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BHP CFO: New investors are buying into copper exposure and AI demand
Vandita Pant, BHP's Chief Finance Officer, said on Wednesday that generalist investors are buying into the company as AI demand makes its exposure to copper more valuable. BHP shares, the largest listed copper miner in the world, reached a new record on March 2, but then dropped amid a sector-wide selloff when the war with Iran began. They have since recovered some of their losses. She told the Macquarie Australia Conference that she has seen a?growing?interest since half results. We also see more generalist international investors in our register. BHP Group reported a ?stronger-than-expected half-year underlying profit driven ?by copper, which for the first time surpassed iron ore in the company's earnings, as prices for the red metal surged on AI-fuelled demand. They don't like to choose winners. They're?going downstream and asking where the bottleneck is? Copper is a bottleneck. We want to invest in companies where we can reduce the downside risk, but still have exposure to this upside. BHP is a good option for them." Investors told last month that major fund managers were 'heralding' a sustained rally for mining and metals as the money poured into the sector in the fastest rate in years. This was driven by a buildout of AI infrastructure, increasing defence spending, and a shift away expensive tech stocks.
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Iron ore prices jump as China resumes trade after the holiday
Iron ore futures rose on Wednesday, as China returned from its May Day holiday break. Demand for steelmaking feedstock is expected to increase in the summer when construction activities will re-start and blast furnaces will resume production. As of 0221 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was up 2.33% to 812 yuan (US$119.08) per metric ton. The benchmark June Iron Ore at the Singapore Exchange is 1.19% higher, $109.8 per ton. Galaxy Futures, a Chinese broker, said that after the five-day holiday, steel demand will likely pick up in China. After completing maintenance over the holidays, blast furnaces are expected to restart operations. Galaxy Futures reported that iron ore prices were 'also supported by an increase in volatility of coking coal and?coke?prices as summer approaches. This was driven by a higher?energy?demand, Galaxy Futures added. However, high ore imports, and a weaker overall steel demand, weighed down on price gains. According to Mysteel, the number of iron ore arriving at Chinese ports has increased from April 27 to may 3, by 2,15 million tonnes week-on-week. Liu Huifeng is the chief researcher for ferrous metals and futures at Donghai Futures. He said that although steel prices have "rebounded", surging energy prices and raw materials are putting pressure on the "already decreasing steel mill margins". Coke and coal, which are used in steelmaking, both grew by 2.57% and 2.04% respectively. The benchmark steel prices on the Shanghai Futures Exchange increased. Rebar jumped 1.25%. Hot-rolled coil climbed 1.9%. Wire rod soared 5.26%. Stainless steel grew 1.49%. ($1 = 6.8187 yuan) (Reporting by Ruth Chai; Editing by Subhranshu Sahu)
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Rivian develops variants of the R2 EVs that are more affordable
Rivian's CEO revealed that the company is developing undisclosed versions of its R2 electric vehicle, just days after it began mass production of "the smaller, more affordable SUVs". Rivian is known for its R1 SUVs and pickup trucks. The company plans to begin delivering R2 SUVs in June. Analysts say that a successful launch will be critical to the expansion of the company's mass market. When asked about the pickup version of R2, CEO RJ scaringe replied in an interview, "There are other variations of R2, that we haven't showed." "What we are building in Georgia allows different variations," said he, referring to a new factory where Rivian plans to expand production of R2 cars. Scaringe didn't disclose any details on what the other variations would look like. The demand for EVs in the United States has been hit by the elimination of 'key tax credits,' although the high price of gasoline has sparked some interest in battery powered vehicles. Affordable EVs have been hailed as a bright spot for the electric vehicle sector, since borrowing costs are still high. Rivian announced in March various trims for the?R2 crossover. The launch will start with a R2 priced at $58,000, and then other versions that are cheaper will be released later this year or in 2027. By late 2027, Rivian will release a $45,000 trim that has a range of over 275 miles. This trim is expected to broaden the customer base for Rivian. Rivian launched first its R1T pick-ups in 2021, followed by the R1S SUVs. Rivian announced R2 SUVs with the mid-size platform. They also have a smaller R3 crossover and the R3X performance variant. Scaringe stated that "clearly?there could possibly be an R2X." He continued: "There will be combinations." "I want to be careful not to announce the program." Rivian’s forecast for a 53% increase in deliveries this is due to the rollout of?R2 cars and implies approximately 22,000-23,000 R2 deliveries assuming steady demand and a smooth ramp up. Cantor Fitzgerald's?Andres?Sheppard wrote in a note to clients following?Rivian’s quarter earnings last week that the R2 will "materially boost" sales and "capture more EV market shares," thanks to its lower price point and autonomy features. Uber will also deploy 10,000 R2 fully autonomous vehicles in 2028 as part of a $1.25 billion robotaxi agreement with Rivian. (Reporting and editing by Christopher Cushing in San Francisco, Abhirup Roy from San Francisco)
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Asia markets reach record highs on AI euphoria and Iran peace hopes
In the morning of Wednesday, the Asian session, stocks soared, oil prices fell and the dollar dropped after U.S. president Donald Trump hailed "great progress" toward a "final deal" with Tehran, while momentum for AI-driven trading accelerated. Trump said he would temporarily pause an operation of escorting ships through the Strait of Hormuz. The Strait of Hormuz carries a fifth of all global oil, and Iran has blocked it since late February. This has triggered a global energy shortage. Brent crude fell 1.2% to $108.51 per barrel on the news, while S&P500 e-minis futures rose 0.3%. MSCI's broadest Asia-Pacific index outside Japan rose 2.3%, setting a new record. The surge was led by the 5.1% increase in South Korea's Kospi which cleared the 7,000-mark for 'the first time'. Analysts from Westpac stated that "markets have embraced a calm and stable environment overnight. The risk of an escalation of the Middle East conflict has been reduced after U.S. Defense Secretary Pete Hegseth made sure the ceasefire remained in place despite U.S. trading blows with Iran yesterday." This boosted risk sentiment and supported a recovery in stocks across the U.S., Europe, at the same as crude oil prices "partially unraveled yesterday's rise." The S&P 500 and Nasdaq Composite both hit new records on Wall Street on Tuesday. Chris Weston is the head of research for Pepperstone Group Ltd. in Melbourne. "Investors continue to add to their positions in 2026 winners," he said. There has been some purchasing in S&P500 materials stocks. However, it is tech stocks that continue to attract the majority of flows. This includes Apple and memory plays. Samsung Electronics, which reopened the Seoul stock market after a long holiday, jumped by 12%. It now has a market capitalization of $1 trillion, surpassing Berkshire Hathaway, and is closing in on Walmart. Rushil Khanna is the head of equity investments in Asia for Ostrum, an affiliate of Natixis Investment Managers. He said that "this capex will lead to the creation of material value in Asia, as we are the providers of the 'picks and shovels' for the AI ecosystem." The shares of Advanced Micro Devices rose 16.5% during extended trading on Tuesday as the company announced second-quarter revenues above Wall Street expectations. This was aided by strong demand for its dead-centre chip as cloud computing companies increase spending on AI infrastructure. The?U.S. dollar index, which measures the greenback's strength against a basket of six currencies, snapped a three-day winning streak. It slipped 0.1% to 98.236. The dollar index, which measures greenback strength against six currencies, ended a three-day streak of gains, slipping 0.1% to 97.236. The dollar was $1.1724, and the pound sterling $1.3577. Both were up 0.3% on this day. The Australian dollar was trading at $0.7227. It rose about 0.6% to the highest level since June 2022. This was due to improved risk appetite, and a third consecutive interest rate hike that took place a day before. The yield of the 10-year Treasury Bond in the United States was unchanged at 4,424%. Gold rose 1.2% to $4,609.59. Bitcoin was down by 0.9% to $80,881.12 while ether fell 1% to $2,358.09. (Reporting and editing by Shri Navaratnam.)
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Oil prices drop by over $2 after Trump suspends Strait opening to possible deal
?U.S. Oil futures dropped on Wednesday morning by over $2 after U.S. President?Donald Trump announced that an operation to reopen Strait of Hormuz would be paused temporarily to determine if an agreement could?be finalised. As of 2326 GMT, U.S West Texas Intermediate fell $2.23 or 2.18% to $100.04 a barrel. Trump stated on Tuesday that while the operation to reopen?the Strait?of Hormuz would be paused,?the?blockade would?remain? in force. WTI fell 3.9% on Tuesday, after the ceasefire was maintained despite reports of exchanges. Brent dropped 4% and closed at $109.87. Market sources cited American Petroleum Institute figures on Tuesday, which showed that U.S. crude inventories had?fallen for the third consecutive week. Gasoline and distillate stock also 'declined. Sources who spoke on condition of anonymity said that crude stocks dropped by 8.1 million barges in the week ending May 1. The sources reported that gasoline inventories dropped by 6.1 million barrels and distillate stocks by 4.6 million barrels in comparison to a previous week. Helen Clark (Reporting; Chris Reese, Editing)
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South Korean consumer inflation in April is highest for nearly two years due to Iran war
As expected, the increase in South Korea's consumer price in April was the fastest in almost two years. The surge in oil prices caused by the Middle East conflict fueled the rise. Data from the government showed that the consumer price index increased 2.6% in April compared to a year ago, after increasing 2.2% in March. This was in line with the median poll forecast and marked the largest year-on year increase since July 2024. According to the Ministry of Data and Statistics, the index increased 0.5% from last month after increasing?0.3% the month prior. Prices of petroleum products rose 7.9% and international airfares jumped 13.5%. The South Korean government has set nationwide fuel price limits, which are reducing inflation pressure. Chun Kyu -yeon is an economist at Hana Securities. Chun stated that "however, for the moment, the trend of rising prices will continue to be valid, since there is a growing possibility of service inflation due to factors such as airfare increases." Even after the Bank of Korea's policy measures, the deputy governor said that it was time to consider raising interest rates. In March, the nation-wide fuel price cap was introduced for the first time since nearly 30 years. The next meeting of the Bank of Korea, which kept interest rates unchanged last month amid increased uncertainty about the Iran War, will be held on May 28.
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Suncor's profits surpass expectations as increased production offsets the oil market turmoil
Suncor Energy, Canada's largest energy company, beat Wall Street estimates for the first quarter adjusted profit on Tuesday. This was largely due to higher production and throughput volumes. Geopolitical unrest and volatility of global oil prices dominated the?quarter. Prices have risen by more than 87% in this year alone after the U.S./Israeli war against Iran damaged supply chains?and key energy infrastructure. Canadian oil and gas producers have steadily increased output while reducing costs. Suncor, and its peers have outperformed global competitors amid macro-uncertainty due to years' worth of investment. Suncor's quarterly upstream?production increased to?875,000 barrels a day (bpd), from 853,000 bpd one year earlier. The refinery's throughput increased by 15,000 bpd, to 498,000 bpd in the third quarter. Its utilization rate was 97%. Canadian producers benefited from capacity increases and higher nameplate capacities in the refining networks. The company has lowered its refinery usage guidance from?99%-102% to 90%-93%, but kept the throughput guidance at 460,000-475,000. Suncor also increased its projected share repurchases of over 30%, and anticipates buying back $4 billion worth of shares by 2026. According to data compiled LSEG, the Calgary-based company reported an adjusted profit per share of C$1.93 (US$1.42) for the 'quarter ended March 31. This compares with analysts' average estimates of C$1.79, according to LSEG.
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Distributors push back against the Petrobras-Vale agreement that has seen direct diesel sales increase in Brazil.
After Petrobras, the state-run oil company, signed a contract with Vale, fuel distributors reacted by reducing their sales. Distributors group 'Sindicom' sent letters to oil regulator ANP and were seen by them. They said direct fuel sales from producers create competitive distortions. The group includes distributors like Vibra, Raizen, and Ultrapar. Sindicom claimed that, unlike distributors of the RenovaBio program, such producers are not required by law to purchase CBios (carbonization credits), also known as CBios. Currently, only distributors are required to purchase them. ANP, in a document seen by us, reported that the direct sales of Diesel B (blended biodiesel) to large consumers were 22.39 millions liters, up from 1.1million liters the previous quarter. ANP confirmed the figures when asked for comment but stated that it would not reveal which manufacturers made the sales "for reasons of competition". Petrobras is Brazil's main diesel producer. Petrobras announced in January that it had reached an agreement with?Vale for the supply of diesel to?the miner?s operations located in Minas Gerais. ANP reports that Minas Gerais purchased 19.49 million liters (nearly 90%) of the diesel directly from producers reported between January and march. In one of the letters Sindicom sent to ANP, it said that "as producers aren't obligated agents in RenovaBio the direct sale by these agents of fossil fuels to large consumers takes place in asymmetrical manner in comparison with distributors." Petrobras stated that it constantly evaluates the possibility of direct sales to large customers, always in compliance with current legislation. It did not confirm the volume sold. Vale stated that the agreement between Petrobras and Vale is subject to confidentiality clauses. The miner did not reveal the purchased quantities. According to statements made by previous executives, Petrobras was seeking to sell fuels directly to large consumers. This strategy would allow Petrobras to gain a greater?share of market and be closer?to the end customer in a more profitable manner. The state-owned firm's executives have claimed that they lost contact with the end consumer after the sale of BR Distribuidora – now Vibra – in 2019. (Reporting and writing by Marta Nogueira, Fernando Cardoso, David Gregorio).
Gold prices jump on dollar weakness and Middle East peace hopes
Gold prices increased by more than 1% on Tuesday, boosted by a weaker dollar. Meanwhile, lower oil prices eased concerns about inflation and interest rates that would continue to rise, in anticipation of an agreement between the U.S. and Iran.
As of 0225 GMT, spot gold rose 1.7% to $4,633.31 an ounce. U.S. Gold Futures for June Delivery rose 1.7% to $ 4,643.20. U.S. president Donald Trump announced on Tuesday that he will temporarily pause an operation in order to help escort vessels through the Strait of Hormuz. He cited?progress towards a comprehensive deal with Iran.
According to Kelvin Wong of OANDA, senior market analyst, "oil prices declined on reduction in the geopolitical risks premium" after the U.S. confirmed the fragile ceasefire that has been ongoing between Iran and the United States is still intact despite the skirmishes that were seen at the start of this past week.
After Trump's announcement that a peace agreement could be reached with Iran to end the conflict, both the U.S. Dollar and crude oil prices fell.
Dollar-priced materials become cheaper for holders of currencies other than the U.S. dollar. ]USD/]
While crude oil prices are rising, they can also increase the probability of interest rates increasing. Gold is considered a hedge against inflation, but high interest rates can make other assets with higher yields more appealing, which reduces its appeal.
Marco Rubio, the U.S. secretary of state, told reporters that "operation Epic?Fury" is over. He added that "we don't cheer for another situation to occur."
Wong explained that if there are any signs of a resurgence of tension, gold prices will be affected by profit-taking or short-term traders unwinding their net long positions in 'gold'. Investors are now awaiting the U.S. Non-farm Payrolls Release later this week. This will test whether or not the economy is resilient enough to maintain the Federal Reserve's monetary policies on hold.
Silver spot rose by 2.7%, to $74.80 an ounce. Platinum gained 1.7%, to $1,986.25, while palladium increased 2.1%, to $1,516.44. (Reporting and editing by Rashmi aich in Bengaluru)
(source: Reuters)