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Copper traders are looking to Chinese buyers after Trump's tariffs
Global copper traders offer cargoes to Chinese customers as they try to unload metal that is no longer able reach the U.S. by President Donald Trump's deadline for a 50% tariff on copper. Trump announced late Wednesday that he will impose a new tariff on August 1, to encourage domestic production, from semiconductors to ammo. He did not specify which copper products will be affected or whether any exceptions will be considered. China is the largest copper consumer in the world. The number of overseas sellers' offers has increased since late June, and now is at its highest level for months, said a Chinese copper dealer who spoke under condition of anonymity. A second China-based broker said that he had received a bid for a cargo of 1,500 metric tons from South America, due to be delivered in late July or early august by a buyer who was "eager to locate a home." The increase in the offers to China shows how traders who spent months shipping cargoes to the United States to prepare for the tariff must now start to look for alternative destinations to ship their cargoes that cannot cross the border of the United States before the tariff takes effect. Logistics sources say that only copper from Latin America, which is currently being loaded or is already on its way, is likely make the deadline. And even then, it will be very close. Albert Mackenzie is a copper analyst with Benchmark Mineral Intelligence. He said that if Chilean material was being released to go to Europe, because the U.S. is receiving less, it would mean that everyone is benefiting. You might also see this in Asia. According to a copper trader based in Singapore, the Yangshan Copper Premium, or bill of lading, a benchmark that measures what Chinese buyers are willing to pay over the LME price for copper outside China, dropped 5% on Thursday to $62, reflecting the current offers. They added that major international trading houses offer thousands of tons originally intended for the U.S. to Chinese buyers for delivery between late July and early August. The Shanghai Futures Exchange's most traded copper contract fell for the fifth consecutive day on Thursday. It dropped 0.4% to 78.600 yuan (10,952.87 dollars) per ton, after reaching its lowest level since June 23.
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MP Materials surges on mega deal to boost US magnet supply
MP Materials has signed a multi-billion dollar deal with the Department of Defense to build a rare earth magnet factory. The U.S. is looking to reduce its dependence on foreign sources for this critical input. Shares of the company have risen by 41% during premarket trading. The DoD is buying $400 million of preferred stock, and also receiving a warrant from the company, which will make it the largest shareholder. China's restrictions in April, which impose a virtual monopoly in the refining and processing of rare earths, caused a drop in exports of rare earth magnets by 75% last month. Later, the U.S. signed an agreement with China to accelerate rare earth approvals. In March, U.S. president Donald Trump invoked emergency powers in order to increase domestic production of vital minerals that are used across the economy. This was part of an effort to counter China's near total control of this sector. MP Materials announced that it will construct its second magnet production facility in the U.S. - the 10X Facility - at a location yet to be determined, for defense and commercial customers. The company stated that the facility should be operational by 2028. The DoD agreed to a NdPr floor price commitment of $110 per kilo for the product that is being stored or sold. Metal NdPr can be used to produce magnets for wind turbines and electric motors. A 10-year agreement will also be signed by the defense and commercial sectors to purchase all magnets. MP Materials plans to expand its heavy rare earth separation capability at Mountain Pass, a California facility. It will receive a loan of $150 million from the Defense Department. Rare earths is a grouping of 17 metals, used in the production of magnets for electric cars, cell phones and other electronic devices.
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UAE ready to boost oil production if market demand arises
United Arab Emirates' energy minister stated on Thursday that the country could increase its oil production after 2027, if the market demands it. This move could push the country into the top five oil producing countries in the world. OPEC granted the UAE a larger production quota for this year. The country argued that it was restricting too much its output after investing heavily to increase capacity from 3 million barrels to 4,85 million. Suhail Mohamed al-Mazrouei, Energy Minister of the country, told reporters that capacity could increase further after 2027. He said that if the market demanded it, they could go up to 6 million. However, this was not an officially set target. The UAE could cover just under 6 percent of the global demand if they were to reach this level. It will also be the fourth largest oil and liquids producer on the planet, only behind the United States of America, Saudi Arabia, and Russia. These countries can produce around 21 million barrels, 12 millions, and 10-12million respectively. The UAE will surpass the oil production of Canada, China and Iraq in 2024 with a 6 million barrel per day output. (Reporting and writing by OPEC Newsroom, Dmitry Zhdannikov, editing by Mark Heinrich & Tomaszjanowski)
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EU lawmakers criticize China for rare earth restrictions before summit
The European Parliament condemned China Thursday for its export restrictions of rare earths, and demanded that the European Union reject any attempt by Beijing to force concessions out of the bloc. Two weeks ahead of an EU-China Summit at which rare Earths will be a major topic, EU legislators backed a resolution saying that China's actions were unjustified and had a coercive intention and that its "quasimonopolistic position" provided it with enormous leverage. The European Parliament passed the motion with 523 votes in favor, 75 against and 14 abstentions. The motion, although not binding, is influential because the European Parliament is the only directly elected institution in the EU. China, which produces 90% of the rare earth magnets that are used in automobiles, home appliances and other products, has imposed export restrictions since early April. Exporters must obtain licenses in Beijing. The motion in parliament urged China, amid a trade conflict with the United States to lift restrictions. Beijing, however, had set up "green lanes" for European firms to make the process easier. Last week in Berlin, China's foreign minister Wang Yi played down European concerns, saying that it is standard practice to restrict exports of goods with a potential military use. However, Europe's requirements could be met by submitting applications. The EU legislators also called for the European Union's 2030 targets to be backed up with a budget and to determine minimum levels of strategic stock of rare earths. (Reporting and editing by Philip Blenkinsop, Aidan Lewis, and Milan Strahm)
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Italy: Conference pledges more than 10 billion euros for Ukraine reconstruction
Giorgia Mello, the Italian prime minister, said that participants in a Rome-based conference on economic recovery for Ukraine had pledged more than 10 billion euros ($11.7billion) to aid the war-torn nation. The conference is being attended by Ukrainian President Volodymyr Zelenskiy and other political leaders. It takes place in the backdrop of more intense drone attacks and missile strikes on Kyiv. Zelenskiy, speaking at the conference's opening, described the attacks in terms of "pure terror". Meloni, as well as German Chancellor Friedrich Merz, cited the recovery from World War Two of their respective countries as an example of the progress Ukraine can achieve. Meloni, in her opening address at the conference, said: "I believe we should be proud today of what we have accomplished together - nations and international organizations, financial institutes, local authorities, business sectors, and civil societies." She added, "Together at the conference today, we made commitments amounting to over 10 billion Euros." It is the fourth conference of this kind since Russia invaded Ukraine in February 2022. The main goal is to mobilize international support for Ukraine. The European Commission announced a support package of 2.3 billion Euros for Ukraine's reconstruction. Von der Leyen stated that "with 2.3 billion euro in agreements signed, our aim is to unlock up 10 billion euros of investments for rebuilding homes, reopening hospitals, revitalizing businesses, and securing energy." She added, "We literally stake our future on the future of Ukraine."
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China solar stocks soar as Beijing tries to end price wars
Several China solar stocks rose sharply on Friday, continuing an upward trend that began on Wednesday, on the news that Beijing is looking to slow down aggressive price cuts that have driven prices of certain components by almost 30% over the past year, according to one estimate. Price wars have been sparked by overcapacity and price reductions made to clear stocks among Chinese manufacturers. Analysts are concerned that further price cuts could lead to deflation, and hinder efforts to stabilize the $19 trillion economy. The shares of JA Solar, the leading solar manufacturer, rose by nearly 10%. They had gained 20 percent since July 1, when leaders of the second largest economy in the world pledged to take measures to stop the price wars. On July 3, the industry ministry announced that it would stop price wars in the solar sector and phase out old capacity. The Oil Price Information Service's (OPIS') assessment of high-efficiency TOPCon (tunnel oxide passivated contacts) modules indicates that prices in the solar industry will fall by nearly 30% between 2024 and 2025. The stock prices of Longi Green, JinkoSolar, and Trina Solar all rose more than 10% in the last month. Companies did not respond when asked for comments. Longi announced to state media last week that it would begin commercialising high-efficiency products earlier in order to solve the low-price problem. Stocks of Xinjiang Daqo New Energy, Tongwei and Xinjiang Daqo New Energy have both risen by 29% since the start of July. Daqo shares, listed in Shanghai, closed Thursday at 26,48 yuan (3.69 dollars), their highest price in almost seven months. Daqo didn't respond to an email request for comment, and Tongwei refused to comment. In a note published on Thursday, Pierre Lau, Citi's managing director, stated that "whether solar share prices will rise this time around is dependent on the release of an effective policy." He said that prior initiatives to reduce excess capacity in the industry had driven prices up as much as 40 percent in just two weeks in October of 2024. Rumours unconfirmed that the National Development and Reform Commission, a powerful state planner, had met with polysilicon producers and asked them to maintain prices above the cost level also supported the price rise. NDRC has not responded to a faxed comment request. Berneuter Research, a consultancy, reports that the market price for a kilogram of meat in China is below $4.50, which is lower than most manufacturers' actual costs. Caixin reported that Tongwei, along with its polysilicon-producing peer GCL, were also preparing a plan for a new company, which would be set up to purchase excess factory capacity. This was according to people familiar with the situation. Citi's Lau stated that although the price of polysilicon has risen by 18% to 21% in the past two weeks, downstream solar manufacturers have continued to resist the increases. (Reporting and editing by Clarence Fernandez; Colleen howe)
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OPEC cuts oil demand for the next four years and says there is no peak in sight
OPEC cut their global oil demand projections for the next 4 years as Chinese growth slows. However, they raised their longer-term outlook based on the rising consumption of oil in developing countries. They also said that there were no signs to suggest oil usage had peaked. The OPEC+ group, which includes the Organization of Petroleum Exporting Countries and its allies, including Russia, pumps more barrels in order to regain market shares after years of cutting back to support the markets. A lower medium-term demand may make it more difficult for the group's other cuts to be unwound, as they remain in place through the end of 2026. OPEC's 2025 World Oil Outlook, published on Thursday, predicts that world demand will average 105 millions barrels of oil per day in 2019. The OPEC expects the demand to increase to an average of 106.3 million barrels per day in 2026, and then to 111.6 millions bpd by 2029. All forecasts of demand for 2026-2029 are lower than the previous year. OPEC has said that demand will average 106.3 millions bpd by 2026. This is down from 108.3 million bpd last year. The forecast for 2029 is 700,000 bpd lower than last year. Compared to other forecasters, OPEC anticipates that demand will grow for a much longer period. BP and International Energy Agency predict that oil consumption will peak in this decade. In the preface to the report, OPEC Secretary-General Haitham Al Ghais stated that "Oil is the foundation of the global economy and central to our everyday lives." There is no imminent peak in oil demand. The report will be launched at the biennial OPEC Seminar in Vienna which brings together oil executives and ministers. OPEC denied journalists from and other news organizations access to its seminar. OPEC refused to comment about why they were doing this. OPEC stated in its report that the demand has recovered from the COVID-19 epidemic, resulting a more stable outlook. OPEC also said that China's growth is slowing, the country which has been driving oil consumption higher over the past few decades. The OPEC referred to China by saying, "This is due to the slower economic growth and the increased penetration of EVs with charging infrastructure as well as the continued use of oil in many sectors." OPEC+ started to reverse its output cuts of 2,17 million bpd with a 138,000 bpd production boost in April. In May, June and July, there were monthly increases of 411,000 bpd. Separate cuts of 3,65 million bpd are still in place by the group until 2026. On Thursday, two OPEC+ delegates stated that there had not been any discussion on the release of this extra oil. GAP WITH IEA AND BP OPEC's forecast for 2030 demand remained unchanged from the previous year. The International Energy Agency, on the other hand, expects the global demand to peak in 2029 at 105.6 millions bpd and then to fall slightly by 2030, said the advisor to industrialised nations last month. OPEC believes that India, the Middle East, and Africa will drive the growth in the long term. OPEC says that developments such as the U.S. leaving the United Nations Climate Pact and a lower EV penetration rate will influence behavior and slow down the energy transition for developing countries. OPEC predicts that the world's oil demand will reach 122.9 millions barrels per day in 2050. This is up from the 120.1 million bpd predicted in last year’s report. This is far higher than other industry forecasts for 2050, such as those of BP. OPEC is calling for increased investment in the oil industry. The sector will need to spend $18,2 trillion by 2050 compared to $17,4 trillion estimated last year.
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US copper prices rise after Trump announces a date for tariffs, but remain below their peak
The price of U.S. Copper rose on Thursday, after U.S. president Donald Trump announced a 50% tariff that would begin on August 1. However, the prices remained below their previous record high due to an oversupply of metal in the country as well as uncertainty about details. Trump announced on Tuesday that new tariffs would be imposed on copper. He announced Wednesday the date and confirmed it. The COMEX copper contract that was most active at 0945 GMT rose 2.1% to $5.60 per lb, down from the record high of $5.90 reached on Tuesday. Ole Hansen is the head of commodity strategy for Saxo Bank, Copenhagen. He said: "I believe that the spike high may be left to its own devices for a while." "The market is now left with plenty of supplies for the near future, and that's why premiums in New York shouldn't reflect the 50% tariff," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. There are many things that can happen over the next three months. On Thursday, the premium for COMEX over LME was $2,690 per metric ton or 28 %, a slight drop from Tuesday's peak. The traders who anticipated copper tariffs following the announcement of a probe in February shipped enough imports to cover a full year's worth this year. Analysts predict that the COMEX premium is likely to ease in the coming months, as the stockpile slowly diminishes and the tariffs are a drag on demand. A Shanghai-based metals expert at a futures firm said that the copper prices on the Shanghai Futures Exchange were under pressure due to expectations that the copper shipments into China would increase as some supplies will be redirected outside of the U.S. The SHFE's most traded copper contract fell for the fifth consecutive day, falling 0.4% to 78.600 yuan per ton ($10,952.87 per ton) after reaching its lowest level since June 23. The benchmark three-month copper price on the LME rose 0.5% on Thursday, after five consecutive days of declines. It now stands at $9,681.50 per ton. Other metals include LME aluminium, which rose 0.6% to $2.613 per ton. Nickel gained 1.2% at $15,165. Zinc climbed 1.2% at $2.774. Lead was up by 0.1%, $2.057, and tin increased 1.2% at $33,675. Click here to see the latest news in metals.
Climate body: Tibetan glacial lake discharge caused deadly floods in Nepal
A regional climate monitoring organization said that the flooding in Nepal's Bhote-Koshi River, which killed nine people this week and left over two dozen others missing, was caused by the draining of an supraglacial water in Tibet.
After Tuesday's floods, which washed the 'Friendship Bridge,' linking Nepal and China, at least 19 people remain missing, including six Chinese employees of the Beijing-backed Inland Container Depot.
China's official Xinhua News Agency has reported that 11 people are missing on the Chinese border.
Satellite imagery from Kathmandu's International Centre for Integrated Mountain Development said the flood was caused by the draining of a lake north of Nepal’s Langtang Himal range.
Sudan Maharjan is a remote-sensing analyst at ICIMOD and an expert on glaciers. He said, "This is based upon the preliminary analysis based off of the satellite images available." Surrounding debris-covered glaciers can form a supraglacial pond. Experts say that it often starts as a small meltwater pool, which then expands and merges to form a large supraglacial lakes.
Saswata Sannyal, a second ICIMOD official said that such events are increasing at a "unprecedented pace" in the Hindu Kush Mountains, which span Afghanistan, Bangladesh Bhutan, China India Myanmar Nepal Pakistan.
Sanyal stated that "we need to dig deeper into the triggers which are resulting cascading effects."
Nepal's mountainous region is susceptible to climate change effects such as extreme weather patterns, inconsistency of rainfall, flash flooding, landslides, and glacial lake floods.
The early monsoons this year have caused deadly damage in Nepal. At least 38 people are dead or missing in Nepal since May 29. This is according to the National Disaster Relief, Reduction and Management Authority. Reporting by Gopal sharma; editing by Raju Gopalakrishnan
(source: Reuters)