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Iron ore gains from China's plan to increase loan issuance
Iron ore prices rose on Wednesday, as the central bank of China announced a plan to expand its loan program. However, declining crude steel use and increasing ores supply were weighing on prices. As of 0239 GMT, the?most-traded contract for September iron ore on China's Dalian Commodity Exchange was 0.45% higher. It stood at 784 Yuan ($114.66), per metric ton. The benchmark June Iron Ore at the Singapore Exchange rose 0.3% to $106.1 per ton. Sources said that the?People's Bank of China asked banks to increase loan issuance in April and to ensure?the outstanding balances of loans show positive growth month-over-month to support the economy. Mysteel, a consultancy, said that restocking in anticipation of China's May Day holiday, which lasts for five days, and the steady demand for construction steel also helped to support ore prices. The state-backed China Iron and Steel Association told reporters that China's apparent crude steel consumption fell by 4.4% on an annual basis to 220 millions tons in the first quarter, underscoring the tepid market for the material. Four sources familiar with the matter confirmed on Tuesday that China's iron ore state buyer had lifted its ban on certain BHP ore products which were accumulating at ports. After submitting a report with China Mineral Resources Group?the sources said, speaking under condition of anonymity. The rising supply is weighing down on prices. Coking coal and?coke, which are used to make steel, also gained on the DCE. They rose by 0.51% and 0.49 respectively. The majority of steel benchmarks traded on the Shanghai Futures Exchange rose. Rebar rose 0.13%. Hot-rolled coil traders were up 0.21%. Stainless steel was up 0.42%. Wire rod fell 2.36%. ($1 = 6.8375 yuan) (Reporting by Ruth Chai; Editing by Subhranshu Sahu)
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Powell's remarks on Iran War impact are expected to be heard soon.
Gold prices were largely stable despite choppy trading on Wednesday, as investors awaited the comments of U.S. Federal Reserve chair?Jerome Powell to assess the economic impact of the Iran War in the face stalled talks. As of 0243 GMT spot gold rose 0.1% to $4,597.07 an ounce after dropping to its lowest level in April 2 the previous session. U.S. Gold Futures for June Delivery were stable?at $4610.20. As markets anticipate the FOMC meeting, gold remained stable. Much of the market's resilience following last April's tariff panic was built on the assumption the Fed would be ready to intervene if conditions worsened. Ilya SPivak, the head of global macro for Tastylive, said that if it sets a high bar, gold could continue to fall. Investors anticipate that the Fed will hold interest rates at the same level?after its two-day meeting later that day. The efforts to end the Iran conflict are at a standstill. U.S. president Donald Trump is unhappy with the latest Iranian proposal, saying that Tehran had told the U.S. they were in a state of collapse and were figuring out their leadership situation. Brent crude oil remains above $110 per barrel, despite reports that the U.S. is extending its blockade against Iranian ports. The likelihood of interest rates rising is increased by higher crude oil prices. Gold is often seen as an inflation hedge, but high interest rates make it less attractive. Investors are also focusing their attention on the central bank decisions of the European Central Bank (ECB),?the Bank of England and the Bank of Canada this week. Standard Chartered stated in a report that they expect 'gold's price to be fragile over the short term. However, prices will continue to gain traction and retest records in the months to come as long as the underlying structural drivers (geopolitical concerns, tariffs and trade uncertainty) remain unchanged. Silver spot rose by 0.8%, to $73.64 an ounce. Platinum fell by 0.4%, to $1,930. Palladium dropped 0.4%, to $1,453.91. (Reporting and editing by Subhranshu sahu, Rashmi aich, and Noel John from Bengaluru)
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As Fed meeting approaches, stocks retreat due to concerns about Iran and AI
The markets started off with a mixed start on Wednesday, as concerns?about the Iran Conflict and the health of the AI Sector dominated the trading session ahead of the Federal Reserve decision and earnings of?tech Megacap Stocks later in the day. MSCI's broadest index of Asia-Pacific stocks outside Japan fell 0.2% for a second consecutive day, slipping from the record highs reached on Monday. This was primarily due to declines in Taiwanese chipset makers. Japanese markets were closed on a holiday. Brent crude rose by 0.4% to $111.71 a barrel, as the efforts to end Iran's conflict have hit a deadlock. Analysts from Westpac stated in a research report that "markets remained cautious over night as peace talks continued stalling, with Iran demanding the lifting of U.S. Naval Blockade of Strait of Hormuz. Mediators expect a revised Iranian offer in the coming days." U.S. president Donald Trump is not happy with the latest Iranian proposal, as he wants the nuclear issue dealt with from the start. The Wall Street Journal reported Tuesday, citing U.S. government officials, that Trump had instructed his aides to get ready for an extended Iranian blockade. The S&P 500 fell 0.5% on Tuesday and the Nasdaq Composite dropped 0.9%, as investors assessed Iran's impasse. The tech shares took a dive after the?Journal revealed that AI giant OpenAI missed its internal targets in terms of weekly users and revenue. This raised concerns about the parent company ChatGPT's ability to fund?its massive expenditure on data centers. This report affected the shares of Oracle, CoreWeave and others. The AI-driven rally will be further tested by the earnings of U.S. tech titans Microsoft, Alphabet, Amazon, and Meta Platforms due on Wednesday. The US corporate sector has shown a remarkable resilience to the conflict in Iran. With slightly more than a third of S&P sectors reporting profits already, 81% have exceeded estimates. The market will focus on the Federal Reserve meeting of April, which is Jerome Powell's final meeting as Fed chairman. Traders think a hold will happen. Fed?funds Futures price an implied 100% chance that the U.S. Central Bank will remain steadfast, with no changes in policy expected until the end of 2027. Analysts from ING wrote that it wouldn't be expensive for the Fed to adopt a hawkish stance, while still remaining in a waiting-and-seeing mode. There will be questions about the future of Powell and Kevin Warsh. The yield on the 10-year Treasury bond in the United States was up 0.6 basis points at 4.346%. Meanwhile, the U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, rose 0.1% to 98.67 for the second day running. The markets also digested United Arab Emirates' surprise departure from OPEC. However, it is expected that the rest will stick together. Chris Weston is the head of research for Pepperstone Group Ltd. in Melbourne. Brent futures for the first month of the year quickly recovered the initial loss. Gold fell 0.3% to $4,581.40. Bitcoin was unchanged at $76,471.21, while ether fell 0.3% to $2,289.16. (Reporting and editing by Jacqueline Wong; Reporting by Gregor Stuart Hunter)
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Sources say that China has tightened border inspections on fertilizer exports.
China has increased its customs inspections to enforce the new controls on fertilizer exports as the gap between domestic and foreign prices continues to widen after the disruptions caused by the closing of the Strait of Hormuz. Three fertiliser traders, who spoke on condition of anonymity due to the sensitive nature of the issue, said that customs inspections are now required for exports of?ammonium?sulphate, one of China's biggest fertilizer exports in terms of volume. Two people said that the crackdown began after two customs officers in Qingdao, a port city located on China's eastern coast, identified exporters who were falsely declaring ammonium as sulphate when they actually meant urea or potash fertilisers. A trader who works in the industry said, "Our ammonium-sulphate exports recently saw a very high inspection rate as a result." Qingdao General Administration was unable to be reached after hours, and China's General Administration of Customs at Beijing did not respond to faxed inquiries sent outside of business hours. China, which shipped more than $13billion in fertilizer last year, is a major exporter of this product. However, exports are tightly regulated to protect farmers. Beijing restricted fertiliser exports last month ahead of spring planting season. Only a small range of products were excluded, most notably ammonium sulphate. These bans have contributed towards the soaring prices of international fertilisers triggered by the Iran War, which has disrupted the flow through the Strait?Hormuz through which approximately a third of the globally traded urea?shipped? Export restrictions and coal-based production systems have kept China's domestic prices well below the global average. This has created a large price gap that would make urea imports profitable if allowed. Exports of urea are controlled through a quota-based system. Beijing usually waits until May to determine if there's a surplus before deciding how much can be exported abroad. StoneX reports that China exported 4.9 million tonnes of urea last year, which is slightly below the historical norms of between 5 and 5.5 millions tons, which would normally account for around 10% global exports.
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Miner Vale reports 36% increase in Q1 profits on higher sales and higher prices
Vale, a major iron ore producer in the world, posted a 36% increase to its?first-quarter 'net profit,' as it increased?sales volume and enjoyed higher prices. However, this was below market expectations. Rio de Janeiro's Vale reported a net profit of $1.89 billion for the period January-March, which was below the $2.05 million predicted by LSEG analysts. The company reported a?quarterly adjusted earning before interest, tax, depreciation, and amortization (EBITDA), of $3.83billion, an increase of 23% over the same period last year. Analysts predicted that this figure would be higher, at $3.96billion. In the Vale earnings report, Vale CEO Gustavo Pimenta stated that "we delivered a solid start to 2026". He cited higher sales volumes across all segments including iron ore and copper. The company reported earlier this month that it had sold 68.7 millions metric tons of iron ore, a 3.9% increase from the previous year. Vale said that sales of copper and nickel also increased year-over-year, with output reaching the highest levels in both metals since 2017 and 2020. Vale announced on Tuesday that its own products also benefited from higher prices. Vale's average realized price of iron?ore, which is the bulk production, was $95.80 per ton, an increase of?5.5% on a year-on-year basis. Vale reported that first-quarter net revenue rose by 14%, to $9.26 Billion, as compared with analysts' forecast of $9.37 Billion. The firm's results were offset in part by the?stronger Brazilian Real, which rose 5.5% to the U.S. Dollar during the quarter. Vale's Capital expenditure for the Quarter?was 7 % lower than that of 2025. It stood at $1.09 Billion, and was in line the 2026 guidance between $5.4 Billion and $5.7 Billion. (Reporting and editing by Brendan O'Boyle; Sarah Morland, Stephen Coates, and Brendan O'Boyle)
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What is the greatest legacy of ROI-Powell? McGeever: Becoming Fed's Defender-in Chief
Jerome Powell is about to preside over what will almost certainly be his final Federal Reserve policy meeting. The debate rages on the merits and place of this eight-year tenure in the pantheon of the 113 year-old institution. A few notable stumblings aside, his economic standing is solid. He is a strong defender of Fed independence. He wasn't the only one who thought that rising inflation in 2022 was "transitory". Many policymakers from around the world shared his view. The Fed's inflation target of 2% is still above and rising. Critics also point out that the Fed balance sheet has doubled to a record-breaking $9 trillion under his leadership, as the central banks fired their policy bazookas in order to support the economic recovery after the pandemic. Some critics claim that the Fed was too aggressive with its quantitative easing, and too slow in reversing it. However, the effects are difficult to quantify. Powell has vehemently denied the charge that the Fed's interest rate cuts were political in nature. Powell is a highly regarded Fed official, and his decisions were made in the midst of a global pandemic as well as a technological revolution, trade wars, and actual wars. His legacy as a champion of Fed independence is even more impressive. STANDING UP AGAINST PRESSURE This legacy is partially due to circumstances. The number and intensity of President Donald Trump's personal attacks on Powell and the leadership of the Fed are unprecedented. Powell has been criticized in hundreds of public and social media comments for failing to lower interest rates fast enough. Trump threatened to fire Powell repeatedly. There was also an indictment that has since been rescinded relating to Powell's testimony regarding renovations at the Fed Headquarters, the Eccles Building, in Washington. Last time a Fed chair was under such intense pressure, it was over 50 years ago when President Richard Nixon heavily relied on Arthur Burns to maintain a loose monetary policy. Powell isn't the only one who refuses to submit to presidential authority. William McChesney Martin Jr. defied Lyndon Johnson to not raise interest rates. But McChesney Martin didn't have to deal with a daily barrage of public criticism or threats of criminal charges. Powell has mostly refused to respond Trump's barbs. But on two occasions, both in front of the camera, he responded in ways that are sure to be long remembered. VIRAL VIDEOS It was almost comical. Both men wore white hard hats and stood next to each other in front of the media at the Fed headquarters. Powell, in apparent disbelief at Trump's criticism of the renovation cost, told him that his figures were incorrect. The scene was both awkward and unintentionally humorous. The tone of the second event was far more serious. The Fed released an extraordinary video message on January 11 in which Powell responded to the Department of Justice's threat of indictment. He said he thought it was because the Fed refused to "bow down" to Trump's demand for lower interest rates. Powell, in a somber tone, said: "It's about whether or not the Fed can continue to set rates based on economic and evidence-based conditions or if monetary policy is instead dictated by political pressures or intimidation." Trump has publicly criticized many prominent figures from business and politics. Few people have responded, particularly in the business and public policy world. Why did Powell refuse? Powell may have resisted because he is an institutionalist, and believes in the independence of the central bank. He's also a Republican who has been around for a while but respects the Washington bipartisan machine. He also seems to have the support of the public. Gallup's December poll showed Powell to be the most popular U.S. politician among 13 policymakers and legislators in the survey. Powell received a 44% rating of approval. Powell also scored highest among Independents. DEFENDER-IN-CHIEF Some things are inarguable when discussing Powell's legacy. As Powell's presumed replacement Kevin Warsh acknowledged last week, America is now?close to full employment. Powell can't claim all the glory. It is fair to say that the Fed, under his leadership, helped secure this outcome, which most policymakers, on a macro-level, would welcome. In July 2023 with interest rates at 5% I wrote a piece suggesting that if the U.S. had a "soft landing" - with no recession and?inflation close to target - in 2024, but only a mild decline with historically low unemployment, "Powell could lay claim to being the most effective Fed chief in the history." This scenario was largely realized, and he became the Fed's top defender. You like this column? Open Interest (ROI) is your new essential source of 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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Silver, zinc sales help boost Grupo Mexico profit 57% in first quarter
The mining and transportation conglomerate, Grupo Mexico, reported on Tuesday a 57% increase in profits in the first three months of the year compared to the same period last year. This was largely due to an increase in sales of silver and zinc. The group's net profit was $1.71 billion. The group's revenues grew 33%, to $5.57 Billion. This was above the $5.53 Billion estimate by LSEG analysts. The core earnings (earnings before interest, taxes, depreciation, and amortization) for the quarter ending March increased by nearly 50%, to $3.31 billion. Grupo Mexico is controlled by Mexican billionaire German Larrea and ranks as one of the world's biggest copper producers in terms of volume. Copper production in the first quarter was 258,138 tons, down by 2.8% from a year ago. This is mainly due to lower output in Peruvian mines. However, this was partly offset by increased production in mining units in Mexico, and the United States. In the first quarter 2026, silver and zinc production increased by 11,1% and 2,0%, respectively. The company has also maintained its target of achieving production of 1,03 million tonnes by 2026. The company said it was still reviewing its plans to?double mine production? and vertically integrate U.S. Asarco's mining unit with a smelter? and refinery? Grupo Mexico's?Southern Copper is developing Tia Maria, which is one of the largest mines in Peru and the third-largest copper producer in the world. The stalled project will begin operating in the third quarter 2027 according to a statement from the?conglomerate. The project has been completed to a 32.5% level. Local opposition to the mine, Peru's largest and most controversial development, is based on water usage and environmental concerns.
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Brown-Forman, the owner of Jack Daniel's and Pernod Ricard, has ended merger talks with Pernod Ricard.
Pernod Ricard & Brown-Forman announced that they had ended their merger talks after failing to reach mutually satisfactory terms. Last month, the companies announced that they had been in talks about a possible merger. This would have combined the second largest spirits producer in the world with the largest American whiskey producer. Sazerac American spirits group, which has brands such as Corazon Tequila and Svedka Vodka, emerged this month as a potential new bidder for Brown-Forman. Pernod Ricard said Tuesday that it remains confident and focused on its operating model and strategy, backed by a strong team of committed employees across the Group. Brown-Forman's shares fell about 5% during extended trading. The company said that it intends to focus its efforts on "strategic priorities" and "operational priorities", including "unlocking the future growth of our geographic footprint." DECISION WAS MUTUAL Pernod's spokesperson said that the decision was made "mutually" and in the best interest of the shareholders. The spokesperson explained that the decision was a "combination" of factors relating to economics and debt structure, not a single issue. Sources said that the family who controls Jack Daniel's preferred a sale to the French distiller rather than the competing proposal from Sazerac. Sources told us last week that the proposed terms of the Pernod merger, which would have included both cash and stock, allowed the Brown family to maintain a significant stake in the combined company and to have some influence. The Brown family has controlled Jack Daniel's since 1870. Sources familiar with the situation said that Sazerac, which is controlled by the Goldring family?, offered Brown-Forman $15 billion or $32 per stock. Industry advisors said Sazerac’s?approach? would require a cash?offer? and greater leverage, forcing the Brown family's control to be relinquished. Reporting by Aishwarya Venugopal, Abigail Summerville, and Emma Rumney, in London, and editing by Sriraj Kalluvila and David Gregorio.
Huayou, a Chinese company, has cut production at an Indonesian nickel factory as sulphur prices rise
Zhejiang Huayou Cobalt announced on Tuesday that the?Indonesian?unit will temporarily stop some production lines starting May?1, cutting about half of the plant's?output. This is after rising sulphur costs increased costs at one its key battery nickel projects.
In a press release, the Chinese nickel and copper maker stated that production at the Huafei Nickel Cobalt facility would be cut due to higher sulphur prices as well as the maintenance needed after a period of high-capacity production.
The company did not specify how long the interruption would last. The spot price of sulphur for Indonesia has risen to $800 per metric ton as the Iran War disrupted the production and shipping. About a quarter (25%) of the global sulphur is produced in this region, and 75% of Indonesia's supply comes from it.
Reports on April 14 stated that Huayou Resources, Lygend Resources, and Tsingshan group Indonesian HPAL producers had reduced output by at least 10% as a result of rising sulphur costs since March.
The Huafei outage is one of the most clear signs at the company level that the HPAL nickel sector in Indonesia, which uses high-pressure acid-leach (HPAL), is being hit by a global sulphur crunch.
HPAL plants process laterite ore using sulphuric acids to produce mixed hydroxide precipitate, a product intermediate used in electric vehicle battery production.
Huayou stated that it would "accelerate" the?process upgrades in order to reduce sulphuric acids consumption and expand sulphur supplies. Huayou said that it would also accelerate the development of nickel, cobalt, and lithium mining resources acquired through equity stakes and investment.
Huafei will generate 14.50 billion yuan (2.12 billion dollars) in revenue by 2025. This is 17.89% Huayou’s total revenue. Huayou's unit made a net profit of 1.25 billion yuan. Huayou received a share of attributable profits from the unit worth 569 million yuan or 9.32%.
(source: Reuters)