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Argentex, a FX company, suspends its trading of shares due to market volatility
The shares of British currency management firm Argentex, which is based in London, were suspended on Tuesday. Argentex said that the sharp drop in the U.S. Dollar had caused a serious deterioration in its liquidity. The company stated in a filing that "Argentex is exposed to significant volatility of foreign exchange rates... As a result, (it) experienced a rapid impact on its short-term liquidity position due to, inter alia margin calls related to its FX Forward and Options books." It stated that it has the support of its main liquidity provider, and is looking to strengthen its positions. However, "in the event the volatility on the currency markets worsens, the company's liquidity position will be stretched if it does not improve in the near future." The global markets have been volatile this month as President Donald Trump’s tariff policy has increased uncertainty about the economy. Argentex stated that it was particularly exposed to the "rapid devaluation of the U.S. Dollar against other major benchmark currency." According to LSEG, the dollar is at its lowest level in three years compared with a basket major currencies. It's also on track for its worst first-four months performance in 50 years. Analysts believe that its decline can be attributed to global investors selling U.S. investments due to concerns about the health of U.S. businesses and the economy Argentex's website describes it as "a global expert in currency risk and alternative banking". It offers its clients payment services and strategies to hedge their currency risks. The company's shares were suspended Tuesday, but they have already logged a 50% gain in 2025. (Reporting and editing by Amanda Cooper, Susan Fenton and Samuel Indyk)
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Severstal, a Russian company, blames the economic slowdown for a 55% drop in its first-quarter profits
Severstal, a Russian steelmaker, said that the economic slowdown in Russia and the reduced demand for steel in the construction and machine building industries led to a drop of 55% in its net profit during the first quarter. In a press release, Alexander Shevelev, the CEO of the company, said that "economic cooling measures, especially the high key rate, continue to put pressure on all major consumers" of rolled metal. Government forecasts predict that Russian economic growth will slow this year to 2.5% from 4.3% by 2024. The central bank's main interest rate is still at 21% - the highest level since the early 2000s. He added that "our estimates indicate that the steel consumption in Russia has decreased by about 13% on an annual basis, primarily due to reduced economic activities in the construction and machinery-building sectors." Earnings before interest, tax, depreciation and amortization (EBITDA), which are the company's earnings, fell by 40% during the first quarter. Revenues, however, only decreased by 5%. The company announced that it would not be paying a dividend for the first quarter due to "market uncertainties". Shevelev stated that the company was able to increase its sales of metal products and high-value products by 9% despite difficult economic conditions. The company increased investment by 140% during the first quarter thanks to a cash cushion. Many Russian companies claim that high interest rates stifle investment. (Reporting and Anastasia Lyrchikova, Writing by Gleb Brnski; Editing Jan Harvey)
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Japan's crude steel production falls 4.5% in fiscal 2020/21 due to weak construction demand
The world's third largest producer of crude steel, Japan, saw its output fall 4.5% during fiscal 2024/25. This was due to a lackluster demand for construction and manufacturing, as well as sluggish exports, as China, the top producer of steel in the world, increased exports. The Japan Iron and Steel Federation announced on Tuesday that the output, which was not adjusted for season, fell to 82.95 millions metric tons during the year ending March 31. This is the third consecutive drop in annual production. According to an analyst with the Federation, production was at its lowest level since fiscal 2020/21. A collapse in demand caused by the COVID-19 epidemic pushed the production to the lowest point it had been for roughly 50 years. The analyst stated that "steel demand has been dampened by construction delay caused by labour shortages, high material costs and a slow recovery in the automotive and other manufacturing sector." He added that "as well, a surplus of steel in the overseas market due to China's massive exports has contributed to reducing Japan's exports." The production is expected to decline as Nippon Steel closed one of their blast furnaces by the end of March, and JFE Steel will temporarily suspend one blast furnace in mid-May. The analyst also said that U.S. Tariffs have increased uncertainty regarding steel demand. Tadashi Imai, chairman of the Federation, warned that U.S. steel and auto tariffs could cause Japan's crude steel production to drop by several millions tons, down to 80 million tons. No exemptions were allowed by President Donald Trump when he raised import duties for steel and aluminum to 25% on March 12. On April 2, tariffs on auto parts and vehicles went into effect. Analysts at the Federation said that in March, Japan's crude-steel output increased by 0.2% compared to a year ago, reaching 7.21 million tonnes. This was the first rise in 13 months. However, local demand continued to be weak. The output was up 12.6% compared to February. (Reporting and editing by Kim Coghill; Yuka Obayashi)
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After Chinese import restrictions, India's small-scale steel mills have halted job cuts
Executives at India's smaller mills said they would delay job cuts, and take other measures, such as reducing output. This comes after the government implemented a temporary tariff in order to protect local producers against a surge of cheap imports from China. India, the second largest producer of crude iron and steel in the world, announced a temporary duty or safeguard provision of 12% on certain steel imports. This duty will last for 200 days. Adarsh Garg is the chairman and managing director of Jogindra Group, a state in northern India. He said: "We will wait and see how the demand develops." Garg stated that the industry had been losing money and that this duty could bring relief as well as an opportunity to increase prices. Vedant Goel, the director of Enlight Metals in Pune, said that the company had seen an increase in orders since the early morning of Tuesday. He added that the rising demand will help the company retain the external workers who were set to be eliminated due to the cheaper imports. New Delhi's tariffs primarily target China, which is the second largest exporter of steel into India after South Korea by 2024/25. Analysts and traders said that Beijing's shipments could slow down. "China's exports of steel to India could return to a previous level in 2025, which was around 1 million tonnes, or a quarter of the exports it made to India last fiscal year," said Xu Xiangchun of Beijing-based consultancy Mysteel. According to government data, India became a net importer for the second consecutive year of 2024/25. Shipments reached a record high of 9 million metric tonnes, a figure not seen in nine years. Atilla WIDNEL, Navigate Commodities' managing director, said that limiting import channels to India would "increase pressure on Chinese officials" to mandate domestic steel production reforms faster to balance the excess supply and deteriorating global and local demand. Executives said that the industry will also increase production in India to meet the growing demand. Shankhadeep Mukherjee is the principal steel analyst for CRU Group, a London-based company. We also predict that India will once again become a net exporter in 2025. This is a position it last held in 2022. (Reporting from Neha Arora, New Delhi; Amy Lv, Beijing; Additional reporting from Michele Pek; Editing by Jan Harvey.)
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French spot is above pre-holiday indicators but the short-term outlook is bearish
The European electricity price was expected to fall over the remainder of the week, as a surplus of thermal energy more than offset the rising demand. Renewables were also less available after the holiday weekend. Marcus Eriksson, LSEG analyst said: "With improved thermal we expect a slashing of the highest price day-on-day and an overall bearish outlook." By 0815 GMT, the French baseload day-ahead traded at 64.41 euros per megawatt hour. The average price of the current week was 48 euros. Germany's baseload day-ahead position has not traded. Four-day delivery Friday, meaning Tuesday, closed at 95 Euros. The French nuclear capacity was 69%, an increase of 2% over Monday but still below the 72% on April 17. Data from the operator EDF revealed that Flamanville 3 started producing power again on Sunday, after an outage lasting more than two month due to issues with equipment at facility. On Wednesday, the German wind power production fell by 400 megawatts and reached 2.8 gigawatts in France. As businesses reopen after Easter, the demand for electricity is expected to increase in both countries. In Germany, the consumption on Wednesday increased by 1.8 GW compared to yesterday's 54.6 GW and in France it rose by 400 MW compared to yesterday's 48.1 GW. German baseload for the year ahead was offered at 82.2 Euros/MWh, after closing at 83.25 euros on April 18. After closing Friday at 60.50 euros, French baseload for 2026 was not traded. $1 = 0.8694 euro (Reporting and editing by Kirby Donovan, Forrest Crellin; Additional reporting by Vera Eckert)
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China is considering setting up overseas storage for Shanghai Gold Exchange
China's central bank announced on Monday that it is looking at setting up overseas storage facilities to facilitate international settlement of certain products on the Shanghai Gold Exchange. The statement stated that Shanghai Gold Exchange would be encouraged to work with overseas exchanges in order to increase the use of the yuan as a benchmark on the international market. Four state agencies, including the People's Bank of China, jointly released a plan to enhance cross-border services in Shanghai. Shanghai Gold Exchange, although it has not specified which products will be covered by the plan, mainly deals in precious metals such as gold, silver, and platinum. Beijing has been seeking to increase the globalisation of certain commodities in order to boost its international influence and pricing power. Reports from last October indicated that China was taking steps to influence the pricing of the industrial metals which it consumes and produces, as well as attracting foreign companies to trade at the Shanghai futures exchange. This would ultimately fragment global markets. China is the largest consumer of precious materials in the world, but its prices are usually set by global benchmarks. Global spot gold has seen a record-breaking rally, with a 31% gain so far this season. This is largely due to the unpredictable tariff policies of U.S. president Donald Trump. The spot prices at the Shanghai Gold Exchange also show a similar pattern.
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Data shows that the share of OPEC oil in India's imports has dropped to a record low.
Data from industry and trade sources revealed that the share of OPEC crude oil in India's imported oil fell to a new record low during fiscal year 2024-25, as refiners continued to gorge themselves on cheaper Russian oil, which was the number one oil supplier for New Delhi for a third consecutive year. India, which is the third largest oil consumer and importer in the world, has been buying Russian oil at a discounted price after the West imposed sanctions against Moscow due to the Ukraine conflict. In the fiscal year ending March 2025, the South Asian nation imported 4.88 million barrels of oil per day on average. This represents a 5% increase over the year before. The data showed that imports of Russian oil increased 7.3%, to 1.76 millions bpd. This raised its share to 36%, while OPEC’s share fell slightly to 48.5%. Russia is a close ally of OPEC, but it has eaten away at the Middle East's key producers. India has been forced to diversify its sources of crude oil due to the geopolitical tensions, and to find cheaper supplies in other countries such as Russia. India's second and third largest sources of crude oil were Iraq and Saudi Arabia. Data compiled by revealed that India's oil purchases from Saudi Arabia in the years 2024-25 fell to their lowest level in 14-years, while those from Iraq dropped to a 4-year low. Industry sources claim that Indian refiners have restricted their purchases of Saudi oil because of higher official prices set by Saudi Aramco, the state-owned Saudi company for most of this year. India's crude oil imports have been impacted by lower Middle East imports due to a decline in Iraqi and Saudi Arabian supplies. The data shows that India's imports from Russia of oil in March rose by 11% compared to February, reaching 1.7 million barrels per day, the highest level for 5 months. The data shows that India imported 5.3 millions bpd of oil in March. This is up 1.3% compared to the previous month. The U.S. ranked fourth in terms of oil supplies to India for the month.
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Dalian iron ore prices are on the rise as traders consider India steel duties and resilient China demand
Iron ore futures traded in a narrow range on Tuesday as investors weighed the impact of new temporary tariffs on certain Chinese steel with the brightening demand for near-term products from China. The September contract for iron ore on China's Dalian Commodity Exchange rose by 0.21%, to 711 Yuan ($97.26), per metric ton. As of 0705 GMT, the benchmark May iron ore traded on Singapore Exchange was down 0.87% at $98.5 per ton. Broker Galaxy Futures said that tariff concerns were affecting steel exports and the outlook for demand for iron ore during the second quarter. India implemented a temporary 12% tariff on certain steel imports (locally known as safeguard duty) to stop a rush of cheap shipments, mainly from China. Beijing has also accused Washington's of abusing tariffs, and warned other countries not to strike a wider economic deal with America at its expense. According to ANZ, despite efforts by the government to reduce capacity, steel production grew 4,6% in March to 93 millions tonnes. "Strong iron-ore purchases by steel mills, and lower imports, saw inventories fall sharply," said ANZ. Steelhome data shows that the total iron ore stocks across China ports fell by 2.39% in a week to 134.6 millions tons on April 18. Everbright Futures, a broker, reported that hot metal production has decreased by about 1,000 tons per month, but profits at steel mills have also declined. Iron ore demand is usually gauged by the hot metal production. According to a report by Mysteel, the volume of iron ore shipped from Australia and Brazil increased 0.1% compared to the previous week. Coking coal and coke, which are used in the steelmaking process, have both fallen by 2.42% and 1.83 percent, respectively. The benchmark steel prices on the Shanghai Futures Exchange have fallen. Rebar fell 0.74%. Hot-rolled coil, wire rod, and wire rod all lost 0.8%. Stainless steel dropped 0.63%. $1 = 7.3102 Chinese Yuan (Reporting and editing by Eileng Soreng, Janane Venkatraman).
Oil markets are waiting to see if Trump’s Russian oil tariff threats is a bluff
The oil markets shrugged Monday off the threat of U.S. president Donald Trump to impose tariffs on Russian oil buyers as the shock factor of the White House's barrage of threats begins to wear out with jaded traders.
Analysts and traders have questioned the seriousness of Trump's proposal.
Warren Patterson, ING's director of commodities strategy, said that the U.S. government's announcements on tariffs and other sanctions have a tired feel.
He said that the market would not overreact until he could provide more concrete information.
The price of oil fell on Monday. Brent crude futures, the most active, were down 0.3% to $72.55 per barrel at 0710 GMT. U.S. West Texas intermediate crude was also down by 0.4% to $69.09 per barrel.
China and India are two of the largest buyers of Russian crude oil. Their consent would be essential to any secondary sanctions package that could seriously harm the exports of the world's number two oil exporter.
India became the largest buyer of Russian crude oil after the Russian invasion of Ukraine. This accounted for 35% of India’s total crude imports by 2024.
India's oil minister said in February that the country's refiners will buy Russian oil from companies and ships that are not sanctioned. This effectively reduces the number of vessels and cargoes available.
Reports indicate that Chinese state-owned oil companies are avoiding Russian oil. Sinopec, Zhenhua Oil and two others have stopped purchasing it, while the other two have reduced their volumes due to renewed U.S. sanction.
On Monday morning, however, several Chinese traders stated that they were not fazed at all by the new threat. All three people who spoke to said that Trump's propensity for brinksmanship made them discount what he said.
One trader said, "No price response yet but the market is still bullish due to all the uncertainty in supply." It's difficult to predict the impact as Trump always bluffs.
In response to a query about tariffs, the Ministry of Foreign Affairs of China said that its cooperation with Russia was neither directed by nor affected in any way by third parties.
Analysts said that if the tariffs were to become a serious threat to the markets, they would focus on how strict the policy was to be implemented and if the Organization of Petroleum Exporting Countries (OPEC) would increase production to compensate for any decrease in Russian exports.
Patterson said that the secondary sanctions on Venezuelan oil imposed last week can be used as a template for assessing the impact of similar policies against Russia.
Chinese buyers had already stopped purchases before the sanctions took effect on Wednesday. Analysts and traders expect that some sales will resume, as buyers come up with workarounds until Beijing issues a blanket prohibition.
(source: Reuters)