2023-12-22 04:01

BEIJING, Dec 22 (Reuters) - China's steel demand in 2023 will decline by 3.3% from 2022 and contract a further 1.7% in 2024, a state researcher forecast on Friday, weighed down by a significant drop in construction activity. The world's top steel producer will consume 890 million metric tons this year, officials at the China Metallurgical Industry Planning and Research Institute (MPI) told a press briefing, leaving it with a significant surplus. China manufactured 952.14 million tons of crude steel in the first 11 months of 2023, up 1.5% year-on-year, official data showed last week. It has also exported 82.66 million tons of steel products so far this year, the highest amount since 2016 and more than earlier forecasts. The country's steel industry has come under significant pressure from the debt-ridden property sector. Demand for construction steel will decline 4.8% this year compared to 2022 to 506 million tons, the researchers at MPI said. Steel demand is set to contract in 2024 to 875 million tons, they added, with construction steel demand dropping 4% next year. Demand from the infrastructure sector will help to partly offset the decline from the property market. "The issuance of one trillion yuan of sovereign debt as well as local government debts that are frontloaded in the fourth quarter of 2023 will support the infrastructure sector in 2024," said Xiao Bangguo, vice president of MPI. China's steel exports next year could slightly fall, said Guan Zhijie, vice general engineer at MPI, as economic growth overseas slows. https://www.reuters.com/markets/commodities/chinas-2024-steel-demand-fall-17-this-year-state-researcher-2023-12-22/

2023-12-22 03:26

MUMBAI, Dec 22 (Reuters) - The Indian rupee is expected to open higher on Friday after a recovery in U.S. equities dampened the demand for the safe haven dollar. Non-deliverable forwards indicate the rupee will open at around 83.20-83.22 to the U.S. dollar, compared with the previous session's closing at 83.2775. U.S. equities recovered from Wednesday's selloff, with the S&P 500 climbing a percent. The dollar index made a low of 101.73 in the New York session, a level not seen since mid-August. Asian currencies were up 0.1%-0.4% and shares rose. An opening uptick in the rupee, alongside Asia, "is all that may happen", a FX trader at a bank said. USD/INR is "back to being well bid on dips" and "difficult to see much of a drop below 83.20", he said. The USD/INR pair ran into consistent buying interest on Thursday, due to oil companies seeking dollars. The dollar index was not helped by the U.S. GDP expanding at a slower pace than was expected in the third quarter. Third-quarter U.S. GDP growth was revised down to 4.9% from 5.2%. Economists polled by Reuters had anticipated that GDP growth would be unrevised. "USDINR could again stay in a range for a few more days. The next important data point is the US PCE inflation," said Srinivas Puni, managing director at QuantArt Market Solutions. The core U.S. PCE (Personal Consumption Expenditures) data due later in the day is the Federal Reserve's preferred inflation gauge. Economists polled by Reuters expect a0.2% month-on-month rise in core PCE price index. The data comes in the backdrop of investors pricing in a high probability of the Fed cutting rates as early as in the March meeting, despite resistance from policymakers. KEY INDICATORS: ** One-month non-deliverable rupee forward at 83.27; onshore one-month forward premium at 8 paisa ** Dollar index at 101.84 ** Brent crude futures up 0.7% at $80 per barrel ** Ten-year U.S. note yield at 3.90% ** As per NSDL data, foreign investors bought a net $241.4mln worth of Indian shares on Dec. 20 ** NSDL data shows foreign investors bought a net $18.8mln worth of Indian bonds on Dec. 20 https://www.reuters.com/markets/currencies/rupee-rise-after-safe-haven-dollar-drops-4-month-low-2023-12-22/

2023-12-22 01:23

Micron jumps on upbeat quarterly revenue forecast Q3 GDP growth trimmed, continuing jobless claims elevated Indexes up: Dow 0.87%, S&P 1.03%, Nasdaq 1.26% NEW YORK, Dec 21 (Reuters) - U.S. stocks closed higher on Thursday, winning back much of the previous day's losses, as economic data fueled optimism that the Federal Reserve would ease monetary policy and revived investor risk appetite. All three major U.S. stock posted gains as chips surged, led by Micron Technology (MU.O) after its better-than-expected quarterly forecast, putting the tech-heavy Nasdaq (.IXIC) out front. The rally gained momentum as the session drew to a close, with the S&P 500 (.SPX) and the Nasdaq surging more than 1%. Data on Thursday showed third-quarter U.S. economic growth was not as robust as originally stated, and cracks are appearing in the tight labor market, which the Fed considers an obstacle to cooling inflation. "The fact that the third-quarter GDP number wasn't revised upward, and in fact was cut, is giving investors comfort that the path the Fed is on, which they enunciated last week, isn't going to change any time soon," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. U.S. stocks abruptly sank late Wednesday afternoon, snapping a multi-session rally, in a sell-off possibly accelerated by hedging activity associated with short-dated option trades. "The investor narrative yesterday was about profit taking on the heels of a very long consistent holiday rally," said Greg Bassuk, chief executive of AXS Investments in New York. "Investors would be prudent to buy on these dips," Bassuk said, adding that he believes stocks "will end the year strongly." Financial markets are pricing in a 71.3% likelihood that the U.S. central bank will reduce the Fed funds target rate by 25 basis points as soon as March, according to CME's FedWatch tool. The market is awaiting the Commerce Department's personal consumption expenditures (PCE) report due on Friday, which will cover income growth, consumer spending and inflation. The Dow Jones Industrial Average (.DJI) rose 322.35 points, or 0.87%, to 37,404.35, the S&P 500 (.SPX) gained 48.4 points, or 1.03%, at 4,746.75 and the Nasdaq Composite (.IXIC) added 185.92 points, or 1.26%, at 14,963.87. All 11 major sectors of the S&P 500 ended in positive territory, and consumer discretionary stocks (.SPLRCD) enjoyed the biggest percentage gains. Micron Technology (MU.O) forecast quarterly revenue above market estimates, and its shares jumped 8.6% on signs of a memory chip recovery in 2024 after one of the most significant downturns in years. The Philadelphia SE semiconductor index (.SOX), housing chip stocks, advanced 2.8%. U.S. electric vehicle makers Tesla (TSLA.O), Lucid Group (LCID.O) and Rivian Automotive (RIVN.O) rose between 1.6% and 3.0% after a report said the United States was considering tariff hikes on Chinese EV manufacturers. Triumph Group (TGI.N) soared 32.9% after the aerospace supplier said it would sell its components aftermarket business to AAR Corp (AIR.N) for $725 million. U.S.-listed shares of Blackberry tumbled 12.7% after its fourth-quarter revenue estimates landed below expectations. Advancing issues outnumbered decliners on the NYSE by a 3.65-to-1 ratio; on Nasdaq, a 2.79-to-1 ratio favored advancers. The S&P 500 posted 17 new 52-week highs and one new low; the Nasdaq Composite recorded 79 new highs and 68 new lows. Volume on U.S. exchanges was 10.88 billion shares, compared with the 12.28 billion average for the full session over the last 20 trading days. https://www.reuters.com/markets/us/futures-rebound-after-broad-sell-off-micron-shines-2023-12-21/

2023-12-22 00:04

NEW YORK, Dec 21 (Reuters) - A sudden surge in U.S. stock volatility this week prompted some traders to blame short-dated options as the culprit, though others say the popular derivatives were just one piece of the puzzle. Traders got a rude awakening on Wednesday when stocks began sliding in the middle of a sleepy afternoon session. With no market-moving news in sight, many said big trades in so-called zero-day to expiry (0DTE) options contributed to the decline, of 1.5% for the S&P 500 (.SPX). The benchmark index closed up 1% on Thursday, unwinding much of the previous day's losses - a bounce some analysts said pointed to the sell-off being driven by technical factors, rather than a shift in market sentiment. Analysts cited a mix of factors such as low year-end volumes and one-sided investor positioning, with short-term options accelerating the market meltdown. "It's kind of a cautionary tale on holiday illiquidity and low-tolerance for losing trades," said Nomura strategist Charlie McElligott. Nevertheless, the whipsaw action highlights how 0DTE options have become a market mover this year as their popularity among retail and institutional investors has soared. While options trading volume hit a record high this year, trading in 0DTE contracts has far outpaced the growth in all other expiry terms, with these short-dated contracts making up about half of S&P 500 options trading, Cboe data from August showed. PERFECT STORM When investors buy large amounts of S&P 500 put options, as they did on Wednesday, market makers on the other side of these trades have to square their own risk by selling stock futures throughout the day. If stocks are weakening, market makers would typically sell faster to protect themselves, potentially exacerbating the downside move, as they appear to have done on Wednesday. Nomura's McElligott believes the bearish 0DTE trades resulted in some $3 billion of stock futures being sold. At the same time, a large institutional investor was in the midst of an asset allocation trade that involved selling equities and buying bonds, which likely added selling pressure on stocks, McElligott said. Investors who were bullishly positioned for a "crash up" in stocks were caught wrong-footed, creating fertile conditions for the sharp reversal, he said. Joe Mazzola, director of trading and education at Charles Schwab, agrees that a mix of factors drove the sell-off with the options helping supercharge the selling. "What happened is you had stretched sentiment, you had low liquidity coming into the day and then once people kind of realized that everybody's on the same side of that one trade and you got that catalyst (0DTE options trades) ... that's what caused that move, that air pocket," Mazzola said. Some analysts worry similar volatile episodes may lurk around the corner, especially as the year winds down, with low expected volumes. Matthew Tym, head of equity derivatives trading at Cantor Fitzgerald, is concerned that many of the factors behind the recent sell-off could reemerge. "If we do get into a situation where we really do have bad news in the marketplace, 0DTE could really start to exacerbate the sell-off," he said. " We could get into another situation like the flash crash that we had almost a decade ago." https://www.reuters.com/markets/us/zero-day-options-just-factor-us-stock-volatility-experts-2023-12-22/

2023-12-21 23:40

VIENNA, Dec 22 (Reuters) - A reactor at North Korea's Yongbyon nuclear complex appears for the first time to be using atomic fuel, the U.N. nuclear watchdog said late on Thursday, which would mean the country has a new potential source of plutonium for its nuclear weapons. North Korea has for years used spent fuel from a 5 megawatt nuclear reactor at Yongbyon to produce plutonium for its nuclear arsenal but a telltale discharge of warm water from a larger light-water reactor suggests that is now coming online, too, the International Atomic Energy Agency said. "The discharge of warm water is indicative the reactor has reached criticality," IAEA chief Rafael Grossi said in a statement, meaning the nuclear chain reaction in the reactor is self-sustaining. The IAEA has not had access to North Korea since Pyongyang expelled its inspectors in 2009. The agency now observes the country from afar, mainly using satellite imagery. Without access, the IAEA could not confirm the reactor's operational status, Grossi said. The IAEA says it has observed a strong outflow of water from the light-water reactor's cooling system since October, suggesting ongoing commissioning of the reactor. More recent indications were that the water was warm, Grossi said. "The LWR, like any nuclear reactor, can produce plutonium in its irradiated fuel, which can be separated during reprocessing, so this is a cause for concern," he said, adding that the advancement of North Korea's nuclear programme was "deeply regrettable". The light-water reactor had appeared complete for years without it going into operation. Activity at North Korea's nuclear test site at Punggye-ri has led to months of speculation that it is preparing to test another nuclear weapon as it seeks to miniaturise its warheads for use in its ballistic missiles. North Korea has conducted six nuclear tests. https://www.reuters.com/business/energy/second-north-korean-nuclear-reactor-appears-be-using-fuel-iaea-says-2023-12-21/

2023-12-21 23:20

COPENHAGEN, Dec 21 (Reuters) - The Norwegian cruise ship MS Maud suffered a power outage after a rogue wave shattered windows on the bridge while it sailed in the North Sea, causing the vessel to lose its ability to navigate, Danish authorities and the ship's owner said on Thursday. The 266 passengers and 131 crew members were safe, according to the Danish Joint Rescue Coordination Centre. "There is no power on the ship. The main engine is functioning but the navigation systems and radars are not," a spokesperson for the centre, which is responsible for coordinating search and rescue operations, said. While sailing roughly 200 kilometres (120 miles) off Denmark's west coast and roughly 330 kilometres off Britain's east coast, strong winds blasted windows on the bridge of the vessel, allowing water to enter and resulting in a power failure on the bridge, the centre said. The ship, which belongs to cruise company HX, a unit of Norway's Hurtigruten Group, left Floroe in Norway on Thursday and was due to arrive in Tilbury in the UK on Friday. "Earlier this afternoon, December 21, MS Maud reported a temporary loss of power after encountering a rogue wave," Hurtigruten said in an emailed statement. "At this time, the ship has confirmed that no serious passenger or crew injuries have been sustained as a result of the incident and the condition of the ship remains stable," it said. A towage vessel from the civil rescue company Esvagt was scheduled to arrive at the ship around 2230 GMT. The ship is currently being steered manually from the engine room but cannot navigate. Esvagt support vessels had arrived to help the ship navigate until the ship could be towed to port. "I don't think there is any danger to the ship now. If the captain thought so, he would have asked to be evacuated which he hasn't," the rescue centre spokesperson said. The area was hit by a storm late on Thursday with hurricane-force gusts blowing from the northwest that were forecast to continue on Friday, the Danish Meteorological Institute said. https://www.reuters.com/world/uk/norwegian-cruise-ship-loses-navigation-ability-north-sea-during-storm-2023-12-21/