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Rusal's first-quarter losses blamed on high interest rates and the strong rouble
MOSCOW, 20 April - Russian aluminum maker Rusal blamed Monday high interest rates and a strong Russian rouble for its unspecified loss in the first quarter, which was recorded despite an astronomical rise?in prices of metal around the world. Last week, prices reached a four-year high as a result of a blockade of Strait of Hormuz. This is the route through which up 9% of global aluminium trade travels. The company stated in a statement released on Monday that "Rusal can't take advantage of current pricing conditions" as all margins go to European and North American companies. Rusal claimed that the "overly-strong" rouble and high interest rates on loans taken to modernise its two major Siberian plants were negatively affecting earnings. The company doesn't publish quarterly results. The company announced a?$500 million loss per year for 2025. Rusal has stressed that the company does not receive any resource rents in Russia, as 75% of the raw materials it uses to make aluminium are imported. The central bank of Russia raised its key interest rates to 21% by 2024, primarily in order to combat high inflation and economic overheating. It has reduced it to 15% but it still remains above the 12% level that businesses consider comfortable for resuming investment. The next central bank rate-setting session is set for April 24. Oleg Deripaska is the founder of Rusal and one of the most vocal critics against the central bank’s monetary policy. Last week, the rouble strengthened to its strongest level against the U.S. Dollar since May 2023, thanks to higher oil prices and government's temporary withdrawal. It is now up 7.3% so far this month. (Reporting Anastasia Lyrchikova, Writing by Gleb Brianski, Editing by Kirovan Donovan).
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US hosts further G20 discussions on the impact of war on food and fertiliser
The U.S. is hosting further discussions in the coming weeks for the Group 20 major economies about the impact of war in the Middle East on food and fertiliser, as they 'continue to push for coordinated actions. The U.S. will make this pledge in a statement by the chair of the G20. It will be made during a meeting between G20 finance minsters and central bankers held on April 16 at the Spring Meetings of the International Monetary Fund (IMF) and World Bank. Before its official release on Monday, a copy of the statement was released instead of a communiqué that would have needed consensus from all members. In a statement, G20 finance officials discussed various issues, such as the economic impact of war, its effect on agriculture, value chains, and fertilizer. However, they did not announce an agreement to coordinate action in order to ensure access of fertilizer amid war-related disruptions. Last week, U.S. Treasury secretary Scott Bessent launched a push to get the G20 (which includes Russia and China) to coordinate with IMF and World Bank in order to make sure that countries have access to urgently required fertilizer. IMF and other organizations?have cut growth forecasts due to the war. This has led to a sharp rise in energy prices. The war has disrupted the supply chain, and this could lead to 45 million people experiencing food insecurity. As a result, the IMF anticipates that at least 12 countries will request new programs from the global crisis lender. Two senior officials who were briefed about the discussions said that a majority of G20 members supported the U.S. led initiative. However, a few could not confirm any action by the week's end. The officials stated that staff-level engagements would continue to be held on the issue and work towards a "actionable consensus". Details of the possible coordinated action have not been disclosed. In the statement, many G20 members emphasized that it is important to maintain food and fertilizer chains, especially for low-income countries and vulnerable nations, by avoiding export restrictions or prohibitions on fertilizers. The IMF and World Bank also praised the efforts of both to coordinate in order to best respond to the economic effects of war. IMF Director Kristalina Georgieva said on Friday that the two institutions will meet this week to evaluate requests for help from member nations and coordinate the best possible response. Many members have also pledged to remain agile and flexible in their macroeconomic policies and cooperation. The members discussed the "potential for coordinated action" in order to support market stability and promote food security, as well as the importance of diversifying fertilizer production. Bessent streamlined work at the G20 under U.S. leadership. A number of committees that were working on climate change and sustainability issues have been stopped, with a focus on macroeconomic core issues. Treasury spokesperson said Bessent is determined to make the G20 "more nimble and action-oriented" and Washington looks forward to taking actions alongside its G20 partner. Reporting by Andrea Shalal, Editing by Raju Gopikrishnan
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Oil prices rise, while stocks fall as the US-Iran truce hangs in balance
On Monday, oil prices rose and global stocks fell as investors became increasingly worried that the ceasefire agreement between the U.S.?and Iran may not last. Meanwhile, tensions in the Strait of Hormuz increased. Brent crude futures increased by about 5%, to $94.92 per barrel. MSCI's global share index fell by a mere 0.26% last week, while Europe's STOXX600 was down by 1.1%. This is after Asia's equity markets shrugged away risks and advanced. S&P futures were down 0.54%. On Monday, concerns grew that the ceasefire agreement between the United States of America and Iran could be in danger after the U.S. announced that it had seized an Iranian cargo vessel that attempted to break its blockade. Iran also vowed retaliation. The U.S. maintains a blockade of Iranian port, while Iran lifted its blockade and then reimposed it on maritime traffic that passes through the Strait of Hormuz. According to shipping data, the strait was virtually at a standstill Monday. Only three crossings were recorded in a span of 12 hours. Kpler data revealed that over 20 vessels carrying metals, oil products, gas, and fertilisers had crossed the strait in the space of 12 hours on Monday. Markets try to hold on to every bit of information that could indicate one outcome or the other, thus these large swings. Sandra Horsfield is an economist with Investec. She said that, while markets had pulled back on Friday, when Iran announced it would open up the Strait of Hormuz, those moves hadn't been completely retraced. This suggests that "improved sentiment" is still present. Keir starmer, British prime minister, is scheduled to speak in Parliament on Monday. He will be facing calls for resignation due to his handling of Peter Mandelson's appointment as U.S. Ambassador, despite Mandelson having failed a thorough vetting procedure. QUESTION THE PEACE TALKS; FOCUS HORMUZ The future of negotiations between Iran and the U.S. seemed to be uncertain. In a recent note, Derren Nathan, Hargreaves Lansdown's head of equity analysis, stated that "more volatility is likely to follow." Iran's state news agency reported that it rejected any new peace talks with America, just hours after U.S. president Donald Trump announced he would send envoys to Pakistan for talks and launch new?strikes against Iran if they did not accept his terms. Horsfield, from Investec, said: "We thought that there would be a few swings and 'roundabouts' within this rather than a linear?path towards the end result." The yield on the benchmark 10-year Treasuries increased by 2.4 basis points, to 4.2678%. Meanwhile, the yield of German 10-year government bond?was 2.9 bps more at 2.9947%. The dollar, which has been sold in the last two weeks, is now trading at $1.1773 to the euro. Wall Street indexes reached record highs Friday on the back of expectations for robust first-quarter results, with most of them coming this week. The week will also bring British inflation, U.S. retails sales, and European Purchasing Managers' Index data. However, the markets' main focus is on Gulf shipping. Bob Savage is the head of BNY's markets macro strategy. He said that "the critical barometer of risk in geopolitics has been reduced to one data point, which is the number of ships passing through Strait of Hormuz". The immediate focus of the talks is oil and other shortages that are driving inflation.
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Gold falls as tensions between the US and Iran increase due to inflation woes, a stronger dollar and rising US interest rates
The gold price fell Monday due to the stronger dollar. Dollar and inflation fears after another closure of the?Strait of Hormuz drove oil prices higher. As of 1103 GMT spot gold was down 0.8% to $4,790.59 an ounce after reaching its lowest level since April 13 earlier in session. U.S. Gold Futures for June Delivery fell by 1.4% to $4.811. Oil's rise after the weekend chaos surrounding the Strait of Hormuz ensures that inflation risks are palpable and offsets gold's appeal as a safe haven asset. Han Tan, Bybit's chief market analyst, said that the dollar has been the safest haven during the conflict. Spot?gold will likely remain at these low levels of under $5,000 unless there is a sustained and meaningful de-escalation in the conflict. The U.S. announced?on Sunday? that it had seized an Iranian cargo vessel that attempted to break its blockade, while Iran declared it would retaliate. This heightened fears about a possible resumption in hostilities. The oil prices rose around 5% as a result of fears that the ceasefire agreement between the United States of America and Iran may collapse. Traffic through the Strait of Hormuz was largely stopped. Dollar index rose, increasing the price of greenback bullion for holders of other currencies. Benchmark 10-year U.S. Treasury Yields increased, increasing the cost of holding non-yielding gold. Gold is considered a safe-haven during geopolitical and economic uncertainty. However, the rising costs of energy due to the war in Iran has stoked inflation fears and caused the yellow metal's price to drop on the expectation that the U.S. Federal Reserve will tighten monetary policy. "Gold has the potential to continue its recent recovery as long as structural demand drivers remain." "Central bank buying, currency debasement and de-dollarisation trends have faded, but they are still alive and can help support gold," said Nikos tzabouras, senior analyst at Jefferies owned Tradu.com. Silver spot fell 2.1%, to $79.07 an ounce. Platinum dropped 1.7%, to $2,066.90. Palladium declined 1.6%, to $1,533.64. (Reporting by Anjana Anil in Bengaluru; Editing by Kevin Liffey)
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Agnico Eagle consolidates Finland gold assets through multi-deals
Agnico Eagle Mines announced on Monday that it would 'acquire Rupert Resources, Aurion Resources and buy a majority stake in a joint venture with B2Gold. It is consolidating a major gold district located in northern Finland. The Canadian miner stated that the three transactions would 'give it full control over a large land parcel?in Central Lapland Greenstone Belt. Building a multi-asset platform anchored by the existing Kittila?mine and the Ikkari?gold?project. The deals include a C$481,000,000 all-cash purchase of Aurion and a C$325,000,000 purchase of B2Gold’s 70% stake in Fingold. The Ikkari Gold Project and Agnico's Kittila Mine, the largest primary gold mine of Europe, will be integrated into these deals. In premarket trading, U.S. listed?shares?of Agnico fell 1.7%. Agnico stated that the deals could generate operating and development synergies of up to C$500 million, thanks to the removal of property boundaries, the sharing infrastructure, procurement, and regional expertise.
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State Dept official: US companies are eyeing Congo mining assets including Rubaya
A State Department official stated that U.S. mining companies have shown "significant" interest, particularly in the area of Rubaya, which is controlled by rebels. The official added that investment?in this area would need to be aligned with Washington's peace efforts. In early 2018, Congo sent a list of strategic assets to Washington, including gold, copper-cobalt and manganese projects, for U.S. investment as part of a mineral partnership. Through the Minerals Partnership, the U.S. hopes to influence the Congo's critical minerals supply chain through peace and investment agreements. The U.S. is stepping up its efforts to secure vital mineral supplies worldwide for a strategic stockpile of metals as it tries to reduce its reliance on China and counter China’s dominance in Africa. Officials from the U.S. have been contacting the private sector to get their feedback on the assets list. The official confirmed that "we have significant interest" but refused to identify the companies. He said "the conversations are just beginning." The Congolese government and the?M23 did not respond immediately to questions about U.S. companies' interest in mining assets. RUBAYA COLTAN MINING IN FOCUS The Rubaya coltan deposit, which is one of the richest tantalum deposits in the world, was included on the list. Kinshasa is trying to attract U.S. investments into the mineral-rich, but conflict-torn eastern Congo. The official stated that "Rubaya" is something in which we are still interested. There are also a number of companies interested in the area, so discussions are moving forward. Rubaya may give Washington access tantalum, which is a highly-sought metal that can be produced from coltan, and used for capacitors, aerospace parts, and nuclear technology. Officials said that investments must run in parallel with the U.S. peace agreement to end the fighting in eastern Congo where thousands have been killed. "Rubaya?is in many respects at the heart of what's happening in eastern DRC now." "The commercial side cannot be separated from this," the official said. M23 has criticized the U.S. - Congo?partnership for being deeply flawed and unconstitutional. M23 officials told a February M23 official that Kinshasa offered Rubaya as a gift to Washington despite not having control over the site. They wanted to get Washington to help the Congolese government militarily recover the area. VIRTUS DEAL Virtus Minerals, a U.S. company, announced this month that it is working to restart Congolese cobalt producer Chemaf’s mines. This marks the first time a mine has been acquired under the U.S. - Congo minerals partnership. The official from the State Department said, "We see that as an important foundational project for this agreement." It's all about establishing confidence in the business climate for the U.S. and U.S.-aligned sectors. Officials said that investors were most concerned with Congo's fiscal security. "These companies...must be able to tell their shareholders and boards with certainty the fiscal, regulatory and tax situation throughout the lifetime of their investment." (Reporting by Olivia Kumwenda-Mtambo. Maxwell Akalaare Adombila and Ange Adihe Kasongo contributed additional reporting from Dakar and Kinshasa. Jane Merriman (editing)
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Sources say that Pakistan has put a $1.5 billion sale of Sudanese weapons on hold due to Saudi objection.
Two Pakistani security sources and a diplomatic source have confirmed that Pakistan has suspended a $1.5billion deal to provide weapons and 'jets to Sudan after Saudi Arabia demanded the agreement be terminated and stated it would not finance the purchase. Conflict between Sudan's army, and its paramilitary Rapid Support Forces, has caused the worst humanitarian crisis in the world for three years. It is now a focal point for foreign interest and threatens to split the Red Sea nation, which is a major producer of gold. Saudi Arabia brokered the deal in January, but Riyadh did not disclose any financing at that time. The Pakistani military was negotiating several defence sales after its jets, weapons systems and skirmishes against India in May of last year gained attention. Saudi Arabia has been one of Pakistan's most important allies, providing crucial loans and financing for Islamabad’s struggling economy. Since signing a mutual defence agreement last year, their relationship has grown. One of the sources of security said that Saudi Arabia had signaled to Pakistan that it should cancel the deal once it dropped its idea of funding it. A request for comment was not immediately responded to by the Saudi government's media office. Sudan's military did not respond immediately either. The Pakistani army did not reply to a comment request. The air force and military had not confirmed that an agreement was on the way. Sources added that Riyadh was advised by some Western countries to avoid proxy wars in Africa. Saudi Arabia and United Arab Emirates have supported opposing sides in conflict ridden?countries throughout the?region including Sudan. Saudi Arabia, which has backed the Sudanese army, has also been accused by the UAE of providing logistical assistance to the RSF. The UAE denies this accusation. Sources said that a meeting in March between Sudanese army leaders and Saudi authorities at Riyadh led to the termination of Saudi financing. A $4 billion deal with the Libyan National Army was reported by? The second source stated that the Saudis were "revisiting" their strategy in both countries. Reporting by MubasherBukhari, with additional reporting by Ariba Sayeed and Saad Shahid in Islamabad; Timour Azhari and Khalid Abdelaziz in Dubai; and Sharon Singleton.
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IAI reports that due to the war, Gulf Aluminium production fell 6% in March.
The International Aluminium Institute reported that the primary aluminium production rate in the Gulf region fell by 6% from the previous month in March. They cited an "obvious effect on the market" due to the Middle East war. The IAI data provides an initial estimate of the damage to the aluminium supply due to the conflict. This has seen two of the largest smelters in the region attacked by Iran and impacted the shipping to export markets. The IAI said in a press release that the daily production of 'the Gulf countries', which account for around 9 percent of global aluminum smelting capability, dropped to 15,963 tons on average in March from 16,997 in February. Jonathan Grant, IAI Secretary-General, said: "We don't yet have the final March figures from?all of our members smelters. We can expect that the actual production will be even lower when the complete?dataset is available in May." IAI reported that global primary aluminium production in 'March increased 0.9% on a year-on-year basis to?6.302 millions tons. However, the daily rate fell 0.3% compared to February. Reporting by Tom Daly, Editing by Joe Bavier
MORNING BID AMERICAS - Green light, red Light
What's important in the U.S. and Global Markets Today By Mike Dolan. Editor-at-Large for Finance and Markets
Stop-go, stop-go. The Friday market excitement at the opening of Strait of Hormuz was tempered again on Monday, as Iran's green light turned to red once again over the weekend due to?the United States continuing blockade of Iranian port. As Iranian troops opened fire on tankers and the U.S. seize an Iranian cargo vessel, tensions grew. The markets and the belligerents are not sure what exactly was agreed before Iran temporarily opened the waterway on Friday.
Below, I'll go into more detail. Listen to the Morning Bid Daily Podcast, where I discuss the continued growth of tech and the political turmoil in Britain.
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GREEN LIGHT / RED LIGHT: Further peace?talks could be in the works this week. U.S. envoys are reportedly headed to Islamabad, but Tehran has stated that it will not take part. Wednesday will see the expiration of a two-week ceasefire between the sides. Oil prices have recovered 5% on Monday after a drop of 9% on Friday. Crude prices are still below $100 per barrel. On Saturday, 20 ships passed through the disputed strait, the most since March 1. The weekend tensions in Asia did not affect the stock markets as much as they have been affected by similar news reports over the last few months. They may be referring to Wall Street's gains on Friday of over 1% and the 13th consecutive day?of gains by the tech-heavy Nasdaq, the first time since 1992. Unlucky 13? The tech optimism has once again surpassed geopolitical worries - and is partly driven by these concerns. Tesla will be the very first company to announce its first-quarter results on Wednesday. In the meantime, European shares fell early Monday morning, Wall Street futures dipped, and dollar rose.
But, more broadly, it seems that the beginning of an end to the Gulf conflict is in sight. Even if it takes weeks or even months to restore physical oil supplies to normal. China kept its key interest rate unchanged on Monday while British markets watch as the pressure on Keir starmer grows. Starmer will address Parliament today about what he knew - or did not know - about the security screening of the former U.S. Ambassador Peter Mandelson. Mandelson was fired last September for his links with the late sex offender Jeffrey Epstein.
The markets are less worried about a new vote than they are by the possibility that Starmer will be ousted by his own Labour Party.
Chart of the Day Even if all guns cease to fire, it will still take months and years to restore the flow through the Strait of Hormuz to its pre-war level. Even under benign conditions, a full rebalancing of the global tanker fleet, and a return to pre-war loading rhythms in the Gulf, will take at least 8-12 weeks.
Watch today's events
* Canada March CPI (8:30 a.m. EDT)
* ?U.S. Envoys are due to arrive at Islamabad in connection with reported talks
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(source: Reuters)