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Iron ore gains weekly as China's exports of steel reach record high
Iron ore futures dipped on Friday, but posted a weekly gain. This was largely due to China's record steel exports, strong mill margins and low inventories. The September contract for iron ore on China's Dalian Commodity Exchange traded at 790 Yuan ($109.99) per metric ton, down 0.19%. The contract still rose by 0.7% last week. As of 0707 GMT, the benchmark September iron ore traded on Singapore Exchange was down 0.15% at $102.1 per ton but had gained 2.1% this week. After reporting lower half-year profits, major miners have paid out the lowest dividends they've ever paid in order to keep cash on hand for their major projects. BHP plans to invest up to $7.4billion in its Jansen Potash Mine in Canada. Rio Tinto will invest more than $13billion in the next 3 years in developing new iron ore mining in Western Australia, as reserves are declining. China's exports of steel continued to rise in July. They increased by 1.7% from month-to-month. The year-to date total is the highest since 1990. The move comes despite countries introducing more trade barriers because they are worried about cheap Chinese steel undercutting domestic manufacturers. Analysts from ANZ said that iron ore imports in July increased by 2% on an annual basis, which is well above the average monthly imports of the year. This was due to healthy mill margins, and low inventories, motivating mills restock. S&P Global, a global ratings agency, has maintained China's credit rating at A+. It noted that the country's fiscal stimulus measures will support its economic growth even though it faces challenges in the property sector and from tariff pressures. Coking coal and coke both increased in price, but the other steelmaking ingredients were mixed. The benchmarks for steel on the Shanghai Futures Exchange have mostly fallen. The price of rebar fell 0.71%. Hot-rolled coil dropped 0.55%. Wire rod slipped 0.23%. Stainless steel rose 0.19%. ($1 = 7.1822 Chinese yuan). (Reporting and editing by Rashmi Liew)
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India's HPCL explores Russian alternative oil amid price and sanction worries
Vikas Kaushal, chairman of Hindustan Petroleum Corp in India, said that the company is looking for alternatives to Russian crude oil if they were to stop purchasing it due to rising prices and sanctions. Indian refiners stopped buying Russian oil because it was becoming too expensive. President Donald Trump has threatened to penalize the South Asian nation if they continue to buy Russian oil. Trump imposed an additional 25% tariff to Indian goods citing New Delhi’s continued imports from Russia. This move escalated tensions after trade talks between the two countries reached a standstill. Kaushal stated that HPCL's Russian Oil intake for the quarter ending June fell by 13.2% as a result of narrowing discounts, despite the fact that there was no official government directive regarding the purchase. It's not for any geopolitical reasons. Kaushal said in an analyst call that it was an economic choice based on the fuel we needed to operate our refineries. HPCL is still willing to buy Russian oil, if the price drops. The company will absorb any financial losses incurred by not processing Russian crude oil, as they have already reduced their Russian oil processing. HPCL controls directly 490,000 barrels of refining capacity per day. It also has a stake with the private refiner HPCL Mittal Energy Ltd., which operates a plant that produces 226,000 barrels per days in northern India. The company is also constructing a 180,000-bpd refinery in Barmer, a desert state in Rajasthan. HPCL has diversified its crude supplier base and simplified its crude import strategy by sourcing 4,000,000 barrels via a single bid instead of multiple offers.
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Reliance Infra, an Indian company, will recover 2.44 billion dollars in unpaid electricity dues from New Delhi customers
Reliance Infrastructure, an Indian company, announced on Friday that it will be recouping 214.13 billion rupees (2.44 billion dollars) of unpaid dues from its New Delhi power distribution companies. This follows a Supreme Court decision earlier this week which upheld the claims. Dues are due because of historical tariff shortfalls where the electricity prices approved by regulators didn't fully cover costs. Reliance Infra belongs to the Anil Ambani Reliance Group. He is the younger sibling of Mukesh Ambani, a billionaire. The amount will be recovered by consumers in four years, starting April 2024. This is likely to happen through increased electricity rates. The Supreme Court of India ordered on Wednesday that all electricity regulators in India clear any deferred payments and unpaid bills owed by power distribution companies. The court also ordered state regulators conduct audits and to submit recovery plans. According to a court document, by March 2024 three distribution companies in New Delhi, including a Tata Power unit, had accrued 272 billion rupees of unpaid dues. The Delhi Electricity Regulatory Commission (DERC) will supervise the recovery process. This is expected to lead to higher electricity bills in the capital. Reporting by Sethuraman NR, New Delhi. Editing by Sonia Cheema.
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Miran receives Fed approval, but Japan's stocks are booming. The rest of Asia is uneven.
Asian markets recovered unevenly on Friday. Japan's largest stock index hit a new record high, boosted by strong corporate earnings. Tariffs on goods imported from the country The declines in Hong Kong, South Korea, and Australia were a sign of fragile investor confidence following the Wall Street retreat, as traders assessed the impact that the appointments at the U.S. Federal Reserve would have on the policy direction. The Nikkei index rose by 2%, while the Topix index gained more than 1%. Both reached new records and traded above 3,000 dollars for the first. SoftBank Group shares rose as high as 11% following the announcement by the technology investor that it had returned to profitability in the first-quarter. Sony Group added 6% to its 4.1% gain on Thursday, fueled by earnings. MSCI's broadest Asia-Pacific share index outside Japan fell 0.6%, with Hong Kong leading the declines. This comes after U.S. shares ended their previous session with mild loss after reaching a near-one-week-high. U.S. president Donald Trump announced on Thursday that he will nominate Council of Economic Advisers chairman Stephen Miran to temporarily fill a vacancy at the Federal Reserve while the White House searches for a permanent addition for the central bank's board of directors and continues to search for a Fed chair. Ray Attrill of National Australia Bank, Sydney's head of FX Strategy said: "It locks-in a vote in favor of rate cuts for all meetings from now until the end of the month." He added that "markets are already traveling with a very high expectation of a rate reduction." There is a question over whether he will be able to ratify the agreement in time for the meeting in September. Bloomberg News reported that Fed Governor Christopher Waller was the leading candidate to succeed Chair Jerome Powell whose term expires on May 15, 2026. Gold futures reached a new record after the Financial Times reported that the United States imposed tariffs for imports of 1 kg gold bars. These represent the majority of Switzerland's exports of bullion to the U.S. Gold spot was down 0.1%, and bullion traded at $3393.36 an ounce. The S&P 500 eminis and Nasdaq Futures were both up 0.3%. Both are on course to extend their gains into a second day. Tony Sycamore is a market analyst with IG in Sydney. He said that the rally in stocks came "against... an emerging titanic dovish reversal at the Federal Reserve." After a weak auction of 30-year bond, this is the latest in a series of disappointing sales. The rise in Japanese stocks comes after a mixed bag earnings reports from the country's largest exporters. Some companies, such as Toyota Motor, slashed profit forecasts because of U.S. Tariffs, but Sony and Honda claimed the impact was less than expected. Tokyo's chief trade negotiator announced that the U.S. government promised to adjust some of the overlapping tariffs it has on Japanese products in order to avoid paying duties twice on certain goods. Hong Kong's Hang Seng Index dropped 0.7%. Technology shares led the declines, while China's blue chip CSI 300 index fluctuated between gains and losses and ended up with a 0.1% gain. Australian stocks fell by 0.1%, while Korea's Kospi dropped 0.7%. The dollar increased by 0.1% to 147.24 yen. Data on Friday showed Japanese household spending data rose by a slower-than-anticipated 1.3%. Data on consumer spending is closely monitored as the Bank of Japan discusses whether or not to resume interest rate hikes. The euro currency fell 0.1%, to $1.1652, after gaining 2.13% over the past month. Meanwhile, the dollar index (which tracks the greenback versus a basket other currencies from major trading partners) was up by 0.2%, at 98.188. Brent crude futures remained unchanged at $66.45 a barrel while U.S. Crude futures remained little changed at 63.8.
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ASIA GOLD - Price rise dampens activity in major Asian hubs
This week, physical gold demand in major Asian hubs declined as rising prices dampened interest in buying while higher rates encouraged others to sell their holdings. Gold isn't a popular purchase at the current prices. Some investors are selling the gold bars and coins they bought when prices were cheaper, said Ashok Jain of Mumbai's Chenaji Narsinghji. On Friday, gold prices in India were around 102.100 rupees (1,165.45 dollars) per 10 grams after reaching a record-high of 102.191 rupees. Indian dealers have this week offered a discount The discount last week was up to $7. A Mumbai-based dealer of bullion with a private banking firm said that jewellers are reluctant to purchase gold because the demand for their largest market, which is the United States, will likely fall due to tariffs implemented by President Donald Trump. Bullion was traded in the world's largest consumer, China, at a premium of $2 per ounce to the global benchmark spot rate . Dealers quoted gold last week between a discount and premium of up to $12 per ounce. Last week we saw some interest in buying gold, but prices are on the rise this week so there is less interest. Peter Fung is the head of trading at Wing Fung Precious Metals. He said that people are buying gold when prices dip. In Hong Kong, gold In Singapore, the price was $1.60 higher than par. Gold traded at par prices with a premium of $2.50. We see more retail and wholesale sales as gold prices rise. We are seeing more people borrowing gold now that prices have risen, said Brian Lan of GoldSilver Central in Singapore. In Japan, bullion A Tokyo-based trader said that the product was sold at $0.25 more than spot prices. $1 = 87.6060 Indian Rupees (Reporting from Brijesh Patel in Bengaluru, and Rajendra Jhadhav in Mumbai. Additional reporting by Anushree Mukerjee. Editing by Subhranshu S Ahu.
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Trump's tariffs on Russia’s oil buyers brings economic and political risks
Donald Trump, the U.S. president, has used tariffs to achieve a variety of foreign policy goals. Trump's favorite trade tool has been put to a new, if risky, use. He gave Russia a deadline of Friday to reach a peace agreement in Ukraine, or else its oil customers would face secondary tariffs. Wednesday, the administration took an important step in punishing Moscow's clients by imposing a 25% additional tariff on goods imported from India due to its imports Russian oil. This is the first financial sanction aimed at Russia during Trump's second tenure. A White House official confirmed on Wednesday that secondary measures Trump had threatened against countries purchasing petroleum would be expected on Friday. The latest of Trump's threats to impose tariffs on non-trade matters include attempting to stop the fentanyl delivery from Mexico and Canada and penalizing Brazil for what he called a "witchhunt" against the former president Jair Bolsonaro. Secondary tariffs may hurt the Russian economy by cutting off a major source of funding to President Vladimir Putin's war efforts, but they are also costly for Trump. The oil price will rise and cause him political difficulties before the midterm elections in the U.S. next year. Tariffs could also hinder the administration's attempts to reach trade agreements with China and India. Putin, for his part has indicated that Russia is ready to weather any economic hardships imposed by the U.S. According to Eugene Rumer a former U.S. Intelligence Analyst for Russia, who is now the Director of Carnegie Endowment for International Peace’s Russia and Eurasia Program, there are "nearly zero chances" that Putin will agree to an agreement to ceasefire because Trump has threatened tariffs and sanctions against Russia. Theoretically, if you stopped Indian and Chinese oil purchases that would be a heavy blow to Russian economy and war effort. "But that's not going to happen," said he, adding that China has signaled that they will continue buying Russia's crude oil. The White House didn't immediately respond to an inquiry for comment. The Russian Embassy in Washington has not responded immediately. NEW COSTS FOR RUSSIA Russia would be hurt by secondary tariffs, as it is the second largest oil exporter in the world. Since late 2022, the West has imposed a price limit on Russia's oil exports to reduce its ability to finance wars. This cap has increased costs for Russia, as it forced the country to redirect oil exports to India and China. These countries were able to buy huge quantities of oil at reduced prices. The cap kept oil flowing on global markets. The White House has said that Putin and Trump may meet as early as next week. This follows a Wednesday meeting between U.S. ambassador Steve Witkoff with the Russian leader. Some analysts doubt that Moscow will stop the war. Brett Bruen is the former adviser on foreign policy for Barack Obama, now director of Global Situation Room. He warned that Putin had found ways to evade economic sanctions and sanctions. Even if sanctions and tariffs reduce Russia's revenue, Putin does not feel much pressure at home. Bruen stated that secondary tariffs could cause economic pain. "But it is still unclear whether this will actually change Putin's behavior." Tariffs could create problems for Trump's administration, as it seeks to pursue sweeping trade agreements with India and China. Kimberly Donovan is a former U.S. Treasury Official who said that the tariffs may hamper U.S. trade and bilateral relations with India and China. Donovan is now the director of the Economic Statecraft Initiative at the Atlantic Council’s GeoEconomics Center. China has shown its leverage by cutting off the U.S.'s mineral exports. New tariffs could upset the delicate balance that was negotiated in May to restart these vital flows for a number of U.S. Industries. India has leverage on generic pharmaceuticals and precursor chemicals exported to the U.S. Both countries claim that the purchase of oil is a matter for their sovereigns and that they adhere to the old rules. This includes the price cap placed on Russian crude. RUSSIAN ROULETTE Secondary tariffs will increase the price of imported products into the United States from Russia's clients, which could encourage them to purchase their oil somewhere else. By squeezing the shipments, Trump could face political problems due to a spike in fuel prices and inflation worldwide. Fears of disruptions by Russia in the month following Moscow's invasion of February 2022 pushed crude oil prices near $130 per barrel. This was not far off their previous high of $147. Analysts said that if India stopped buying 1.7 millions barrels of Russian crude per day, which is about 2% global supply, the world price would rise from $66, as it currently does. Analysts at JP Morgan said that it would be "impossible", this month, to sanction Russian crude oil without causing a price spike. Brent oil could reach $80 or more if there is a perceived disruption in Russian oil shipments. They said that despite Trump's claims that U.S. producers will step in, the country would not be able to ramp up quickly. Russia could respond by closing the CPC Pipeline, which would create a global shortage. Western oil companies Exxon, Chevron, Shell, ENI, and TotalEnergies can ship up to one million barrels a day through CPC. The CPC has a total capacity of approximately 1.7 million bpd. Cullen Hendrix is a senior fellow at Peterson Institute for International Economics. He said that energy shocks were never welcomed, particularly in the context of a weakening job market and a softening house price. The key question is if Trump can make any economic pain seem necessary in order to get Russia to negotiate. Hendrix said, "Of his tariff gambits this one could resonate the best with voters in principle, at least," It's also a move with massive downside risk." Timothy Gardner, Don Durfee, Diane Craft, Don Durfee, Matt Spetalnick and Patricia Zengerle reported from Washington, and Seher Dareen and Patricia Zengerle were in London.
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India's IOC and BPCL have said they will buy 22 million barrels non-Russian oil for delivery in September-October
Trade sources reported that Indian Oil Corp. and Bharat Petrol Corp., two of the largest state refineries in India, had bought at least 22,000,000 barrels non-Russian oil for delivery between September and October. This was after U.S. pressed India to stop buying from Russia. After the Russian invasion of Ukraine, Indian state refiners began to purchase cheaper Russian crude. After pressure from U.S. president Donald Trump, they halted their Russian purchases at the end of July. Sources said that in its latest tender IOC purchased 2 million barrels on a delivered-basis of U.S. Mars Crude, 2,000,000 barrels Brazilian grades, and 1,000,000 barrels Libyan crude. BP sold high-sulfur Mars crude cargo for $1.5-$2 a bar above Dubai prices in September, they said. Sources said that Petraco, a European trader, sold 1 million barrels each of Libyan Sarir Mesla and Brazilian Sepia crudes and Totsa (the trading arm of TotalEnergies) sold 2 million barrels each of Brazilian Sepia Sururu crudes. Prices for these cargoes are not yet available. These deals come after IOC purchased 8 million barrels from Middle East, United States of America, Canada, and Nigeria through tenders last week. A source familiar with these purchases revealed that India's second largest state refiner BPCL purchased 9 million barrels through negotiations in September for arrival. He said that the oil included 1,000,000 barrels from Angola Girassol and 1,000,000 barrels from U.S. Mars. 3,000,000 barrels came from Abu Dhabi Murban, while 2,000,000 barrels were Nigerian. Companies usually do not comment about crude deals, citing confidentiality. Sources said that the arbitrage economics for Asian refiners have improved, allowing them to support these purchases. Reporting by Nidhi verma from New Delhi, and Florence Tan from Singapore; editing by Jacqueline Wong & Edwina Gibbs
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Iron ore to gain weekly as China's steel imports reach record high
Iron ore futures dipped on Friday, but are still on track to gain a week-long gain. This is due to China's record steel exports, strong mill margins and low inventories. As of 0318 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.57% lower. It was 787 yuan (109.58 dollars) per metric ton. The contract has risen by 0.57% this week. The benchmark iron ore for September on the Singapore Exchange is down 0.49% at $101.75 per ton but has gained 1.9% this week. After reporting lower half-year profits, major miners have paid out the lowest dividends they've ever paid in order to keep cash on hand for their major projects. BHP plans to invest up to $7.4billion in its Jansen Potash Mine in Canada. Rio Tinto will spend over $13billion in the next 3 years in order to develop new Iron Ore mines in Western Australia, as reserves are declining. China's exports of steel continued to rise in July. They increased by 1.7% on a month-to-month basis, and the total for the entire year is at its highest level since 1990. The move comes despite countries introducing more trade barriers because they are worried that cheap Chinese Steel is undercutting domestic manufacturers. Analysts from ANZ said that iron ore imports in July increased by 2% on an annual basis, which is well above the average monthly imports of the year. This was due to healthy mill margins, and low inventories, motivating mills to restock. S&P Global, a global ratings agency, has maintained China's credit rating at A+. It noted that the country's fiscal stimulus measures will support its economic growth even though it faces challenges in the property sector and from tariff pressures. Coking coal and coke, which are used to make steel, also fell on the DCE. They were down by 0.82% each and 1% respectively. The benchmarks for steel on the Shanghai Futures Exchange have mostly fallen. The price of rebar fell by 0.8%, the price of hot-rolled coil dropped by 0.87% and that for wire rod was down 0.64%. Stainless steel rose 0.08%. ($1 = 7,1820 Chinese yuan). (Reporting and editing by Rashmi Liew)
Investors suggest alternatives to YPF in dispute between US and Argentina
The U.S. Government sided with Argentina in its effort to temporarily suspend a court order requiring it to turn over its 51 percent stake in the oil and gas company YPF as part of a $16.1-billion judgment won by two investors. In a late-night filing, the U.S. government informed the 2nd U.S. The 2nd U.S. Circuit Court of Appeals stated that it is in the public's interest to resolve the dispute on its merits "free of the rushed compulsion of a non-stayed turnover order, and any negative impact on U.S. Foreign Relations with Argentina." Petersen Energia Inversora, Eton Park Capital Management and other investors urged the Manhattan appeals court, to reject a stay on U.S. district judge Loretta Preska’s June 30, 2013 turnover order, while Argentina appeals.
The appeal was likely to fail and Argentina's "strategy" of delaying and obstructing the collection of the $16.1 billion judgement, against which it is also appealing, justifies the turn-over.
Investors said that if the court of appeals is not inclined to simply deny the stay, then it should return the matter to Preska so Argentina can propose alternative collaterals or set conditions in order to avoid "irreversible results" during the appeal.
The investors' attorneys said that "Plaintiffs do not want to have their shares rendered unrecoverable if Argentina wins on appeal and they are not interested in running an oil firm." They would therefore accept reasonable conditions so the transfer of the shares can be unwound easily if needed.
Outside of business hours, Argentina's representatives had no comment to make.
Argentina said that it would suffer irreparable damage and its economy might be destabilized if they gave up their stake in YPF - the country's biggest energy company.
You have until the 22nd of July to reply to the Investor's filing.
Burford Capital, a litigation funding company, represents Petersen and Eton Park. Burford Capital has stated that it expects to receive between 35% and 73% respectively of the damages.
The lawsuit arose out of Argentina's decision in 2012 to take the YPF stake away from Spain's Repsol, without making a bid to minorities shareholders.
Preska will award the $16.1 billion verdict in September 2023. The U.S. Government expressed its position through a proposed friend of the court brief. This echoed a position that it took in November last year during the Biden Administration. Petersen, Eton Park and the U.S. government were said to be against its motion for filing a brief. Reporting by Jonathan Stempel, New York; editing by Raju Gopikrishnan
(source: Reuters)