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Liulin Senze Coal & Aluminum, a Chinese company, will produce alumina using low-grade ore
The developer of the new technology said that in July, a Chinese company Liulin Senze Coal & Aluminum would begin producing alumina in its Shanxi factory from low-grade bauxite thanks to a technology developed in France. China's bauxite reserves are large, but many of them are of poor quality. This makes the country dependent on imports of bauxite to meet the demand for alumina, a critical input for the production of aluminium. China is the largest producer of aluminum in the world. Romain Girbal, CEO of IB2, said that the process developed by French green technology company IB2 allows low-grade bauxite to be converted into high-quality aluminum by neutralizing impurities like silica and sulfur. He said that the plant in Shanxi is expected to produce 50,000 tons of bauxite a month by December, and IB2 plans to increase this to 3,000,000 tons per year over the next two-years. He said that IB2 technology was being used in a 22-year contract signed with Liulin Senze Coal & Aluminum. Liulin Senze Coal & Aluminum has not responded to any requests for comment. Girbal stated that IB2 has advanced discussions about providing technology with five other Chinese manufacturers. The technology may help China reduce its reliance on imported Bauxite to produce alumina, but the long-term production scale that can be achieved using this technology is still unknown. The global bauxite supply is in doubt after Guinea's military-led government cancelled 129 mineral exploration licenses, including some relating to bauxite. Customs data shows that Chinese bauxite exports increased 12.4% in 2024, from 158.77 to 158.77 millions tons. According to the International Aluminium Institute, China produced 72 million tonnes of primary aluminum last year. Reporting from Ashitha Shivaprasad, Bengaluru. Editing by Pratima Deai and Susan Fenton.
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Lobby group warns that China's export restrictions on rare earths could stop German auto production.
The German auto lobby has warned that China's export bans on rare earths - used in everything from anti-lock brake sensors to windshield wiper motors - could cause production delays. This is the latest industry group which has raised the alarm about supply delays. In a recent statement, Hildegard Müller, head of the auto lobby VDA said that delays in export clearance and slow granting of licenses meant that suppliers were unable to produce essential components to keep production of cars running smoothly. This was the first time that the lobby warned of a possible production stoppage. Sources said earlier Tuesday that diplomats, automakers, and other executives, from India, Japan, and Europe, are seeking urgent meetings with Beijing officials in order to press for a faster approval of rare-earth magnet exports. This is after China implemented new rules, requiring exporters to obtain licenses from Beijing, back in April. Beijing is seen by many as using controls as a major diplomatic tool because there are few alternatives outside China. Trade groups representing automakers in the U.S., India, and other countries, including General Motors and Toyota, have warned that their factories could close within weeks if their suppliers were unable to supply critical components, such as sensors, cameras, and transmissions. China has granted some permits to rare earth producers including Volkswagen suppliers, but not enough, according to VDA's Mueller. Last week, German auto parts manufacturer Bosch stated that China's stricter procedures for granting export permits have caused delays in the supply chain. Mueller stated that "production delays or even production outages cannot be ruled out if the situation does not change quickly."
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VW Wolfsburg may switch to a four-day work week in 2027, according to the workers' council
Daniela Cavallo, the head of the Wolfsburg works council, told employees on Tuesday that Volkswagen's restructuring its Wolfsburg factory from 2027 in order to allow for EV production only could lead to a temporary four day working week. Cavallo was a key figure in negotiations last year with management over cost reductions. He said that unions had agreed on a minimum capacity utilization for the transition period. However, he urged workers to work extra shifts to compensate for the possibility of reduced working hours in the future. Cavallo stated that a four-day work week was not unreasonable from 2027. Volkswagen's agreement with unions to reduce costs in Germany last December included the production of the combustion engines Golf from Wolfsburg, Germany to Mexico by 2027. This prompted concern from some employees of the company's headquarters about the future of the factory. Cavallo tried to assure the workers that the future of the plant was in better hands by announcing plans to produce an electric Golf as well as the successor to its T-Roc small SUV, before the end of this decade. He cited the decline in demand for VW's iconic combustion engine car. A graph created by the Wolfsburg works council, and seen by, showed that golf production has dropped from more than a million cars in 2015 to less than 300,000 by 2024. This year, only 250,000 vehicles are expected. The Golf must move to Mexico. Sooner or later. Cavallo, in comments posted on the intranet of the company, said that if we don't, we will be at the bottom end of the statistics I showed.
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Lobby group warns that China's export restrictions on rare earths could stop German auto production.
The German auto lobby warned that China's export restrictions on rare earth alloys, magnets, and mixtures pose a serious threat to the industry. This could lead to production delays and even outages if no solution is found. In a recent statement, Hildegard Müller, head of the auto lobby VDA said that the slow granting of licenses and delays in the customs clearance for exports with valid licences were causing major problems for automakers. This was the first time VDA has warned about an imminent stop in production. Sources said earlier Tuesday that diplomats, automakers, and other executives, from India, Japan, and Europe, are seeking urgent meetings with Beijing officials in order to press for a faster approval of rare-earth magnet exports. This is after China implemented new rules, requiring exporters to obtain licenses, from Beijing, back in April. "Although some licences have been granted, they are not enough to guarantee smooth production..." Mueller warned that if the situation does not change quickly, delays in production and even production shutdowns are no longer a possibility. The shortage of rare earths threatens to further strain the supply chains for automakers such as Volkswagen, Mercedes-Benz, and BMW. It will also affect suppliers like Bosch and other companies who use them for motors in electric cars.
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JPM estimates that Saudi Arabia will issue bonds worth $12.6 billion by the end of the year.
JPMorgan reported on Tuesday that Saudi Arabia will issue bonds worth $12.6 billion for the rest of the year. The kingdom is resorting to debt markets as it makes huge investments in order to revamp its economy and reduce oil prices. The Gulf nation, which is forecasting a budget gap of $26,93 billion for this year, seeks funds to invest into new industries, and wean itself off oil, under its Vision 2030 Plan, by investing in tourism, manufacturing, and technology. Reports in April indicated that Saudi Arabia faces increasing pressure to increase debt or reduce spending following a drop in crude oil prices. The Kingdom enjoys a low ratio of debt to GDP and the confidence of lenders. It was also among the largest emerging markets debt issuers by 2024. JPMorgan Chase said that it has issued $14.4 billion in bonds so far this fiscal year. It is the largest issuer of emerging market debt in the first five month of 2025. This was despite the market volatility caused by President Donald Trump’s trade policies. JPM stated that "an uncertain macro-economic environment around the world and higher borrowing costs were deterrents to new issue activity in emerging markets over the last three months". The bank stated that, "supply could increase in June, if market conditions remain stable," but warned that volatility was still a major risk. Saudi Arabian companies, such as the state oil giant Aramco, and sovereign wealth fund PIF have also tapped into the debt market. Saudi Aramco raised $5 billion last week through bonds. It also published a prospectus for Islamic Bonds, which could indicate a future issuance. JPM reported on Tuesday that Kuwait was one of the other emerging market countries with the "largest issuance expectations" from now until the end of this year. Kuwait is forecasting an $8 billion debt issuance before year's end. This small Gulf state is also the fourth largest oil producer in the Middle East. It issued this law earlier this year to regulate public borrowing, as it prepares to return to the international debt markets, after an eight-year absence. (Reporting by Federico Maccioni, editing by Yousef Saba, William Maclean)
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Dollar slips, shares cautious as trade concerns persist
The dollar hovered around a 6-week low on Tuesday as the erratic U.S. policies of trade clouded the market's sentiment. Investors also took a defensive stance ahead of important developments in the coming week. The White House announced on Monday that U.S. president Donald Trump and Chinese leaders Xi Jinping would likely speak this week. This comes after Trump had accused Beijing of breaking an agreement to reduce tariffs and trade barriers. Markets will closely monitor the call between the leaders, as trade tensions sparked by tariffs continue to simmer between the world's largest economies. U.S. Futures are slightly lower due to the gloomy trade situation in the world. This has led them to lose the gains they made overnight on Wall Street. S&P futures dropped 0.2%, but Nasdaq futures only showed a slight decline. Samy Chaar is the chief economist of Lombard Odier. He said that while uncertainty has decreased, it remains high, causing economic agents to "freeze" in anticipation of clarity. The Trump administration is asking countries to submit their best offers on trade negotiations before Wednesday. Officials are trying to speed up talks with several partners in order to meet a deadline of five weeks. The data on Monday revealed U.S. manufacturing contracted China's economy grew for the third consecutive month in May. Factory activity A private sector survey released on Tuesday showed that the number of manufacturers in May fell for the first time since eight months. This indicates that U.S. Tariffs are beginning to harm manufacturers. Data released on Tuesday showed that euro-zone inflation fell below the European Central Bank target in December, confirming expectations of another rate cut this coming week. The strong auction in Japan earlier that day and this news pushed long-dated government bond yields for the euro zone up. Chaar stated that the growth environment was still subpar, (...), but not particularly alarming. The pan-European STOXX 600 fell by 0.2% while London's blue chip FTSE 100 traded flat. PAYROLLS ON DECK The dollar dropped to its lowest level in six weeks against a basket currency early on Tuesday. This was ahead of U.S. data on job openings later that day, and the U.S. nonfarm employment figures on Friday, which will provide a timely read on the state of the U.S. economic health. Index was half a point higher, at 99.07 to erase earlier losses. After the Swiss inflation rate fell to zero in May, the currency rose to 0.8181 Swiss Francs. This was the first time in more than four-years that consumer prices had fallen. The Swiss National Bank is now under pressure to reduce its interest rates by a large amount later in the month. Kenneth Broux is the head of corporate FX and rates research at Societe Generale. Broux explained that if countries like Switzerland, where the inflation rate is falling and the differential between rates continues to widen, this could prompt an intervention to stop the depreciation and appreciation of the Swiss franc. A currency is likely to appreciate if the rates in its home country are higher than elsewhere. The euro reached a six-week high before falling to $1.1389 on the day, while sterling fell 0.34% at $1.3498. Investors have largely given up hope of a rate cut in this month or the next due to the rise in unemployment. A weaker U.S. employment report would be welcome news for the Treasury Market, where yields on 30-year bonds continue to hover around 5% as investors seek a higher premium in order to compensate for the growing supply of debt. This week, the Senate will begin considering a tax and spending bill that would add $3.8 trillion to federal debt of $36.2 trillion. Brent crude futures rose 0.43%, to $64.91 per barrel, and U.S. crude rose 0.48%, to $62.82 a barrel. Gold prices fell from their four-week highs and were last seen at $3,358 per ounce.
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Beijing is urged to relax export restrictions on rare earth magnets by diplomats and automakers
Sources said that diplomats, automakers, and other executives, from India, Japan, and Europe, were seeking urgent meetings with Beijing officials in order to press for a faster approval of rare-earth magnet exports. This was because shortages could halt global supply chains. According to a source who is familiar with the trip, a business delegation from Japan plans to visit Beijing early in June to meet with the Ministry of Commerce to discuss curbs. A European official revealed that European diplomats representing countries with large auto industries also requested "emergency meetings" with MOFCOM over the past few weeks. In the next two or three weeks, auto executives will be travelling to India where automakers have warned they are close to closing down. Adam Dunnett is the secretary general of the European Chamber of Commerce of China. He said that some companies could cease production this week. Requests for comments were not immediately responded to by the European Union and Japanese Missions in Beijing. Beijing's dominance of the rare earths industry over the past decade has given it a huge advantage. China, which controls 90% of the global processing capacity for magnets used in everything from cars and fighter jets to household appliances, imposed export restrictions to seven rare earth elements as well as several magnets. Exporters were required to obtain licenses through Beijing. Controls are viewed by many as an important diplomatic tool, because there are few alternatives to China. Beijing agreed, as part of the Geneva truce, to suspend or remove all non-tariff measures imposed by Washington since April 2. There has been only a small trickle of approvals and Chinese officials have refused to speak publicly about the issue. Last week, U.S. trade representative Jamieson Greer accused Beijing of "slowing down" the removal non-tariff measures. An official said that the South Korean industry ministry had asked China to grant more export licenses as only a few companies were licensed. The Chinese foreign ministry did not answer a question Tuesday about whether Beijing will speed up the processing of export licence applications. After-hours queries to the Ministry of Commerce were not answered immediately. A source with knowledge of the issue said that thousands of applications from European companies alone are awaiting approval. Last week, the Chinese state media reported that China may relax some of its restrictions on European semiconductor companies. The Ministry of Foreign Affairs also announced last week that it would increase cooperation with other countries regarding its controls. The application process to obtain export permits was long and opaque, which resulted in a halving of rare-earth magnets exported from China. "China will not blink, but it will strategically and slowly provide exemptions," said an American businessperson briefed about the issue who declined to name himself for sensitive reasons. It's a painful test for a relationship that is already fragile. Reporting by Aditi Shah in Delhi, and Laurie Chen in Beijing. Additional reporting by Antoni Sladoskowski in Beijing, and Hyunjoo Ji in Seoul. Writing by Lewis Jackson. Editing by Bernadette B. Baum.
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Andy Home: Rio Tinto is betting lithium will remain the battery metal of choice.
The lithium market is a difficult one to be in as the metal has been weighed down by an excess of supply. The price of lithium hydroxide has fallen by 90% since its peak in 2022 and shows no signs that it will recover. According to Wood Mackenzie, multiple producers now operate at negative or zero margins. Albemarle, which is the world's biggest producer of battery metal, has cut costs and delayed new projects in order to survive the supply crisis. Rio Tinto is not deterred. The global mining company remains "consistent" in its belief that lithium's long-term prospects are positive. The company has put its money where it's mouth is by acquiring the U.S. producer Arcadium at a cost of $6.7 billion, and partnering with Chilean entities for two projects. Rio believes that despite the current market dejection, demand will be sufficient to absorb current excesses and bring the market back into deficit by the end of the decade. In a rapidly changing landscape, it's a good bet to say that lithium will continue to dominate the battery metal market. Low Price, High Demand Lithium prices are weak because of the oversupply on the market. According to the International Energy Agency, global lithium production will grow by more than 35% per year in 2024. Chinese companies are not interested in cutting production and new mines continue to ramp up. However, the supply tsunami masks the strength in lithium demand. According to the IEA, global consumption grew 30% last year. This is equivalent to the global market size in 2018. Electric vehicles (EVs) are in good health. They are the largest users of lithium-ion battery technology. According to Rho Motion, sales of new energy vehicles increased by 25% in 2013 and by 29% during the first quarter of 2014. The use of lithium in energy storage systems has increased even more as the global power system pivots towards cleaner, but intermittent, energy sources like solar and wind. Rio Tinto expects the demand to increase at a rate of 10% or more annually through 2040. DOMINANT METAL This scenario is primarily threatened by a change in battery chemistry, as manufacturers strive to make batteries that are cheaper and more efficient. The use of more expensive metals in batteries, such as nickel and cobalt, has declined dramatically. However, lithium remains the most dominant element. Adamas Intelligence reports that the amount of nickel and copper deployed in new energy cars in March was only up by 12% and 2% respectively year-over-year. The deployment of lithium was up 30%, which is the same as overall EV growth. However, the battle for battery materials is not over. The Chinese company CATL is a pioneer in the development of sodium ion batteries. The latest iteration, Naxtra, will almost match in efficiency the lithium iron phosphate (LFP) batteries that are displacing nickel-manganese-cobalt (NCM) chemistries. Robin Zeng, the billionaire founder of CATL, believes that sodium-ion battery could replace up to 50% of the LFP market. The IEA, however, is less certain, noting the fact that sodium-ion battery prices are high in a lithium-rich environment. This is not what we have at present. Lithium’s low cost may be the best way to fight off competition from other materials. The battery price is also falling, making new electric vehicles more affordable. MARKET ACCELERATOR According to the IEA, battery pack prices have fallen by 20 percent to a new record low of $115 kilowatt hours in 2024. This is the biggest annual decline since 2017. Prices across the spectrum of battery metals have soared to record levels, resulting in a drop in the share of cathode materials in battery pack prices from 20% in 2023 to just 10% in 2024. LFP batteries are 30% cheaper in China than NCM batteries, which are popular in Western markets. European automakers have taken notice. Volkswagen has adopted LFP technology to create a 20,000 euro entry-level electric vehicle for the European market. The price of electric vehicles has been a major barrier to consumers switching over, but that gap is closing. Market forces can be a powerful counterbalance to tariffs, and the fact that President Donald Trump has scrapped his predecessor's green agenda. SAFE BET The metal crown of lithium's battery looks secure for the time being. The impact of the global EV Revolution and the growing demand for grid-storage solutions will mitigate the impact on lithium, even if sodium-ion battery market shares start to take off in China. The IEA also points out that despite interest in new chemistries the main driver for battery innovation is still the conventional chemistries based upon lithium. Both NCM and LFP technology are constantly improving. The demand for lithium is growing at a phenomenal rate and all indications are that it will continue in the coming years. How long it takes for the current surge in supply to translate into a deficit on the market and higher prices depends on how long this supply surge continues. Do not hold your breath. It may take some time. These are the opinions of a columnist who writes for.
Goldman Sachs lowers its oil price forecast following OPEC+'s decision to increase output
Goldman Sachs has reduced its oil forecast after the Organization of the Petroleum Exporting Countries (OPEC+) and its allies decided to increase oil production. The bank stated this in a Sunday note.
The bank expects Brent crude oil to average $60/bbl for the remainder of 2025, and $56/bbl by 2026. This is a $2 decrease from its previous forecast.
It also reduced its forecast of West Texas Intermediate crude (WTI) by $3/bbl. Now, it projects that the average price for WTI will be $56/bbl through 2025.
OPEC+ decided on Saturday to increase oil output for a second consecutive month. The June production was increased by 411,000 barrels a day despite lower prices and weakened expectations of demand.
Goldman Sachs sees the OPEC+ agreement as a long term equilibrium strategy aimed to maintain internal cohesion, and strategically regulate U.S. shale oil supply despite relatively low inventories.
The bank has now increased its estimate for the final OPEC+ increase in production to 0.41 million barrels a day (mb/d) from 0.14 mb/d.
This revised forecast is based on the group's recent decision and stronger-than-expected economic activity data, suggesting that the expected demand slowdown may not yet be evident enough for OPEC+ to slow the pace of production increases when determining July production levels on June 1, the bank noted.
Goldman Sachs is of the opinion that despite the tight fundamentals in the oil market, the high level of spare capacity and the high risk associated with recessions are factors that skew risks for the oil price to the downside.
Brent crude futures traded at $60.02 per barrel at 0802 GMT. U.S. West Texas intermediate crude was trading at $56.96 per barrel. (Reporting from Anmol Choubey, Bengaluru; Editing by Louise Heavens).
(source: Reuters)