2025-01-02 06:45

JAKARTA, Jan 2 (Reuters) - Indonesia has yet to implement a higher mandatory blend of biodiesel planned for Jan. 1 as industry participants await technical details of the new regulation, causing confusion among palm oil traders. The government had pledged to mandate a 40% mix of palm oil-based fuel in biodiesel from Jan. 1, known as B40, from a 35% blend currently in force. The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange closed 2.5% lower on Thursday at 4,336 ringgit ($968.72) a metric ton amid uncertainty about B40 implementation, after rising about 1.8% earlier in the day when it tracked gains in Dalian vegetable oil. The plan for higher biodiesel blend by the world's biggest palm oil producer helped drive up Malaysia's benchmark palm oil contract nearly 20% in 2024 on expectations of lower palm oil exports from rival producer Indonesia. As of Thursday, Indonesian state energy firm Pertamina, which operates the country's largest petrol station network, and biodiesel producers group APROBI said they were waiting for the relevant official decrees before selling the fuel. "Once the regulation has been issued, there will be time to transition for the sale. At the moment we have prepared Plaju and Kasim refineries for processing of B40," Pertamina spokesperson Fadjar Djoko Santoso said. Members of APROBI cannot draw contracts for biodiesel distribution without a decree from the government, Secretary General Ernest Gunawan said. Edi Wibowo, director of bioenergy at the energy ministry, said on Thursday that he was awaiting further instructions for B40, without providing more details. Other senior officials at the energy ministry did not respond to queries about B40 implementation. Palm oil industry watchers had expected the rollout of the policy to be gradual. Meanwhile, palm oil traders are waiting for the official volume of biodiesel that Indonesia will allocate to fuel retailers to gauge how much exports will be affected. Indonesian officials have previously said the country plans to allocate 15.62 million kilolitres (4.13 billion gallons) of palm oil-based fuel for B40 in 2025. Analysts are concerned about plans to only subsidise B40 for non-industrial use, which represents less than half of the country's demand. "There are hurdles for the bullish sentiment as (market) participants are still not convinced over the fate of the Indonesian B40 biodiesel policy success," said Anilkumar Bagani, head of research at Mumbai-based vegetable oil broker Sunvin Group. ($1 = 4.4760 ringgit) Sign up here. https://www.reuters.com/markets/commodities/indonesias-palm-oil-b40-delay-causes-market-uncertainties-2025-01-02/

2025-01-02 06:25

Bullion rose more than 27% in 2024 Early-year corrections could make way for fresh gold rally, analyst says Silver, platinum up nearly 2% Jan 2 (Reuters) - Gold hit a more than two-week high on Thursday, fuelled by safe-haven buying, while the market took out positions ahead of the Federal Reserve's rate outlook and the potential impact of President-elect Donald Trump's proposed trade tariffs. Spot gold rose 1.2% to $2,654.24 an ounce by 02:57 p.m. EST (1957 GMT), hitting its highest since Dec. 16. U.S. gold futures settled 1.1% higher at $2,669. "I can't see anything market-moving in the news, but geopolitical forces (international tensions as well as financial uncertainties, not less ahead of the inauguration of President-elect Trump) are supportive," said StoneX analyst Rhona O'Connell in an email. Bullion thrives in low-interest-rate environments and acts as a hedge against economic and geopolitical risks. Russia launched a drone strike on Kyiv early on Wednesday, causing damage in at least two districts, while the Israeli military struck a suburb of Gaza City. Traders await next week's U.S. job openings data, the ADP employment report, the Fed's December FOMC meeting minutes and the U.S. employment report to gauge the interest-rate outlook for 2025. In 2024, rate cuts, central-bank buying and geopolitical tensions drove gold to record highs with an over 27% annual gain, its biggest since 2010. "Corrections or consolidations in the early part of the year could set the stage for a renewed rally," Fawad Razaqzada, market analyst at Forex.com said, adding that a gold-price target of $3,000 an ounce was feasible. "The unwinding of the 'Trump trade' - a phenomenon characterised by a strong U.S. dollar and robust equity markets - could weaken the dollar and bolster gold prices." Trump's inauguration on Jan. 20 has heightened uncertainty, with his proposed tariffs and protectionist policies expected to be inflationary and potentially spark trade wars. Among other metals, spot silver rose 1.9% to $29.43 an ounce, palladium was steady at $910.64 and platinum climbed 1.9% at $920.72. Sign up here. https://www.reuters.com/markets/commodities/gold-nudges-higher-market-awaits-us-data-economic-cues-2025-01-02/

2025-01-02 06:24

China's iron ore imports to rise despite property crisis Higher imports driven by growing supply from Australia and Brazil Steel demand forecast to fall 1.5% in 2025, MPI reports BEIJING, Jan 2 (Reuters) - China's iron ore imports are likely to hit a new high in 2025 as traders stockpile cheap ore for the world's top consumer despite a protracted property crisis continuing to weigh on Chinese steel demand, traders and analysts said. The country's imports of the key steelmaking ingredient will likely rise by between 10 million and 40 million metric tons to up to 1.27 billion tons this year, up from what forecasters expect to be record volumes in 2024, seven analysts and two traders said in a Reuters survey. Higher imports will mainly be driven by growing supply from major producers including Australia and Brazil, they said, as miners look to sell ore before the giant Simandou iron ore project begins production later this year and floods the market with new supply. Iron ore prices are expected to fall to between $75 and $120 a ton in 2025, the survey showed, versus $88 to $144 a ton in 2024, according to data from consultancy Steelhome. "Our base case assumes a moderate surplus in 2025 and prices holding up around $95-100/t," said Myles Allsop, UBS' head of EMEA mining. "We see the surplus getting larger in 2026/27 driving prices deeper into the cost curve." Weakness in the steel sector, which consumes the bulk of iron ore, means imports are likely to grow Chinese port stockpiles to up to 170 million tons in 2025, said analysts. Stocks are already up 28.3% on-year to 146.85 million tons as of Dec. 27. China, which buys more than two-thirds of global seaborne cargoes, imported 1.124 billion tons of iron ore in the first 11 months of 2024, up 4.3% year-on-year, even as its crude steel output slid by 2.7% over the same period. Rising imports show traders and suppliers still expect Chinese iron ore demand to remain resilient for years to come despite persistent weakness in the property sector. In 2025, supply from top producer Australia will grow by around 20 million tons thanks to rising production at projects including Rio Tinto's (RIO.AX) , opens new tabWestern Range , opens new tab, Fortescue's (FMG.AX) , opens new tab Iron Bridge and Mineral Resources' (MIN.AX) , opens new tab Onslow, said analysts. Brazilian miner Vale (VALE3.SA) , opens new tab aims to produce between 325 million and 335 million tons of iron ore in 2025 from about 328 million tons in 2024. But a possible yuan depreciation and China's last-ditch efforts to increase the share of steel output from electric arc furnaces, which mainly consume scrap material, to 15% by 2025 may lower iron ore imports this year, four of the analysts said. DWINDLING STEEL DEMAND Steel demand is forecast to fall 1.5% this year following an expected 4.4% decline year-on-year in 2024, according to state-backed China Metallurgical Industry Planning and Research Institute (MPI), as a buoyant manufacturing sector and resilient steel exports fail to fully offset the real estate downturn. Beijing has unveiled a raft of stimulus to revive its economy and is expected to roll out more to counter the potential impact from proposed tariff hikes by incoming U.S. President Donald Trump. But that will mostly lift demand from second-tier steel consumers like automotive and white goods manufacturers, according to Tomas Gutierrez, head of data at consultancy Kallanish Commodities. "Positive as this is, it won't be enough to counteract the effect of restructuring in the real estate sector," he added. Sign up here. https://www.reuters.com/markets/commodities/chinas-2025-iron-ore-imports-set-hit-new-high-even-steel-demand-dwindles-2025-01-02/

2025-01-02 06:20

U.S. stocks fall as Tesla drags U.S. yields ease but 10-year Treasury still above 4.5% Dollar continues recent strength, hits 2-year high NEW YORK, Jan 2 (Reuters) - Global stocks fell on Thursday as early gains faded, continuing the year-end downdraft into the first trading day of the new year, while the dollar hit a two-year high after economic data indicated the U.S. labor market remained on solid ground. On Wall Street, U.S. stocks closed broadly lower after initial gains failed to hold, with the S&P 500 and Nasdaq notching their fifth straight daily decline, the longest skid since April. The U.S. Labor Department reported that the number of Americans filing new applications for unemployment benefits dropped to an eight-month low of 211,000 last week, below the 222,000 estimate of economists polled by Reuters. "The labor market has been incredibly resilient and we've seen that continue," said Keith Buchanan, senior portfolio manager at Globalt Investments in Atlanta. "Overall, the labor market is really what's fueled the consumer, which has held this economy together for the last three years of this fight we've had with inflation." Wall Street declines were led by the consumer discretionary sector (.SPLRCD) , opens new tab, which dropped 1.27% and was dragged lower by a 6.08% fall in Tesla (TSLA.O) , opens new tab after the electric vehicle maker reported its first decline in annual deliveries. The Dow Jones Industrial Average (.DJI) , opens new tab fell 151.95 points, or 0.36%, to 42,392.27, the S&P 500 (.SPX) , opens new tab fell 13.08 points, or 0.22%, to 5,868.55 and the Nasdaq Composite (.IXIC) , opens new tab dipped 30.00 points, or 0.16%, to 19,280.79. European stocks closed higher after a sluggish start to the session, buoyed by a jump in energy names (.SXEP) , opens new tab. MSCI's gauge of stocks across the globe (.MIWD00000PUS) , opens new tab lost 1.72 points, or 0.20%, to 839.70. Europe's STOXX 600 (.STOXX) , opens new tab index gained 0.6%. The dollar jumped to a two-year high on Thursday, building on the strong gains from 2024 as expectations remained intact that economic growth in the U.S. will outpace that of its peers, keeping the Federal Reserve on a slower interest rate-cut path. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.67% to 109.27, after climbing to 109.54, its highest since Nov. 10, 2022. "In terms of 2025 economic growth, there's no rival to the dollar," Adam Button, chief currency analyst at ForexLive in Toronto, said. "Capital flows dominate the turn of the year and the U.S. stock market has really put to shame every other global market,” Button said. "The dollar is the only game in town until there is a genuine stumble in the U.S. economy." The euro was down 0.89% at $1.0263 after slumping to $1.0223, its lowest level since Nov. 21, 2022. Against the Japanese yen , the dollar strengthened 0.47% to 157.60. Sterling dropped 1.12% to $1.2377 and was on pace for its biggest daily percentage drop since Nov. 6. Stocks had stumbled heading in to the end of the year, denting a year-long rally fueled by growth expectations surrounding artificial intelligence, anticipated rate cuts from the Federal Reserve, and more recently, the likelihood of deregulation policies from the incoming Trump administration. However, the recent economic forecast from the Fed, along with worries that President-elect Donald Trump's policies such as tariffs may prove to be inflationary, has sent yields higher and created a stumbling block for equities. The yield on benchmark U.S. 10-year notes slipped 1.6 basis points to 4.563%, but remained above the 4.5% mark that analysts see as a problematic level for stocks. Oil prices advanced, with U.S. crude settling up 1.97% at $73.13 a barrel and Brent climbing to settle at $75.93 per barrel, up 1.73%, on optimism over China's economy and fuel demand after a pledge by President Xi Jinping to promote growth. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2025-01-02/

2025-01-02 06:09

Dollar index highest since November 2022 Sterling, euro tumble through technical levels Yen pinned near five-month low Bets on Trump policies leading to stronger dollar remain in place NEW YORK, Jan 2 (Reuters) - The U.S. dollar jumped to a two-year high on Thursday in the first day of 2025 trading, building on last year's strong gains on expectations U.S. growth will beat peers and keep U.S. interest rates relatively elevated. The Federal Reserve has indicated that it will be more cautious in cutting interest rates as inflation remains stubbornly above its 2% annual target and the economy remains strong. Policies by U.S. President-elect Donald Trump are also expected to boost growth and potentially add to upward price pressures. "In terms of 2025 economic growth, there's no rival to the dollar," said Adam Button, chief currency analyst at ForexLive in Toronto. "Capital flows dominate the turn of the year and the U.S. stock market has really put to shame every other global market," Button added. "The dollar is the only game in town until there is a genuine stumble in the U.S. economy." Data on Thursday confirmed a still solid jobs market. The number of Americans filing new applications for unemployment benefits dropped to an eight-month low last week, pointing to low layoffs at the end of 2024. The dollar index was last up 0.77% on the day at 109.38. The euro dropped 1.01% to $1.025, its lowest since November 2022. The single currency accelerated losses after it broke below the $1.03 level, indicating that technical factors were deepening the sell-off. Traders anticipate deep interest rate cuts from the European Central Bank in 2025, with markets pricing in at least four 25-basis-point cuts, while not being certain of even two such moves from the Fed. ECB policymaker Yannis Stournaras said on Thursday he expected the bank's main interest rate to be cut to 2% by the autumn, from 3% currently. Sterling, which held in better than most major currencies against the greenback last year, fell 1.19% to $1.2368, its lowest since April. Its fall accelerated after it broke through resistance around $1.2475. The dollar gained 0.47% to 157.61 Japanese yen. It reached a five-month high above 158.09 yen in late December, potentially putting pressure on the Bank of Japan, which is expected to raise interest rates early this year, but perhaps not imminently. China's yuan languished at 14-month lows as worries about the health of the world's second-biggest economy, the prospect of U.S. import tariffs from the Trump administration and sliding local yields weighed on investor sentiment. CNY/ In cryptocurrencies, bitcoin rose 2.77% to $97,404.93. Sign up here. https://www.reuters.com/markets/currencies/dollar-starts-2025-higher-yen-rooted-five-month-lows-2025-01-02/

2025-01-02 06:00

US gasoline and distillate stockpiles jump, EIA says Chinese data raises hopes of further stimulus Volumes remain thin on first trading day of the year Investors await US manufacturing data NEW YORK, Jan 2 (Reuters) - Oil prices settled up by more than $1 a barrel on Thursday as investors returned for the first trading day of 2025 with an optimistic eye on China's economy and fuel demand after a pledge by President Xi Jinping to promote growth. Swelling gasoline and distillate inventories in the U.S. pressured prices and capped gains. Brent crude futures settled at $75.93 a barrel, up $1.29, or 1.7%. U.S. West Texas Intermediate crude settled at $73.13 a barrel, up $1.41 or 2%. Xi said in his New Year's address on Tuesday that China would implement more proactive policies to promote growth in 2025. China's factory activity grew more slowly than expected in December, a Caixin/S&P Global survey showed on Thursday, amid concerns about tariffs proposed by U.S. President-elect Donald Trump. Some analysts view weaker Chinese data as positive for oil prices because Beijing could be encouraged to accelerate stimulus. An official survey released on Tuesday showed China's manufacturing activity barely grew in December. Services and construction fared better, with the data suggesting policy stimulus is trickling into some sectors. U.S. oil stocks data from the Energy Information Administration released on Thursday, a day later than normal due to the New Year holiday, showed gasoline and distillate inventories jumped last week. U.S. gasoline stocks (USOILG=ECI) , opens new tab rose by 7.7 million barrels in the week to 231.4 million barrels. Distillate stockpiles (USOILD=ECI) , opens new tab, which include diesel and heating oil, increased by 6.4 million barrels in the week to 122.9 million barrels. "The negative portion of the release was in the large product stock builds," said Jim Ritterbusch of Ritterbusch and Associates in Florida, which he said were attributable to an unexpected drop in demand. Crude stockpiles fell less than expected, decreasing by 1.2 million barrels to 415.6 million barrels last week compared with analysts' expectations in a Reuters poll for a 2.8-million-barrel draw. Traders kicking off the new year also are probably weighing higher geopolitical risks and Trump's efforts to run the U.S. economy hot against the expected drag from proposed tariffs, said IG market analyst Tony Sycamore. "Tomorrow's U.S. ISM manufacturing release will be key to crude oil's next move," Sycamore said. Sycamore said WTI's weekly chart is winding itself into a tighter range, suggesting that a big move is coming. "Rather than trying to predict in which way the break will occur, we would be inclined to wait for the break and then go with it," he added. Oil prices are likely to be constrained near $70 a barrel in 2025, down for a third year after a 3% decline in 2024, with weak Chinese demand and rising global supplies offsetting OPEC+ efforts to shore up the market, a Reuters poll showed. In Europe, Russia halted gas pipeline exports through Ukraine on New Year's Day after the transit agreement expired on Dec. 31. The European Union has arranged alternative supply ahead of the widely expected stoppage while Hungary will keep receiving Russian gas via the TurkStream pipeline under the Black Sea. Sign up here. https://www.reuters.com/business/energy/oil-rises-investors-return-holidays-eye-china-recovery-2025-01-02/