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Kremlin denies it helped Iran little
The Kremlin reacted to criticism on Tuesday that it hadn't done enough for Iran. It said it had taken "a clear position" in condemning U.S. Vladimir Putin condemned the "unjustified attacks" by the United States on Iranian nuclear sites, which he had signed a treaty of strategic cooperation with in January. He stated on Monday that Russia will try to assist the Iranian people. However, he did not give any specifics. Earlier this week, Iranian sources said that Tehran was not impressed by Russia's support. When asked about the comparisons with the overthrow of Syrian leader Bashar Al-Assad last year, when Moscow refused sending troops or more power in the air to keep its ally at power, the Kremlin responded that some people are trying to ruin the Russian-Iranian relationship. Dmitry Peskov, Kremlin spokesperson, said that Russia had supported Iran's position with its clarity. He added that Abbas Araqchi the Iranian Foreign Minister appreciated Moscow's stand when he met Putin Monday. Peskov stated that it was too early to determine the extent of damage to Iran's nucleus facilities. Peskov stated that "some information is being received through the proper channels, but at this time it is too early." "No one has a complete understanding at this time." Peskov, when asked about a report claiming that Araqchi brought a letter from the Supreme Leader Ayatollah Ayatollah Khamenei to Putin, said no document had been handed over. "The fact that certain messages were sent by the Iranian leadership are true." Peskov stated that the report was not true. Donald Trump, the U.S. president, announced a ceasefire on Monday between Israel and Iran. This could end the 12-day conflict that caused millions to flee Tehran. It also sparked fears of a further escalation. Peskov added that Qatar was credited with brokering the ceasefire. The Russian Federation has called for this since the beginning of the conflict. This is a good thing and we should welcome it. We also hope that the ceasefire will last. (Reporting and writing by Dmitry Antonov, editing by Mark Trevelyan).
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China's Lithium Futures Near Two-Week High on Short Covering
The prices of lithium carbonate in China rose on Tuesday, reaching their highest level in almost two weeks. This was largely due to a wave covering of shorts, but a persistent supply surplus in the material for electric vehicle batteries remained an obstacle. The Guangzhou Futures Exchange's most active contract for lithium carbonate closed the daytime session 3.06% higher, at 60,700 Yuan ($8,458.28), per metric ton. It had earlier reached its highest level since the 11th of June at 61,660 Yuan per ton. Chen Jing said that the price rally is due to some bears selling off their positions in response to market talk pointing towards improving fundamentals. In reality, Chen Jing added, fundamentals are not changing much. Analysts say that despite the gains in lithium prices, the expectation of a growing supply coupled with a seasonal sluggishness in demand will continue to keep them under downward pressure. Galaxy Futures' Chen said that domestic lithium carbonate production is expected to reach a record high in July, as some producers intend to resume production by mid-June. Hedging margins will be boosted thanks to the two price recovery rounds this month. The price of lithium carbonate has fallen by 22% this year due to a glut in supply as a result rapid capacity expansions and slower than expected demand growth. On Monday, the futures contract reached its lowest level since July 2023 when it was first launched at 58.400 yuan per ton.
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Prices of EUROPE GAS have fallen by over 10% following the news that Iran and Israel had reached a ceasefire
The wholesale gas price in the Netherlands and Britain fell by more than 10% Tuesday morning, following the news that Iran had agreed to a ceasefire with Israel. This removed the premium for risk the market had built into the market due to potential disruptions of oil and gas supplies. The benchmark Dutch front month contract at the TTF Hub fell by 4.86 euro to 36.38 Euros per Megawatt Hour (MWh), which is $12.38/mmBtu by 0939 GMT. It had traded as low 35.45 Euros/MWh earlier, LSEG's data showed. The British front-month contracts was down 13.72 pennies at 84.85 cents per therm. The two contracts have now reached their lowest level since June 11. Contracts all along the curve are showing drops of about 12%, erasing any gains made since the first Israeli strike on Iran. A trader explained that Tuesday's decline was due to the news from Israel that it had agreed to U.S. president Donald Trump's proposal of a ceasefire between Iran and the United States. In its daily market report, Auxilione noted that "at the open today we saw an incredible sigh relief as more than 10% of the price levels were eroded." They warned that any breach of the ceasefire by either party would immediately bring back concerns to the market. Israel claims that Iran has violated the ceasefire, and it will respond. Iran denies the claims. Gas prices were at an 11-week high before due to fears that hostilities would lead to the closure of the Strait of Hormuz and lock in 20% of global LNG supply. The oil price also fell sharply on Tuesday. Arne Lohmann, GRM's chief analyst said that the talk of a Hormuz Strait closing and broader war risks has all but disappeared for the moment. A trader stated that gas prices could fall even lower, to levels not seen before the war, due to the high LNG supply, and the need to unwind some long positions by market participants. The Dutch day-ahead contracts plunged further, dropping from 36.25 euros/MWh to 4.92 euros. The British contract for the day ahead fell by 9.25 pence, to 85.50 pence per therm. The contract for the next day was down 11.60 pence, at 85.00 pence per therm. The benchmark contract on the European carbon markets was up by 0.90 euros at 74.17 euro per metric ton. Nora Buli, OSLO; Nina Chestney, editing.
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China's heavy dependence on Iranian oil
China is the largest buyer of Iranian oil, accounting for approximately 13.6% of the purchases made by the world’s biggest crude importer this year. This leaves Beijing exposed to any disruption in supply caused by conflict in the Middle East. Beijing, the world's largest oil importer and buyer from Venezuela, has been able to reduce its import bill by billions of dollars in recent years. How much Iranian oil does China buy? China purchases 90% of the Iranian oil shipped, but this is limited due to U.S. Sanctions aimed at cutting funding for Tehran's Nuclear Programme. According to Kpler, China bought an average of 1,38 million barrels of Iranian oil per day in the first half of this year. According to Kpler, China imported about 14.6% more than it did last year in Iran. Who are the main Chinese buyers of Iranian crude? Teapots are independent Chinese refiners that cluster mainly in Shandong Province. They buy Iranian crude because of the discount it offers compared to barrels from non-sanctioned countries. Teapots are a small part of the Chinese refinery industry, and their margins can be negative. Recently, a tepid demand for refined products has led to a squeeze on these margins. Traders and experts claim that China's large state oil companies have not bought Iranian oil in 2018/2019. How much cheaper is Iranian oil? Three traders reported that Iranian light crude was trading at $3.30 to $35 a barrel less than ICE Brent, for July deliveries. This compares to discounts of about $2.50 in June. Teapots slowed the buying, and sellers were looking to reduce inventories. According to traders, Iranian oil is currently trading at a discount of $7-8 per barrel compared to Middle East oil that has not been sanctioned. DO U.S. Sanctions Have an Impact? Washington re-imposed sanctions on Tehran in 2018 and, since Donald Trump took office in January, his administration has imposed new sanctions against Iran's oil industry. Reports state that Trump's sanctions include penalties on three Chinese Teapots. This has caused several independent mid-sized businesses to reduce their purchases, fearing being designated. According to one trader, non-sanctioned Iranian oil has replaced around 100,000 bpd in China this year. What is Beijing's position on the Iran Oil Trade? Beijing defends its trade relations with Iran and rejects unilateral sanctions. The traders who import Iranian oil into China usually label it as coming from another country, like Malaysia, which is a major hub for transshipment. Since July 2022, Chinese customs records have not indicated any oil being shipped from Iran. Reporting by Asia Energy Team, written by Tony Munroe and edited by Saad sayeed
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Gold drops to a two-week low after Israel-Iran ceasefire reduces demand for safe-haven gold
Gold fell more than 1% on Tuesday to reach a two-week-low, after President Donald Trump announced a ceasefire agreement between Israel and Iran. This announcement diminished the appeal of gold as a safe haven. As of 0852 GMT spot gold fell 1.2% to $3326.87 per ounce after reaching its lowest level since the 11th of June earlier in session. U.S. Gold Futures fell 1.6% to $3339.40. "Gold prices have been trending down today due to a shift in risk appetite as optimism increases over a possible end to hostilities within the Middle East," Ricardo Evangelista said, senior analyst of the brokerage firm ActivTrades. I don't think that the gold price will drop below $3,000 in the near future. "I see $3,300 as a significant support level." After the ceasefire was announced, oil prices fell and global stock markets rose in the hopes that it would herald the end of the war. Israel Katz, the Israeli Minister of Defence, said that he ordered his military to attack Tehran on Tuesday in response to a alleged violation to the ceasefire. The markets await Jerome Powell’s testimony to the House Financial Services Committee, which is scheduled for later today. Powell has been cautious in his recent comments about any rate cuts that may be coming soon. In an environment with lower interest rates, the appeal of non-yielding gold tends to be more prominent. Investors expect 57 basis point cuts in Fed rates by the end this year. ANZ stated in a report that "gold price is likely consolidate before staging a rally towards $3,600/oz at year's end." We expect the price of gold to reach its peak in 2025. This will be followed by a gradual drop in 2026, as global trade uncertainty and economic growth prospects improve. The price of spot silver fell 0.1%, to $36.08 an ounce. Platinum rose 1.4%, to $1.312.58, and palladium dropped 0.6%, to $1.070.49. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Vijay Kishore)
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Prices of EUROPE GAS have fallen by over 10% following the news that Iran and Israel had reached a ceasefire
The wholesale gas prices for the Dutch and British front months fell by more than 10% Tuesday morning, following the news that Iran had agreed to a ceasefire with Israel. This removed the risk premium that the market had built in due to potential disruptions of oil and gas supplies. LSEG data shows that the benchmark Dutch front-month contract for the TTF hub dropped by 4.61 Euros to 36.63 Euros per megawatt hour (12.41/mmBtu) or 12.41 euros/MWh by 0818 GMT. The contract has fallen to its lowest price since June 12, the morning of the first Israeli strike on Iran. A trader explained that Tuesday's decline was due to the news from Israel that it had agreed to U.S. president Donald Trump's proposal of a ceasefire between Iran and the United States. The daily market report by consultancy Auxilione stated that "at the open today, we have seen a tremendous sigh relief as more than 10% of the price levels were eroded." They warned that any breach of the ceasefire by either party would immediately bring back concerns to the market. Israel said that Iran had already violated the ceasefire, and it would be responding. Gas prices were at an 11-week high before due to fears that hostilities would lead to the closure of the Strait of Hormuz and lock in 20% of the global supply of liquefied gas (LNG). The oil price also fell sharply on Tuesday. Arne Lohmann, GRM's chief analyst said that the talk of a Hormuz Strait closing and a broader war threat has faded completely for the moment. A trader stated that gas prices could fall even lower, to levels not seen before the war, due to the high LNG supply, and the need to unwind some long positions by market participants. The Dutch day-ahead contracts fell by 5.25 euros, to 35.92 euro/MWh. Meanwhile, the British contract dropped 10.75 pence, to 84.50 pence per therm. The benchmark contract on the European carbon markets was up 0.31 euros at 73.58 euro per metric ton. Nora Buli, OSLO, and Nina Chestney edited the story.
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China's demand for iron ore cushions the fall, despite a firm outlook on Australia's supply.
Iron ore futures ended a three-day rally Tuesday, despite a stronger outlook for supply from Australia's top producer. However, the resilient steel demand in China helped to cushion the fall. The September contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 0.42% lower, at 703 Yuan ($97.97). As of 0725 GMT, the benchmark July Iron Ore traded on Singapore Exchange fell 0.71% to $93 per ton. Rio Tinto, world's biggest iron ore producer enters a joint venture to develop the Hope Downs 2 Project in Western Australia. Rio announced in a press release that the two pits of iron ore will have an annual combined production capacity totaling 31 million metric tonnes. Chinese consultancy Mysteel reported that iron ore exports from Australia and Brazil increased by 8.8% during the week of June 16-22. This is the highest level since June 2024. Mysteel data showed that hot metal production, which is a measure of iron ore consumption, increased 0.24% week-on-week to 2.422 millions tons as of 20th June. Analysts at ANZ said that "volumes have remained around 2.4 millions tons since April. This suggests resilience on the largest steel market in the world." Hexun Futures says that the market has not yet priced in the expected lower seasonal demand. Coking coal and coke, which are used in steel production, fell by 1.94% each and 2.03% respectively. The benchmark steel prices on the Shanghai Futures Exchange have fallen. The price of rebar, hot-rolled coil and wire rod dropped by 0.5%. Stainless steel fell 0.28%. $1 = 7.1757 Chinese yuan (Reporting and editing by Lucas Liew, Michele Pek and Sherry Jab-Phillips).
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More storms are on the horizon
After days of rain, multiple rivers in China's flood hit province of Guizhou burst their bank. This is the southwest end of the seasonal rain belt which stretches from Japan to China. Congjiang, and Rongjiang, both riverside cities with populations of more than 300,000 people, told their residents to leave the low-lying and fast-rising areas and along the rivers' banks. Since last week, the East Asia monsoon has been bringing heavy rains to parts of China. This is breaking records for rainfall. Scientists warn that while China has experienced summer flooding before, climate change will bring more rain and heavier rainfall. Government officials warn that massive flooding could lead to "black swan events" with severe consequences, such as dam collapses. Local media reported that a viaduct fell on a highway leading to Rongjiang after a landslide knocked down concrete columns. One section of road was sent crashing into the hillside. Video shared on social networks showed a cargo truck whose driver was perched dangerously over the edge as the section in front of it collapsed. Many highway sections in Guizhou were affected by landslides and cave-ins. Flooded streets in cities like Rongjiang paralysed traffic, and low-lying zones including underground garages and basements of shopping malls were submerged. State meteorologists predict that more rain will fall in the coming days. They warn provinces including Guizhou which have been hit by storms that overlapped to be on guard. On Tuesday, temperatures in provinces to the north of the seasonal rainfall belt, such as Henan and Shandong, as well the capital Beijing were just below 40 degrees Celsius. In a report released on Monday by the World Meteorological Organization, under the United Nations, it was noted that Asia is warming twice as quickly as the average global rate, causing more extreme weather conditions and a heavy burden on the region. (Reporting and editing by Saad sayeed; reporting by Ryan Woo)
After the Iran-Israel truce, caution is prevailing.
The London Metals Exchange (LME) and Shanghai Futures Exchange (SFE) saw copper prices rise on Tuesday, as caution reigned following the announcement by U.S. president Donald Trump of the ceasefire between Iran and Israel.
As of 0703 GMT, LME's three-month copper rose 0.52% to $9,717.5 a metric ton, and SHFE's most-traded Copper gained 0.4% to $78,640.
Trump stated in a post to his Truth Social website that a "complete" and "total" ceasefire would be implemented between Israel and Iran with the aim of ending the 12-day conflict.
The commodity market has been unpredictable this year, and traders and investors are likely to wait and see how things turn out.
As news of a ceasefire eased fears of supply disruptions, the U.S. Dollar fell and oil dropped to its lowest level in over a week.
The greenback price of commodities is cheaper for buyers who hold other currencies.
LME Aluminium fell 0.6%, to $2573 per ton. On Monday, it had reached a three-month peak on fears that the conflict could push up energy costs and disrupt supply. SHFE aluminium fell 0.51% to 20 315 yuan.
LME Nickel rose 0.48%, to $14,875 per ton. Lead grew by 0.37%, to $2.010.5. Zinc climbed 0.07%, to $2.689; tin fell 0.06%, to $32,675.
SHFE nickel fell 0.44% to reach 117,450 Yuan. Zinc rose 0.73% to 22090 yuan. Lead increased 0.5% to 16955 yuan. Tin gained 0.3% at 263,800.
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Data/Events (GMT 0800 Germany Ifo Business climate, current conditions, expectations New Jun 1400 US consumer confidence Jun ($1 = 7,1773 Chinese Yuan) (Reporting and editing by Sumana Niandy, Vijay Kishore, Hongmei Li)
(source: Reuters)