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Oil prices pause as markets consider Trump's ultimatum against Russia
After a spike in the previous session of over 3%, oil prices were down in Asian trade Wednesday as investors waited for developments regarding President Donald Trump's new deadline to Russia to end its war in Ukraine. Brent crude futures were up 8 cents or 0.12% to $71.81 a barge by 0419 GMT. U.S. West Texas Intermediate crude was also up 8 cents or 0.12% to $69.29 a barge. Brent crude, the September contract that expires on Wednesday, was up 18 cents to $72.69 per barrel. The settlements of both contracts on Tuesday were the highest since June 20, 2006. Trump announced on Tuesday that if Russia did not end the war in 10-12 days, he would begin imposing secondary tariffs on its trading partners of 100%. This is a move from a previous 50-day deadline. Vandana Insights, the oil market analyst, said that the $4-$5 per barrel premium for supply risk, which was introduced in recent days, can be expected to continue, unless Putin takes a conciliatory step. Treasury Secretary Scott Bessent said at a Stockholm news conference where the U.S. and EU were holding trade negotiations, that the United States warned China, which is the biggest buyer of Russian oil to stop buying it or face large tariffs. Analysts at JP Morgan said that India had signaled it would comply with U.S. Sanctions, which could put 2.3 million barrels of Russian oil per day in danger. The United States, the European Union and other countries have avoided a trade conflict with an agreement for 15% U.S. Tariffs on European Imports. This deal eases concerns over the impact of trade tensions on the economic growth as well as providing support for oil prices. After talks last week, foreign partners of Venezuela's state oil company PDVSA still await U.S. authorization to operate in the country sanctioned. This could bring some supply back to the market and ease the pressure on prices. Hari said that the oil market pays attention to the U.S. Trade Deals and Talks and the Fed but these are only marginal influences on sentiment. The U.S. Federal Reserve, despite President Donald Trump’s objections at the policy meeting on Wednesday evening, is expected to keep interest rates unchanged. The International Monetary Fund (IMF) raised its global growth predictions slightly for 2025-2026 on Tuesday. However, it warned that the world economy was facing major risks such as geopolitical tension, a rise in tariffs, and a larger fiscal deficit. Reporting by Mohi Nairayan in New Delhi; Additional reporting by Colleen Hough in Beijing. Editing by Muralikumar Anantharaman, Clarence Fernandez.
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Australia's IGO warns of more problems at Kwinana as revenue drops
IGO, an Australian lithium producer, reported a decline in its annual revenue on Wednesday. It also announced a charge for impairment relating to the troubled Kwinana Lithium Refinery in Western Australia. The Perth-based firm reported sales revenues of A$512.5m for the year ending June 30. This is lower than A$822.6m reported by the company a year earlier. IGO reported that the impairment charge, which is a cost a company incurs when an asset it owns loses value, could range between A$70 and A$90 (between $45.6 million to $58,7 million) for fiscal year 2025. The shares of the Australian producer of battery metals fell as much as 12 percent to A$4.40. This is on course for its worst day in 2022. The Kwinana plant is part of a joint venture called Tianqi Lithium Energy Australia, a partnership between IGO Australia and China's Tianqi Lithium. IGO Australia holds a 49 percent stake in the TLEA and Tianqi Lithium the remainder. The first lithium hydroxide facility to be built in Australia has struggled with production delays and operational problems amid a slump in the lithium price. IGO is not confident that this asset can achieve meaningful and sustained improvements. IGO said that it continues to work with its JV partner in order to determine the best future path for the plant. After a 90 percent drop in lithium prices in the past two years, some mines producing lithium for electric vehicle batteries have curtailed their operations or delayed expansion. The refinery that produces lithium hydroxide - a key component in batteries - posted a loss of A$28.7million despite the support provided by the Western Australian Government to boost the lithium sector. The company also said that Kwinana’s production for the full year was below the forecast due to operational issues which continued to affect the refinery’s output.
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TenneT Hires Asso.subsea for Cabling Work off Germany
Subsea cable services company Asso.subsea has secured the nearshore cable installation contract for three key projects under TenneT’s 2 GW grid program, including BalWin4, LanWin1, and LanWin5.The projects are located off the northwestern coast of Baltrum Island, in northern Germany, and mark the beginning of a new collaboration with Jan De Nul, acting as the main contractor, with TenneT as the end client.Each project involves the transportation and nearshore installation of a complex cable bundle comprising 2 x HVDC power cables, one metallic return cable, and one fiber optic cable.Installation will be executed in 2027 (BalWin4), 2028 (LanWin1), and 2029 (LanWin5) respectively.The scope of work includes cable transpooling from load-out ports in the Netherlands or Germany, nearshore installation operations using the cable laying vessel (CLV) Atalanti, which will be specially modified to accommodate the four-cable bundle configuration.Also, Asso.subsea will be involved in precision cable landing via beaching operations with spud cans, and cble free-lay in intertidal zones and wet storage of cable ends“These nearshore operations are highly sensitive to tidal conditions, requiring detailed planning and precise execution. Our in-house capabilities, vessel adaptability, and commitment to engineered solutions ensure that we’re ready to meet the unique demands of these technically challenging works,” said Asso.subsea.
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Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan
The 50-50 consortium between Allseas and Boskalis has been awarded a large contract by CPC Corporation Taiwan for the second offshore gas pipeline from Yongan to Tongxiao (YT2) in Taiwan.Under the contract, the consortium will design, construct, install and pre-commission the new YT2 36-inch offshore natural gas pipeline, which will run approximately 232 kilometers parallel to the existing YT1 pipeline, connecting the Yongan LNG terminal in the Southwest with the Tongxiao transfer station in the Northwest.The comprehensive scope of work includes trenching, pipeline installation with 34 crossings over existing and future infrastructure and assets, backfilling and two landfalls.Within the consortium, Allseas will carry out the pipeline installation and pre-commissioning, including the pre-lay installation of concrete mattresses. For these activities, Allseas will deploy two of the most advanced pipelay vessels in the industry.Boskalis will be responsible for the landfalls and associated microtunnelling activities, as well as nearshore and offshore trenching, backfilling, and the installation of rocks for the 34 pipeline crossings. For these activities, Boskalis will deploy two large hopper dredgers, a large backhoe dredger, and a subsea rock installation vessel.The total contract value for the landmark energy project, developed to accelerate energy transition and improve gas supply capacity in Taiwan, is approximately $1.4 billion (€ 1.2 billion).Project execution is scheduled to begin in 2026, with completion anticipated in 2028.
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Gold prices rise on lower Treasury yields, but Fed policy is still pending
The gold price edged upwards on Wednesday. This was supported by lower Treasury yields, and a slight drop in the dollar. Investors are now awaiting the U.S. Federal Reserve policy statement, which is scheduled to be released later that day, for further guidance on the future path of monetary policy. As of 0236 GMT, spot gold rose 0.1% to $3,329.27 an ounce. U.S. Gold Futures increased 0.1% to $3326.90. The Treasury yields are showing that there is a possibility that the Fed will start to lean towards the dovish end of the pendulum. Kelvin Wong, senior market analyst at OANDA, added that the strength of the dollar was also being moderated. On Wednesday, the benchmark 10-year Treasury yields were hovering near a 1-month low. Despite Donald Trump's repeated calls to lower rates, it is expected that the Fed will keep interest rates unchanged. The markets continue to price-in a possible rate cut in September. In an environment of low interest rates, gold tends to perform well. Wong stated that if gold prices rise above $3,350 before the end of the week, due to the release of U.S. employment and inflation data, this could swing the momentum in the direction of a price increase, at least on the short-term. After two days of talks, U.S. officials said that Trump would make the final decision. The International Monetary Fund slightly raised its global growth forecasts for 2025 and 2026 on Tuesday, citing stronger-than-expected buys ahead of a jump in U.S. tariffs on August 1 and a drop in the effective U.S. tariff rate to 17.3% from 24.4%. Silver spot fell by 0.1%, to $38.14 an ounce. Platinum lost 0.6%, to $1,386.31, and palladium increased 0.4%, to $1,262.99. (Reporting and editing by Harikrishnan Nair, Sumana Nandy, and Anmol Choubey from Bengaluru)
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Shanghai evacuates 280,000 people in response to Tropical Storm
China Central Television (CCTV), reported Wednesday that Shanghai had relocated over 280,000 people as a precaution in preparation for heavy rains due to the arrival of tropical cyclones in eastern China. Co-May, a tropical cyclone, made landfall in Zhoushan (Zhejiang Province) in the early morning hours of Wednesday. The maximum sustained wind speed near the centre was 23 metres per second 83 kph. Co-May's winds are less powerful than those of a typhoon, but the Chinese financial center and other cities along the Yangtze Delta have not taken any chances. They cancelled flights and trains, suspended schools and moved people from high-risk areas. Forecasters predict that Co-May will make a second landfall nearer to Shanghai on Wednesday. Shanghai rarely receives direct hits from powerful typhoons, which usually land further south in China. Bebinca, China's most powerful tropical storm since 1949, was the most recent typhoon to land directly in Shanghai. (Reporting and editing by Tom Hogue, Raju Gopalakrishnan, and Ryan Woo)
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Sino-US trade talks yield iron ore benefits
Iron ore futures prices rose on Wednesday amid hopes for a longer-term extension of the tariff truce, but caution before a high level meeting in China, the top consumer, limited gains. As of 0211 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.69% higher. It was 798 yuan (US$111.23) per metric ton. As of 0205 GMT, the benchmark September iron ore traded on Singapore Exchange was trading at $102.9 per ton. U.S. officials and Chinese officials have agreed to extend their 90-day trade truce after two days of constructive talks between both parties in Stockholm. The goal was to defuse an escalating global trade war that is threatening the growth of the two largest economies. Treasury Secretary Scott Bessent has quashed any expectations that Donald Trump would reject the extension. The International Monetary Fund, in an effort to boost market sentiments, raised its forecast of China's economic expansion this year from 4.0% to 4.8%. Analysts at Everbright Futures stated in a recent note that the iron ore market is now more influenced by macro sentiment. Iron ore prices rose, but were then capped off by fears that Beijing might not announce more stimulus measures by the end of July. This meeting is expected to determine the economic policy of the country for the remainder. Coking coal and coke, which are used to make steel, have recovered from two sessions in which they fell. They rose by 5.66% and 5.33% respectively. The Shanghai Futures Exchange steel benchmarks gained due to higher raw material costs. Rebar climbed by 1.48%. Hot-rolled coils jumped 2.11%. Wire rod grew 1.62%. Stainless steel ticked up 0.58%. ($1 = 7.1741 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
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Asian stocks hold steady as investors prepare for the tariff deadline and Fed
Investors were cautious on Wednesday after the U.S.-China trade talks ended without a substantive agreement, and before the Federal Reserve policy announcement. MSCI's broadest Asia-Pacific index outside Japan rose 0.3% led by gains in Taiwanese shares, after U.S. stock markets ended their previous session with modest losses, as traders prepared for a flood of corporate earnings. Australian shares rose 0.7%. The Nikkei index in Japan fell 0.03% and the Hang Seng Index in Hong Kong dropped 0.4%. The euro rose from its one-month low to $1.1564 as the markets assessed the EU's deal with Trump. The next few days will be filled with several key central bank decisions and economic reports, as well as corporate earnings. This culminates in the August 1 deadline for tariffs set by U.S. president Donald Trump. Federal Reserve officials are expected to keep interest rates the same at their policy meeting on Wednesday. However, some may be in favor of lowering borrowing costs. Tom Kenny is a senior international economist with ANZ, Sydney. He said in a podcast that some officials were concerned about tariffs leading to higher inflation expectations and more persistent pressure on prices, rather than just a one-time hit. "Our expectation is the Fed will be in a good position to reduce rates at its September meeting." Treasury bonds in the United States advanced ahead of the Fed meeting. The yields fell to their lowest level in nearly four weeks after a successful auction of notes with a maturity of seven years, which helped calm fears about dwindling demand for government debt. Last week, the yield on 10-year Treasury Notes was 4.328%. This is the lowest since July 3. The yield on two-year Treasury notes, which increases with traders' expectation of higher Fed Fund rates, was unchanged at 3.873%. Tariffs, corporate earnings Bank of Japan will likely hold steady Thursday. The focus will be on the comments it makes to determine when the next rate hike will occur. A trade agreement between Japan and the U.S. has cleared the way for BOJ to continue its rate-hike journey. Some countries were preparing to negotiate with the U.S. until the last minute before Trump's deadline for a deal that would avoid the imposition of "Liberation Day tariffs". On Tuesday, U.S. officials and Chinese officials agreed that they would seek to extend their 90-day truce in tariffs. However, no major breakthroughs had been announced. U.S. officials stated that it was up President Trump to decide if he would extend the trade truce, which expires August 12, or if he would allow tariffs to rise to triple-digit numbers. Two Indian government sources say that India will also face higher U.S. duties -- between 20 and 25 percent -- on certain exports, as it delays new trade concessions before the deadline of August 1. Three South Korean Cabinet-level Officials met with U.S. Secretary of Commerce Howard Lutnick to try and finalize a deal. Prices of oil rose after Trump set a short deadline for Moscow to end the conflict in Ukraine. Brent crude futures increased 14 cents or 0.19% to $72.65 per barrel. Microsoft and Meta, two of the biggest U.S. technology companies, are expected to release their earnings on Wednesday. This will set the tone and pace for the rest the week and earnings season. Chris Weston is the head of research for Pepperstone. He said, "It has been a good reporting season in the U.S., but now that the bar has been raised, these megacaps need to go all out and make a splash." The Singapore dollar strengthened 0.2% after Singapore's central bank kept its monetary policy settings unchanged on Wednesday following stronger-than-expected economic growth in the second quarter.
Gold prices steady as attention turns to US-China talks and Fed meeting
The gold price held almost steady on Tuesday, as the markets focused their attention on upcoming U.S. China talks and Federal Reserve policy decisions.
Spot gold was steady at $3,313.63 an ounce by 10:05 ET (15:00 GMT). On Monday, prices fell to their lowest level since July 9, after a trade agreement between the United States of America and the European Union dampened demand for safe havens.
The U.S. Gold Futures remained unchanged at $3.311.60.
The lack of details and a clear outline of the trade deals announced... continue to keep market participants at a high level of anxiety," said Zain Vwda. Analyst for MarketPulse, by OANDA.
Vawda said that a drop below $3,300 in the short term could lead to a fall towards the $3,000 mark.
U.S. officials and Chinese officials met for more than five hours in Stockholm, Sweden on Monday to discuss extending the trade truce of three months. Discussions are set to resume on Tuesday.
Analysts point out that while recent U.S. agreements with the EU and Japan have provided some relief, talks with China are still complex and lengthy.
The U.S. central banks two-day meeting begins later today, and rates are expected to stay the same. Investors will be closely watching the Fed's comments for any indications on the timing and rate of future rate cuts.
Peter Grant, senior metals analyst at Zaner Metals and vice president, says that the markets are pricing in a rate cut of just 50 basis points by year's end, with October as the likely starting point.
He added that dissent by two Fed members might shift expectations towards a September reduction, which would potentially boost gold.
In a low-interest rate environment, gold tends to be more attractive for investors due to the lower yield on other assets.
Silver spot fell by 0.5%, to $37.98 an ounce. Platinum was unchanged at $1,389.85, and palladium dropped 1.2%, to $1,232.67. Sherin Elizabeth Varighese, Bengaluru (Reporting) and Shash Kuber (Editing).
(source: Reuters)