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China's Iran Oil Imports Surge in June due to a rise in shipments and teapot demand
Analysts said that China's imports of Iranian oil surged in June, as shipments increased before the recent conflict and the demand from independent refineries improved. According to data from ship-tracking firm Vortexa's, the world's largest oil importer, and biggest buyer, of Iranian crude, imported more than 1.8 millions barrels per day between June 1-20. This is a new record. Kpler data puts the average month-to date of China's Iranian condensate and oil imports to 1.46 million barrels per day as of June 27. This is up from 1 million barrels per day in May. Kpler data revealed that the rise in imports is partly due to the increased discharge of large volumes of Iranian crude oil into the water. In May, exports from Iran had reached an all-time high of 1,83 million bpd. It usually takes about a month for Iranian crude oil to reach Chinese port. Analysts Kpler and Vortexa said that China's Iran imports will likely remain high, given the large volumes of cargoes loaded in May and early-June. Xu Muyu is Kpler's senior analysts. He said that independent Chinese "teapots" refineries, which are the main buyers for Iranian oil, showed a strong demand for discount barrels, as their stockpile depleted. She added that a possible relaxation of President Donald Trump’s policy regarding Iranian oil sanctions would further boost Chinese purchases. Trump said that Washington had not abandoned its maximum pressure campaign against Iran, including restrictions on Iranian crude oil sales. However, he indicated a possible easing of enforcement in order to assist the country's rebuilding. Two traders with knowledge of the matter reported that Iranian Light crude oil is being traded this week at a discount of around $2 a barrel below ICE Brent, for deliveries between late July and early August. This compares to a previous discount of $3.30 to $3.50 a barrel for July deliveries. The traders said that the tightening of discounts was prompted by fears of oil flow disruptions through the Strait of Hormuz - a vital waterway connecting Iran and Oman. The market fears of a chokepoint closure had risen after the U.S. strike on Iranian nuclear sites last weekend, but they have eased since Iran and Israel announced a ceasefire on Tuesday. The decline in futures prices coincides with a tightening of discounts on Iranian oil. ICE Brent crude oil futures were hovering at $68 a barrel on Friday. This was their level prior to the Israel-Iran war and down 19% since Monday's peak.
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JSW expands its paint business with AkzoNobel India $1.6 billion deal
JSW Paints is buying the Indian division of Dutch paint maker AkzoNobel in a deal worth about 1.4 billion euro ($1.64 billion), excluding debt. The acquisition will expand its paints range amid increasing competition in India. The deal is made amid increasing challenges for Indian paint manufacturers, including volatile costs of raw materials, increased competition after Grasim Industries entered the market, and a weakening in urban spending. Data sourced from Dealogic, and seen by revealed that the transaction could be India's largest paint deal ever. After the announcement of the deal on Friday, shares of Akzo Nobel India rose more than 11%. However, they are still down around 1.4% for this year. Akzo Nobel (the maker of Dulux Paint) announced last year that it would review its South Asia operations in order to reduce costs and increase its core coatings business. The Dutch parent company, which is the fourth-largest in the world in terms of market capitalisation, behind PPG, Nippon Paint, and Sherwin-Williams will retain its Indian research and development centres and industrial coatings businesses. JSW Paints will purchase a 74.76% share in AkzoNobel India, a $23 billion company, for 89.86 Billion Rupees ($1.05 Billion) and make an open offer to the approximately 25% of public shareholders. Amit Purohit is senior vice president of Elara Capital. He says that while this acquisition presents JSW Paints with a significant opportunity to scale up, the near-term challenges in integrating could present an opportunity for existing players to improve their market position within the luxury segment. The deal is expected to close by the fourth quarter 2025, and Akzo Nobel will likely earn 900 million euro in net proceeds.
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Dollar struggles due to Fed concerns; Asia shares reach three-year high
Asia shares reached their highest level in over three years on Friday, as they followed a Wall Street rally. However, the U.S. Dollar struggled due to concerns about the Federal Reserve’s independence and the expectation of early rate cuts. The stock indexes around the world are expected to close the week in a positive manner, as worries over tensions in the Middle East along with uncertainty about tariffs and trade agreements have been put on hold for the time being. Early in the session MSCI's broadest Asia-Pacific share index outside Japan reached its highest level since Nov 2021, while the gauge for stocks around the world hit another record high. The DAX and EUROSTOXX50 futures both rose more than 0.5% while the FTSE Futures were barely changed. S&P 500 and Nasdaq Futures both gained 0.1%. The news that Washington and Beijing had reached an agreement on how to expedite the shipment of rare earths to the United States was one reason for the positive mood. U.S. Treasury secretary Scott Bessent said also on Thursday that after Washington reached an accord with the Group of Seven industrialized countries, he asked Republicans to remove Section 899 of their tax and spending bills. When that provision was adopted by the House, it made some investors nervous, particularly foreign investors. If that provision is removed, it will ease one of the fears of foreign investors, said Khoon Gh, ANZ's head of Asia Research. The positive developments that have been made in the market over the past few months are all contributing to this buoyant mood. Nikkei, the Japanese stock exchange, rose 1.4% to surpass the 40,000-mark for the first five-month period. Hong Kong stocks and mainland China's shares traded slightly lower. However, the CSI 300 was on course for a 2.6% weekly gain, the biggest since November 2024. FED CUTS COMING The Wall Street Journal reported on Friday that U.S. president Donald Trump was considering the possibility of announcing the replacement of Fed chair Jerome Powell by September or Oct. The dollar was further weakened as traders worried about the erosion of Fed's independence, and began to price in additional rate cuts for this year. The dollar was near its lowest level in three-and-a half years on Friday, and it was heading for a weekly loss of 1.4%. This would be the largest drop since over a month. The greenback has already fallen more than 10% for the year. If it continues to fall in the coming days, this will be the biggest half-year drop since the beginning of the free-floating currency era in the early 1970s. The euro, against a weaker US dollar, was at its highest level in more than three years. It stood at $1.1688. Last time, the pound bought $1.3725. "Trump's wish to'shadow,' the Fed by using a designated successor for Chair Jay Powell, isn't a great way to promote perceptions of autonomy and integrity in U.S. Policymaking, and, by extension that of reserve currency status of U.S. Dollar," said Thierry Witzman, global FX rates and FX strategist at Macquarie Group. The Fed's bets on a Fed cut have been strengthened by a series of U.S. data that were weaker than expected. Attention is now focused on the release of Friday's core PCE Price Index, the U.S. Central Bank's preferred inflation measure. The yields on U.S. Treasury bonds were unchanged in Asia, after a previous session that saw them fall. The two-year yield was at 3.7418% while the benchmark 10-year rate was at 4.2573%. Oil prices are set to decline by a week's end, as the ceasefire between Israel and Iran continues. This has eased concerns about Middle East supply. Brent crude futures rose 0.58% to $68.12 per barrel, while U.S. Crude rose 0.6% at $65.63 a barrel on Friday. However, both are headed for a drop of more than 10% in the coming week. Spot gold dropped 1% to $3.294.50 per ounce.
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The biggest weekly drop in oil prices since two years is expected as the war premium disappears
The oil price fell to its lowest weekly level since March 2023, Friday, due to the lack of supply disruption caused by the Iran-Israel conflict. Brent crude futures gained 35 cents or 0.52% to $68.08 a barge by 0429 GMT, while U.S. West Texas intermediate crude rose 40 cents or 0.61% to $65.64. Both contracts are now on track for a weekly decline of around 12%. The benchmarks have now returned to the level they were before Israel began the conflict on June 13 by firing missiles against Iranian military and nucleonic targets. Prices reached a five-month-high after the U.S. launched an attack on Iranian nuclear sites over the weekend. However, prices plummeted to their lowest level in more than a week when U.S. president Donald Trump announced a ceasefire between Iran and Israel. Traders and analysts say they do not see any material impact of the oil crisis at this time. Macquarie analysts said in a Thursday research note that, "absent the threat of significant disruption to supply, we still see oil as fundamentally undersupplied. Our 2025 balances indicate a surplus of approximately 2.1 million barrels a day (bpd)." Analysts expect WTI to be around $67 per barrel this year and about $60 next year. After factoring in the geopolitical premium, each forecast is raised by $2. Prices rose slightly in the second half of the week, as U.S. data revealed that crude oil and fuel stocks had fallen a week before. Demand and refining activities were also on the rise. The market is beginning to realize that crude oil stocks are extremely low, said Phil Flynn. Senior analyst at Price Futures Group. A Wall Street Journal article stating that Trump intended to select the next Federal Reserve Chief earlier than usual also supported prices. This fueled new bets that the U.S. would cut interest rates, which is what typically boosts demand for oil. Reporting by Siyi Liu and Nicole Jao, both in Singapore; editing by Tom Hogue and Christopher Cushing
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Sources say that Antofagasta's copper smelters have won a better than expected $0 TC/RC contract from China.
Four sources familiar with the matter said that Antofagasta, a Chilean miner, had agreed to a new record-low processing fee for copper concentrates. The fees will be $0 per ton of copper concentrate and $0 cents per pound. The low prices reflect the shortage of copper concentrate and are compared to the benchmarks for 2025, which were $21.25 per ton and 2.125cents per pound as agreed by the Chilean company with Chinese smelters. Two analysts and one smelter who spoke on the condition of anonymity said that it was "better than anticipated". Antofagasta didn't immediately respond to an outside office hour request for comment. Spot charges hover around $43 - meaning smelters will have to pay the copper miner for processing their concentrate. The contracts will still result in smelter losses, especially for China, which is the largest refiner and consumer of copper. These fees are the main source of income. Analysts, smelters, and traders all said that the new low would eventually force some smelters into cutting production. This year, the shortage of concentrates has increased as more smelter capacities are coming on line in China.
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The Financial Times reports that Britain's Centrica will take a 15% stake in the Sizewell C nuclear plant.
The Financial Times, citing sources familiar with the talks, reported that British Gas' owner Centrica was set to acquire a 15% stake at the Sizewell C nuclear plant in southeast England. The report stated that all sides were eager to make a final decision about the project's investment before the British Parliament recess, which begins on July 21. Could not confirm immediately the report. The government announced earlier this month that it would invest an additional 14.2 billion pounds (19.25 billion dollars) in the construction of the Sizewell C Nuclear Plant, bringing its total investment to 17.8 billion pounds. Britain wants to replace its aging nuclear fleet with new plants in order to improve its energy security and reach its climate goals, as well as create new jobs. The Financial Times reported that Canada's Brookfield Asset Management was still in discussions about investing in Sizewell C, and may be willing to take a bigger stake than Centrica. Sizewell C was initially being developed by France’s EDF and China’s General Nuclear Power Group, but the government purchased the Chinese firm’s stake in 2022 due to security concerns. EDF reported its financial results in February that the UK government held 83.8% of the company and EDF 16.2%. EDF's share is expected to decline following Britain's investment this month. Outside of regular business hours, Centrica Sizewell C or Brookfield Asset Management didn't immediately respond to requests for comments.
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Andy Home: The extended export ban on cobalt does not resolve the Congo's Cobalt Dilemma
The Democratic Republic of Congo extended its export ban for cobalt three months, as the world’s largest producer of battery metals tries to turn its power of supply into pricing power. The price response has been muted this time after a sharp rally in February when the original ban was announced. A certain extension was expected. It is clear that the physical supply chain is so backed up with inventory, Congo has not been able to deter buyers. Investors are not buying into a market turnaround imminent. Cobalt Holdings pulled out of its London Stock Exchange initial public offering earlier this month, which was to list an investment vehicle that would hold physical cobalt. Congo's dilemma with cobalt is to limit the supply of this metal, which is mined from copper and is an even greater revenue earner for this resource-rich nation. It would be better to concentrate on its own role within the supply chain. INVENTORY CUSHION The full impact of February's export ban has been delayed because it takes 90 days to ship Congo’s intermediate cobalt products to China for refinement. China's imports Congolese Cobalt were strong at more than 50,000 metric tonnes in both March & April. The Chinese supply chain remains bloated due to years of consecutive market surplus. Benchmark Mineral Intelligence, a consultancy, estimates that cobalt stocks outside Congo were equivalent to 8-10 month's global consumption during the second quarter of 2018. BMI estimates that cobalt hydroxide in China won't be physically depleted until the end of the year, despite the extended export controls imposed by the world’s largest producer. Oversupply is a result of the shift in Chinese electric vehicle manufacturers' away from cobalt-based chemistry. According to an analysis of the Cobalt Institute by Shanghai Metal Market, the country's cobalt consumption by the battery sector decreased last year. Since DRC only stopped exports, not production of intermediate cobalt is also accumulating in Congo. BY-PRODUCT BLUES Cobalt is a by-product, so Congo can't easily follow Indonesia, who has begun using mine quotas in order to limit the production of nickel, despite its inflated price. Mining restrictions on Congo’s cobalt producers will have a direct impact on the production of copper. Copper is in high demand at this time. London Metal Exchange Copper Price is at a high of close to $9900 per ton due to tight markets for raw materials and refined metal. Chinese operators, like CMOC Group in Congo, are motivated to continue digging up as much copper as possible. Cobalt is also free. Congo is the world’s largest cobalt producer and CMOC the largest producing company. No good options? The government is considering an export quota because it has limited options to force companies like CMOC and Glencore to reduce cobalt production without sacrificing copper revenues. However, enforcing export quotas instead of the blanket ban would be difficult to implement and wouldn't address the stockpiles that are accumulating. A policy change could lead to a flood of Congolese cobalt, which would have a significant impact on the price. The Congolese Government is preparing for a long-term standoff with the market of cobalt and isn't even sure what price it targets. It is possible that if it sets its sights too high, it could accelerate the loss of cobalt’s market share in the battery industry. INDONESIAN LESSON Congo has learned that controlling the supply of cobalt and controlling the market price are very different things. This is especially true when the opposite end of the supply chain in China is thousands of miles from the Congo. One of the best ways to counter this is by linking exports with commitments to increase downstream processing capacity. Indonesia has used this linkage successfully in the nickel and copper sector, where this year two new smelters will be launched as a result ever-tighter controls on exports of copper concentrat. Congo's dominant position in the supply chain will allow it to decide where it is located within the supply chain, even though it may struggle to control the price of cobalt. This will not alone solve the overproduction of copper, but would result in more revenue per pound of metal extracted from the rich mineral resources of the country. These are the opinions of the columnist, who is also an author. (Editing by Barbara Lewis).
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ASIA GOLD - India demand is muted, despite a price correction. However, buying in China and Singapore has picked up.
The demand for gold in India was subdued despite the price correction this week, as buyers waited for a larger drop. Meanwhile, in China and Singapore, the demand for gold increased. This week, Indian dealers offered a discount Discounts of up $18 per ounce on official domestic prices, including 6% import duties and 3% sales taxes, compared to last week's up to $27. Retail buyers have not changed their buying habits despite the price correction. It is a traditionally low-demand season, and buyers are looking for an even bigger price drop," said a jeweller in Kolkata. The domestic gold price was around 96.100 rupees for 10 grams of the metal on Friday, after reaching an all-time peak of 101.078 rupees in early this month. A Mumbai-based bullion seller with a private banking firm said that jewellers were not buying as much gold from banks, because retail customers were trading in old jewellery for brand new pieces, which satisfied a large part of demand. As of 0425 GMT spot gold was trading at $3,294.19, down from levels around $3,450 the previous week. Dealers in China, the world's largest gold consumer, charged premiums between $12 and $14 per ounce above the global benchmark spot prices. This is higher than the $10 premium last week. Peter Fung, the head of trading at Wing Fung Precious Metals, said that people are still interested to buy gold as a "safe haven". He added that a drop below $3,300 might attract more attention as investors appear ready to purchase on any weakness. In Hong Kong, gold In Singapore, the price was $2.00 higher than in Singapore. Gold traded at par price or a premium of $2.20. Brian Lan, managing Director at GoldSilver Central said: "We have seen more retail purchases... Wholesalers are also covering short-coverage because prices dropped quite a lot from last week." In Japan, bullion The premium was $0.5 flat. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Sumana Nandy)
US reserves will not be fully stocked until the end of the year
According to the Department of Energy, scheduled crude oil deliveries into the Strategic Petroleum Reserve will be delayed until the end of this year because of maintenance. This is up to seven months behind schedule.
From January to May, the administration of former President Joe Biden planned deliveries of 15.8 million barrels to the SPR. Only 8.8 million barrels of this total have been delivered so far in the current year.
A spokesperson for the Energy Department said that due to maintenance on site, SPR rescheduled all crude oil from previous solicitations as well as any exchanges through December 2025.
Biden sold 180 million barrels of oil in 2022 - the biggest ever sale - in order to try and control the rising gasoline prices following the Russian invasion of Ukraine.
On his first day as president in January, Donald Trump promised to fill up the SPR to "the top" in order to support the domestic petroleum industry. But it takes time.
Chris Wright, the Energy Secretary, estimated that it would take 20 billion dollars and many years to replenish the reserve back to its level before the sales. Trump's tax and spending bill allots $1.5 billion to purchase SPRs and maintain them.
Wright also criticised Biden for his large-scale sale of the reserve. He said it had caused damages of hundreds of millions.
When asked for a breakdown of those damages, his department said the 180 million barrel sale resulted in $2 million in emergency repairs, $35 million in costs to move the oil and $243 million in costs from delays to congressionally-directed maintenance.
Biden's DOE said at the time that it bought back 59,000,000 barrels of oil for the SPR at an average price less than $76 per barrel. This was a significant discount to the $95 per barrel it sold in 2022. Biden's DOE reported at the time that this resulted in an estimated $3.5 billion profit. (Reporting and editing by Muralikumar Anantharaman, Jamie Freed and Timothy Gardner in New York)
(source: Reuters)