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London metals drop amid caution before US-China trade talks
Metal prices dropped in London on Wednesday, as investors were more cautious about the outcome of a meeting between U.S. trade officials and Chinese counterparts. This was due to investors' concerns over the economic stimulus measures taken by Beijing. As of 0342 GMT, the benchmark copper price on London Metal Exchange (LME), was down by 0.7% at $9,469.5 per metric ton. The plan was to The meeting between U.S. officials and Chinese officials in Switzerland this weekend comes after months of increasing tensions, which have seen the duties on trade between two of the largest economies of the world soar above 100%. While the two sides will likely discuss lowering tariffs on both specific products and broader tariffs, traders are waiting to see what happens. The outcome of the trade talks is still unclear. "While we can't assume a positive outcome, we remain optimistic for meaningful progress in our relationship," said a trader. On Tuesday, U.S. president Donald Trump announced that he will be reviewing potential trade agreements over the next two week to decide which to accept. China's central banks said that to help the economy in the midst of the trade war it will, for the very first time, in 2025, reduce the reserve ratio requirement for banks by 50%, releasing about 1 trillion yuan worth of liquidity. Other London metals saw aluminium drop 0.9%, to $2.405 per ton. Zinc fell 0.4%, to $2.405, while lead dropped 0.2%, to $1.919; tin declined 0.9%, to $31,700, and nickel fell 0.1%, to $15,680. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper rose by 0.1%, to 77.770 yuan (10,761.63 dollars per ton), with the support of rapidly declining stocks monitored by the SHFE. SHFE aluminium fell 1.8% to 19.505 yuan per ton. Zinc was down 0.4% at 22,330 yuan. Lead was unchanged at 16,695 Yuan. Nickel was up 0.1%, to 124.690 Yuan. Tin was up 0.1%, to 260.560 Yuan. $1 = 7.2266 Chinese Yuan (Reporting and editing by Mrigank dhaniwala, Savio D’Souza and Violet Li)
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Oil prices rise as the market looks at US-China trade negotiations and lower US output
Investors focused on U.S. China trade talks and signs that U.S. oil production is declining. Brent crude futures rose 44 cents a bar, or 0.7% to $62,59 a bar by 0400 GMT. U.S. West Texas Intermediate crude gained 50 cents or 0.9% at $59.59 a gallon. The benchmarks fell to a 4-year low after OPEC+ decided to increase output. This fueled fears of an oversupply, at a time that U.S. Tariffs are increasing concerns about demand. Brent crude is trading higher on news that the U.S. will begin trade talks with China this weekend, extending a rally in oil, said commodities strategists from ING. "While negotiations could help improve sentiment on the oil market we will need to see substantial progress in lowering tariffs to increase the outlook for demand," ING said. In recent weeks, the lower oil price has prompted several U.S. companies to reduce their rigs. Analysts believe this will support prices by reducing production over time. Daniel Hynes, senior commodity strategist at ANZ Bank, believes that the latest announcements suggest a decline in output over the next few months. Last month, we warned that the falling oil prices and decreasing drilling activity would increase the risk of U.S. output dropping. Market sources cited American Petroleum Institute data on Tuesday to report that crude stocks dropped by 4.5 millions barrels during the week ending May 2. The U.S. Government will release data about stockpiles at 10:30 am ET. ET (1430 GMT). The average expectation of the analysts polled is that U.S. crude stock will decline by 800,000 barrels for last week. The signs that demand was improving also helped to support prices. China's consumers increased their spending on May Day and when the market returned from the holiday. Analysts expect companies in Europe to report a 0.4% increase in their first-quarter earnings. This is an improvement from the 1.7% decline analysts expected just a week earlier. It is expected that the Federal Reserve will leave interest rates in the United States unchanged on Wednesday, as tariffs continue to roil economic prospects. Reporting by Nicole Jao from New York, and Jeslyn Lerh from Singapore; Editing and rewriting by Stephen Coates and Kate Mayberry
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Toyota's earnings are cushioned by the demand for hybrids but a US tariff threat looms
Toyota's profits are expected to remain steady when it reports its annual earnings on the 15th of this month. However, investors will be alert for any signs that U.S. Tariffs could have an impact. Investors will pay close attention to the impact of President Donald Trump's Tariffs on Toyota's future profits. The levies will likely deal a severe blow to automakers doing business in the U.S. What Toyota says about Toyota Industries will also be of interest, after the automaker announced last month that they were considering a possible buyout. Seiji Sugiura is a senior analyst with Tokai Tokyo Intelligence Laboratory. "The focus will be on the guidance for fiscal year ending in March 2026," he said. "I do not know whether Trump's tariffs will be considered or not." According to the average seven analysts surveyed, the Japanese automaker will deliver a 2% increase year-on-year in operating profit, which would be equivalent to $7.86 billion. This would be the first rise in three quarters. The company's sales data has already shown that the momentum was maintained at the beginning of the year. Toyota's sales worldwide rose by 5% between January and March compared to a year ago, thanks to strong demand in the United States and Japan, its two biggest markets. Toyota's operating profits for fiscal 2024 are expected to be lower than last year's record. The automaker increased its forecast of operating profit for the fiscal year that just ended in February to 4.7 trillion Japanese yen. This would represent a 12% drop year-over-year. Toyota's strong demand for hybrids like the Prius, Camry and other gasoline-electric vehicles has validated its bet on this technology. However, it also poses a challenge to the automaker as suppliers are struggling to keep up. POTENTIAL TARIFF HIT Tokai Tokyo’s Sugiura said that the company's operating profit for fiscal 2025 could be affected by 800 billion yen as a result of the impact of tariffs on Toyota’s U.S. bound exports from Japan. The estimate doesn't factor in any wider impact of Trump's tariffs such as a possible U.S. economy slowdown, or on Toyota exports from Canada and Mexico to the largest economy in the world, where they have production bases and make some of their most popular models. Toyota previously stated that it would continue its normal operations and focus on reducing fixed costs. It did not take more radical measures, such as raising car prices to respond to tariffs. Toyota, according to sources familiar with the situation, is looking at producing its next-generation RAV4 SUV on American soil to protect itself from the potential risk of U.S. exchange rates and tariffs. The demand for this car also appears to be outstripping supply. Toyota shares are down 13% this year compared to the Nikkei index's 8% drop over that time period. Analysts are also waiting for an update from Toyota on its strategy to unwind cross-shareholdings, as regulators and investors have been putting pressure on Japanese companies in recent years to sell stakes they hold in business partners and affiliates. The structure of any deal will determine how Toyota's price is affected by a possible investment into a potential purchase of Toyota Industries. Toyota Industries was a company that has been around for nearly 100 years, from which Toyota Motors was spun-off. James Hong, Macquarie's head of mobility analysis, explained. Toyota Industries owned around 24% of Toyota as of September of last year. Toyota Industries also held more than 5% Denso, a major Toyota supplier, and a Toyota group company. He said that investors would view any additional investment by Toyota in its supplier as a negative, but steps to address cross-shareholdings and dual listing concerns could be seen as positives for the entire market, including Toyota. $1 = 143.7500 Japanese yen (Reporting and editing by Muralikumar Anantharaman).
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Shell and Google Enter PPA to Extend Life of First Dutch Offshore Wind Farm
Shell and Google have signed a power purchase agreement (PPA) for the electricity produced at 108 MW NoordzeeWind project, extending the lifespan of Netherland’s first offshore wind farm.The agreement will extend the lifespan of the NoordzeWind offshore wind farm by at least four years beyond its original decommissioning date.Google purchased 100% of the wind farm's 108 MW capacity, which enabled Shell to pursue permit extensions and invest in crucial upgrades, preventing the premature loss of valuable clean energy.Shell NoordzeeWind is the oldest and first offshore wind farm to undergo a life extension in the Netherlands.“The initiative helps to keep existing carbon-free energy resources on the grid that would otherwise have retired.“To date, we’ve supported over 1 GW of clean energy generation capacity in the Netherlands through PPAs.“This investment in offshore wind, including our largest offshore wind project ever, reflects our broader commitment to a carbon-free future and our hope to inspire similar partnerships giving new life to clean energy assets facing retirement,” Google said.
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Officials say four people were injured in a fire at a coal processing plant in Russia’s Far East.
Early on Wednesday, Russian authorities and officials of the company said that four people had been injured in an early morning fire at a coal-processing plant in Russia's far northeast. Mechel, a Russian mining company, said in a press release that its workers had been evacuated from the coal processing plant at Neryungri, in the Republic of Sakha (also known as Yakutia), after a fire started in a warehouse containing finished goods. Mechel and Yakutugol own the Neryungri Plant. Yakutugol is the largest coal mining firm in the Sakha Republic. According to Russian media reports, the Neryungri coal plant began operations in 1984 and has a capacity of 9 million tons per year. In a video posted on Telegram, Denis Gerasimenko said that more than 50 firefighters and twelve pieces of equipment had been involved in fighting the fire. Gerasimenko stated that the problem lies in the construction of the building, and the presence of a load which is flammable. A number of Russian Telegram channels reported that an explosion had occurred at the plant. We were unable to independently verify reports of an explosive. (Reporting and writing by Lidia Kel in Melbourne, Editing by Christopher Cushing & Kate Mayberry
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Stocks rise on US-China talks, China rate reduction
U.S. stocks futures and Chinese stock markets both rose on Wednesday as investors welcomed news of a high-level meeting between U.S. officials and Chinese counterparts as an opportunity to reduce tariffs. China also cut interest rates and promised to support the stock market. Scott Bessent, U.S. Treasury secretary, said that the meeting scheduled for this weekend in Switzerland would be a de-escalation. S&P 500 futures were up about 0.9%, and Hong Kong's Hang Seng rose 1.7% at mid-morning. China blue chips were up 0.5%, while Japan's Nikkei index was largely flat. Ray Attrill, head of Foreign Exchange Research at National Australia Bank, said: "It seems that both sides are willing to reach out and meet on a high-level. I wouldn't have thought it could be anything other than positive." It's positive for Asian foreign exchange in general. The dollar rose a little against the yen, euro and yuan. China's rate reductions weighed down on the yuan. The South Korean won, which was gaining ground with the surge of Asian currencies, has fallen by more than 1 percent. Gold dropped 1.4%, while oil rose 0.5%. China's central banks governor announced a 10 basis-point cut in the benchmark interest rate, and a 50 basis-point cut to bank reserves on Wednesday. This will allow more money into the banking system. Investors interpreted the announcements of the financial regulator as a coordinated effort by the authorities to promote the property market. It's reminiscent of the press conference that started the stimulus euphoria back in September. Homin Lee is a senior macro-strategist at Lombard Odier, based in Singapore. Later on Wednesday, the U.S. Federal Reserve will meet to set interest rate cuts. The markets indicate that there is almost no chance for a move to be made on Wednesday, and only 33% of a reduction in June. This is down from 64% one month ago. India and Pakistan are nuclear-armed neighbors and the fighting has been intense for more than 20 years. India fired gunfire and shells over the border in Kashmir, while India also hit targets in Pakistan. Attrill of NAB said that it would add another layer to the geopolitical tensions and likely cause India's currency to fall. The euro was supported above $1.13, with German conservative leader Friedrich Merz being elected chancellor after his alliance with Social Democrats suffered a shock defeat in the initial round.
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Financial Times - May 7
These are the most popular stories from the Financial Times. These stories have not been verified and we cannot vouch their accuracy. Headlines After three years of negotiations, UK and India reach a trade agreement UK closes on US trade deal with lower tariff quotas and cars After rival complaint, a Czech court stops an $18 billion deal for nuclear reactors Brussels wants to force EU gas companies to reveal their Russian contracts View the full article Britain and India have signed a free trade agreement that has been long sought after. The tariff wars sparked by U.S. president Donald Trump forced both sides to speed up efforts to increase trade in whisky and cars, as well as food. Officials in London and Washington say that the U.S. has made progress in negotiations with Britain on a possible trade agreement, which would include lower tariffs for steel and automobiles. After a complaint by a rival bidder, a Czech court blocked CEZ from signing an 18 billion dollar contract with South Korea's KHNP for the construction of a nuclear power plant. The European Commission wants to tighten up on fuel imports by Russia in 2027.
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Gold falls on US-China Trade Talk Hopes; traders focus on Fed policy
The gold price fell on Wednesday, as investors awaited the Federal Reserve policy meeting that would be held later in the afternoon. As of 0225 GMT, spot gold was down by 1.2% to $3,388.67 per ounce. The metal rose by nearly 3% the previous session. U.S. Gold Futures dropped 0.7% to $3 397.70. "Gold is pulling back amid broad-based "risk-on" movement across markets... This pro-cyclical setup could echo optimism amid signs that the U.S. has begun real trade negotiations with China," said Ilya SPivak, Tastylive's head of global macro. This weekend, U.S. Treasury secretary Scott Bessent will be in Switzerland for talks with chief Chinese economic official He Lifeng. Last month, both countries imposed tariffs of equal value on each other. This triggered a trade conflict that fueled fears of global recession. On Tuesday, U.S. president Donald Trump announced that he will be reviewing potential trade agreements over the next two week to decide which to accept. Later in the day the Federal Open Market Committee meeting is expected to be the focus of the market, as the U.S. Central bank will likely hold rates steady. Spivak said that the FOMC would remain vague in order to maintain as much flexibility as is possible when it comes to determining what impact this trade war may have on growth and inflation. The traders expect 80 basis point rate cuts in this year starting in July. The remarks of Fed Chair Jerome Powell will also provide clues as to the timing of any future rate cuts. In an environment of low interest rates, gold, which is traditionally viewed as a hedge to economic and political uncertainty, thrives. Silver spot fell by 0.9%, to $32.93 per ounce. Platinum dropped 0.6% to $979.07 while palladium was down 0.4% at $970.28. (Reporting and editing by Sumana Nady and Sonia Cheema in Bengaluru)
Azerbaijan wishing to cut emissions with $2 bln green energy investment
Azerbaijan is intending to raise the share of renewables throughout its energy sector to practically a. 3rd with over $2 billion in green investments, its energy. minister said on Wednesday, as Baku plugs its ecological. credentials before hosting COP29 later on this year.
Azerbaijan, which will host the United Nations COP29 climate. summit in November, has actually an estimated 2.5 trillion cubic metres. of gas reserves, according to the 2021 BP Statistical. Evaluation of World Energy, and it aims to double its gas exports to. Europe by 2027.
While the worldwide warming emissions from burning gas. are lower than those from coal or oil, they stay much higher. than green energy sources.
The country is eager to promote more sustainable energy. projects, which include wind and solar, and efforts to construct. an electrical cable television under the Black Sea to transfer green Azeri. energy from prepared Caspian Sea windfarms to Europe.
By 2027, in the first phase of collaboration with energy. companies we are planning to understand close to 2 gigawatts of brand-new. eco-friendly volumes, which will increase the share of renewables. in set up capacity to 33%, Energy Minister Parviz Shahbazov. stated in a speech on Wednesday.
The existing share is 20.86%, the ministry stated. The share. for electricity generation is lower, at 8.5% at the end of the. very first quarter of 2024.
Shahbazov said financial investments of more than $2 billion would. assistance produce 5.3 billion kilowatt hours of electricity, saving. 1.2 billion cubic metres of gas and reducing emissions by as much as. 2.5 million tonnes.
At the very same time, Shahbazov stressed that Azerbaijan would. continue pushing fossil fuels.
In spite of the worldwide drop in fossil fuel funding and. absence of long-lasting demand guarantees, Azerbaijan remains. devoted to gas supply to its partners, he said.
(source: Reuters)