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China's demand for iron ore is resilient in the near term
Iron ore futures prices rebounded Thursday as a result of a wave short-covering, with China, the top consumer, remaining resilient in near-term demand. However, concerns about escalating tensions on trade limited the upside. As of 0735 GMT, the benchmark April iron ore contracts on the Singapore Exchange rose 1.23% to $101.90 per metric ton. The daytime trading price of the most traded May iron ore contract at China's Dalian Commodity Exchange was 0.45% higher, closing at 780 Yuan ($107.68). "Prices are moving between $95 to $110 per ton, and whenever they drop below $100, we will see a quick rebound due to short-covering," said a Beijing iron ore trader, who requested anonymity because he was not authorized to speak to the media. The short-term outlook for hot metal production is that it will continue to recover, so prices are unlikely to fall dramatically, but downward pressure on prices will increase in the second half, as more supply comes online. Analysts at Hongyuan Futures stated in a report that hot metal production, which is typically used to gauge demand for iron ore, will increase in March, due to the attractive steel margins. The mounting trade frictions with China over its cheap steel products continue to be a drag on the demand for steel and steelmaking materials. The market's mood was dampened on Wednesday by the renewed talk of China's plans to reduce crude steel production to combat the industry-wide oversupply. The National Development and Reform Commission of China, the state planner in China, did not reply to a request for comment. Coking coal and coke, which are used to make steel, also advanced on the DCE. They both increased by 2.44% and respectively. The benchmark steel prices on the Shanghai Futures Exchange have gained ground. Hot-rolled coil rose 1.7%, rebar climbed 1.21%, wire rod increased 1.02%, and stainless steel gained 0.59%.
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Data shows that Indian refiners are replacing Russian oil with Latam and Africa in February.
Data from trade sources show that India's crude imports from Latin America, Africa and the Middle East increased marginally in February, as refiners sought alternative sources of oil, fearing a reduction in Russian oil supplies due to tighter U.S. sanction, based on data. After the West imposed sanctions against Moscow in response to its invasion of Ukraine 2022, South Asia became the largest buyer of Russian oil shipped by sea. The data show that in February, New Delhi's crude oil purchases from Moscow fell by 3% compared to January, to approximately 1.54 million barrels a day (bpd). This is the lowest share of Moscow among New Delhi's total crude purchases since January 2024. The data revealed that India's imports of oil from African countries rose from 143,000 barrels per day in January to 330,000 barrels per day in February. Those from South America also increased 60% to 453,600 barrels per day. Washington imposed sanctions in January on Russian producers and tankers. This resulted in a disruption of the supply coming from the No. The number two producer in the world, Russia, was hit with sweeping sanctions that tightened ship availability. The data revealed that the share of Latin America in India's total oil imports, which is the third largest oil consumer and importer in the world, rose to 9% in February, its highest level since December 2021. The data revealed that India took Argentinian Medanito oil for the first and rare time last month. The data shows that Indian refiners increased their purchases of Russian oil in advance of the deadline of February 27 set by the US to settle certain energy deals. Around half a dozen vessels carrying Russian oil arrived in Indian ports at the end of February and were released by March. In February, a slight decrease in the consumption of Russian oil boosted the oil share from the Organization of Petroleum Exporting Countries (OPEC) and West African countries.
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Commodities ignore Trump's noise and focus on fundamentals of trade: Russell
The best way to navigate the challenges that the U.S. president Donald Trump's inconsistent and erratic trade policies are posing for the global commodity markets is to ignore the noise and concentrate on the fundamentals. While the media focuses on every headline-grabbing announcement or social media post regarding new and retaliatory duties from the U.S. president and his administration the commodity markets continue to do what they have done in the past: adapt to rapidly changing conditions. It's important to distinguish between commodities that are already affected by Trump's policies and those likely to be impacted in the future. There may also be those who will not suffer direct effects, but could feel indirect effects due to a slower world economy. Steel and aluminum are included in the first group, with Trump's 25% tariffs now on all metal imports. Steel and aluminum prices are likely to rise in the United States as domestic producers cannot increase production significantly. The tariffs will be imposed on the consumers, who are likely to see the price of metals sourced from the United States increase as the local producers match the prices of imports. It is possible, in the long term, that U.S. producers of aluminium and steel will either increase their capacity and output or that foreign producers may build plants in the United States. If this is the case, it will depend on how companies view the tariffs and whether the U.S. economic situation is strong enough to justify the investment. Tariffs may cause some trade flow reordering for countries that do not sell metals to the United States. However, the greater risk is a global economic slowdown due to the reduction of trade, inflation, and competitive advantage. Trump is targeting crude oil and the copper industry, but from different perspectives. Trump has said he plans to impose a tariff on imports of copper, which is causing inventories to move from Asia and Europe into the United States. This in turn increases the price for U.S. Copper relative to other benchmarks around the world. This is a simple arbitrage game that will likely end as soon as the tariffs go into effect or not depending on what Trump decides. The global copper market will likely be relatively stable this year, as the Chinese economy is expected to have a greater impact, being the largest importer and producer of the metal in the world. MILITARY METALS One example of ignoring the noise and looking at the fundamentals is Trump's reported plans to build metals refinery facilities on U.S. Military bases in order to secure a supply of vital minerals. Trump is right to be concerned about China's control of much of the sourcing, processing, and distribution of minerals that are critical, including metals like copper, lithium, and cobalt as well as other minor metals, such as tungsten, and rare earths. It is not clear if building refineries on military bases is the best solution. Trump's actions do not seem to increase U.S. resources. Trump's bullying tactics and tariffs against friends and enemies alike have ruined the reputation and image of the United States. Anthony Albanese, Australia's Prime Minister, urged Australians to purchase local goods rather than U.S. products in response to Trump's tariffs. Albanese, in a radio broadcast on Thursday, said: "Buy Bundy instead of some American products... You can make an impact." Albanese was referring to the famous domestic rum. Australia has large reserves of many critical minerals. However, with Trump's treatment of the country as an enemy in trade it is becoming increasingly difficult to find cooperation for investment into developing mines and processing. Crude oil may also be affected by Trump’s policies but from a geopolitical perspective rather than tariffs. Prices will rise if Trump uses sanctions to reduce Iran's crude oil exports to zero. If he is able to achieve a deal for peace in Ukraine, this will likely be at Russia's terms, and may result in a easing of sanctions that could boost supply. If the trade war escalates, there is also a risk that U.S. oil exports will be included in retaliatory duties. This would force a reordering of global flow. The United States, the largest LNG shipper in the world, is at risk of getting caught up in trade wars. This has already begun with China's tariffs which will likely end Beijing's purchase of U.S. goods. Gold has quietly benefited from Trump's actions. Its price has risen to new highs, as investors look for a safe-haven. The fact that Trump hasn't mentioned gold in his list of tariff targets is important. Much of the current rise of precious metals, which is about 15%, since November's election win to Wednesday's closing price of $2,932.06 per ounce is due to U.S. investor buying. Metals Focus reports that from December to February, 600 metric tonnes of gold were transferred into CME-approved vaults. This has led to a tightening of the physical supply of gold in Asia, which is the region with highest demand. Gold is in some ways the poster child of how commodities should respond to Trump. Don't over-analyze the situation. Assess it, and act accordingly. These are the views of a columnist who writes for.
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Gold gains, but stocks fall as tariffs slash inflation relief
Stocks fell in Asia on Friday, reversing gains made earlier, as concerns about the impact of President Donald Trump’s trade policies surpassed early optimism based on a tepid U.S. inflation reading. The safe-haven Japanese yen rose, and U.S. Treasury yields fell. Crude oil prices fell as well. Hong Kong's Hang Seng fell 1.4% at 0545 GMT and mainland Chinese blue-chips dropped 0.7%. The Nikkei index of Japan gave up gains as high as 1.4% in order to trade flat last week, while Taiwanese stocks dropped by 1.1% and South Korea’s KOSPI fell by 0.4%. The Australian stock benchmark fell 0.5%, and now stands 10% below its February 14 record high. This confirms a technical adjustment. Futures indicate that Wall Street will open lower at reopening, with S&P futures down 0.5% and Nasdaq forwards down 0.8%. The price of the STOXX50 futures for Europe fell by 0.5%. The Wall Street rebound was led by the resurgent U.S. technology shares on Wednesday, after new data revealed that U.S. consumer price growth had slowed to its lowest rate since October of last month. Inflation figures were closely monitored following recent economic data that showed a softer tone, but they did not reflect the full impact of Trump's tariff campaign. Michael Brown, Senior Research Strategist at Pepperstone, said: "This market is still one that I feel cannot hold gains for the time being. This should be a huge old red flag to any potential dip-buyers out there." "Alongside my bearish equity tilt, I still favor a bullish view on bonds, especially as risks are increasingly tilting to the downside for U.S. economy." Trump's increased duties on all U.S. imports of steel and aluminum took effect on Tuesday, intensifying a campaign to reorder the global trade in favor of the U.S. In a note to clients, TD Securities analysts stated that "uncertainty continues in the air" as the outlook for inflationary consumer prices is still clouded by the trade policy developments. The impact of the recent tariffs on Chinese, Canadian, and Mexican products and the expectation of future announcements suggests that the worst is still to come. Gold prices rose by 0.5%, reaching $2,947.06, close to the previous record set on February 24, at $2,956.15. Treasury yields in the United States declined. The two-year yield fell by 2 basis points, to 3.974%. It had risen as high as 4,005% on Wednesday. The yen increased by 0.4%, to 147.70 dollars per yen. The euro fell 0.1% to $1.0879. Crude oil eased off after Wednesday's rally. Brent futures fell 0.3% to $70.77 per barrel while U.S. West Texas Intermediate futures dropped 0.4% to $67.34 a barrel. Kevin Buckland reported; Jacqueline Wong, Sam Holmes and Sam Holmes edited.
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South African coal miner Exxaro names a new CEO amid a profit slump
Exxaro Resources, a South African miner of coal, announced that veteran mining executive Ben Magara has been appointed as its new CEO, following the departure Nombasa Tsengwa. Magara is a former CEO at platinum miner Lonmin, and former executive of Anglo American. He will take over the CEO role on April 1, 2025. He will replace acting CEO Riaan Kopseschaar who will continue to serve as finance director. In a press release, Chairman Geoffrey Qhena stated that the new CEO will be expected to guide the coal miner in the face of declining profits as a result of lower prices for fossil fuels and to drive Exxaro’s diversification into transition minerals to green energy. South African miner, Exxaro, reported that its profit dropped to around 7 billion rand (381.44 millions) in 2024 from almost 11 billion a few years earlier. Exxaro reduced its dividend from 10.10 to 8.7 rands per share. Magara was the CEO of Lonmin, a platinum miner acquired by Sibanye Stillwater rival in 2019. He succeeds Tsengwa who resigned following a board investigation that was launched into her governance practices.
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Oil slips amid macroeconomic concerns despite firm demand expectations
The oil prices fell on Thursday, after an earlier surge on the back of a bigger-than-expected drop in gasoline stocks in the United States. Markets weighed macroeconomic worries against a firm demand in near-term. Brent futures dropped 5 cents, to $70.9 a bar by 0426 GMT. U.S. West Texas Intermediate crude oil futures lost 10 cents, to $67.58 a bar. Both benchmarks rallied about 2% on Wednesday as U.S. government data showed tighter-than-expected oil and fuel inventories. Analysts had predicted a 1.9 million barrel drop in gasoline stocks, but the actual decline was 5.7 million. Distillate stocks were also lower than expected - despite gains for crude oil stocks. Hiroyuki Kikakawa, Nissan Securities Investment's chief strategist, said that declining U.S. gas inventories increased expectations of a seasonal increase in demand for spring. However, concerns over the global impact of tariff wars on the economy weighed heavily on the market. He added that "with strong and weak factors moving simultaneously, it is difficult for the markets to lean in one direction." Donald Trump warned on Wednesday that he would escalate a global war of trade by imposing further tariffs on European Union products, while major U.S. trade partners announced they would retaliate against trade barriers already put in place by the U.S. President. Trump's focus on tariffs has shaken investors, consumers, and business confidence in the U.S. and raised recession fears. The Organization of the Petroleum Exporting Countries (OPEC) said that Kazakhstan was the leader in the OPEC+ group for a significant increase in crude production in February. This highlights the difficulty the producer group faces in enforcing adherence of agreed output targets. JP Morgan analysts noted that concerns about the sluggish demand for jet fuel weighed on markets. They also pointed out that U.S. Transportation Security Administration (TSA) data revealed passenger numbers in March had decreased by 5% compared to last year, after a stagnant February. The overall market was not as weak as expected due to the strong demand outlook. Analysts at JP Morgan said that the strong demand from the U.S. and Ukraine's 377 drones that targeted Russian energy infrastructures and military installations helped to support prices. They added that "as of March 11th, global oil demand averaged 102 million barrels a day. This is an increase of 1.7 million barrels compared to last year and exceeds our projection for the month."
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Singapore iron ore prices rise as China's demand remains resilient in the near term
Singapore iron ore contracts rebounded Thursday due to a wave short-covering, as the near-term Chinese demand remained resilient. However, concerns about the global trade war limited the upward trend. As of 0325 GMT, the benchmark April iron ore traded on Singapore Exchange was trading at $101.5 per metric ton. The iron ore market is essentially moving between $95-$110 per ton. Every time they drop below $100, the short-covering activity will soon kick in, said a Beijing-based trader, who requested anonymity because he was not authorized to speak to the media. In the short-term, the hot metal production is still recovering. Therefore, it's unlikely that we will see a dramatic fall in prices, although the downward pressure on prices will be stronger in the second half. Analysts at Hongyuan Futures stated in a report that hot metal production, which is typically used to gauge demand for iron ore, will increase in March, due to the attractive steel margins. However, the most traded May iron ore contract at China's Dalian Commodity Exchange closed morning trade 0.13% higher than its previous closing price of 775.5 Yuan ($107.18). Prices for the main steelmaking ingredient fell on Wednesday, as the market's mood was dampened by the renewed talk of China's plans to reduce crude steel production to combat the oversupply problems plaguing the industry. The National Development and Reform Commission of China, the state planner in China, did not reply to a request for comment. Coking coal and coke, which are used to make steel, also advanced on the DCE. They rose by 1.59% and 1.14 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have gained ground. Rebar rose by 0.71%. Hot-rolled coil gained 0.89%. Wire rod increased 0.7%. Stainless steel edged up 0.33%.
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Zinc at a 7-week high due to Nyrstar's production cut; metals are down on concerns about tariffs
London metals were mostly lower on Thursday, despite aggressive Trump tariffs. Zinc surged to more than a seven-week high after Nyrstar cut production in Australia. The U.S. president Donald Trump slammed Canada on Tuesday for its retaliation to his previous tariffs. He doubled the import duty for Canadian steel and aluminium, and kept rates at 25% for all other nations, and removed prior exemptions, exclusions, and quotas. As of 0341 GMT, the price for three-month zinc at the London Metal Exchange increased by 0.3% to $2932 per metric ton. The price of zinc reached a seven-week high earlier in the session, after Nyrstar announced on Wednesday that it would be cutting 25% from its Hobart Zinc operations in Australia starting in April. The company, owned by commodity traders Trafigura, said that its Australian assets are still facing significant financial challenges because of the worsening market conditions for raw materials, increased costs and negative treatment charges. In an email, Nyrstar said that the zinc smelter at Hobart is one of the largest in the world. It has a capacity of 260,000 metric tonnes per year. The company did not provide the most recent output figures. LME copper rose 0.1%, to $9,777 per ton. LME aluminium fell 0.2%, to $2698.5 per ton. Lead dropped 0.1%, to $2080. Tin eased by 0.1%, to $33,400. Nickel was down by 0.9%, to $16,495. The price of SHFE copper increased by 0.8%, to 79.490 yuan. (This is $10,892.44) A metric ton. SHFE aluminium, however, was unchanged at 20,930. $1 = 7.2307 Chinese Yuan Renminbi (Reporting and editing by Sumana Niddy and Janane Venkatraman).
High-flying zinc shrugs off European smelter restarts: Andy Home
Belgium's Nyrstar is reactivating the Budel zinc smelter in the Netherlands after a. fourmonth period of care and maintenance.
The company, managed by worldwide trade home Trafigura,. stated enhanced market conditions and the reinstatement of a Dutch. energy cost support scheme will allow the plant to reboot. later on this month, albeit not at complete annual capability of 315,000. metric loads.
It is the 2nd European smelter to come out of care and. upkeep this year after Glencore re-fired its. 165,000-ton-per year Nordenham smelter in Germany in February.
The zinc market seems to have taken the news in its stride. London Metal Exchange (LME) three-month metal struck a. 13-month high of $2,974 per lot on Tuesday. It is presently. trading simply shy of that level at $2,880.
Zinc is being buoyed by the wider circulation of financial investment money. into the base metals sector. But the zinc narrative has likewise. altered with focus moving from smelter restraints to mine. supply issues.
TIGHTER THAN ANTICIPATED MARKET
Smelter treatment charges have actually collapsed this year,. signalling a squeeze on the schedule of mined focuses.
This year's benchmark terms were set at $165 per load, down. from $274 in 2023. That is currently looking generous to smelters. Spot terms for Chinese import delivery have plunged to $30-50,. the lowest considering that 2018, according to price reporting firm. Fastmarkets.
This is the culmination of two years of falling mine. production. Worldwide mine output diminished by 2.3% in 2022 and by. another 1.2% in 2023, according to the International Lead and. Zinc Study Group (ILZSG).
The Group's latest forecast is for mine supply to enhance. this year but only by a minimal 0.7% and mainly thanks to the. ramp-up of the 250,000-ton-per year Kipushi mine in the. Democratic Republic of Congo.
Constrained raw materials supply will act as a brake on. refined production growth this year, according to ILZSG, which. now expects metal supply to grow by simply 0.6% this year,. compared with projection development of 3.3% when the Group last met in. October.
The sharp downgrade to worldwide output discusses why ILZSG has. cut its expected supply surplus for 2024 from an excess of 367,000. lots to a lot more minimal 56,000 loads.
ILZSG's rethink about mine supply and the sharp cut in. forecast surplus mirror the latest projections from sibling. organization the International Copper Study Hall.
There is, however, a key difference in between the two metals.
THE PRICE IS RIGHT
Copper's mine supply woes have mostly been because of. functional restrictions or, in the case of the closed Cobre. Panama mine, a supreme court mandate.
The majority of the zinc mines that have actually closed down over the last. year or so have done so in big part due to price.
The LME zinc cost plunged from a record high of $4,896 per. lot in March 2022 to a low of $2,215 in May 2023, leaving a. trail of rate casualties in its wake.
Nevertheless, the recent rally suggests that prices are now trading. around $400 per lot above the 90th percentile cost of. production, according to experts at Citi.
Every mine has its unique cost setup and for some. price alone may not suffice, but the higher the cost travels,. the greater the capacity for restarts.
Swedish manufacturer Boliden, for instance, has actually been. working out with unions at its Tara mine in Ireland on a brand-new. agreement that would pave the way for resuming operations after a. year of lack of exercise.
The results of a tally of union members are due on Friday,. according to regional news sources.
The rate has already voted.
FLUID LANDSCAPE
ILZSG approximates European zinc mine production fell by 6.2%. in 2023 and is forecasting another 7.9% slide this year due to. the closure of Tara and the Aljustrel mine in Portugal.
If Boliden gets its union contract at Tara, that will. alter simply as the reboot of the Budel and Nordenham smelters. changes refined metal dynamics, especially in Europe.
Zinc fundamentals are currently extremely fluid.
So is fund positioning on the London market.
Investment funds were collectively net short of zinc as. recently as February, when the LME cost was still listed below $2,500. per load.
They were net long to the tune of 27,036 contracts at the. close of last week. Straight-out long positions of 59,391 agreements. are the highest they've been because June 2022.
Investor bull positioning is still modest by comparison with. some of other base metals such as copper, which has stronger. energy transition qualifications.
It is likewise likely to be more unstable simply since zinc's. essential landscape is shifting so quick.
The opinions revealed here are those of the author, a. columnist .
(source: Reuters)