2025-06-12 06:04

Project jointly developed by Hive Energy and BuiltAfrica Says can produce at $650 per metric ton Global price is around $760 a ton CAPE TOWN, June 12 (Reuters) - A $5.8 billion project on South Africa's east coast seeks to use the country's infrastructure and cheap renewable power to make some of the world's cheapest green ammonia for clients in Europe and Asia, an executive said. South Africa is vying with other African nations, including Egypt, Morocco and Namibia, to meet rising demand in the European Union and Asia for hydrogen and ammonia described as green because they are produced from renewable energy. Sign up here. Ammonia is used in making fertiliser and by the chemical industry and it is also the means to deliver hydrogen, which is sought after to reduce carbon emissions but is very difficult to ship or pipe. The project at the port of Coega, jointly developed by Britain's Hive Energy and South African partner BuiltAfrica, is expected to ship around one million metric tons a year of green ammonia to clients by late 2029, Hive Energy's Africa CEO Colin Loubser told Reuters. "Our project, we believe, will provide the lowest cost green ammonia globally," he said on the sidelines of an energy conference in Cape Town. The project can use existing infrastructure and ample wind and solar energy. A desalination plant on site, operated by South Africa's biggest salt-maker by volume Cerebos, for example, will also help to offset capital expenditure. Benchmarking global indices, Loubser said green ammonia was priced at around $760 a ton free-on-board, but the Coega operations could produce the commodity for less. "We can produce at $650 a tonne and still give an investor a very attractive double-digit internal rate of return," he said, adding that the company was in talks with customers in Europe, Japan and Korea. According to South Africa's Department of Trade, Industry and Competition, the country could approach $1 per kilogramme of green hydrogen by 2050. Loubser said subsidy programmes in countries such as Australia and India may pose a threat to South Africa, but that it should remain competitive in the nascent sector. Strategically situated along a major shipping route, Hive's project could eventually quadruple production to 4 million tpa, Loubser said. https://www.reuters.com/sustainability/south-africas-58-billion-hive-project-aims-lead-low-cost-ammonia-output-2025-06-12/

2025-06-12 06:01

MUMBAI, June 12 (Reuters) - India's FX market traders have increased activity in the dollar-rupee forwards market as spot market price action continues to be rangebound on two-sided client flows and the lack of firm cues. The rupee has hovered in the 85.30 to 86.02 range against the U.S. dollar over June so far with its 1-month realised volatility declining to 4.5%, the lowest in about six weeks. Sign up here. Dollar-rupee forward premiums, meanwhile, have witnessed sharper moves, sparked by the Reserve Bank of India's outsized rate cut last week and changes in expectations of U.S. rate cuts. The 1-year dollar-rupee implied yield fell to its lowest in nearly one year earlier this month while the 1-month forward premium has fallen about 4 paisa to its lowest level since November. The fall in dollar-rupee forward premiums leaves the rupee vulnerable to further depreciation by reducing the currency's "carry trade" appeal and diminishing the incentive for exporters to hedge receivables, analysts said. Speculative activity has picked up on forward premiums as markets are "largely playing the range (on spot USD/INR)," a trader at a large private bank said. To be sure, large moves in global foreign exchange markets could spur the dollar/rupee to break out of its prevailing range, said Apurva Swarup, vice president at Shinhan Bank India. If the dollar index breaks below the 98 level, that could unlock room for rupee appreciation from prevailing levels, Swarup said. On Thursday, the rupee was nearly flat against the U.S. dollar at 85.5125 as of 11:00 a.m. IST. Asian currencies were mostly stronger with the offshore Chinese yuan rising 0.2% as the latest trade truce between Washington and Beijing raised hopes that the world's two largest economies could avoid escalations in their tariff row. https://www.reuters.com/world/india/interbank-traders-turn-focus-dollar-rupee-forwards-spot-treads-water-2025-06-12/

2025-06-12 05:58

Euro jumps along with safe-haven Swiss franc and yen Geopolitical risks in focus Trump says he will send out letters with trade deal terms US PPI data shows cooling inflation in May US rate futures pricing in two cuts this year NEW YORK, June 12 (Reuters) - The dollar slumped on Thursday, as weaker-than-expected U.S. inflation data for May suggested that the Federal Reserve could resume cutting interest rates sooner rather than later, while the safe-haven yen and Swiss franc benefited from rising Mideast tension. The euro, on the other hand, soared to its highest level in almost four years against the dollar. The greenback also fell to a two-month low versus the Swiss franc and a roughly one-week trough against the yen. Sign up here. Data showed that the U.S. Producer Price Index (PPI) increased less than expected in May, curbed by lower costs for services like air fares, a report that undermined the dollar. Wednesday's data also indicated cooling inflation, with a lower-than-expected rise in the U.S. Consumer Price Index (CPI). Vassili Serebriakov, FX analyst at UBS in New York, said higher tariffs are not showing just yet on inflation data, although he noted U.S. growth seemed to be slowing. "We already priced in two cuts for the Fed this year, which was less than two last week," said Serebriakov. "The data is seen as potentially opening the window for the Fed cutting either a little bit sooner or a little bit more." Futures tracking the Fed's policy rate showed rising bets the U.S. central bank will deliver a pair of back-to-back interest rate cuts starting in September. Before the data, bets were for a rate cut in September followed by one in December. Following weaker-than-anticipated readings for producer and consumer prices last month, Nomura has revised lower its forecast for the core Personal Consumption Expenditure (PCE) price index, another inflation measure, to 0.169% from its pre-PPI estimate of 0.349%. That pushes the three-month annualized core PCE inflation lower to 1.52%, the lowest since November 2020. "Three consecutive benign readings of monthly core PCE inflation suggest that the underlying inflation trend has decelerated recently," wrote Nomura in a research note. Thursday's U.S. data also showed that the number of Americans filing new applications for unemployment benefits was unchanged at higher levels last week, as labor market conditions continued to steadily ease. Investors also rushed into safe-haven assets, with geopolitical risks in focus after U.S. President Donald Trump said some U.S. personnel were being moved out of the Middle East because "it could be a dangerous place" and that Washington would not allow Iran to develop a nuclear weapon. A combination of rising Middle East tensions and concern over the fragility of the U.S.-China trade deal drew investors into safe-haven assets. Analysts noted that the dollar serves as a key barometer of trade talk sentiment, while geopolitical instability prompted investors to buy the Swiss franc and yen. In afternoon trading, the dollar was down more than 1% at 0.8114 Swiss francs , after dropping to 0.8104, the lowest since April 22. The dollar slid 0.7% to 143.59 yen. Earlier in the session, it fell to a one-week low. The euro reached its highest since October 2021 against the dollar at $1.1632 and was last up 0.8% at $1.1576. Some analysts said the euro also gained support from a hawkish European Central Bank, which hinted at a pause in its year-long easing cycle after inflation finally returned to its 2% target. However, ECB policymaker Isabel Schnabel said on Thursday the strong euro exchange rate is being driven by safe-haven investors in a positive confidence shock in Europe, and not by interest rate differentials. "The dollar has lost some of its safe-haven characteristics," said UBS' Serebriakov. "And I think the euro just benefits from that as being the second most important global reserve currency, the second most important trade invoicing currency, and really just the first alternative to the dollar." In trade, Trump said he would be willing to extend a July 8 deadline for completing talks with other countries. But the U.S. will send out letters in coming weeks specifying trade terms to dozens of other countries which they could embrace or reject, he added. This keeps the risk of a July 9 jump in U.S. import tariffs on the table, a negative for the dollar, some investors noted. The greenback and U.S. Treasuries dropped sharply after Trump announced a blitz of reciprocal tariffs - which he dubbed "Liberation Day" - in early April. Against a basket of currencies, the dollar fell 0.5% to 97.95. It hit 97.786, its lowest since March 2022. https://www.reuters.com/world/africa/dollar-slides-easing-trade-tensions-fed-expectations-2025-06-12/

2025-06-12 04:57

LAUNCESTON, Australia, June 12 (Reuters) - The tentative deal between the United States and China may represent a retreat from the worst-case scenario of a total collapse of trade between the world's two biggest economies, but it creates more problems than it solves. President Donald Trump touted the agreement, which is still subject to final approvals on both sides, as a "great deal" that will be good for both countries. Sign up here. "We have everything we need, and we're going to do very well with it. And hopefully they are too," Trump told reporters prior to attending a performance on Wednesday evening at Washington's Kennedy Center. While not all the details are known, what has been revealed shows a deal that will probably hurt both economies, and not solve some of the pressing issues, such as China's dominance of the rare earths supply chain. The United States will impose tariffs of 55% on imports from China, while China can levy 10% on its purchases from the United States. This still represents a sharp increase in tariffs from the 25% on imports from China that was in place when Trump returned to the White House in late January. Tariffs at such a level are likely high enough to cause trade to shrink while boosting inflation in the United States, and lowering economic growth in both countries. If Beijing does keep 10% tariffs on imports of U.S. energy commodities, these will be high enough to ensure that virtually no U.S. crude oil, coal or liquefied natural gas enters China, eliminating one of the few products that China is able to buy in large quantities from the United States. It's also questionable whether the tariffs will be enough to prompt more manufacturing in the United States, or whether they will simply cause some production to shift from China to countries with lower import duties. Trump did single out rare earths when talking up the trade deal, saying China will provide the metals that are found in a wide range of electronics and vehicles "up front". But the deal does little to solve the underlying problem with rare earths, magnets and other refined metals such as lithium and cobalt, which are dominated by Chinese supply chains. At best, the agreement this week is a kick the can down the road type of deal, insofar as it prevents an immediate crisis in manufacturing in the United States, but leaves open the possibility that Beijing will once again threaten supplies if there are problems between the two sides in the future. China controls 85% of global rare earths refining, a situation that has hitherto largely benefited Western companies as they have been able to source the metals at prices far lower than what they would have had to pay had they tried to mine and process the elements by themselves. CRITICAL MINERALS Rare earths are an example of the wider problem with so-called critical minerals. It's all very well to designate a mineral as critical, but if you don't actually do anything to secure a supply chain, then you really have to question just how critical the mineral is. Rare earths aren't really that rare, although finding economic deposits is challenging. It's the same for lithium, copper, cobalt, tungsten and a range of other metals that many governments designate as critical. But developing supply chains for these minerals and refined metals outside of China is costly, and so far Western countries and companies have been unwilling to commit funds. Companies won't develop new mines and processing plants if they have to compete with China at market prices, as very few projects would be economic. Governments have been sluggish in developing policies that would support new supply chains, such as guaranteeing offtake at prices high enough to justify investment, or by providing loans or other incentives. This means that the world remains beholden to China for these metals, and is likely to remain so until governments start to act rather than just talk. It's also worth noting that China will have learned from its latest talks with the Trump administration. As Trump himself may have put it, the United States doesn't hold all the cards, with Beijing having a few aces up its sleeve as well. The danger is always in overplaying one's hand. If Beijing keeps using rare earths as a trump card, it runs the risk that the West will cough up the cash to build its own supply chain. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn , opens new tab and X , opens new tab. The views expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/commodities/china-us-trade-deal-kicks-rare-earths-can-down-road-2025-06-12/

2025-06-12 04:51

A look at the day ahead in European and global markets from Johann M Cherian European investors are set to wake up to a souring mood as rapidly rising tensions in the Middle East and yet another tariff salvo from U.S. President Donald Trump triggered a new wave of dollar-selling and risk-off moves. Sign up here. The much-hyped U.S.-China talks culminated in a fragile truce that may have put a lid on simmering trade tensions between the world's top two economies for now but the lack of details has left investors unnerved. For starters, China President Xi Jinping is yet to give his approval on the 'deal'. And details on how the new tariffs will be implemented are yet to be ironed out and U.S. export restrictions on high-end artificial intelligence chips are still in place. And with the July 8 deadline on worldwide tariffs fast approaching, Trump is back to his unilateral style of policymaking as he said he would send out letters in one to two weeks outlining terms of trade to dozens of other countries, which they could embrace or reject. Markets will be hoping for another TACO moment. While backward looking inflation reports are yet to reflect the price pressures, companies are starting to sound the alarm. Zara-owner Inditex (ITX.MC) , opens new tab was the latest to issue a disappointing quarterly report and flag headwinds from trade uncertainty. And as if investors did not have enough to juggle with already, geopolitical tensions in the Middle East are flaring, adding to the risks of rising crude prices fuelling inflation pressures. Supply concerns out of the oil-rich region pushed Brent and West Texas Intermediate futures to two-month highs of nearly $70 a barrel each. In all of this, as my colleague Jamie McGeever points out, valuations in equities and stocks are beginning to appear stretched, compounding the risks to investors in the event of a market selloff. European futures were down 0.7%, while futures in the U.S. are pointing to a lower open on Thursday, but the benchmark indexes in the regions are just about 2% away from their respective record highs. Further, investors continue to question the dollar's safe-haven status. On Thursday, the euro hit a seven-week high and is up 11% this year, poised for its biggest yearly advance since 2017. The central bank bonanza next week could perhaps throw more light on the global economy's outlook. The U.S. Federal Reserve along with the Bank of Japan and the Bank of England are due to announce their policy decisions. Meanwhile, investors will look for a string of UK economic data including reports on gross domestic product and manufacturing output later in the day. Both are expected to reflect a decline in activity on a monthly basis, reigned in by the BoE's cautious approach to monetary policy easing. Key developments that could provide more direction to markets on Thursday: - In the UK: GDP, industrial output, manufacturing output and trade data - In the U.S.: Producer inflation data, initial weekly jobless claims report and an auction of 30-year bonds worth $22 billion - Policymakers expected to speak include ECB's Jose Luis Escriva, Reserve Bank of Australia's David Jacobs - UniCredit (CRDI.MI) , opens new tab CEO sees slim hopes of BPM (BAMI.MI) , opens new tab deal, says Commerzbank (CBKG.DE) , opens new tab too costly - Oracle (ORCL.N) , opens new tab raises annual forecast on robust cloud services demand - Warner Bros' (WBD.O) , opens new tab credit rating downgraded to junk by Fitch on split-up https://www.reuters.com/world/china/no-relief-us-china-trade-truce-2025-06-12/

2025-06-12 03:02

MUMBAI, June 12 (Reuters) - The Indian rupee is expected to open marginally higher on Thursday, supported by a weaker dollar following further signs that U.S. President Donald Trump is taking a conciliatory approach on tariffs and on rising expectations of Federal Reserve rate cuts later this year. The 1-month non-deliverable forward indicated an open in the 85.42-85.44 range, versus 85.51 in the previous session. Sign up here. The dollar index fell 0.5% on Wednesday and extended losses in the Asia session on Thursday. The decline lifted regional currencies, with most Asian units rising between 0.1% and 0.4%. The dip in USD/INR at the open may "at best" extend to the 85.30–85.35 zone, a currency trader at a state-run bank said. A move below that zone would mark a significant victory for rupee bulls, he added. The trader's remarks come against the backdrop of relatively range-bound trading in the Indian currency over recent sessions. TRADE AND FED WEIGH ON THE DOLLAR Expectations of cooing trade tensions and potential Fed rate cuts kept the dollar under pressure. Trump said on Wednesday he would be willing to extend a July 8 deadline for completing trade talks with countries before higher U.S. tariffs are imposed. Further, Trump said that a deal to get the fragile truce in the U.S.-China trade war back on track is done. Meanwhile, data on Wednesday showed U.S. consumer prices rose less than expected in May, leading traders to ramp up bets of a rate cut at the Fed's September policy meeting. The inflation report "eased some fears around persistent inflation acceleration" and accordingly, additional Fed easing was priced in with about 5-6 basis points of incremental easing added to end-2025 and 2026, Morgan Stanley said in its daily commentary. KEY INDICATORS: ** One-month non-deliverable rupee forward at 85.54; onshore one-month forward premium at 9 paisa ** Dollar index down at 98.40 ** Brent crude futures down 0.6% at $69.4 per barrel ** Ten-year U.S. note yield at 4.4% ** As per NSDL data, foreign investors bought a net $359.6 million worth of Indian shares on June 10 ** NSDL data shows foreign investors bought a net $159.4 million worth of Indian bonds on June 10 https://www.reuters.com/world/india/rupee-likely-be-buoyed-by-fed-cut-bets-softer-us-trade-signals-2025-06-12/