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India's palm oil imports in July fell as soyoil jumped to a 3-year high
A leading trade group reported that India's palm-oil imports fell in July due to cancellations of import contracts. Meanwhile, soyoil exports soared by a third year, driven by the competitive price and arrival of June consignments delayed, it said. India's lower palm oil imports, which are the largest buyers of vegetable oils in the world, could cause a buildup of stocks among top producers Indonesia, and Malaysia, and put pressure on Malaysian palm futures. Solvent Extractors' Association of India said that India's imports of palm oil in July dropped 10.5% from June to 855 695 metric tons. In a press release, the industry trade group said that imports of sunflower oil fell 7.5%, to 200,010 tonnes, while soyoil imports increased 36.9%, to 492,336 ton, which is the highest in three years. The SEA reported that the increase in soyoil imports boosted India's total edible oils imports by 1.1%, to 1.55 millions tons, from a year earlier. This was the highest level of imports since November. A Mumbai-based trader said that palm oil imports dropped in July due to order cancellations. However, they may rise in August, as refiners build up stocks for the festival season. In India, the demand for edible oils, especially palm oil, usually increases during festival season because of increased consumption sweets and fried food. The dealer stated that a significant amount of soyoil was being diverted into rapeseed oils as a substitute, since rapeseed oils are currently selling at hefty premiums over other edible oil. Six dealers said earlier this week that India's soyoil imports will surge 60% annually to a new record of 5.5 million tonnes in 2024/25. Palm oil is mainly imported from Indonesia and Malaysia. Soyoil, sunflower oil, and other oils are imported from Argentina, Brazil and Ukraine. India's push to produce more ethanol has led its farmers to stop growing oilseeds. This undermines government efforts to reduce expensive imports of cooking oil in the world's biggest buyer.
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As supplies increase, the summer demand ends and the oil price structure is narrowed.
The premiums for benchmark oil prices are declining compared to those of future months due to the increased production in the Middle East, Latin America, and Europe just as summer peak demand is ending, traders and analysts reported on Thursday. Oil prices are also affected by the easing of concerns that the U.S. may impose additional sanctions on Russia, causing further disruptions to oil supplies. Brent futures time spreads over six months U.S. West Texas intermediate futures Middle East benchmark Dubai has narrowed its backwardation by more than one dollar per barrel since the beginning of the month. Backwardation is a market structure in which the prices of immediate months are higher than future months. This indicates a tight supply. The market expects a rise in supplies if the structure narrows. The Brent and Dubai time spreads have weakened mainly due to expectations of increased OPEC+ supplies in September, and the easing of fears of Russian disruption following recent steady flows via Baltic and Black Sea. He said that "U.S. Crude Supply remains Stable, but Refinery Runs will gradually decrease into the shoulder seasons, which will ease prompt tightness." The U.S. president Donald Trump will meet with the Russian president Vladimir Putin in Alaska, on Friday, to reach a ceasefire agreement in Ukraine. Citi analysts predicted that Brent oil could fall to the low $60s per barrel if a U.S. - Russian deal is reached. RISE IN SUPPLY AT THE END OF SUMMER Traders expect more supplies now that the Organization of the Petroleum Exporting Countries (OPEC+) and its allies have agreed to boost September production. This comes as non-OPEC producers like Guyana, Brazil, and Norway begin new production. The sources also said that the peak oil demand of the Northern Hemisphere's summer has ended, cooling the red-hot margins for diesel in Europe, and decreasing the burning crude to generate electricity in Saudi Arabia. Harry Tchilinguirian is the group head of Onyx capital Group's research. He said that the physical trade on the North Sea Market was awash with "sales in the window" as expectations around crude demand were revised down. Where do the extra Saudi barrels end up? The spot premiums in the Middle East for benchmarks Dubai, Oman and October-loading supply were at their lowest level for more than a week. Dubai's relative strength is still greater than Brent. This allows the Atlantic Basin to export its oil to Asia, while keeping the spread between benchmarks, also known as Exchange of Futures for Swaps, narrow. Millions of barrels of oil have been purchased by Asian refiners from the United States and other countries in Africa and Europe, for delivery between September and October. Neil Crosby of Sparta Commodities said that there was still uncertainty about Russian oil supply, with India, the third largest oil importer in the world, buying spot cargoes recently to replace Russian oil. He said: "Some Urals (Russian oil) will be shipped to China, but this story is not yet over. There is still a tail risk as to what happens to Russian oil that is not cleared. This makes short-term EFS trading even more difficult than usual."
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China suspends construction before military parade, causing iron ore to slide
The price of iron ore futures fell on Thursday, after the Chinese government suspended construction activities ahead of an upcoming military parade in Beijing. The January contract for iron ore most actively traded on China's Dalian Commodity Exchange fell by 2.94%, to 775 Yuan ($108.06), per metric ton. As of 0730 GMT, the benchmark September iron ore price on Singapore Exchange was down 1.36% at $102.1 per ton. On September 3, the military parade will commemorate World War II's end. Atilla Winnel, Navigate Commodities' managing director in Singapore said that the Chinese authorities had ordered the suspension in construction in at least twelve provinces in the lead up to and during the event. It's therefore not surprising that Shanghai rebar futures and DCE/SGX Iron Ore Futures have experienced significant selling. The Chinese consultancy Mysteel stated in a Thursday note that the demand for construction steel in China is expected to be stable in August. This will be supported by new projects. However, recent bad weather has caused construction delays. China's new loans in yuan have been broadly contracting in July, for the first two decades. This indicates a weak demand from the private sector amid ongoing trade negotiations with Washington. This was the largest monthly drop since December 1999 and the first contraction in the credit growth since July 2005. The central bank has not loosened policy despite improvements in credit growth. Coking coal and coke both fell by 6.25% and 4.32 % respectively. Mysteel reported that China's coking market softened after a shopping spree. End-users increased material cost control, Mysteel stated in a separate report. The benchmarks for steel on the Shanghai Futures Exchange have fallen. Rebar fell 1.82%; hot-rolled coils dropped 1.18%; wire rods dropped 1.38%; and stainless steel declined 1.14%.
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Antofagasta's half-year earnings jump 60% due to higher copper prices and demand
The Chilean miner Antofagasta reported a 60% increase in its core earnings for the first half of this year, thanks to higher production and prices paid by customers for copper used as an energy transition material. The EBITDA for the first half of this year rose from $1.39 to $2.23, slightly exceeding analysts' expectations. Antofagasta is majority owned by the Luksic Family of Chile. The company announced a dividend per share of 16.6 cents, up from 7.9 cents in the interim last year. Copper is a key material for power and construction industry applications, as well as for green energy conversion. Analysts predict that copper prices could reach a record high of $12,000 per metric ton by the end the decade. This is an increase of around 20% over current levels. Antofagasta bucked a trend set by other FTSE100 companies that reported lower results. Global trade concerns have been a factor in the price of industrial metals for most of this year. Ivan Arriagada, CEO of the company, said that the company is expecting a 30% increase in production in the medium-term. Early London trading was flat, as expected in the resources sector. Analysts at RBC Capital Markets said Antofagasta had produced a "remarkably clean" set of results. They noted that the company expected capital expenditures to accelerate in the second half. Centinela Concentrator, a producer's Centinela concentrator, is expected to cost $3.9 billion by 2025, up from $2.7 in 2024. Antofagasta has four copper mines operating in Chile. It also wants to develop Twin Metals, a project in Minnesota that was put on hold after the administration of President Joe Biden blocked permits due to environmental concerns. Arriagada said on July 10, he saw an "opportunity" to advance Twin Metals following President Donald Trump’s decision to impose a tariff of 50% on copper imports. (Reporting and editing by Clara Denina, Joe Bavier, and Bernadettebaum)
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Nigeria approves $2.6 billion electricity sector debt refinancing plan
Nigeria's finance minister announced that the country has approved a plan to refinance its electricity sector debt of 4 trillion naira (2,61 billion dollars) to stabilize and improve the nation's struggling power industry. The debt, which is primarily due to 27 power companies, for unpaid invoices from 2015-2023, has hindered investment in the sector and worsened power outages. Bola Tinubu, the president of Nigeria, has promised to settle all claims after a recent inspection. On Wednesday, he approved the plan. After a cabinet session in Abuja, the finance minister Olawale Edu said that the refinancing will be carried out within three to four week under the supervision of the debt management offices. Edun stated that the project is now approved and ready for implementation. Plan will probably involve the issuance of bonds and other instruments in order to spread out repayment obligations over time. The government expects to save around 1.1 trillion Naira ($718.58 million) annually. $1 = 1,530.8000 Naira (Reporting and editing by Elisha Gbogbo, Joe Bavier and Isaac Anyaogu)
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Wall Street Journal – Aug 14,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. U.S. president Donald Trump and European leaders, including Ukrainian President Volodymyr Zelenskiy, agreed on red lines for the upcoming talks with Russian President Vladimir Putin. He said he hopes to follow quickly with a tripartite summit between the two warring leader. Tesla has taken the first steps to bring their robotaxis into New York City, just weeks after rival Waymo revealed its plans to test its autonomous vehicles in New York City. Walmart announced that, as of immediately, it would extend its employee discount of 10% to nearly all groceries purchased in its stores or online. This is the latest step to improve recruitment and retention. The U.S. Financial Accounting Standards Board has voted to establish the first ever requirements for how companies should account for environmental credits, such as renewable energy certificates and carbon offsets. However, it reduced the disclosures that were proposed by last year. President Donald Trump of the United States issued an executive directive that will speed up rocket launches and open more spaceports.
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Tinubu wants a 7% growth in Nigeria's economy by 2027
Bola Tinubu, the Nigerian president, set an annual growth target of 7% by 2027. He aims to lift millions of people out of poverty by then and to expand the economy four times larger than it is today by 2030. Tinubu, who took office in 2023 and has been president since then, has devalued twice the naira and ended petrol and electric subsidies to increase Nigeria's slow production over the past decade. These steps have triggered the most severe cost of living crisis in generations and are yet to produce faster growth. The rebasing of the gross domestic product boosted Nigeria's economy by 3.13% during the first quarter. The rebasing of the GDP increased the size to 372.822 trillion Naira ($243,55 billion) but growth was lower than expected. Tinubu, in his address to the federal cabinet said that the reforms have boosted macroeconomic stability and investor's confidence. However, he cited low public savings, as a barrier to growth. He added that public investment only accounts for 5% of the gross domestic product. Tinubu told his team that to maintain the momentum of the country, they must maximize every naira. They were instructed to examine the revenue retentions and deductions made from the federal account. This included fees charged by the Customs agency, the Tax Agency, and the National Oil Company Ltd. The Petroleum Industry Act (PIA), currently, allows NNPC 30% of certain revenues to be retained for the management of oil and gas operations. 30% of profits can also be deducted to fund exploration in frontier basins that are underexplored. The government has been criticized for these significant retentions, which are excessive and lack transparency. They have contributed to the drain on revenue and inefficiencies of Nigeria's fiscal performance. Tinubu set a 6% growth target when he took office two years earlier. The World Bank predicts that Nigeria's economy will grow by 3.6% in 2019 and 3.8% between 2027.
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Dollar suffers as stocks take a break and the Fed's rate cuts continue.
The U.S. Dollar was under pressure Thursday, as traders bet that the Federal Reserve would resume cutting interest rates in January. Bitcoin reached a new record high while global stock markets took a break from their blistering rally. MSCI's measure of Asia ex-Japan equities remained near its highest level since September 2021. It took cues from Wall Street where the S&P 500 index and Nasdaq closed at new highs for a second consecutive day. The MSCI All Country World Index reached a new record on Wednesday, and was nearly flat the following day. The futures markets suggested that European and U.S. stocks were set for a muted launch. Dollar falls to a 2-week low against a basket major counterparts as expectations for rate cuts in the United States shift. Comments from U.S. Treasury Sec. Scott Bessent have also sparked some bets on a 50-basis point reduction. Goldman Sachs predicts that the U.S. Federal Reserve will deliver three 25-basis point interest rate reductions this year, and two more by 2026. CME's FedWatch tool shows that traders are pricing in the near certainty of an interest rate cut for September. The odds of a 50-bps cut, which is more aggressive, have risen to 7% from 0% one week ago. Ben Bennett, APAC Investment Strategist at Legal and General Investment Management said that a rate cut is likely in September given recent revisions to the job market. He said that "but inflation data remain sticky and there is no sign of serious economic downturn. So the Fed will likely want to keep its options open for the remainder of the year." In the Asian hours, the Japanese yen was the biggest mover. It climbed to its highest level in three weeks at 146.38 to the dollar after Bessent stated in a press interview that the Bank of Japan would likely raise interest rates because it is behind in dealing with inflation risk. The yen has also strengthened against the euro, British pound and other currencies. BOJ Governor Kazuo Ueda said he was willing to continue raising rates, but defended his decision by stating that "underlying inflation," which is based on domestic demand and wage growth, still falls short of the BOJ target. BOJ policymakers are also hesitant to raise rates until they have a better understanding of the impact U.S. tariffs will have on Japan's economy and corporate profit. CRYPTO SURGE Analysts also point to recent financial reforms for a boost to the asset class. Bitcoin is up 32% in 2025. Ether, the second-largest cryptocurrency, has increased by 41%. It's just a little bit shy of its November 2021 high. Gold prices and crude oil prices rose a little bit on commodity markets after they hit a two-month high on Wednesday. Investors remained focused on the Friday summit between U.S. president Donald Trump and Russian President Vladimir Putin. Trump warned on Wednesday that "severe consequences would follow" if Putin refused to agree to peace in Ukraine. He also stated that the meeting could be quickly followed by another one, which would include Ukrainian president Volodymyr Zelenskiy. Trump has previously said that both sides would have to exchange land in order to stop the fighting, which has resulted in tens and thousands of deaths and millions of displaced people. Goldman Sachs analysts wrote that while a lack of progress on a ceasefire could lead to new threats of secondary oil sanctions/tariffs, they saw a limited risk of major disruptions of Russia's supply. Investors are also waiting for the U.S. producer prices inflation data, which will be released later that day. The retail sales report is expected to follow on Friday. DBS analysts believe that investors will apply the "bad-news-good-news" rule. They will treat soft U.S. economic data as an indicator of lower yields, weaker dollars and a stronger risk appetite, while viewing stronger data as evidence to counter the narrative of easing. Reporting by Jaspreet Banerjee and Ankur Kalra in Singapore, Editing by Muralikumar Anantharaman & Kim Coghill
Copper prices fall on fears of tariffs affecting US demand
The copper price fell on Friday, as investors feared that a 50% tariff would be levied on U.S. imports of the metal. Speculators also unwound their positions.
The London Metal Exchange's three-month copper was down 0.8% at $9,622 a metric ton as of 0915 GMT. This is down from the peak reached on July 2 for the last three months, which was $10,020.50.
The contract was expected to drop about 2% in the second week of this year.
Carsten Menke is an analyst at Julius Baer, Zurich.
"Another aspect, I believe, is the re-evaluation of the situation by speculators who need to now reassess a situation that was quite bullish previously."
Menke believes that the LME will return to $9,000 per ton, or less.
In recent months, speculators have driven up the price of U.S. Copper on the expectation of tariffs after an announcement was made in February that an investigation would be conducted into import duties.
COMEX copper prices reached an all-time high of $5.90 per lb after the announcement of the 50% levy, but fell on Friday by 1.4% to reach $5.51. This brings the COMEX premium over LME copper up to $2,532 per ton or 26%.
Analysts said that the COMEX price was also affected by an overhang of inventory after traders sent roughly a year's supply of copper to the United States to avoid the tariff.
Investors also faced uncertainty, including which products would be subject to the tariffs and whether certain countries could get exemptions.
The Shanghai Futures Exchange's most traded copper contract edged up 0.05% to 78.430 yuan (10,937.87), though it ended the week with a loss of 2.05% after two consecutive weeks in which the contract had gained 2.8%.
Other metals include LME aluminium, which fell by 0.4% to 2,598 per ton. Nickel also dropped 0.3%, to $15,230. Zinc lost 0.6%, to $2760. Lead was down by 0.7%, to $2029, and tin by 0.8%, to $33,305.
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(source: Reuters)