2025-10-14 11:05

LONDON, Oct 14 (Reuters) - (This Oct 14 column has been refiled to correct the spelling of 'build' in paragraph 14) China is once again rolling out the big cannon of curbs on metals and minerals vital to the global energy transition, as well as key components in weapons and electronics. Sign up here. There is little doubt that every time China places restrictions on exports, or threatens to do so, it causes much consternation among Western governments and companies, which have come to rely on China's dominance of the processing and production of refined metals. The latest instance is China's decision to expand export controls on rare earths, adding five new elements to existing restrictions that have resulted in tighter scrutiny on products such as critical minerals used to produce magnets. But there are also risks for China in this behaviour, as the cannon of export curbs can effectively only be fired once in anger. If China does eventually decide to cut off Western buyers from metals such as rare earths, lithium, cobalt, antimony, tungsten and others, it would cause massive disruption to Western supply chains. But it would also prompt a rapid build out of new supply and processing facilities across the Western world. The raw ores used to make many of these metals aren't necessarily rare or difficult to mine, and between them Western nations would have adequate supplies. The challenge would be to build refining capacity, but this could be accomplished quickly in the event of a genuine emergency created by China ending its supply to Western buyers. This would obviously come at a high cost, but Western governments would have no other option other than to stump up the cash as obtaining new sources of supply would trump any financial considerations. The ultimate risk for China is that in cutting off Western buyers from refined metals it would risk eventually destroying its own industry through massive overcapacity as Western buyers build out their own supply chains. China currently produces about 90% of refined rare earths, more than 90% of graphite, just under 80% of cobalt and nearly 70% of lithium. Its share of nickel is considerably less, but if its control of Indonesian nickel refining is added to what is produced in China, around 70% of refined nickel is under Chinese control. Copper is often cited as a critical mineral, but China only accounts for just under half of refined metal output, meaning the Western world could rely on sources of supply outside of Chinese control to meet its needs. POLITICS DRIVING The question for the market is why is China placing restrictions on the exports of critical minerals and metals, when ultimately doing so only encourages its current customers to build alternative supply chains? It would seem that the answer is largely political. China is engaged in a tricky trade war with U.S. President Donald Trump and both sides are making threats to use what leverage they have to try and improve their negotiating positions. The problem for Beijing is that the more it rolls out the big guns of export restrictions on critical minerals, the more it encourages the Western world to bite the bullet and build alternative supply chains. China doesn't even have to fire the cannon, the repeated threat of doing so will be enough to spark the necessary Western investment, especially in refining metals. As Trafigura Chief Executive Richard Holtum told the LME Week seminar in London on Monday, processing minerals is more important than mining them. "You do not have national security if you just have stuff in the ground," Holtum said. If his message is increasingly being heeded in Western capitals, it's likely that more cash will be ploughed into metals refining, as well as subsidies and incentives to keep existing refineries operating even though they can't compete with China at current prices. The end result of China's export restrictions is likely to be the development of a two-tier global system for refined critical metals, a more expensive but secure supply chain for Western consumers and a cheaper Chinese system that is subject to Beijing's political imperatives. 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-can-only-fire-big-gun-refined-metals-restrictions-once-2025-10-14/

2025-10-14 11:03

BEIJING, Oct 14 (Reuters) - A Chinese container ship has completed a pioneering journey through the Arctic to a UK port, state-run news agency Xinhua reported, cutting in half the usual transit time for the electric vehicles and solar panels aboard destined for Europe. The Istanbul Bridge's maiden voyage, originally expected to take 18 days, was delayed by two days due to a storm off the coast of Norway but the ship still reached Europe earlier than the 40 to 50 days it takes freighters going through the Suez Canal or around the Cape of Good Hope. Sign up here. The new Northern Sea Route, running entirely through Arctic waters and within Russia's exclusive economic zone, can now be navigated by ships due to global warming. China is exploring speedier maritime links with the European Union - the world's third-largest economy - while in the middle of a costly trade war with the United States, the world's biggest consumer market. The push reflects Beijing's need to diversify its export markets to sustain growth in an economy heavily dependent on selling its manufactured goods overseas. Exports to Europe rose an annual 14% in September, Chinese customs data shows, while shipments to the U.S. fell 27% over the same period. Over the past four decades, the Arctic has warmed about four times faster than the global average, resulting in a dramatic reduction in sea ice and creating seasonal windows for commercial shipping. But weather and sailing conditions along the Arctic passage can be unpredictable. Carrying around 4,000 containers from the Chinese port of Zhoushan, the Istanbul Bridge docked in Felixstowe, Britain's largest container port, on Monday and was scheduled to make stops in Germany, Poland and the Netherlands, Xinhua said. The ship is operated by Chinese-controlled container line Sea Legend, it said. The company did not immediately respond to a Reuters request for comment. In recent years Beijing has deepened maritime cooperation with Russia in Arctic waters, as China seeks an alternative shipping route to reduce its dependence on the Strait of Malacca in Southeast Asia. https://www.reuters.com/sustainability/climate-energy/chinese-freighter-halves-eu-delivery-time-maiden-arctic-voyage-uk-2025-10-14/

2025-10-14 10:58

IEA expects global supply to rise by 3 million bpd in 2025 Trims demand growth forecast this year to 710,000 bpd Implied surplus to reach 4 million bpd in 2026 LONDON, Oct 14 (Reuters) - The world oil market faces an even bigger surplus next year of as much as 4 million barrels per day as OPEC+ producers and rivals lift output and demand remains sluggish, the International Energy Agency predicted on Tuesday. The latest outlook from the IEA, which advises industrialised countries, expands its prediction of a 2026 surplus from about 3.3 million bpd last month. A surplus of 4 million bpd would be equal to almost 4% of world demand, and is much larger than other analysts' predictions. Sign up here. OPEC+ is adding more crude to the market after the Organization of the Petroleum Exporting Countries, Russia and other allies decided to unwind some output cuts more rapidly than earlier scheduled. The extra supply is adding to fears of a glut and weighing on oil prices this year. IEA LIFTS OUTLOOK FOR SUPPLY, TRIMS DEMAND FORECAST In the IEA's view, supply is rising far faster than demand. This year, it expects supply to rise by 3.0 million bpd, up from 2.7 million bpd previously. Next year, supply will rise by a further 2.4 million bpd, it said. The agency on Tuesday also trimmed its forecast for world demand growth this year to 710,000 bpd, down 30,000 bpd from the previous forecast, citing a more challenging economic backdrop. "Oil use will remain subdued over the remainder of 2025 and in 2026, resulting in annual gains forecast at around 700,000 barrels per day in both years," the IEA said in a monthly report. "This is well below historical trend, as a harsher macro climate and transport electrification make for a sharp deceleration in oil consumption growth." IEA demand forecasts are at the lower end of the industry range, as the agency expects a faster transition to renewable energy sources than some other forecasters such as OPEC. On Monday OPEC maintained its forecast that demand will rise by 1.3 million bpd this year, almost double the rate expected by the IEA, and said the world economy was doing well. Oil prices declined on Tuesday, with Brent crude trading just below $62 a barrel. That was still up from a 2025 low of near $58 in April. GLUT LOOMS The IEA has been saying the world market looks oversupplied. Tuesday's report said global oil supply in September was up by 5.6 million bpd from a year ago, with OPEC+ accounting for 3.1 million bpd of the increase. In a sign of extra supply heading to the market, the IEA said the amount of oil currently seaborne in September rose by 102 million barrels, which it called the largest increase since the COVID-19 pandemic, partly due to surging Middle East production. As well as OPEC+, supply growth next year will also come from outside producers such as the U.S., Canada, Brazil and Guyana, the IEA said. The IEA's view on the potential surplus is larger than that of others. A Reuters poll of analysts in September suggested the market could face an oversupply of 1.6 million bpd in 2026. OPEC, in contrast, expects world oil supply to closely match demand next year, because it sees a much slower rate of expansion from outside OPEC+ as well as stronger demand. https://www.reuters.com/business/energy/iea-raises-2025-oil-supply-forecast-after-opec-output-hike-decision-2025-10-14/

2025-10-14 10:55

LONDON, Oct 14 (Reuters) - The global oil market will tighten in the medium to longer term, a range of oil industry executives said in London this week, maintaining optimism despite a near-term glut driven by rising output. Production decline rates, which could accelerate as prices fall, will help to rebalance the oil market as longer-term demand is supported by rising consumption from emerging economies, the executives said. Sign up here. The global oil market surplus will reach 3.6 million barrels per day in the fourth quarter, compared with a 1.9 million bpd average so far this year, the International Energy Agency (IEA) said in its monthly oil report on Tuesday. Rising production from both the Organization of Petroleum Exporting Countries and allies (OPEC+) and non-members has kept a ceiling on oil prices this year. Brent futures were trading around $62 a barrel on Tuesday morning, down more than $15 compared with the same day last year. MEDIUM TERM TIGHTNESS Oil production from producers outside of OPEC will start to decline if oil prices fall to $60 per barrel, TotalEnergies (TTEF.PA) , opens new tab CEO Patrick Pouyanne said on Tuesday. "Fundamentally, the short term market is a little bearish ... but we are quite bullish on the medium-term," Pouyanne said at the Energy Intelligence forum in London, citing production decline rates and no peak in global oil demand. On Monday at the same conference, ExxonMobil CEO Darren Woods warned that decline rates could hit 15% per year without investment in unconventional oil and gas fields, and said that in his view oversupply will be a "short-term issue." "We see resilient demand, and the pressing need for long-term investments in supply," Saudi Aramco CEO Amin Nasser added on Monday. "The key strategic question for companies like mine and others is, where is the conventional oil going to come from to satisfy the demand in the face of plateauing or peaking U.S. unconventional supply, as demand continues to grow," ConocoPhillips CEO Ryan Lance said. Lance added that oil prices could recover to $70-75 a barrel, as in the mid-cycle supply will have to be generated to meet demand. https://www.reuters.com/business/energy/oil-executives-see-market-rebalancing-surplus-medium-term-2025-10-14/

2025-10-14 10:43

Oct 14 (Reuters) - Britain's financial regulator set out plans on Tuesday to encourage asset managers to "tokenise" their funds on blockchain, in a move aimed at attracting younger investors. Under the proposals being considered, UK asset managers would be able to create crypto tokens representing shares in their funds, using public blockchains like Ethereum. Until now, funds had only been able to use private blockchains. Sign up here. Tokenisation - the process of creating blockchain-based versions of financial assets - has seen a revival of interest this year, helped by rising crypto prices and U.S. President Donald Trump's support for the crypto industry. Proponents say it can improve efficiency and cut the costs of fund management. BRITAIN SEEKING A BIGGER ROLE IN CRYPTO "Tokenisation has the potential to drive fundamental changes in asset management, with benefits for the industry and consumers," Simon Walls, executive director of markets at Britain's Financial Conduct Authority, said in a statement launching a consultation on the plans. The move is the latest sign of Britain's push to promote digital assets. The country's finance ministry last month announced plans to co-operate with the U.S. on crypto. The FCA also sought feedback on whether to allow stablecoins - crypto assets that are pegged to a fiat currency - to be used as settlement for the funds. In a press briefing, Nike Trost, interim director buy-side at the FCA, acknowledged that the benefits could take a while to materialise, as firms take time to upgrade their technology. The watchdog said it was minded to act as technology was driving changes in consumer expectations around investing. Almost half (47%) of the users of trading apps are aged 18-34, the FCA said, and such apps typically sell low-cost investments in shares, or fractions of them, rather than funds. The regulator said the possibility of allowing regulated funds to invest in cryptocurrencies would be considered in a future review. https://www.reuters.com/sustainability/boards-policy-regulation/uk-regulator-backs-tokenised-funds-attract-younger-investors-2025-10-14/

2025-10-14 10:39

Oct 14 (Reuters) - What matters in U.S. and global markets today By Mike Dolan , opens new tab, Editor-At-Large, Finance and Markets Sign up here. Wall Street's 'fear gauge' of implied stock market volatility touched its highest in almost four months on Tuesday as a fresh wave of AI excitement jostled with trade war tensions and the onset of the third quarter earnings season. The VIX earlier hit its highest since mid-June as U.S.-China trade exchanges turned sour again overnight following Monday's Broadcom-led stock rebound. Tuesday's packed diary includes Q3 updates from the big U.S. banks, a keynote speech from Federal Reserve Chair Jerome Powell and the International Monetary Fund's World Economic Outlook. U.S. stocks snapped back on Monday, with chipmakers leading the charge as Broadcom soared 10% on news of an OpenAI partnership and Google announcing $15 billion of investments in datacenters in India. But weekend hopes of cooling U.S.-China trade tensions were undermined again as the two countries began charging additional port fees on ocean shipping firms that move everything from holiday toys to oil. Treasury Secretary Scott Bessent said there was still a chance to avert 100% U.S. tariffs on November 1 and that a meeting of the two countries' leaders was still possible. U.S. stock futures relapsed about 1% before Tuesday's bell, however, and yields on Treasuries, which had not traded on Monday's Columbus Day holiday, plunged further. The 30-year bond yield plummeted to its lowest since the April trade shock even as the dollar firmed, with Bessent saying the ongoing government shutdown was hitting the economy and "getting serious". Overseas, Japan's Nikkei dived 2.5% after a long weekend, clocking its sharpest one-day drop since April as investors fretted over uncertainty around the country's next prime minister. In France, newly re-appointed Prime Minister Sebastien Lecornu addresses parliament on Tuesday to spell out his budget priorities. U.S. crude oil prices slipped to their lowest since May, and gold hit a new record at $4,179 per ounce - but bitcoin continued its sharp retreat and is now down more than $10,000 from its October 6 peak. In today's column, I discuss whether gold's parabolic surge is becoming the bubble investors think they're hedging against. Today's Market Minute * Hamas freed the last living Israeli hostages from Gaza on Monday under a ceasefire deal and Israel sent home busloads of Palestinian detainees, as U.S. President Donald Trump declared the end of the two-year-long war that has upended the broader Middle East. * The United States and China on Tuesday will begin charging additional port fees on ocean shipping firms that move everything from holiday toys to crude oil, making the high seas a key front in the trade war between the world's two largest economies. * Google will invest $15 billion over the next five years to set up data centre capacity for an artificial intelligence hub in India's Andhra Pradesh, the company said on Tuesday, marking one of its biggest ever investments in the country. * The U.S. dollar just notched up its best week in two months, a move many would dismiss as a short-term bounce in a longer-term decline, especially with lower U.S. interest rates on the horizon. But, writes ROI markets columnist Jamie McGeever, the bull case for the tarnished greenback is surprisingly persuasive. * The UK stock market has become one of the top contrarian trades , opens new tab after the recent Bank of America survey reported a record number of fund managers underweight the British market. There are plenty of reasons to think that UK equities could outperform their U.S. counterparts in 2026 and potentially for the next decade – and this optimism does not rest solely on Britain’s cheap valuations. Read more in Panmure Liberum investment strategist Joachim Klement's latest piece for ROI. Chart of the day The AI boom ignited by ChatGPT's launch in late 2022 has continued to fuel staggering capital outlays and data center expansion despite a brief crisis of confidence sparked by China's cheaper DeepSeek model and periodic market concerns over Trump's tariff policies. Citigroup last month raised its forecast for AI-related infrastructure spending by tech giants to surpass $2.8 trillion through 2029, from $2.3 trillion estimated earlier, citing aggressive early investments by hyperscalers and growing enterprise appetite. Today's events to watch (all times EDT) * U.S. NFIB small business survey for September (6:00 AM EDT); Canada August building permits * Federal Reserve Chair Jerome Powell speaks (12:20 PM EDT) in Philadelphia, Fed Board Governor Christopher Waller speaks in Washington, Boston Fed President Susan Collins speaks in Boston; European Central Bank policymakers François Villeroy de Galhau and Sharon Donnery speak in New York; Bank of England policymaker Alan Taylor speaks in London * The International Monetary Fund releases World Economic Outlook (9:00 AM EDT) as IMF-World Bank meetings get underway in Washington. Speakers at the IMF meeting include Federal Reserve Vice Chair for Supervision Michelle Bowman, European Central Bank President Christine Lagarde, Irish Central Bank Governor Gabriel Makhlouf * French Prime Minister Sebastien Lecornu addresses parliament to spell out his budget priorities (8:00 AM EDT) * U.S. corporate earnings: JPMorgan, Goldman Sachs, Citigroup, BlackRock, Wells Fargo, Johnson & Johnson, Domino's Pizza Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website , opens new tab, and you can follow us on LinkedIn , opens new tab and X. , opens new tab Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/finance/global-markets-view-usa-2025-10-14/