China Tariffs on U.S. Energy Products May Have Limited Impact — Market Talk

Iron ore falls in the morning Asian session, dragged by concerns over the tariffs China announced Tuesday. China imposed a 15% tariff on imports of U.S. coking coal, ANZ Research analysts say in a research report. Chinese iron-ore markets will probably come under pressure amid worries about weaker export-driven demand, the analysts add. Coking coal along with iron ore are raw materials used in steel production. All of the iron-ore contracts on the Dalian Commodity Exchange are lower, with the May 2025 contract last quoted 1.2% down at CNY799.5 a ton. (ronnie.harui@wsj.com)

China's tariffs announced Tuesday may have limited near-term impact on energy prices, Goldman Sachs commodities analysts say in a research report. "Neither global supply nor demand of these commodities are changed by China's tariffs," the analysts say. "Impacted U.S. volumes are likely to easily find alternative buying markets, while China replaces impacted import volumes with alternative suppliers," they add. However, there could be a potential pause in new long-term liquefied natural gas contract talks between China buyers and U.S. LNG facilities. Given that most proposed U.S. LNG facilities require that a substantial portion of their capacity is contracted under long-term deals to obtain financing, such a pause might delay new U.S. LNG export facilities reaching a final investment decision, the analysts add. (ronnie.harui@wsj.com)

Gold surged past $2,850 per ounce on Wednesday, reaching a new record high, as investors sought safety assets amid growing concerns that a US-China trade war could hinder global growth.

US President Trump postponed tariffs on Mexico and Canada but proceeded with a 10% levy on all imports from China this week, prompting Beijing to announce retaliatory tariffs on US energy goods, set to take effect next week.

Adding to the uncertainty, Trump suggested that the US take control of the Gaza Strip and oversee its reconstruction.

Meanwhile, interest rate futures continued to signal market expectations of two US rate cuts this year, in contrast to last month's broad consensus of no cuts.

This outlook was reinforced by lower-than-expected job openings in the latest JOLTS report and a sharper-than-anticipated drop in factory orders to a six-month low.

Gold rose to a record high, after advancing by almost 1% in the previous session, as the opening salvos of the US-China trade war stoked haven demand.

Bullion reached an all-time peak of $2,849.05 an ounce on Wednesday. That came after President Donald Trump hit Chinese imports with a 10% tariff the day before, prompting a swift but more targeted retaliation from Beijing.

The response from China was relatively muted compared to Trump’s first term, when Beijing hit back with tariffs that were almost on par with the US, but there’s still plenty of trepidation about the impact on the world’s two biggest economies. Markets are also waiting to see if there are any ripple effects for US monetary policy if tariffs reignite inflation.

Adding to the uncertain outlook, Trump proposed that the US take over the Gaza Strip and assume responsibility for reconstructing the war-torn territory, during a press conference with Israeli Prime Minister Benjamin Netanyahu. The precious metal should benefit from increasing unease about what lies ahead, although may lose some of its luster if interest rates stay high.

A gauge of the dollar fell, extended losses following a US jobs report on Tuesday that pointed to a gradual slowdown in the labor market. A weaker greenback makes commodities like gold cheaper for most buyers.

“Who doesn’t like a safe-haven in this scenario?,” said Charu Chanana, a strategist at Saxo Capital Markets Pte.. “No good news on US-China talks and more geopolitical angst with the Gaza news would continue to provide a further boost to gold, irrespective of where the US dollar goes.”

Spot gold rose 0.1% to $2,844.82 an ounce as of 9:17 a.m. in Singapore. The Bloomberg Dollar Spot Index was down 0.1%, after a 0.7% loss on Tuesday. Silver and palladium dipped, while platinum edged higher.Trade-war fears had jolted precious-metals markets even before Trump went ahead with the tariffs on China. US prices of gold and silver have surged above international benchmarks in recent weeks, prompting dealers and traders to rush huge volumes of the metals into America before any tariffs take effect. The chaos also led to a spike in lease rates for gold and silver — the return that holders of metal in London’s vaults can get by loaning it out on a short-term basis.

The Malaysian government's proposal for lower pension fund contributions for foreign workers appears positive for the plantation sector, RHB IB analyst Hoe Lee Leng and team say in a note. The government recently proposed a fixed 2% mandatory employees provident fund contribution, down from the initial 12% proposed last year, though the implementation date has yet to be set, they note. This should be a relief for planters, especially following the higher minimum wage policy introduced in February, they say. While these moves may have a slight negative impact on earnings amid higher costs, it is expected to be minimal, they add. RHB maintains an overweight rating on the Southeast Asian plantation sector, pegging Johor Plantations, Sarawak Oil Palms, Bumitama Agri, London Sumatra Indonesia and SD Guthrie as top picks. (yingxian.wong@wsj.com)

Brent crude oil futures held its recent decline to around $76 per barrel on Wednesday as traders weighed concerns over a US-China trade war against President Trump's intensified economic pressure on Iran.

On Tuesday, Trump reinstated his "maximum pressure" campaign, aiming to reduce Iran's oil exports to zero and counter its regional influence.

This followed China's retaliation against US tariffs with levies on American coal, LNG, and crude oil, raising fears of weaker global demand.

Meanwhile, OPEC+ confirmed plans to gradually increase oil output from April.

On the supply side, API data showed US crude inventories surged by 5.025 million barrels last week, exceeding expectations of a 3.17 million barrel build.