U.S. Treasury Secretary: Iran Strait Deal Possible as Soon as Wednesday

Market recap and key drivers to watch. Good morning. It's Wednesday, August 5, 2026. Top headlines 1) U.S. Secretary of State Marco Rubio said talks with Iran on reopening the Strait of Hormuz have made progress. No final outcome has been reached, but officials see room for a near-term agreement. 2) U.S. Treasury Secretary Scott Bessent told CNBC an agreement with Iran to open the Strait of Hormuz could be reached on Tuesday or Wednesday, and may land as early as Wednesday. 3) The U.S. government is soliciting public comment via the Federal Register on broadening the scope of metal-related tariffs, with proposed coverage including products such as welders and cranes. 4) China's Ministry of Industry and Information Technology (MIIT) said it held a July 30 symposium on the photovoltaic industry to further explain and推进 implementation of a mandatory national standard for PV modules. 5) A union representing BHP's Port Hedland operations in Western Australia has yet to reach a pay deal with the company. Macro 1) CCTV News reported that at a China Meteorological Administration press conference, the National Climate Center said the latest monitoring shows El Niño will continue to strengthen from June to July 2026. Against a strong-to-extreme El Niño backdrop, China is expected to see above-average rainfall, heatwaves, and typhoons in August. 2) Bessent reiterated to CNBC that a Strait of Hormuz reopening agreement with Iran could be reached on August 5. 3) The central bank released its July 2026 liquidity-operations summary: SLF net withdrawal of 10 billion yuan; MLF net injection of 100 billion yuan; PSL net withdrawal of 116.1 billion yuan. In open-market operations, 7-day reverse repos posted a net injection of 249.5 billion yuan; net government-bond purchases injected 50 billion yuan; central treasury cash management injected 30 billion yuan. 4) Reuters cited senior Iranian sources saying that in talks with Oman on reopening the Strait of Hormuz, Tehran and Oman reached a temporary arrangement that could grant Iran full control over all inbound shipping. 5) On Tuesday, Qatari Foreign Ministry spokesperson Majed Al Ansari said work is under way to pursue a diplomatic resolution to the U.S.-Iran conflict. He said mediators including Qatar, Pakistan, and Oman are coordinating closely to push both sides to negotiate and exchange draft proposals. 6) Rubio again pointed to progress in the Strait of Hormuz talks, while noting the absence of a finalized outcome. 7) The UK's Daily Telegraph reported Iran is considering charging European countries for maintaining the strategic waterway under a plan tied to reopening the Strait of Hormuz. Global futures moves 1) Precious metals ended broadly higher: COMEX gold +1.07% at $4,134.20/oz; COMEX silver +3.27% at $59.75/oz. 2) Crude sold off sharply: front-month WTI -6.47% at $75.14/bbl; front-month Brent -6.08% at $78.68/bbl. 3) Most LME base metals rose: copper +1.25% at $14,043.5/ton; lead +1.23% at $1,890.0/ton; tin +0.69% at $55,830.0/ton; zinc +0.55% at $3,661.0/ton; nickel +0.53% at $17,150.0/ton; aluminum -0.12% at $3,217.5/ton. Ferrous and bulk commodities 1) Mysteel satellite data showed iron ore inventories across seven major ports in Australia and Brazil totaled 13.801 million metric tons for July 27–August 2, 2026, down 602,000 metric tons from the prior period. Stocks continue to fall and remain slightly above the annual average. 2) A union spokesperson said Tuesday the union covering BHP operations at Port Hedland—the world's largest iron ore export hub in Western Australia—has not secured a wage agreement, making a two-day strike this weekend unavoidable. The action is scheduled for August 8 (Saturday) and August 9 (Sunday). The strike is expected to target BHP operations only and not affect other Port Hedland operators. 3) Mysteel reported Hebei Iron & Steel's August tender for ferrosilicon 75B was 2,740 tons, down from 3,380 tons previously. The group's August ferromanganese procurement was 16,600 tons versus 15,400 tons in July. 4) Ferroalloy Online said Sichuan and Yunnan are in the high-water season. Historically, operating silicon-metal furnaces in the two regions typically rise to around 150–180 at this time of year, but only about 70 are running this year. Output has been edging lower and their share of national production is declining. 5) Mysteel said coking coal prices in Changzhi were unchanged on August 4. Qinyuan County added 1.2 million tons of new low-sulfur lean coal capacity, but supply remains tight due to temporary mine shutdowns. With coke makers operating at losses and demand weak, alongside rising steel inventories and lower pig iron output, the market is pricing in a third round of coke price cuts. Agriculture 1) The National Grain and Oils Information Center said that as of July 31, 2026, commercial inventories of the three major domestic edible oils slipped to 2.42 million tons, down 10,000 tons week over week but up 240,000 tons month over month. Imported soybean inventories at major crushers were 7.5 million tons; soybean meal inventory was 960,000 tons. Commercial soybean oil inventory was 1.21 million tons. 2) Mysteel agriculture data showed that as of July 31, 2026, corn inventories at four northern ports totaled 2.036 million metric tons, down 59,000 metric tons on the week. Weekly outbound shipments from the four ports were 259,000 metric tons, down 122,000 metric tons week over week. 3) Argentina's grain exporters and processors association CIARA-CEC said Tuesday that a maritime workers' strike has halted vessel movements in and out of the country's grain ports, disrupting key export hubs. Argentina is a major exporter of soybean meal, soybean oil, and corn, with most cargo moving through Parana River ports. The strike duration and the number of affected vessels remain unclear. 4) The USDA said a private exporter reported the sale of 132,000 tons of soybeans to China for delivery in the 2026/2027 marketing year. Energy and chemicals 1) Sources said Syria has agreed to sharply reduce imports of Russian oil in exchange for the U.S. lifting Syria's designation as a "state sponsor of terrorism." The shift would reduce Syria's reliance on Russian crude and could weaken Moscow's influence there. 2) Sources said Saudi Arabia is pursuing behind-the-scenes diplomacy to contain the latest conflict involving the Houthis, seeking to avoid a clash with the Iran-backed group that could disrupt its oil sector and broader economy. Metals 1) SMM reported that on August 4, Global Lithium said its Manna lithium project in Western Australia received approval from the Western Australian Department of Mines, Petroleum, and Exploration for its Mine Development and Closure Plan. First shipments of direct-shipping ore (DSO) are scheduled for Q2 2027. 2) Indonesia's Energy and Mineral Resources Minister Bahlil Lahadalia said coal companies paying higher royalties are expected to receive priority under a proposed relaxation of the coal RKAB policy. 3) MIIT reiterated details of the July 30 photovoltaic industry symposium focused on the mandatory national standard for PV modules. 4) China Nonferrous Metals Corporation said on August 4 it received a notice from the Shaoguan Emergency Management Bureau titled "Notice to Order the Fan Kou Lead-Zinc Mine to Cease Operations." The notice requires an immediate halt and a comprehensive safety inspection; production can resume only after issues are rectified and verified. The Fan Kou Lead-Zinc Mine has stopped operations accordingly. 5) Tianhua New Energy said on August 4 via an interactive platform that its subsidiary Sichuan Tianhua will conduct routine maintenance on its 60,000-tons-per-year battery-grade lithium hydroxide line (also capable of flexibly producing 53,000 tons of battery-grade lithium carbonate) for about one month in August under its annual maintenance plan. 6) The U.S. is seeking public comment on expanding metal tariff coverage, including products such as welders and cranes. 7) LME positioning data for the week ended July 31, 2026 showed investment funds held net longs of 40,700 contracts in copper (+2,682 on the week), 129,800 in aluminum (+698), and 49,000 in zinc (+436). Analyst focus: trading logic and key themes 1) Weather in focus for ags: Yide Futures said U.S. precipitation has increased versus earlier periods, supporting improved conditions across the central and eastern Corn Belt, while drought recovery remains limited in the Northern Plains and the western Corn Belt. As crops move into a critical yield-setting phase, attention is shifting from pollination risks to yield verification. The firm flagged continued monitoring of drought trends in the western Corn Belt and the potential impact of mid-August precipitation changes on final yields. It added that while rainfall may increase over the next two weeks, it is expected to be concentrated in northern Malaysia and Indonesia, offering limited relief for core drought-hit areas such as central and southern Borneo and southern Sumatra. Over the medium to long term, with El Niño developing alongside the seasonal dry period, drier risks in Indonesia's key producing regions may build, keeping soil moisture and potential impacts on second-half palm oil output in focus. 2) Coking coal and coke: Sanli Futures said the "dual-coking" market has seen a technical correction, with pricing increasingly factoring in three rounds of spot-price cuts for metallurgical coal. On the supply side, the firm cited surveys indicating heavy rain caused a substation line fault in Liulin County, Lüliang City, leading to temporary shutdowns at seven coal mines for an estimated four days. While slow restarts in major producing areas offer some near-term support, Sanli said the broader seasonal-demand weakness and insufficient demand remain intact. The firm said expectations for a third round of coking coal cuts are strong, and while prices have bounced from oversold levels, upside may be limited as weak demand continues to cap the market. Key upcoming data and events 1) Aug. 5, 22:30: U.S. EIA crude oil inventories (week ended July 31) 2) Aug. 6, 20:30: USDA weekly export sales (week ended July 30) 3) Aug. 6, 20:30: U.S. initial jobless claims (week ended Aug. 1)