Fear of ‘Hormuz Strait’ in the markets

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Lerato Khumalo

With Israel’s large -scale air strikes for Iran’s nuclear facilities and missile infrastructure, Tehran’s response to Tel Aviv with ballistic missiles on the same night increased the demand for “safe port” beings, while export concerns in oil.

While US President Donald Trump called on Iran to reach an agreement on the nuclear program in order to “end the planned attacks”, the latest developments increased concerns that shipments can be disrupted in the Hormuz Strait, where about 5 -thirds of the world’s oil passed.

Analysts stated that Iran could pay heavy fees if they block the Hormuz Strait, while the country’s economy is largely dependent on the oil exports made by sea and that this step could harm its relations with Iran’s only major oil customer, China.

Analysts stated that the increase in oil prices will increase the product costs, and that the possible monetary policy changes of the big central banks after these developments have settled at the focus of investors.

In addition to geopolitical developments, US President Donald Trump in a completed week, in his sharing from his Truth Social account, a trade agreement with China, including rare earth elements, was subject to the approval of the two countries’ leaders and the US products will apply a total of 55 percent of China products to the US products. “We will work closely for both countries by working closely with President Shi.” He used the expression.

However, the US central bank (FED), which will be announced next week, has also settled at the focus of investors.

Consumer Price Index (CPI) in the USA, 0.1 percent on a monthly basis in May, increased by 2.4 percent on an annual basis to be below expectations. In the money markets, the FED will leave the interest rate at the range of 4.25-4.50 percent at the next week’s meeting, while the probability of going to interest rate reductions in September is priced as 86 percent. A total of two discounts expectations by the end of the year stand out.

With these developments, the US 10 -year bond interest completed the week from 4.42 percent with a decrease of 9 basis points, while the dollar index decreased by 1 percent to 98.2.

Platinum at the summit

Precious metals gained value except for the increasing safe harbor demand with the increase in inflation data in the United States in the United States and increased geopolitical tensions in the Middle East.

The price of ounce of gold gained value at the demand for safe port, 3 thousand 433 dollars, while the price of platinum ounce of international markets with 1308 dollars of 4 years saw the highest level.

The price of ounce of platinum has seen the highest level since February 2021, and since the beginning of the New Year, it has increased by more than 40 percent to the most valuable metal. Gold rose 30 percent, silver 25 percent, Palladium rose above 16 percent. While supporting the supply shortage and increasing demand prices on the platinum, uncertainty about Trump’s tariff plans and geopolitical tensions continue to increase interest in precious metals.

Palladium prices gained value in the first half of the year, but continued to remain below the October 2024 summit. Analysts, paladium demand is largely connected to gasoline vehicles and the transition to electric vehicles limited the price increase, while the demand remains weak paledium, platinum alternatives such as alternatives, he said.

With these developments, all precious metals lost value, prices on ounce -basis increased by 5 percent in platinum, 3.4 percent below and 0.9 percent in silver, while paladium lost 1.9 percent.

Chinese concerns and US pricing

Some metals were supported by positive macroeconomic data from the United States in the completed week, while recession expectations and concerns about China demand had an impact on pricing.

While China’s weak imports and industrial data negatively affect the appearance of demand in some metals, the US trade war has increased the pressure on prices, causing some metals to turn the direction of some metals into the USA.

On the other hand, the news stream that Trump will increase metal import taxes continues to be the focus of investors.

With these developments, some of the metals in the market in the market this week prices decreased by 1.6 percent in copper basis, 1 percent in zinc and 1.9 percent in nickel, 0.2 percent in bullet and 1 percent in aluminum increased.

Markets’ Fear of ‘Hormuz’

Oil prices, Israel’s large -scale air strikes against Iran, along with the increase in the concerns that oil exports may be interrupted, said harsh rise in the week.

The Iranian National Oil Refinery and Distribution Company said that refining and storage facilities were not damaged and that the activities are ongoing. On the other hand, Brent oil prices recorded the most powerful rise since October 3, 2022 on a weekly basis due to the developments in question and completed the week at $ 73.7.

Iran, a member of the Organization of Oil Exporting Countries (OPEC), produces approximately 3.3 million barrels per day, while exporting more than 2 million barrels.

Analysts stated that other countries that produce OPEC and oil have a spare capacity equivalent to Iran’s production, which could compensate for possible supply cuts, and that the exports of Saudi Arabia, Kuwait, Iraq and Iran were attached to a narrow passage such as the Strait of Hormuz, increasing the concern of the shipment.

With these developments, the barrel price of Brent oil increased by 11.1 percent this week, while the price of natural gas traded on the New York Commodity Exchange in the British Thermal Unit (MMBTU) lost 2.5 percent.

In agricultural commodity prices, the US Department of Agriculture (USDA) issued reports and news streams from regions had an impact on pricing.

According to USDA data, the ratio of “good/very good” class in winter wheat increased to 54 percent and realized the best start of June for the last six years. Harvest remains at 4 percent, export estimated by 25 million bustles increased in the report 825 million bustles, at the end of the season’s stock estimation was withdrawn 898 million bustles.

97 percent of the cultivation in corn was completed, while 71 percent of the product took place in the “good/very good” class. 90 percent of the fields in soybeans are planted, while 68 percent of the crop was reported in a positive class.

The production estimation in rice was reduced by 4.9 million CWT, while the expectation of imports increased to a record level of 50.7 million CWT. Sugar beet limits the decrease in yield, while cotton global production is expected to decrease by 3 percent.

Analysts emphasized that positive planting conditions and increasing yield were effective on cereal prices and Chinese demand and weather conditions will be decisive in the course of prices.

With these developments, prices per clan in Chicago Commodity Exchange increased by 1.1 percent in soybeans, 0.2 percent in corn and 0.9 percent in rice, decreased by 2.1 percent in wheat.

In Brazil, 2025 Robusta coffee harvesting with a strong travel of yield expectations, while increasing supply coffee prices are putting pressure on the prices.

The existing rainfall in the intermediate cocoa harvest on the Ivory Coast supports the yield by maintaining the moisture of the soil. Farmers, until the end of June, the continuation of balanced weather conditions is critical for the quality of product quality, with the appropriate conditions with high -harvest high yields, he said.

In the US commodity exchange Intercontinental Exchange, prices on libre, increased by 0.3 percent in sugar, decreased by 2.7 percent in coffee and 0.5 percent in cotton. The price of cocoa per ton completed the week with a decrease of 12.5 percent.