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London metals trading in a tight range as the market awaits an update on US-China tariff talks
Investors were glued to the news of developments in U.S. China negotiations as well as a flurry of U.S. Economic Data. The benchmark copper price on the London Metal Exchange rose by 0.1%, to $9 387 per metric ton at 0128 GMT. This week, the U.S. personal consumption expenditures data (PCE) and initial unemployment claims are due. Donald Trump, the U.S. president, said that progress had been made in negotiations with China. Beijing denies that trade talks have taken place, and U.S. Treasury secretary Scott Bessent has not backed Trump's claim about tariff talks with China. China has exempted some U.S. imports of its retaliatory duties, a sign the trade war may be easing. Last week, the Trump administration signalled its willingness to deescalate. A trader stated that "the trajectory of the U.S. China trade dispute remains undetermined and the market eagerly awaits a clear indication on its future course." "If tensions continue to escalate, they could have far-reaching effects, possibly triggering a worldwide recession." Other London metals include aluminum, which fell by 0.1%, to $2.432 per ton. Zinc rose 0.4%, to $2.644, while lead increased 0.1%, to $1.968, and tin was up 0.3%, to $32,115. Nickel, however, dropped 0.2%, to $15.585 per ton. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper rose by 0.3%, to $10,656.24 per metric ton. The Shanghai Futures Exchange's (SHFE) warehouses, which monitor inventories of CU-STX and SGH metals, have seen a 32% drop week-on-week. SHFE aluminum fell 0.1%, to 19,905 Yuan per ton. Zinc rose 1%, to 22,545 Yuan. Lead added 0.1%, to 16,945 Yuan. Nickel rose 0.1%, to 124420 Yuan. Tin lost 0.2%, to 261,100 Yan. $1 = 7.2793 Chinese Yuan Renminbi (Reporting and editing by Sumana Niandy; Reporting by Violet Li & Lewis Jackson)
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Dollar slips as stocks fall on US-China standoff
The dollar fell to its highest monthly level in years on Tuesday, as investors prepared for the impact of the trade war. The tariffs imposed by Donald Trump have shaken the confidence in U.S. assets. Even though the S&P 500 has recovered much of the early April losses it suffered, the dollar is only able to maintain its current level, with no significant rebound. The situation deteriorated overnight after U.S. Treasury Sec. Scott Bessent said on CNBC that it was up to China to "de-escalate the tariffs", which are currently at 125%, for most U.S. Exports to China. The Asia session was dominated by a holiday in Japan, which kept most currency pairs at the same level. The euro's rise to $1.1409, up 5%, is its biggest monthly gain in 15 years. Nikkei, S&P 500 and Dow futures rose, aided by officials who hinted at a easing of automotive tariffs. However, investors were still waiting for a more significant relief from the 145% U.S. Tariffs on China. China has made some concessions, but has not yet introduced any stimulus measures. They are hoping that Washington will blink first. China's Foreign Ministry also stated that President Xi Jinping has not spoken with Trump in recent times, nor have their respective administrations tried to reach a tariff agreement, contrary to the U.S. President's claim made in an interview to Time magazine. Hong Kong's Hang Seng index rose 0.3% in the early trading and mainland blue chips index fell by 0.2%. J.P. Morgan analysts stated in a report that the first-quarter GDP figures and the April U.S. job numbers due later this week will likely be supported by purchases made in advance to avoid the new taxes. However, a decline in China shipments indicates a reckoning could be coming soon. In a recent note, J.P. Morgan analysts said that the clock was ticking for hard data resilience. They highlighted a 42% drop in China's shipments to the U.S. from peak to trough in the last 10 days. This, if it continued, would have a ripple effect on supply chains. "A worrying decoupling between U.S. and China trade appears to be underway. We expect the damage will increase in the coming weeks and month." Investors will also be watching the results of the Canadian election, which is expected to bring the Liberals back to power. Inflation readings in Europe are due, starting with Spain and Belgium on Tuesday. After a massive outage that brought Spain and Portugal to an absolute standstill, power started to return to some parts of the Iberian Peninsula late Monday. HSBC, BP, Deutsche Bank and Coca-Cola will all be reporting their quarterly results on the same day, as well as Adidas, Coca-Cola and Visa. Apple, Microsoft and Meta Platforms will report their mega-caps in the coming week. Gold was trading at $3,333 per ounce on February, an increase of nearly 7% over April, and almost 27% so far this year. Brent crude fell a little to $65.68 per barrel. Treasuries weren't traded in Asia due to the holiday in Japan, leaving 10-year benchmark yields at 4,206%. Futures were largely unchanged.
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Australian young voters put aside their disillusionment in order to keep right-wingers out
Jessica Louise Smith, a student at an Australian university, says she'll vote in the general election on Saturday with one goal: to avoid the "worst" possible outcome of a conservative government. After seeing Donald Trump's disruption in the United States, the 19-year old said that the prospect of the conservative opposition leader Peter Dutton becoming the next Prime Minister was "very scary". She said, "I don't feel as if I am as focused on genuine politics in Australia than I am just avoiding the worst option." Smith will cast his vote at an election on 3 May alongside millions of Millennials, Generation Z and other voters. These four groups make up almost half of the 18 million Australians who are enrolled in Australia's compulsory voting system. They outnumber the influential Baby Boomer group. Social media, podcasts, and memes have been used by the Liberal-National Coalition and Anthony Albanese’s Labor Party to announce housing and student loan policies. Young voters who grew up in a world of global pandemics, economic turmoil and climate crises, expressed their disillusionment and dissatisfaction with the inaction by both major parties on issues that directly affected them. Darcy Palmer (18) said that many people of his age feel compelled to support Labor "just to make sure Dutton does not get in", even though Australia has preferential voting, which allows voters to rank the choices. According to a recent survey by political consultancy Redbridge Group, Labor has a 60% lead over the conservative Liberal Party among Millennials. Kos Samaras, Redbridge's director of communications and marketing, said that this group is also the most likely to "give their first preference to minor parties or independents" in a Financial Review op-ed. Jasmine Al-Rawi is an architecture student who has recently become a citizen after moving from New Zealand. She would like to see the climate change and pressures on cost of living addressed more. The 22-year old said, "Both major political parties have ruled for the wealthy. I don't think that the Labor Party has done anything for ordinary people ever since they were elected." "I don't think the Labor Party is any better than Peter Dutton, but I also think that there are no positive arguments for them." According to the Australian Election Study, the trend of two major parties losing their support among younger voters has increased in recent years. During Australia’s last election, in 2022 26% of Gen Z voters and 18% Millennials voted Greens. The party is focused on the environment. The study found that support for major parties, and in particular the conservative coalition, fell to its lowest level ever. Ava Cavalerie Johnson (18) said that she hoped the youth vote would shift Australia's Parliament further to the left, but warned against generalising the group. There are still many conservative political beliefs. She said: "I think there will be more of a shift to the left but not a complete one." (Reporting and editing by Cordelia Chen in Sydney, and Christine Hsu in Sydney)
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Oil prices fall as economic uncertainty dampens demand expectations
Crude oil fell early in Asian trading on Monday as investors reduced their expectations of demand growth due to the ongoing US-China trade war. Brent crude futures dropped by 25 cents or 0.4% to $65.61 a barrel at 0024 GMT. U.S. West Texas Intermediate Crude Futures fell 18 cents or 0.3% to $61.87 per barrel. Both benchmarks dropped more than $1 Monday. A majority of economists surveyed said that President Donald Trump’s efforts to reshape the world’s trade by imposing tariffs against all U.S. imported goods has increased the risk that this year’s global recession will be a reality. China, which was hit by the highest tariffs, responded with its own duties against U.S. imported goods, sparking a trade conflict between the two top oil-consuming nations. Analysts have been forced to lower their forecasts for oil demand and prices. Barclays cut its forecast for 2025 Brent crude prices by $4, to $70 a barrel. The company cited increased trade tensions as well as a shift in the production strategy of OPEC+. These factors are driving a surplus oil supply this year of 1 million barrels per day. Sources told us last week that several members of OPEC+ (which includes the Organization of the Petroleum Exporting Countries, and its allies) will propose an acceleration of production increases for a second month consecutive in June. In a recent note, oil analyst Philip Verleger stated that a substantial drop in the price of (oil) is likely if exporting nations increase production. According to an initial poll conducted by analysts on Monday, the U.S. crude stockpiles probably increased by around 500,000 barrels during the week ending April 15. The American Petroleum Institute, a trade group, will release its estimate of U.S. crude oil inventories on February 2. The Energy Information Administration is expected to release official figures on Wednesday. (Reporting and editing by Sonali Paul in New York, Shariq Khan is reporting from New York)
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Fortescue iron ore company in Australia overcomes weather problems to record higher Q3 iron-ore shipments
Fortescue, an Australian iron ore miner, reported higher third-quarter shipments of the commodity on Thursday. This was in line with analysts' expectations as production recovered from a derailment that occurred in the same quarter last year. Andrew Forrest is the billionaire chairman of this iron ore company. It reported quarterly iron ore shipment numbers of 46,1 million metric tonnes (mt), up from 43.3 million tons reported a year ago. This was in line with Visible Alpha's consensus estimate of 46.8 mt. The increase in iron ore shipment comes despite Fortescue experiencing significant weather disruptions. This included a five-day port closure at Port Hedland, and operational restrictions from Tropical Cyclone Zelia which drove a 7% decline quarter-on-quarter. The shares of the fourth largest iron ore mining company in the world rose up to 2.1%, reaching a high of A$15.8, which was higher than the 0.3% increase seen across the entire mining sector. Fortescue continues to review its timeline for Iron Bridge operations in order to reach full production of 22 millions mt per year. An assessment of key processing machinery is expected to be complete by June. Fortescue's green energy division is re-evaluating development timeframes of its Arizona Project located in the U.S., and its Gladstone PEM50 Project located in Queensland. By June, "greater clarity" regarding external factors that affect these projects will be expected. The company has maintained its guidance for fiscal 2025 of 190-200 million mt iron ore shipments, which includes 5 million-9 millions mt Iron Bridge at 100%. The projected capital expenditure for 2025 of $3.5 to $3.8 billion remains the same. Fortescue delivered the first T 264 Power System during the quarter to Liebherr, a manufacturer of mining equipment. The system will convert diesel mining trucks into zero-emission vehicles, as part of Fortescue's efforts to decarbonize.
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Harbinger, an EV startup, launches a hybrid van platform in order to attract more fleet clients
Harbinger, a startup that produces electric vehicles, launched on Monday a new platform of gasoline-electric hybrid vans for medium-duty trucks. The company is looking to attract more fleet customers. Hybrid vehicles make it easier for fleets to transition from gasoline vehicles to electric ones by reducing their dependence on expensive charging infrastructure. They also offer benefits like a longer range and reduced fuel consumption. Harbinger CEO John Harris said that the hybrid chassis is a good fit for fleets with long routes, unpredictable days and limited charging access. It's also a good choice for those who have multi-shift schedules, middle-mile distribution, or longer routes. Harbinger, a new vehicle platform with a 500-mile range between charges and electric motors that drive the wheels, is backed by Capricorn Investment Group, an early Tesla investor, and Tiger Global. The gasoline engine will recharge the battery. Customers can choose to plug in the vehicle to charge the batteries. Harbinger’s platform is set to be delivered in the next year. It's a vehicle framework with all of its main components, including an electric motor and battery, as well as steering, brakes and engine. It is common for a company to send its chassis to customers or dealers, who will then add a body with the help of another company. This is essentially the process used in the industry. Harbinger announced last week that Panasonic, a supplier to Tesla, will be its supplier for EV batteries. Panasonic, a supplier to Tesla, will be the company's vendor for EV battery cells. After factoring in federal incentives provided under the Inflation Reduction Act, the startup claims that its new hybrid platform is priced at a competitive level with diesel models. Harbinger has also launched a program that will offer buyers a price reduction similar to the IRA Tax Credits if the Trump Administration removes them.
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Brazilian steelmaker Gerdau reports slight core earnings gain as US revenues rise
Gerdau, a Brazilian steelmaker, announced on Monday that it had slightly surpassed its first-quarter core earnings. The company attributed this to the United States changing its trade policy for steel. Gerdau, Brazil’s largest steelmaker based on market capitalization, and owner of mills in the Americas, reported adjusted earnings before taxes, depreciation, and amortization (EBITDA), of 2.4 billion reais. This was higher than the 2.29 billion reais expected by analysts according to an LSEG survey. The adjusted EBITDA still fell by nearly 15% compared to the previous year, and the adjusted net profit dropped 39%, reaching 758 million reais. Gerdau stated, however, the adjusted EBITDA was nearly unchanged quarter-over-quarter, due to better results in North America. The firm stated in its earnings report that the increased demand in the United States is partly due to seasonal factors, but also because of customers' reactions to the changes in US trade policies, as well as the increase in inventory and the preference for domestically produced steel. In North America, net revenue increased by more than 16 percent from the December quarter. However, in Brazil it fell 3.5%. Gerdau's net total revenues for the quarter were 17.38 billion reais, which was higher than the 17.06 billion reais predicted by an LSEG survey.
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Whitehaven Coal's third quarter production in Australia drops by 5% q/q
Whitehaven Coal, Australia, reported on Tuesday a 5% decline in production in the third quarter. This was mainly due to a reduced output at its Narrabri Mine in New South Wales as well as lower production in its Queensland mines. For the quarter ending March 31, the country's largest independent coal miner reported a managed run-ofmine (ROM coal) production of 9,2 million metric tonnes, compared to the 9.7 million tons that was reported for the previous three-month period. Visible Alpha's consensus estimate of 8 million tons was exceeded. Narrabri, the only underground mine of the company, reported a decline in ROM production of 31%. The mine had equipment failures that took time to fix during the period reported. The Queensland operations, which include the Daunia mine and Blackwater, saw a drop of 3% in ROM output during the first quarter, to 4.5 millions tons. The Queensland coal operations of the company earned A$221 (141.99 dollars) per ton sold during the quarter. ($1 = 1.5564 Australian dollars)
US court launches 30-day competition to buy parent company's shares of Citgo
According to a late Thursday court filing, a U.S. court official overseeing the auction of shares of Citgo Petroleum's parent company in Venezuela has proposed opening a 30-day period for bids on April 28. The final winner of the process will be chosen on June 11.
The Delaware Judge Leonard Stark must approve the proposed calendar. It follows confirmation of a $3.7 Billion starting bid from Contrarian Funds affiliate Red Tree Investments.
Red Tree's "stalking horse" bid was selected, and the 16 creditors who remain in this 8-year old case began a fight. Some parties thought the offer was too low, while others found it too complicated because it included an agreement to pay $3 billion in compensation to holders of Venezuelan defaulted bonds.
Some companies hope that following an auction hearing held last week, where creditors and bidders presented their arguments, the court will give priority to price rather than certainty of closure in selecting the winner of the auction next month. This would allow creditors to receive the maximum amount possible of proceeds.
Miner Gold Reserve, one of the creditors involved in the case, submitted an offer this year for $7.1 billion that was not chosen as the starting bid. The company said they were "encouraged by the decision made by Judge Stark on the stalking bid."
The order expresses reservations regarding Red Tree's lower offer price and the implicit undervaluation of the transaction support agreement between 2020 bondholders and the company, which is to the detriment to the judgment creditors involved in the Citgo Sale proceeding.
The person said that a consortium consisting of a subsidiary Gold Reserve, Rusoro, and two units of the conglomerate Koch are looking forward to the next phase of the process.
Vitol is one of the four consortia or companies that have submitted bids this year. It wasn't immediately clear whether it would make a new offer.
Citgo is valued at no more than 13 billion dollars, and the total proceeds of the auction are estimated between $7 billion to $8 billion.
(source: Reuters)