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Trump tightens waiver rules for the defense supply chain
The executive order signed by President Donald Trump Monday will make it more difficult for U.S. Defense contractors to obtain waivers that would allow them to purchase critical minerals and materials from China and other banned?foreign?suppliers. This is the latest effort of the Trump administration to reduce reliance on overseas supply chain for weapons production. Defense contractors will now have to prove much more than that Chinese suppliers are the cheapest or easiest option. Companies seeking a waiver must prove that they have searched for 'alternatives', explain the source of their materials and present a plan on how to get away from prohibited suppliers. Contractors who don't do enough to source locally will lose their contracts. "No more": "We tried nothing and are out of options", White House advisor Peter Navarro said to reporters during a press briefing held before the executive order's release. The Pentagon is pushing defense contractors such as Lockheed Martin and Boeing towards rapid expansion of weapons production, while still facing persistent vulnerabilities within the supply chains which feed the U.S. Military. Many of the critical minerals, processed materials, and advanced systems used in missiles and aircraft still depend on Chinese suppliers. This leaves companies trapped between the demands to move?away from Beijing and needing to keep weapons flowing into U.S. forces. The executive order also directs the Pentagon to develop rules requiring contractors to map critical supply chains from raw materials to finished military products. Companies will have to provide the source of components, minerals, software and other inputs that are used in certain weapons systems. This extends government visibility beyond prime contractors, to lower-tier providers. This is not paper work. "This is not paperwork," Navarro said. He argued that the Pentagon 'needs to be aware if missile systems -or other platforms- are dependent on foreign-controlled suppliers – before a war begins. Contractors are also required to evaluate suppliers' foreign ownership, financial vulnerabilities, and manufacturing risks. They must replace any suppliers who are deemed unreliable.
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Rate hike bets and US-Iran escalated oil prices have caused gold to fall.
Gold prices fell on Monday due to the escalating conflict between the U.S. and Iran. This also affected U.S. rates of interest. As of 2:50 pm EDT (1850 GMT), spot gold was down by 0.2%. U.S. Gold Futures for August Delivery settled at $4,015.90, down around 0.1%. The yields on the benchmark U.S. Treasury 10-year note increased by 0.4%. The U.S. Dollar was up by 0.2% making bullion more expensive for overseas buyers. Iran's Revolutionary Guards claimed they struck U.S. assets in the Middle East after another night of U.S. bombing of Iranian cities. Yemen's Iran aligned Houthis also declared a maritime blockade of Saudi Arabia. Brent crude oil prices are up after reaching a month-high, fueling inflation fears and stoking bets that interest rates will continue to rise. Gold is often seen as a hedge against inflation, but high interest rates tend to reduce the appeal of this non-yielding investment. David Meger is the director of metals at High Ridge Futures. He said that "higher energy prices are still in focus" as the escalation of tensions in the Middle East adds to the concern that the Fed's less than expected data on inflation last week may not be sufficient to prevent them from raising rates this year. Cleveland Fed President Beth Hammack has added her voice in a growing chorus that believes interest rates need to be raised to fight persistent inflation. This will set up a heated debate at the Fed’s next meeting, and could lead to disagreements during Kevin 'Warsh's 2nd meeting as the central bank chairman. According to CME FedWatch, traders now expect an interest rate increase in the U.S. by December. This is up from 73% last week. "We anticipate that the Fed won't raise rates until later in this year. We expect them to use balance sheet adjustments. Meger stated that we believe the realization of the situation?in the next month or two will actually add support to the gold market, and put pressure on the dollar. Other than that, silver spot gained 1.2%, to $56.55 an ounce. Platinum was up by 0.1%, at $1,592.86, while palladium rose by 0.9%, to $1,258,83. (Reporting and editing by Leroy Leo, Shailesh Kumar and Vedika Thorat in Bengaluru)
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Oil and semi-stocks are up, as is the price of equities.
The global stock index rose on Monday, as chipmaker stocks recovered from their recent sharp declines. Oil prices also increased slightly with investors cautious about the Gulf developments. Yemen's Iran aligned Houthis have declared a blockade of Saudi Arabia. Iran's Foreign Ministry stated that mediators have presented "proposals", signaling diplomatic contacts are still active. However, it did not provide any details. U.S. crude climbed 0.15%, to $82.61, and Brent rose 0.6% to $88.63 a barrel. Since the start of the U.S. - Iran conflict on February 28, higher oil prices have been a concern for both consumers and businesses. After last week's pullback in chip stocks, the equities have largely stabilized. Peter Cardillo is the chief market economist of Spartan Capital Securities, New York. He said that he was seeing some semiconductor stocks recover. The semiconductor index was up 1.5% on Saturday after it ended Friday more than 20 percent below its record-breaking high from late June. This confirms that the market is in a downturn. Oil prices are also a factor. The Dow Jones Industrial Average dropped 158.80?points, or 0.30%?to 51,987.62. The S&P 500 rose 18?40 points or 0.25% to 7,476.09, and the Nasdaq Composite grew 141.45?points, or 0.55%?to 25,661.70. The U.S. earnings season is picking up speed, as several major companies including Intel and IBM are due to release results. Earnings will either confirm or contradict this year's gains. This has been driven by an increase in AI capital expenditure, which is seen as a boon for semiconductor stocks and companies. This season will give us some insights into the AI trade, which includes chipmakers. It will also shed more light on the secondary effects of war. U.S. Treasury Yields rose as traders considered the impact of escalating prices for oil, driven by the war with Iran. Futures markets have priced in at least one Federal Reserve interest rate hike before year's end. On Monday, the benchmark 10-year Treasury was at 4.56% - up 2 basis points. The yield on the benchmark 10-year U.S. notes increased 6.28 basis points from 4.541% to 4.604% late on Friday. Dollar rose as investors watched developments in the Iran War, and the pound dropped from its earlier highs as the markets prepared for the new British Prime Minister Andy Burnham. Sterling fell 0.26%, to $1.3418. The dollar index (which measures the greenback versus a basket including the yen, the euro and other currencies) rose by 0.15%, to?100.98. Meanwhile, the euro fell by 0.25%, to $1.141. U.S. Natural?gas Futures fell about 1% due to rising production, a drop in exports of liquefied gas, and forecasts that demand will be lower this week than expected. (Reporting from Caroline Valetkevitch and Alun John, in New York; additional reporting from Wayne Cole, in Sydney; editing by Sharon Singleton and Jan Harvey)
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Smoke lingers on parts of the US as wildfires in Ontario expand
Wildfires in Ontario have grown from 650,000 to 735,000 acres (1.8 million hectares) since the weekend. Premier Doug Ford announced this on Monday. The air quality in Ontario has improved, but remains unhealthy in some parts of the U.S. Midwest. Ford stated at a Toronto press conference that the province was battling 190 active fires. Around 1,800 residents were evacuated from sparsely-populated communities in northwest?Ontario. Ford stated, "We won't spare a dime in fighting these fires or keeping the people safe." Wildfires in Canada, which mostly occur in areas that are difficult to access, have led to tensions between Canada, the U.S. and some politicians who have criticized Canada for its response. The smoke from wildfires in Ontario, Minnesota and northern Canada caused the worst air pollution ever to reach Toronto last week. It then spread to New York City and Washington. The air quality has improved since then in Southern Ontario, the U.S. Northeast, and the Mid-Atlantic. However, it remains poor in some U.S. states in the Midwest. As of 11:15 a.m. The U.S. Environmental Protection Agency’s AirNow website rated air quality in a region that includes parts of Wisconsin and Iowa, Illinois, Indiana, Ohio, Michigan, Missouri and Illinois as “unhealthy” or “unhealthy for groups sensitive to the air”. Donald Trump, the U.S. president, said that Mark Carney, Canadian prime minister at the time of his visit to Washington on Sunday told him that Canada needed to do more in order for it control wildfires in Ontario. Trump claimed that he discussed the matter with?Carney at the FIFA World Cup Final, which both of them attended Sunday. This was two days after Trump threatened to levy extra tariffs on Canadian products to punish 'Canada for the wildfire smoke. Carney hasn't directly replied to Trump. However, he did say that?all countries include the United States. Climate change must be addressed more. Ford called it "inacceptable" that Trump chose to criticize Canada’s response to wildfires and threaten tariffs instead of sending help. He said that Ontario would send hydro workers to the U.S. to assist with Hurricane Helene in 2024 and water bombers in California to combat wildfires in California in 2025, as proof of Canadian support during natural disasters. Ford said, "Instead of criticizing and threatening Canada, your closest allies, perhaps one day you will need our help." Canada is home to some of world's biggest forests. Major forest fires are now a common occurrence. Experts say that rising temperatures are causing drier wood and an increased risk of fire. (Reporting and editing by Mark Porter in Toronto, with Ryan Patrick Jones reporting from Toronto)
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Investors' gold prices remain stable as they weigh US-Iran developments and Fed signals
Investors assessed 'developments in the escalating U.S. - Iran?conflict which?lifted?energy prices and clouded U.S. rate outlooks. As of 11:47 am EDT (1547 GMT), spot gold was down by 0.1% to $4,014.39 an ounce. U.S. Gold Futures for August Delivery were unchanged at $4,019.00. The yields on the benchmark 10-year U.S. Treasury notes increased by 0.5%. The U.S. Dollar was up by 0.3% making gold more expensive for overseas buyers. Iran's Revolutionary Guards claimed they had attacked U.S. military equipment across the Middle East?after another night's bombardment by the U.S. of Iranian cities?while Yemen's Iran aligned Houthis announced a naval blocade against Saudi Arabia? Brent crude oil prices have stabilized after reaching a high of more than a month, fueling inflation fears and increasing bets on higher interest rates for longer. Gold is often seen as a hedge against inflation, but high interest rates tend to reduce the appeal of the non-yielding investment. David Meger is the director of metals at High Ridge Futures. He said that "higher energy prices are still in focus" as the escalation of tensions in the Middle East adds to the concern that the Fed's less than expected data on inflation last week may not be sufficient to prevent them from raising rates this year. Cleveland Fed President Beth Hammack has added her voice in a growing chorus that believes interest rates need to be raised to combat persistent inflation. This will set up a heated debate at the Fed’s next meeting, and possibly dissents during Kevin Warsh's 2nd meeting as chairman of the central bank. According to CME FedWatch, traders now expect an interest rate increase in the U.S. by December. This is up from?73% last Friday. "We anticipate that the Fed will not raise rates until later in this year. We expect them to use balance sheet adjustments. Meger stated that we believe the realization of this will add some'support' to the gold price and put pressure on the dollar in the next month or two. Other metals such as palladium, platinum, and silver also saw gains. Palladium gained 1.6%, while spot silver rose 2%. (Reporting and editing by Noel John in Bengaluru, Vedika Thorat)
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Zinc prices expected to decline in 2026 due to weak demand and supply concerns
Analysts predict that zinc prices will fall from their recent highs in the remainder of the year, as a lacklustre supply offsets the disruptions to demand. Due to the 'tight ores supply' and smelter losses, the metal used to galvanise steel will be up by more than 13% in 2026 on London Metal Exchange. Zinc, which outperformed copper, nickel, lead, and aluminium last month, reached its highest level in nearly four years, at $3,658 a metric ton. Tighter-than-expected supply has prompted analysts to revise up their 2026 price forecasts, but while they see zinc remaining elevated in the second half of ?the year, they don't expect it to hold on to current levels above $3,500. Tom Price, Panmure Liberum analyst, said that China's production of steel in 2026 will be lower than its five- to six-year rolling average. Price said that if steel production falls, it will be a primary driver of demand for zinc. He believes the metal could drop to $3,100 per ton by the end of the fourth quarter. BMI, an arm of Fitch Solutions, predicts that zinc prices will drop further, to $3,000, by the end of this year, due to the long-term positioning caused by an explosion and fire at Kazzinc’s smelter in May, as well as a fire at Nexa Resources’ Cajamarquilla facility. BMI stated in a report that "prices will likely ease from their current levels, as the headline-driven premium associated with recent supply disruptions diminishes and?the market moves to a narrow surplus." This year, the market is estimated at 14 million tons. Jonathan Leng is Wood Mackenzie’s research director of zinc markets. He expects the price to drop to $3,350 at end-2026 with a global demand growth rate of only 0.9%. He still predicts an 80,000 ton deficit, and warns LME Zinc stocks Just over 100,000 tons is?only a thin cushion. Leng stated that "if there is any further disruption in smelting, we could see a spike higher." Leng stated that the recent opening of the arbitrage windows to ship zinc from Shanghai Futures Exchange warehouses to LME could lower LME prices. ShFE zinc stocks Shanghai zinc has increased by less than 3% in the past year, despite being at a record high.
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Investors' gold prices remain stable as they weigh US-Iran developments and Fed signals
?Gold held firm on 'Monday as investors assessed the escalating 'U.S.-Iran Conflict, which boosted energy prices and clouded prospects for U.S. Interest Rates. As of 9:25 am EDT (1325 GMT), spot gold was down by 0.1%, at $4,011.96 an ounce. U.S. Gold Futures for August Delivery fell 0.1% to $4015.80. The yields on the benchmark U.S. Treasury 10-year note increased by 0.5%. The U.S. Dollar was up by 0.1%, making bullion prices more expensive for foreign buyers. Iran's Revolutionary Guards claimed they had attacked U.S. military equipment across the Middle East, after another night of U.S. bombing of Iranian cities. Yemen's Iran aligned Houthis also declared a?naval blockade against Saudi Arabia. Brent crude oil prices have stabilized after reaching a high of more than a month, fueling inflation fears and?betting on higher interest rates for longer. Gold is often seen as a hedge against inflation, but high interest rates can reduce its appeal. David Meger is the director of metals at High Ridge Futures. He said that "higher energy prices are still in focus" as the escalation of tensions in the Middle East adds to the concern that the Fed's less than expected data on inflation last week may not be sufficient to prevent them from raising rates this year. Cleveland - Fed President Beth Hammack has added her voice in a growing chorus that believes interest rates need to be raised to combat persistent inflation. This will set up a heated debate at the Fed meeting next week and could lead to dissensions during Kevin Warsh’s second meeting as chairman of the central bank. According to CME FedWatch, traders now expect an interest rate increase in the U.S. by December. This is up from?73% a week ago. "We expect the Fed to use balance sheet adjustments, and not raise rates until later in this year. Meger stated that we believe the'realization' of this will actually add some support to the gold price and pressure on the dollar in the next month or two. Other than that, silver spot gained 1.7%, to $56.87 an ounce. Platinum was down by 0.3%, at $1,586.21 and palladium climbed 1.3%, to $1,264.34. (Reporting from Noel John in Bengaluru and Vedika Thorat; editing by Leroy Leo).
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India's infrastructure production rises by 5% in June, according to a new series
India's infrastructure production grew by?5% in June, the fastest pace in five months. The data was released as part of a new series that uses?2022-23 for the base year. The government released a new series on Monday, replacing the 2011-12 base years and expanding the core sector basket from eight industries to nine, including iron ore. According to the latest data from the government, infrastructure output grew by a revised 3.2% compared to a year earlier in May. The revised series shows that it grew faster than 5.2% last in January. KEY NUMBERS * The Cement production rose by 9.8% in June, compared to an 8.4% rise in May. * The?production of steel?increased by 4.6%?last month compared to an increase of 5.1% in May, which was revised. * Electricity production increased 9.8% in June compared to an increase of 11.2% in May, which was revised. * The coal production increased by 1.4% in the month of June compared with a 9.5% fall that was revised for the previous month. *?Iron Ore Production rose 43.9% from a revised 19% increase in May. * Crude oil production fell by 4.2% in June. This is the same as in May, when it was revised down. * Fertiliser output fell 3.3% in June after a revised 1% decline in May. *?Natural Gas Production shrank 7.4% in July, compared to an earlier revised decline of 5%. * The output of refinery products fell by 4.7% in June, compared to a fall of 8.2% a month earlier. * The growth in infrastructure output for April-June was 3.6%, compared to a revised 1.0% during the same period last year. (Reporting and editing by Eileen Soreng, Sarita Chaganti-Singh, and Shivangi-Acharya)
What is China's next surprise on the oil market? Lower fuel imports and higher fuel exports: Russell
China's reaction to the Iran conflict is not surprising, but the degree to which the world's largest?crude oil importer reduced its oil imports and refinery production.
China has a "strong record" of reducing crude imports to respond to rising prices and increasing arrivals when the price drops.
The collapse of imports in June to their lowest level in nearly 10 years was dramatic. This is especially true when you consider that, despite the fact that crude prices spiked in the weeks following the U.S.-Israeli attack on Iran in February, they did not reach the levels reached in 2022 after Russia invaded Ukraine.
According to official data, China's crude imports in June were 7,12 million barrels a day (bpd), which is the lowest level since October 2016, and down 41.3% compared with the same month last.
A drop of this magnitude would normally have led to a huge drawdown on China's inventory, but that didn't occur.
Refiners in China reduced processing rates in June to 12,47 million bpd, a 17.7% drop from the same period in 2025. This is the lowest level since March 2020 during the COVID-19 Pandemic.
China does not reveal the volume of crude oil flowing in or out of strategic and commercial stockpiles. However, an estimate can easily be calculated by subtracting the amount processed from total crude produced domestically and imported.
This means that refiners have a total of 11,53 million bpd.
The 12.27 million bpd they processed meant that approximately 940,000 bpd were drawn from inventory, up from around 500,000 bpd back in May.
China added reserves to its first-half total despite drawing from stockpiles for the past two months. The surplus crude was around 530,000 barrels per day.
Beijing's unofficial export restrictions of refined products were a major factor in China's ability to reduce refinery runs dramatically in June. This was seen as a response to ensure a sufficient supply of fuels for the domestic market, during the Iran conflict.
According to Kpler's data, China exported 393,000 barrels per day (bpd) of light and medium distillates in June. This is slightly less than the 400,000 bpd exports in May, but higher than the 54-month-low of 338,000 bpd that was recorded in April.
It is clear that China played a major role in adjusting the demand for crude oil throughout the current Iran Crisis, which saw the loss of approximately 10 million bpd of supply of crude and refined products due to the closure of the Strait of Hormuz.
China's exports have also been reduced since April, contributing to the tightness of product markets.
What is China going to do to respond to the current crisis?
Prices are key
China could be planning another surprise for the markets if the answer is seen through the prisms of prices.
China's crude imports will likely?recover' in August and September, as refiners have likely bought up the cargoes that were able to leave the Strait of Hormuz after the short ceasefire between Iran and the U.S.
The market expected a return of normal Middle East supply and therefore, a glut.
Benchmark Brent futures fell to $70.14 per barrel on July 2. They had been as high at $126.41 a barrel at the end April. The return of hostilities on Monday morning saw Brent rise to $90.80 per barrel.
China's refiners will likely reduce imports as crude prices rebound. This means lower arrivals in October, given the time lag between cargoes being arranged and delivered.
What happens to China's refined products exports is the wildcard.
Beijing is confident that it will be able to survive on its huge stockpiles, estimated at?least 1 billion barrels.
China could also be tempted by the opportunity to take advantage of high margins in Asia.
Gasoil (the building block of diesel) ended July 17 at $143,03 per barrel, a $54.93 premium to the Brent closing prices and almost three times that $18.94 markup which?prevailed the day before U.S. and Israel launched their attack on Iran.
Kpler has tracked shipments of light and medium distillates of 787,000 Bpd for July.
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These are the views of the columnist, an author for.
(source: Reuters)