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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).
European shares reach record highs amid hopes for peace in Ukraine
European futures reached record highs on Tuesday, as defence stocks soared amid expectations of a boost in spending. Meanwhile, Hong Kong shares were nearing three-year highs after investors celebrated the business leaders' meetings with President Xi Jinping.
As expected, Australia's central banks began their rate-cutting cycle. The Australian dollar was supported at $0.6350, with a cautious approach to further easing.
S&P 500 Futures rose 0.2%, while European futures gained 0.1%. Japan's Nikkei gained 0.5%, with shares in defence and bank stocks following Europe's rally.
The pan-European STOXX 600 closed Monday 0.5% higher, as a gauge for defence and aerospace stocks soared 4.6%, reaching lifetime highs, after having more than doubled since Russia invaded Ukraine in 2013.
Analysts have called this "supercycle" in the sector. It is expected that earnings will continue to grow in the defence industry due to the significant increase in budgets for new security requirements.
The hope for a peaceful resolution of the conflict in Ukraine has also improved sentiments in other parts of Europe.
Bruno Schneller is the managing director of Erlen Capital Management. He said that a resolution to the conflict could bring positive growth for Europe. This includes improved consumer confidence, reduced energy prices and easier financial conditions.
French President Emmanuel Macron hosted an emergency summit about Ukraine on Monday after U.S. officials said that Europe would not have a role in any talks in Saudi Arabia this week aimed at ending conflict.
The British government said that it is ready to send peacekeeping forces to support any agreement, and Russian and U.S. officials are preparing to hold their own discussions on Tuesday in Saudi Arabia.
Volodymyr Zelenskiy, Ukraine's president, said that his country will not recognize any decisions taken in deliberations when he is not present.
DELETED THREATS
The U.S. market was closed for the public holiday.
The rare meeting between Xi, the Chinese president, and top business leaders on Monday has boosted markets in China. Hong Kong's Hang Seng index rose by 1.8%, reaching its highest level since October. An index of technology shares also reached near three-year highs.
After a steep decline on Monday, Baidu shares stabilized after the founder was not present at the meeting. The company will report earnings in the afternoon. Alibaba will report earnings later this week.
BHP shares rose 0.6% after the global mining company reported its lowest first-half profits in six years but noted signs of economic improvement in China.
The threat of reciprocal U.S. Tariffs has waned, but there was still a concern that these levies could include taxes based on the value-added tax in other countries.
The Financial Times reported Sunday that, in order to protect its farmers and to follow the reciprocal trade policy of U.S. president Donald Trump, the European Commission will explore strict import limits for certain foods manufactured to different standards.
In Europe, the markets are also watching the German elections at the weekend.
The euro was hovering just below $1.05 while the yen remained steady at 151.74 following solid growth figures that boosted chances of an interest rate hike in Japan within months.
Investors awaited the employment and inflation figures later this week. The pound was trading at $1.26033 - just below its high level of two months.
Gold fell from Friday's record-highs to $2,895 per ounce after seven weeks of gains.
Bloomberg News, citing delegates, reported Monday that OPEC+, the oil producer group, is considering delaying a series monthly increases in supply due to start in April, despite Trump's calls for lower prices.
Brent oil held gains overnight at $75.42 per barrel. (Reporting and editing by Nell Mackenzie, Tom Westbrook and Lincoln Feast.
(source: Reuters)