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Investors wait for demand signals to see iron ore prices rise
Iron ore futures remained in a narrow range Monday as investors waited for a new batch of trade statistics from China, the world's largest consumer. As of 0242 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange was unchanged at 787.5 Yuan ($110.44). As of 0232 GMT, the benchmark October iron ore traded on Singapore Exchange was trading at $104.95 per ton. Investors will be closely monitoring China's import and export statistics on Monday for any demand signals. Steelmakers in China's top steelmaking hub gradually resumed production on September 4 following the conclusion of a military procession in Beijing commemorating the end World War Two. This signals a pickup in raw material demand. But the sharper-than-expected fall in hot metal output, a gauge of iron ore demand, reflected demand recovery is slower than expected, raising cation among investors. The average daily hot metal production fell by 4.7% compared to the previous week, reaching 2.29 million tonnes in the week ending September 4, the lowest level since February 28. Coking coal and coke, the other steelmaking components, both gained 0.75 %. The benchmarks for steel on the Shanghai Futures Exchange are mixed. Rebar fell 0.48% and wire rod dropped 0.43%. Hot-rolled coils gained 0.3% while stainless steel advanced by 0.35%. Citi Research analysts expected a meaningful supply cut in steel in the fourth quarter. This is a traditionally slack season for demand. ($1 = 7,1307 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
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Gold nears record high amid US rate cuts
Gold held steady near its all-time highest on Monday. It moved closer to the key $3,600 mark, buoyed by expectations that the U.S. Federal Reserve will cut rates this month after a weaker than expected jobs report last weekend. As of 0121 GMT, spot gold was unchanged at $3,586.81 an ounce. Bullion reached a record-high of $3,626.10 per ounce on Friday. U.S. Gold Futures for December Delivery fell by 0.7% to $3.626.010. The main drivers are the U.S. job data and expectations that the Fed will cut by 50 basis point in September. The marginal change is a significant one compared to the situation before the employment figures were released, said Capital.com's financial market analyst Kyle Rodda. "We will be able to test $3,600 despite an inflation shock that occurred this week." The U.S. unemployment rate rose to nearly four-year levels in August. This confirms that the labor market is softening, which will lead the Fed to cut rates next week. According to CME FedWatch, traders have priced in a rate cut of 25 bp this month. There is an 8% probability that the cut will be a 50 bp jumbo. Gold becomes cheaper when interest rates are lower. The Fed will now be focusing on the U.S. Inflation report due out on Thursday, which could provide more information on the expected size of its rate cut. Bullion prices have risen 37% this year, after a gain of 27% in 2024. This is due to the weakening dollar, central bank purchases, a softerening of monetary policy, and broader geopolitical, economic, and political uncertainty. China's central banks added gold to their reserves in August. This is the 10th consecutive month that they have purchased bullion. Gold speculators increased their net long positions to 168.862 contracts in the week ending September 2. Silver spot fell 0.5% elsewhere to $40.75 an ounce. Platinum increased 0.1% to $1374.35, while palladium remained flat at $1109.71.
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Oil prices rise as OPEC+ agrees on a slower rate of production increase from October
Early Monday morning, oil prices rose, reversing some of the losses of last week, after OPEC+ decided over the weekend that they would increase output at a slower rate than October, due to expectations of a weaker global market. Brent crude rose 34 cents or 0.5% to $65.84 a bar by 0047 GMT. U.S. West Texas intermediate crude climbed 30 cents or 0.5% to $62.17 a bar. The two benchmarks both fell by more than 2% Friday, as the weak U.S. employment report dimmed expectations for the energy demand. Last week, they lost more than 3 percent. OPEC+ - which includes the Organization of the Petroleum Exporting Countries, Russia, and other allies - agreed on Sunday that oil production would be increased from October, as Saudi Arabia tries to regain its market share. However, the rate of increase will be slower than previous months. OPEC+ increased production in April, after years of cutting to support the oil markets. But the decision to boost further output was a surprise because a possible oil glut is looming during the winter months in the Northern Hemisphere. Eight members of OPEC+ are expected to increase production by 137,000 barrels a day from October, a far cry from the monthly increases that were about 555,000 bpd between September and August as well as 411,000 bpd during July and June. Toshitaka Takawa, an analyst with Fujitomi Securities, said, "The oil markets rebounded a little, boosted by relief at OPEC+ modest production hike and a bounce in technical terms following last week's drop." He added that the downward pressure will likely continue as OPEC+ increases production and supplies decrease. Ukrainian officials reported that on Sunday, Russia had launched its biggest air strike of the war against Ukraine. It set the main government building in central Kyiv on fire and killed at least four people including an infant. Donald Trump, the U.S. president, said on Sunday that he would invite individual European leaders to the United States to discuss the Russia-Ukraine conflict on Monday and on Tuesday. After reporters asked him about the Russian air attack, Trump said he was "not pleased" with the current status of the war. He expressed his confidence in the end of the war. The European Union will not change its plan to phase out Russian crude oil by 2028. This was the message from the EU's energy chief on Friday. He added that Washington had not pressed him to move this deadline forward. (Reporting and editing by Diane Craft, Jamie Freed and Yuka Obayashi)
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Europe's electric vehicle industry urges EU to not delay CO2 emissions targets
More than 150 executives from Europe's electric vehicle industry signed a Monday letter urging the European Union not to abandon its zero-emission target for cars, vans and trucks by 2035. Signatories from the electric car industry, including Volvo Cars, Polestar and others, have warned against any delay in meeting the targets. They said that this would lead to a stalling of Europe's EV Market, giving an advantage to competitors around the world and eroding the confidence of investors. This follows a separate, end-of-August letter from the heads of European automotive manufacturers' and suppliers' associations to European Commission president Ursula von der Leyen in which they stressed that a reduction of 100% for cars by the year 2035 was not feasible. The letter was signed by Ola Kaellenius, CEO of Mercedes-Benz. Von der Leyen will discuss the future of automotive industry with players in the sector, who are facing dual threats of increased competition by Chinese competitors and U.S. Tariffs. Michael Lohscheller said that lowering targets would send the message that Europe is willing to compromise on its commitments. This would be harmful to the climate. He said that it would hurt Europe's competitiveness. Michiel Langzaal is the CEO of Fastned a charging company in the EU. He cited how the 2035 goal had brought clarity and the investments made already, such as charging infrastructure and software. He said, "Those investments will only produce returns if we reach this goal." According to a Monday report by the transport research and campaigning group T&E, all European carmakers except Mercedes-Benz are on track to meet CO2 regulations for cars and vans in 2025-2027. Mercedes said it would have to pool its emission with Volvo Cars, Polestar, and other manufacturers to avoid being fined for not meeting the target. (Reporting and editing by Marleen Kasebier, Nick Caresebier)
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Oil prices increase as OPEC+ agrees on a slower rate of production increases from October
Early Monday morning, oil prices increased, reversing the losses of last week, after OPEC+ decided over the weekend that they would increase output, but at a slower rate than October, due to a predicted weakening in global demand. Brent crude rose 23 cents (0.4%) to $65.73 a bar by 2213 GMT. U.S. West Texas intermediate crude rose 21 cents (0.3%) to $62.08 a bar. The two benchmarks both fell by over 2% Friday, as the weak U.S. employment report dimmed expectations for energy demand. Last week, they lost more than 3 percent. OPEC+ - which includes the Organization of Petroleum Exporting Countries, Russia, and other allies - has agreed to increase oil production in October, as Saudi Arabia tries to regain its market share. However, the pace of the increases will be slower than previous months. OPEC+ increased production in April, after years of cutting to support the oil markets. But the decision on Sunday to boost output further came as a shock amid a possible looming oil surplus during the winter months in the Northern Hemisphere. In a Sunday online meeting, eight members of OPEC+ decided to increase production by 137,000 barrels a day from October. This is a much smaller increase than the monthly increases in September and August of approximately 555,000 bpd and 411,000 bpd between July and June. (Reporting and editing by Diane Craft; Yuka Obayashi)
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Trump is ready to launch a second phase of sanctions against Russia over the Ukraine conflict
Donald Trump, U.S. president, said Sunday that he was ready to move into a second phase in sanctioning Russia. This is the closest he's come to implying he might be about to ramp up sanctions against Moscow and its oil purchasers over the war with Ukraine. Trump has repeatedly warned Moscow of further sanctions, but he withheld them while pursuing peace talks. Trump did not commit to a decision, nor did he specify what the second phase would entail. When asked by a White House reporter if he was ready to move on to the "second phase" of sanctions, Trump replied, "Yeah. I am." He didn't elaborate. Trump is frustrated at his inability, after taking office in January, to quickly end the conflict in Ukraine. The White House didn't immediately respond to a Sunday email seeking comments about the steps Trump is considering. The exchange followed Trump's Wednesday comments defending his actions against Russia, which included imposing punitive duties on India's exports to the U.S. last month. India is the largest buyer of Russia’s energy exports. Western buyers, however, have reduced their purchases in response to war. Trump stated on Wednesday that "that cost Russia hundreds of billions" of dollars. "You call this no action?" "You call that no action?" Treasury Secretary Scott Bessent stated on Sunday that both the U.S. & the European Union can impose "secondary tariffs" on countries who buy Russian oil, pushing the Russian economy into a state of crisis and forcing Russian President Vladimir Putin at the negotiation table. China is the largest buyer of Russian energy.
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OPEC+ agrees to increase oil production from October in order to gain market share
OPEC+ agreed to increase oil production in October, as Saudi Arabia tries to regain its market share. However, the pace will be slower than previous months because of an expected weakening of demand worldwide. OPEC+ increased production in April, after years of cutting to support the oil markets. But the decision on Sunday to boost output further came as a shock amid a possible looming oil surplus during the winter months in the Northern Hemisphere. In a Sunday online meeting, eight members of OPEC+ decided to increase production by 137,000 barrels a day from October, according to OPEC+. This is a much smaller increase than the monthly increases that were about 555,000 bpd between September and August, and 411,000 bpd between July and June. Eight members of OPEC+ have begun unwinding a second tranche, which amounts to about 1,65 million bpd. This is more than a calendar year ahead of schedule. The group has already unwound its first tranche of 2,5 million bpd, which is equivalent to 2.4 percent of the global demand. The barrels are small but they send a powerful message, said Jorge Leon, an analyst at Rystad who is a former OPEC representative. The increase in barrels is not about volume but more about signalling – OPEC+ wants to gain market share, even if that means softer prices. Leon says that OPEC+ (made up of the Organization of the Petroleum Exporting Countries, Russia, and other allies) found it easy when the demand grew in the summer. But the real test comes in the fourth quarter, with the expected slowing of demand. OPEC+ stated that it had the option to increase, pause, or reverse increases at future meetings. The next meeting between the eight countries is scheduled for October 5. NEW CAPACITY Saudi Arabia's efforts to punish overproducing members like Kazakhstan and the United Arab Emirates for building new capacity have also contributed to the increase in OPEC output this year. In an effort to fulfill his promise made during the election to lower domestic gasoline prices, Donald Trump pressured the group earlier this year to increase production. As a result of the increased production, oil prices have fallen by around 15% this year. This has pushed oil company profits to their lowest level since the pandemic. The oil price has not fallen, but is still trading around $65 per barrel. This is due to the sanctions imposed by the West on Russia and Iran. This has encouraged OPEC+ producers to increase their output. OPEC+ has not met its pledged increases because the majority of members are operating at near-capacity. Analysts and data show that only Saudi Arabia and United Arab Emirates can add more barrels to the market. OPEC+ already had two levels of cuts in place before the Sunday agreement - the 1,65 million bpd reduction by the eight member countries, and a second 2 million bpd reduction by the entire group until 2026. (Additional reporting from Olesya Astakhova and Maha el Dhan; editing by Nick Zieminski, David Holmes and David Holmes).
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Stellantis CEO asks EU to support the car sector
In order to protect the automotive industry, the new CEO of Stellantis, a carmaker in Greece, has called on the European Union (EU) to be flexible when it comes to the transition to electric cars. "A strategic dialog is important, but it's now vital to act urgently." Antonio Filosa became CEO of Stellantis in June. On September 12, European Commission President Ursula von der Leyen will host executives from the automotive industry to discuss the future. The sector is under threat due to the Chinese competition with electric vehicles, and U.S. Tariffs. Filosa is the head of Fiat, Alfa Romeo and Peugeot brands. Chrysler, Jeep and Opel are also part of the group. Filosa has called on the European Commission (EC) to encourage the sale of hybrid cars to reduce the average age of the vehicles on the roads. In a joint interview, he told Italy's Il Sole 24 Ore as well as France's Les Echos that a European policy encouraging the replacement of older vehicles with new ones and a wider range of powertrains could have a greater effect on global CO2 emission than an annual new car market. Filosa stated that the Light Commercial Vehicles sector is facing an urgent situation and suggested that the CO2 emission period for this category should be increased to five years, from three. As he reviewed the brand portfolio, he also tried to dispel speculation that Stellantis might seek a buyer of Maserati. He said: "I would like to be clear that Maserati was not for sale. We need to know which products we should develop and what long-term strategies to adopt for our iconic brand."
Mexico's top prosecutor promises more action against fuel crime after 14 arrests
Mexico's top prosecution said that 14 people have been detained so far for suspected involvement in illicit fuel trade. He reiterated that new information would lead to more action.
The authorities in Tampico seized on March 19 a tanker of petroleum, along with the nearly 63,000 barrels it carried of diesel, and containers and vehicles used for its transportation and storage.
LSEG's tanker tracking data revealed that the tanker Challenge Procyon had arrived from America.
The Mexican authorities claimed that the truck was carrying diesel, for which an import tax was required. Instead, the truck was declared as a petrochemical and exempted from tax.
Alejandro Gertz, the attorney general of the country, said that this seizure was one of the biggest in recent memory. It sparked a series investigative and intelligence activities which revealed a part of criminal structure behind the crimes. "There will be more actions."
Gertz said that the investigations confirmed the existence a group dedicated to theft and illegal hydrocarbon trade, using false documents, complicit public officials and customs agencies.
To protect the identities of those detained, the Mexican authorities did not release the names of companies and only gave the first names to the 14 individuals suspected of being involved in the crime.
Investigations into the businessmen, retired and active naval officers, and former Customs officials are still ongoing.
Raymundo Morales said, at the same Mexico City press conference, that the Mexican Navy has strengthened its internal controls and disciplinary processes to prevent and eradicate illegal fuel imports.
"We protect the institution, without excusing isolated, individual behaviors that violate the public trust," he said, alongside Gertz and Omar Garcia Harfuch, the minister of security. (Reporting and editing by Matthew Lewis in Mexico City, with Stefanie Eschenbacher)
(source: Reuters)