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Asian stocks fall as oil prices rise after Trump's Hormuz levies threat
Tuesday, oil prices rose and stocks fell in Asian trading after Donald Trump announced that the U.S. would re-impose its blockade of Iranian ships in the Gulf and charge a 20% surcharge on all cargo crossing Strait of Hormuz. After a volatile session, MSCI’s broadest Asia-Pacific share index outside Japan fell 1.7%. The biggest declines were in South Korea and Taiwan, where shares at their lowest points exceeded 3%. Japan's Nikkei fell by 0.8% while S&P500 e-minis futures declined by 0.3%. The CSI 300, the benchmark for Chinese stocks, fell 0.4% less than the regional index after Tuesday's export and import figures beat expectations. Brent crude futures rose 1.7% to $84.72 per barrel after hitting their highest level since mid-June, $85.64. The markets were also shaken by the hawkish remarks made on Monday by Federal Reserve Governor Christopher Waller. He said that the U.S. Central Bank may have to raise interest rates in the near future if inflation continues well above its 2% target. The U.S. CPI is expected to be released later Tuesday. Kevin Warsh will then deliver the semi-annual report of the Federal Reserve's monetary policy to Congress. Chris Weston of Pepperstone, Melbourne's head of research, stated that "markets reacted aggressively to the recent headlines about the Iran conflict." The prospect of tighter monetary policies into a possible energy shock rarely supports risk assets. Overnight, Wall Street stocks fell and oil futures soared by more than 9%, as the conflict between Iran and the U.S. re-emerged, once again slowing the flow of goods across the Strait of Hormuz. The S&P 500 ended 0.8% lower, and the Nasdaq Composite dropped 1.6%. Fed funds futures are pricing in an implied probability of 43.3% for a 25 basis-point increase at the U.S. Central Bank's next two day meeting on July 28 and 29, compared to 34.2% on Friday. This is according to CME Group's FedWatch. The yield on the 10-year Treasury bond in the United States was up 1.6 points to 4.624%. The U.S. Dollar Index, which measures the strength of the 'greenback against a basket?six currencies - dipped 0.1% to 101.18. It was trading at its highest levels for the month. Gold rose 0.3% to $4,012.37. Vis Nayar, Eastspring Investments chief investment officer, said in a recent note that the risk of a resurgence in U.S. - Iran tensions is primarily due to the impact higher energy prices have on currencies and interest rates. "Continually higher oil prices will increase the likelihood that the U.S. Federal Reserve will raise the Fed funds rate this year." Taiwan's benchmark index? fell to a new low in Taipei and led regional declines. Seoul's?stocks fluctuated between positive and negative territory, as shares of?SK Hynix fluctuated between gains and losses. They fell as much as 5,6% after a rally. The memory chipmaker's volatility comes after its dramatic drop a day before following its Nasdaq launch last week. (Reporting by Gregor Stuart Hunter; Editing by Muralikumar Anantharaman and Kevin Buckland) (Reporting and editing by Muralikumar Anaantharaman, Kevin Buckland, and Gregor Stuart Hunter)
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China's June imports of iron ore are at a six-month high due to robust shipments and resilient demand
China's imports of iron ore in June increased by 15% compared to the previous month, reaching a six-month record. This was due to miners increasing shipments to meet quarterly targets and lower prices encouraging more buyers among steelmakers and traders. Data from China's General Administration of Customs revealed that the world's largest iron ore importer imported 112,69?million tons of the key ingredient in steelmaking last month. This was up 6.4% on the previous year and the highest amount since December. Analyst Qingwei Xie at Shanghai Metals Market said that "shipments increased last months as some miners increased efforts to meet quarter guidance and as certain mines boosted production." Data from the shipping tracking agency Kpler revealed that iron ore exports to major suppliers Australia, Brazil and South Africa increased by 4.3% in late June. Hot metal production remained high?in the month of June, Xie said. Mysteel data showed that the average daily hot metal production in June, which is a measure of iron ore consumption, was 0.7% higher than it was in May. Analysts said that some cargoes cleared customs in June, but arrived as early as May. This contributed to the increase in ore imports. The price of this key ingredient in steelmaking fell by 4.7% during the month, as energy and freight prices dropped due to the tentative agreements between the United States & Iran. China's imports of iron ore totalled 628.87 millions tons between January-June, a 6.3% increase on an annual basis. Steel exports in China in June were high, despite a small monthly drop. This was due to a lackluster domestic market and competitive prices on the export market. Exports in June, which totaled 10.32 million tonnes, were 0.2% lower than the previous month, but 6.6% higher than the same period last year. Last month, steel consumption declined as high temperatures and heavy rains in certain?regions curbed building. This encouraged mills export more steel products. Last month, export prices dropped in line with the trend on the domestic market. This made Chinese steel more competitive against its international rivals. The Iran conflict has disrupted the flow of steel from the Gulf and prompted Middle Eastern customers to look for alternatives. Steel exports fell by 5.6% in the first half of this year to 54.87 millions tons. (Reporting and editing by Amy Lv, Lewis Jackson and Kate Mayberry.
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Trump reduces the size of two Utah National Monuments
The White House reported that U.S. president Donald 'Trump' signed orders on Monday reducing the size of 2 national monuments by over 90% in order to allow for motorized recreation, logging, and other resource developments in the area. The Bears Ears National Monument was reduced to 121.100 acres (49,000 ha) from 1.36 million acres and the Grand Staircase-Escalante National Monument was cut to 181,500 from 1.87 millions acres. Earthjustice, an environmental?group, said that it would "maintain protections for these precious landscapes" by taking legal action. Trump announced the news?at The White House with Utah Governor Spencer Cox, and Utah's two U.S. Senators, Mike Lee, and John Curtis. Trump stated that "we're doing something very drastic and very important for people in?Utah and people in?our country because many people use this." Joe Biden, the former president of the United States, expanded the monuments despite the opposition from Utah officials. Former President Barack Obama established Bears Ears in 2016. The monument is named after twin buttes which resemble the head of a bear on the horizon. It contains cultural and archaeological sites sacred to many Native American tribes. Bill Clinton, former president of the United States, established Grand Staircase-Escalante in 1996. Over the past two decades, numerous dinosaur fossils were found at 'the monument, which is known for its colorful rock formations. Trump has dismissed environmental and cultural preservation projects in the past. Senator?Martin Heinrich of New Mexico, a Democrat whose State borders southern Utah, criticized the President's decision. Heinrich stated in a?statement that this administration had repeatedly put the interests billionaires and powerful industry ahead of the?America's?public lands and their owners. "They're once again ignoring Tribal Voices, marginalizing local communities, and endangering places that belong every American." (Reporting and editing by Sonali Freed and Jamie Freed; reporting by Gram Slattery in Washington, Kanishka Singh and Nichola Slattery in Los Angeles.
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Asia markets are choppy due to Trump's threat of a levy on the Gulf of Hormuz.
The stock market fluctuated between gains and losses on Tuesday, and oil reached a new high of one month in early Asian trading after President Donald Trump announced that the U.S. would re-impose its blockade of Iranian ships in the Gulf. He also said the U.S. would charge a 20% surcharge on all cargo crossing the Strait of Hormuz. MSCI's broadest Asia-Pacific share index outside Japan rose by 0.4% in a volatile session. The gains were led by 2.2% for Korean shares. Japan's Nikkei was up by 0.2% while S&P500 e-minis futures were down 0.1%. Brent crude futures rose 2.6% to $85.50 per barrel, the highest price since mid-June. Trading resumed in Asia. The markets were also shaken by the hawkish remarks made on Monday by Federal Reserve Governor Christopher Waller. He said that the U.S. Central Bank may have to increase interest rates in the near future if inflation continues well above its 2% target. Chris Weston of Pepperstone Group Ltd, Melbourne, stated that "markets reacted aggressively to the recent headlines about the Iran conflict." The prospect of tighter monetary policies into a possible energy shock rarely supports risk assets. Overnight, Wall Street stocks fell and oil futures soared by more than 9%, as the conflict between Iran and the United States re-ignited and once again choked the flow of goods across the Strait of Hormuz. The S&P 500 ended 0.8% lower, while the Nasdaq Composite dropped 1.6%. The U.S. CPI is expected to be released later on Tuesday, and then Fed Chair Warsh will give the semi-annual monetary report of the central bank. Fed funds futures price in an implied 43.3% chance of a 25 basis-point 'hike' at the U.S. Central Bank's next two day meeting on July 28 and 29, compared to a 34.2% chance last Friday, according to the CME Group’s FedWatch tool. The yield on the 10-year Treasury Bond in the United States was up 2.2 basis point at 4.6297%. The U.S. Dollar Index, which measures the strength of the greenback against a basket six currencies, was at 101.29 and trading near its highest levels for the month. Gold fell 0.1% to $3,997.27. Stocks in Seoul fluctuated between positive and negative territory on Tuesday, as shares of SK Hynix fell as much as 4.7% in the opening minutes of trading, before rallying and trading up to 4.6% higher. The memory chipmaker's volatility comes after its dramatic drop a day before following its Nasdaq launch last week. Bitcoin was up 0.3% to $62,318.43, while ether rose 0.7% to $1,777.63. (Reporting and editing by Muralikumar Aantharaman; Reporting by Gregor Stuart Hunter)
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Australia blocks the voting rights of certain China-linked investors at Northern Minerals
Northern Minerals announced?on?Tuesday that Australian Treasurer, Jim?Chalmers, has ordered three 'offshore 'investment firms - including Hong Kong Ying Tak - to refrain from exercising voting rights within the rare earths developer. Foreign Investment Review Board of Australia (FIRB) has said that Hong Kong Ying Tak and?British Virgin Islands registered Real International Resources as well as Hong Kong registered?Qogir Trading & Service have failed to comply to earlier government 'orders to reduce stakes in Northern Minerals. In May, Treasurer Chalmers?ordered offshore shareholders to divest by July?2 their?holdings over concerns that Chinese-linked groups were seeking control of rare-earths mining company. Ying Tak's phone number and email address are not listed in the Hong Kong companies registry. Adam Handley, Northern Minerals' Executive Chair, said that the Federal Treasurer had issued interim instructions regarding compliance with his May Disposal orders. Handley stated that a review of Northern Minerals' share registry on July 10 found that the majority of shares covered by May divestment were still held by the investors targeted by these orders.
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Oil reaches a one-month high after US and Iran intensify attacks on Strait of Hormuz
The price of oil rose 2% to its highest level in four weeks on Tuesday as the U.S. reimposed a naval blockade of?Iran and the U.S. and Iran intensified their attacks in the Strait of?Hormuz. This increased uncertainty over?energy flow. Brent crude futures rose $1.68 or 2% to $84.98 a barrel at 0051 GMT. U.S. West Texas Intermediate Crude gained $1.65 or 2.1% to $79.79 a barrel. Brent crude gained 9.6% during the previous session. This was its largest daily gain since May 2019. The oil prices have reached their highest level since June 17, when the two countries signed an agreement to end the conflict. The UAE Ministry of Defence announced on Monday that two United Arab Emirates tanks were struck by "two Iranian cruise missiles" in the southern lane of Strait of Hormuz, in Omani territory waters. One Indian crew member was killed and eight others injured. Donald Trump, the U.S. president, told reporters the United States has reinstated the blockade of Iranian ships, and that he wants to be reimbursed by the U.S. for helping countries in the Strait of Hormuz. Tim Waterer, chief market analyst at KCM Trade, said that the latest escalation has brought new risks to the market. He added that, "While there hasn't been a complete closure yet, the conflicting objectives of both parties have made the supply situation highly uncertain." U.S. Central Command announced that it had begun a third night of attacks against Iran. Meanwhile, the semi-official YJC News Agency in Tehran reported early on Tuesday morning that seven explosions could be heard near Bandar Abbas port and two others on Kish Island. Yemen's Houthi group also fired missiles towards Saudi Arabia, accusing the kingdom of having bombed an airport that it controlled on Monday. Simon Wong, portfolio manager at Gabelli Funds said in a recent note that if the Houthis continue their attack on Saudi crude oil products in the Red Sea it would create (further?) uncertainty for crude shipments from the region. A preliminary poll conducted on Monday showed that U.S. crude stockpiles are expected to have declined last week while gasoline and distillate inventories likely increased. (Reporting by Ishaan Arora in Bengaluru; Editing by Jamie Freed)
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Vault and Genesis merge to create an $8.71 billion Australian gold company
Genesis Minerals announced that it had 'agreed' to buy smaller rival?Vault Minerals?in a transaction which would make Australia the third largest gold producer, with a market cap of approximately A$12.6billion ($8.71billion). Regis Resources dropped its pursuit of Vault after stating the terms required to match Genesis’ offer did not meet their value and return goals. The rival bid from 'Genesis,' announced last week, valued Vault at A$5.6 billion and was 15.7% higher than the closing price of Vault at that time. Due to the close proximity of their respective operations in Western Australia, Bardoc-Mount Monger and Leonora, the combination is expected to yield a?synergy of A$2 billion. This could allow Genesis to mill its higher-grade ore through Vault, rather than having to expand their own processing plant. Genesis shareholders will own around 59.8%, and?Vault shares the remaining 40%. The Vault board unanimously approved the plan. The combined entity will have a board that consists of four Genesis directors and 3 Vault directors. Russell Clark, the non-executive chairman of Vault, will remain in his role at the combined group. Genesis CEO Matt Nixon is to be named 'chief executive officer' of the merged entity. Vault and Regis?shares?were down by as much as 2,2% and 2.7% respectively, parallel to a 3% drop?in ASX's gold sub-index. Bullion prices fell 3% in one day as tensions in the Middle East increased the likelihood of longer-term interest rates in the United States.
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Iraqi Prime Minister seeks large energy investment on US visit
Zaidi Bets on US Companies to Stimulate Energy Sector The Iran War has caused a major economic blow to Iraq Zaidi to meet Trump for possible deals Written by?Ahmed Rasheed & Muayad Haeed BAGHDAD (July 13) - Iraqi Prime Minister Ali al-Zaidi hopes to secure significant U.S. investments in his country's energy, oil, and gas sectors, during a trip to the White House, this week. The Iran War has impacted crude production and the state finances. Analysts say that Iraq's government has a growing focus on diversifying international relationships to better deal with regional instability. This agenda is expected to be a major part of the visit from July 13 to 18th. This is one of the most direct attempts to date to attract major U.S. investments into a sector that has long been dominated by Chinese and Russian firms. Iraqi officials, however, reject any suggestion Baghdad was distancing themselves from their close ally Tehran for closer ties with Washington. Ahmed Younis, a political analyst based in Baghdad, said that the Iran war marked a turning-point. It highlighted the dangers of relying too heavily on a single partner in the region. He said that "Zaidi believes energy is the fastest way to deepen cooperation with Washington." According to Iraqi officials and U.S. government officials, the effort involves negotiations with Chevron on major upstream projects; support for U.S. backed power and liquefied gas ventures;?security assurances for American operators operating in Iraq's semiautonomous Kurdistan Region, and revived export pipeline plans linking Iraq to Mediterranean markets. Zaidi’s cabinet has approved a number of initiatives, including an agreement with HKN Energy, based in the United States, to develop the Himreen Oilfield in northern Iraq. The government also authorized the Electricity Ministry, which is responsible for negotiating a comprehensive agreement with General Electric to expand Iraq's transmission and generation infrastructure. Zaidi stated that the government planned to increase oil production "significantly" within three years. This was according to a press release from his office. The remarks were made during a Washington meeting with Iraqi Christian businesspeople, who he encouraged to invest in education, healthcare, and petroleum products. These deals will be the focus of a discussion between Zaidi, an Iraqi multimillionaire, who was appointed in May, as well as Donald Trump, U.S. president, who has given Zaidi strong support. Zaidi stated in a press release issued before the trip that "we have instructed the Ministries of Oil and Electricity to give priority in their procurement to American companies with reputable track records in the fields of energy, technology, and telecommunications." Focus on U.S. Companies vs. Chinese, Russian and European companies Analysts say it will be difficult to attract enough investment for the development of oilfields, and fixing infrastructure bottlenecks which have prevented sustained increases in production. A document that was seen by showed that the Iraqi Cabinet instructed the Basra Oil Company, the state-run oil company in Iraq, to exempt U.S. companies involved in energy project discussions from certain regulatory requirements relating to preliminary agreements in early June. Mohammed Abbas is an energy consultant and former manager of the Basra Oil Company, which is run by the state. "Zaidi uses Iraq's oil sector to strengthen relations with Washington, and to change the perception of some U.S. major energy companies that Iraq is not a conducive environment for large-scale investments." Four Iraqi oil officials who are familiar with the discussions with U.S. companies, including Chevron and ExxonMobil -- as well as?HKN -- have said that the move underscores Baghdad's broader efforts to deepen its economic cooperation with the United States. Iraq is attempting to reach out as it faces the same challenge as many other oil-producing countries: attracting investors and increasing production while remaining constrained by OPEC+ producer's group output limits. Iraq has some of the largest crude oil reserves in the world, but long-standing production restrictions have made it difficult to increase revenues to support an ever-growing population. Iraq's strategy has been shaped by its negotiations with Chevron. Chevron began exclusive talks with Iraq earlier this year over the West Qurna-2 Oilfield after Baghdad replaced Russia's Lukoil, the?operator. This could have given the U.S. firm control over one of Iraq's largest and most productive assets. Iraqi legislators and analysts have indicated that the energy initiatives of the government are meant to signal Washington that Iraq has become a more attractive location for international investment following years of'security concerns, bureaucratic obstacles, and legal disputes. The security situation has significantly improved since the defeat of Islamic State a decade back, but periodic drone attacks and tensions in the region continue to be a threat to energy infrastructure. Iraqi officials claim that security measures around oil installations have been strengthened since the Iran conflict. Additional measures are also being taken to reassure foreign energy companies. "Prime Minister Zaidi is a businessman and knows that winning over American companies to invest in Iraq, especially with the fragile security situation in the region, is not an easy task," said Murad ISMAEL, a member of Iraq's oil and gas parliamentary committee. (Reporting and editing by Michael Georgy and Aidan Lewis; Additional reporting by Enas Alashray; and Lincoln Feast.
BRICS nations raise power emissions to new highs over rest of world: Maguire
The BRICS group of major emerging economies Brazil, Russia, India, China and South Africa emitted a record 1.98 billion metric tons of co2 from power generation during the first quarter of 2024, information from energy think tank Ember programs.
That emissions toll was approximately 500 million heaps higher than the whole emissions load generated by the rest of the world combined and highlights the diverging pollution trends between key fast-growing economies and most developed nations.
A compounding issue for emissions trackers is a potential deterioration in trade relations between BRICS members and the United States and its allies, and the possibility that BRICS members focus on financial development over decarbonization efforts.
Together, the BRICS nations account for more than 40% of the world's population and around a quarter of the worldwide economy, and so hold considerable influence when banded together.
The bloc was established as a casual club in 2009 to challenge a world order dominated by western economies, and over 40 other nations including Indonesia, Saudi Arabia, Egypt and Kazakhstan have revealed interest in signing up with the forum.
If the present BRICS group opts to integrate ambitious members, the brand-new club could have the means to mostly overlook western financial pressure to reduce pollution, as growing trade and investment within the new BRICS bloc could provide a guard against blowback by western-affiliated trade partners.
HEAVY HITTERS
China and India alone accounted for over 90% of the BRICS emissions total throughout the first quarter, highlighting how focused power contamination is within the BRICS bloc due to high coal usage by Asian countries.
China and India are likewise perhaps the most prominent members of the BRICS, with the power to deliver on trade pacts and to undertake considerable foreign financial investment projects that might entice new members.
As the world's largest power producer and renewable energy developer, China is also an essential gamer on the worldwide phase in regards to current nonrenewable fuel source emissions as well as sustainable energy generation possible.
The nation discharged approximately 5.4 billion tons of CO2 from nonrenewable fuel source power generation in 2023, or approximately 40% of the worldwide overall, which has made China an essential target for global pressure to lower international pollution.
China is likewise by far the world's top clean energy designer and exporter, and intends to control the production and export of tidy energy products over the coming years.
However, Beijing has faced allegations of unfair trade practices including the discarding solar panels, electric cars and other products onto world markets at prices that undercut rival manufacturers.
This has actually led to trade spats with the United States and Europe in the last few years and lengthy disputes at the World Trade Organisation (WTO).
Over the same duration, China has become the top location for exports from countries that deal with western sanctions, consisting of Russia and Iran, providing those nations with critical revenues that further strain China's relations with western powers.
India, the world's second biggest coal user behind China, has likewise frustrated western sanctions efforts by emerging as a. key purchaser of Russian product exports, consisting of crude oil,. coal and natural gas.
India is likewise under growing global pressure to cut. power emissions, but like China is struggling to balance the. energy needs of its fast-growing economy with promises to control. pollution.
India also deals with the difficulty of producing sufficient tasks. for its 1.4 billion population - the world's biggest - which. requires a rapid and sustained growth to its cost-sensitive. manufacturing sector.
Power firms have actually dedicated to sharply increasing energy. products from tidy sources but still count on low-priced coal to. produce over 75% of the country's electricity.
India has actually vowed to reach net zero carbon emissions by 2070. however is deemed highly unlikely to reach that target, given the. withstanding reliance on coal and prepared even more expansions in usage. of the fuel, according to Environment Action Tracker.
GROWTH DRIVE
In addition to China and India, Russia likewise recorded sharp. development in power emissions throughout the very first quarter, while Brazil. and South Africa kept emissions mostly flat.
These emissions patterns put BRICS members at odds with lots of. western countries.
But the fact that each BRICS country is a crucial producer of. several vital products that aid financial growth makes BRICS. membership attractive to other emerging economies.
In addition to surging volumes of low-cost made and. semi-finished goods, BRICS nations produce and export coal, gas,. crude oil, soybeans, corn, rice, metals and rare earth minerals.
Many BRICS countries are also committed to consuming growing. volumes of the majority of nonrenewable fuel sources for the coming decades, that makes. the bloc an appealing trade partner for the similarity Saudi. Arabia and Indonesia which have plentiful fuel products but face. decreasing need for them in western markets.
At present, the still-limited degree of BRICS forum. engagement with other countries suggests that western policymakers. still play an essential role in major choices by the majority of emerging market. federal governments.
Which suggests that western values about the environment may. still prevail and stimulate a power sector clean-up in some. countries.
But if BRICS nations choose to discover new club members that look for. economic development above all else, the decrease of emissions may. take a rear seats to more emissions-laden commercial. expansion.
<< The opinions revealed here are those of the author, a. writer .>
(source: Reuters)