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Sources say that China has restricted some Fortescue iron-ore cargoes due to deteriorating talks.
Sources in the industry said that China's state buyer of iron ore has asked some domestic steel mills to not accept certain portside products of iron ore from Fortescue. This is the latest Australian miner to be snared by Beijing's efforts to 'increase' control over the market. Five sources familiar with the matter said that China Mineral Resources Group (CMRG), notified mills verbally on July 15th, they should not accept portside cargoes containing Fortescue’s Super Special Fines or Fortune Fines. These are both lower-grade products of iron ore. The move is part of CMRG’s campaign to assert its control over the way iron ore is entered into the Chinese?market. It follows a months-long dispute with BHP, which ended in April. Fortescue exports most of its iron ores to China, and is still negotiating with CMRG about supply terms. CMRG - and Fortescue - did not respond immediately to requests for comments outside of 'working hours. As of 1503 GMT, the most active August 'iron ore futures' contract on the Singapore Exchange had risen 2.53% to $100 per metric ton after reaching its highest level since June 17, at $101.2 during the evening trading session. As of June 30, a trader who requested anonymity said that Fortescue’s Super Special fines stocks in some major Chinese port cities stood at 7,22 million tons. According to data from Steelhome, this represents almost 5% of the total portside stocks of iron ore. . CMRG told some domestic'steelmakers last month not to discuss with Fortescue a new iron-ore product - Fortune Fines – scheduled for shipments starting in July. Fortescue confirmed that its China president left in June, only four months after taking up the position. BHP announced in mid-April it had ended supply contract negotiations with CMRG. This was the end of a long-running dispute. Beijing then lifted its bans on a number of BHP's products. CMRG, which was founded in 2022, is part of Beijing’s effort to centralise iron ore procurement as well as win better terms from mining giants upstream. (Reporting and editing by Emelia Sithole Matarise and Kevin Liffey; Staff)
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SMM reports that Antofagasta has agreed to spot-indexed sales of copper ore with certain Chinese smelters.
The industry information provider SMM reported on Wednesday that Antofagasta, a Chilean copper miner, has agreed to supply?term copper concentrator supplies to certain Chinese smelters with spot-indexed prices and a floor guaranteed. The reported deal would be a departure from a long-standing practice in which miners sold term supplies for fixed treatment and refinement charges (TC/RC), which serve as a benchmark globally. Antofagasta stated that its negotiations are confidential and it does not discuss them with other parties. The smelters receive a TC/RC from the miners to refine copper concentrate. However, charges on the spot market are incredibly low due to an 'ore shortage. The smelters are now paying for?processing material and there is increased pressure on the benchmark which has been set at zero until 2026. Some miners have already abandoned this benchmark. Chinese smelters resisted Antofagasta’s proposal to switch from spot-indexed pricing to term-supply negotiations at mid-year, arguing that it would reduce price certainty. SMM reported that after Antofagasta demanded the change, both sides came to an "innovative compromise" whereby TC/RCs are linked to an index while also being subject to a floor guarantee. Antofagasta is not allowed to sell?term concentration at TC/RCs that are below a certain level. According to the Argus, spot TCs were minus $126.80 per metric ton by the end of last week. The SMM report didn't say what the floor level would be. Tom Daly reported. Lewis Jackson, Amy Lv and Lewis Jackson contributed to the reporting. Mark Potter (editing)
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US construction spending increases in May but homebuilding is weak
The U.S. construction sector grew in May, despite the fact that mortgage rates were higher due to the Middle East conflict. Census Bureau of the Commerce Department?said that construction spending increased 0.1% on Wednesday after a downwardly-revised 0.3% rise in April. Economists surveyed by predicted construction spending would gain 0.1% following a previously reported increase of 0.4% in April. In May, construction spending declined 1.5% compared to the same month last year. The amount spent on private construction projects remained unchanged in May after increasing by 0.3% the previous month. Residential construction investment increased by 0.3% due to renovations. The spending on single-family housing projects fell by 0.1%. In May, it fell 4.0% on an annual basis. The U.S. Israel war against Iran has boosted?oil rates, which in turn have pushed up mortgage rates and inflation. Data from mortgage finance agency Freddie Mac shows that the average?rate of the?popular 30 year fixed-rate mortgage increased by 50 basis points after the conflict began at the end February. It averaged 6.49 % last week. The spending on multi-family units, which make up a tiny part of the housing market in May, fell by 0.1%. In May, investment in non-residential private structures like?power plants and factories fell by 0.3%. The spending on factory construction fell by 1.3% while power plant expenditures decreased by 0.1%. This is despite an increase in data centers for artificial intelligence. Investments in?public-sector construction projects increased by 0.5% in May, following a similar increase in April. State and local government construction spending increased 0.4% in May, while federal government expenditures jumped 1.3%. This is likely due to the building of immigration detention centers. (Reporting and editing by Andrea Ricci; Reporting by Lucia Mutikani)
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Gold increases by over 2% following Fed chair Warsh's comments and soft jobs data
Gold prices rose more ?than 2% on Wednesday after ?softer-than-expected jobs data and comments ?from Federal ?Reserve Chair Kevin Warsh that suggested inflation risks have eased. Gold spot rose 2.1%, to $4.089.49 an ounce at 0955 ET (1355 GMT), after falling to its lowest level since last November during the previous session. The yellow metal posted a quarterly loss Tuesday. U.S. gold futures for August delivery rose 1.6% to $4103.10. Gold is seeing a nice rebound this morning. A lower-than expected ADP 'print set the scene and Fed chair Warsh’s comments about inflation coming down have pushed 'yields' lower and jolted an otherwise sleepy gold market to smartly rise," Tai Wong said. Wong said, "Gold has carved out at least a temporary base, unless tomorrow we receive a payrolls report that is blown away." ADP's national employment report released ahead of Thursday's non-farm payrolls reported that private employment increased by 98,000 last month, after a 122,000 increase in May. The economists surveyed by predicted that private employment would increase by 118,000. Warsh also said that the Fed was committed to bringing down inflation to its 2% target. Gold is often seen as a way to protect against inflation, but higher interest rates can reduce its appeal. According to the CME FedWatch Tool, traders are currently pricing in about a 67% probability of an interest rate increase for September. According to an Iranian official, on a geopolitical level, the U.S. and Iran held technical discussions in Doha, Qatar, on Wednesday, as they tried to reach an agreement on the flow of ships through the Strait of Hormuz, and secure a 'lasting ceasefire. Silver spot rose?2.8% per ounce to $60.24, while palladium rose 1.6% to $1.223.68. After hitting its lowest level since November, platinum rose by 3.1%, to $1,599.36. Reporting by Sukanya Mitra and Ashitha Shivprasad from Bengaluru, editing by Diti Pjara
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UK's National Grid invests $1.75 Billion in AI power boom through Joulent Investment
Britain's National Grid said on Wednesday that it would invest $1.75billion for a 35 percent stake in Joulent. Joulent is a U.S. platform for developing power infrastructure for the data centres. It wants to take advantage of the surge in demand for electricity driven by AI. The agreement will fund Joulent’s first project: a 2,67-gigawatt, gas-fired facility developed in a joint venture with Chevron in?West Texas. Chevron will also supply power to a Microsoft data centre campus under a 20 year power purchase contract. National Grid's shares dropped 1.4%, trading at 1,230.5 pence as of?1142 GMT. AI-related demand for electricity is changing the global energy market. The demand for data centres to power artificial intelligence services grew?by 17 percent in 2025. This was far greater than the growth of 3% in global electricity 'demand. National Grid stated that the?investment would add to its existing capital investment programme for five years of at least PS70bn through fiscal year 2020 and be funded by available capacity in its balance sheet. The company stated that the transaction would not affect its current financial situation. We would expect that the returns on this investment through National Grid Ventures will be higher than the 9-10% equity return we expect from regulated networks, reflecting a slightly greater relative risk profile. Morgan analysts stated in a report. National Grid stated that the strategic partnership would also strengthen their 'existing data center connection programme. They expect to connect over 10 gigawatts in the UK and United States within the next five year. Kilby is the name of the 'project, which has already secured crucial equipment including GE Vernova Turbines, reserved engineering and construction capacities, and aims to start delivering electricity by 2028. National Grid stated that Joulent will be able to generate a positive cash flow from early 2030s. The final investment decision for the Joulent stake should be made by the end 2026. Reporting by DhanushVigneshbabu in Bengaluru, Editing by Jonathan Ananda & Emelia Sithole Matarise
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Petrobras CEO believes oil will settle in the range of $72 to 75 per barrel
The chief executive of Brazil's state oil company Petrobras said that the oil prices have remained in a range between $72 and $75 per barrel. However, the market is yet to 'normalize fully,' he added. Petrobras announced its decision to lower diesel prices on Tuesday evening, reflecting the fall in Brent crude oil prices. CEO Magda Chambriard confirmed this in an interview that same day. Brent crude futures traded at $72.05 per barrel on Wednesday. This is close to the price seen the day before Israel and the U.S. launched their military campaign against Iran. Chambriard stated that "the oil market hasn't yet returned to normal but $75-$72 seems to be the new range." Petrobras has announced a price reduction of 0.3515 Reais per liter of diesel that it sells to its distributors. This is equal to the amount of the government subsidy now being removed. The company's selling prices will therefore remain unchanged. According to an announcement by Finance Minister Dario Durigan on Tuesday, the government's diesel subsidies, which were introduced to 'cushion the effect of the Iran War, will expire on Wednesday. According to Durigan, other fuel subsidies are being reviewed for gradual phase-out following the drop in oil prices and easing tensions across the Middle East. Last month, Iran and the U.S. signed an interim agreement aimed at halting the war and reopening the Strait of Hormuz through which 20% of global oil supply had passed before the conflict. Parties are also exploring ways to reach a permanent resolution of the conflict.
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Portugal wants investment commitments from Moeve-Galp for Sines refinery
The Portuguese Environment Minister said that Moeve and Galp, Spain's refiners, should?invest and commit to the viability of Sines as part of a planned merger of their operations. Moeve has been in talks with Galp since January to create two joint ventures. One will operate 3,500 fuel stations in the Iberian Peninsula. The other will combine Galp's refinery located in southern Sines, Spain, with Moeve refineries located in Huelva, Spain, and Algeciras, in southwest Spain. Moeve will hold the majority of shares in Europe's largest refining company, while Galp retains a mere?over 20 percent. Environment Minister Maria da Graca Carvalho stated that the government closely monitored the deal, from the perspective of?security of supply and sovereignty of the nation. She stated that it was important to "ensure the sustainability and continuity of operations at Sines refinery, the only one in Portugal, in the long run. She told a hearing in parliament that "the Sines refinery must be given the conditions necessary to increase investment, modernise its infrastructure, and improve production processes." Carvalho stated that it was necessary to also attract skilled workers, encourage innovation and create business and industrial synergies. She said that the current geopolitical background, which includes tensions in the Middle East, underscored the need for Portugal to strengthen its infrastructure and reduce its dependence on fossil fuels by preparing for the future. The refinery must focus more on the so-called "green molecules" such as hydrogen, sustainable aviation fuel, and second-generation Biofuels. The government does not have veto power, but the strategic importance of Sines refinery to Portugal allows it to exert pressure on other parties regarding the future direction of the asset. The Portuguese government also owns 8% of Galp. (Reporting and editing by Louise Heavens; Sergio Goncalves)
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Sberbank of Russia lowers expectations for corporate lending as bad debts increase
Sberbank's finance chief said on Wednesday that the bank will lower its corporate lending growth forecast for 2026 due to the deteriorating financial position of its borrowers. Taras Skovortsov, CFO of Bank of Russia, told the Bank of Russia Financial Congress in St Petersburg that the country's largest lender had performed better than expected, but that the economy was slowing due to the ongoing conflict in Ukraine and the growth forecast for 2026 is only 0.4%. Skvortsov stated that "it is true?that we performed slightly better than anticipated in the first half. This is primarily due to interest income and perhaps even the cost of risks." "In the second half of this year, and particularly in the last few months, we have seen some worrying trends regarding the quality of corporate portfolio." Skvortsov stated that there had been a decline in the financial health of clients, which included requests to restructure loan. "All this will, of course, force us to set aside provisions for such cases. He added that the cost of corporate risk is likely to rise. Skvortsov cited high interest rates as another factor for the projected 9% to 11% growth in corporate lending by Sberbank this year. He declined to provide any further details about the revised forecast. On June 19, the central bank cut its main interest rate from 15.5% to 14.25%, a smaller reduction than analysts had expected. Retail fuel prices have increased due to nationwide fuel shortages following 'Ukrainian drone strikes on refineries. Analysts surveyed in June raised their inflation forecasts from May's 5.5% to 5.7%. An official of the central bank said that the attacks on Russian oil refining facilities will likely have an impact on the economic growth in the second half. "We are observing the situation on fuel markets. Skvortsov stated that all of this has a direct impact on the economic position of a number of companies. He added that the lender would?try to keep its dividend payout percentage at 50% of its net profit over the next three year but would then present its final calculation along with its strategy by the end of 2026. Reporting by Elena Fabrichnaya, Writing by Lucy Papachristou, Editing by Mark Trevelyan & David Goodman
Sources say that OPEC+ is likely to increase oil production targets again in August.
Three sources told Reuters that OPEC+ countries are likely to agree on a 'further increase in their 'output targets for August, when they meet?Sunday. This will add supply at a moment of falling prices, as the Strait of Hormuz slowly reopens.
Sources said that the target for August will be the same as it was for June and for July. OPEC didn't immediately respond to a comment request. All sources, who spoke under condition of anonymity, said that 'no decision has been finalized. Seven members of OPEC+ (which groups OPEC, Russia and other producers) have increased their 'output quotas between April and July by nearly 800,000 barrels a day. The Iran War has, however, led to a sharp decline in production among key members. OPEC data shows that OPEC+ production fell from 42.77 to 33.13 millions bpd between February and May. Oil prices have returned to prewar levels despite the pressure from weaker Chinese imports and higher exports by non-Middle East suppliers. The International Energy Agency coordinated a record-breaking'strategic inventory release', which helped to ease supply concerns. Brent crude was trading just above $72 per barrel at 1309 GMT. Sources said last week that Iraq, OPEC’s second largest producer after Saudi Arabia, and one of the five founding members had considered quitting the group if not allowed to increase its oil production significantly. Baghdad officials later said that they were in favor of a re-evaluation of OPEC's production quotas, to reflect the current conditions within member states.
Rollback of 2023 Supply Cut The seven producers - Saudi Arabia, Russia. Iraq, Kuwait. Algeria, Kazakhstan, and Oman - are increasing output as part of a gradual rollback of the 1.65 million bpd cut in supply agreed upon in 2023 when the group included?the UAE. The UAE left the alliance at the end of April to better align its production with its capacity, without the production restrictions imposed by the group. OPEC+ has been reviewing the oil?production capacities of its members to serve as a benchmark for production baselines in 2027, from which quotas will be set. Calculations show that the seven countries will have to bring back 379,000 bpd from the original cut by August. This is after the UAE's exit in May. If the group continues to unwind at the same rate, they will have unwound the remaining cut by September.
(source: Reuters)