Latest News
-
Australia shares are down as miners and gold stocks weigh on the market; Middle East conflict is in focus
Australian shares fell on Wednesday, as mining and gold stock losses offset gains in energy and technology stocks. Investors remained cautious because of the ongoing Israel-Iran war. The S&P/ASX 200 Index fell by 0.1%, closing at 8,531.2. The benchmark index fell by 0.1% on Tuesday. As the Israel-Iran conflict entered its sixth day, fears of a wider conflict were stoked by Trump's demand for Iran's submission and a thinned thread of U.S. tolerance. The benchmark index on the Sydney Stock Exchange fell 1.6%, the lowest since May 2. Iron ore prices dropped due to a weaker dollar and the slowdown in demand from China, the largest consumer. BHP Group, the world's biggest listed miner, fell by 1.2%. Rio Tinto, Fortescue and Fortescue, on the other hand, lost 1.1%, and 4% respectively. Gold prices remained flat, but gold stocks fell 2.3%. Henry Jennings is a senior analyst at Marcustoday and a portfolio manager. He said that investors lock in recent gains in gold stocks by taking profits. Energy stocks rose 0.7% on the back of rising oil prices amid fears that the conflict between Israel and Iran could disrupt supply. The financial stocks of Australia's largest lender, Commonwealth Bank of Australia, rose 0.1%, led by an increase of 0.6%. Grady Wulff is a Bell Direct market analyst. He said that banking stocks were rising due to the fact that they are considered safe havens in times of geopolitical unrest. The technology stocks gained 1.1% despite Wall Street's decline overnight. Jennings said that since domestic technology stocks are not doing well, there is a dip in buying of the sub-index. The benchmark S&P/NZX 50 Index for New Zealand closed at 12,627.32 - a 0.1% decrease. Investors around the world are also waiting for the Federal Reserve to announce its monetary policy later that day. The central bank is expected to maintain its current rates. (Reporting and editing by Tasim Zahid in Bengaluru, Adwitiya Shrivastava from Bengaluru)
-
UK inflation falls in May, but food prices rise
British inflation in May slowed down as expected, mainly due to the fall in air fares in April, and the correction of an error in tax data. However, food prices rose at their fastest rate in over a year. The Office for National Statistics reported on Wednesday that consumer prices increased by 3.4% annually in May. This was in line with the predictions of economists as well as the Bank of England. The BoE forecasted that the services price inflation would be 4.7% in May, which is the same as the April reading of 5.4%. The poll predicted a reading of 4,8%. The ONS reported earlier this month that the headline reading for consumer prices in April of 3.5% was overstated by 0.1% due to an error with the data on car taxes from the government. The April figures were not changed, but the correct data for May was used. After a spike during the Easter holidays, air fares dropped sharply in April. The data is unlikely to change interest rate expectations. Investors and economists who believe that the BoE will not raise borrowing costs when it announces their June policy decision Thursday. The US dollar and sterling both rose a little after the ONS release. In April, gas, electricity, and water prices increased along with higher employer taxes, which caused inflation to jump from 2.6% in march. The rise in oil price since the beginning of the Iran-Israel war last week may cause inflation to increase again. The ONS reported that food prices increased by 4.4% over the past 12 months, which is the largest increase in more than a year. This was a major blow to low-income families. Some BoE officials disagreed with the central banks' key assumption made at its meeting in May that the recent rise in inflation would not have a longer-term effect on pricing behavior. Huw Pill, Chief Economist at the Bank of England, said that interest rates were being cut too quickly last month due to inflationary pressures from wages. However his May vote to hold borrowing costs was more likely a "skip" than a stop to rate reductions. The market pricing on Tuesday indicated that there is an 87% probability that the BoE would leave rates unchanged this week. Two 0.25 percentage point cuts are priced in for the end of the year. In a vote split in three, the BoE cut rates by a quarter-point to 4.25%. Two members of the Monetary Policy Committee voted for a larger reduction and two others - including Pill Pill - voted to hold. In May, the central bank stated that it expected inflation to reach a peak of about 3,7% in later this year. Some economists believe that April could be the peak, but the Middle East conflict poses a greater risk for price pressures. (Writing and editing by Andrew Heavens; Andy Bruce)
-
ONS reports that UK inflation in May was 3.4%.
The Office for National Statistics reported on Wednesday that British inflation was down to 3.4% per annum in May from the original published rate of 3.5% per annum in April. In a poll of economists, the Bank of England also predicted a reading of 3,4% for May in its forecasts last month. The ONS reported earlier this month that the 3.5% consumer price inflation rate for April had been exaggerated by 0.1 percent points because of an error in the data on car taxes from the government. The April figures have not been changed, but the correct data has been used for the May readings. Investors and economists who were surveyed believe that the BoE's policy announcement for June will be held on Thursday. In April, gas, electricity, and water prices increased along with higher employer taxes, which caused the inflation rate from March to jump by 2.6%. The rise in oil price since the beginning of the Iran-Israel war last week may cause inflation to increase again. Several BoE officials disagreed with the central banks' key assumption made at its meeting in May that the rise in inflation would not have a longer-term effect on pricing behavior. Huw Pill, Chief Economist at the Bank of England, said that interest rates were being cut too quickly last month due to inflationary pressures from wages. However his May vote to hold borrowing costs was more likely a "skip" than a stop to rate reductions. The market pricing on Tuesday indicated that there is an 87% probability that the BoE would leave rates unchanged this week. Two 0.25 percentage point cuts are priced in for the end of the year. In a vote split in three, the BoE cut rates by a quarter-point to 4.25%. Two members of the Monetary Policy Committee voted for a larger reduction and two others - including Pill Pill - voted for a holding. In May, the central bank stated that it expected inflation to reach a peak of about 3,7% in later this year. Some economists believe April could be the peak, despite the Middle East conflict posing a greater risk for price pressures. (Reporting and editing by Sarah Young; reporting by Andy Bruce)
-
Does the battle over LME aluminum stocks signal or cause noise? Andy Home
Where has all the aluminum gone? In the warehouses of London Metal Exchange (LME), there were 1.3 million tons of aluminium two years ago. Since then, the inventory has almost halved to levels last seen in 2020. London's market is becoming more turbulent as traders compete for what's left. This may not be apparent at first glance, but the calm exterior masks a lot of turmoil. Short-dated spreads are tightening and becoming volatile. While the LME outright three-month price has been tethered around $2,500 per ton, the LME outright three-month prices have been sedately hovering around that level. LME's aluminium market has seen titanic battles for metal between traders with deep pockets. The game has taken on an entirely new dimension ever since the exchange in April of last year banned the delivery of new Russian aluminum. This latest LME stock battle echoes past LME stock battles, but this time the LME noise could be masking an essential market signal. A LARGE MARK, LARGE POSTIONS The biggest base metals market in the world is aluminium, with an annual consumption of about 100 million tons. Aluminium traders are known to have taken outlandishly big positions on the London market. This mega-long position has been causing havoc in nearby spread structures for the past month. The benchmark period is three months of cash The market has moved from a comfortable contagious of more than $42 per tonne in April, to a small backwardation. Last week, the "tom-next spread", which is a cost-effective way to roll a position over night and an indicator of market stress was traded at a backwardation of $12.30 per ton. There is no doubt that someone is looking to buy a large amount of aluminium, but the LME has only 321,800 tonnes of metal available in its warehouses. Two-thirds are Russian. In April of last year, Russian metal was banned from the United States and United Kingdom. It is now subject to quotas and a complete ban in Europe will be implemented at the end 2026. This makes it less desirable. There's no way to tell how many of the 323,000 tonnes of metal in LME storage that are also Russian, but there is no indication of this metal being moved to warrant to ease the spread tightness. If the goal of the squeeze is to get metal out of deep non-LME shadow storage, then it does not seem to work. So far, this month's arrivals have been a mere 150 tons. The LME ban on Russian metal after April 13, 2020 may hinder the normal functioning of the LME stock grab trade. This is to tighten the spreads in order to force holders of metal to release it. This assumes that there are a large number of aluminum products, Russian or otherwise, available for LME deliveries. CHINA'S IMPORT AFFECTION GROWS This assumption is beginning to seem a bit questionable given the absence of significant arrivals in the LME system of any type of aluminium since March. China's imports of Russian metal so far in this year indicate that even Russian metal is in high demand. Since the beginning of the Ukraine war in 2022, the country has been buying up Russian aluminum that was shunned in the West. Imports of Russian aluminum primary by China grew from 291,000 tonnes in 2021, to 1,13 million tonnes in 2024. In 2025, the pace of growth has increased again. Imports increased by 48% on an annual basis to 741,000 tonnes in January-April. The structural changes in aluminium supply are the main reason for China's appetite to import metal. The country's smelters have reached the annual cap set by the government of 45 million tonnes. Since the beginning of the year, the national annualised run rate has remained at around 44 million tons. The domestic market for primary metals is tightening up against a backdrop that includes a robust demand from solar energy. The Shanghai Futures Exchange has seen stocks fall to their lowest level in 16 months, 110,000 tons. Also, the curve for forward trading is now backwardated. SCRAP WARS China's stated strategy is to increase secondary production of recyclable metals to compensate for the cap in primary metal production. This may become more difficult as recyclable materials flow to the United States, because they are exempted from the tariffs of 50% imposed by Donald Trump's administration. The second major structural shift could lead to a tightening of the global scrap supply, which would force processors outside the United States to use more primary material. The scrap flows to China, which is the largest buyer in the world, could be further disrupted by the European Union imposing export tariffs. This would stop what they call "scrap leakedage". The United States is now the threat. Originally, it was China. Testing Availability This latest mega-trade to grab a piece of the available stock is just the latest in an extensive history of mega-trades. It doesn't seem to be drawing any metal into the system. This story may have a Russian twist, but it is also a test to see if the market can be supplied. So far, supply has not been satisfactory. The LME stock churn will appear more like a signal of a downtrend in the LME's inventory the longer it continues. The author is a columnist at
-
Fed markets jittery as Mideast conflict continues
On Wednesday, investors were hesitant to buy risky assets due to concerns over the escalating hostilities across the Middle East. This sent oil prices up and prompted investors not to purchase any new investments. Investors are becoming increasingly concerned about the possibility of a direct U.S. involvement in the Israel-Iran war as it enters its sixth day. President Donald Trump has called for Iran to surrender unconditionally and warned that the patience of the United States 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. Brent crude futures rose 0.3% on Wednesday to $76.67 a barrel, while U.S. Crude climbed 0.43% to 75.16 per barrel. Both oil prices had increased by more than 4% the previous session. The mood was still gloomy despite the fact that the risk-off movement across the markets has slowed down. The broadest MSCI index of Asia-Pacific stocks outside Japan dropped 0.3%, as did the EuroStoxx 50 futures which fell 0.34%. DAX futures also fell 0.54% while FTSE Futures edged 0.06% upwards. After the Wall Street cash session ended in the red, Tuesday, S&P 500 Futures gained 0.12% and Nasdaq Futures added 0.17%. The dollar has dominated the gains in currencies against its counterparts. The euro was unable to recover from Tuesday's 0.7% drop and bought only $1.1501. The pound rose 0.12% to $1.3443 after a 1.1% drop in the previous session. The dollar dropped 0.2% to 144.98yen after reaching a high of one week earlier in the day. The rise in oil prices has a marginal negative impact on the yen, as Japan and the EU import a lot of energy while the United States exports it. The war has shown that the U.S. Dollar still retains a little bit of a haven status under certain circumstances, for example, when it is perceived to increase the risk of disruption of global oil supply and when it diverts the traders' attention from risks that are U.S. centric," said Thierry Witzman, global FX rates and FX strategist at Macquarie Group. FED OUTCOME 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. retails sales dropped 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 focus will be on updated central bank projections of the economy and benchmark rate. Erik Weisman is the chief economist of MFS Investment Management. He said, "We don't expect much innovation from the Fed." The new forecasts in the Summary of Economic Projection may indicate a slightly slower growth combined with a slightly higher inflation. Investors poured money into safe-haven bonds after the latest developments in Israel-Iran conflict. Bond yields are inversely related to bond prices. The benchmark 10-year rate was at 4.4067% last, after falling roughly 6 basis points the previous session. The yield on the two-year bond was 3.9582%. Spot gold was up 0.13% at $3,392.61 an ounce.
-
VEGOILS- Palm rises tracking rival soyoil, crude oil
The price of palm oil in Malaysia rose on Wednesday, supported by higher soyoil prices in Dalian and Chicago, a stronger ringgit and higher crude prices. By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives Exchange for September delivery had gained 20 ringgit (0.49%) to $4,084 ringgit (US$962.30) per metric ton. Kuala Lumpur based trader stated that the market was in rangebound mode but with a bias towards the positive due to the strength of rival oils and the ringgit's weakness. The Chicago Board of Trade's (CBOT), which trades soyoil, saw a 0.75% increase. Dalian's palm oil contract and most active soyoil contract both rose by 0.66%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils. On Wednesday, oil prices increased in Asian trade. This was a continuation of a 4% increase from the previous session due to fears that the conflict between Israel and Iran could disrupt supply. Palm oil is more attractive as a biodiesel feedstock due to the stronger crude oil futures. The Malaysian Ringgit, which is the contract currency for palm, has eased by 0.02% in relation to the U.S. Dollar, making goods denominated in ringgit more attractive for holders of foreign currencies. Intertek Testing Services, a cargo surveyor, said that exports of Malaysian products containing palm oil for the period June 1-15 were up 26.3% compared to the same period in May. AmSpec Agri Malaysia is an independent inspection company and reported shipments increasing 17.8%. According to Wang Tao, a technical analyst, palm oil is neutral between 4,072 and 4,113 ringgit a metric ton. A break in the range could indicate a direction.
-
The Iran-Israel conflict is now in its sixth day, and oil prices are continuing to rise.
On Wednesday, oil prices increased in Asian trade. This was a continuation of a 4% increase from the previous session due to fears that the conflict between Israel and Iran could disrupt supply. Brent crude futures were up 26 cents or 0.3% to $76.71 per barrel at 0440 GMT. U.S. West Texas Intermediate Crude Futures increased 35 cents or 0.5% to $75.19 a barrel. The U.S. president Donald Trump called on Iran to "unconditionally surrender" Tuesday as the Iran-Israel war entered its sixth day. Three officials confirmed on Tuesday that the U.S. Military is sending more fighter planes to the region in order to strengthen its forces. Analysts say the market is primarily concerned about disruptions to the supply of oil in the Strait of Hormuz. This area carries around a fifth of all the seaborne crude oil. OPEC's second-largest oil producer, Iran, extracts about 3.3 millions barrels of crude oil per day. However spare capacity between producers of the Organization of the Petroleum Exporting Countries (OPEC) and their allies could easily cover this. "Material disruptions to Iran's export or production infrastructure would increase the upward pressure on prices." Even if all Iranian exports were lost, spare capacity from OPEC+ would be able to replace them. Brent crude oil has gained $10 per barrel in the last two weeks. Fitch analysts expect that the geopolitical premium on oil prices will be around $5 to $10. According to market sources, Brent crude’s premium over the Middle East benchmark Dubai soared to above $3 a bar on Wednesday. This was its highest level since late September 2023, according to LSEG Data. The markets are also anticipating a second session of U.S. Federal Reserve meetings on Wednesday. It is expected that the central bank will keep its overnight benchmark interest rate between 4.25% and 4.50%. Tony Sycamore is a market analyst at IG. He said that the Fed could cut rates in July by 25 basis points, earlier than what the market expects. Sycamore stated that "the situation in the Middle East may become a catalyst to the Fed sounding more dovish as it did after the Hamas attack on October 7, 2023." Low interest rates boost the economy and increase demand for oil. The Middle East conflict creates new sources of inflation, including a surge in oil prices, which makes the Fed's decision difficult.
-
Small farmers are affected by China's massive feed shift to reduce soybean imports
Industry experts believe that China's plan to limit the use of soymeal as animal feed in order to reduce its dependency on imports will not only be feasible, but also costly and difficult for smaller farmers who produce one-third of the Chinese pork. China announced in April that it would lower the content of soymeal in animal feed to 10% by 2030. This is down from 13% as in 2023. The ongoing trade war between China and the United States has increased Beijing's urgency in bolstering food security. According to the Chinese agriculture ministry, soymeal made up 17.9% of animal feed in 2017. According to calculations and estimates by two analysts, China's soybean imports could be cut by 10 million tons annually, which is equivalent to the $12 billion that China spent on U.S. beans in 2024. This would reduce the demand for soybeans from U.S. farmers and Brazil, the top soybean supplier. Farmers, nutritionists and analysts say that while leading swine producers in China have reduced their soymeal usage, they can reduce it further by using other protein sources. Smaller producers, however, will likely struggle due to cost constraints and an increased sensitivity to the effects on animal growth. China is the home of half the world's pork. Matthew Nicol is a senior analyst with the research firm China Policy. He said that smallholders have a habitual preference for soymeal formulations. This is mainly due to familiarity and trust. He said that "larger firms will move faster, while smaller producers could lag behind or even suffer setbacks." In China, soybeans can be crushed to produce cooking oil or meal. This is a cheap, high-protein ingredient that's used to fatten cattle, pigs and poultry. In feed, soymeal is highly valued for its amino acid profile as well as compatibility with grains rich in energy such corn and wheat. China, the largest soybean importer in the world, has decreased its dependence on U.S. products since the trade conflict began during the first term of President Donald Trump. China purchases about 20% of its soybeans in the U.S. This is down from 41% of 2016 but it still represents nearly half of U.S. oil seed exports. SOYMEAL CUTTINGS China uses less soymeal than some other regions. In the United States, soymeal is estimated to make up 15% to 25% of hog rations. Alternative protein sources such as corn-ethanol byproducts distillers grain, and synthetic amino acids, have been used to replace soymeal at times. Basilisa Reas is the regional technical director for U.S. Soybean Export Council. According to government and company documents, the top Chinese hog breeder Muyuan Foods reduced its soymeal usage to 5.7% in 2023, from 7.3% in 2012, while Wens Foodstuff reported a soybean meal inclusion rate in compound feed of 7.4% on average in 2021. Analysts and nutritionists say that smaller Chinese producers, who raise 32% pigs in the country, 63% beef cattle, and 12% broilers, lack the technical know-how and precision feed tools needed to reduce soymeal usage. Chinese family farms use between 15% and 20% soymeal, according to data from the pig-farming platform Zhue.com.cn. Wang, a veteran pig farmer who raises 200-300 pigs in the northern Chinese province of Shanxi, uses 18% soybean meal in his sow's feed. He believes that a diet with less soymeal would reduce weight gain and lengthen production cycles. He said, "With diets high in soymeal, I can feed less." He said that if I feed low-soymeal, the pigs will become too thin. Alternatives that are expensive and underdeveloped Reas explained that soymeal substitutes are usually a mixture of protein alternatives such as palm kernel meal and rice bran or fish meal. They may also contain synthetic amino acids. China's Agriculture Ministry announced in April that it would encourage alternatives, such as synthetic amino acid, fermented hay, high-protein corn, and non-grain protein sources, including microbial proteins, insect proteins, and kitchen waste. It aims to produce non-grain proteins in excess of 10 million tons per year by 2030. China, since the first trade war of the Trump administration, has been promoting a "low-protein technology" that reduces animal reliance on soymeal by supplementing animal feeds with synthetic amino acid, particularly among large-scale companies. Muyuan is, for example, collaborating with Westlake University, Hangzhou, on synthetic biology, aiming at "zero soy" pig breeding. Industry experts have said that synthetic amino acids cannot replace the natural protein in animals and can only partially meet their digestive needs. Beijing has also planted 667,000 acres of high-protein corn. The variety has a protein content of over 10%, up from 8%. According to Guide to Chinese Poultry (a journal backed by the agriculture ministry), insect protein is also on the rise. Black soldier fly farms, located in Shandong, Guangdong, and other provinces, produce 100,000 tons of food annually. This feed is currently being used in diets for poultry, pigs, and aquaculture. The majority of alternatives are either expensive or still in the early stages of development. According to a Shanghai-based dealer, in late May soymeal cost 66 Yuan ($9.19), per unit of protein. This was cheaper than lysine (a synthetic amino-acid supplement used to balance feed) at 79 Yuan and corn protein, which costs 69 Yuan. Even Rogers Pay is an agriculture analyst with Trivium. As long as it remains the most cost-effective option for livestock and price, soymeal will maintain its market share. $1 = 7.1810 Chinese Yuan Renminbi (Reporting from Ella Cao and Naveen Thkral in Beijing; Additional reporting from Karl Plume in Chicago, Editing by Tony Munroe & Sonali Paul).
Equinor expects to reboot Hammerfest LNG plant on Monday
Equinor remains on track to restart its Arctic Hammerfest LNG plant on Monday after a weekend power blackout halted production, a company spokesperson stated.
Hammerfest LNG, likewise called Melkoeya, has capacity of about 6.5 billion cubic metres of gas per year. That is enough to provide about 6.5 million European homes and accounts for approximately 5% of all Norwegian gas exports.
We plan to increase today, the representative said.
Production at Europe's largest melted gas export center was stopped late on Saturday and is expected to stay offline until 1900 GMT on Monday, according to a regulatory disclosure.
The plant's power generators had been undergoing upkeep when its backup supply from an external grid stopped working, resulting in the interruption.
Equinor will inform the market when a restart has taken place, the Norwegian business's spokesperson said.
Norway is Europe's biggest supplier of natural gas after a. sharp reduction in Russian shipments since the start of the war. in Ukraine in 2022.
The Melkoeya plant receives its gas through pipeline from the. Snoehvit offshore field. Its owners are Equinor, Petoro,. TotalEnergies, Vaar Energi and Wintershall. Dea.
(source: Reuters)