Exclusive-Satellite Chemical, Vinmar get US Govt Letters Preventing Ethane Unloading in China

Commodity

China–U.S. Trade War

Summary:

The letter could be perceived as the administration preparing to lift the restriction, industry sources and analysts said.

Ethane traders Satellite Chemical USA and Vinmar International have received U.S. government letters allowing them to load ethane on vessels destined for China but prohibiting unloading ethane in China without authorization, sources familiar with the matter said.

The letters received Wednesday from the U.S. Department of Commerce follow a licensing requirement imposed several weeks ago on ethane exports to China, stalling shipments and leading vessels to drift or anchor around the U.S. Gulf Coast.

The letter could be perceived as the administration preparing to lift the restriction, industry sources and analysts said.

Even so, there would likely still be some reluctance to load ethane - which is extracted from U.S. shale gas and primarily used as a petrochemical feedstock - as China-bound vessels could be stuck in limbo depending on how long the full-path restriction plays out, said AJ O'Donnell, an analyst at Tudor Pickering Holt & Co.

The U.S. also sent similar letters to Enterprise Products Partners and Energy Transfer on Wednesday, Reuters reported exclusively.

China's Satellite Chemical Co Ltd, the parent of Satellite Chemical USA, and Vinmar declined to comment.

Around half of all U.S. ethane exports head to China, and the halt in flows has pushed ethane prices lower on worries of domestic oversupply. The restrictions are likely to cut into profits of top ethane producers.

Supertanker Gas Bluebonnet loaded for China's Satellite Chemicals at Energy Transfer's Nederland facility in Texas on June 12 and was near the Panama Canal on Thursday, ship tracking data on LSEG and Kpler showed. At least nine other tankers were drifting or anchored along the U.S. Gulf, while two were moored at loading docks.

In the near term, export terminal operators such as Energy Transfer and Enterprise could benefit as they can push their buyers to load at the docks, industry sources said.

Still, Enterprises Morgan Point dock near Houston could see lower volumes as a result of the ethane restrictions, Tudor Pickering Holt & Co's O'Donnell said.

Chinese petrochemical firms use ethane, extracted from natural gas, as a feedstock because it is a cheaper alternative than naphtha, while U.S. oil and gas producers need China to buy their natural gas liquids as domestic supply exceeds demand.

Source: Reuters

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China–U.S. Trade War

Economic

Rates for shipping cargo containers from China to the U.S. have dropped by more than half since earlier this month, as imports rebounded less than expected after the slump that followed President Donald Trump slapping 145% tariffs on China.

Trump quickly reversed course by lowering the rate to 30%. That cost increase on goods from the nation's No. 1 ocean trading partner remains significant, especially at a time when U.S. economic data is signaling weakness.

Rates on the closely watched Shanghai-to-U.S. West Coast route appear to have found a near-term floor at around $2,500 per 40-foot container, after peaking early this month at around $6,000, Jefferies shipping analyst Omar Nokta said in a note on Thursday.

Shipping rates had surged to their recent peaks after Trump cut tariffs on China to 30% from 145%. That led U.S. importers to rush in new orders on goods they had halted because of the astronomical levy.

The retreat in shipping rates "is a sign that the recent surge in imports to the U.S. ... will fail to have the lasting impact we had initially expected," maritime consultancy Drewry said on Thursday.

Drewry's World Container Index fell 9% for the second consecutive week following five weeks of gains.

U.S. consumers have yet to feel the full effects of tariffs because many importers stockpiled goods ahead of the new duties - delaying price hikes.

Now, time is running out. Walmart, the world's largest retailer and top ocean importer, warned it would start raising prices in late May and June.

Federal Reserve Chair Jerome Powell on Wednesday said he expects tariffs to start stoking inflation this summer.

Tariffs have already risen on some goods, but there is a coming July 9 deadline for higher levies on a broad set of countries. No one is certain whether Trump will back down to a 10% baseline tariff that analysts are using as a minimum, or whether he will impose something more aggressive.

Some maritime experts say Trump has painted the U.S. into a corner with his trade war.

Import shipments to the U.S. virtually ceased in April, due to Trump's short-lived 145% tariffs on China. That volume is rebounding. But the bounce may be less than expected as tariffs begin to weigh on consumer spending and economic growth.

"The more volume goes down, the less economic activity goes up. The less volume goes down, the more inflation goes up," said John McCown, senior fellow at the Center for Maritime Strategy.

"There is actually no comfortable place to land."

Source: Reuters

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Cryptocurrency

Bitcoin (BTC) has traded between $100,000 and $110,000 for a seventh consecutive week due to slower profit realization, cooling transfer volume, and a cautious derivatives backdrop, according to a June 26 Glassnode report.

The report cited the market’s struggles to extend May’s all-time high rally, with the 30-day realized profit gauge peaking in early May, then declining as traders secured the third earnings wave of the cycle.

Realized profit

The cumulative realized profit for the cycle between 2023 and 2025 now totals $650 billion, already surpassing the entire period between 2020 and 2022. However, the current landscape signals reduced capital rotation.

Furthermore, on-chain transfer volume fell 32% from the late-May high to $52 billion, and spot exchange turnover sits at $7.7 billion, well below earlier breakout levels.

A cost-basis density heat map shows a dense accumulation zone between $93,000 and $100,000. Bitcoin Stays Confined to $100k–$110k Band as Realized Profit and Network Activity Recede_1

Bitcoin Stays Confined to $100k–$110k Band as Realized Profit and Network Activity Recede_1

Bitcoin briefly tested the upper edge of that band during a weekend dip to $99,000 but reclaimed the six-figure threshold as geopolitical tensions eased.

The report highlighted the cluster as structural support and noted that a decisive break could force holders in that range to capitulate and deepen a correction.

Derivatives reset as leverage sheds conviction

Futures liquidations spiked to $28.6 million for longs and $25.2 million for shorts during the whipsaw, flushing leverage on both sides. Open interest contracted from 360,000 BTC to 334,000 BTC, a 7% slide that cleared speculative excess.

Annualized funding rates and three-month basis levels continue to decline over a multi-week period, suggesting that traders are hesitant to re-establish aggressive long exposure despite elevated volume.

The report noted that momentum remains constructive while Bitcoin holds above cost-basis support but a breakout requires “a clear pickup in demand, activity, and conviction.” Until those inputs emerge, the price is likely to oscillate within the current $10,000 range.

Bitcoin was trading at $107,630 as of press time, moving towards the cap of the prevailing range.

Source: Cryptoslate

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Economic

China–U.S. Trade War

The White House Council of Economic Advisers chairman Stephen Miran told Yahoo Finance on Thursday that he expects the Trump administration to extend the tariff pause for countries negotiating "in good faith."

"I mean, you don't blow up a deal that's that's in process and making really good faith, sincere, authentic progress by dropping a tariff bomb in it," Miran told Yahoo Finance's Brian Sozzi.

In recent weeks, President Trump and administration officials have signaled a willingness to roll back the self-imposed tariff deadline of July 9 as pressure builds for talks to turn into pacts. From Canada to Japan, key trade deals are struggling to get over the finish line with just two weeks to go.

Trump and officials have warned that he could soon simply tell countries their tariff rates, raising questions about the status of negotiations. Miran said that he doesn't see the aggregate tariff rate falling materially below the 10% level in the long run, but some countries may negotiate more favorable duties while others will see a return of the steeper "Liberation Day" tariffs.

So far, Trump has firmed up a trade deal with the United Kingdom. In Canada, Prime Minister Mark Carney's government threatened to hike tariffs by late July on US imports of steel and aluminum, after Trump ballooned US levies on those metals. The countries are aiming for a deal by mid-July.

The European Union has also vowed to retaliate if the US sticks with its baseline 10% tariffs, according to a report in Bloomberg. Trump has threatened tariffs of up to 50% on EU imports. Trump Tariffs Live Updates: Trump may Extend Tariff Deadline, CEA Chair Stephen Miran Says_1

Trump Tariffs Live Updates: Trump may Extend Tariff Deadline, CEA Chair Stephen Miran Says_1

One sticking point in negotiations has come from Trump's disorganized approach to his tariff policies. According to Bloomberg, some countries have resisted signing deals without knowing whether Trump's other duties — including those on metals, chips, and other materials — would still apply to them.

Meanwhile, the US economy is still figuring out the effects of the tariffs while the White House is simultaneously making a push to get the "big, beautiful" tax bill passed in the Senate. Fed Chair Jerome Powell this week reiterated that the central bank is still waiting to see the effects of the tariffs on prices before cutting interest rates.

Source: Yahoo Finance

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Political

Central Bank

Federal Reserve Chair Jerome Powell mostly breezed through two hearings on Capitol Hill this week but now heads into a much bigger challenge: a potential threat that President Donald Trump could undermine his authority by soon naming his pick to head the central bank next year.

As Powell testified Wednesday before the Senate Banking Committee, holding generally cordial exchanges with lawmakers, Trump was at the NATO summit in The Hague lobbing his latest attacks on a man he had nominated for the Fed job nearly eight years ago.

“I think he’s terrible,” Trump said when asked during a news conference about his intentions for the next Fed leader. Trump then called Powell a “very average mentally person,” adding he has “a low IQ for what he does” and is “a very political guy.”

“I think he is a very stupid person, actually,” Trump said.

While Trump’s name-calling of Powell isn’t particularly new, the words now could signal action

Potential candidates

In the wake of the intense criticism, Wall Street has been buzzing over the potential for a “shadow chair,” or someone Trump could install as a central bank gadfly until Powell’s term expires in May 2026.

The talk has impacted markets: Traders on Thursday accelerated bets on rate cuts this year, with three reductions now at about a 60% odds, compared to a strong likelihood of two just a few days ago, according to CME Group data. Treasury yields tumbled at the shorter end of the curve, which is where the Fed has its influence, falling much more than those at the long end. The dollar also was down sharply against its global counterparts.

Trump confirmed that he has a list of potential Powell successors down to “three or four people,” without naming the finalists.

The cadre of potential candidates has become familiar: Treasury Secretary Scott Bessent, National Economic Council Director Kevin Hassett, former Fed Governor Kevin Warsh, and as a dark horse in-house pick Christopher Waller, who is a Trump appointee serving as governor and as of late has been an advocate for lower interest rates.

In some circles, Bessent has been considered a front-runner, though sources familiar with Trump’s thinking say that is not necessarily the case. Bessent himself has said he’s not interested in the job, though that could change if Trump would ask him to take it.

A report in The Wall Street Journal Wednesday evening suggested that former World Bank President David Malpass also is in the running. The Journal report indicated that Trump is considering naming the successor sooner than expected in an attempt to influence interest rate policy.

White House officials did not respond to a request for comment beyond Trump’s remarks at the news conference.

An active Fed

There are several issues making Trump’s desire to name a chair now problematic. For one, there are no immediate open positions, though Governor Adriana Kugler’s term ends in January 2026. Powell’s term as governor itself doesn’t expire until 2028, though the chair term runs out next year.

“This plan probably isn’t constitutional and would politicize the Fed for a few months before stability is restored next May,” Greg Valliere, chief strategist at AGF Perspectives, observed Thursday. “But the damage to the Fed’s independence would be considerable if Trump becomes a monetary back-seat driver, second-guessing Fed policies this fall.”

The latest Trump-Powell tumult comes during a busy time for the central bank.

Over the past several days, the Fed has taken two significant steps aimed at banking: removing “reputational risk” as a criteria for bank exams, a seeming nod to Trump’s complaint over politically motivated de-banking at large institutions, and the relaxing of reserve capital rules for systemically important banks. The latter measure was pushed by Vice Chair for Supervision Michelle Bowman, also a Trump appointee but someone who is thought to be at best an outside hopeful for “shadow chair” finalist.

Nevertheless, Trump’s biggest gripe, namely the Powell-led Federal Open Market Committee’s refusal to lower interest rates, remains a sticking point.

Chicago Fed President Austan Goolsbee told CNBC in a Thursday interview that the political waves are not a factor in decision-making, nor would be the naming of a shadow chair.

“That would have no effect on the FOMC itself,” Goolsbee said. “Just look at the minutes and transcripts. You can see, word for word, what the rationale are in making the decisions, and they’re not about elections and they’re not about partisan politics.

Source: CNBC

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Economic

President Donald Trump stepped up attacks on his handpicked Federal Reserve chairman on Wednesday, claiming Jerome Powell has “low IQ” and suggested that he has narrowed down the list of potential replacements to three or four people.

“He’s an average mentally person…Low IQ for what he does,” Trump said of Powell during remarks at a press conference at the NATO summit in the Netherlands Wednesday. “I think he’s a very stupid person, actually.”

Trump has been berating Powell all year, arguing the Fed’s reluctance to slash interest rates is costing the federal government hundreds of billions of dollars in interest.

Trump nominated Powell for the powerful position in 2017. He’s one of the only major Trump nominees whom President Joe Biden kept in place. Biden renominated Powell for another four-year term that expires in May 2026.

Asked about whether he’s started interviewing a replacement for Powell, Trump said: “Yeah, I know within three or four people who I’m going to pick.”

Trump added that Powell’s term is up “pretty soon fortunately, because I think he’s terrible.”

Powell has argued it’s too early to cut interest rates because many economists anticipate Trump’s tariffs will eventually boost the inflation rate, which is lower today than when Trump took office.

During a hearing on Tuesday, Powell poured cold water on calls from his colleagues to cut rates as soon as next month, noting that most forecasters “expect a fairly substantial wave of price increases to come through to the consumer.”

Commerce Secretary Howard Lutnick echoed Trump’s attacks on the Fed chair on Wednesday. “Jerome Powell – your job is to help Americans not hurt them, so do your job and CUT our absurdly high interest rates at your next meeting,” Lutnick said in a post on X.

Powell has also faced some defections from his own ranks this week.

Fed Vice Chair for Supervision Michelle Bowman on Monday downplayed the potential impacts of Trump’s tariffs on prices and said the US central bank should swiftly lower rates to preserve the labor market’s health.

On Friday, Fed Governor Christopher Waller said tariffs will likely only result in a “one-off” increase in inflation. Both Bowman and Waller are Trump appointees.

On Monday during a moderated discussion in Milwaukee, Chicago Fed President Austan Goolsbee said the Fed could lower borrowing costs again “if we do not see inflation resulting from these tariff increases.”

Powell, on the other hand, has cautioned that tariffs could start causing prices to rise starting in the summer. And if that happens, cutting rates could reignite inflation. At its policy meeting earlier this month, the Fed kept its benchmark lending rate unchanged for the fourth consecutive time.

“If we make a mistake, people will pay the cost for a long time,” Powell said in his testimony Wednesday.

Source: cnn

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Forex

There is a risk on tone to markets on Thursday, bond yields are lower, stocks are up slightly and oil prices remain stable. Geopolitical fears are receding, and there are rising hopes for chunky rate cuts from the Federal Reserve in the coming months and years.

Shell not interested in BP

The main news in the UK is Shell’s firm rebuttal that it will make any offer for BP. News circulated last night that talks about a purchase were ongoing, however, Shell has put this to bed, for at least 6 months. Shell published a detailed statement denying the recent reports, which triggers section 2.8 of the Takeover Code. For now, any takeover of BP by Shell will be a 2026 story, and is unlikely to happen in 2025.

Interestingly, BP’s share price is higher on Thursday, while Shell’s share price is slightly lower. YTD, BP and Shell are both underperforming the FTSE 100, which is partly down to the weaker oil price. BP’s share price is still underperforming its global peers, and now that Shell is out of the running as a potential buyer, we do not see BP repairing its position in the coming weeks or months.

While the speculation about Shell’s purchase of BP will die down, there is some logic in the oil majors bonding together. The oil price could remain suppressed for some time, as there is ample supply in the market, for both this year and next, according to the IEA. This is a tricky period for the oil majors, and there could be strength in combining reserves.

Dollar drops as rate cut expectations surge

The dollar is in focus on Thursday, after reports suggested that Donald Trump is considering announcing his pick for Jerome Powell’s successor as Fed chair as early as this Autumn, even though Powell’s term as governor does not end until May 2026. This could undermine Powell’s final months as chair. The consensus is that Trump will pick a dovish chair, who is likely to cut interest rates. This triggered a decline in US bond yields, which has weighed on the dollar.

The dollar index fell to a new three-year low, and is extending declines on Thursday. Trying to call a bottom for the USD seems pointless now, since it is closely linked to fiscal and political developments. The Trump administration said that the Fed should pursue a ‘growth-orientated monetary policy’, which suggests that the White House wants rate cuts as soon as possible.

Is the Fed’s independence at risk?

The interest rate futures market has rushed to price in deeper rate cuts from the Federal Reserve in the aftermath of this report. There are now 2.5 cuts priced in for this year, with a further 2.5 cuts priced in for next year. By the end of 2026, when the new governor of the Fed will be ensconced in their new role, US interest rates are expected to be a mere 3%. This is a level that would no doubt please President Trump, but it may also lead to questions about the Fed’s independence.

If the new chair is announced in the coming weeks, then we could see a shadow Fed emerge, which could undermine Powell’s message of slow and steady rate cuts. The governor-elect could also impact market sentiment, and ultimately their statements could become more important than Fed meetings as we move into the second half of the year. So far, the front runners to replace Powell include Kevin Warsh, Kevin Hassett, Christopher Waller (who called for a rate cut in July), and even Treasury Secretary Scott Bessent.

Why falling yields, and fiscal concerns could weigh on the dollar

The bigger picture suggests that the US dollar is declining in the face of high bond yields, as the US fails to attract capital. However, things could start to shift for US bonds. There has been a large shift lower in yields in recent days, which is weighing heavily on the greenback. Bond yields in the US fell on Wednesday and yields across Europe are also lower. In the last week, the 2-year Treasury yield has fallen more than 18 bps, which is helping to topple the dollar.

The dollar is the second weakest currency in the G10 FX space so far this week. It has made large declines vs the pound, as UK yields are likely to remain higher than their US counterparts for the foreseeable.

Nvidia reaches a fresh record as US stocks are in vogue

US stock market futures are pointing to a higher open later today. Tech stocks are rising sharply, as lower yields boost their attractiveness. Nvidia rose 4% on Wednesday to a fresh record high. It is now the world’s most valuable company, after rallying more than 60% since the April low. Bitcoin is rising in line with US stocks and is also moving towards its record high. This is also supporting Coinbase, which is the top performer on the S&P 500 so far this week.