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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
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Iron ore prices fall on uncertain demand, but still head for a weekly gain
The price of iron ore futures fell on Friday, despite a trade truce that was reached between the US and China. This is due to signs of a softer near-term market demand as well as growing concern over the outcome of the Sino-U.S. Tariff War. The September contract for iron ore on China's Dalian Commodity Exchange closed the daytime trading 0.95% lower, at 728 Yuan ($101.11), a metric tonne. This marked a 4.5% weekly increase. As of 0703 GMT the benchmark June iron ore traded on the Singapore Exchange fell 0.83% to $100.35 per ton. This represents a 3.5% gain for this week. Both benchmarks are up around 3% in May. A survey by consultancy Mysteel revealed that the average daily hot metal production, which is a measure of iron ore consumption, fell 0.4% compared to the previous week, reaching around 2,45 million tons on May 15. This weighed down sentiment and prices. Analysts and traders expect hot metal production to remain stable in May and June, as mills are encouraged by profit margins to keep up high operating rates. The easing of trade tensions is likely also to spur another round of early shipments of steel. Benchmark Mineral Intelligence analysts forecast a $100 average annual ore price, reflecting a subdued outlook for demand, possible China steel production limits, and renewed optimism about easing trade tensions. Coking coal fell by 3.84%, to its lowest level in over eight years. Meanwhile, coke dropped by 1.93%. The benchmarks for steel on the Shanghai Futures Exchange have also fallen. Rebar fell 1.15%; hot-rolled coil dropped 0.95%; wire rod sank 1.25%; and stainless steel declined 0.65%. ($1 = 7,2002 Chinese Yuan) (Reporting and editing by Mrigank Dahniwala and Eileen Soreng; Amy Lv, Lewis Jackson)
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Lotte Chemical will start operating Indonesia cracker by H2 2025
An executive from Lotte Chemical's Malaysian affiliate told reporters on Friday that Lotte Chemical intends to begin operations at its new cracker plant in Indonesia by the second half 2025. The cracker, which can produce 1,000,000 metric tons of ethylene per year, is part of the $3.95 billion Cilegon project in Indonesia's Banten Province. The facility will be operational at a moment when global petrochemical firms are experiencing lower margins due to an oversupply of ethylene from China. Philip Kong, Executive Vice President, Corporate Planning at Lotte Chemical titan (LCT), said that Lotte Chemical had reduced its stake from 49% to 24% in order to manage its finances. The equity was sold to a group of five Korean finance companies. LCT is 51% owner of Lotte Chemical Indonesia. He said that the company was looking for Middle East naphtha as a feedstock for crackers, on the sidelines the Asia Petrochemical Conference. He added that Lotte could also switch 50% of its feedstock to natural gas liquids, such as liquefied petrol gas (LPG) or ethane. Kong, vice president of the Malaysian Petrochemicals Association and LCT's Malaysian representative, stated that the company has been operating at only 45%-50% capacity since the middle of December. Local media reported the company's intention to sell assets. Kong stated that the petrochemical sector is currently experiencing a trend of mergers and purchases, so they are looking at all possible angles to maximize shareholder value.
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MORNING Bid EUROPE: Trade-driven rally concludes the week on a low note
Stella Qiu gives us a look at what the future holds for European and global markets. The week began with a bang, but by Friday traders were beginning to worry that the recovery had been overshot. They also feared that there would be more twists and turn in the trade saga. Wall Street and European futures are virtually unchanged, while Asian shares are in a mixed state. Hong Kong's Hang Seng fell by 0.8%. Alibaba's more-than-5% fall was a major factor. Investors were not impressed with its earnings. Australian shares performed better, rising by 0.7%. Now, it seems that the stock market is acting as if there was never a tariff war. MSCI's broadest Asia-Pacific share index outside Japan hovers just below its seven-month high. Even blue-chip stocks in China have recovered their losses since President Donald Trump's April 2 announcement of "reciprocal tariffs" on the rest the world - which has since been put on hold. Investors who had been beaten down by the bond market cheered a surprise drop in U.S. Producer Prices and a soft core Retail Sales print. They increased their forecast for rate cuts from 49 basis points to 56 basis points for this year. The benchmark 10-year Treasury yield fell by 3 basis points on Friday to 4.424%, continuing a 7-bps drop overnight. Trump has been very busy over the last few days promoting deals in the Middle East. This includes a possible nuclear deal with Iran. Trump's remarks that a deal is near sent oil price tumbling by 2% on Friday. Markets are eager to hear about progress in the trade negotiations with China, and any other trade agreements that may be signed after an agreement reached with Britain. Remember that tariffs have been higher since the 1930s, even before Trump started his crusade against trade. Walmart, the largest retailer in the world, announced that it will have to raise prices this month because of the high tariffs. This means more pain for American consumers. The latest U.S. prices data may have looked benign but it could only be a matter time before the tariff impact starts to show in the hard numbers the Federal Reserve needs to see to decide its response to the trade-related uncertainty. Economic calendars for Europe and the U.S. could be a little thin. U.S. releases include the University of Michigan Consumer Sentiment Survey and import prices for April. These could be helpful for gauging Trump's tariff maneuvering. The following are key developments that may influence the markets on Friday. University of Michigan Consumer Sentiment Survey U.S. Import Prices for April
Iron ore prices fall on the back of falling demand in the near term, but still head for a weekly gain
The price of iron ore futures fell on Friday, despite a trade truce that was reached between the US and China. This is due to signs of a softer near-term market demand as well as growing concern over the outcome of the Sino-US tariff war.
As of 0228 GMT on China's Dalian Commodity Exchange, the most traded September iron ore contract was trading 0.75% lower, at 729.5 Yuan ($101.3) per metric ton. This represents a 4.7% increase so far this week.
As of 0220 GMT the benchmark June iron ore traded on the Singapore Exchange had fallen by 0.68% to $100.5 per ton. This represents a 3.7% gain this week.
A survey by consultancy Mysteel revealed that the average daily hot metal production, which is a measure of iron ore consumption, fell 0.4% from the previous week to approximately 2.45 million tonnes as of May 15. This weighed on sentiment and prices.
Analysts and traders expect hot metal production to remain stable in May and June, as mills are encouraged by profit margins to keep up their high operating rates. The easing of trade tensions is likely going spur another wave of first-run shipments.
Benchmark Mineral Intelligence analysts forecast an average annual ore price of $100, despite the subdued outlook for demand amid possible China steel production cuts and renewed optimism about easing trade tensions.
Coking coal and coke, which are used to make steel, also fell on the DCE. The declines were 2.88% and 1.49 %, respectively.
The benchmarks for steel on the Shanghai Futures Exchange have also fallen. Rebar fell 0.51%, while hot-rolled coils dropped 0.55%. Wire rod slumped 0.38%, and stainless steel declined 0.42%. ($1 = 7,2033 Chinese Yuan) (Reporting and editing by Mrigank Dahniwala; Amy Lv, Lewis Jackson)
(source: Reuters)