japan's crude?steel production, which is the fourth largest in the world, fell 3.2% to its lowest level since fiscal 1968 in fiscal 2025, due to weak construction demand and slowing exports. The Japan Iron and Steel Federation announced on Wednesday that production fell to 80.33 millions metric tons for the year ending March 31. This is the fourth consecutive year of a decline. Steel?demand remained weak in the construction industry due to labour shortages, high material costs and falling exports, according to an analyst with the federation. The closure of two blast furnaces in 2025 also weighed on production. He said that despite signs of recovery in the automotive and industrial machinery sectors, the Middle East conflict may affect production and car exports due to material shortages. This could also have a negative impact on crude steel. The federation reported that Japan's crude steel output in March fell by 4.1 percent from a year earlier to 6.92 million tons. The output, which was not adjusted for season, increased by?8.2 percent from February. The Ministry of Economy, Trade and Industry announced earlier this month the crude steel production?is anticipated to fall by?0.7% during the April-June period compared to the same quarter last year due to the slackness in demand from the construction and manufacturing industries. (Reporting and editing by Yuka Obayashi)
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Climate investor asks for votes against directors of Japan's trading houses and megabanks
Climate advocacy group calls on investors in Japan's largest banks to vote against the board members of three trading firms and three banks for failing to manage risks associated with investments in fossil fuel production. According to presentations seen by the, environmental advocacy group Market forces argues that directors fail to monitor material financial risks for banks and trading house's businesses. The presentations were made to institutional investors at the banks Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group as well as Mizuho Financial Group and trading houses Mitsubishi Corp., Mitsui & Co. and Sumitomo Corp. The investors' reactions to the company presentations were not immediately apparent. Mitsubishi Corp confirmed that it has received the presentation and will review its details. MUFG confirmed that it had received the presentation, but declined to make any comments. The other companies did not reply to our request for comments. Market Forces, based in Australia, has shifted its strategy from submitting shareholder propositions to opposing director reappointments this year at annual general meetings. The group's goal is to prevent investment in projects which?would harm environmental and cause global heating. Since 2020, when Mizuho was the first publicly listed company in Japan to be subjected to a vote on climate change, shareholder activism has grown in Japan. Although no climate resolutions were passed yet, the pressure from shareholders has led to some changes in company policy. Market Forces, a Japanese shareholder organization, has sent shareholder proposals to Japanese trading houses, banks and utilities firms in 2020. These proposals call for climate change plans and governance reforms. Prior proposals received up to 35% of support. In 2025, however, shareholder support will drop to between 3.5% and 15%. Market Forces owns investments in all the major banks and trading firms. The presentations also argue that the 'war in Iran' has highlighted the fragility and instability of investments in the fossil fuel industry, which is now facing disrupted supply chain and wild price fluctuations. The closing of the Strait of Hormuz highlighted the?risk of assets in the LNG supply chain becoming stranded. Around 95% of Japan's oil and 11% its liquefied gas comes from the Middle East. The Strait of Hormuz is the route used by almost all of Japan's crude oil and LNG. (Reporting and editing by Muralikumar Anantharaman; Reporting by Anton Bridge)
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What is the EU doing to combat energy prices rising?
The European Commission plans to announce on Wednesday a reduction in electricity taxes to help'reduce the impact of the Iran War on prices and coordinate the filling of gas storages across countries ahead of an increase in heating demand this year. Here are some of the measures taken by governments in the European Union since the Middle Eastern conflict erupted on the scene at the end February and began to drive up energy prices. GERMANY Berlin decided to limit the volatility of petrol prices by allowing stations to raise prices once per day, at noon (1100 GMT). Prices can be reduced at any time. Fines up to 108,000 euros (100,000 euros) could be imposed for violations. FRANCE France’s?government chose to support only the most vulnerable sectors, in stark contrast to sweeping energy 'price caps' that severely strained the public finances following Russia's invasion of Ukraine 2022. The government announced 70 million euros of fuel subsidies for the transportation, agriculture and fishing industries in April. This is in addition to 150 euro benefits for 3.8 millions low-income households in order to pay their energy bills. The Italian government has allocated 417.4 millions euros ($480.34) for the reduction of excise duty on petrol and diesel up until April 7. However, prices have not changed much. Industry lobbyists want more effective measures. POLAND Poland announced that it would reduce fuel taxes and cap prices at the pump. It could also pursue a windfall-tax on energy companies. ROMANIA Romania has introduced a limit to the markups on fuel prices, and a six-month time limit for fuel exports. The measures may be extended for three months at a given time. The government approved a state aid scheme of 652?million lei ($147.23 millions) to offset a part of the cost for road transporters that carry cargo and passengers. The Spanish government has proposed 5 billion euro ($5.8 'billion) in measures to offset the impact of the Middle East conflict and local energy prices. The measures, which need approval from parliament, include a reduction in value-added taxes on electricity bills of up to 10% and fuel prices of up to 30 cents a litre. They also grant a 'fuel subsidy' of 20 cents a litre to farming and transportation sectors that are most affected by the price increase. HUNGARY Hungary decided, in advance of the elections on April 12th, to limit fuel prices and release reserves to ensure supply. The cap was only applicable to vehicles registered in Hungary. IRELAND Ireland has cut the excise tax on petrol by 15 cents and diesel by 20 cents until May. This is part of a package worth 250 million euros ($290 million), which came into effect at midnight on Tuesday. (Reporting and editing by Barbara Lewis; Jan Strupczewski)
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UN agencies warn that extreme heat is a threat to global food systems
According to a report by the U.N. food and weather agencies, extreme heat is pushing the global agrifood system to the edge, and threatening livelihoods and the health of over a billion people. Heatwaves are getting more intense and longer, causing damage to crops, livestock and fisheries. Extreme heat changes the rules of what and when farmers, fishermen and foresters are allowed to grow. It can even dictate if people are able to work, said Kaveh Zaidi, the head of FAO's climate office. "At its heart, this report tells us that we are facing a very uncertain tomorrow,"?he said. Recent climate datasets indicate that global warming is increasing, and 2025 will be among the hottest years ever recorded, leading to a?increase in severe weather events. Extreme heat increases the risk of droughts, pest outbreaks, and wildfires. It also reduces crop yields when critical temperature thresholds are exceeded. As temperatures rise, the risks increase rapidly According to the report, temperatures above 30 degrees Celsius (86 degree Fahrenheit) reduce yields of most major crops. Zahedi gave the example of Morocco, where heatwaves followed six years' drought. This led to a 40% drop in cereal yields. The olive and citrus harvests were decimated. "These harvests were essentially a failure," he said. Marine heatwaves also become more frequent. They deplete oxygen levels in the water and threaten fish stocks. The report stated that 91% of oceans around the world will experience at least one marine-related heatwave in 2024. As warming accelerates, risks increase sharply. The report stated that the 'intensity' of extreme heat events will roughly double with 2 degrees Celsius warming and quadruple with 3 degrees. Zahedi stated that every degree increase in global average temperatures reduces yields by approximately 6% for the four main crops of the world - maize (?rice), soya (soya beans), and wheat. FAO and WMO stated that piecemeal response was?inadequate' and called for better governance of risk and early warning weather systems to assist farmers and fishermen in taking preventative action. Zahedi stated that if you could get the data into the hands of farmers, they would be able to adjust their planting schedule, what they plant and when they harvest. The report said that adaptation alone was not enough. It argued that the only solution to the increasing threat of extreme heat was ambitious and coordinated actions to curb climate changes. Crispian Balmer reported. Mark Potter edited the story.
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Ferrexpo, a miner, is seeking at least $100 Million to avoid bankruptcy as the Ukraine war affects operations
Ferrexpo, the iron ore pellet manufacturer, said that it would be pursuing an equity raise of at least $100 million in order to stave off bankruptcy. It warned it only had enough cash to last until August's end without additional funding. Early trading saw shares of the London-listed company fall 5.5% to 40.80 pence. The Ukraine-focused mining company said that its net cash available had fallen to about $20 million as of April 17 compared to $101 million by 2024's end, due to the disruption caused by the Ukraine War. The company stated that without the fundraise "it is highly likely" that the company will have to file for bankruptcy in the'relevant jurisdictions, and the shareholders could lose their entire investment or a substantial portion. Ferrexpo also said that it expected to have its shares suspended from trading and listing in May if they did not launch and complete the fundraise by April 30. This is because it would not be able to publish its 2025 annual report, which was already delayed. The company's finances have been severely affected by the suspension of refunds for value-added taxes, combined with attacks against Ukraine's power grid. Ferrexpo?is operating only one of its pellet lines at a capacity of about a quarter compared to pre-war. The first-quarter production dropped 72% compared to last year. Ferrexpo Poltava Mining's main mine has been in bankruptcy proceedings for the past few months. A Ukrainian court had accepted a claim of?4.73bn hryvnias (?107.87m) relating to disputed surety contracts with a former bank owned by Kostiantyn Zhevago, founder and Ukrainian billionaire.
Mercuria warns that aluminium faces a 'black-swan' supply shock
According to Mercuria's top metals analyst, the global aluminium market has experienced a "black-swan" event as disruptions caused by the Middle East war have triggered a supply shock. This will?lead? to major shortages in this year.
Around 7 million metric tonnes of aluminium is smelted in the region each year, which represents about 9% of global production this year. Aluminium is used in the construction, transport and packaging industries.
Nick Snowdon of Mercuria's metals & mining research said that the scale of supply shock in the aluminium industry is "probably the biggest single supply shock a metals market in post-2000 era". He was speaking at the Financial Times Commodities Global Summit, held in Lausanne in Switzerland.
"We're already experiencing a black swan event. He said that no one could have predicted something of this magnitude. The London Metal Exchange rallied on April 16 due to concerns about supply disruptions resulting from the U.S./Israeli war against Iran. Aluminium prices reached a record high of $3,672 per ton, a four-year-high.
Mercuria believes the market is likely to face a deficit between now and year's end of at least 2 million tons. Snowdon said that this estimate could be conservative as it assumes an improvement in the near-term alumina flow via the Strait of Hormuz, which will allow some smelters restart production during this quarter.
Snowdon stated that the shortfall is compared to about 1.5 million tonnes of visible inventory, and just under 3 million tons total global stock (including non-visible units), leaving the market with limited buffers.
He said that if the conflict continues and alumina, which is a key feedstock in the production of aluminium, is not flowing to the Gulf then a larger deficit could be possible.
Middle East aluminum cannot be easily replaced. China, which is the top producer in the world, has a 'output limit' of 45 million tons per year, whereas the U.S., and Europe, have very little idle capacity.
Snowdon stated that the U.S., Europe and other countries were especially vulnerable to the supply shock due to low stock levels.
The Middle East accounted for nearly 22% of the 3.4 millions tons of primary and alloyed aluminum that the United States imported last year, according to Trade Data Monitor, an information provider. According to Trade Data Monitor (an information provider), the Middle East imported nearly 22 percent of the 3.4 million tons of primary and alloyed aluminium that?U.S.
According to TDM, Europe imported 1.2 million tonnes, or 18.5% of its primary and alloyed aluminum from the Middle East in 2017.
The premiums paid over the LME price of physical metal have also risen. In the U.S., they reached a record of $1.14/lb, or $2,521.50/ton, and in Europe, they hit a four-year high at $599/ton, early in April. (Reporting and editing by Paul Simao; Additional reporting by Tom Daly, Polina Devitt, and Pratima Dasai)
(source: Reuters)