2025-01-09 04:54

LAUNCESTON, Australia, Jan 9 (Reuters) - The world's imports of seaborne iron ore rose a modest 3.6% to a record high in 2024, but the increase was almost entirely driven by China, the world's biggest buyer of the key steel raw material. Global seaborne imports of iron ore were 1.707 billion metric tons in 2024, up 60 million tons from the 1.647 billion in 2023, according to data compiled by commodity analysts Kpler. But of that 60 million ton increase, 59.1 million tons were accounted for by China, as its seaborne imports rose 4.9% to 1.274 billion tons. This means China's seaborne imports of iron ore will be at a record high in 2024, a fact that looks somewhat incongruous with the likely decline in steel production. Official data showed that crude steel output in the first 11 months of 2024 was 929.19 million tons, down 2.7% from the same period in 2023. Given that December is likely to have been a soft month for steel production given winter shutdowns and lower seasonal demand, it's likely that full-year output will drop in 2024 from 2023. Nonetheless, China's steel production will come in around the 1 billion ton level for 2024, marking the sixth straight year it has been around this volume. With China's steel output effectively flatlining since 2019, the question for the market is why iron ore imports gained in 2024. There is likely some element of replacing lower-quality domestic production, but the main drivers are probably the lower price trend over the year and the rebuilding of inventories. PRICE TREND The price of iron ore contracts traded on the Singapore Exchange had their 2024 peak very early in the year, hitting $143.60 a ton on Jan. 3. They then declined to a low of $91.10 a ton by Sept. 10, before recovering to end the year at $103.61. But the 28% drop over the year was likely enough to prompt Chinese steel mills and traders to increase purchases, especially in the second half of the year when prices were lower than in the first half. The price has had a soft start to 2025, dropping to $97.36 a ton on Wednesday. This decline is more sentiment driven, given worries about the trade policies of the incoming U.S. administration under President-elect Donald Trump, with the threat of tariffs of up to 60% hanging over steel-intensive industries such as manufacturing. China has also been rebuilding inventories, with port stockpiles monitored by consultants SteelHome ending last year at 146.85 million tons, up from 114.5 million at the end of 2023. That gain of 32.4 million tons is slightly more than half of the total increase in seaborne imports, underscoring the significance of inventory building to China's iron ore demand in 2024. The outlook for China's iron ore and steel sectors is clouded by uncertainty over what actual policies the new Trump administration will implement, and how China and other affected countries will respond. Like other commodity markets, iron ore is largely in a wait-and-see mode ahead of Trump's return to office on Jan. 20. EUROPE, MIDDLE EAST The same uncertainties will also weigh on iron ore demand outside China, but there are some established trends that are likely to continue. Demand in the developed countries of Europe is likely to continue to soften, after 2024 imports dropped to 85.12 million tons from 88.40 million in 2023, with much of the decline concentrated in the United Kingdom. Japan, the world's second-biggest importer, also saw a decline with 2024 seaborne arrivals coming in at 88.19 million tons, down from 98.71 million the prior year. Offsetting the lower imports in Europe and Japan were increases in smaller buyers, especially those in the Middle East and North Africa. Overall, while the composition of seaborne iron demand ex-China is shifting, it's likely that the volumes will remain more or less steady, with the caveat of Trump's policies having only a mild impact on global growth. The views expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/commodities/global-seaborne-iron-ore-had-good-2024-its-all-china-russell-2025-01-09/

2025-01-09 04:45

Jan 9 (Reuters) - Foreign investors net sold Japanese stocks in the week ended Jan. 4, taking advantage of 2024 gains while aiming to reduce risks amid an unusually long market closure. Foreigners sold a net 74 billion yen ($468.30 million) worth of Japanese stocks during the week, following net accumulations of approximately 562.7 billion yen in the previous week. They acquired approximately 1.23 trillion yen worth of Japanese stocks in 2024, primarily in the first half of the year and shed around 4.77 trillion yen worth of shares in the second half. The Nikkei index (.N225) , opens new tab posted a 19.22% gain last year, marking its second-best annual performance in 11 years. However, after trading resumed on Monday, the index has dropped by 1.15% this week as investors began locking in profit following the recent rally. Foreigners bought Japanese debt securities worth nearly 227.5 billion yen last week, halting a three-week selling trend. Overseas investors snapped up 154.8 billion yen worth of long-term bonds and 72.7 billion yen worth of short-term instruments. In parallel, Japanese investors added a net 325.1 billion worth of foreign equities, registering a fourth consecutive weekly net purchase. They, however, withdrew out of foreign bonds for a third straight week, with a net 331.8 billion yen worth of selling in long-term and a net 4.9 billion yen worth of disposals in short-term debt securities. ($1 = 158.0200 yen) Sign up here. https://www.reuters.com/markets/asia/foreigners-turn-net-sellers-japanese-stocks-lock-2024-gains-2025-01-09/

2025-01-09 00:56

Jan 8 (Reuters) - The union representing 45,000 dock workers on the U.S. East and Gulf Coasts and their employers on Wednesday said they reached a tentative deal on a new six-year contract, averting a strike that could have snarled supply chains and taken a toll on the U.S. economy. It would have been the second strike in just four months by U.S. dock workers. The tentative agreement did not, however, include terms on the use of automation, which has been the thorniest issue of the labor talks. The United States Maritime Alliance (USMX) employer group and the International Longshoremen's Association (ILA), in a joint statement, called the agreement a "win-win." "This agreement protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf coast ports – making them safer and more efficient, and creating the capacity they need to keep our supply chains strong," the groups said. Terms of the deal were not disclosed. The two sides extended talks until Jan. 15 to hammer a deal on automation. Shipping industry executives were concerned that the parties would not be able to overcome their impasse, leading to a second ILA strike just days before President-elect Donald Trump's Jan. 20 inauguration. A three-day ILA strike in October triggered a surge in shipping prices and cargo backlogs at the 36 affected ports. Longshoremen returned to work after employers agreed to a 62% wage increase over the next six years. ILA and USMX have agreed to continue operating under the current contract until the union can meet with its full Wage Scale Committee and schedule a ratification vote, and USMX members can ratify the terms of the final contract. Sign up here. https://www.reuters.com/world/us/us-dockworkers-port-employers-reach-tentative-agreement-2025-01-09/

2025-01-09 00:25

Water systems in LA not designed for wildfire demands 70,000 evacuated, five dead as fires burn unimpeded Experts highlight infrastructure challenges in rapid water delivery LOS ANGELES, Jan 8 (Reuters) - Crews battling multiple wildfires that raged across Los Angeles on Wednesday were up against a near-perfect storm: intense wind, low humidity and, most troubling for residents, inadequate supplies of water to contain the blazes. Los Angeles authorities said their municipal water systems were working effectively but they were designed for an urban environment, not for tackling wildfires. On Wednesday, at least three major blazes burned in LA County communities simultaneously, including a fire in the affluent Pacific Palisades neighborhood, an area west of downtown LA dotted with multimillion-dollar celebrity homes built along steep canyons. Jay Lund, a professor in civil and environmental engineering at the University of California Davis, said city water tanks are typically designed to be able to put out localized fires, not widespread fires like the ones blazing in Los Angeles. "It's not a matter of there's not enough water in Southern California, it's a matter of there's not enough water in that particular area of Southern California just for those few hours that you need it to fight the fires," Lund added. Across the county, more than 70,000 people were ordered to evacuate and at least five were left dead as fierce winds fueled the fires, which have burned unimpeded since Tuesday. The fires have destroyed hundreds of buildings. "A firefight with multiple fire hydrants drawing water from the system for several hours is unsustainable," said Mark Pestrella, director of Los Angeles County Public Works. Janisse Quinones, CEO and chief engineer of the Los Angeles Department of Water and Power, said the demand for water to fight fires at lower elevations was hampering the city's ability to refill water tanks at higher elevations. The lack of water hampered efforts particularly in Pacific Palisades, an upscale coastal enclave where a wildfire has consumed nearly 12,000 acres (4,856 hectares). TANKS FILLED IN ADVANCE The Los Angeles Department of Water and Power said that in advance of the windstorm, it had filled all available water tanks in the city, including three 1-million-gallon (3.8-million-litre) tanks in the Palisades area. The area had exhausted the three water storage tanks by early Wednesday, Quinones said in a press briefing. "We're fighting a wildfire with urban water systems, and that is really challenging," she added, noting that Pacific Palisades experienced four times the normal water demand for 15 hours as firefighters battled the blaze. The department urged Angelenos to conserve water, and said it had deployed 18 water trucks of 2,000 to 4,000 gallons since Tuesday to help firefighters. Lund said the nature of the fires was such that it was nearly impossible to arrange enough water in advance. "If everything catches fire at once, there's not going to be enough water for everybody," he said. "There's just no way that you could fit the pipes to work to move that much water across that area in a short period of time." Gregory Pierce, director of the UCLA Water Resources Group and an adjunct professor at the Department of Urban Planning, said the fires were unusually intense even by Southern California standards. His brother's house burned down, he said. He said the problem was not a lack of water so much as the difficulties in rapidly getting large amounts of water to a specific point where it was needed, which would entail major investments in power and infrastructure. Sanah Chung, a Pacific Palisades resident who spoke to a reporter while hosing down hedges and trees in his front yard, said governments at all levels should have been more proactive in preparing for the fires. "There must be some things we can do to try to mitigate this. Please. Fire hydrants are empty. Firefighters are doing everything they can, but we need to do things more proactively before," Chung, 57, told Reuters. Sign up here. https://www.reuters.com/business/environment/los-angeles-water-runs-short-wildfires-burn-out-control-2025-01-09/

2025-01-09 00:13

US private payrolls growth slows in December - ADP Fed meeting minutes show rising price pressure risk Quantum-computing stocks drop as Nvidia CEO sees long road ahead Indexes: Dow and S&P up 0.16%; Nasdaq down 0.66% Jan 8 (Reuters) - U.S. stocks ended little changed on Wednesday in a session they struggled for a clear direction, as investors digested the impact of two conflicting sets of jobs data and a report that said President-elect Donald Trump was mulling a national economic emergency declaration on inflation. "Inflation is the wild card in 2025. There are lots of things that potentially have the risk to shift inflation back upward," said Charlie Ripley, senior investment strategist for Allianz Investment Management. The minutes of the Federal Reserve's Dec. 17-18 meeting showed on Wednesday that officials saw a rising risk that price pressures may remain sticky as policymakers began wrestling with the impact of policies expected from the incoming Trump administration. Market sentiment was fragile after a CNN report said Trump was mulling building the new tariff program by using the International Economic Emergency Powers Act, which authorizes a president to manage imports during a national emergency. Benchmark 10-year yields peaked at 4.73%, the highest since April 25, to retreat slightly to 4.677% later in the afternoon. Ahead of Trump taking office later in the month, concerns about potential surcharges on U.S. trade partners have kept investors on edge as Trump's policies, including mass deportations and tariffs, could stoke inflation pressures. "If wider tariffs are implemented it could have a short-term impact on inflation," said Thomas Hayes, chairman at Great Hill Capital LLC. "The Fed will sit back and see if he (Trump) does enact punitive tariffs and if he does, how much of that potential inflationary impact will be offset by the cuts in government spending." The Dow Jones Industrial Average (.DJI) , opens new tab rose 106.84 points, or 0.25%, to 42,635.20, the S&P 500 (.SPX) , opens new tab gained 9.20 points, or 0.16%, to 5,918.23 and the Nasdaq Composite (.IXIC) , opens new tab lost 10.80 points, or 0.06%, to 19,478.88. Eight of the 11 S&P 500 sectors posted gains, led by the healthcare index (.SPXHC) , opens new tab up 0.53%. The Russell 200 Index (.RUT) , opens new tab tracking domestically focused small-cap companies dropped 0.52%. Megacaps were mixed with Microsoft (MSFT.O) , opens new tab up 0.52%, while Alphabet (GOOGL.O) , opens new tab and Meta (META.O) , opens new tab fell 0.79% and 1.16%, respectively. Investors also assessed an ADP National Employment Report , opens new tab that showed private payrolls growth slowed sharply in December, although a separate Labor Department report said jobless claims for the previous week fell. On Friday, the government publishes its closely watched employment report for December. The Fed has stayed put on interest rates, and traders now expect the first trim this year in either May or June, according to the CME Group's FedWatch Tool. Fed Governor Christopher Waller said inflation should continue falling in 2025 and allow the central bank to further reduce interest rates, though at an uncertain pace. EBay (EBAY.O) , opens new tab rose 9.86% after Meta Platforms (META.O) , opens new tab said it will launch a test showing the e-commerce firm's listings on Facebook Marketplace. Edison International (EIX.N) , opens new tab dropped 10.18%. Its Californian subsidiary cut power to customers to prevent damage to distribution lines from a wildfire. Quantum-computing stocks Rigetti Computing (RGTI.O) , opens new tab and IonQ (IONQ.N) , opens new tab plunged over 40%, while Quantum Computing (QUBT.O) , opens new tab was down 39% after Nvidia boss Jensen Huang said computers based on the emerging technology are as much as 30 years away. Markets will be closed on Thursday for a national day of mourning to mark the death of former President Jimmy Carter. Declining issues outnumbered advancers by a 1.21-to-1 ratio on the NYSE and by a 1.98-to-1 ratio on the Nasdaq. The S&P 500 posted 4 new 52-week highs and 29 new lows while the Nasdaq Composite recorded 42 new highs and 116 new lows. Volume on U.S. exchanges was 15.86 billion shares, compared with the 12.29 billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/futures-edge-up-after-wall-st-selloff-economic-data-awaited-2025-01-08/

2025-01-08 23:30

ORLANDO, Florida, Jan 8 (Reuters) - China, the global growth engine for the last 20 years, now boasts lower long-term bond yields than Japan, the former poster child for deflationary economic stagnation. This may signal that the "factory to the world" faces the real risk of "Japanification." China's bond yields have plunged to their lowest levels on record, with the two-year yield about to break below 1.00%, having been 1.50% only a few months ago. Remarkably, China's 30-year yield recently fell below the Japanese Government Bond (JGB) yield for the first time ever. That phenomenon looks set to hit the 10-year tenor, with China's bond yield now less than 50 basis points above its JGB equivalent. It's a situation that would have scarcely been believable to any observer of the global economy over the past 30 years. But here we are. The collapse in Chinese yields is a reminder that the deflation, bad debt dynamics and troubling demographic trends plaguing Asia's largest economy today are strikingly similar to those that hobbled its fiercest regional rival for three decades. CAPITAL FLIGHT Japan has recently begun to free itself from its decades of deflation, sluggish growth and negative interest rates, enabling the Bank of Japan to begin gradually "normalizing" rate policy. Meanwhile, Beijing is struggling to reflate an economy slammed by COVID-19 pandemic shutdowns and a property sector bust. Deflation, lackluster consumer demand and capital flight forced Beijing to announce unprecedented stimulus and liquidity measures late last year. Investors initially cheered Beijing's pledges, but the optimism has faded quickly. Chinese stocks are down 5% so far this year and are underperforming their regional and global peers. The country's foreign exchange reserves also tumbled $64 billion in December, representing nearly 2% of China's total stash. This was the biggest monthly fall since April 2022 and one of the steepest since the yuan slide and capital flight of 2015-2016. Analysts at JP Morgan reckon the sharp drop was a result of Beijing's efforts to mitigate capital outflows in December, which they believe neared $80 billion. China's plight is exacerbated by the very real risk of another U.S.-Sino trade war once President-elect Donald Trump officially begins his second term in the White House later this month. And if UBS economists are right, China's economy will grow just 4.0% in 2025 compared with 4.9% last year. Apart from the pandemic-ravaged years of 2020 and 2021, that would be China's lowest growth since it emerged as a global economic force in the 1990s. Those with a decent memory will recall that it took decades for Japanese property and equity prices to recover their pre-crash peaks following the country's real estate bust in the early 1990s. It's too early to know if a similar fate awaits Chinese assets, but investors right now are unquestionably pessimistic. 'TACTICALLY NEUTRALISING' Consequently, many are reevaluating their relative exposure to these two Asian powerhouses. Societe Generale's asset allocation team said at the end of last year that it was "tactically neutralising" the Chinese equity allocation in its portfolio from overweight, as it increased its exposure to Japan. This week, analysts at HSBC slashed their year-end forecast for China's 10-year yield to 1.2% from 1.8%. The generally pessimistic and optimistic consensus outlooks for China and Japan, respectively, are obviously not without risk. Perhaps Japan won't "normalize" as quickly as many expect. The country has not seen interest rates as high as 0.5% in nearly 20 years, which helps explain Japanese policymakers' caution. Indeed, economists at Barclays recently pushed out their forecast for the next BOJ interest rate hike to March from January and the timing of the subsequent increase to October from July. In the short term, the inverse correlation between Chinese and Japanese bond yields may fizzle out or even reverse, simply because it has been too powerful in recent months to be sustainable. But longer term? Beijing has its work cut out. (The opinions expressed here are those of the author, a columnist for Reuters.) Sign up here. https://www.reuters.com/markets/asia/chinas-tumbling-bond-yields-intensify-japanification-risks-mcgeever-2025-01-08/