Daily Brief Macro: Market Intel from a Commodity Trader & China Analyst and more

• Discussion shifts towards the market consensus on China, highlighting a cyclical stabilization within a structural slowdown.
• China’s credit cycle, green shoots in the economy, and property market are discussed.
• Speaker shares insights on the Chinese real estate sector, mentioning a contraction and the need for new areas of investment.

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• We provide an analysis of the top 100 companies with the highest percentage of treasury shares as a percentage of market cap. 
• These 100 companies are prime targets of tender offers and M&As. Many of these companies have low PBR ratios.
• Number five in this list is Telcoware (078000 KS) which just announced a tender offer by the CEO who is trying to take the company private. 

• Steve Lowe, former managing director at Scotiabank, discusses his experience leading the iconic Scotia metals business
• Scotiabank’s success in the gold market was attributed to its broad scope and involvement in the physical business
• Focus on client service and cooperation among regions contributed to Scotiabank’s success in the gold market

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• Signals about underlying inflationary pressures remain the most interesting aspect of another unrevised euro area print of 2.2% in April, with the core at 2.75%.
• The median impulse was also steady at about a 2% annualised pace as national moves offset. Other statistical measures and wage growth remain stuck above the target.
• We expect the ECB to cut again in June, alongside forecasts that will be lowered due to Euro appreciation. The tight labour market should discourage cutting to a loose setting.

• Asia’s base oils demand could see earlier-than-usual seasonal slowdown in face of weak lube consumption and improving supply.
• Asia’s lube demand falls at end-Q1 2025 from year-earlier levels.
• Demand weakness shows signs of extending into Q2 2025 as uncertainty about US tariffs compounds signs of slowing economic growth.

• Asia’s heavy-grade base oils prices hold firm versus feedstock/gasoil prices.
• Asia’s Group II light-grade prices slip vs feedstock/gasoil prices faster than heavy grades and faster than Group I light grades.
• Supply-demand fundamentals likely to improve for light and heavy grades in coming weeks as plant maintenance draws to a close and demand slows.

• We summarize our gleanings from the Champion Iron (CIA AU) presentation, which captures the cost curve and other interesting details on the DRI market. 
• After declining below 100 USD/ton for 2 weeks, iron ore prices have slowly inched up towards 100 USD/ton, maintaining their level at the high end of the cost curve. 
• A 100 USD/ton level bodes well for the cash flows of the larger low-cost players like Vale (VALE US), Rio Tinto Ltd (RIO AU). 

• For the week ending 16/May, U.S. natural gas prices dropped by 12.2% on the back of mild weather, rising output, and lower LNG export flows.
• For the week ending 09/May, the EIA reported that U.S. natural gas inventories rose by 110 Bcf, moderately lower than analyst expectations of a 111 Bcf build.
• Henry Hub OI PCR remained unchanged at 0.92 on 16/May compared to 09/May. Call OI increased by 3.5% WoW, while put OI grew by 3.3%.

• US$16.9 mn initiative to enhance productivity and quality in Northeast  
• Stress on sheet-making infrastructure to fetch better price for farmers  
• INROAD creates over 136,000 new smallholders in the Northeast  

• While Duterte-allied candidates secured a strong showing in the Senate elections, they lack sufficient numbers to form a veto block against Sara’s impeachment. 
• Despite the Senate setback, Marcos can still govern viably from his allies’ substantial lower house majority and by forming new coalitions with a revitalised liberal, non-aligned bloc.  
• Even as policy will largely be unaffected by the elections, intra-elite politicking will continue to shape political dynamics in the run-up to the 2028 presidential election.