WTI crude oil futures dropped to around $66.6 per barrel on Monday as weak economic data from China and uncertainty over U.S. tariffs fueled demand concerns. China’s consumer prices fell for the first time in 13 months, while producer price deflation persisted, underscoring deflationary pressures in the world’s top crude importer. Oil remains under pressure as President Trump’s shifting tariff policies raised concerns about economic growth and energy demand. While Trump delayed the 25% tariffs on most goods from Mexico and Canada until April 2, Canada’s retaliatory measures remained, and China’s tariffs on U.S. farm goods took effect today. Further weighing on crude, OPEC+ last week agreed to proceed with oil output hikes in April. However, losses were capped as Trump said the U.S. would increase sanctions on Russia if it fails to reach a ceasefire with Ukraine. Russia's Deputy Prime Minister Novak also indicated that OPEC+ could reverse the decision in the event of market imbalance.
Gold held steady around $2,910 per ounce on Monday, supported by a weaker dollar and safe-haven demand amid widespread fears of a broader trade war. While U.S. President Donald Trump postponed the 25% tariffs on many goods from Canada and Mexico for a month, Canada’s retaliatory measures remain in place, and China's tariffs on certain U.S. agricultural products came into force today. Adding to investor jitters, in a Fox News interview on Sunday, Trump refused to say whether the economy is facing a recession or rising inflation. Meanwhile, Federal Reserve Chair Jerome Powell on Friday said officials don’t need to rush to cut interest rates despite increased uncertainty in the U.S. economic outlook. Investors now await a crucial U.S. inflation report, due later this week, for further clarity on the Fed’s rate path.
Steel rebar futures eased to CNY 3,250 per tonne from the over one-month high of CNY 3,340 touched on March 3rd as markets scaled back expectations on the magnitude of capacity cuts for the year. During its Two Sessions conferences, the Chinese government announced it will promote a restructuring for domestic steel production to prevent oversupply amid as China scales back new construction projects and protectionist policies limit mills' ability to offload steel to foreign consumers. Still, the lack of insights on the extent of capacity cuts by the CCP limited expectations of aggressive controls, compared to the earlier speculation that 50 million tons of annual output would be chopped. This comes as China's steel exports grew nearly 7% in the first two months of the year to 17 million tons, despite dumping levies on Chinese steel were raised by Vietnam and pledges of similar measures from South Korea, Brazil, and Chile.
