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Indian refiners cancel orders for palm oil from July to September due to price surge
Four trade sources confirmed that Indian refiners canceled orders for 65,000 tons of crude palm (CPO) due for delivery between July and September, following an unexpected surge in Malaysian benchmark prices. Refiners of the world's biggest palm oil importer have cancelled orders over the last three days, after Malaysian palm futures increased by more than 6%. They are hedging against the possibility of falling prices and locking in a gain. There is a lot volatility on the market. "There was a greater margin in cancelling CPO purchased than in importing and refining palm oil and selling it on the local market," stated an Indian buyer, who runs a refinery in the west coast. He cancelled shipments scheduled for July. Indian buyers purchased CPOs nearly a week ago, at a cost of $1,000 to $1030 per ton. This includes the cost, insurance and freight. A rebound in palm oil prices brought down prices, which were their lowest for more than eight month. Palm oil futures rose this week in response to a rally of Chicago soyoil after the U.S. proposed a higher biofuel blend volume. Sources who spoke under condition of anonymity as they were not authorized to speak to the media said that this sudden increase prompted Indian refiners cancel contracts between $1,050 to $1,065 a ton. They made a profit greater than $30 per ton. A New Delhi-based dealer at a global trading firm said that buyers agreed to cancel contracts by accepting a slightly lower price than the current market rates. This decision was mutually made with sellers. CPO was offered in India at $1,070 per ton for delivery in July, down from $1,020-1,030 one month earlier. Sandeep Bajoria is the chief executive officer of Sunvin Group. A vegetable oil brokerage. India's imports of palm oil reached a six-month peak in May. This was due to low inventories, and the oil being sold at a lower price than rivals soyoil or sunflower oil. The Indian market had gained momentum following India's halving of import duties on CPO last month, but cancellations by the government have disrupted this momentum, according to a Kuala Lumpur based trader from a palm oil production company. (Reporting and editing by Tony Munroe, Emelia Sithole Matarise, and Rajendra Jadhav)
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Israel will resume natural gas exports once the military determines that it is safe, says energy minister
Israel's Energy Minister Eli Cohen announced on Wednesday that the country will resume natural gas exports once its military deems it safe. The air battle between Israel & Iran is now in its sixth day. Since June 13, two of Israel's three natural gas fields, Leviathan operated by Chevron and Karish owned by Energean, off its Mediterranean coastline that provides the bulk of the exports to Egypt & Jordan have been closed. The older leaves are still in use Field used mostly for domestic supply. Cohen stated that he had been in touch with Egpyt, Jordan and Jordan regarding the reduction in supplies. "They can clearly see that we're in a conflict." Cohen said after a press briefing that he had to reduce exports because he didn't want our strategic storage to be used. "I hope that I can use another rig to supply gas (exports) as soon as possible." "I think the most important thing for me is to (supply) Israel," he stated, referring to the need for fuel during the conflict against Iran. Cohen noted that it was not clear when another field would be reopened. "We're working with them (the military), the Navy and at this time their recommendation is to continue one (field) and shut down two." Data from the Joint Organisations Data Initiative shows that Israeli gas makes up about 15-20% of Egypt's total consumption. Egypt's fertilizer industry halted operations Friday due to the disruption in Israel's supply of gas. Israel began its air war against Iran on Friday, after concluding that the country was close to developing a nuclear bomb. Iran insists that its nuclear program is solely for civilian purposes. Other Energy Sources Cohen stated that Israel's energy industry was running normally and no shortages were expected, since the country has reserves of coal, diesel, and renewable energy. Israel's Oil Refineries, located in Haifa, were hit by an Iranian rocket this week. Three people died and the refineries were forced to stop operations. Cohen expressed his hope that the facility will resume its operations in a month. A second refinery is still open to the south. Cohen stated that since Friday, the amount of solar energy or renewable energy used to produce electricity has doubled, reaching about 40%. The airstrikes by Iran also caused some damage to pipelines and wastewater treatment plants. Cohen said that a victory over Iran may take several weeks, but Israel's needs for energy could be met. The Iranians may have damaged some of our energy plants, but we still have a very strong energy infrastructure that can meet all of Israel's energy needs, including fuel, electricity, and water. (Reporting and editing by Bernadette baum)
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Germany passes bill to speed up housing construction through reducing red tape
The German government approved a draft bill on Wednesday that will speed up housing unit construction, which has slowed down amid the wider property market crises, by cutting through red tape, which often drags out projects for many years. In Germany, the number of apartment units built last year dropped dramatically, dropping 14.4% between 2023 and 251,900. This is far below the goal set by previous governments of 400,000 units per year. Germany's real estate sector has been recovering slowly from its worst slump in decades that began in 2022. According to data released by the Federal Statistics Office on Wednesday, residential building permits, a key indicator of future construction, rose 4.9% in April. This is the second consecutive month that construction planning has increased. The new German government hasn't set any concrete goals, but Chancellor Friedrich Merz cited affordable housing as an important social issue. He told the parliament, "Building, Building, Building" was his plan to make housing more affordable. The bill allows municipalities to streamline the approval of residential buildings in Germany by giving more flexibility on the development plans that often take years to put together. According to the bill, construction will be approved automatically if the municipal council does not vote it down within two months. Verena Hubertz, Minister of Construction, stated that the goal is to increase the speed and efficiency in building, urban consolidation, and to make it easier to add floors to homes or apartments. She said: "We don't just throw out all the rules." "But we want to deal with them more pragmatically and faster." At a press conference alongside Hubertz, Finance Minister Lars Klingbeil stated that the government plans to invest large amounts in affordable housing. He added that the key figures of draft budgets that will be presented next Monday would reflect this drive. Klingbeil said, "With the 500 billion Euro special fund we have created the conditions necessary for more investment."
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Copper prices steady before Fed decision; focus on Middle East
The copper price remained stable on Wednesday, due to the softer dollar in anticipation of the Federal Reserve's decision on U.S. Interest Rates. However, the escalating conflict in the Middle East with its impact on demand and growth dominated the mood. At 1001 GMT, the benchmark copper price on London Metal Exchange was up by 0.2% to $9,691 per metric tonne. Traders said that metals activity is low as the Federal Reserve will announce its interest rate decision in a few hours and the U.S. market closed for Juneteenth on Thursday. The oil prices have risen in the last few days, as the markets assess the likelihood of disruptions to supply from the Iran-Israel war. Reports indicate that the U.S. military has increased its presence in the area, causing speculation about a possible U.S. invasion, which investors fear will escalate the conflict. The region is rich in energy resources, supply chain and infrastructure. Tom Price, Panmure Liberum's analyst, said that "Copper and industrial metals were under pressure" because the spike in oil prices was putting the global economy at risk. "We don't have an end in sight to the conflict but they are already discussing one. So the market is settling down, and trading will resume as normal." Concerns about copper availability on the LME due to falling stock, large holdings in warrants (title documents conferring ownership) and cash contracts have pushed up premiums for nearby contracts. Copper Stocks In LME registered warehouses, 107.350 tons has dropped 60% from March to the lowest level since May 2024. Backwardation or premium Cash over the three month copper contract reached near $150 per ton. This was the highest price since October 2022, compared with the discount at the end of April. The traders are also keeping an eye on a large number of aluminum warrants (0#LMEWHC>) and contracts that are nearing maturity (0#LMEFBR>), which have also led to premiums in nearby contracts. Aluminium for three months was down by 0.3% to $2,541, while zinc fell 0.1% to 2,635, lead increased 0.1% to 1,977 and tin rose 0.8% to 32,525; nickel advanced 0.6% at $15,015. (Reporting and editing by David Evans; Pratima Dasai)
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Dassault and Anil Ambani’s Reliance will make Falcon 2000 business aircraft in India
Reliance Infrastructure and France's Dassault Aviation have partnered to manufacture Falcon 2000 jets locally in India. The companies announced this on Wednesday as India aims to increase its sourcing of local-made defence equipment. Dassault has stated that it will deliver the first jets made in India by 2028, for both corporate and military purposes. It will also cater to the growing demand on Indian and international markets. India is the largest arms importer in the world. Global firms are being pushed to manufacture in India either independently or with local partners. New Delhi also wants to increase defence exports. These grew 12% during the fiscal year ending in March, reaching $2.76 billion. Dassault said it would build Falcon 2000 jets for the first ever outside France, partnering with the Reliance Aerostructure owned by Anil Ambani to establish the final assembly line at Nagpur, a western Indian city. Reliance Infrastructure's shares rose 5% in the afternoon, while Dassault's shares were mostly flat. The French company signed an agreement earlier this month with India's Tata Group to produce the fuselages of Rafale aircraft outside France for first time. Reporting by Hritam Mukerjee from Bengaluru; additional reporting by Yadarisa Shabbong; editing by Eileen Soreng and Nivedita Battacharjee.
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Fed markets jittery as Mideast conflict continues
Investors held back on new stock market and forex bets on Wednesday due to the escalating Middle East hostilities, and the uncertainty surrounding the Federal Reserve's decision on monetary policy later that day. While traders pondered how Israel's ongoing airstrikes on Iran, which are now in their sixth day, will affect the global financial and economic markets, European stock indexes and international oil price fluctuated, without much direction. The broad European equity index traded flat. The UK's FTSE 100 index edged up 0.2% and Germany's DAX rose by the same amount. Brent crude oil dropped 0.8% to $75.92 per barrel but was still set for a weekly increase of 1.6%. Local media reported that thousands of Tehran residents fled Israel's attacks on the inner circle of Iranian leader Ayatollah Ali Khamenei, while Israel reported Iranian counterattacks and U.S. fighter jets deployed to the region. Israel's biggest ever air strike against Iran, launched shortly after it concluded that Tehran was close to developing nuclear weapons, has sparked fears of disruptions of oil supply in the Strait of Hormuz. This is a major sea-borne oil conduit. In addition to the U.S. tariffs, the sharp rise in oil prices poses a new global inflation risk. Investors are becoming more nervous about the possibility of a direct U.S. involvement in Syria after President Donald Trump called this week for Iran to surrender unconditionally and warned Washington that its patience is wearing thin. Joseph Capurso is the head of sustainable and international economics for Commonwealth Bank of Australia. The markets are trying hard to assess the risk of a large U.S. Military intervention. The market may not be thinking clearly, but the oil and currency prices indicate that they are pricing in some risk of a very bad outcome. The U.S. equity contracts were also directionless. Contracts tracking the S&P 500, and the tech-heavy Nasdaq 100 rose about 0.2% each after the cash session ended in the negative on Tuesday. The dollar has been gaining against other currencies due to its energy exporting status. However, future oil price spikes may impact consumer spending in regions that import oil, such as the eurozone and Japan. Last bought at $1.1535. The pound edged up 0.2% to $1.3458 after slipping 1.1% the previous session. The yen also rose 0.2% to 1.4498. Thierry Wizman, global FX and rate strategist at Macquarie Group, said that "the war has shown that the U.S. Dollar still retains a little bit of a haven status" in certain situations. FED 'DOT' Plot The Middle East conflict, coupled with the prolonged uncertainty surrounding Trump's tariffs, and signs of fragility within the U.S. economic system, create a difficult backdrop for the Federal Reserve to make its policy decision on Wednesday. Data released on Tuesday showed that U.S. retail sale fell by 0.9% more than expected in May. This was the largest drop in four month. The Fed is expected to maintain its current interest rates. However, the Fed's updated economic projections and benchmark rate (also known as a dot plot) will be the main focus. Harvey Bradley, co-head global rates at Insight Investment, said that markets will be closely monitoring the Fed's quarter dot plot to get clues as to when and how the central bank plans on resuming its rate cutting cycle. He added that "tensions in the Middle East could threaten the inflation picture even further. It cannot be ruled-out that projections will adjust to reflect only one rate reduction this year." He added that this was not a certain outlook, as the U.S. labor market had begun to falter. U.S. Treasury rates were stable after they fell on Tuesday when investors bought government bonds as a safe haven in response to recent developments in Israel and Iran. Treasury yields are the benchmark for interest rates on debts around the world. They fall as the price of securities increases. The benchmark 10-year U.S. bond yield rose by about one basis point (bp), to 4.4027%. It had fallen approximately six basis points the previous session. The two-year rate, which is more sensitive than the 10-year to changes in expectations of Fed interest rates, remained at 3.9586%. Spot gold was flat at $3.386 per ounce.
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China's slowdown in demand for iron ore has led to a further decline in the price of iron ore
Iron ore futures declined on Wednesday, and were on course for a fifth consecutive session of declines. This was due to a slowdown in demand for steelmaking materials from China, the top consumer. The day-traded price of the most traded September iron ore contract at China's Dalian Commodity Exchange was 695.5 Yuan ($96.79). As of 0702 GMT, the benchmark July Iron Ore traded on Singapore Exchange fell 0.41% to $82.4 per ton. "Iron ore price fell below $93 per ton, as China's demand continues to slow." The demand from China will likely remain weak due to the ongoing slowdown of China's real estate market," said ING analyst in a recent note. Official data released on Monday showed that China's new house prices dropped in May, continuing a stagnation of two years. According to Mysteel's data, China's blast-furnace steel mills saw their production fall for the fifth consecutive week between June 6-12. The consultancy attributed this to the regular maintenance stops among the mills. The rainy season in southern China has slowed down construction activity. ANZ analysts said that high temperatures in the north are contributing to a slower pace of construction. ANZ reported that Beijing's efforts to curb steel overcapacity appear to be working. The National Bureau of Statistics reported that China's crude output of steel fell 6.9% compared to the same month a year ago, reaching 86.55 millions tons. Steelhome data show that the total iron ore stocks across China's ports increased by 1.06% in a week to 133.4 millions tons on June 13. Coking coal was down 0.57%, while coke rose 0.62%. The benchmarks for steel on the Shanghai Futures Exchange have gained some ground. Hot-rolled coil and wire rod gained around 0.43%, while rebar and stainless steel rose by about 0.1%. ($1 = 7.1856 Chinese Yuan) (Reporting and editing by Michele Pek)
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Gold prices fall as investors remain on the sidelines before Fed decision
The gold price fell in choppy trading on Wednesday as investors avoided placing large bets in anticipation of the U.S. Federal Reserve policy announcement. They also kept a close eye on developments in the Israel-Iran dispute. As of 0647 GMT, spot gold was down by 0.2%, at $3,381.10 per ounce. U.S. Gold Futures were also down 0.2% at $3,399.30. Investors tracked the Middle East risk escalation. Gold fluctuated. The Fed's decision to lower rates this year is bolstered by the tepid U.S. retail sales, housing market and industrial output reports. Iran and Israel launched missile attacks on each other Wednesday, as the air conflict between the two long-time enemies entered its sixth day. This is despite the call by U.S. president Donald Trump to Iran's unconditional submission. Three U.S. officials said that the U.S. was deploying additional fighter aircraft in the Middle East, and expanding the deployment of warplanes. The data released on Tuesday shows that U.S. retails sales fell more than expected in the month of May. This was mainly due to a drop in motor vehicle sales as the rush to avoid tariff-related price increases waned. The U.S. Central Bank is expected to keep interest rates the same at the end its policy meeting, which will take place later that day. The Fed will also update its projections of the economy and benchmark interest rates. Goldman Sachs stated in a report that they "maintain our forecast" that central bank purchases and ETFs holdings will increase the price of gold to $3,700/oz and $4,000/oz respectively by the end of 2025 and mid-2026. The SPDR Gold Trust is the largest gold-backed ETF in the world. Its holdings increased by 0.43% on Tuesday to 945.94 tons. Other than that, silver spot fell 0.2% per ounce to $37.14, platinum rose 0.7% at $1,270.88 and palladium increased 0.2% at $1,054.30.
London copper prices rise on a softer dollar but Middle East tensions limit gains
London copper prices rose on Wednesday due to a weaker dollar. However, heightened tensions across the Middle East dampened risk appetite globally and held down metal prices.
As of 0712 GMT, the London Metal Exchange reported that three-month copper was up by 0.46%, at $9,713 a metric ton.
LME aluminium fell 0.02% to 2,550 per ton. Zinc climbed 0.55% to $2653, while lead grew 0.18% at $1979.5, and nickel climbed 0.24% to $14,960. Tin rose 1.11% to $30,625.
The U.S. Dollar fluctuated against the majority of major currencies on Wednesday.
Dollar-denominated investments are more affordable for holders of currencies other than the dollar.
Analysts at ANZ said that "base metals remained under stress amid a broader risk-off tone across the markets".
Worries about the escalating violence in the Middle East were at forefront of markets on Wednesday and drove oil prices up. Oil prices are rising, which dampens economic growth and increases inflationary pressures.
Retail sales in May fell more than expected, despite President Donald Trump's changing tariff policies.
The SHFE's most-traded contract for copper gained 0.42%, to 78.860 yuan (10,976.10) a metric ton.
SHFE aluminium rose 1.35% to 20,680 Yuan per ton. Lead fell 0.68% at 16,810 Yuan. Nickel dropped 0.42% to 118,480 Yuan. Zinc gained 0.85% to 22060 yuan. Tin increased 0.28% at 265,010 Yan.
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(source: Reuters)