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Iron ore reaches multi-month high in hopes of a steel supply cut and Chinese stimulus
Thursday, iron ore futures prices rose for the third consecutive session, reaching multi-month highs. This was due to a resurgence of optimism about a new reform wave to curb steel production and additional stimulus measures by China, its largest consumer. As of 0318 GMT on China's Dalian Commodity Exchange, the most traded September iron ore contract was trading 1.97% higher, at 751 Yuan ($104.64), a metric tonne, which is the highest price since April 3. As of 0308 GMT the benchmark August iron ore traded on the Singapore Exchange rose 1.96%, to $97.95 per ton. This is the highest price since May 26. The main reason for the rise in prices is the anticipation of supply-side steel reforms, according to a Shanghai analyst who spoke on condition of anonymity because he was not authorized to speak to media. On Wednesday, the head of China's state planner announced that the country's economy would exceed 140 trillion yuan in this year. Meanwhile, the second largest economy in the world has been battling a long-running trade war with the United States as well as persistent deflationary forces. Analysts at Yongan Futures said that this fueled some hopes about "whether there will be more stimulus in the high level meeting later this month." Pei Hao is an analyst with Freight Investor Services, a brokerage in international. She says that iron ore has benefited from the recent rally on the coal markets, which was fueled by the expectation of reforms at the supply side. Pei said that there was no fundamental shift in iron ore supply and demand. Although shipments fell, a decrease in arrivals is likely to be visible until late July. Coking coal and coke, which are both steelmaking ingredients, also saw gains. The benchmarks for steel on the Shanghai Futures Exchange have strengthened. Hot-rolled coil, rebar, wire rod, and stainless steel all gained.
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Prices of copper in London and China are near their 3-week-lows due to the looming US tariff of 50%
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw copper prices drop on Thursday. They were near their lowest level in three weeks, due to President Donald Trump’s plan to impose a 50% tariff on imported copper starting August 1. Trump announced a 50% tariff for copper on Wednesday, stating on social media the tariff would take effect on August 1, and that it was a decision made following a national assessment. The LME's three-month copper rose 0.19%, to $9,649 a metric ton, by 0111 GMT. Meanwhile, the SHFE's most traded copper contract fell 0.75%, to 78.320 yuan. Both contracts were near their lowest levels since June. The COMEX copper contract that was the most active on Wednesday hovered around its record high and its premium over the LME copper increased to 26%. A futures analyst in Shanghai commented: "Traders are very sensitive and alert. Only limited cargoes can still make it to the U.S. by August 1. Therefore, most have stopped betting on higher LME and SHFE price premiums and have stopped using the premium. COMEX inventories The analyst stated that copper prices are at a seven-year high. In the next few days, supplies of copper may be shipped to other countries, which will ease regional supply shortages. LME aluminium rose 0.27%, to $2.603.5 per ton. Nickel was up 0.24%, to $15.015, while tin was up 0.2%, to $33,350. Zinc increased by 0.2%, to $2.748, and Lead advanced by 0.12%, to $2.058.5. SHFE aluminium rose 0.93% at 20,705 yuan per ton. Zinc was up 0.84% to 22,265 yuan. Tin was up 0.5% to 264,890 yuan. Lead gained 0.26% at 17,245 yuan. Nickel was up 0.12% at 119,600. Click or to see the latest news in metals, and other related stories. Data/Events (GMT) 0600 Germany HICP final YY June 200900 Germany, France and UK Q3 Comprehensive Risk 1230 Initial US Jobless Clm, 5 July (w/e) 1430 EIA Nat Gas Bcf, 4 July (w/e) 1430 Nat Gas-EIA implied flow, 4 July (w/e)
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Gold prices rise on weaker dollar as trade war intensifies
Gold prices rose on Thursday as a result of a slight decline in bond and dollar yields. Investors also kept an eye on the trade talks, with President Donald Trump expanding his tariff war. By 0157 GMT, spot gold had risen 0.3% to $3322.46 an ounce. U.S. Gold Futures rose 0.3% to $3,331. Trump ramped up his global tariff attack on Wednesday. He announced a new tariff of 50% on U.S. imports of copper and a duty 50% on Brazilian goods, both starting on August 1. Trump issued tariff notices on Thursday for seven minor trading partner countries, in addition to the 14 other notices issued earlier this week. These included South Korea and Japan. The 25% levies will take effect August 1, unless an agreement is reached. Trump also said that trade talks with China and Europe, the U.S.'s largest bilateral trading partners, were going well. The market impact of tariffs appears to be decreasing with every new headline. "Tariff fatigue is upon us, and traders require a new catalyst in order to wake up volatility from the lull," Matt Simpson, senior analyst at City Index, said. The U.S. Dollar Index fell 0.3% while the yield of benchmark 10-year U.S. Treasury Notes retreated from its three-week high. A lower yield reduces the opportunity cost for holding bullion that does not pay a return, and a weaker US dollar makes gold more affordable for holders of foreign currencies. Minutes from the Federal Reserve meeting of June 17-18 showed that "a few" Fed officials thought interest rates could be cut as soon as this month. The majority, however, preferred reductions to occur later in the year because of inflation concerns linked to Trump's trade policies. At its meeting in June, the Federal Open Market Committee unanimously decided to keep rates unchanged. The next policy meeting is scheduled for July 29-30. (Reporting by Anmol Choubey in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu) (Reporting and editing by Rashmi aich and Subhranshu Sahu in Bengaluru.
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Nvidia helps Asia shares to a high, as investors are unfazed with Trump's tariff moves
Asian stocks rose on Thursday on the back of optimism following Nvidia's rise to a record $4 trillion valuation. Investors also shrugged off President Donald Trump's recent tariffs. U.S. Copper Futures increased their premium over the London benchmark overnight, after Trump announced his plans to impose 50% tariffs on copper. Later, on Wednesday, he said that the tariffs would be in effect from August 1. Trump's trade anger also erupted against Brazil on Wednesday, as he issued notices of tariffs and threatened to impose a 50% penalty on Brazilian exports. The recent moves have not caused much of a stir in the markets. MSCI's broadest Asia-Pacific share index outside Japan is up 0.2%. The Nikkei Index fell 0.56%. China's blue-chip CSI300 index increased 0.2%, and Hong Kong’s Hang Seng Index rose 0.1%. Futures on the EUROSTOXX50 index gained 0.18%, while those of the FTSE Index advanced 0.33%. Nvidia, a designer of artificial intelligence chips, became the first company in history to reach a market capitalization of $4 trillion on Wednesday. It also cemented its place as one Wall Street's favourite stocks. U.S. Stock Futures Weakened in Asia on Thursday. Nasdaq and S&P 500 Futures each fell about 0.2% after both indexes had closed higher overnight. Jeff Ng of SMBC, Asia macro strategy head, said that investors are "numb" about the constantly changing situation. "They know there is still room to negotiate." Many of these announcements start with impressive numbers but are not final and are subject to change. "Even if implemented, these changes could be reversed within the next few months or even a year," said he. Expectations of Federal Reserve rate reductions later in the year also kept stocks supported. The minutes of the Fed meeting held last month showed that "most participants" expected rate cuts to occur later this year. Any price shocks from tariffs are expected to be "temporary and modest". Ng stated that markets do not currently price in a large chance of a full blown recession, as the labour market is still quite resilient. However, they are aware that there is a lot pressure on policy rates to drop, which could reduce the opportunity costs of holding stocks. DOLLAR EASES The dollar fell 0.4% to 145.79 yen on Thursday after Trump's 25% tariffs on Japan earlier in the week. The euro rose 0.17%, to $1.1742. Sterling gained 0.11%, to $1.3605. The Brazilian real was an exception, as it sank to a low of 5.5826 dollars per Brazilian real in response to Trump's threat of tariffs on Latin America's biggest economy. Julia Wang, Global Market Strategist at J.P. Morgan Private Bank, said: "Despite the S&P 500’s impressive rally the U.S. Dollar continues to retreat. This highlights a changing global macro narrative." We believe that the dollar is still 5-15% undervalued. We expect further weakness as cyclical trends and capital reallocation play out. Bitcoin was near its record high at $111,234.63, and ether rose 1.3% to 2,775.54. "We are seeing our clients adopt a more measured strategy, choosing to allocate their funds strategically into cryptocurrencies that have real utility rather than chasing after short-term movements. Bitcoin is still the most popular choice on OKX Singapore's platform, according to Gracie Lin. Brent crude futures fell 0.16% on Thursday to $70.08 a barrel. U.S. crude dropped 0.22% to $68.02 a barrel. Spot gold increased 0.3% to $3322.69 per ounce.
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Trump announces a 50% tariff on Copper Effective August 1
The U.S. president Donald Trump announced a new tariff of 50% on copper that will begin on August 1, in an effort to promote the domestic development of a critical industry for defense, electronics and autos. This is the latest of a series of tariffs Trump has imposed on sectors such as steel, aluminum and other metals. Economists have warned that this will increase costs for American consumers. Trump announced on Tuesday that he would be imposing new tariffs on the copper market, causing U.S. Comex futures copper prices to reach record highs. In February, the White House launched a Section 232 inquiry into copper imports. This was done using a law which gives the president the authority to impose higher duties based on national-security grounds. Trump said that on Wednesday he had received a "robust", national security assessment which concluded that tariffs were needed to protect U.S. manufacturing of a commodity critical in a variety of industries. Trump stated in a Truth Social post that "Copper is essential for Semiconductors, Aircraft, Ships, Ammunition, Data Centers, Lithium Ion Batteries, Radar Systems, Missile Defense Systems, Hypersonic weapons, which we are currently building." According to the U.S. Geological Survey, nearly half of America's refined copper requirements will be imported in 2024. The U.S. is expected to import 810,000 metric tonnes. According to U.S. Census Bureau statistics, the countries most likely to be affected by this tariff are Chile and Canada, who were the U.S.'s top suppliers of refined copper and copper alloys in 2024. Chile, Canada and Peru told the administration their imports do not pose a threat to U.S. interest and therefore should not be subjected to tariffs. All three countries have free-trade agreements with the U.S. The high tariffs are designed to encourage the production of copper in the U.S., as more than two thirds of it is mined there. However, the massive new mine that Rio Tinto and BHP had planned has been in limbo for over a decade.
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Oil prices fall as Trump's tariffs expand and cloud the demand outlook
Oil prices fell on Thursday, as market participants perceived that the latest tariff announcements made by U.S. president Donald Trump would threaten global economic growth. Brent crude futures fell 22 cents or 0.31% to $69.97 per barrel at 0052 GMT. U.S. West Texas Intermediate Crude lost 27 cents or 0.39% to $68.11 per barrel. After a public spat, Trump threatened to impose a 50% penalty on Brazil's exports to the U.S. Trump had announced tariffs for copper, semiconductors, and pharmaceuticals. His administration also sent tariff letters to Iraq, the Philippines, and other countries. These letters were added to a dozen that his administration issued earlier this week, including to two of the most important U.S. suppliers, South Korea and Japan. Minutes released by the Federal Reserve on Wednesday show that policymakers are still concerned about inflationary pressures caused by Trump's tariffs. Only "a few" officials said they thought interest rates could drop as early as this month. High interest rates increase borrowing costs and decrease demand for oil. The Energy Information Administration reported on Wednesday that the rise in crude oil stocks and declines in gasoline and distillate stockpiles last week helped support prices. The EIA reported that gasoline demand increased 6% last week to 9.2 millions barrels per day. J.P. Morgan stated in a note to clients that global daily flights averaged 107,600 during the first eight days in July. Flights in China reached a five-month high. Port and freight activities indicated'sustained growth' in trade activity from last year. The note stated that "year to date, the global oil demand has grown by an average of 0.97 million barrels a day, which is in line with our prediction of 1 million barrels a day." (Reporting and editing by Muralikumar Aantharaman in Tokyo)
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Noem calls for the elimination of FEMA 'as currently constituted' as it aids flood victims in Texas
U.S. Homeland Security Secretary Kristi NOEM called for the Federal Emergency Management Agency's elimination in its current format on Wednesday, while the agency was sending specialists and supplies to Texas as part of the response to the devastating floods. Noem's remarks were a restatement on her thoughts about FEMA's Future but noteworthy given FEMA’s critical role currently in central Texas. Flash floods on 4th July At least 119 people have been killed, and scores more are still missing. Noem, who spoke at a meeting with a government review panel looking for ways to reform FEMA noted that the agency provided resources including personnel to assist state and local officials leading the response in Texas. Noem also used the occasion to criticize FEMA's past failures. She claimed that the agency is too slow and bureaucratic, and it ties state and local officials up. She said that federal emergency management should be led by the states and local governments, not as it has been for decades. It has been slow at the federal level to respond. Even the delivery of resources to Americans who are in crisis has been delayed. This is why it's time to restructure this agency and make it more responsive. FEMA's defenders claim that President Donald Trump, and his aides, have tried to politicize an agency vital for helping states prepare for disasters such as hurricanes and flooding and clean up afterward. Michael Coen, FEMA chief-of-staff for former presidents Barack Obama, Joe Biden and Hillary Clinton, called Noem’s remarks “disappointing” and pointed out that people affected by the floods in Texas are "still searching for their loved ones, with the help of the federal government." FEMA's fate is not clear The Texas floods were the first major disaster to kill many people since Trump assumed office in January, vowing to abolish or gut FEMA. They served as a stark reminder to how much states rely on FEMA during disasters. Trump and Noem are yet to specify how FEMA would be remade, and how its operation would differ from the way it currently operates. Local officials in Kerr County have been questioned about their role, especially since the majority of victims were from that county. Do more Residents should be warned as floodwaters rise. FEMA's daily operation briefing states that the agency has sent search and rescue teams to Kerr County from five different states, as well as experts and supplies, to help the state's emergency headquarters located in Austin. The Army Corps of Engineers was also activated. Trump announced last month that he will "phase out" FEMA following the current hurricane season which runs through November. He said that states would receive less federal assistance for disasters with the White House controlling funding distribution. FEMA continues to play a role in the funding of state emergency capabilities. FEMA provided Texas with nearly $20 million in the fiscal year prior to pay for emergency management operations that are now the frontline of flood response. Trump has often said that he believes the states should be responsible for disaster response, but he was more reserved in his remarks following the Texas flooding. Trump said that he would "talk about it later" when asked by a reporter if he planned to phase out FEMA. Karoline Leavitt, White House Press Secretary, was equally guarded on Monday. She told reporters that the federal government's disaster response is a "policy conversation that will continue." Coen stated that he found Trump and Leavitt encouraging. He said that both seemed to be aware of the significance of the moment, and hoped that the Texas disaster could serve as an "opportunity to look at things in a different way." Reporting by Nathan Layne, Maria Tsvetkova and Ted Hesson in New York and Courtney Rozen and Ross Colvin in Washington. Editing by David Gregorio and Ross Colvin.
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Stocks rise as Nvidia reaches $4-trillion valuation, euro inch lower
The major stock indexes rose Wednesday, as Nvidia briefly reached a valuation of $4 trillion. Meanwhile, the euro dipped, as the Trump administration was getting closer to an agreement with its largest trading partner, the European Union. The U.S. president Donald Trump has issued final tariff notifications to seven minor trading partner. Bitcoin reached a new high of $112,000 on late Wednesday. This was largely due to increased risk appetite and continued institutional demand. The U.S. stock market rose after the minutes of the Federal Reserve meeting on June 17-18 revealed that only "a few" officials said they believed interest rates could drop as early as this month. The majority of policymakers are concerned about the inflationary pressure that they expect will come from Trump's use import taxes to reshape international trade. Trump expanded his trade war on Tuesday, announcing that he would impose an import tariff of 50% on copper. This move caused the copper price in the United States to soar and stock prices in America to fall. He said that he will soon introduce levies up to 200% on pharmaceuticals. On Wednesday, U.S. Copper Futures increased their premium over the London benchmark. After Trump warned 14 countries on Monday that they would face a sharply increased tariffs by a new deadline, August 1, more developments in the trade conflict are expected. Oliver Pursche is a senior vice president with Wealthspire Advisors, based in Westport, Connecticut. He said that investors aren't paying attention to the noise because they don't believe that tariffs will cause a lot of inflationary pressure or economic disorder. This hasn't been the case. Nvidia's shares, which are a supporter of the stock, closed the session up 1.8%. The company briefly exceeded a $4 trillion market cap, becoming the first company to do so in the history of the world, before closing at $3.9 billion. "Whenever you have an event like this in the market - which is a historic event - it's generally good for the overall market. This shows that investors have their eyes on the future. Peter Cardillo is the chief market economist of Spartan Capital Securities, New York. The Dow Jones Industrial Average gained 217.54 points or 0.49% to 44,458.30. The S&P 500 rose 37.74 points or 0.61% to 6,263.26. And the Nasdaq Composite gained 192.87 point, or 0.9%, at 20,611.32. The MSCI index of global stocks rose by 4.99 points or 0.54% to 924.30. The pan-European STOXX 600 ended up with a 0.78% gain. EU sources said that the euro fell 0.09%, to $1.171. Investors weighed up the possibility that the EU wouldn't receive a tariff notice and would be able to secure exemptions for the U.S. base rate of 10%. The dollar index (which measures the greenback versus six major counterparts) is still down over 6% from the day Trump announced his reciprocal tariffs on "Liberation Day", April 2. The New Zealand dollar rose 0.03% to $0.59, after the central bank of the country left its benchmark interest rate unchanged as expected. It also noted that inflation risks were near-term. U.S. Treasury Yields dropped after Treasury saw a strong demand for $39 billion in 10-year notes. This suggests that fears about investors leaving the market are unfounded. The yield on U.S. benchmark 10-year notes fell 7.7 basis points in the last day to 4.34%. Investors weighed strong U.S. data on gasoline demand and attacks against shipping in the Red Sea to determine oil prices. Brent crude futures gained 4 cents or 0.06% to settle at $70.19 per barrel. U.S. West Texas Intermediate Crude gained 5 cents or 0.07% to settle at $68,38.
Barclays lowers Brent oil forecast for 2025 on the basis of soft demand
Barclays lowered their 2025 Brent Oil price forecast on Friday by $9 per barrel. This was due to a weaker demand outlook in the face of increased economic uncertainty.
Brent crude futures traded at around $70 per barrel on Friday after closing 1.5% lower the previous session. U.S. West Texas Intermediate Crude was around $67 per barrel.
Barclays analysts said that they were "neutral" on oil prices compared to the curve. They also revised down their 2025 demand forecast to 510,000 barrels a day, due to low-frequency indicators being soft and economic uncertainty increasing.
It said: "However we don't turn bearish in relation to the curve as inventories are still low and declining and risks for the supply outlook are also skewed towards the downside due to producers who are price sensitive pulling back, and geopolitical pressures."
The International Energy Agency
Warning: Thursday
Global oil supply may exceed demand this year by 600,000 barrels a day due to the U.S.-led growth and lower-than-expected demand.
Barclays has also sharply lowered its outlook for oil demand, now expecting a growth of 900,000. barrels per a day in the entire year. (Reporting from Brijesh Patel and Anmol Chaubey in Bengaluru, Editing by Paul Simao.)
(source: Reuters)