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Base metals gain from a possible US-China deal and a weaker dollar
Base metals were up in London on Friday as fears of a trade war with China, the world's largest metal consumer, were put to rest after U.S. president Donald Trump stated that a new deal could be reached. The price of three-month aluminium at the London Metals Exchange (LME) had risen 1.5% to $2,726 per metric tonne by 1716 GMT, after reaching $2,729, its highest level since November 15. LME copper increased 0.8%, to $9 539 per ton. This week, the metal surpassed its 200-day moving median which supports it now at $9432. Aluminium has extended its gains for a fifth session in a row, supported by upcoming restrictions on Russian primary aluminum imports into the European Union. The impact of this ban will likely be minimal. The EU continues to import Russian aluminum, but volumes have dropped, as European buyers have self-sanctioned since the invasion in Ukraine. This comes at a time when the U.S. is in talks with Russia about a peace agreement to end the conflict in Ukraine. She added that the U.S. had indicated that sanctions could be lifted as part of a deal. Dollar-priced materials became more appealing to buyers who use other currencies due to the weakening of the U.S. dollar. The yuan grew. Trump indicated that the concerns over the possibility of a trade war had only been temporarily alleviated. He said he would announce new tariffs within the next month, or even sooner. In addition to the previously announced plans for imposing duties on imported automobiles, semiconductors, and pharmaceuticals, he will also add lumber and forest products. Manthey stated that tariffs were bearish for industrial metals such as copper, given the slowdown in global growth. LME zinc jumped 1.3% to $2.912 per ton. Nickel gained 1.6% at $15,640. Tin jumped 2.3% to $33,455, its highest level since October 8. Lead fell 0.3% to $1.992. (Reporting and editing by Shailesh Kumar, Kirsty Donovan, Elaine Hardcastle and Polina Devitt in London)
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Teck Canada sees no impact of Trump's tariffs
Teck Resources, a Canadian mining company, said that the proposed tariffs by Donald Trump on Canadian imports would not materially impact its business. On a call following earnings, CEO Jonathan Price stated that "our copper and zinc concentrat sales would not have been impacted" as the company mainly sells to Asia and Europe. Some products are sold in the US, mainly zinc, lead, and special metals like germanium, sulfur, and indium, which is refined in British Columbia. Price stated that while Teck produces large amounts of this diverse group of metals they only account for less than 15 percent of the company's revenues. He added, "We expect trade flows will adjust if tariffs are imposed." Teck shares traded nearly 2% higher at midday, after the miner surpassed analysts' expectations for its fourth-quarter profits. This was aided by increased copper production volumes from its Chile mine. The total copper production in the quarter reported was 122,100 tons, an increase of 19% from a year ago. 60,700 tonnes came from its Quebrada Blanca mine (QB) in Chile. Red metal prices and sales volumes are also strong. The company is investing in a QB debottlenecking program and anticipates that it will lead to an additional increase of throughput between 10-15%. Teck anticipates that copper production will range between 480,000 and 565,000 tons in 2025. According to data compiled and analyzed by LSEG, the company reported a profit adjusted of C$0.45 ($0.3168), per share for quarter ending December 31. This compares with an average analyst estimate of C$0.43, per share. ($1 = 1.4205 Canadian dollars) (Reporting by Mrinalika Roy in Bengaluru; Editing by Sriraj Kalluvila and Shailesh Kuber)
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Mitsui hires a former DRW Investments executive as the head of precious metals for its subsidiary
The company announced that Mitsui Bussan Commodities Ltd. (MBCL), a trading firm for energy and base metal derivatives, hired Darren Botha, formerly the head of precious materials at DRW Investments to help expand its business into precious metals. MBCL's decision enter the global precious-metals trading market to hedge client risks is expected to add extra liquidity to global precious-metals markets, replacing those that left the sector. MBCL is a subsidiary company of Mitsui & Co., a major Japanese brokerage house. It has also entered the precious metals market in the midst a gold price rise that began in 2024. Gold reached a new record on Thursday. Botha will be based out of London, where he will serve as the head of precious metals for MBCL, responsible for growing its global business. Mark Crawshaw said that MBCL was excited to announce Darren's appointment. Mitsui started trading precious materials in the 1970s. It still maintains a separate department for precious metals. Mitsui & Co. is another subsidiary. Precious Metals Inc. left the business in 2015. Botha stated that it was a good time for MBCL's diversification into precious metals, as this would allow the firm to provide its clients with solutions in terms of risk management and liquidity. Reporting by Polina Devitt. (Editing by Jane Merriman.
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Colombia deforestation rose 35% in 2024, minister says
The Environment Minister Susana Muhamad announced on Thursday that deforestation rose by 35% in Colombia in 2024, from a 23 year low in the previous years. This was mainly due to an increase in the Amazon region. The deforestation rate reached 1,070 sq km (413 sq miles) in 2018, after dropping to just under 792 sq km in 2023, from about 1,235 square km in 2022. Muhamad, a journalist in Bogota told reporters that the increase in deforestation in 2024 was due to operations involving large capital. He noted that organized crime had a greater involvement than rural communities. Muhamad, after the presentation, told journalists that there was a margin for error between 5% and 10%. He added that a final number would be released later in the year. Colombia, which hosted the COP16 United Nations Biodiversity Summit last year, is among the most biodiverse nations in the world. The country is home to thousands of animal and plant species. However, it loses large areas of forest each year due to deforestation. Muhamad stated that despite the increase in deforestation in 2024, it was the second lowest figure in the past 23 years. She said earlier this month that the number would be the third lowest within the period. Deforestation in Colombia's Amazon region increased by more than 50% between 2023 and now, to 680 square km. Colombian deforestation has traditionally been concentrated in the Amazon. Muhamad announced last week that the U.S. Agency for International Development, or USAID, had frozen $70 million of environmental funding in Colombia following President Donald Trump's decision to eliminate the organization. She said that the Amazon region of the country will feel the most impact. Muhamad announced earlier this month that she was resigning from the government headed by President Gustavo Petro. She cited her opposition to Petro's appointment of Armando Benedetto to the cabinet due to his alleged abuse of women and influence-peddling. Benedetti said that false stories about him are being spread.
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Codelco and Anglo American will jointly operate copper mines at central Chile
The companies announced that they had signed a Memorandum of Understanding to operate copper mines located in central Chile. Codelco's board of directors, in a letter sent to the local regulators, approved the deal for the operation of its Andina Mine alongside Anglo American’s flagship Los Bronces Mine outside of Santiago. In a Santiago press conference, Codelco chairman Maximo Pacheco said: "This memorandum will allow us jointly to develop a mine plan for both joint deposit that are next to each other." He said that the agreement would allow the production to increase by 120,000 tons per year over a period of 21 years, without the need for any additional investment. Andina will produce 164,500 tons of copper by 2023. Los Bronces is Anglo American's key mine, producing 215,000 tons of copper in 2023. Codelco holds a 20% stake of Anglo American Sur (the local Anglo American division that includes Los Bronces). Anglo American confirmed that the production increase would begin in 2030. Pacheco said that the agreement would force the company review its development plan for the Andina mine. The Center for Copper and Mining Studies' (CESCO) analyst Cristian Cifuentes said that the details are still being finalized. Cifuentes stated that Andina does not have the processing capacity to process the entire amount of mineral it extracts, and there is no short-term or medium-term solution. Los Bronces, on the other hand, has almost double the processing capability of Andina. Codelco stated that the company hopes to finalize the details of the agreement in the second half this year. Both projects have been delayed by the need for environmental permits. Environmental groups have opposed the Andes expansion due to the potential impact it could have on the glaciers and the water supply in a drought-stricken Chile.
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Britain and France explore electrical interconnection of approximately 1 GW
Ofgem, the British energy regulator, and CRE, its French counterpart, have agreed to explore opportunities for electricity interconnection with capacity of approximately 1 gigawatt between France and Britain, Ofgem announced on Thursday. In recent years, several other projects have been proposed. The two countries share electricity links totaling 4 GW. Ofgem announced that it has approved two more projects, FAB Link GridLink and FAB Link, between France. CRE conducted a study that found, while the capacity of 1 GW could be beneficial to France, it depends on how revenues and costs are distributed. They said that the two regulators had agreed to continue discussions on the higher costs of key components, bottlenecks within the national grids, and the cost and revenue-sharing between the two countries. The two added that they plan to release an updated statement on regulatory position by the end October 2025.
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CenterPoint increases its spending plan due to a surge in power demand for data centers
CenterPoint Energy, a U.S. utility company, added $500 million on Thursday to its 10-year plan of capital expenditures to improve its electricity grid in order to meet the surge in demand for energy from new data centres. According to a report by the Lawrence Berkeley National Laboratory, the power demand of U.S. data centres is expected to triple over the next three to four years. This could consume up to 12% the total amount of electricity produced. CenterPoint anticipates that demand in Houston will increase by nearly 50% between 2031 and 2030. On Thursday, it increased its capital budget through 2030 from $47.5 billion to $47.5 Billion to improve grid reliability. CenterPoint's CFO Christopher Foster stated in a recent conference call that "we, like our peers, have seen an unprecedented interest in connecting to the grid. We have received around 40 gigawatts of load interconnection requests." Dominion Energy Duke Energy DTE Energy have also increased their capital spending plans in the past month to meet the increasing power demand of data centers. Utilities ranked among the top winners of the S&P 500 in 2008, thanks to the expectation that data centers would increase their demand. The S&P Index tracking utilities is expected to rise 19.6% by 2024. CenterPoint also confirmed its profit forecast for 2025 between $1.74 to $1.76 per common share, after matching Wall Street's expectations of a fourth-quarter adjusted earning per share of 40 cents. The company's net quarterly income increased to $248 millions, or 38 cents a share, up from $192million, or 30cents a share, one year ago. (Reporting and editing by Leroy Leo in Bengaluru, Sriraj Kalluvila).
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After Trump tariffs, Brazil's Gerdau steelmaker rethinks its Mexico mill
The CEO of Brazilian steelmaker Gerdau said that the company may decide to increase its production capacity in the United States rather than build a new facility in Mexico. This is because tariffs imposed by President Donald Trump are affecting global trade. Gerdau announced in 2013 that it was looking at installing a special steel mill for Mexico. The new mill would have a capacity of 600,000 tons per year and require an investment between $500 million and $600 million. Gerdau originally expected to make a final decision on investment by the end 2024, and start construction this year. However, it has postponed that decision to July. "We are reviewing our analyses in light what is happening", Chief Executive Gustavo Werneck said on an earnings call. "Special Steel is an important segment for us here in the Americas." Werneck, citing the Michigan and Arkansas units of the company, said: "We're looking at the option of building the mill two-stages or increasing the production capacity in the United States." The U.S. president Trump raised the tariffs on imports of steel and aluminum to a flat rate of 25%, "without any exceptions or exclusions". He also threatened to raise tariffs against other major trading partners like Mexico and Canada. Gerdau will benefit from tariffs as it has production units in the U.S. and previously promoted its large footprint as a hedge to protectionism by Trump. Werneck said that the tariffs would lead to an improved production mix and increased profitability in the U.S. The company is currently operating 70% of its capacity in the U.S. or approximately 4 million tons each year. Gerdau, Brazil’s largest steelmaker based on market capitalization, reported a 9% drop in its adjusted fourth-quarter net profit compared to a year ago, falling below the market's expectations. The company, which has mills in the Americas, announced that it will segment its earnings by region starting with the first quarter of the year 2025 - Brazil. North America, and South America. Analysts at Scotiabank stated that Gerdau North America would be the clear winner, at least for the short-term, following President Trump's announcement of steel tariffs. However they noted the Brazilian unit may be negatively affected. Gerdau shares traded in Sao Paulo rose by 0.7% Thursday, following the Bovespa index. (Reporting and writing by Alberto Alerigi Jr., Editing by Elaine Hardcastle).
Trump's SEC chief shifts power away from investors and into boardrooms
Experts say that new policies by the U.S. Securities and Exchange Commission give corporate boards greater power over investors. This could limit investor-initiated efforts to reform everything from climate policy or director contests.
Since the U.S. president Donald Trump appointed Mark Uyeda as acting chairman of the Securities and Exchange Commission last month, the agency has made a number of changes. They have increased the filing requirements for passive funds and limited the communication capabilities that investors can use.
Attorneys say that the changes will give directors greater freedom to ignore efforts to limit emissions and report diversity in the workforce. Traditional activists who run their own director slates may also find it more difficult to challenge boards.
Ann Lipton, a professor of business law at Tulane University, said: "It is a reallocation that is relatively dramatic. It's not only to make corporate policies but also to protect them against activists."
Uyeda, along with other Republican officials, including Paul Atkins, Trump’s nominee to lead the SEC, have expressed their skepticism about environmental, social, and governance (ESG), investment considerations. Uyeda stated in a speech from 2023 that "shareholder meetings were never intended to be debating societies or political battlegrounds under state corporate law."
A spokesperson for the SEC declined to comment upon being contacted. Atkins didn't respond to any questions posed by his current firm.
Fewer ballot items
The SEC changes are consistent with other Trump Administration efforts, such as the dismantling of diversity programs and withdrawal from the Paris Climate Agreement.
ESG resolutions received significant support between 2021 and 2022 but have declined since. In a legal bulletin issued on February 11, the SEC encouraged companies to avoid voting on resolutions by claiming that the proposals would "micromanage" the businesses.
This change could make the process of negotiating with executives difficult for activists who are interested in ESG.
Rick Alexander, CEO at Shareholder Commons (which tracks and writes resolutions), said that it would be more difficult to carry out this kind of work if it was harder to get a resolution passed by the SEC.
The SEC revised its "beneficial ownership" reporting interpretations on February 11, allowing firms such as asset managers BlackRock or Vanguard to rely more on SEC Schedule 13G forms to report their major holdings.
The agency has tightened the rules on when managers may use the Schedule 13D form instead of the more complicated Schedule 13D which increases their costs. The SEC will now test if an organization "imposes pressure" on management, such as by tying director voting to the presence of a staggered or poison pill defense against takeovers.
BlackRock and Vanguard both have policies on proxy voting that suggest these circumstances could lead critical votes.
BlackRock and Vanguard declined comment.
Caroline Crenshaw via email, the only Democratic member currently on the SEC said that the change may have a negative impact on the outreach of big funds.
The interpretation confuses institutional investors with an unstated aim of discouraging them from engaging in business with corporations. Crenshaw stated that this policy was bad for capital creation.
Communication Breakdown
Thirdly, new guidelines have been issued on the use of electronic records by investors to send out "exempt solicitations" or communications between shareholders.
Smaller investors have started to file their own exempt solicitations to express their opinions on certain issues, such as whether they should oppose a director or support a resolution by shareholders.
In an update on January 27, the SEC restricted their use. The SEC stated that the documents "are not intended to be used as a means by which someone distributes written soliciting materials to security holders" but are only meant to inform the public about written materials sent through other means to security holders.
Tom Quaadman is Senior Vice President of the U.S. Chamber of Commerce. This top business lobbying organization welcomed the SEC changes.
He said: "You are seeing a rebalancing in SEC rules and policies that is designed to remove special interest activism, and to bring things back to an investor-focused focus." Reporting by Ross Kerber, Boston. Simon Jessop, London editor.
(source: Reuters)