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As US court blocks Trump's tariffs, oil prices drop on concerns about demand in volatile session.
The oil prices dropped on Thursday after the director of the International Energy Agency warned about weaker Chinese demand. Market participants also awaited potential new U.S. sanction to curb Russian crude flow and an OPEC+ announcement on increasing output in July. Prices rose after a U.S. Court ruled on Wednesday that President Donald Trump had overstepped his powers by imposing duties across the board on imports coming from U.S. Trading Partners. The court wasn't asked to deal with some of the industry-specific tariffs Trump imposed on automobiles and steel, using a different statute. Analysts say that the Trump administration's announcement to appeal the ruling may only provide temporary relief, as it has already said they will appeal. Brent crude futures fell 60 cents or 0.9% to $64.30 per barrel at 12:12 pm EDT (1612 GMT). U.S. West Texas Intermediate Crude fell 67 cents or 1.1% to $61.17 per barrel at 12:12 p.m. EDT (1612 GMT). Futures prices fell after IEA Director Fatih Birol told Bloomberg in an interview that the demand for oil in China was weak and developments in Russia, Iran and other countries were "questionable" for oil price. The U.S. is holding talks with Iran to curb Iranian nuclear activities, which have accelerated rapidly since Trump withdrew Washington from a 2015 agreement between Iran and major power that limited these activities. Phil Flynn is a senior analyst at Price Futures Group. He said, "We've heard a lot about Iran, and whether or not we are getting closer to conflict or peace." We're moving both technically and emotionally in many of these markets. OPEC+ (Organization of the Petroleum Exporting Countries) and its allies could agree to increase oil production in July on the front of oil supply. We assume the group will agree to another large increase in supply of 411,000 barrels a day. As the group intensifies its efforts to defend market share, we expect similar increases until the end third quarter. There are concerns over possible new sanctions against Russian crude. Chevron, which had its license revoked in March by the Trump Administration, has now stopped its oil production in Venezuela and other activities. Venezuela cancelled in April cargoes that were scheduled for Chevron citing payment uncertainty related to U.S. Sanctions. Chevron exported 290,000 barrels per day of Venezuelan crude oil before then, which was over a third the total. In a recent note, Mukesh S. Sahdev, Rystad's global head of commodities markets, predicted that demand would grow faster than supply by 600,000-700,000 bpd. The price of oil futures recovered some losses on Thursday after Energy Information Administration (EIA) data revealed that U.S. crude stocks fell by 2.8 millions barrels in the last week to 440.4million barrels. Analysts expected an increase of 118,000 barrels. A wildfire in Alberta, Canada forced the evacuation of residents from a small community and led to a temporary shut down of oil and gas production. This could affect supply. Reporting by Stephanie Kelly, Anna Hirtenstein, Katya Golubkova, and Emily Chow, in New York; London; Tokyo; and Singapore. Mark Potter, Nick Zieminski, and Nia William edited the story.
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US approves bigger nuclear reactor design for NuScale, document says
A document posted on the regulator's website on Thursday said that the U.S. Nuclear Regulatory Commission had approved NuScale Power’s design for a 77-megawatt reactor. This is the final hurdle to be cleared by the company before it can build a modular small reactor. NuScale originally requested and received NRC approval of a smaller reactor design. The company wanted a larger 77 MW design in order to improve the economics and performance for its planned small modular nuclear reactors (SMRs). Supporters of nuclear energy say SMRs are safer against proliferation risks, and they can reduce costs because multiple plants can be built at a factory rather than on-site. SMR critics claim that they are more expensive to run than conventional reactors because of their size and economies of scale. NuScale is the only U.S. firm with a design that has been approved. They want to build the first SMR in the United States. In 2023, it cancelled its first project in Utah with a local power group, despite the US government promising to fund the plant for $1,35 billion over 10 years. As the costs increased, several towns pulled out of this project.
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As markets struggle with US trade ruling, stocks rise and dollar gains are reduced
The U.S. Dollar weakened on Thursday after earlier gains were given up against major counterparts as markets digested a surprise ruling by a trade tribunal that blocked President Donald Trump’s so-called “Liberation Day” tariffs. The U.S. Court of International Trade ruled late Wednesday that Trump had overstepped his powers by imposing uniform duties on imports. After the Trump administration appealed and seemed ready to go to the Supreme Court, if necessary, the decision set off a legal battle that could weigh heavily on the markets. Wall Street saw all three indexes trade higher, after having lost ground the previous session. This indicates that the markets view the decision largely in a positive way. Nvidia rose 4% on Thursday after it reported earnings that exceeded expectations. The Dow Jones Industrial Average rose 0.11%, to 42,146.94. The S&P 500 increased 0.32%, to 5,907.51, and the Nasdaq Composite increased 0.48%, to 19,192.11. The STOXX 600 Index for Europe was down by 0.13% after rising earlier during the session. MSCI's broadest Asia-Pacific share index outside Japan closed the night up 0.77%. The MSCI index of global stocks rose by 0.42%, to 880. Brian Jacobsen is the chief economist of Annex Wealth Management, based in Wisconsin. He said that "the court's decision to overturn Trump's tariffs was more than a speed bump." While President Trump has the option to appeal or sidestep the ruling, these options are limited and could end up with the same outcome. The stock markets are happy with the ruling." After the news of the ruling, the U.S. Dollar initially rose against safe-haven currencies. However, it has since pared these gains. The number of Americans claiming unemployment benefits last week was higher than expected, indicating that the labor market continues to improve. The dollar fell 0.35% against the Japanese yen to 144.31 and 0.42% against the Swiss Franc to 0.824. The euro rose 0.56% to $1.1355. The dollar index fell by 0.95%, to 99.44, measuring the greenback in relation to a basket including the yen, the euro and other currencies. The yields on U.S. Treasury bonds, which had been under pressure due to investors' unease over Trump's tax and spending bill, rose initially but then fell. The yield on the benchmark 10-year U.S. notes dropped 3.1 basis points, to 4.448%. The yield on 30-year bonds fell 2.6 basis to 4.9521%. Bond markets may not be as happy. Jacobsen stated that bond investors still counted the revenue even though the tariffs weren't included in the budget bill. After the International Energy Agency director warned about weaker demand in China, and markets viewed possible U.S. sanctions against Russian crude flow, oil prices declined, retreating from their earlier gains. Brent crude futures fell 1.53% to $64.91 per barrel. U.S. West Texas Intermediate Crude fell 1.89%, to $60.67 per barrel. Gold prices increased in volatile trading, partly due to the weaker jobs data. Spot gold increased 0.74%, to $3313.77 per ounce. U.S. Gold Futures rose by 0.49% to an ounce of $3,311.10.
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Holcim CEO: Tariff uncertainty will not affect Holcim expansion in the US
Holcim, a Swiss supplier of building materials, will not be slowed down by tariff uncertainty. A Manhattan court ruled Wednesday that U.S. president Donald Trump exceeded his authority when he imposed duties across the board on imports coming from trading partners. Markets reacted with jubilation, but there is also uncertainty as to how this will affect companies. Holcim's shareholders approved the spin-off of its North American cement business, Amrize. This will allow Holcim to focus on the increased construction spending in America and reap the benefits. "We sell locally to local customers and produce locally." "The impact of tariffs on us is zero," said Chief Executive Miljan Gutovic in Greece, at the opening a net-zero 400 million-euro ($454million) cement plant. He said that the planned spin-off of their U.S. operations will occur by the end June. Gutovic stated, "I believe (it) will happen any day now. Probably in the second half June."
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African Development Bank launches carbon credit support facility
Senior bank officials announced on Thursday that the African Development Bank would launch a carbon market support facility to help unlock financing for a region that is increasingly affected by climate-change related droughts and hurricanes. Africa's largest multilateral lender said that the Africa Carbon Support Facility will be divided into two components. The first component helps governments create policies and regulations for carbon trading. The second component focuses on increasing the supply and demand of credits, as well as improving the market infrastructure necessary to increase their usage. Anthony Nyong said at the AfDB annual meeting that "we envision a future in which carbon credits will be tradable on Africa's stock markets." Carbon credits can be created by projects like planting trees in developing countries or installing wind farms. These projects receive one credit per metric ton of emissions they reduce or remove from the atmosphere. Companies and countries can purchase these credits to reach their climate goals. He said that most of Africa's carbon credit, which is mainly generated by forestry, land usage and farming, is currently sold on voluntary markets. However, embedding these credits in stock exchanges will boost their price. Africa's 54 nations have been hit the hardest by climate change, despite emitting a small share of pollution compared to industrialised countries. In recent years, it has been hit by a number of climate disasters, including tropical storms which have ravaged island states in the Indian Ocean, such as Madagascar, and coastal areas of Southern Africa, and severe droughts on the Horn of Africa. According to officials in the continent, only 1% of global climate finance is allocated annually to the continent. Kevin Kariuki is the AfDB vice president of power, energy and climate change. Nyong added that the initiative would also boost earnings by ensuring carbon credits produced on the continent are sold on compliance offsets markets where they could fetch prices up to 10 times more than voluntary offsets. (Reporting and editing by Marc Jones, David Holmes, and Duncan Miriri)
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IAEA official: No signs of preparations for restarting Zaporizhzhia
A U.N. nuclear monitor said that there was no indication Russia was planning to restart Zaporizhzhia's nuclear power plant after Ukraine complained. Russia had been reported to be preparing to connect the Zaporizhzhia to their grid. The largest nuclear power plant in Europe is Zaporizhzhia. It is owned by Russia. Six reactors have been shut down while war rages all around. The International Atomic Energy Agency called for a truce, and then measures could be taken to improve water and external power sources needed to cool nuclear material. The IAEA official, speaking on condition of anonymity, said: "Our teams confirm that at this time there are no active preparations being made for a restart now." On Wednesday, a Ukrainian official claimed that his country was a terrorist state Protests had been made IAEA: Tell them that Russia is building powerlines to connect Zaporizhzhia to its own grid. Yuriy Vitrenko is the Ukrainian ambassador to the IAEA. He told the Ukrainian news agency Ukrinform, that Kyiv views any attempt made by Russia to connect its grid to the occupied nuclear plant as a violation of international law. The New York Times reported on Tuesday that a recent Greenpeace report found that Russia was building over 80 km (50 miles) of powerlines between the occupied Ukrainian towns of Mariupol & Berdyansk. Rafael Grossi, IAEA director In March, it may be possible to restart at least one of the six reactors of the plant within months after a ceasefire lasting for several years has been achieved. This would require the plant to increase its water supply and external power. The plant has had a water problem since its biggest source of water, the nearby Kakhovka Reservoir, was emptied in 2023 when the dam was blown. This led to the digging of wells in Zaporizhzhia that provide enough water for cooling nuclear fuel while the reactors are shut down, but not enough if they were restarted. The IAEA official stated that "the plant has lost its main source for cooling water so the entire system cannot function as originally designed." "The water consumption is orders of magnitude greater (when the plant operates) than a cold shutdown. "We don't think there is a quick, easy fix," they said. Francois Murphy is the reporter; Toby Chopra, Giles Elgood and Toby Chopra are editors.
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India's Bajaj Auto warns that magnet delays in China will affect EV production by July
Indian automaker Bajaj Auto warned on Thursday that further delays in the supply of rare-earth magnets from China may "seriously" impact electric vehicle production before July. China controls over 90% of the global processing capacity in magnets for automotives, home appliances and clean energy. In April, the country implemented restrictions requiring import permits to be obtained from Beijing. On Wednesday, it was reported that Indian auto industry associations have asked Prime Minister NarendraModi's government for help in gaining access to magnets stored at Chinese ports since the beginning of April. Rakesh Sharma, Bajaj Auto’s executive director, told analysts on Thursday during an earnings conference that he hoped exporters in China would approve the shipment of vehicles based on declarations made by their vendors. Sharma's remarks marked the first time that the implications of China's restrictions on exports of rare earth magnets could bring Indian auto production to an end. Rare earth magnets can be found in the electric motors of EVs, as well as in parts like power windows and audio systems used in conventional cars. Sharma called the current situation "a dark cloud in the horizon". He said that while the process of end-use declarations for non-military uses has been defined in India it is yet to be finished in China. Bajaj Auto produces electric scooters and electric three-wheelers under the "Chetak' brand. The "Pulsar", a motorcycle manufacturer, reported a profit for the fourth quarter that was above the market estimate. This was due to the fact that motorcycle exports were higher and the foreign exchange gained compensated for the slump in domestic demand. (Reporting by Nandan Mandayam in Bengaluru; Editing by Shilpi Majumdar)
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Copper gains after US Court puts brakes on Trump Tariffs
The market was buoyed by optimism on Thursday after a federal judge halted President Donald Trump’s plan to impose tariffs on most imports from the United States. The Court of International Trade, in a wide ruling issued on Wednesday, blocked the majority of Trump's import duties. It found that Trump had exceeded his authority when he imposed tariffs on all imports. Minutes later, the Trump administration filed an appeal notice and questioned the jurisdiction of the court. Ewa Mannthey, ING commodities analyst, said that copper rose because of the court's decision. Markets are likely to remain volatile while the administration continues to fight the ruling. The London Metal Exchange reported that the price of three-month copper was $9,576 per ton at 1435 GMT. This is a 0.1% increase. LME copper is up nearly 19% from its 17-month-low of $8,105 reached in April when Trump imposed the so-called reciprocal duties. A weaker dollar also supported the market, reversing gains made earlier, as investors prepared themselves for the battle over tariffs. The weaker dollar means that commodities priced in U.S. dollars are cheaper for buyers who use other currencies. Manthey, in discussing the outlook for copper noted that downside risks included prolonged trade negotiations and a reduced policy stimulus by China. He said that prices may benefit from possible reductions in refined copper production due to the ongoing shortage of concentrates. The market's attention was also focused on Washington’s ongoing investigation of potential copper import tariffs. This has kept the COMEX premium over the LME standard elevated, and sparked a surge in metal inflows to COMEX owned warehouses. . U.S. Comex Copper Futures increased by 0.1% to $4.71 a lb. This brings the Comex Premium over LME up to $803 a tonne. Cochilco, the Chilean state copper commission, has raised its forecasts for the average copper price this year and the next. They cited an improved outlook globally following the pause in tariff war between China and the United States. Other metals include LME aluminium, which fell by 0.4% to 2,458 per ton. Zinc also declined, falling 0.1% to 2,684, while lead dropped 0.9% to 1,965 and tin lost 1.4% to 31,205. Nickel rose 1.8% to $16,280. Ashitha Shivaprasad reports from Bengaluru. Editing by Joe Bavier and Mark Potter.
Dalian iron ore falls, rebars slump to five-year low due to tepid China's steel production
The price of iron ore futures fell for the fourth session in a row on Wednesday, while rebar prices dropped to their lowest level since 2020. This was due to a slowdown in steel production by China, which is regarded as he biggest consumer.
The September contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 0.14% lower, at 698.5 Yuan ($97.14).
As of 0747 GMT, the benchmark June iron ore traded on Singapore Exchange was $96.15 per ton.
Rebar, a product used in construction, fell 0.77% for the day. LSEG data show that prices fell to their lowest level since April 2020 earlier in the day, at 2,950 yuan.
The Shanghai Futures Exchange saw a decline in most steel benchmarks. Hot-rolled coils fell 0.55% while stainless steel fell 1.32%. Wire rod rose 1.96%.
Mark Ferguson, Director of Metals and Mining Research at S&P Global Commodity Insights told a conference in Singapore on Wednesday that China's crude output is expected to drop to 968 millions metric tons in 2025, a 37 million ton decrease from 2024.
Lange Steel, citing data from the China Iron and Steel Industry Association, said that daily crude steel production at key steel companies in May decreased by 0.3% on a month-to-month basis to 2.2 millions tons.
Despite Beijing's previous announcement that it would cut crude steel production this year, traders are betting on the fact that these cuts will not be enforced due to improved industry profitability.
The Brazilian government also dampened sentiment by renewing 25% tariffs, which were originally imposed on 19 steel products last year.
Official data released on Tuesday showed that China's industrial profit accelerated in April. This gives policymakers reason to be optimistic about recent stimulus measures helping keep the economy afloat.
Coking coal and coke, which are both steelmaking ingredients, were down by 2.2% and 1.99%, respectively. $1 = 7.1904 Chinese Yuan (Reporting and editing by Mrigank Dahniwala, Sherry Jacob Phillips)
(source: Reuters)