2025-11-19 05:22

Reuters Open Interest (ROI) is your essential source for global financial commentary. LAUNCESTON, Australia, Nov 19 (Reuters) - China's steel production this year will drop below 1 billion metric tons for the first time since 2019, but iron ore imports may rise to a record high. While there are some fundamental factors that help explain the seeming contradiction between robust iron ore demand and softness in the product it is used to produce, the main difference is probably sentiment. Sign up here. Iron ore is being driven by the view among market participants that Beijing will continue to stimulate the world's second-largest economy, and ultimately that steel demand will recover. The decline in steel production comes as mills struggle to remain profitable amid higher input costs and muted demand from the key construction sector. China, which produces more than half of global steel, recorded output of 72.0 million tons in October, down 2% from September and 12.1% from the same month in 2024, according to data released on November 14. For the first 10 months of the year steel production was 817.87 million tons, down 3.9% from the same period last year. It also means that to achieve 1 billion tons of output this year, production in the last two months of the year would have to be 182.13 million tons, or about 91 million tons in both November and December. It is more likely that output will not exceed 75 million tons in each of the last two months of the year, meaning annual production is on track to be around 970 million tons. Steel production was last below 1 billion tons in 2019, when it was 996 million tons. However, iron ore imports are on track to eclipse last year's record high of 1.24 billion tons achieved in 2024. For the first 10 months of the year iron ore imports were 1.03 billion tons, meaning that if arrivals in the last two months of the year exceed 210 million tons, a new record will be set. November imports are already looking strong, with analysts at DBX Commodities estimating arrivals at 116.5 million tons, while Kpler is even more bullish with a forecast of 120.6 million tons. The question is why are iron ore imports so strong when the steel sector is so obviously struggling. INVENTORIES, PRICES One fundamental reason is that China has been rebuilding stockpiles, with port inventories monitored by consultants SteelHome rising for an eighth week to 139.6 million tons in the seven days to November 14. Inventories are now up 7.3% from the 18-month low of 130.1 million tons hit in early August, but they are still short of the 150.7 million tons from November last year. This implies that there is still scope for stockpiles to rise in coming weeks, especially if prices remain relatively steady. Benchmark Singapore iron ore futures ended at $104.60 a ton on Tuesday and have been in a narrow range between $100 and $108 since the beginning of August. While steady prices may support some buying momentum they are hardly a strong driver, especially when the widespread market view is that iron ore prices are likely to head lower in 2026 as the massive new Simandou mine in Guinea ramps up production. The fundamental case for strong iron ore imports is not convincing, which means the driver is more likely to be sentiment. An interview last week with Finance Minister Lan Foan is a case in point. Stronger fiscal policy using tools such as the budget, taxation, government bonds and transfer payments will be used to provide sustained support for economic and social development, Lan said. Iron ore is being driven by optimism that Beijing's efforts will bear fruit, while steel output is recognising that the stimulus has yet to make a substantial difference. 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-steel-output-slumps-iron-ore-imports-head-record-2025-11-19/

2025-11-19 05:12

Oil settles down on US push to end Russia's war in Ukraine Peace talks would reduce oil supply risks, analysts say Larger-than-expected draw from US crude stocks limits oil's losses NEW YORK, Nov 19 (Reuters) - Oil prices fell on Wednesday after reports indicated the U.S. is renewing its push to end Russia's war in Ukraine and has drafted a framework for it. Brent crude futures fell $1.38, or 2.1%, to settle at $63.51 a barrel, while U.S. West Texas Intermediate crude futures closed down $1.30, or 2.1%, to $59.44. Sign up here. The U.S. has signaled to Ukraine President Volodymyr Zelenskiy that his side must accept a U.S.-drafted framework to end the war with Russia, which proposes Kyiv giving up territory and some weapons, two sources told Reuters. Zelenskiy said U.S. leadership had to remain effective in order to end the war which has lasted more than 3-1/2 years. The Ukrainian President said his Turkish counterpart Tayyip Erdogan had proposed different formats for talks. An end to the war in Ukraine might pave the way for higher Russian oil flows, adding to oversupply concerns, analysts said. "With the amount of oil on the water, in floating storage and what has been sanctioned, prices will probably end up in the low $50s as all of that oil that is sanctioned from Russia will probably come to market," said Scott Shelton, energy specialist at TP ICAP Group. Last month, the U.S. announced sanctions against Rosneft and Lukoil, setting a November 21 deadline for companies to wind down business with the Russian oil majors. The sanctions had already reduced Moscow's oil revenues and are likely to reduce the amount of oil it can sell in the long-term, the U.S. Treasury said on Monday. "There is maximum pressure right now as Friday's deadline is looming," said Rystad Energy oil analyst Janiv Shah, adding that a lower geopolitical risk premium would leave investors focusing more closely on weak market fundamentals. Russia's Deputy Prime Minister Alexander Novak denied that the sanctions were harming oil production, and said Russia will reach its OPEC+ production quota by the end of this year or early next year. Supporting oil prices, the U.S. Energy Information Administration reported a larger-than-expected draw from U.S. crude stockpiles last week on higher refinery runs and exports. The oil market is also suffering "headline fatigue" around Russia-Ukraine news, suggesting will likely stay rangebound in the short term as traders await firm agreements to end the war, said Ed Hayden-Briffett, an oil analyst at Onyx Capital Group. https://www.reuters.com/business/energy/oil-prices-fall-rising-us-inventories-reinforce-oversupply-concerns-2025-11-19/

2025-11-19 05:11

Nov 19 (Reuters) - The European Union plans to set up a central authority to coordinate buying and stockpiling of critical minerals to keep the U.S. from securing supplies "under our noses," industry chief Stéphane Séjourné said on Wednesday. In an interview, Séjourné told the Financial Times newspaper that the EU had become "collateral damage" in a U.S.-China dispute over rare earths, which are vital for defence and clean technologies. Sign up here. https://www.reuters.com/world/china/eu-plans-stockpile-critical-minerals-amid-us-china-tension-ft-says-2025-11-19/

2025-11-19 05:08

Zambia hosts first Chinese premier visit in 28 years China, West vie for influence after $13.4 bln debt restructure Beijing is Zambia's biggest creditor, owed $5.7 bln Copper-rich Zambia seeks investment pledges rather than loans BEIJING, Nov 19 (Reuters) - Zambia will host a Chinese premier for the first time in 28 years as the sub-Saharan state emerges from a financial crisis, with Beijing eager to access the country's commodities and develop a bigger market for its exporters. China is Zambia's largest official creditor with $5.7 billion owed and is eager to highlight countries that are model members of President Xi Jinping's flagship Belt and Road infrastructure initiative. China has said it would also like to show how African nations can recover from financial crises with its assistance. Sign up here. Premier Li Qiang's arrival in Lusaka on Wednesday is part of a push to deepen China's presence in the copper-rich country as Europe and the U.S. vie to become alternative benefactors now that Zambia's $13.4 billion in debt is on a more sustainable repayment plan. Industrialising Zambia needs fresh investment for its mining sector, infrastructure network and production capacity, while China wants to boost exports of tractors, electrical equipment and construction vehicles. The World Bank expects Zambia's economy to grow 6.5% next year, compared with an average of 5% over the past two decades. "Li is going to bolster China's presence in a strategically vital country where both the President (Hichilema) and Chinese mining companies need support," said Eric Olander, co-founder of the China-Global South Project, referencing a February acid spill at a Chinese-run copper plant that dumped 50,000 cubic metres of contaminated water into the Kafue River, a key supply for millions of people, which is now a major election issue. "China this year also approved a massive refurbishment of the Tazara Railway that is widely seen as a counter to the U.S./EU-backed Lobito Corridor." China financed the line in the 1970s to reach Zambia's vast copper deposits through Tanzania on Africa's east coast and is continuing to invest as the West builds up its route to the country via Angola and the Democratic Republic of the Congo. "The debt issue is largely seen as settled," he said. Han Jing, China's ambassador to Zambia, said Li's visit was expected to produce dozens of cooperation agreements, according to a statement on the embassy's Facebook page. "The impact of Chinese aid and Chinese investments can be felt across the country as an important force for economic transformation and the social progress of Zambia," Han said, encouraging Lusaka to "draw on China's technological and economic momentum to build capacity and develop greater resilience." INVESTMENT OVER LOANS After the COVID-19 pandemic forced many African countries to borrow heavily to pay for health responses, weakening their ability to repay creditors and pushing several into debt distress, governments across the continent shifted to seeking investment. One reason Zambia's debt restructuring dragged on for three-and-a-half years was that it had a large number of Chinese creditors, which made it difficult for the government to assert control over the process, analysts said. Chinese companies have invested around $6 billion in Zambia over the past 20 years, according to data from the American Enterprise Institute, almost all of which went into the metals sector. These companies now face increasing pressure from European and American firms. The European Union's top official for international cooperation and development visited earlier this month to unveil fresh investments in transport, energy, agriculture and critical raw materials along the Lobito Corridor. Donald Trump Jr., the eldest son of U.S. President Donald Trump, met Hichilema on Sunday, according to a post on the Zambian president's X account. https://www.reuters.com/world/china/china-premier-makes-landmark-zambia-trip-west-vies-investment-foothold-2025-11-19/

2025-11-19 04:58

Nvidia's earnings top estimates, stock up in extended trading FOMC minutes reveal policymaker divide Delayed employment data may affect Fed rate decision European stocks end flat NEW YORK, Nov 19 (Reuters) - U.S. stocks climbed on Wednesday, clawing back some ground lost during the recent selloff as investors positioned themselves ahead of Nvidia's (NVDA.O) , opens new tab much-anticipated quarterly results and crucial employment data that had been unavailable during the longest-ever U.S. government shutdown. All three major U.S. stock indexes closed in positive territory, with tech strength (.SPLCRT) , opens new tab putting the Nasdaq out front. Sign up here. Chipmaker Nvidia, which has come to represent the nascent artificial intelligence technology that has powered much of the stock market's rally in recent months, reported better-than-expected earnings and forecast fourth-quarter revenue above estimates. "The companies that are Nvidia's customers are expanding and continuing to grow their investment in AI infrastructure, so chip demand looks like it's set to increase," said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management in Seattle. "It seems early to talk about an AI bubble because the growth has been driven by earnings, which have driven growth expectations fairly higher," Haworth added. "We’re early in this investment cycle; we’re moving from building these models to implementing them." Minutes from the Fed's October meeting showed policymakers were more divided than usual, lowering interest rates even as some members cautioned the move could quell efforts to cool inflation. Gold pared gains following the release of minutes from the U.S. Federal Reserve's October meeting, and crude prices slid on reports of a U.S.-proposed resolution to Russia's war on Ukraine. The recently ended government shutdown resulted in a backlog of official economic data, which is now beginning to flow. The Labor Department's September employment report is slated for release on Thursday. Should the report fall short of expectations, it could affect the U.S. Federal Reserve's interest rate decision at the conclusion of next month's monetary policy meeting. Even so, the Labor Department announced it would release a combined October/November employment report as the shutdown hindered critical data collection, so the Fed will have less information on the state of the labor market when it meets in December. NASDAQ LEADS THE WAY The Dow Jones Industrial Average (.DJI) , opens new tab rose 47.03 points, or 0.10%, to 46,138.77, the S&P 500 (.SPX) , opens new tab gained 24.87 points, or 0.38%, to 6,642.19 and the Nasdaq Composite (.IXIC) , opens new tab rose 131.38 points, or 0.59%, to 22,564.23. European shares ended nearly unchanged, drifting near one-month lows ahead of Nvidia's earnings. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab rose 0.73 points, or 0.07%, to 976.74. The pan-European STOXX 600 (.STOXX) , opens new tab index fell 0.03%, while Europe's broad FTSEurofirst 300 index (.FTEU3) , opens new tab fell 0.97 points, or 0.04% Emerging market stocks (.MSCIEF) , opens new tab fell 1.54 points, or 0.11%, to 1,360.21. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab closed lower by 0.32%, to 697.91, while Japan's Nikkei (.N225) , opens new tab fell 165.28 points, or 0.34%, to 48,537.70. U.S. Treasury yields rose after the U.S. government said jobs data for October and November would not be released before the Fed's next policy meeting in December, dimming hopes for a third and final rate cut this year. The yield on benchmark U.S. 10-year notes rose 0.8 basis points to 4.129%, from 4.121% late on Tuesday. The 30-year bond yield added 0.8 basis points to 4.7487% from 4.741% late on Tuesday. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 0.8 basis points to 3.589%, from 3.581% late on Tuesday. The dollar rose against the yen to its highest level since January as investors await the U.S. jobs report. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.6% to 100.20, with the euro down 0.47% at $1.1525. Against the Japanese yen , the dollar strengthened 0.96% to 157 yen. Reports of a U.S. proposal to end the Russian war in Ukraine, along with ongoing oversupply concerns, sent crude oil prices sliding. U.S. crude fell 2.14% to $59.44 per barrel, while Brent settled at $63.51 per barrel, down 2.13%. Gold prices advanced as investors sought safe-haven assets and girded themselves for the delayed employment data, but pared their gains after the Fed minutes were published. Spot gold rose 0.13% to $4,073.01 an ounce. U.S. gold futures rose 0.26% to $4,072.00 an ounce. https://www.reuters.com/world/china/global-markets-global-markets-2025-11-19/

2025-11-19 04:17

MUMBAI, Nov 19 (Reuters) - The rupee closed nearly unchanged on Wednesday, easing off a two-week high as importer dollar demand ate into gains spurred by a pick up in exporter flows and a mildly bullish bias among interbank traders. The rupee ended the session at 88.5875 against the U.S. dollar, up marginally from its close of 88.6050 in the previous session. Sign up here. The currency climbed to a peak of 88.4250 in early trading, but shed much of its gains in the latter half of the session. A trader at a private bank cited dollar demand from importers and modest portfolio outflows as key contributors to the pressure. Offshore market participants, meanwhile, have opted to use options to position for a potential rally in the Indian rupee, encouraged by Wall Street banks promoting strategies built on the prospect of a U.S-India trade deal. Both New Delhi and Washington have indicated that an agreement is close. Analysts reckon that a breakthrough in negotiations could spark a rebound in the rupee and spur inflows into local stocks. A dip in most Asian currencies also weighed on the local unit on Wednesday. The dollar swung between gains and losses against major peers as investors awaited key U.S. economic data and commentary from Federal Reserve officials to gauge the U.S. monetary policy path. Analysts at MUFG said in a note that the dollar's sensitivity to intra-day moves in U.S. equity markets has increased, which could heighten the impact of quarterly earnings from chip titan Nvidia (NVDA.O) , opens new tab, due later in the day. "Given the current positive correlation between equities and the dollar (which reflects perhaps the renewed concerns over a tech/AI-specific correction hitting the broader US economy) a bad earnings report this evening could drive the dollar weaker," the firm said. https://www.reuters.com/world/india/rupee-set-ignore-weaker-asian-peers-eyes-us-india-trade-deal-cues-2025-11-19/