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Iron ore prices fall as China reports weak auto sales
Iron ore futures fell on Thursday as disappointing data about China's consumption and falling auto sales confirmed the weak demand for steel in the world's biggest consumer. The May contract for 'iron ore' on China’s Dalian Commodity Exchange traded 0.2% lower, at $762 yuan ($110.40), per metric ton. As of 0707 GMT, the benchmark March iron ore contract on Singapore Exchange was down 0.35% at $99.6 per ton. China's auto sales fell in January at the 'fastest pace for nearly two years, as the competition intensified in a cut-throat market. Automakers are battling fading government subsidies and softer demand. Data from the China Association of Automobile Manufacturers revealed on Wednesday that domestic sales fell 19.5%?from the previous year to 1.4million vehicles. This is the largest drop since February 2024. Steel demand has shifted from construction to manufacturing as China's property woes show little signs of improvement. The fastest-growing sub-sectors in the steel industry are automobile, appliance, and shipbuilding. According to Mysteel, data shows that by 2025, China will use around 53% more steel in manufacturing than construction. After China's central banks announcement, the mood of investors has improved slightly. Pledged To lend financial assistance to boost the domestic demand as industrial overcapitalisation, and lacklustre consumer confidence weighs on business confidence. There are a number of concerns. consumption data The report released on Wednesday highlighted the entrenched weakness of?demand? in the second largest economy. The consumer price index (CPI), which measures prices at the retail level, increased by 0.2% in one year. This is below the 0.4% increase projected in an? The producer price index (PPI), which is a measure of industrial firm profits, fell by 1.4% in the past year, continuing a trend of deflation that has lasted for years. Coking coal and coke, two other steelmaking ingredients listed on the DCE, also fell. They were down by 0.53% and 0.33% respectively. The Shanghai Futures Exchange?also saw a decline in steel benchmarks. Rebar fell 0.23%; stainless steel declined 0.18%; wire rod softened by 0.42%, and hot-rolled coil dropped 0.31%.
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MORNING BID EUROPE - Jobs in the rearview and earnings next
Ankur Banerjee gives us a look at what the European and global markets will be like tomorrow. Investors will be focusing on a slate of European earnings after the U.S. jobs report surprised many with its strength. This has led to expectations that the Federal Reserve would likely keep rates steady at least until the second half. The future of policy is dependent on the labour market and consumer price trends. Investors are reducing their bets on a Fed move in the near future, and the focus is now shifted to Friday's inflation data. The U.S. employment data presented a mixed picture. The headline figure was higher than expected, which 'hinted that the labour market may be doing well. But a closer look revealed?job consolidation and previous downward revisions showing underlying weakness. The current market pricing suggests that there is little chance of a rate cut in March. However, a possible move could be made in June. The Fed's shift in expectations has helped the dollar firm up a little bit against most currencies, except for the yen. It is now up 3% on the week after Prime Minister Takaichi won a resounding victory at the weekend. Takaichi's reassuring comments on fiscal policy have boosted the yen. Investors hope her victory will mean that the Takaichi Government is fiscally responsible, and does not have to bend down to opposition demands. The pan-European STOXX 600 closed at a new record high?on Wednesday?and futures indicate a higher opening ahead of earnings reports from Mercedes, world's largest brewer Anheuser-Busch?InBev, and luxury firm Hermes. LSEG data shows that the outlook for European 'corporate health' has improved. However, companies are expected to still report a 'decrease in fourth-quarter earnings, which could be the worst performance in the past seven quarters. The following are key developments that may influence the markets on Thursday. Economic events: UK GDP for Q4 and beyond Earnings: Mercedes Benz, Hermes, Anheuser-Busch Inbev and L'Oreal
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FT reports that four partners have left EY following potential breaches of Shell audit
The Financial Times reported that four partners had left EY after potential breaches in its audit of Shell, which led to the oil major dropping the accounting firm as its auditor. According to the report, public records and sources familiar with the matter indicate that the partners of one of the "Big Four" accounting and consulting networks left in December. It said that among the four partners who left was a partner who was?ascended to EY's highest ranks only a few months earlier and Gary Donald who led Shell audit. Earlier this month, Shell said it had chosen PricewaterhouseCoopers (PWC) as its next auditor after a tender process, with PwC set to ?replace EY from 2027. Shell stated in a regulatory filing made in July that EY had violated rules requiring an accounting firm to?change their lead audit partner at least every five or seven years. The British 'Financial Reporting Council' announced in December that it had launched an investigation into EY’s audit of Shell’s financial statements for 2024 due to possible breaches 'of audit partner rotation rules'. EY and Shell did not respond to requests for immediate comment.
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Nickel rally and iron ore prices rise as China's fiscal assistance promise lifts sentiment
Iron ore futures rose Thursday, as the promise of China's top consumer to lend monetary assistance?to boost a lacklustre demand boosted sentiment. The recent rally in nickel prices also helped. As of 0249 GMT, the most-traded contract for May?iron ore on China's Dalian Commodity Exchange was trading 0.33% higher. It was 766 yuan (US$110.98) per metric ton. The benchmark March ore price on the Singapore Exchange rose by 0.25% to $100.2 per tonne. Investor confidence was raised after China's central bank announced it would lend financial assistance to boost domestic consumption. Industrial overcapitalisation and lacklustre consumer spending are weighing on business confidence. GF Futures, a Chinese broker, said that the recent?rally of nickel prices helped boost sentiment towards other metals including iron ore and supported prices. China's auto sales fell at their fastest rate in two years in January as the competition intensified in a cutthroat industry where automakers struggle with government subsides fading, softening of demand and tighter regulation. Data from the China Association of Automobile Manufacturers on Wednesday showed that domestic sales fell 19.5% compared to a year ago, resulting in 1.4 million cars, which is the largest drop since February 2024. China's property woes are not improving, and demand for steel has shifted from construction to manufacturing. The fastest-growing sub-sectors in the industry include automobiles, appliances, and shipbuilding. According to data from the consultancy Mysteel, by 2025, China will use around 53% more steel in manufacturing, and 36% in construction. Coking coal and coke were both up or down by 0.18% on the DCE. The benchmarks for steel on the Shanghai Futures Exchange were also mixed. Rebar fell 0.03%, stainless steel declined 0.27% while wire rod rose 0.32%. Hot-rolled coil was unchanged. ($1 = 6.9019 yuan) (Reporting by Ruth Chai; Editing by Subhranshu Sahu)
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Indonesia takes a look at the decision to takeover Martabe Gold Mine
Indonesia has re-examined its decision to buy the 'Martabe' gold mine from a firm linked to Jardine Matheson. It had previously announced that it would transfer ownership of the mine to a state company. Indonesia has revoked permits for 28 companies that operate in northern Sumatra. This includes mine operator Agincourt Resources. The move follows accusations that environmental violations exacerbated the effects of landslides and floods that claimed at least 1200 lives late last year. Authorities have said that the assets would be transferred to Danantara Indonesia, a sovereign wealth fund. PT Perusahaan Mineral Nasional, or Perminas is a new company that Danantara set up to manage the'mine. Agincourt is a part of the conglomerate Astra International. Astra's largest shareholder is Jardine Matheson. As the takeover occurred without a court order, the?business community closely followed the fate of Martabe. Analysts say the future of the mine could have a significant impact on Indonesia's investment climate. Energy Minister Bahlil lahadalia stated in a video posted on the Presidential Office's YouTube account that "the president has ordered... to check and if there were not violations, we must return the rights of investors." He added, "If there were violations, we mete out proportional penalties." Bahlil said that the final decision will be announced soon. Agincourt didn't immediately reply to a comment request. It was not immediately clear whether the government would review its acquisition of assets that were previously owned by another company.
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South32, Australia's South32, confirms winding down of Mozambique factory after beating profit targets
South32, an Australian diversified mining company, reaffirmed that it would put its Mozambique aluminum plant on care and maintenance in the next month after a drought affected power supply. It posted a first-half profit higher than analysts' expectations on Thursday. The announcement comes just days after Mozambique Energy Minister Estevao Palae stated that "the government will do everything required to ensure that the (Mozal ) plant does not go into maintenance." South32 took a $372-million impairment last year on its business due to the impact of the drought on Mozambique’s hydroelectric power utility. South32 was unable to reach a deal with Eskom, the South African utility that provides back-up power, at a reasonable price. "Unfortunately,... reality is that we are running out of things within the next week, or so, of pitch and?coke, and even though we find a power contract, it would not arrive in time for us to keep the plant running. We're heading towards care and maintenance, said South32's incoming CEO Graham Kerr on an earnings call. He said that the miner employs more than 2,000 people in Mozambique directly and another 2,000 through contractors. The plant is responsible for one-third of all manufacturing jobs in the country. Kerr said that the Middle East will most likely receive the alumina that was intended for the smelter. Earnings rise, shares rally South32's earnings for the first half of the year ended December 31 were $435 million, exceeding the Visible Alpha consensus forecast of $386.6 millions and surpassing the $375million earned a year ago. Shares rose as much as 5%. The world's largest manganese producer said that the first-half gains in earnings were largely driven by higher commodity prices - notably copper and silver -, lower controllable costs, and the restarting of its manganese operations in Australia. The manganese division in Australia has turned a profit, with earnings before taxes and interest of $66 millions, up from $34 million a year earlier, as it normalised its production rate following the effects of Tropical Cyclone Megan. The?miner has reduced its production guidance for Brazil aluminium to 135,000 tons from 160,000 tonns this year, and to 140,000 tonns from 165,000 tonns next year. South32 reported that the smelter operator was implementing measures to improve stability and increase production on all three potlines. South32, the company that was spun off in 2015 from BHP, announced an interim dividend per share of 3.9 cents, up from 3.4 cents last year. Reporting by Melanie Burton from Melbourne and Sherin sunny in Bengaluru, with editing by Krishna Chandra Eluri & Jamie Freed
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Oil prices increase on fears of tensions between the US and Iran
Investors worried about the escalating tensions between Iran and the U.S. pushed up oil prices on Thursday morning. Brent crude oil futures were up 34 cents or 0.49% at $69.74 per barrel at 0126 GMT. U.S. West Texas Intermediate Crude climbed 37 cents or 0.57% to $65.00. Both benchmarks closed higher on Wednesday. Brent futures rose 0.87%, and WTI more than 1.05% as investor concerns about U.S. - Iran tensions overshadowed a rise in U.S. oil stocks. After talks with Israeli Premier Benjamin Netanyahu, Donald Trump stated that the two leaders had not reached a "definitive agreement" on how to proceed with Iran. However, he insisted that negotiations with Tehran will continue. Trump announced on?Tuesday that he would consider sending a second carrier to the Middle East in case a deal with Iran is not struck, as Washington and Tehran were preparing to resume their talks. Last week, U.S. diplomats and Iranian diplomats had?indirect discussions in Oman. Date and location of the next 'round of U.S. - Iran talks are yet to be announced. Tony Sycamore, IG analyst, said that a sustained break above a level of $65-$66 would require further escalation on the Middle East. Any de-escalation, however, could trigger a rapid profit-taking down to $60-$61 for WTI. The Labor Department reported that U.S. jobs growth unexpectedly increased in January, and the unemployment rate dropped to 4.3%. This is a sign of health for the economy. Mingyu Gao is the chief researcher at China Futures for energy and chemicals. The 'heavy build-up in U.S. crude stocks' has capped the price increases. The Energy Information Administration reported that U.S. crude stocks grew by 8.5 million barrels, to 428.8 millions barrels, last week. This was far more than analysts expected in a poll, which predicted a rise of 793,000 barrels. Gao said that since the beginning of the year 'global oil inventories have been below expectations, and that net long positions on overseas crude oil futures?and options?have not yet reached overweight levels. Gao said that oil prices will likely remain on the rise, due to the U.S. Iran situation, the tightening of sanctions against Russian oil, and the expectation of lower exports.
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Northern Star's first-half profits surge 49%, a record for the company.
Northern Star Resources, Australia, reported a 49% increase in its first-half profits on Thursday. The higher gold prices boosted the profit, sending shares to record highs. The benchmark index was up 0.6% at 0044 GMT. Shares of the firm rose 6.7%, reaching a new high of A$30.16. They were also among the top gainers. Northern Star has announced an interim dividend of 25 Australian cents. This is the same as last year. Gold miner reports a 19% increase in revenue for the half-year period to A$3.41billion, driven by an increase of 31% in its average gold price. The half-year gold sales were 729,000 ounces, down from the 804,000 ounces sold a year ago. After a half-year review, the company posted an impairment charge of A$77.6M. Cost of sales for the miner rose by 9% during the period reported, due to increased mining activity and higher expenses on crushing and maintenance, as well as inflationary pressures in labour rates and contractor rates. This?brought the underlying net profit of A$759.8 (US$541 million) to A$759.8?millions for the half-year period ended December 31 compared to A$511.5?millions a year ago. The miner reduced its outlook for fiscal year 2026?group production to 1,600-1700koz compared to?1,700-1.850koz last month. This was due in part, because of weaker gold sales across all three centres during the December quarter.
Iron ore dips as falling need weighs
Iron ore futures rates moved on Monday as some investors and traders liquidated particular long positions to cash in revenues on bets of faltering demand entering seasonally slack steel demand season in leading customer China, while deliveries increased.
The most-traded September iron ore agreement on China's. Dalian Product Exchange (DCE) ended morning trade. 0.88% lower at 901 yuan ($ 124.36) a metric heap.
The benchmark June iron ore on the Singapore. Exchange was 0.95% lower at $119.65 a lot, since 0358 GMT.
A seasonally slowing need for steel items will also. drag down usage for iron ore, analysts at Sinosteel. Futures stated in a note.
On the other hand, the worldwide weekly iron ore shipments have been. above 30 million tons for five straight weeks, and shipments. from some mainstream suppliers are slowly swinging back into. the uptrend. High supply and reasonably weak demand collectively. contributed to the relentless pick-up in portside inventories. even at a time when stocks usually fall, they included.
Weighing on belief is likewise a loss of 22.22 billion yuan. in the very first four months in the steel industry, although China's. commercial revenues swung back into favorable territory in April,. data from the nation's National Bureau of Stats revealed.
Other steelmaking active ingredients on the DCE likewise lost ground,. with coking coal and coke down 1.19% and. 0.11%, respectively.
The majority of steel standards on the Shanghai Futures Exchange were. down on lower basic materials rates and slowing downstream. need.
Rebar lost 0.53%, hot-rolled coil fell. 0.61%, wire rod dipped 0.32%, while stainless-steel. included 0.55%.
Steel demand has rather declined with deal volumes. falling and destocking decreasing, analysts at Everbright. Futures stated in a note.
(source: Reuters)