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Copper prices fall outside US after Trump's 50% tariff
The London Metal Exchange and Shanghai Futures Exchange saw a drop in copper prices on Wednesday, as the announcement of U.S. tariffs on copper signaled the end of a long-running arbitrage trade which had pulled the metal from the global markets. U.S. president Donald Trump announced on Tuesday that he would announce 50% tariffs on copper. U.S. Comex Copper futures rose more than 12%, reaching a new record high. The U.S. Commerce Department's Howard Lutnick announced shortly after that the copper tariffs were likely to be implemented by the end or August 1 of this year. The announcement was like a thunderous boom in the middle night. A 50% tariff is higher than expected. Since the announcement of the tariff investigation in February, traders from around the world have sent copper to the U.S. as they anticipated higher prices. Comex inventories have reached their highest level since last year. The days of this trade are numbered, given the short time left to move the copper before the deadline. This could potentially lead to a release of supply from outside the U.S. Prices reflected a shift in the market. In the wake of a Comex record, the LME three-month contract for copper fell by 1.2%, to $9,675 a metric ton, at 0346 GMT. The most traded copper contract on SHFE also dropped 1.1%, to 78.580 yuan (10,944.29) per ton. Michael Wu, an analyst for copper at the Shanghai Metals Market said that there are few buyers in Asia who want to deliver copper to the U.S. given the short time left before the deadline. He added that the only shipments likely to meet the deadline will be those from Latin America. LME nickel dropped 0.5% to $14,965 per ton. Lead fell 0.6% to $2,000, while tin eased by 0.2% to $33,370. Zinc was down 0.4% to $2709 and aluminium was down 0.5% to $2574. SHFE nickel dropped 1.4% to 118.960 yuan per ton. Lead gained 0.5% at 17,195 yuan. Zinc was unchanged at 22,010, aluminium rose 0.2% to 20.525 yuan and tin increased 0.2% to 264.880 yuan. Click or to see the latest news in metals, and other related stories.
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A flash flood in a New Mexico resort town traps many in their homes and vehicles
A state official reported that flash flooding in New Mexico caused by monsoon rains trapped dozens in their homes and vehicles around Ruidoso, a mountain resort village. The floods also swept an entire home away. The house was ripped apart from its foundations and careened through the brown, muddy water of the flood-engorged Rio Ruidoso. It smashed trees on the way. "I have seen the video." Danielle Silva, spokesperson for New Mexico Department of Homeland Security and Emergency Management said: "We don't know who was inside the house." No immediate reports of death or injury from Tuesday's floodwaters have been confirmed. Silva reported that emergency teams, pre-positioned in Ruidoso by local law enforcement, and the National Guard, conducted at least 85 rapid-water rescues, including many victims who had been stranded by flooding in their homes and cars. Silva reported that the river rose quickly to a record-breaking 20.24 feet (6.22 metres) during the flood of late afternoon. As the floodwaters started to recede, the authorities began searching through the debris for survivors. She said that the intensity of the debris flow had been heightened by the charred landscape that was left by the wildfires that swept through the area in June last year, and the subsequent flooding that eroded soil. Ruidoso, a popular ski resort and summer getaway in south-central New Mexico's Sierra Blanca range is located about 115 miles south of Albuquerque. The latest flooding occurred in Texas Hill Country four days after a flash flood caused by torrential rainfall along the Guadalupe River devastated a large area of Texas Hill Country. At least 109 people were killed and scores more are still missing. Reporting by Steve Gorman, Los Angeles; editing by Michael Perry
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Investors await clarity on tariffs, which has led to a drop in oil prices from their two-week highs
The oil prices fell on Wednesday, after reaching two-week highs the previous day. Investors were waiting for new developments regarding U.S. Tariffs and the expectation of rising crude stocks in the United States. Brent crude futures fell 7 cents or 0.1% to $70.08 per barrel at 0400 GMT. U.S. West Texas Intermediate Crude fell 8 cents or 0.1% to $68.25 per barrel. The latest delay in tariffs by U.S. president Donald Trump gave some hope to the major trading partners Japan, South Korea, and the European Union, that deals could be reached to reduce duties. However, it left some smaller exporters, such as South Africa, confused and without clarity about the way forward. Trump has pushed the previous deadline of Wednesday back to August 1. He declared on Tuesday that "no extensions will be granted." Trump said he will impose a tariff of 50% on imported copper, and introduce levies that have been threatened for years on semiconductors and pharmaceuticals. This will intensify a trade conflict that has roiled markets around the world. Priyanka Sackdeva, a senior analyst at Phillip Nova, said: "Investors constantly deal with 'tariff headlines' and their potential impact on global trade." "... "... While there was a strong demand for travel during the U.S. holiday on July 4, industry data showed that crude inventories in the U.S. could have increased by around 7.1m barrels. Fuel products' stock levels were also lower. In a note to clients, ING analysts said that the API numbers overnight were negative for oil. They added that "changes made in refined products have been more positive". The U.S. Energy Information Administration will release official data at 1430 GMT today. The Energy Information Administration said in its monthly report on Tuesday that the U.S. would produce less oil than expected in 2025 due to the lower oil prices this year. In its report on short-term energy outlook, the EIA stated that it expects to see 13.37 million barrels of oil produced per day by 2025. This is a decrease from last month's prediction of 13.42 millions bpd.
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Scientists estimate that the European heatwave has caused 2300 deaths.
According to a rapid analysis of the scientific literature published on Wednesday, around 2,300 people in 12 European cities died from heat-related causes during the severe heatwave which ended last week. The study focused on the 10 days ending July 2 when temperatures in large parts of Western Europe reached 40 degrees Celsius. According to a study by Imperial College London and London School of Hygiene and Tropical Medicine, of the estimated 2,300 deaths during this time period, 1,500 were linked to climate changes, which caused the heatwave to be more severe. Climate change has made the world significantly hotter, making it more dangerous, said Dr Ben Clarke. He is a researcher from Imperial College London. Researchers found that climate change has increased temperatures in 12 cities, including Barcelona, Madrid and London, by as much as 4 degrees Celsius. Researchers used epidemiological models to estimate death rates. This includes deaths that were caused by heat, as well as deaths in which pre-existing conditions were exacerbated. Scientists said that they used peer reviewed methods to quickly estimate the death toll because most heat related deaths are not reported officially and some governments don't release this data. In a bulletin published on Wednesday, the EU's Copernicus Climate Change Service stated that June 2018 was the third hottest month on record for the planet, after the same months in 2024, and 2023. Copernicus reported that Western Europe had its warmest month on record in June. Much of the region experienced "very strong heat-stress" conditions, defined as temperatures of 38 degrees Celsius and above. Samantha Burgess is the strategic lead at Copernicus for climate. She said: "Heatwaves will become more intense, frequent and affect more people in Europe as a result of global warming." According to new research from European health institutions, researchers in 2023 reported that up to 61,000 people could have died during Europe's scorching heatwaves of 2022. This suggests the countries' efforts in heat preparedness are failing fatally. Over time, the average temperature of the Earth has risen due to the accumulation of greenhouse gases in the atmosphere. These emissions are mainly caused by the burning fossil fuels. The increase in the baseline temperature means that temperatures can soar higher during a heatwave.
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Rem Offshore's Zero-Emission Subsea Construction Vessel Hits Water (Video)
Norwegian shipowner Rem Offshore has launched the hull for its dual-fuel methanol energy subsea construction vessel (ESCV) Rem Pioneer in Vietnam, months ahead of schedule.The launch ceremony was held on June 27 at Song Cam shipyard in Vietnam.According to the company, hull construction will continue for a while, and outfitting will begin in the autumn at Myklebust Verft.Rem Pioneer ESCV will be delivered in 2026 and will be the first of its kind that can perform heavy construction work in both offshore wind and subsea with net zero emissions.The newbuild uses a number of solutions where energy consumption is almost halved compared to comparable tonnage in today’s market, as well as meeting future requirements for zero emissions from end to end, according to the company.The vessel will be equipped with dual-fuel methanol engines in combination with battery packs.All offshore lifting equipment, including the 250 T crane, is electric and regenerates power to the batteries.The working deck is over 1,400 m2, and it is also prepared for the installation of an offshore gangway for use in offshore wind.Rem Pioneer will be able to accommodates 120 persons.
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Iron ore prices continue to rise despite falling shipments, but China data is mixed and may limit gains
Iron ore prices rose for the second session in a row on Wednesday. This was aided largely by a drop in shipments, and a resilient demand. However, mixed factory data from China, whose top consumer, curbed gains. As of 0250 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.68% higher. It was worth 736.5 Yuan ($102.57). As of 0240 GMT, the benchmark August iron ore traded on Singapore Exchange was up by 0.34% to $96.1 per ton. Everbright Futures analysts said that iron ore shipments have dropped after the ramp-up at the end of last quarter. Galaxy Futures analysts noted that the ore price will be supported by the supply side. Galaxy's analysts said that despite a slight decline, hot metal production remained at a high level. Steel consumption in the manufacturing sector is also strong. Iron ore demand is usually gauged by the hot metal production. The gains, however, were modest. Data showed that China's consumer price index rose in June for the first five months. Meanwhile, its producer deflation reached its highest level in nearly two years. In the second largest economy in the world, uncertainty about a trade war around the globe and a subdued domestic demand are still causing policymakers to be under pressure to introduce more support measures. Coking coal and coke, which are used to make steel, have gained 1.55% and 1.06 % respectively. The benchmarks for steel on the Shanghai Futures Exchange have been moving in a narrow range. The price of rebar was 0.07% higher. Hot-rolled coil, stainless steel and wire rod were all flat. ($1 = 7,1802 Chinese Yuan) (Reporting and editing by Harikrishnan Nair; Amy Lv, Lewis Jackson)
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Gold nears a one-week low amid firmer US dollar and yields
The gold price hovered near its lowest level in over a week on Wednesday, under pressure due to a stronger U.S. Dollar and rising Treasury yields. Meanwhile, fresh tariff threats by U.S. president Donald Trump unnerved the markets. As of 0234 GMT, spot gold remained at $3.301.50 an ounce. U.S. Gold Futures dropped 0.2% to $3310.10. Trump announced that he would impose tariffs of 50% on imported copper, and levy the long-promised levies against semiconductors and pharmaceuticals. Trump reiterated on Tuesday his threat to impose 10% tariffs on BRICS countries. A day earlier, he had notified 14 countries including Japan and South Korea of the tariff increases that would take effect August 1. The U.S. Dollar Index steadied on Wednesday after reaching a new two-week-high late Tuesday. Meanwhile, the yield of benchmark 10-year U.S. Treasury Notes hovered around a three week high. Ilya Spirak, global macro head at Tastylive said: "Gold prices have held up well against the backdrop of rising yields as well as a stronger dollar. Its ability to resist pressure indicates underlying strength and bullish bias." A higher yield increases the cost of non-yielding gold, while a weaker US dollar makes it more affordable to holders of other currencies. Investors are closely examining the minutes of the latest U.S. Federal Reserve meeting, which is due later today, to look for any hints about possible interest rate reductions, despite the central bank’s wait-and see approach. Spivak stated that "it's been a quiet week in terms of economic data. However, the reaction of prices to the minutes from the June FOMC meeting could help determine where we stand on this debate between Fed and markets." The New York Fed's most recent survey showed that Americans' expectations for inflation remained unchanged. One-year inflation was estimated at 3% in the latest survey, down from the 3.2% of May. Three- and five year inflation expectations were also maintained at 3% and 2,6% respectively. Spot silver dropped 0.5% to $36.58 an ounce. Platinum was down 0.8% to $1,348.78, and palladium fell 0.4%, falling from $1,106.29.
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As traders consider tariffs, the dollar is firmer and Asian stocks are mixed.
The dollar was trading at a two-and-a-half-week high against major peers on Tuesday, while copper reached a new all-time high overnight after U.S. president Donald Trump expanded his global trade conflict by threatening to impose a 50% tariff. Trump said that levies would be imposed on pharmaceuticals and semiconductors in the near future, which weighed on Wall Street Tuesday. Futures indicate further weakness on Wednesday. Stock markets in Asia-Pacific were mixed as investors digested Trump’s latest shifting trade salvos. Japan and South Korea, two of the largest U.S. trading partner countries in Asia-Pacific, face a deadline on August 1, to either reach a deal with Trump or face new tariffs. Trump has given mixed signals about how flexible he is regarding this date. Trump's Monday comment that he was "firm but not 100%" confirmed the belief among some markets that deadlines were a negotiation tactic the U.S. President would eventually back away from. Trump's stance appeared to be hardened on Tuesday when he said, "No extensions will ever be granted." Nikkei, the Japanese stock index, fell 0.2% after a small gain. Australia's index of stocks fell by 0.4% and Hong Kong's Hang Seng dropped 0.9%. The KOSPI in South Korea rose 0.5%, while mainland Chinese blue-chips gained 0.2%. U.S. S&P futures eased by 0.1% following a loss of 0.1% for the cash index Tuesday, which extended the 0.8% decline that began the week. The delay of the imposition of tariffs against some of the U.S. major trading partners until August 1st has both pushed the can down the road, and reinforced the notion that higher tariff rates were a negotiation ploy," Kyle Rodda wrote in a Capital.com note. "As a consequence, the markets are left hanging and waiting for a more powerful catalyst to drive the move." Trump said that the trade talks with China and the European Union have been good, but he also added that he was only a few days away from sending the EU a tariff letter. Since Trump's announcement of reciprocal tariffs on April 2, "Liberation Day", the markets have been roiled. Washington and China reached an agreement in June on a framework for tariff rates. Metals, Currency U.S. Copper Futures have risen by over 10%, reaching a new record high, after Trump threatened to introduce new duties on this metal, which is essential for electric vehicles, military equipment, the power grid, and many consumer products. These duties would be added to those already in place on steel, aluminum and automobile imports. Copper futures in London, Shanghai and other markets fell on Wednesday as traders might not have enough time to ship to the United States after Trump's sudden tariff announcement. Trump has also threatened to impose 200% tariffs for drug imports. He said that the delay could be up to a year. The U.S. Dollar continued to gain strength on Wednesday and reached its highest level since June 20, at 147.02 Japanese Yuen. The dollar index (which measures the currency's value against the yen, and five other major competitors) edged up at 97.573 after reaching its highest level since June 25, Tuesday, when it was 97.837. The dollar was unchanged at $1.1720 and the euro at $1.1720. Sterling was also flat at $1.3585. After a more than 1% decline on Tuesday, gold found a bottom at $3,301 an ounce. The oil prices have retreated from their two-week highs of Tuesday. Brent crude futures fell 20 cents, to $69.95 per barrel. U.S. West Texas Intermediate Crude dropped 21 cents, to $68.12 per barrel.
What Germany's planned expenditure spree might mean for the economy
German chancellor-in-waiting Friedrich Merz reached an agreement with the Greens on Friday on a massive increase in state borrowing, just days before a parliamentary vote on the issue, a source close to the negotiations said.
The parties aspiring to form the next government have agreed to create a special infrastructure fund of 500 billion euros ($545 billion), and to remove the debt restrictions on defence investments.
What the future plans for Europe's biggest economy could mean in terms of growth and debt:
Could the spending boost Germany's ailing economy?
According to economists yes, according to the economists
The German DIW Economic Institute said that the planned infrastructure fund could alone increase economic output by more than two percentage point per year in the next ten years.
DIW stated that a growth rate of 2,1% in 2026 is now expected instead of the previous 1.1%.
A second institute, IfW, also revised its growth estimate for Germany in 2026, predicting a 1.5% expansion on the backs of expected increases in public expenditure.
The IMK, an economic institute that has not updated its forecasts yet, predicts the German economy to grow by only 0.1% this year after two years of contractions in 2023-2024. However, the institute said new proposals might make a significant difference.
Sebastian Dullien, IMK’s director of economics, said: "If the financial package was implemented quickly, a noticeable acceleration in growth could be expected for the second half the year. Growth in the entire year may also move away from stagnation."
WHICH SECTORS ARE SET TO PROFIT MOST?
Construction can benefit from the fund set up to upgrade Germany's crumbling infrastructure.
The shares of Heidelberg Materials increased by 4% Friday. Bilfinger shares rose 4.8%, while Hochtief's were up 5%.
Also, the defence industry stands to benefit. The proposed coalition plans would amend the constitution to remove the strict limit on borrowing in Germany, known as the "debt brake", and allow for higher defence spending plans.
The news of this agreement has led to gains of between 5% and 7% for Rheinmetall, Hensoldt, Thyssenkrupp, and Renk, all German defence companies.
How much more debt will Germany take on?
Lots.
Germany's debt was 64% of its gross domestic product last year. This is lower than other industrialized countries like the United States or France.
Joerg Kraemer, chief economist at Commerzbank, expects this level to rise by 10 percentage points in the next few years due to the special fund created for infrastructure.
If defence spending was increased to 3.5% of GDP, the debt ratio would increase by 2.5 points per year.
Kraemer stated that the government debt ratio in 10 years could reach 90%. However, this is also dependent on inflation, and therefore, not easy to predict.
Friedrich Heinemann, a ZEW economist, said: "This would mean Germany would soon join the ranks the EU's most indebted countries." He predicted that Germany's debt could reach 100% in 2034.
WHAT WOULD THIS DO TO GERMANY'S TRIPLE A CREDIT RATING
Not necessarily. Eiko Sievert, a Scope analyst, said that the spending plans may increase Germany's level of debt to 72% of its gross domestic product in 2029. This is below the previous record of 80%, which was set after the global financial crash of 2010, when Germany maintained its AAA rating.
Sievert stated that the future of this possibility depends on the implementation and success of the necessary reforms in politics to boost competitiveness and economic development.
CAN GERMANY FIND SUFFICIENT LENDERS?
Germany is a popular borrower because of its top credit rating. To make German government bonds more attractive to investors, however, it would be necessary to increase interest rates.
Kraemer, Commerzbank's Kraemer, says that investors are likely to demand a higher risk premium for German government bonds.
Investors digested the news about the agreement regarding spending plans. This indicates that Germany's interest payments will likely increase.
Could Germany's Spending Spree Influence ECB Policy?
It is possible that pumping hundreds and billions of Euros into the economy will lead to inflation.
The ECB must take into consideration that inflationary pressures will increase again due to the planned expansionary fiscal policies in Germany, said Cyrus de la Rubia. Chief economist at Hamburg Commercial Bank. Reporting by Rene Wagner and Maria Martinez, Writing by Rachel More, Editing by Gareth Jones, Christina Fincher
(source: Reuters)