Mining Investors Eye Annual China Meeting for Signals From Beijing — Market Talk

Malaysian palm oil futures fell over 1.5% to around MYR 4,400 per tonne, extending steep losses for a second session and nearing their lowest level in nearly a month.

A further decline in energy markets weighed on sentiment after US President Trump paused military aid to Ukraine, while markets braced for US tariffs on Canada, Mexico, and China to take effect.

Additionally, concerns over weak exports persisted after cargo surveyor data showed that palm oil shipments in February fell between 8.5% and 11%, following a decline in January.

Worries about slowing demand also mounted, with expectations that consumption could ease after March once the month-long Ramadan festival concludes.

Limiting further losses were supply tightness and low stock levels in Malaysia.

Meanwhile, in key buyer China, a major parliamentary meeting has begun, with expectations that policymakers will introduce new stimulus measures to boost consumption and support an economic recovery.

Morgan Stanley's newly positive outlook on lithium is being challenged by a falling industry cost curve, as producers pare expenses amid an ongoing market downturn, analysts at the bank say in a note. A lower cost curve should make it harder for lithium to rally and instead lead to flat prices in the absence of any more meaningful supply cuts, say the MS analysts. "We turned more constructive on lithium in December, seeing sufficient pain on the supply side from low prices, which drove significant production cuts through 2H 2024," the analysts say. However, "lithium price action may be more sideways than upwards from here as costs adjust to the new price backdrop and new sources of supply come through." (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

Gold steadied around $2,880 per ounce on Tuesday, with investors assessing the economic outlook as U.S. President Donald Trump prepares to impose tariffs on key trade partners.

On Monday, Trump confirmed that 25% tariffs on imports from Mexico and Canada would start later today, along with a doubling of China levies to 20%.

He also reiterated that reciprocal tariffs would take effect on April 2 on countries that impose duties on U.S. products.

These reignited fears of a global trade war that already showed signs of rising inflation and slowing economic growth — both of which support gold’s status as a hedge against inflation and economic instability.

The latest data on U.S. factory activity showed a slowing pace of expansion, raising concerns that U.S. tariffs could undermine an already cooling economy.

Investors are now awaiting ADP employment report due on Wednesday and the non-farm payrolls report on Friday for more clues on the Federal Reserve’s interest rate trajectory.

Palm oil prices are lower, weighed by weakness in soybean oil on the Chicago Board of Trade overnight, says David Ng, a trader at Kuala Lumpur-based Iceberg X. Palm olein's softness on the Dalian Commodity Exchange is also adding pressure to palm oil, he says. However, Malaysia's palm oil supply tightness and low stock levels could help support prices, Ng says, and sees support for CPO prices at 4,350 ringgit/ton and resistance at 4,500 ringgit/ton. The Bursa Malaysia Derivatives contract for May delivery is 86 ringgit lower at 4,398 ringgit/ton. (yingxian.wong@wsj.com)

Iron ore prices are lower in early Asia trade amid cautious sentiment. Rising trade tensions between China and the U.S. further pressure the prices of iron ore. With Trump saying 25% tariffs on goods from Mexico and Canada will take effect Tuesday, investors now closely monitor the ongoing geopolitical tensions between China and U.S. The possible reduction from China on steel production by 50mt this year could add further pressure as well, ANZ Research analysts write in a note. The most-traded iron-ore contract on the Dalian Commodity Exchange is down 1.4% at CNY756.5/ton. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

Most haven assets strengthen in the morning Asian session, boosted by U.S. President Trump's decision to proceed with 25% tariffs on imports from Canada and Mexico from Tuesday. "With tariffs increasingly becoming a reality, expected market response was to derisk," IG's Yeap Jun Rong says in an email. This may spark a wave of retaliatory trade measures and could further intensify recent worries over U.S. economic growth, the market strategist adds. The U.S. 10-year Treasury yield falls 3 bps to 4.1257% and Australia's 10-year yield drops 8 bps to 4.2470%. Japan's yen strengthens broadly, with USD/JPY falling 0.4% to 148.93 and AUD/JPY dropping 0.6% to 92.54. Meanwhile, gold edges 0.1% lower to $2,888.34/oz. (ronnie.harui@wsj.com)