China's Industrial Profits Rebound After Three-Month Slump

Energy – US LNG plants reduce gas intake

US natural gas prices continued their rally yesterday, with front-month Henry Hub settling almost 29% at $6.80/MMBtu. This takes the total gains since 19 January to almost 120%. Yet the move in US natural gas is even more astonishing when looking at the spot Henry Hub price, which briefly broke above $30/MMBtu in recent days. It's been driven by a severe winter storm across the US. This is impacting natural gas production and boosting heating demand. The storm is estimated to have hit around 11% of US natural gas production. The key question for the outlook, obviously, is how long this disruption lasts. There are some signs that production is already recovering, with gas output from the Permian estimated to be up 11% day-on-day yesterday. If this trend continues, it suggests prices have likely peaked.

Developments in the US natural gas market remain a concern for the European market, as supply disruptions could weigh on US LNG exports to Europe. In recent days, US LNG plants have significantly reduced their gas intake, estimated at around 48%, which will translate into reduced LNG exports from these plants. TTF continues to trade at a healthy premium to Asian LNG to ensure LNG cargoes move into Europe, where storage has now fallen below 45% full. It's looking increasingly likely that storage will end the 25/26 heating season at below 25% full. This would also be below the levels seen in 2022. The difference between 2022 and 2026 is that we are currently seeing significant LNG supply ramp-ups, which should help soothe supply concerns to some extent.

Oil prices settled lower yesterday, with ICE Brent closing down more than 0.4%. The US winter storm should also support demand for heating fuels, as reflected in the heating oil crack. Freezing conditions will disrupt US oil output. The weather has also affected refinery operations. So, refinery run rates have fallen in recent days.

There are also signs that the honeymoon phase between the US and the new Venezuelan leader may be coming to an end, with President Delcy Rodriguez saying Venezuela has had enough of US interference. While these comments may be more for internal consumption, they are certainly worth keeping an eye on, as they could alter the outlook for Venezuelan oil supply.

Kazakhstan's oil output is set to recover, with Tengizchevroil restoring power to its Tengiz field. Operations at the Tengiz and Korolev fields, which produced around 890k b/d over the first three quarters of 2025, were halted last week due to power issues. Meanwhile, the completion of repair work at the CPC terminal should also support a recovery in export flows. A recovery in these flows should improve availability in the prompt market, putting some pressure on the Brent prompt spread, which has strengthened significantly through January. The strength in timespreads has been at odds with estimates for a large oil surplus.

Metals - Silver smashes another record above $110/oz

Silver surged more than 12% in its biggest one-day jump since 2008, hitting a new record above $110/oz, before giving back some of these gains. The rally reflects both its precious metal appeal and tightening physical conditions: inventories remain low, lease rates are elevated, and the market has entered yet another year of supply deficits. Prices are now up around 60% year‑to‑date after a nearly 150% surge in 2025. Yet risks remain, with high prices potentially triggering industrial demand destruction and silver's tendency to overshoot, keeping volatility high. The gold–silver ratio has now slipped below 50, its lowest level since 2011, underscoring silver's dramatic outperformance.

Gold also extended its rally above $5,100/oz at one stage yesterday. It was supported by Federal Reserve rate cut expectations, a weaker dollar and persistent geopolitical risks. With the central bank buying holding strong and real rates likely heading lower, the medium-term outlook remains favourable. As political uncertainty elevated, from President Trump‑driven policy surprises to a new Fed chair to the US midterm elections later this year, gold should continue to find investor support.

Source: ING

Former US President Donald Trump has signaled a potential tariff hike to 25% on goods imported from South Korea. He cited the Korean legislature's alleged failure to finalize a trade agreement concluded with the United States last year as the primary reason for the move.

The current tariff rate on South Korean exports under the existing agreement is 15%. In a social media post on Monday, January 26, Trump stated the increased tariff would apply to sectors including cars, lumber, and pharmaceuticals, among other "Reciprocal TARIFFS."

Trump's Rationale and Market Impact

Trump claimed that South Korea's legislature is not honoring its side of the trade deal. "In each of these Deals, we have acted quickly to lower our TARIFFS as agreed," he stated. "We expect our Trading Partners to do the same."

Analysts immediately weighed in, warning that such a tariff increase could severely impact major South Korean companies. Hyundai Motor Co., for example, shipped 1.1 million cars to the U.S. in 2024 and would be significantly affected by the change.

It is important to note, however, that the administration has not issued any official notice authorizing the execution of these suggested tariff amendments.

A Pattern of Global Trade Pressure

Reports suggest this move is part of a broader strategy by Trump to escalate trade tensions with key U.S. allies. His statements targeting South Korea are consistent with other recent threats made against major trading partners.

Canada and Europe Targeted

Trump has also signaled plans to impose 100% tariffs on Canadian products if the country finalizes a trade agreement with China.

Furthermore, he has indicated that he is considering new tariffs on goods from Europe. This consideration is reportedly in line with his strategic focus on Greenland, the world's largest island and a territory within the Kingdom of Denmark.

Sanctions Pressure via Iran

To intensify pressure on Tehran amid anti-government protests, Trump also announced his intention to impose tariffs on exports from any nation that trades with Iran. This tactic uses secondary sanctions to isolate the Iranian government.

Domestic Political Headwinds

While Trump’s trade policies create global market uncertainty, their long-term viability faces significant challenges within the United States.

Supreme Court Scrutiny

Analysts note that an upcoming Supreme Court decision could render these latest tariff threats insignificant. If the court rules against him, Trump's ability to unilaterally adjust import taxes could be restricted. A hearing on the matter is scheduled for February 20 of this year.

Public and Party Concerns

Recent polls suggest that many Americans are frustrated with Trump's leadership approach, a sentiment observed ahead of the midterm elections scheduled for Tuesday, November 3, 2026.

Even the former president's allies have reportedly raised concerns about his high-pressure tactics. They have pointed to his interest in Greenland, a fatal shooting by federal agents during an immigration crackdown in Minneapolis, and a US military operation that resulted in the arrest of Venezuelan President Nicolás Maduro. Some allies have argued that Trump should soften his hardline stance, particularly on deportation.

China's Anta Sports Products (2020.HK) said on Tuesday it would buy a 29.06% stake in Puma (PUMG.DE) from the Pinault family for 1.51 billion euros ($1.79 billion), making it the biggest shareholder in the German sportswear maker.

The Hong Kong-listed company will pay 35 euros per share in cash for 43 million Puma shares, Anta said in a stock exchange filing. The price is a 62% premium to Puma's 21.63 euros closing share price on Monday, up nearly 17% in the session.

Reuters was the first to report the deal earlier this month.

Anta said it believed Puma could increase its international competitiveness and build its brand recognition with the Chinese company as its largest investor.

It said Anta would seek Puma board seats once the deal was finalised.

"Its (Puma) global business footprint and focused positioning in sports categories are highly complementary to the group's existing multi-brand and specialised business," Anta said in a statement.

Anta has a track record of acquiring and revamping Western sports and lifestyle brands, and in 2019, it led a consortium to buy Amer Sports, owner of racquet maker Wilson and mountain sports specialist Salomon.

Reuters reported in early January Anta had offered to buy about 29% of Puma from the Pinault family and had secured financing for the acquisition, although talks had at the time stalled over valuation.

The transaction comes as the German sportswear group struggles to revive sales and investor confidence under its new CEO, Arthur Hoeld.

Artemis, run by Francois-Henri Pinault, chairman of luxury group Kering (PRTP.PA), had previously described its Puma stake as non-strategic. The Pinault family acquired the holding from Kering in 2018, when the group repositioned itself as a pure luxury player.

Puma has been under pressure as demand weakened, and recent sneaker launches, including the Speedcat, failed to generate the momentum executives had hoped for. Hoeld, who took over last year, has outlined a turnaround focused on brand heat, performance products, and cost discipline.

The deal is subject to antitrust clearances, shareholder approval at Anta, and regulatory approvals in China and other jurisdictions. Anta said it expects to convene an extraordinary general meeting, with closing targeted after conditions are met.

($1 = 0.8421 euros)

Source: Reuters

Despite persistent US pressure and sanctions, India's appetite for discounted Russian oil has proven remarkably resilient. While market watchers once predicted a sharp drop-off, a new status quo suggests these significant crude flows could continue well into 2026, driven by compelling economics for New Delhi.

Indian Oil Minister Hardeep Puri recently highlighted the complex global energy landscape, noting that despite an abundance of supply, the world has "become more challenging." Speaking ahead of a major energy summit in Goa, Puri emphasized that market dynamics ultimately determine India's purchasing decisions—a clear signal that price remains a top priority.

This places the dilemma over Russian crude at the center of upcoming discussions, alongside topics like the global gas supply surge and a renewed interest in nuclear energy.

Navigating Sanctions and Market Realities

Washington's efforts to curb Moscow's oil revenue have certainly had an impact. Before Russia's 2022 invasion of Ukraine, India sourced most of its crude from the Middle East. In recent months, there has been a partial return to these traditional suppliers as a way to rebalance its import portfolio.

State-owned Bharat Petroleum Corp. (BPCL), for instance, has issued tenders for long-term supplies of Abu Dhabi's Murban, Iraqi Basrah, and Omani crude. Meanwhile, Indian Oil Corp. (IOC) has increased its purchases on the spot market.

However, the allure of cheap Russian oil is difficult to ignore. As US sanctions on major Russian producers cause the price of benchmark Urals crude to fall, Indian refiners are finding the discounts irresistible. Even the typically conservative Reliance Industries Ltd. has placed new orders for non-sanctioned Russian cargoes, joining IOC, BPCL, and the sanctioned refiner Nayara Energy Ltd. in continuing these purchases.

Analyst View: Russian Imports Are Here to Stay

Market experts believe that while the volume of Russian oil heading to India may have dipped from its peak, it is unlikely to disappear.

"We know that oil will always find a way," said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management. He noted that while US sanctions and EU bans are affecting the market, he "strongly doubt[s] that India will give up importing Russian oil."

At its highest point, India imported over 2 million barrels of Russian crude per day. That figure fell to around 1.3 million barrels per day in December and is expected to hold steady this month. This is a far cry from the near-zero levels some analysts predicted in October after the US blacklisted Russian energy giants Rosneft PJSC and Lukoil PJSC.

Naveen Das, a senior crude oil analyst at Kpler Ltd., predicts India will "maintain a healthy baseload of Russian crude." He expects this to be part of a broader strategy that includes expanding deals with Middle Eastern suppliers and exploring new opportunities, such as non-sanctioned Venezuelan oil.

"India will continue to look out for the best prices and best margins for its refiners, strategically changing its buying slate," Das added.

What Could Change India's Strategy?

Beyond direct disruptions to Russia's export capabilities, such as Ukrainian attacks, only a few key factors could significantly alter India's current approach:

• A US-India Trade Deal: If a comprehensive trade agreement is signed, New Delhi might adopt a more cautious stance on Russian imports to align with its strategic partner. Former US President Donald Trump recently mentioned a "good trade deal" was forthcoming, but offered no specifics.

• Geopolitical Diversification: India is keen to cultivate trade and political ties beyond its long-standing relationship with Russia. As its refining capacity is forecast to grow from 258 million to 309.5 million tons a year by 2030, diversifying its energy sources is a strategic imperative. Puri noted that India now has 41 supply sources, up from 27 just a few years ago.

• A Global Oil Glut: The current oversupply in the global oil market gives India substantial leverage. Even without Russian discounts, India has plenty of other options available.

As one of the world's most important demand hubs, India is in a powerful negotiating position. "What is key to remember is that in a world of oversupplied oil currently... India is still one of the key demand hubs," explained Kpler's Das. This gives the country a "fair amount of optionality," meaning it won't be punished for adjusting its purchasing strategy as it sees fit.

These dynamics will be a central theme at India Energy Week, which runs from January 27 to January 30.

Canada and India are set to revive their energy partnership, agreeing to expand trade in oil and gas as the two countries work to reset their relationship following a period of diplomatic tension.

The agreement will see Ottawa commit to increasing shipments of crude oil, liquefied natural gas (LNG), and liquefied petroleum gas (LPG) to India. In return, New Delhi will boost its exports of refined petroleum products to Canada.

A New Chapter in Energy Cooperation

The deal will be formalized at a meeting between Canadian Energy Minister Tim Hodgson and Indian Petroleum and Natural Gas Minister Hardeep Singh Puri during India Energy Week in Goa. This event serves as the platform to relaunch the "ministerial energy dialogue," a key channel for cooperation that had become inactive during the recent diplomatic dispute.

Beyond oil and gas, the two ministers will also commit to several key initiatives:

• Facilitating greater reciprocal investment in their respective energy sectors.

• Exploring collaboration in future-facing industries like hydrogen and biofuels.

• Partnering on battery storage, critical minerals, and modernizing electricity systems.

• Investigating the use of artificial intelligence to optimize the energy industry.

The Strategic Pivot: Diversifying Canada's Exports

This renewed push is a cornerstone of Prime Minister Mark Carney's strategy to diversify Canada's export markets, particularly as trade tensions with the United States escalate. The move reflects a broader shift in his government's foreign policy toward a more pragmatic, economy-first approach with major partners in Asia.

The relaunch of the energy dialogue signals that both governments recognize significant untapped potential and strategic value in strengthening an economic relationship that had been allowed to drift.

Untapped Potential in Bilateral Trade

This energy pact is part of a larger diplomatic reset. Prime Minister Carney is expected to visit India in the coming weeks, building on the momentum from November when he and Prime Minister Narendra Modi restarted negotiations for a comprehensive economic partnership agreement.

While two-way goods trade between Canada and India reached C$13.3 billion ($9.7 billion) in 2024, Ottawa believes there is substantial room for growth. This is especially true in the energy and resources sector. For instance, India currently accounts for just 1% of Canada's critical minerals exports, a figure that highlights the scale of the opportunity.

Canada's infrastructure is increasingly geared toward Asian markets. The country began exporting LNG to Asia in June 2025, and its LPG terminals offer relatively short shipping routes to India. Furthermore, the expansion of the Trans Mountain pipeline provides a more direct path for Canadian crude shipments to reach Indian ports, though many barrels still transit through the U.S. Gulf Coast.

Balancing Global Trade Pressures

Prime Minister Carney's upcoming India visit follows a recent trip to Beijing, where he and President Xi Jinping agreed to lower tariff barriers. That move prompted a sharp reaction from U.S. President Donald Trump, who threatened to impose 100% tariffs on Canadian goods if Ottawa "makes a deal with China." Carney has clarified that Canada is not pursuing a formal free trade agreement with Beijing.

Gold prices surged to new records this week, with spot gold briefly topping $5,111 per ounce. The rally is being fueled by a cocktail of market uncertainty, driven primarily by President Donald Trump's aggressive trade policies and simmering geopolitical tensions.

Investors are also adopting a cautious stance ahead of a U.S. Federal Reserve meeting this week, further bolstering demand for the safe-haven asset.

Precious Metals Rally Amid Market Uncertainty

During early Asian trading on Tuesday, spot gold held firm at $5,040.74 an ounce, following its all-time high of $5,111.11 on Monday. April gold futures, however, saw a slight pullback, dipping 1% to $5,072.86 an ounce.

The positive sentiment extended to other precious metals. Spot silver climbed 3.2% to $107.1735 an ounce, while spot platinum rose 1.4% to $2,621.21.

Trump's Trade Tariffs Fuel Safe-Haven Demand

A primary catalyst for the surge in gold is the escalating trade friction initiated by President Trump. Investors are flocking to assets like gold as the administration targets key U.S. allies with new tariff threats.

Recent moves that have unsettled markets include:

• Canada: Trump threatened 100% tariffs on Ottawa, objecting to a potential trade deal between Canada and China.

• South Korea: The president announced an increase in tariffs on South Korean goods to 25%, citing delays in the enactment of a recent trade agreement.

Although Trump has softened his stance on tariffs against Europe and his demands for Greenland, the unpredictable nature of his trade policy continues to keep global markets on high alert.

Fed Meeting and Mideast Tensions Add to Risk

Compounding the market's anxiety is the upcoming U.S. Federal Reserve meeting. While the central bank is widely expected to hold interest rates steady on Wednesday, traders remain cautious, contributing to a general risk-off sentiment that benefits gold.

Meanwhile, geopolitical risks are also providing a tailwind for precious metals. The arrival of U.S. ships in the Middle East has intensified tensions with Iran, further bolstering demand for gold as a hedge against potential conflict.