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ROI-Global trade in rude health? McGeever: Yes, with a catch
Global trade is not cooling in the shadow of tariffs and trade wars. It's heating. How durable is it when the price and not the volume is what's stoking up the flames? Recent trade data from the U.S., China and other major economies show that cross border commerce is growing at a faster rate than economists expected. In many cases the "increased activity" and the "surprisingly strong headline export numbers" were primarily driven by "higher prices". These reflect the spike in inflation caused by the Iran War, particularly on the oil and energy markets. This was especially true in the U.S. where exports reached a record of $327 billion last month, largely due to shipments of a wide range goods. In fact, the goods surplus shrank to the lowest level since 2020. This is good news for the U.S. economic system, since the declining deficit could contribute to the growth of the economy in the second quarter. This may be primarily due to the high prices of fuel, oil and other energy products. It is important to ask how long the improvements will last. It's not only the price that matters. Canada's physical export volumes are now back where they were prior to the U.S. Presidential election which returned Donald Trump to office in November 2024. This has triggered trade tensions with the United States. According to CIBC, the exports of April were only second to those in February last year when companies were preparing for Trump's looming duties. Base effects are another factor which may have a positive impact on headline trade figures. The slowdown in trade during the first half of the year as Trump's tariff wars began is now used to compare year-over-year figures. It is too early to predict a trade revival. CHIPS, CHIPS HORAY The price is also playing a major role in Asia's trade explosion, but the booming AI-related demand also fuels the sizzling numbers. China, the largest exporter in the world, saw its total exports rise 19.4% in May. Pantheon Macroeconomics says that sales of high-tech goods accounted for 12 percent. While the value of integrated-circuit exports has more than doubled in the last year, the export volume rose by only 2%. This suggests that the headline figure is inflated because the price was high. The same thing is happening in other sectors. However, Beijing policymakers and critics will continue to focus on headline dollar figures, particularly the large one, China's total 12-month rolling trade surplus of more than $1 trillion. Taiwan's AI export surge was even more impressive. Exports rose in May more than expected to the second highest level by value ever, up almost 52% compared to a year ago. Price was again a major factor. TSMC, the largest manufacturer of 'advanced chip technology used in AI applications', is based in Taiwan. It also supplies Nvidia and Apple, among other tech giants. Chips, computer equipment and software, as well as other high-tech products, have seen a surge in price over the last year, largely due to an explosion in demand. Goldman Sachs Global Institute estimates that AI-related investments will reach $7.6 trillion by 2031. SURPRISING RESILIENCE Global trade has shown remarkable resilience, which few observers could have imagined possible in the face of volatile market conditions. Trump's "Liberation Day tariffs" triggered a global trade war, which may have ended decades of internationalization. Geopolitical rifts also threaten trade flows, notably in Middle East. AI frenzy?can be credited with keeping global trade moving. The demand for these applications has accelerated, and much of the trade of AI-related products takes place across borders. The question is, can this continue? Could the rise in AI compute costs curb demand eventually? Could major powers seek to reduce AI supply chains in order to minimize national security risks? The AI boom is unlikely to fade away anytime soon, which suggests that trade activity could'remain resilient', even in the face of deglobalization, tariffs and protectionism. Everything seems to be dependent on the outcome of this tech story, just as it is with other parts of the global economic system. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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IIR reports that the gasoline unit of Nigeria's biggest refinery will resume full rates by mid-June.
IIR Energy, a monitor of the oil industry in Nigeria, said that Dangote's refinery had derated its gasoline-making unit (RFCC), by 34%. The?unit is expected to resuming full fares around mid-June. The refinery didn't immediately respond to our request for comment. "Initially, the lighter crude that was being processed resulted?insufficient feed availability for the RFCCU. By the end of the month, IIR Energy confirmed that there was a problem with the RFCCU's flue gas sliding gate valve. IIR confirmed that the repair work is nearly complete on "that issue" in an email. Fuel prices are at record highs due to the war in the Middle East. Africa's biggest refinery was fully operational in early 2018. Its goal was to?transform Nigeria into a major supplier of?refined? products after decades of inadequate refinery capacities. According to Kpler's data, gasoline exports have fallen from 81,000 barrels per day last June, down to 17,000 barrels a day in May.
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Expected increase in US consumer prices for May
The Federal Reserve has more reasons to maintain interest rates at the same level until 2027, as U.S. consumer inflation grew at its fastest pace in three years during May. According to the Labor Department Bureau of Labor Statistics, on Wednesday, the Consumer Price Index rose 4.2% over the 12-month period ending in May. This is the biggest gain since April 20,23. In April, the CPI increased 3.8% on a year-on-year basis. Prices rose 0.5% monthly after a 0.6% increase in April. Economists surveyed by predicted?the CPI to increase 4.2% on an annual basis and gain 0.5% monthly. Inflation has been outpacing wage growth for the second consecutive month, which could weigh on overall economic growth. For the second straight month, inflation outpaced wage increases. This could have an impact on economic growth. The rising cost of living has become a political liability for Donald Trump and his Republican Party as they seek to maintain control of Congress during the November midterm elections. Trump's promise to reduce inflation was a major reason he won the presidential election of 2024. However, his approval ratings have fallen as frustration grows over his economic management. Core CPI, excluding volatile components such as food and energy, increased 2.9% on an annual basis in May. This was after a 2.8% increase in April. The so-called core CPI rose 0.2% monthly after increasing 0.4% in April. For its 2% target, the U.S. Central Bank tracks Personal Consumption Spending Price Indexes. All inflation measures are well above the Fed target. Data from the U.S. Energy Information Administration revealed that in May, the national average gasoline cost increased by?8.8% to $4.60 per gallon. Gasoline prices were at one time up by over 50% since the U.S. Israel and the United States attacked Iran in late February. In recent weeks, prices have fallen amid a ceasefire. This has led some economists to cautiously hope that May will be the CPI peak. This report came after news that the economy had posted a?month with above-expectations growth of jobs in May for a third consecutive?month. For the third month in a row, the?unemployment level remained at 4,3%. Although financial markets are pricing in an increase, economists continue to believe that the central bank has a high bar to raise interest rates. (Reporting and editing by Andrea Ricci, Chizu Nomiyama, and Lucia Mutikani)
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Sempra says Texas grid projects require over $7 billion investment after ERCOT backing
Sempra, an energy infrastructure company, announced?on Wednesday it had received approvals for a number of new transmission projects in Texas. These, along with earlier go-aheads are expected to cost over $7 billion. Last week, the Electric Reliability Council of Texas, the operator of?the electricity grid in Texas, approved the new projects. According to the U.S. Energy Information Administration (EIA), U.S. electricity demand reached'record levels' in 2025, and it is expected to continue to rise 'this year as tech companies rapidly build data centers that use as much electricity as an entire town at one site. Sempra’s latest projects include new lines along the I-35 and southern Dallas-Fort Worth corridors, along with a?upgrade approved in April. These are expected to support 16 gigawatts in new power demand. As they rush to meet the soaring demand of tech giants, power companies in the U.S. are raising prices and increasing capital expenditures to expand infrastructure. Oncor Electric Delivery Company in which Sempra holds an 80.25% stake?expects the?majority? of the projects to be constructed. The projects should be completed between 2026-2034. Reporting by Katha Kalya in Bengaluru, Editing by Shailesh Kuber
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Hungary's Lake Velence is drying up and threatening tourism, wildlife and
Experts and locals say that the water level in Hungary's largest lake will?fall to new lows due to climate change and years of mismanagement of water. This could threaten its ecosystem and tourism sector. Experts say that Lake Velence is a popular destination for holidaymakers, but the water level may soon be too low to allow swimming and sailing. A recent warm day saw children playing on newly exposed sandbanks that extended far beyond the shoreline of the lake. Rental boats were resting at a jetty, now far away from the water, and on the sand. Data from the National Directorate General for Water Management revealed that the lake level in the town of Agard measured 56 cm, only 3 cm higher than the 'historic low' of 53 cm, which was recorded in 2022 - the year Hungary suffered an extreme drought. The water level was 80 cm in the early months of 2026. Experts warned that without substantial rain, the water level could drop by as much as half a centimetre per day, and reach as low as 30cm by summer's close. Tibor Horanyi, from the Association of Great Lakes, said that the water level would drop by at least 25-30cm in the next 30-40days and that the record low will be reached within days. Horanyi said that the problem was not just climate change, but also decades of poor water management. Businesses have already been affected by the disruption. Peter Szaniszlo, a sailing instructor, has started moving his operations to the?Lake Balaton. "Most people who wanted to learn how to sail chose me because Lake Veence is near Budapest. "Now they have to go to Balaton," said he. GOVERNMENT PLEDGES TO ACT Laszlo Gájdos, the Minister of Environment, met last week with local mayors, water management experts, and NGOs to discuss the future of the lake. Gajdos stated in a Facebook post that the government is working to improve the water quality and restore the shoreline. It will take some time to figure out how to replenish water in Lake Velence, according Arpad 'Pal Eotvos the mayor of Gardony a town located on the lake. Eotvos stated, "We'll have to adapt to this." As the climate changes, so will we. (Written by Anita Komuves, edited by Alexandra Hudson).
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In May, the share of Russian aluminium in LME stocks rose to 93%.
Data from the London Metal Exchange showed that, in May, the share of Russian-origin aluminum stocks in London Metal Exchange warehouses increased to 93%, up from 72%, in April. This was due to traders' decision to withdraw Indian metal. The total available or on-warrant aluminium inventories (0#MALSTXLOC>) on the LME dropped 23% to 254,625 tons in May, and now stand at 250 525 tons. This is the lowest level since May 2025. Production and logistics constraints in the Middle East are limiting global supply. Absolute terms, the amount of?Russian aluminum available in May fell by 3,950 tonnes to 237.175. The?share of?Russian aluminium rose however as Indian stocks fell by a greater 71,750 tonnes. After the withdrawal of 2,275 tonnes of Indonesian aluminum, the LME warehouses only had?17.450 tons of Indian aluminium left at the end May. In March, the share of Russian aluminium had reached 92% before Indian aluminum was placed back on warrant. Many traders do not want to deal with Russian metal, even though it can be traded if it was produced before April 13, 2020. To comply with Western sanctions, aluminum produced in Russia after that date is not allowed to be stored at the LME warehouse system. The share of Chinese copper in the LME's copper stock increased to 53% from 51% in April, despite the fact that the total amount dropped by 36,425 tonnes to 141.025 tons. The total?available copper stock decreased by 79.375 tons, to 266,875 tonnes. At the end of December, the?share of Chinese nickel remained at 71% of LME stock. Reporting by Tom Daly. Mark Potter (Editing)
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India rejects US claim of excess capacity in textiles and steel
Amitabh Kumra, a trade official in India, said that India did not have'surplus manufacturing capacity' in textiles and steel as claimed in the Section 301 investigation by the U.S. Trade Representative. Washington has cited structural surplus capacity in Indian industries, from solar panels and petrochemicals, to steel and textiles. It also cites its $42 billion goods trade deficit with the United States by 2025. Kumar, India's Additional Trade Secretary, said that its textile and Steel output should be evaluated in relation to the size of its population, its domestic demand, and its growth needs rather than its absolute production. "Overcapacity" is a matter of perspective. Kumar stated that they did not believe there was any overcapacity. He added that India's textile consumption per capita was low, especially for?man-made fiber and technical items. This country has a tropical climate. We wear cotton. "How can we have an overcapacity?" Kumar rejected U.S. concerns about?steel production, saying India's requirements reflected the country's development. He said that India's per capita consumption of steel is one of the lowest in the world. The output remains low compared to the population and growth requirements. Analysts say Washington uses the threat of Section 301 Tariffs to pressure India to increase its purchases of U.S. energy products and defence goods, and to open up their markets to agricultural products and other products. New Delhi wants a deal with the United States that would include preferential tariffs for competitors. However, the negotiations have been clouded due to the uncertainty surrounding the U.S. investigation against India. In March, the USTR office launched investigations against India among 16 other countries for policies like subsidies, state funding and industrial planning which 'let factories continue producing even when market conditions were not supportive. The U.S. has proposed an additional 12.5% tariff on imports of goods from India, and other countries. They cite their?uses of forced labour. India, however, says that these are not final as?New Delhi engages Washington in the Section 301 Process. USTR also considers a separate tariff against India. It claims that there is excess capacity in certain sectors, such as textiles, and exports hurt the U.S. industrial sector. Kumar claimed that the move was aimed at "a particular country" while also serving to further other commercial goals. The Trade Minister Piyush Goyal stated last week that both sides are moving quickly to finalise the first tranche of an agreement on trade, possibly as early as mid-July. (Reporting and writing by Manoj Kumra; editing by YPrajesh, Clarence Fernandez and Sakshi Dayal)
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The chips in MORNING BID AMERICAS are blue
What's important in U.S. and Global Markets Today By Mike Dolan, Editor at Large, Finance and Markets It's unnerving that the relapse of U.S. Tech stocks on Tuesday occurred as oil prices dropped sharply in the same session. This shows how stock market anxiety extends "well beyond" the energy story. The crude?prices on Wednesday were volatile after the U.S. and?Iran exchanged missile strikes overnight, the most alarming direct interaction between the two sides since the fragile ceasefire was established. Below, I will go into more detail. Check out my most recent column about why the stock exchange is becoming more important to a growing number employees and households. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. The SOX chip index dropped nearly 2% Tuesday, but the selloff at midday was much more severe. It had been over 8%. Wednesday's equities market mood was further darkened by the fall of Asian indexes and the decline in U.S. Futures before the bell. This comes before the U.S. CPI report for May, which is expected to be released?on Tuesday. Headline inflation will likely creep over 4% for the very first time in 3 years. Core inflation is predicted to hover around 3%. The report is not only going to set the tone for the stock market, but also a 10-year Treasury Auction later that day. A Federal Reserve rate increase by the end of the year has now been baked into the futures markets. The ECB could deliver a rate hike tomorrow. Meanwhile, Japanese wholesale price data released on Wednesday confirmed that the Bank of Japan would follow suit next Monday. Chinese producer inflation data showed that prices were also hot in China last month. Oil's dramatic fall to a 7-week low Tuesday was one of the few positives in the last 24 hours. The U.S. claimed that oil exports were increasing through the Strait of Hormuz, while Washington and Tehran are struggling to reach an agreement. The renewed U.S. - Iran hostilities'muddied' the picture a bit, as crude prices rose before reversing their gains in volatile trading on early Wednesday. Even though oil prices have fallen, some are still concerned about a possible supply shortage this month due to the shrinking U.S. crude oil stocks. This all sets a noisy, bumpy background to the SpaceX IPO that will take place later this week. Some say that the event is contributing to the market volatility as investors are clearing the decks to accept the new offer. Chart of the Day The U.S. Trade deficit shrank in April, as exports of capital goods and petroleum products jumped to new records. Oil exports jumped to $37 billion, a record-high from $28 billion dollars in March. This was due to both increased volumes and the?elevated prices of oil tied to Middle East conflict. The U.S. has become a net exporter of oil. Its petroleum trade surplus increased to $17.7billion from $9.4billion in March. Watch today's events * U.S. CPI for May (8:30 am?EDT). * U.S. 10-year note auction (1 p.m. EDT) Want to receive the "Morning bid" in your email every morning? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent the views of News. News is committed to the Trust Principles and values integrity, independence, freedom from bias, and impartiality.
As solar capacity grows, some of America's the majority of productive farmland is at threat
Dave Duttlinger's very first thought when he saw a thick band of yellowishbrown dust smearing the sky above his Indiana farm was: I cautioned them this would occur.
About 445 acres of his fields near Wheatfield, Indiana, are covered in photovoltaic panels and associated equipment-- land that in April 2019 Duttlinger leased to Dunns Bridge Solar LLC, for one of the biggest solar advancements in the Midwest.
On that blustery spring afternoon in 2022, Duttlinger stated, his phone sounded with concerns from disappointed next-door neighbors: Why is dust from your farm inside my truck? Inside my home? Who must I contact us to clean it up?
According to Duttlinger's solar lease, examined , Dunns Bridge stated it would utilize commercially reasonable efforts to lessen any damage to and disturbance of growing crops and crop land caused by its building activities outside the project website and not get rid of topsoil from the property itself. Still, sub-contractors graded Duttlinger's fields to help the structure of roads and installation of posts and panels, he said, despite his warnings that it might make the land more susceptible to disintegration.
Crews reshaped the landscape, spreading great sand across large stretches of rich topsoil, Duttlinger said. When visited his farm last year and this spring, much of the land beneath the panels was covered in yellow-brown sand, where no plants grew.
I'll never ever be able to grow anything on that field again, the farmer stated. About one-third of his roughly 1,200-acre farm-- where his family grows corn, soybeans and alfalfa for livestock-- has been rented.
The Dunns Bridge Solar project is a subsidiary of NextEra Energy Resources LLC, the world's biggest generator of eco-friendly energy from wind and solar. Duttlinger stated when he approached NextEra about the damage to his land, the company stated it would evaluate any restorative work needed at the end of its agreement in 2073, based on the terms of the arrangement.
NextEra declined to talk about the matter or on what future dedications it made to Duttlinger, and could not independently validate them. Job designer Orion Renewable Energy Group LLC directed concerns to NextEra.
The solar market is pushing into the U.S. Midwest, drawn by less expensive land rents, access to electric transmission, and a. wealth of federal and state rewards. The region likewise has what. solar needs: wide-open fields.
A renewable resource boom runs the risk of damaging some of America's. richest soils in essential farming states like Indiana, according to a. analysis of federal, state and local information; numerous. pages of court records; and interviews with more than 100 energy. and soil researchers, agricultural economic experts, farmers and. farmland owners, and regional, state and federal lawmakers.
Some of Duttlinger's farm, consisting of parts now covered in. solar panels, is on land categorized by the U.S. Department of. Farming (USDA) as the most productive for growing crops,. according to a analysis.
For landowners like Duttlinger, the guarantee of profits is. appealing. Solar leases in Indiana and surrounding states can. provide $900 to $1,500 an acre per year in land rents, with yearly. rate increases, according to a evaluation of solar leases. and interviews with four solar project designers. In. contrast, farmland lease in top corn and soybean manufacturers. Indiana, Illinois and Iowa balanced about $251 per acre in 2023,. USDA information shows.
Farmland Partners Inc, an openly traded farmland real. estate financial investment trust (REIT) has actually leased about 9,000 acres. nationwide to solar companies. Much of that ground is highly. productive, said Executive Chairman Paul Pittman.
Do I believe it's the very best usage of that land? Probably not. However our investors would kill us if we didn't pursue this, he. stated.
Some renewable energy designers said not all leases become. solar projects. Some are designing their sites to make it. possible to grow crops between panels, while others, like Doral. Renewables LLC, said they utilize animals to graze around the. panels as part of their land management. Designers likewise argue. that in the Midwest, where more than one-third of the U.S. corn. crop is used for ethanol production, solar power is key for. powering future electric automobiles.
Some farming economists and agronomists counter that. taking even percentages of the very best cropland out of production. for solar advancement and destructive important topsoil effects. future crop potential in the United States.
Typical solar farm construction practices, consisting of cleaning. and grading large sections of land, likewise can lead to considerable. disintegration and major overflow of sediment into waterways without. proper remediation, according to the U.S. Environmental. Defense Company and the Justice Department.
Solar development comes in the middle of increasing competitors for. land: In 2023, there were 76.2 million - or nearly 8% - fewer. acres in farms than in 1997, USDA information shows, as farmland is. converted for domestic, commercial and industrial use.
In reaction to ' findings, USDA said that city. sprawl and development are presently bigger contributors to. farmland loss than solar, citing reports from the Department of. Energy and agency-funded research.
BUILDING ON PRIME CROPLAND
No one knows just how much cropland nationwide is presently under. solar panels or leased for possible future development. Land. offers are normally personal transactions. Scientists at the. United States Geological Study and the U.S. Department of. Energy's Lawrence Berkeley National Lab have actually been. putting together a database of existing solar centers throughout the. country. While that task is incomplete and continuous, . discovered that around 0.02% of all cropland in the continental U.S. intersected in some method with large-scale, ground-based solar. panel sites they had actually recognized since 2021.
The overall power capability of the solar operations tracked in. the information set represents over 60 gigawatts of electrical power. capability. In the following 2 years, solar capacity has nearly. tripled, according to a Dec. 2023 report from the Solar power. Industries Association (SEIA) and Wood Mackenzie.
To much better understand future land-use patterns, . evaluated federal government data to recognize cropland that USDA. classified as prime, special, or of regional or statewide. significance. likewise reviewed more than 2,000 pages of. solar-related files filed at regional county recorders' offices. in a small sample of four Midwestern counties-- Pulaski, Starke. and Jasper counties in Indiana, and Columbia County in. Wisconsin.
The counties, representing a location of land somewhat larger. than the state of Delaware, are where a few of the nation's. largest jobs are being developed or built. The sample is not. necessarily representative of the broader United States but. provides a concept of the prospective impact of solar projects in. farm-heavy counties.
discovered the percentage of these counties' many. efficient cropland secured by solar and energy business as of. end of 2022 was as follows: 12% in Pulaski, 9% in Starke, 4% in. Jasper and 5% in Columbia.
Jerry Hatfield, previous director of USDA Agricultural. Research Service's National Lab for Farming and the. Environment, said ' findings in the four counties are. worrying.
It's not the number of acres converting to solar, he said. It's the quality of the land coming out of production, and what. that suggests for regional economies, state economies and the. nation's future abilities for crop production.
More than a dozen agronomists, in addition to renewable energy. researchers and other specialists sought advice from , stated the. technique to determining solar's impact was fair. The news company. also shared its findings with six solar developers and energy. firms operating in these counties. Three said ' sample size. was too small, and the variety of findings too broad, to be a fair. representation of industry siting and building and construction practices.
By 2050, to satisfy the Biden Administration's decarbonization. targets, the U.S. will need approximately 1,570 gigawatts of electrical. energy capability from solar.
While the land needed for ground-based solar advancement to. achieve this goal will not be even by state, it is not expected to. go beyond 5% of any state's acreage, other than the smallest state of. Rhode Island, where it could reach 6.5%, by 2050, according to. the Energy Department's Solar Futures Study, released in 2021.
Scientists at American Farmland Trust, a non-profit. farmland defense company which champs what it calls. Smart Solar, anticipated in 2015 that 83% of brand-new solar power. development in the U.S. will be on farm and ranchland, unless. existing federal government policies changed. Nearly half would be on the. country's finest land for producing food, fiber, and other crops,. they alerted.
FUEL ARGUMENT
Five renewable designers and solar energy companies interviewed. counter that the market's use of farmland is too. small to impact domestic food production in general and should be. stabilized with the requirement to decarbonize the U.S. energy market in. the face of climate change.
Doral Renewables, the designer behind the $1.5 billion. Mammoth Solar job in Pulaski and Starke counties, does not. think about corn or soybean yields in its siting decisions.
Instead, the company looks at the land's topography, zoning. and closeness to an electrical grid or substation-- and tries to. prevent wooded locations, ditches and environmentally sensitive locations,. said Nick Cohen, Doral's president and CEO.
Moving corn acres for solar? I do not see it as changing. something that is vital to our society, Cohen stated. Solar can. make farmland more efficient from an economic perspective, he. added.
Indiana farmer Standard Welker says he got a much better deal leasing. 60% of his farmland to Mammoth than he would have growing corn,. with rates dipping to three-year lows this year.
We have actually got mounds of corn, we're listed below the expense of. production, and today, if you're leasing land to grow corn--. you're losing cash, Welker said. This way, my financial. circumstances are very good..
(source: Reuters)