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Nickel prices rise on fears over supply via Hormuz
Nickel prices rose by nearly 2% Thursday, as concerns over traffic disruptions through the Strait of Hormuz triggered fears of sulphur shortages. Benchmark?three-month Nickel?on the London Metal Exchange rose 1.83% by 0300 GMT to $17110 per metric ton. The Shanghai Futures Exchange's most traded nickel contract was up 2.01% to 131,640 Yuan ($19.455.53) per metric ton. "Sulphur tightness expectations are fermenting again." This is mainly due to an increase in the cost of nickel's?high pressure acid leaching process", analysts at Chinese broker Jinrui Futures stated in a report. Indonesia, the world’s largest nickel producer, relies on the Middle East to provide about 75% the sulphur needed in sulphuric acids for leaching metals from ore. The U.S.-Iran blockade of the Strait of Hormuz, as well as military operations, have caused a disruption of shipments along this vital shipping route. The copper price was stable, thanks to a weaker U.S. Inflation data and the hope of a more dovish Federal Reserve. The price was also supported due to supply concerns and withdrawals from LME storage facilities. Metal prices rose by 0.17% in London and fell by 0.28% in Shanghai. U.S. Producer Prices posted their largest?decline?in 14 months 'in June. Data released on Wednesday added to a series of U.S. Reports that have cooled expectations regarding Federal Reserve interest rate increases. Reduced borrowing costs tend to boost economic activity and therefore, metal demand. Aluminium rose by 0.43% on the?LME, while?zinc increased by 0.58%. Lead added 0.35%, and tin fell 0.15%. The SHFE showed that aluminium fell 0.13%. Zinc dropped 0.87%. Lead dipped by 0.1%. Tin declined 1.67%. $1 = 6.7662 Chinese Yuan (Reporting and editing by Subhranshu Sahu).
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MORNING BID EUROPE - This AI will make money, right?
Stella Qiu gives us a look at what the future holds for European and global markets. The'monstrous' rally of Asian?chipmakers is now hitting a rough patch. The jitters can be seen in the extreme volatility of South Korea's KOSPI market, where 'wild swings' in chip giants like Samsung?Electronics or SK Hynix are a recurring occurrence. The index fell 6% on Friday, bringing it down to 27% below its peak in June and increasing the pain of some leveraged retail funds. This tumble is a confirmation of investors' concerns at a moment when everyone is concerned about the rising costs of AI capex - can this massive expenditure actually turn a profitable? The world is now watching the second-quarter results of Taiwan Semiconductor Manufacturing Co. (TSMC), which makes the advanced chips sold by Nvidia to 'power the AI revolution'. The expectations are that the chip giant will achieve a net profit increase of nearly 60% for the quarter. Even if it exceeds this, it may still not be enough. To avoid being "punished", a perfect report will be required, along with more than just rosy forecasts. Look at ASML results. While most Asian share markets are in the red due to the shift from memory and hard-ware, European futures seem to be less affected, with a more likely flat opening. Wall Street futures are 0.1% higher after a strong session overnight, thanks to lower inflation and solid bank earnings. Netflix, GE, and a few other banks, such as U.S. Bancorp, State Street and U.S. Bancorp, will release their results later. The U.S. retail sector is expected to grow by a modest 0.2% in June, following a 0.9% increase in May. However, the control group's sales are forecast at 0.5%. A dovish shift in Fed bond markets could be bolstered by any weakness, reducing concerns over demand. There's also the Middle East war, in which the U.S. military has launched another round of strikes against?Iran, while Tehran claims to have targeted an American troop gathering. It's because of this that Brent has risen 18% over the last two weeks, to $85 per barrel. Central?banks around the world are still wary. South Korea raised rates for the first?time?in three-and-a half years. Bond investors are relieved that the Fed's July price hike has been reduced to 10% from more than 40% earlier in the month. The following are key developments that could impact the markets on Thursday. TSMC to report earnings at 0530 GMT The UK's monthly GDP, industrial production and trade balances in May Earnings of Netflix, GE Aerospace Bancorp, State Street and Bancorp Kate Mayberry edited the following: U.S. retail sales for June, and weekly unemployment claims.
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Administrators say that Australia's sole manganese smelter will close.
Administrators announced on Thursday that Australia's sole manganese smelter in Tasmania, the Liberty Bell Bay Smelter will close immediately after a failed sale. The former British billionaire Sanjeev Gupta owned the smelter. It was placed under voluntary administration by March, after it had ceased operations in mid-last. In a'statement, EY stated that "in the absence of a commercially viable?transaction and the required funding to continue operations, the Administrators made the difficult decision to begin the orderly closure?of the?business with immediate effect." GFG did NOT immediately respond to a comment request. The smelter had been experiencing a period in which it was having difficulty supplying ore due to problems caused by cyclones and setbacks experienced at its key supplier Groote Eylandt Mining Company, South32. Tim Ayres, Minister of Industry, said that despite the federal and state governments' support, including A$10m ($6.99m) in wages and a A$20m?startup package and a continuation of a 10 year concessional power contract?struck last year with GFG Group, a serious buyer could not be found.
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Nuclear fuel company Standard Nuclear raises 150 million dollars in US IPO
Standard Nuclear announced on Wednesday that it has raised $150m in its U.S. initial public offering, after cutting its offer size by more than half. Investors remained cautious over 'valuations. The Oak Ridge, Tennessee nuclear fuel company, which sold 10,000,000 shares at $15 per share, valued it at about $2.41 Billion. The shares will begin trading at the New York Stock Exchange under "STDN" on July 16. Originally, the company had planned to sell 18.25 million shares between $18 and $21 per share. The IPO market is gaining momentum despite the geopolitical uncertainties, as the resilient equity markets are encouraging companies to go ahead with their listing plans. Investors continue to examine valuations. Nuclear-sector 'companies listed recently' have struggled to hold onto their debut gains. X-Energy, Deep Fission and other reactor developers are trading below their IPO price. Companies in this sector will benefit from the U.S. Government's push to expand the nuclear power industry. The goal is to quadruple the country's capacity of nuclear power by 2050 to meet the rising demand for electricity from AI-driven data centres, electric vehicles, and cryptocurrency. Standard Nuclear is a producer of nuclear fuels for advanced 'nuclear reactors. This includes small modular reactors as well as microreactors. The company focuses on scaling up domestic capacity. After the offering, Thomas Hendrix's?Class B shares will give him 60.8% of voting power in the company. Standard Nuclear intends to use the IPO proceeds for working capital, corporate purposes, and possible acquisitions - or investments in complementary businesses, technologie, or assets. Underwriters of the offering include Goldman Sachs, Barclays, and UBS Investment Bank.
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Bonds cheer lower inflation, while Asian shares fall on chipmaker drag
Asian shares dropped on Thursday, as chipmakers stumbled before results from bellwether TSMC. Bonds benefited 'from another benign reading of U.S. inflation which?lessened risk of an impending rate hike. As hostilities escalated in the Middle East, oil prices continued to rise. Washington has continued to strike Iran following the re-imposition of a naval blocade on its ports. Meanwhile, Tehran has warned of an "existential conflict" with America. Brent crude futures increased 0.6% to $85.45 per barrel, adding to the 12% gain this week. The quarterly earnings of Taiwan Semiconductor Manufacturing Co. (TSMC), world's leading manufacturer of advanced AI chip, are the focus. The company's net profit is expected to increase by 59% for the period April-June, marking a fifth consecutive quarter of record earnings. Investors are not happy as ASML shares, the dominant global supplier of equipment used to manufacture high-tech computer chip, ended 0.4% lower despite it raising its sales forecasts for 2026 and pledging a capacity increase. Brian Heavey said, in a JPMorgan note, that he was "seeing aggressive pullbacks in Memory/Hardware". Don't believe there is a 'negative headline' that's driving the semis/hardware sale. "I think it just shows how high semis earnings are." The?selling spread to Asia. MSCI's broadest Asia-Pacific index outside Japan fell 1.7%, while South Korea's KOSPI dropped 6.3% due to SK Hynix's 11% drop and Samsung's 8% decline. Japan's Nikkei dropped 3%. Taiwanese stocks fell by 0.5% while China's Hang Seng Index rose 1.2%. The South Korean central bank increased interest rates to 2.75 percent on Thursday for the first increase in three-and-a half years. This was done to stabilize a falling won and to combat persistent inflationary pressure. The decision was mostly as expected. Wall Street gained overnight, as investors shifted from semiconductors to Magnificent Seven and banks following strong earnings by major lenders. However, Asia is more susceptible to the chip selling-off due to its greater exposure to "semiconductor" stocks. BONDS CHEER COOL INSFLATION The surprising softness of the U.S. consumer inflation data in June was added to the positive figures for the previous day. Markets now price out the likelihood of a rate hike by the U.S. Federal Reserve within the next month to only 10% from 43% at the beginning. The pullback in inflation will likely only be temporary as oil prices are expected to rise due to renewed Middle East hostilities. The Wall Street Journal reported that President Donald Trump was leaning toward expanding U.S. operations in Iran and sending ground forces. Bond investors are however focused on the cooler inflation data. The yields on two-year Treasury bonds increased by 2 basis points, to 4.1493%. They had fallen 14 bps in the previous?two days. Ten-year yields remained at 4.5593% after falling 7 basis points over the last two days. The dollar fell against all currencies except the yen. The dollar index was steady at 100.48 after dropping 0.4% overnight, to the lowest level since June 18. The yen was hovering at 162.08, not far from its 40-year low 162.84, as speculators remain cautious of Japanese intervention. The pound reached a two-month high on the expectation that Andy Burnham will choose a fiscally conservative Finance Minister, if he is named Labour Party leader this Friday. The pound rose 0.1% to $1.3538 after a 1% surge overnight. Gold remained at $4,055 per ounce.
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El Nino could affect growth, warns Peru's central banking chief after weak May GDP
The chief of Peru's central banking Julio Velarde warned on Wednesday that El Nino would "likely" weigh on economic activity in the coming months, as it did in May when the country recorded its lowest growth rate for the year. According to data released by the national statistics agency INEI in May, Peru's GDP grew 1.8% from a year earlier. This is below the 3.2% predicted in a survey and slower than April's 3.73% growth. Velarde stated that "Perhaps, the figures we will see in 'the coming months won't be as?good because they are derived?from an existing natural phenomenon." He added that the overall economic climate remained favorable due to the "exceptional" price of the minerals exported by the country. The 73.1% drop in fishing output was the main factor behind 'the slowdown'. Warmer surface waters, linked to El Nino, pushed fish like anchovies deeper into the water. INEI reported that the manufacturing output fell by 10.7% as climate change affected the production cycle of textile?industry. Industry groups have warned that a strong El Nino can affect cotton production and lower the demand for winter clothing. It could also complicate logistics due to flooding and rains.
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BHP's quarterly iron ore price rises despite China's purchasing curbs
BHP Group reported record iron ore production and higher realised prices on Friday, despite the purchasing restrictions imposed by China Mineral Resources Group during tense contract talks earlier this summer. BHP's Western Australia iron ore operations produced 291.2 Mt of iron ore on a 100 percent basis, which is higher than the 290 Mt. In fiscal 2026, the average realized price for iron increased by 3% to $84.56 a wet ton. BHP didn't mention any price impacts from its annual negotiation with China's State Buyer, after reporting in April that?its biggest client had lifted its prohibition on certain products. China's state-owned buyer is flexing his muscles in annual price negotiations with big iron ore miner companies. It wants to take advantage of its size and pay less for the ore to lower costs for its steelmakers. The miner expects to produce between 284 and 296 Mt of ore in fiscal 2027 from its Western Australia operations. Visible Alpha's consensus for the quarter ending in 2026 was 75.1 Mt. The 77.5 Mt production of the same period last year was based on the Visible-Alpha consensus. BHP's Port Hedland Iron Ore Operations, which handles $80 million in iron ore per day, is set to strike later on Thursday. Negotiations are expected to resume next Tuesday. COPPER PERFORMANCE & OUTLOOK The quarterly production of Copper, which BHP views as a source of long-term value growth, reached 491,900 tonnes in the quarter ending June 30. This was largely in line?the Visible Alpha estimation of 492,700 tones and less than 516,200 tones reported last year. Major miners are focusing more on copper as the demand for it increases, driven by the rapid growth of power consumption by AI data centers and the transition to cleaner energies. The underground conveyor belt at Carrapateena was unable to function properly last quarter due to a 'unexpected failure'. This process of recovery and replacement is expected to affect mine production for eight weeks. The copper production is expected to fall by as much as 15% next year, due to a predicted grade decline at Escondida. BHP projected that unit costs for fiscal 2026 would be lower than its forecast range. This shows a strong cost management, and resilience to a challenging macroeconomic climate. Separately the miner announced approval of $900 million for the Ministers North Iron Ore?project, in Pilbara. First output is expected in fiscal year 2029. Early trade saw shares fall more than 1%, while the sub-index for mining fell by a little over 1%. BHP will release its annual results on 18 August.
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Sources say that China refineries are opting for less expensive crude oil in order to reduce their fuel oil consumption.
Industry sources say China's fuel demand will take a long time to recover after its imports hit a record low. Refiners reduced production and opted for cheaper crude as a result of the U.S. - Iran war. China's low demand for high-sulphur oil (HSFO), one of Asia’s largest importers, is expected to limit prices. This is despite the fact that the market has strengthened after Washington and Tehran intensified their attacks on the Middle East disrupting Gulf supply through the Strait of Hormuz. LSEG data show that the Asian refiners' margins for 380 centistoke HSFO rose to a discount of less than $2 a barge to Brent on March 13, which was the highest since more than a year. The?380cst HSFO crack for Dubai has risen to a premium of over $3.25 a barrel. A trading source at a Chinese refiner who refused to be identified due to commercial sensitivity said that "Regular crude oil currently trades at ICE levels between minus $5 and minus $8 a barrel." Fuel oil is no longer able to compete. In June, China's refinery run rates plummeted by a decade due to a weak domestic market and the export restrictions on refined oil products that followed the outbreak of conflict. The conflict has lowered the demand for fuel oil as an alternative to crude oil. Imports hit a record low in May According to LSEG data dating back to 2004, China's total imports of fuel oil in May fell to a monthly record low of approximately 559,000 metric tonnes (115,000 barrels). HSFO is a fuel that can be refined or used in marine fuel. According to Vortexa's ship-tracking data, June fuel oil imports totaled 700,000 to 800,00 tons. This is a slight increase from May, but still well below the typical import volume. In the first quarter 2026, China's fuel imports were about 2.29 millions tons per month compared to 1.8 million tons in 2025. Analysts and traders said that fuel oil imports may have recovered slightly in June and into July. However, they mainly used to refuel ships, not refineries. Chinese refineries import fuel oil primarily from Russia, as well as the Singapore and Malaysia trading hubs. According to Asian trading sources and refinery, the price of crude oil has also become more competitive. Traders said that spot offers for Russian straight-run oil fuel are currently muted due to low interest in buying. Russian fuel exports also fell as Ukraine intensified its attacks on Russian infrastructure. Chinese refiners are turning to discounted crude to take advantage of the additional?crude importquotas that were issued this year. Analysts said that while Beijing has eased the export restrictions for refined products, it is not clear whether this will lead to a rapid recovery in run rates or feedstock purchases.
China's Xi will outline AI diplomacy at a key Shanghai forum
Chinese President Xi Jinping will outline an ambitious vision of China's role as a global AI governance leader at a forum this Friday. Huawei is showcasing its most advanced AI computing cluster yet, in a move to create a domestic alternative to U.S. tech. Xi's first-time attendance at the World Artificial Intelligence Conference, or WAIC, underscores Beijing’s view that AI is both a key driver of global economic growth and a technology of strategic importance in the global competition. Huawei's Atlas 950 SuperPoD AI computing system, a large-scale AI computer system with a high performance will be unveiled at the forum from July 17-20 in Shanghai. This launch is the most clear demonstration yet of China’s efforts to build such systems without U.S.-based giant Nvidia’s most advanced chips.
The system, which is designed for AI inference and?training on a large scale, links thousands of Huawei Ascend AI processing units through high-speed connections so that they can operate as one computing cluster. DeepSeek V4's latest model was adapted to run on clusters created using Huawei Ascend chips. This shows the progress made by Chinese companies in creating AI ecosystems that are independent of U.S. tech. Chinese chipmakers Biren and MetaX, as well as other Chinese companies were reported to be releasing new "supernode computing clusters" in the domestic media.
AI GOVERNANCE
Washington and Beijing are preparing for their first government level AI talks under U.S. president Donald Trump's Administration. This gathering is a test to see how China will compete for influence on the rules that govern AI globally. Washington and Beijing presented competing 'visions' for AI governance during a UN AI dialogue last week. Washington argued that sweeping regulations would stifle technology breakthroughs, while Beijing promoted its open-source, low-cost AI models as public goods that would help bridge global AI inequalities. "In this context, WAIC is more than just a tech showcase. It's now a geopolitical platform where Beijing is trying to articulate its AI vision as a national priority, and also a diplomatic tool," wrote George Chen of the Asia Group.
Xi compared AI in a speech he gave in January to a "major technological transformation that followed the steam engine." Beijing has explicitly staked its future growth on spreading AI throughout the economy and achieving autonomy in frontier technologies.
At the last conference, China proposed a World AI Cooperation Organisation. However, no country has officially announced its membership.
The conference will coincide with a "High-Level Meeting" on Global AI Governance to be held in Shanghai. This meeting is expected to announce progress on WAICO as well as the implementation of the Global AI Governance Initiative.
OPEN SOURCE PROMOTION
Beijing will also?promote China's open source AI models as an alternative low-cost to Western offerings. They argue that they can widen access to the technology.
People's Daily published a commentary in which it stated that "AI development must not move towards a monopoly technology, but always remain anchored on the fundamental goal of helping humanity." WAIC will also feature international leaders such as UN Secretary-General Antonio Guterres and Kazakh President Kassym Jomart Tokayev, along with a number of other Chinese tech industry titans.
There will be nine Turing Award laureates and Nobel laureates in attendance, including deep-learning pioneers Yoshua Bengio and Richard Sutton. However, there is little representation from the major U.S. technology firms.
Unnamed Asian diplomat said: "China is making significant progress in building AI capacity with Southeast Asian countries and is presenting itself as a voice for developing countries that are left behind in AI race." Chinese media reported that AI agent smartphones will be launched at the forum by ZTE's Nubia, and AI startup StepFun. (Reporting and editing by Laurie Chen, Miyoung Kim, and Stephen Coates).
(source: Reuters)