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Shanghai warehouse copper stock jumps, ending long withdrawals
This week, copper inventories in China increased sharply. They broke a run of three weeks of large withdrawals which had caused concerns about shortages due to the global pull of copper supplies toward the United States. Shanghai Futures Exchange warehouses reported a 34 percent increase in copper inventories, which reached 108.142 metric tonnes On Friday, there was the first weekly net increase since mid-March. The stock levels are still well above those of late 2023, when they fell below 30,000 tonnes twice. According to an anonymous analyst and trader, the rise in inventories can be attributed to tepid demand for copper in China as well as steady production from a growing and giant smelter industry that is not deterred by negative margins. The Shanghai daily warrant stock has been increasing every day in the last week. Chinese buyers have clearly backed off these higher prices," Alastair Mudro, senior metals strategist with broker Marex said. The increase in inventories may have allayed fears about shortages. However, this concern is based on the fact that vast quantities of global copper are being redirected towards the United States in order to take advantage of high prices caused by the threat to import tariffs. China's Yangshan Copper Premium Since March, the key indicator of import demand has steadily risen to US$100. It has been hovering around this level for the last two weeks. The trader said that there was panic in China when material that would normally go to China was diverted to the U.S. But that has been replaced with the realisation that demand is not really there.
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Copper prices fall due to demand concerns
The copper price fell on Friday for the second time in a row as the softer demand of price-sensitive buyers such as China, which was sparked off by the 90-day U.S. China trade truce, drove the metal's recent highs down. By 0959 GMT, the benchmark three-month price of copper at the London Metal Exchange was down by 0.8% to $9,495 per metric tonne. Metal, which is used for power and construction, reached $9,664 Wednesday. This was its highest price since April 2 and it has risen 4% this month. JP Morgan wrote in a report this week that "Copper Prices above $9,500 appear to be again encountering the same Chinese Price Sensitivity which has fundamentally and ultimately reined-in previous rallies in the last two year." The Shanghai Futures Exchange monitored warehouses in China, the top metals consumer. This week copper inventories grew sharply. The copper inventory rose by 34% to 108.142 tons, marking the first weekly net increase since mid March. The initial optimism regarding the 90-day suspension of most of Washington's and Beijing's retaliatory duties has faded as the focus of the markets has shifted back to the state of the global economy. A metals analyst in Shanghai said that "Chinese traders were happy with the 90-day break, but the market was still uncertain as to what would happen after 90 days." Yangshan Copper Premium This week, the, which measures China's appetite for copper imports, fell to $100 per ton, down from $103, and its highest level since December 2023. (Reporting by Polina Devitt; additional reporting by Hongmei Li Editing and Shreya Biswas) (Reporting and editing by Shreya Biwas; Additional reporting by Hongmei LI)
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Gold drops, heading for the worst week in six-months on the ease of trade tensions
Gold prices fell more than 1% Friday, and are heading towards their worst six-month period in recent memory. An overall stronger dollar and the temporary U.S. China trade agreement have weakened investor demand for this safe-haven. As of 0933 GMT, spot gold was down by 0.9% at $3,210.19 per ounce. Bullion is down more than 3% this week, and it's on track to have its worst performance weekly since November 2024. U.S. Gold Futures dropped 0.4% to $3213.60. Nitesh Sha, commodities strategist for WisdomTree, said: "We have had a week of optimistic signals regarding trade negotiations, and we've seen the dollar increase on its course, which has weighed on gold prices." The U.S. and China agreed earlier this week to temporarily reduce the harsh tit for tat tariffs that were imposed in April. This lifted the mood on the financial markets. Gold is less appealing to other currency holders because the dollar index has been subdued for the day but is on track for a fourth consecutive weekly gain. Last month, gold, which is often used as a store of value in times of political or financial uncertainty, reached a record high of $3.500.05 per ounce, thanks to central bank purchases, fears of tariff wars, and a strong demand for investment. This week, the United States economic data and signs of a slowing inflation have fueled bets on more Federal Reserve rate reductions this year. Gold that does not yield tends to flourish in an environment with low rates. Tim Waterer, Chief Market Analyst at KCM Trade, said: "On the positive side, gold prices continue to drop, showing that it remains a preferred asset. Global growth and inflation prospects are still murky." Silver spot fell 1.2% at $32.28 per ounce. Platinum fell 0.4% to $885.30, and palladium dropped 1% to $958.56.
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China issues a weather alert after high temperatures threaten wheat quality
China warned on Friday of a high-risk of hot, dry winds between Monday and Thursday, which could cause damage to winter wheat crops, especially in Henan, a major wheat-growing region known as "the granary" for the country. The China Meteorological Administration has predicted that temperatures will exceed 40 degrees Celsius during this period. CMA warns that extreme heat and wind could cause wheat to grow too quickly and disrupt the filling process. Henan will produce about 27% (or more) of China's total output of wheat in 2024. Harvesting usually begins around late May. China could increase its wheat imports if production declines. As reported previously, Chinese buyers purchased between 400,000 to 500,000 metric tonnes of wheat from Australia or Canada as the concern grows over the impact heat has on crops in China’s agricultural heartland. Reporting by Ella Cao & Lewis Jackson David Evans, Mark Potter and David Evans edited the article.
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Fiala: EDF's protests over nuclear deal with Czech Republic affect country's safety
Petr Fiala, Czech Premier, said that France's EDF has gone very far to appeal against the Czech Republic's choice of South Korea's KHNP as the contractor for a multibillion-dollar nuclear power project. This is impacting the security of the country. This month, the Czech government stepped up their rhetoric against EDF’s challenge as they seek to protect the largest energy investment in the country. The investment is a crucial part of the plans to replace coal-fired power plants and nuclear units that are getting older. EDF has won an injunction from a Czech court this month, preventing the signing of the final contract on the project that costs $18 billion at today's prices. It is also complaining to European Commission. In an interview published on Friday, Fiala said that there is logic to the idea of the unsuccessful bidder defending themselves. "I don't object to it, but I believe that they are going too far in this defence and that today it already touches upon the security interests and strategic interests the Czech Republic." Fiala said that the taxpayer should not cover any damages caused by delays, echoing CEZ's comments. He said that "it certainly shouldn't end with Czechs paying for damages. So some other steps must follow," without specifying what these steps could be. He said, "Let's avoid getting ahead of ourselves." EDF has opposed the conduct of this tender as well as any potential state assistance to KHNP. KHNP, CEZ (which ran the tender) and the Czech government have all rejected the complaints. The Czech government, CEZ and KHNP have all rejected the complaints. EDU II will build the two reactors of 1,063 Megawatts by 2036-2037 on CEZ's existing nuclear site in Dukovany. The government acquired 80% of EDU II from CEZ this month. CEZ owns the remaining 20%. (Reporting and editing by Jan Lopatka)
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Copper prices are expected to rise by a weekly average of 4% on the US-China trade truce
The copper price fell on Friday, but was set to rise for the week due to a temporary truce in trade between China and the United States. However, uncertainty about longer-term prospects for demand for this metal limited further gains. As of 0707 GMT, the benchmark copper price on London Metal Exchange (LME), was down by 0.4% to $9,536 per metric tonne. The most traded copper contract at the Shanghai Futures Exchange (SHFE), which is worth $10,851.12 per ton, fell 0.3%. LME copper prices are up around 1.1% this week, while Shanghai prices have increased by about 0.6%. A metals analyst in Shanghai said that "Chinese traders were happy with the 90-day break, but the market was still uncertain as to what would happen after 90 days." The fact that China exporters are rushing to ship out cargoes is a warning sign. Initial optimism regarding the 90-day suspension of most retaliatory duties agreed between Beijing and Washington has faded. Market attention is now focused on potential new tariffs imposed by the U.S. on copper imports, which it has been mulling over since February. Chinese analysts expect that the SHFE copper prices will hover between 78,000-79,000 Yuan per ton, reflecting mixed sentiment in the market. The SHFE monitored warehouses saw a 34% increase in copper stocks, to 108.142 tons. The analyst in Shanghai said: "It's not surprising that copper stocks are increasing, but the pace is a little too rapid, which could put pressure on the price of copper in the short term." Aluminium fell 0.8% per ton to $2468.5, while zinc dropped 1.1% to $2694.5, and lead lost 1.1% at $1983. Tin also declined 0.5%, to $32,800. SHFE aluminium dropped 0.5% to 20130 yuan per ton. Zinc fell 1.1% to 22500 yuan, and lead slipped by 0.8% to 16870 yuan. Click TOP/MTL for the latest news in metals ($1 = 7.2011 Chinese Yuan Renminbi). (Reporting and editing by Eileen Soreng; Reporting by Hongmei Li)
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After a big sell-off, capital flows back into US-listed China ETFs
In May, major U.S. exchange-traded fund (ETF) trackers of Chinese stocks saw inflows as a U.S./China tariff truce boosted the sentiment following a large sell-off last month. By the Numbers Global investors have bought a total of $401.7 million worth of four major U.S. listed China ETFs – iShares MSCI China, iShares China Small-Cap, KraneShares CSI China Internet, and Xtrackers CSI 300 China A Shares ETF – this month. Data from LSEG Lipper revealed that the outflow was $3.8 billion in April. Lipper's records show that the outflows in April were second to only a $4.4 Billion outflow from November 2024. Goldman Sachs reports that U.S. institutions own approximately $250 billion of Chinese stocks listed on U.S. exchanges. Why it's important Analysts closely monitor flows of Chinese shares on U.S. stock exchanges to gauge investor concerns over the possible removal of Chinese firms from U.S. stock exchanges. A delisting could increase the financial decoupling of the two largest economies. These concerns came to the forefront in April, when U.S. president Donald Trump escalated his war of trade with China and raised tariffs on Chinese goods to 145%. U.S. Treasury secretary Scott Bessent also hinted that the delisting Chinese stocks from U.S. bourses could be a factor in the trade negotiations. KEY QUOTES Jason Lui is the head of APAC equity strategy and derivatives at BNPParibas. He said that trade tensions were a major factor in April's selling pressure. The majority of April's outflows came from hedge funds and arbitrage strategies. Most institutions are still investing in our fund," said Xiaolin Chan, the head of international for KraneShares which manages $7 billion KWEB.
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ADNOC: UAE and US will invest $440 billion on energy sector by 2035
Sultan al-Jaber of the UAE oil company ADNOC said that the United States and United Arab Emirates intend to invest a total $440 billion over the next decade in the energy industry. Donald Trump, the U.S. president, announced over $200 billion in deals with the UAE as part of his tour of Gulf nations. In March, senior UAE officials had already met Trump and committed to a 10-year investment framework of $1.4 trillion in the United States in order to strengthen reciprocal relations. In a Friday statement, the White House stated that the framework would "substantially" increase UAE investments in U.S. manufacturing, energy, semiconductors and AI infrastructure. A panel at the UAE and U.S. Economic Dialogue said that the United States would invest $60 billion into UAE energy projects during Trump's Gulf Visit this week. XRG is the international investment arm for ADNOC. It's looking to make a substantial investment in U.S. Natural Gas. ADNOC stakes in NextDecade’s Rio Grande LNG Export Facility and a planned ExxonMobil Hydrogen Plant – both in Texas – were transferred to XRG. This company was established last year, and ADNOC said it has assets worth $80 billion. Its mandate is to pursue global deals for chemicals, natural gases and renewables. Mubadala Energy is an arm of Abu Dhabi’s second-largest sovereign wealth fund. It signed a deal last month with U.S. company Kimmeridge, which will grant it stakes in U.S. natural gas assets. Reporting by Ahmed Elimam, Yousef Sabah; Writing by Tala RAMADAN; Editing and Mark Potter by Michael Georgy and Barbara Lewis
Copper prices rise on optimism about US-China trade
Copper prices rose on Friday, and are on track to finish the week on a positive note, thanks to a truce in the Sino-American tariff war. However, concerns about the long-term demand of the metal have capped any further gains.
Asian stocks are set for a strong, but tempered week as the euphoria surrounding the U.S. China trade talks has faded. Meanwhile, renewed bets on policy easing by the United States have sparked a rally among the beaten down bond markets.
As of 0238 GMT the benchmark copper price on the London Metal Exchange was up by 0.1% to $9,585 per metric ton. The most traded copper contract on Shanghai Futures Exchange rose 0.1% to 78,430 Yuan ($10,889.43).
Metals from Shanghai said that "Chinese traders were happy with the 90-day break, but the market was still uncertain as to what would happen after 90 days." She added that the fact that China exporters are rushing to ship cargoes is a telling sign.
LME copper prices are up around 1.5% this week, while Shanghai copper prices have increased by about 1%.
The initial optimism about the 90-day suspension of most retaliatory duties agreed between Beijing and Washington has faded. The market has also been focusing on potential new tariffs imposed by the U.S. on copper imports since February.
Other London metals saw aluminium rise 0.1% per ton to $2492, zinc fell 0.1% at $2723 and lead dropped 0.4% to $1996.5. Tin rose by 0.1% to $33,000.
Analysts expect the price to be between 78,000-79,000 Yuan per tonne in the near future, reflecting a mixed market sentiment.
SHFE aluminium dropped by 0.3%, to 20,185 Yuan per ton. Zinc fell by 0.6%, to 22,595 Yuan. Lead also declined 0.5% to 16920 Yuan.
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(source: Reuters)