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The World Bank predicts that six Western Balkan economies will grow collectively by 3.2% in 2025
The World Bank's bi-annual report, released on Monday, said that the weakening external demand and the global economic uncertainty will moderately slow the growth of the six Western Balkans nations in 2025. The report stated that Albania, Bosnia and Herzegovina, Kosovo, Montenegro North Macedonia, Serbia, will all grow by 3.2% in 2025. This is 0.5 percentage points lower than the previous bank projections. The growth rate in the region is expected to reach 3.5% by 2026. The World Bank's division director for Western Balkans, Xiaoqing Yu said, "We see some positive economic trends that demonstrate the region’s resilience and should support firm economic growth." Lower inflation and increasing wages are supporting consumption, and public investment is picking up. Yu stated that the economic outlook for the region could be negatively affected by the increased uncertainty in several countries. He also said that the slower economic activity of the European Union, as well as the uncertainty in global trade, would reduce trade in goods and service and investment and remittances. According to the report, the region's economies need to diversify their growth sources and renew structural reforms including removing labor market barriers in order maintain economic resilience. The report stated that a faster implementation of EU accession Reforms, including joining the Single Euro Payments Area and introducing green lanes to streamline cross border trade, would further boost business confidence, attract investments and stimulate job creation. The report stated that as the six countries face rising temperatures, extreme weather, and the transition to a lower-carbon economy, it is important to reform their social protection and employment systems to prepare their workforce for the new opportunities created by the green shift. Reporting by Daria Sucic, Editing by Toby Chopra & Sharon Singleton
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China's GEM will boost vital minerals recycling capacity
GEM, a Chinese recycler and battery materials maker, will increase its capacity to recycle critical minerals as part of a plan to boost China's self-sufficiency in these metals. This was announced in the company's 2024 earnings report. GEM's expansion into recycling will likely reinforce the dominant position China holds in the critical minerals sector. This has been the case since 2023, when China began to restrict exports of over ten metals including germanium and gallium. GEM said it plans to increase the production of recycled tungsten and develop high-purity galium, indium and scandium. Yangzhou Ningda Metal, a subsidiary of the company, will serve as the base for a hub that will produce high-purity materials and recycle gallium. GEM has reported significant progress on its recycling efforts for 2024. The lithium carbonate production exceeded 4,000 metric tonnes, an increase of 44% from last year, and the tungsten recycling reached 6,486 metric tons. This is a 39% rise over the previous year. In 2024, the company's operating revenues will have increased by 8.75% on an annual basis to $33.2 billion yuan (approximately $4.55 billion). GEM shares were down 1.5% at the Shenzhen Stock Exchange as of 0541 GMT. Reporting by Violet Li, Lewis Jackson and Joe Bavier; editing by Joe Bavier.
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Minister: South Korean companies to increase Indonesian investments by $1.7 billion
Airlangga Hartarto, Indonesia's economic minister, said that South Korean firms will increase their investments in Indonesia by $1.7billion. She made the announcement after attending a business meeting between President Prabowo and a South Korean association. Airlangga reported that the increase in investment is more than 10% over the $15.4 billion invested by South Korean companies into Southeast Asia's biggest economy. Prabowo’s office reported that he had met with over a dozen South Korean firms who have invested in Indonesia. These included holding company Lotte Corporation and steel firm POSCO. Airlangga, without providing any further details, said that POSCO and KCC Glass are among the companies planning new investments. Airlangga reported that Lotte Chemical Corp.'s $3.9 Billion large-scale petrochemical facility in Indonesia is expected to begin operating by September or Oct. this year. He added that Indonesia was also in discussions with South Korea's Poongsan Corporation about buying ammunition. KCC Glass POSCO Lotte and Poongsan have not responded to requests for comment.
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Dalian Iron Ore drops amid possible Chinese steel production cuts
Iron ore futures fell on Monday as a result of the possibility that China would cut crude steel production. However, the losses were limited by the continued increase in demand for this steelmaking ingredient. The September contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 0.49% lower, at 710.5 Yuan ($97.32). As of 0705 GMT, the benchmark May iron ore traded on Singapore Exchange was $98.6 per ton. Baoshan Iron & Steel, China's largest listed steelmaker, has said that a national output cut is likely to occur this year. Requests for comment were not immediately responded to by the China Iron and Steel Association, a state-backed organization and state planner. Wu Wenzhang is the chairman of the consultancy Steelhome. According to the state-owned China Metallurgy News, the steel market will be in balance if crude steel production this year falls by 50 million tons compared to last year. Wu said that steel consumption is expected to drop by 30 million tons from 2024 this year. Steel exports are also expected to fall between 15 and 25 millions tons. Steelmakers' increased production has helped to support prices. Everbright Futures, a broker, reported that hot metal production reached its highest level since October 2023 last week. Iron ore demand is usually gauged by the hot metal production. Coking coal and coke, which are used to make steel, also fell, by 1.6% and 1.66%, respectively. The Shanghai Futures Exchange saw a rise in most steel benchmarks. The rebar price rose by nearly 0.61%. Hot-rolled coil was up by 0.84%. Stainless steel gained 0.31%. Wire rod fell 0.57%. ($1 = 7.3006 Chinese Yuan) (Reporting and editing by Sumana Cheema and Sonia Cheema; Amy Lv and Michele Pek)
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Angola is more likely to borrow from IMF after the oil price drops, says Finance Minister
Vera Daves de Sousa, the Finance Minister, said that the drop in crude oil prices increases the likelihood of Angola needing an IMF loan. The government is also conducting stress tests to assess the impact on finances. After U.S. President Donald Trump's announcement of sweeping tariffs, on April 2, the second-largest crude oil exporter in Sub-Saharan Africa based its budget for 2025 on an oil price per barrel of $70, Brent oil futures briefly fell below $60. This was their lowest level in over four years. The contract closed at $66.91 per barrel on Friday. Daves de Sousa, in an interview at the International Monetary Fund Spring Meetings and World Bank Spring Meetings in Washington on Friday, said: "We are rolling stress test scenarios." De Sousa explained that a small drop in oil prices might trigger a temporary freeze on some expenditures, but a drop of say, $45 would require an additional budget. She said that the government is working to improve tax administration, increase enforcement of property taxes and mitigate the effect of lower oil prices. BOND PRICE DECLINES Many smaller and riskier emerging countries, including Angola have felt the impact of recent volatility in fixed income markets, particularly U.S. Treasuries. Angola's dollar-bonds were also hammered by investors who sold risky assets after U.S. Trump imposed sweeping tariffs on trade. The yield on the 2049 maturity has increased to 13% from 12% prior to the U.S. Tariffs. Bond yields are inversely related to bond prices. The bond was quoted on Monday at 70.87 U.S. dollars per cent. A level lower than 70 is usually a sign that a nation may have difficulty borrowing. Last week, the bonds rose on hopes that the tariffs standoff would be resolved. Angola was required to pay $200 million to JPMorgan earlier this month as a margin for its $1 billion total-return swap, a loan that the lender issued in December and which was backed by dollar bonds of the country. JPMorgan didn't respond to a comment request immediately. De Sousa stated that she is in discussions with JPMorgan about measures to be taken to avoid a margin call. She said that neither investors nor rating agencies have expressed concern about the payment. She said that there were no negative connotations. Instead, they were surprised at how quickly we had been able to raise such a large amount of money. The government is currently examining the possibility of requesting an IMF financing program. De Sousa, when asked about Chinese loans backed with oil, said that the government would have to pay another $8 billion. It expected to be able do so by 2028, rather than 2030-2031 as it had previously predicted. Angola is also borrowing more money, mainly from China's EXIM Bank, but this money was not secured by collateral, it was concessional, and earmarked to specific projects, such as improving internet capability in rural areas, or improving education. De Sousa stated that Angola would love to tap into international capital markets once again, but does not plan to do so for the time being. We want to go on the market but with the way things are going, this isn't the right time. We will keep an eye on it to make sure we are prepared for the next time. De Sousa said that officials from the Trump administration had confirmed in Washington, in meetings with the public, their commitment to fund the Lobito Rail Corridor without specifying an amount. The project is designed to transport minerals from central Africa's copperbelt into the West. (Reporting and editing by Paul Simao, Sharon Singleton and Paul Simao; Additional reporting in Nairobi by Duncan Miriri)
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National Grid announces a three-year rate plan in Upstate New York
National Grid, a British company, announced on Monday that it had submitted a proposal for a three-year plan of rates to the New York Public Service Commission in order to run its electric and gas distribution operations upstate New York. Niagara Mohawk Power Corporation, which provides electricity and gas to 1.7 million customers, accounts for around 15% of National Grid’s regulated assets. If the plan is approved, the average residential electricity customer using 625 kilowatt hours (kWh) each month will see their monthly bill increase by $14.32 the first year, then $6.44 the second and finally $4.34 the third. The company stated that residential natural gas users using an average of 78 thermos per month will see their monthly bills increase by $7.66 the first year, then $8.08 the second and $9.18 the third. National Grid announced that the plan will run from 2025-2028 and include a 9.5% return on equity, as well as a capital investment for NIMO of 1,43 billion dollars in electricity, and 351 million dollars in gas in the first year of rate. The plan also includes over $290 million of bill discounts and the retirement of approximately 112 miles of natural gas pipeline with a high leakage rate in the next 3 years. The commission will likely make a final decision in the coming months. Reporting by Shashwat awasthi, Bengaluru. Editing by Janane venkatraman and Kirby Donovan.
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S-Oil reports refining and petchem losses, expects US tariffs will affect margins in Q2
S-Oil, a South Korean company majority-owned by Saudi Aramco and with refining and chemical units, suffered losses in the first-quarter. It expects that margins will be affected by U.S. trade negotiations and volatility on the market during the second-quarter. S-Oil announced a loss of 14.5 billion won (14.93 millions) for the first quarter of 2025 compared to a profit of 454.1 million won a year ago, in a Monday statement. The first-quarter revenue of the company fell by 3.4% on an annual basis to 8.99 trillion won. S-Oil reported that its refining division had an operating loss in the quarter under review of 56.8 trillion won, compared to 250.4 billion won profit a year earlier, due to low demand in an uncertain economic environment and delays in maintenance. The company said that losses in its petrochemicals division have more than doubled from the previous quarter to 74.5 billion won. S-Oil's 669,000 barrels-per-day oil refinery, located in the city of Ulsan, southeast of Seoul was operating at 94% capacity compared to 93% for full-year 2024. S-Oil anticipates that the second-quarter refinery margins will be affected by the outcome of U.S. Tariff Negotiations, as well as increased global market volatility. S-Oil stated in a presentation that "ongoing U.S. Tariff tensions could weigh on oil demand predictions." The progress of trade negotiations is expected to reduce global uncertainty. S-Oil is also scheduled to perform maintenance on its residue fluid catalytic cracked (RFCC), unit in the fourth quarter. Separately the company targets mechanical completion of the Shaheen Project during the first half 2026. The $7 billion project will produce up to 3.2 millions metric tons of petrochemicals from crude oil each year. (1 dollar = 1,439.7000 won). (Reporting and editing by Heekyong Yak and Michele Pek, Florence Tan, and Rashmi Anich.
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Angola's Finance Minister says that country stress testing for lower oil prices and IMF program is more likely
Angola has been running stress tests in order to assess the impact of a drop in oil prices on the government's finances. Finance Minister Vera Daves de Sousa announced on Friday that this situation would make a request for IMF loans more likely. The second-largest crude oil exporter in Sub-Saharan Africa has built its budget for 2025 on an oil price per barrel of $70, but Brent oil futures briefly fell below $60 after U.S. president Donald Trump announced tariffs on April 2nd. The contract closed at $66.91 per barrel on Friday. Daves de Sousa said in an interview at the International Monetary Fund's and World Bank's spring meetings in Washington that "we are rolling out stress tests scenarios." De Sousa explained that a small decline in oil could lead to a temporary freeze on some expenditures, but a drop of $45 would require an additional budget. She said that the government was working on measures to reduce the impact of lower prices of oil on revenue, improve tax administration, and increase enforcement of property taxes. Many smaller and riskier economies, including Angola have been affected by the recent volatility in fixed income markets, particularly U.S. Treasuries. Angola was forced to pay $200m earlier this month when JPMorgan issued an margin call on its 1 billion total return swap, a loan that the lender issued in December and which was backed by dollar bonds of the country. De Sousa stated that she was in discussions with JPMorgan about measures that could be taken to avoid another margin payment and that neither investors nor rating agencies had given her any negative feedback on the payment. She said that there were no negative connotations. Instead, they were surprised at how quickly we had been able to raise such a large amount of money. The government is currently examining the possibility of requesting an IMF financing program. De Sousa, when asked about Chinese loans backed with oil, said that the government would have to pay another $8 billion. It expected to be able do so by 2028, rather than 2030-2031 as it had previously predicted. Angola is also borrowing more money, mainly from China's EXIM Bank, but this money was not secured by collateral, it was concessional, and it had been allocated to specific projects, such as improving internet capability in rural areas, or improving education. De Sousa stated that Angola would love to tap into international capital markets once again, but does not plan to do so for the time being. We want to go on the market but with the way things are going, this isn't the right time. We will keep an eye on it to make sure we are prepared for the next time. De Sousa said that officials from the Trump administration had confirmed in Washington, in meetings with the public, their commitment to fund the Lobito Rail Corridor without specifying the exact amount. The project is designed to transport vital minerals from central Africa's copperbelt into the West. (Reporting and editing by Paul Simao; Karin Strohecker)
MORNING BID EUROPE - Markets want more signals, less noise in trade
Wayne Cole gives us a look at what the future holds for European and global markets.
The week has started off in a quiet manner, as President Trump is more focused on his disappointment over Russia than his trade war. The White House has communicated on trade with a lot of noise, rather than a clear message.
Rollins, the Agriculture Secretary, told TV that they speak with China daily, which was likely news in Beijing. Scott Bessent, Treasury Secretary, says he did not discuss tariffs with Chinese officials. He also does not know if Trump spoke to Xi as he had claimed.
The White House is reportedly planning to hold trade talks every week with six different countries until Trump's tariff deadline of July 9. It's a bit optimistic given that it usually takes 18 months to negotiate a deal and even longer to pass one.
Markets are currently assuming that they have reached the peak of tariffs and Trump is forced to lower them on China. This is especially true after major U.S. retail chains warned Trump last week that their shelves will soon be empty if he doesn't.
Barclays analysts believe that a 60% tariff on China is likely, a 10% tariff on everyone else, and a 25% sectoral tax, with some exceptions. They note that even this would be worse than the worst-case scenario for 2025.
It could be that analysts are optimistic about earnings, but the Wall St futures have fallen around 0.5%.
This week, 180 S&P companies, including Apple, Microsoft and Amazon, will account for more than 40% the market value of the index. Apple's iPhone sales outlook and the impact tariffs will have on its vast supply chain are likely to be of great interest.
Data-wise, the euro zone and U.S. reports on inflation this week will be dovish in terms of policy. The same is true for the Q1 U.S. Gross Domestic Product report, where an increase in imports - notably gold – will have a negative impact on the headline number. The Atlanta Fed GDPNow estimate predicts a 0.4% drop in GDP annualised, even excluding gold.
The Friday payroll numbers are more timely, and they should help refine bets on a Fed rate cut in June. The Fed's current estimate is around 63%.
Market developments on Monday that may have a significant impact
ECB Vice President Luis de Guindos, and Bank of Finland Governor Olli Reinn will be making appearances
- Dallas Fed manufacturing survey
(source: Reuters)