Latest news with #commodityprices


South China Morning Post
3 days ago
- Business
- South China Morning Post
China's US$167 billion dam, anti-involution campaign to sustain stock rally, investor says
China's 1.2 trillion yuan (US$167.4 billion) hydropower project in Tibet and efforts to curb capacity in some industries could sustain a market rally – which has driven shares to three-year highs – and pave the way for bolder policy moves to support growth, according to a veteran investor. The massive investment combined with a so-called anti-involution campaign to eliminate excessive output in the solar and electric vehicle (EV) sectors would probably boost commodity prices by restricting supply, said Hong Hao, chief investment officer at Lotus Asset Management, which has US$500 million of assets under management. Rising commodity prices could alleviate deflation in producer prices and foreshadow an improvement in household spending, he added. 'Historically, rising commodities have led China's producer-price index cycle by about six months,' said Hong. 'We expect such a correlation to persist. The producers will hire more [employees], consumers will earn more and spend more. Eventually, if everything falls into place, a virtuous price and growth cycle should rejuvenate [the economy].' Hong, who previously worked for China International Capital Corp and Grow Investment Group, correctly predicted a stock bubble would burst in 2015. 01:19 China breaks ground on world's largest hydropower dam in Tibet China breaks ground on world's largest hydropower dam in Tibet Beijing's investment in the Yarlung Tsangpo River project, as well as the anti-involution drive, might convince investors that these two events could further bolster the prospects of Chinese stocks. The Shanghai Composite Index and the Hang Seng Index both reached their highest levels in three and a half years this month, buoyed by easing US-China trade tensions and better-than-expected first-half gross domestic product growth. The Yarlung Tsangpo project – reminiscent of the Hoover Dam, built on the Colorado River during the Great Depression – sends a signal to investors that further policy support for the economy was imminent, as a boost from trade-in programmes subsidising household appliances and EVs was quickly fading, Hong said.


Reuters
7 days ago
- Business
- Reuters
Markets bet Beijing is getting serious about China's overcapacity
BEIJING/HONG KONG, July 24 (Reuters) - Commodity prices from steel to polysilicon have surged this month as Chinese investors bet Beijing is finally serious about addressing overcapacity across the world's second-largest economy. Prices for nine industrial commodities including coal, steel, polysilicon, a building block for solar panels, alumina and lithium carbonate have climbed by 10% to 68% this month while share prices in steelmakers, solar panel manufacturers and clean energy companies have outpaced the benchmark CSI 300 Index. The moves coincide with Beijing's call on July 1 to tackle "disorderly price competition," or overcapacity, and an acknowledgement it intends to deal with a persistent problem fuelling deflation at home and trade barriers abroad. Since then, state media has amplified that message with warnings against involution, a now-popular reference to competition so fierce it becomes self-destructive. "I think that addressed a big concern for investors, which is the profit margin squeeze on some of the very promising sectors," said Tai Hui, Asia Pacific chief market strategist at JPMorgan Asset Management. Champions of the old economy including steel and coal and newer industries such as solar panels and electric vehicles are grappling with overcapacity and falling prices, which had previously prompted many warnings but little action. This month, some of the reactions from ministries, regulators and local governments suggest Beijing's signal is being received. Two days after a top-level policy meeting on July 1 called for action, the industry ministry pledged to curb price wars in the solar sector. China's photovoltaic industry index is up about 11% this month. (.CSI931151), opens new tab Polysilicon prices are up 68% after local media reported that the two biggest producers were preparing to buy up smaller rivals and consolidate the sector. Last week, a lithium miner in northwest China was temporarily shut for non-compliant mining, leading speculators to bet that more closures could follow. This week, prices for coking coal used to make steel rose to their daily limit for three consecutive sessions after the National Energy Administration ordered inspections at mines to check for excess production. To be sure, Beijing has pushed supply-side reforms before, most recently about a decade ago to cut production in the cement, steel, glass and coal industries. However, the task is more difficult this time due to higher levels of private ownership in many of these industries, misaligned incentives at the local and national levels, and limited options for other sectors to absorb lost jobs. It's unclear how far authorities are determined to go in curbing production and which other sectors they may target. China's leadership is sending a clear and positive signal about their commitment to address overcapacity, but progress is likely to be much slower this time around and it could take a year or two to see improvement in company profits, said Laura Wang, Chief China Equity Strategist for Morgan Stanley based in Hong Kong. "In the next three to six months, we are relatively conservative in terms of how much actual capacity shutdown you would be able to see," Wang said.

RNZ News
23-07-2025
- Business
- RNZ News
NZers will need to deal with high butter prices for longer
food money 22 minutes ago A dairy analyst says New Zealanders will have to put up with high butter prices for the time being, until commodity prices and consumer demand subsides. Rabobank senior dairy analyst Michael Harvey spoke to Charlotte Cook. Tags: To embed this content on your own webpage, cut and paste the following: See terms of use.


Times of Oman
11-07-2025
- Business
- Times of Oman
Wholesale inflation likely rose to 0.8% in Jun on food, fuel price surge: Union Bank of India Report
New Delhi: Wholesale inflation in India likely surged to 0.80 per cent year-on-year in June 2025 from 0.39 per cent in May, mainly due to a month-on-month rise in food, fuel and core inflation, according to a report by Union Bank of India. The report highlighted that core WPI, which excludes food and fuel, rose sharply from 0.86 per cent in May to 1.63 per cent in June. It stated "June'25 WPI likely spiked due to commodity prices led rise in core inflation, Wholesale Price Index (WPI), as per our projections, reversed from the recent low of 0.39 per cent in May'25 and accelerated to 0.80 per cent (y/y) in June'25". While food inflation moderated on a yearly basis, month-on-month prices saw an uptick. The food WPI eased to 0.60 per cent in June from 1.72 per cent in May. On the other hand, fuel inflation remained in the deflationary zone, but the pace of contraction slowed. Fuel WPI was likely at (-)1.82 per cent in June compared to (-)3.87 per cent in May. The report noted that the rise in June's WPI was largely driven by commodity prices, which led to an increase in core inflation. However, the report also flagged several risks that could push inflation higher in the coming months. The bank said that global commodity prices are expected to stay volatile due to uncertainties around tariff wars and ongoing geo-political tensions. While ample global supply and weak demand may limit the upside, any further escalation in conflicts or trade-related tensions could impact price stability. The report also pointed out that agricultural commodity prices could remain uncertain depending on the progress of the monsoon. Weather-related disruptions and any geopolitical developments affecting the supply chain in agriculture may pose short-term upside risks to wholesale inflation. Overall, the report outlined that while wholesale inflation likely remained moderate in June, the outlook remains uncertain due to potential risks from global and weather related factors.


Bloomberg
07-07-2025
- Business
- Bloomberg
Exxon Sees $1.5 Billion Earnings Hit From Lower Oil, Gas Prices
Exxon Mobil Corp. expects lower oil and gas prices to reduce the company's earnings by about $1.5 billion as a volatile quarter for commodity prices weighs on second-quarter profits. Oil prices pulled down earnings by about $1 billion while gas contributed another $500 million hit when compared to the first quarter, the Spring, Texas-based company said in a statement Monday. European rival Shell Plc 's shares fell 3.3% Monday after guiding to 'significantly lower' trading earnings than the previous quarter.