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Iron ore posted a weekly loss due to softer China demand and trade uncertainty
The price of iron ore futures fell on Friday, and the weekly loss was attributed to a softer demand in China for this steelmaking component. Traders are bracing for more trade uncertainty. The Dalian Commodity Exchange's most traded September iron ore contract ended the daytime trading session 0.43% lower, at 702 Yuan ($97.65), a metric tonne. This represents a loss of 2.84% over the past week. As of 0704 GMT, the benchmark June iron ore traded on Singapore Exchange was $96.25 per ton down 0.66%. This week, the contract has fallen by 1.91%. The hot metal production, which is typically used as a gauge of iron ore demand to determine the market, has fallen for a third consecutive week. Data from Mysteel revealed that it was down 0.7% at 2.42 million tonnes on May 30. In a recent note, Galaxy Futures said that the seasonal demand for steel is at its peak and will continue to fall. Hexun Futures, a broker, says that iron ore prices remain somewhat stable as long as steel mills continue to make decent profits. A poll conducted on Friday showed that China's manufacturing activity probably contracted for the second consecutive month in May. This suggests that trade tensions between China and its major export markets weigh on manufacturers' minds. The tariffs imposed by President Donald Trump in the U.S. will remain in place after a federal appellate court temporarily reinstated the duties on Thursday. This reversed a decision made on Wednesday by a trade court to block the most comprehensive of the duties. Coking coal and coke, which are used to make steel, also fell, by 5.28% apiece and 2.13% respectively. The benchmark steel prices on the Shanghai Futures Exchange were flat. Hot-rolled coils fell 0.81% and rebars 0.34%, but wire rods rose 0.12%. Stainless steel gained nearly 0.6%. China's financial market will be closed Monday due to a public holiday. Trading will resume Tuesday, June 3rd. $1 = 7.1889 Chinese Yuan (Reporting and editing by Mrigank Dahniwala, Janane Venkatraman).
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After a village is destroyed by ice, floods threaten the Swiss valley
The water trapped behind a glacial debris mass that buried and blocked a village in southern Switzerland this week has led to warnings of the need for further evacuations due to the threat of flooding. The village of Blatten was engulfed by a deluge of millions cubic meters of rock, mud, and ice on Wednesday. The few houses left were later inundated. The village's 300 residents were evacuated in May when part of the mountain behind Birch Glacier started to crumble. The flooding increased on Thursday, as a mound of debris measuring almost 2 km (1,2 miles) wide clogged up the River Lonza. A lake formed among the wreckage. This caused fears that the morass might dislodge, leading to more evacuations. Local authorities warned residents of Gampel and Steg - villages located several kilometres along the Lonza Valley - to be prepared for an emergency evacuation. When conditions permit, the army will be ready with heavy equipment such as water pumps, diggers, and other heavy machinery to assist. Rescue teams are searching for a man aged 64 who has been missing since the landslide. Local authorities suspended their search for the man on Thursday, citing that the debris mounds are too unstable and warned of possible rockfalls. Scientists suspect that the event is a dramatic illustration of climate change's impact in the Alps. Residents are still struggling to comprehend the extent of destruction. (Reporting and editing by Lincoln Feast; Dave Graham).
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ASIA GOLD - Indian gold demand is lagging as prices increase, and wedding purchases are cooling
The physical gold demand in India this week was tepid, due to an increase in prices at home and the end of wedding season, which kept buyers away. Premiums in China, India's top consumer, were also down. This week, Indian dealers offered a discount Last week, the discount was up to $49, but this week it is down to up to $31 per ounce, including 6% import duties and 3% sales taxes. The wedding season has ended and the monsoon is here, so jewellers expect a seasonal drop in demand. This is why people are holding off on new purchases," said Mumbai-based bullion dealers with a private banking institution. On Friday, domestic gold prices traded at around 94.900 rupees for 10 grams after reaching a low of 90.890 rupees in the first month of this month. In China, bullion traded at a premium of $15 per ounce above the global benchmark spot rate, compared to premiums between $16 and $30 last week. Ross Norman, a independent analyst, said that the Shanghai Gold Exchange has seen its drawdowns reach the lowest levels of the year, while imports were exceptionally high in the past few weeks, suggesting that the Chinese domestic market is overstocked. Data from the Hong Kong Census and Statistics Department showed that China's total imports of gold via Hong Kong almost tripled in April compared to March, reaching their highest level for more than a month. Hugo Pascal is a precious metals dealer at InProved. He said that despite the lower volume of trading, gold bullish bets are still dominant on the SHFE. In Hong Kong, gold In Singapore, the price was $0.30 to $1.30 higher. Gold traded at par prices with a premium of $2.50. In Japan, bullion The premium was $0.50. (Reporting from Anmol Choubey and Rajendra Jadhav, in Bengaluru; additional reporting from Brijesh Patel; editing by Eileen Soreng).
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Base metals decline as dollar firms, US tariff optimism fades
The dollar strengthened on Friday, and the market's optimism faded after a court decision that reinstated some of the largest tariffs imposed in the United States by President Donald Trump. As of 0521 GMT, the London Metal Exchange reported that three-month copper was down by 0.1%, at $9,562.50 a metric ton. Red metal, which is used for power and construction, continues to gain 4.8% this month and looks set to have its best month since Sept. 2024. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper fell 0.3%, to 77 740 yuan per ton ($10 813). LME aluminium dropped 0.2%, to $2.445 per ton. Zinc fell 0.7%, to $2.656.50. Lead fell 0.6%, to $1.952, and nickel fell by 0.2%, to $15.335. Tin fell 1.4% to $30.790. Metals traders in Singapore reported that "the market rose yesterday on the optimism that the appeals court would be able to block Trump's tariffs. However, the rally faded as the appeals courts suspended the verdict." On Thursday, an appeals court in the United States temporarily reinstated Trump's most comprehensive tariffs. A day earlier, the U.S. Trade Court had ruled that Trump exceeded his authority by imposing these duties and ordered a blockade. Investors digested court's decision to maintain Trump's tariffs. The dollar index increased by 0.2% against rival currencies, making assets denominated in dollars more expensive for holders of other currencies. Investors are waiting for the Federal Reserve's preferred inflation indicator, the Personal Consumption Expenditures (PCE) Price Index Report due later that day. This could give them more insight into their policy direction. SHFE aluminium fell 0.2% to 20110 yuan per ton. Lead dropped 0.8% at 16,630 yuan. Nickel rose 0.9% to 128,810 yuan. Zinc lost 0.5% to 22250 yuan. Tin fell 2.6% at 251,120.
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How Trump's Trade War is Upending the Global Economy
The tariffs imposed by Donald Trump since his inauguration on January 20, 2017 have sent shockwaves through financial markets, and uncertainty has spread throughout the global economy. This timeline shows the major events: Trump imposes tariffs of 25% on Mexican imports, 10% on Chinese goods and most Canadian imports from February 1. He demands that they reduce the flow of illegal immigrants and fentanyl into the United States. Trump agrees to a 30-day suspension of his tariff threat against Mexico and Canada in exchange for concessions made on border security and criminal enforcement. The U.S. doesn't reach a similar deal with China. Trump delays tariffs until the Commerce Department confirms that systems and procedures are in place for processing low-cost packages from China and collecting tariff revenue. Trump increases tariffs on aluminum and steel to 25%, "without any exceptions or exclusions". March 3 - Trump announces that 25% tariffs will be imposed on imports from Mexico and Canada from March 4, and that all Chinese imports will face a 20% tariff on fentanyl. After a phone call with General Motors, Ford and Stellantis' chairperson and CEOs, the president agreed to defer tariffs on certain vehicles manufactured in Canada and Mexico for a month. Trump exempts Canadian and Mexican goods under the North American Trade Pact from 25% tariffs for one month. Trump announces a 25% import tariff on cars and light trucks. Trump announces global duties with a base of 10% on all imports, and much higher duties for some of the U.S. biggest trading partners. Trump suspends most of the country-specific tariffs he had imposed less than 24 hours before, following a financial market upheaval that erased trillions from global bourses. The 10% blanket duty on nearly all U.S. imported goods remains in place. Trump has announced that he will increase the tariffs on Chinese imports from 104% to 125%, which was the level in effect the day before. The extra duties on Chinese products, including those related to fentanyl, will now be 145%. April 13: The U.S. government grants exemptions from steep tariffs for smartphones, computers, and other electronics imported from China. In an effort to impose tariffs in both sectors, the Trump administration launched national security investigations under Section 232 of Trade Act of 1962 on imports of pharmaceuticals and semiconductors. May 4, Trump imposes 100% tariffs on all films produced outside of the U.S. May 9 - Trump announces a limited bilateral agreement with British Prime Minister Keir starmer that keeps 10% tariffs in place on British exports and modestly increases agricultural access to both countries. It also lowers U.S. prohibitive duties on British auto exports. On May 12, the U.S. & China agreed to temporarily reduce reciprocal tariffs. The U.S. and China agree to temporarily reduce reciprocal tariffs. May 13: The U.S. reduces the "de minimis", or low-value tariff, on China shipments. Duties for items up to $800 are reduced to 54% instead of 120%. May 23 - Trump announces he will recommend a 50% tariff on all goods imported from the European Union, starting June 1. He warned Apple that it would be subject to a 25% tariff on phones sold in the U.S. if they were not manufactured within the U.S. Trump retracts his threat to impose 50% tariffs on EU imports, and agrees to extend the deadline of talks between the U.S. May 28 - The U.S. Trade Court blocked Trump's tariffs in an sweeping ruling, saying that the president had overstepped his powers by imposing duties across-the board on imports of U.S. trading partners. The Trump administration announced that it would appeal this ruling. May 29: A federal appeals Court temporarily reinstates Trump's most sweeping tariffs. It said it was pausing lower court's decision to consider the appeal of the government, and ordered plaintiffs to respond by the 5th June, and the administration to do so by the 9th June. (Compiled in Gdansk by Paolo Laudani, Mateusz Rabiega and Jamie Freed; edited by Milla Nissi Prussak and Lincoln Feast.
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The market is looking at another OPEC+ production hike as the oil price drops for a second consecutive week
The oil price was on course for a second weekly drop on Friday. This was due to expectations of a further OPEC+ production increase in July, and new uncertainty following the latest legal twist that kept President Donald Trump's Tariffs in place. Brent crude futures fell 31 cents or 0.48% to $63.84 per barrel at 0424 GMT. U.S. West Texas Intermediate Crude fell 31 cents or 0.51% to $60.63 per barrel. Brent's July futures contract expires on Friday. The two contracts have both fallen by 1.5% this week. Investors priced in a further increase by the Organization of the Petroleum Exporting Countries (OPEC+), a group of eight members, at their meeting on Saturday. Robert Rennie, Westpac's director of commodity and carbon analysis, said in a recent note that the stage was set for a bumper increase to production. This could be higher than the 411,000-barrels-per day decision made at the two previous meetings. JPMorgan analysts said in a report that the potential price hike is due to the fact that global surpluses have widened from 2.2 million barrels a day to 2.2 millions. This likely means a price increase to stimulate a supply response and restore equilibrium. Prices are expected to stay within the current ranges, before moving into the high 50s by year's end. The U.S. tariffs will remain in place after a federal appellate court temporarily reinstated the tariffs on Thursday. This reversed a Wednesday decision by a trade court to block the most comprehensive of the duties. As traders assessed its impact, the block sent oil prices down more than 1%. Analysts predicted that uncertainty would continue as tariff wars progressed. Since Trump's "Liberation Day", April 2, announcement of tariffs, oil prices have fallen by more than 10%. The tariff war has fueled recession fears, which have clouded demand. Washington has added to the U.S. China trade tensions by ordering a wide range of companies to cease shipping goods to China, including butane and ethane, without a licence and revoking licenses granted to certain suppliers. Analysts at JPMorgan noted that global oil demand increased from the previous weeks, mainly due to a rebound in U.S. consumption of oil, as a result of the long Memorial Day weekend and the influx of travelers. They said that the global oil demand growth is currently at a rate of approximately 400,000 barrels per day (bpd) as of May 28. This is 250,000 bpd less than expected. Colleen Liu and Siyi Howe reported from Beijing, while Sonali Paul edited the article.
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Iron ore to fall by a weekly loss due to softer China demand and trade uncertainty
The price of iron ore futures fell on Friday, and are set to lose money for the week due to a softer demand for this steelmaking ingredient. Traders brace themselves for more trade uncertainty. As of 0254 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.14% lower. It was 704 yuan (US$97.97) per metric ton. This week, the contract has fallen by 2.28%. The benchmark June ore price on the Singapore Exchange is 0.35% lower, at $96.55 per ton. This week it has lost 1.25%. The hot metal production, which is typically used as a gauge of iron ore demand to determine the market, has fallen for the third consecutive week. It was down by around 0.7% at 2.42 million tonnes on May 30, according to data from Mysteel. In a recent note, Galaxy Futures said that the seasonal demand for steel is at its peak and will continue to fall. Hexun Futures, a broker, says that iron ore prices remain somewhat stable as long as steel mills continue to make decent profits. The tariffs imposed by President Donald Trump in the U.S. will remain in place after a federal appellate court temporarily reinstated the tariffs on Thursday. This reverses a decision made on Wednesday by a trade court to block the most comprehensive of the duties. The weakening dollar was also a factor in the price rise, as it headed towards its fifth consecutive monthly drop on account of increased trade uncertainty. Dollar-denominated investments are more affordable for holders of currencies other than the U.S. Coking coal and coke, which are used to make steel, also fell, by 3.46% apiece. The benchmark steel prices on the Shanghai Futures Exchange were flat. Hot-rolled coil and rebar both lost 0.68% while stainless steel and wire rod gained 0.4%. The Chinese financial markets will close on Monday due to a holiday. Trading will resume Tuesday, June 3rd. The trading will resume on Tuesday, June 3.
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As the dollar strengthens, US tariff optimism wanes
The dollar strengthened on Friday, and the market's optimism waned after a court decision that reinstated some of the largest tariffs imposed in the United States by President Donald Trump. As of 0240 GMT, the London Metal Exchange reported that three-month copper was down by 0.2%, at $9,550 a metric ton. Red metal, which is used for power and construction, continues to gain 4.6% this month and looks set to have its best month since Sept. 2024. The Shanghai Futures Exchange's (SHFE) most traded copper contract fell 0.4%, to 77 680 yuan per ton ($10 807.50). LME aluminium dropped 0.4%, to $2.441 per ton. Zinc fell 0.7%, to $2.656, while lead fell by 0.4%, to $1.954, and nickel fell by 0.4%, to $15.310. Tin fell 1.1% to $30,00855. Metals traders in Singapore reported that "the market rose yesterday on the optimism that the court would be able to block Trump's tariffs. However, the rally faded as the appeals courts suspended this verdict." On Thursday, an appeals court in the United States temporarily reinstated Trump's most comprehensive tariffs. This came a day after the U.S. Trade Court ruled that Trump had overstepped his authority by imposing these duties and ordered a blockade. Investors digested court's decision to maintain Trump's tariffs. The dollar index increased by 0.2% in comparison to its rivals. This makes dollar-denominated investments more expensive for holders of other currencies. Investors are waiting for the Federal Reserve's preferred inflation indicator, the Personal Consumption Expenditures (PCE) Price Index Report due later that day. This could give them more insight into their policy direction. SHFE aluminium fell 0.4% to 20060 yuan per ton. Lead dropped 1% at 16,585 Yuan. Nickel rose 1% at 120,960 Yuan. Zinc lost 0.7% at 22,200 yuan. Tin fell 2.5% to 25,310 yuan.
Prices of oil rise on US-China trade talks
Oil prices rose on Thursday, after dropping more than $1 the previous session. This was due to hopes that a breakthrough would be made in upcoming trade talks between China and the U.S., two of the largest oil consumers in the world.
Brent crude futures rose 51 cents or 0.8% to $61.63 per barrel. U.S. West Texas intermediate crude rose 57 Cents or 1%, reaching $58.64 per barrel at 0420 GMT.
Tina Teng, an independent analyst, said that optimism around the U.S.-China trade talks at the weekend was a major factor in supporting the recovery of the oil market.
"Signs that a trade war was deescalating improved the market sentiment and triggered a recovery in oil prices on an oversold marketplace."
Scott Bessent, U.S. Treasury secretary, will meet China's top official in the economy on May 10, for talks about a trade conflict that is disrupting global economic growth. These are the two world's largest economies, and their trade war is likely to reduce crude consumption growth.
Donald Trump, the U.S. president, suggested on Wednesday that China initiated trade talks. He added that he would not be willing to lower U.S. tariffs against Chinese goods in order to convince Beijing to negotiate. Bessent stated that the talks will be a beginning, and not an 'advanced discussion'.
After the Federal Reserve kept interest rates at their current levels but warned of rising economic uncertainty, weak demand concerns have capped oil prices gains.
The Fed has indicated that it will probably hold rates until the tariff effects are clearer. The U.S. Dollar was boosted, adding to the headwinds on the broader commodities markets.
Dollar-denominated crude oil becomes more expensive and less desirable for holders of currencies other than the U.S. dollar.
Analysts are concerned that the U.S. is not preparing for the summer period of demand. This month, gasoline inventories in the U.S. rose, adding to concerns about a weakening demand.
OPEC+ (Organisation of the Petroleum Exporting Countries) and its allies will simultaneously increase their oil production, increasing pressure on the price.
(source: Reuters)