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Sources say BYD has slowed production and delayed capacity expansion in China factories.
Two people familiar with the matter said that BYD, China's electric vehicle leader, has slowed down its production and growth pace by cutting shifts in some factories in China. It also delayed plans to add more production lines. These decisions could be a sign of BYD's sales growth slowing down, even though it has offered deep price reductions in China's fierce auto market. BYD has reduced production by a minimum of a third at its factories and cancelled night shifts, according to sources who declined naming themselves because it is deemed private. One person said that BYD also had suspended plans to build new production lines. BYD has seven factories in China and sold 4,27 million vehicles last year. It has set a target of a nearly 30% increase in sales this year to 5.5 millions. It was not possible to determine the exact size of the reduction in production and the suspension of expansion, nor how long the measures might last. One source said that the measures were taken to save costs while another said they were implemented after sales did not meet target. BYD didn't immediately respond to an inquiry for comment. The China Association of Automobile Manufacturers reported that BYD’s production growth had slowed in April and May to 13% and 0.2 percent year-on-year, respectively. This was the lowest pace since February 20, 2024, when factory operations were disrupted for a week by the lunar New Year holiday. The data revealed that BYD began increasing monthly production in the second quarter of 2023 and 2024. The trend is different this year. Average output in April-May was 29% lower than the fourth quarter in 2024. BYD became the largest EV manufacturer in the world within a few short years, by increasing production and accelerating the release of new models that are more affordable. The recent price reductions, which brought the price of its lowest model down to 55,800 Yuan ($7.800), led to a wider sell-off in Chinese automobile stocks, and new price cuts by rivals. In a survey conducted by China Automotive Dealer Association, in May, BYD dealers had an average of 3.21 months' worth of inventory, the most among all Chinese brands, while the industry-wide inventory level was 1.38 months. Last month, the government-owned media reported that a large BYD dealership in eastern Shandong province had gone out of business. At least 20 of their stores were found deserted or closed. Early in June, as inventory levels increased, the China Auto Dealers Chamber of Commerce called on automakers not to dump too many vehicles on dealerships but to set "reasonable production targets" based on performance. The group claimed that intense price wars are causing cash flow to be squeezed and reducing profitability. Chinese auto dealers demanded on Monday that automakers pay cashback incentives to ease financial pressures. In recent months, Chinese regulators have increased their scrutiny on the auto industry due to the intensifying price competition. This practice has been going on for years and has caused suppliers, automakers and dealerships in the entire industry to be squeezed. Chinese automakers now look to overseas markets in order to boost sales and counter the weakening momentum of their home market. BYD has sold around 1.76 million cars in the first five months this year. Around 20% of these vehicles were exported. $1 = 7.1684 Chinese Yuan Renminbi (Reporting and editing by Zhuzhu cui, Zhang Yan, and Brenda Goh.
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Japan's Nikkei closes at a 4-month high, as shares of chip makers follow US peers higher
The Nikkei share index ended Wednesday at a record high of more than four months, as stocks related to chips followed the overnight gains made by their U.S. counterparts. After a flitting back and forth between modest gains, the Nikkei closed at 38,942.07 - its highest level since February 19. The Topix index as a whole rose 0.03% to 2,782.24 Shigetoshi kamada is the general manager of the research department at Tachibana Securities. He said that the Nikkei fluctuated between gains and losses as investors sought to profit from gains made in the previous session. Investors want to cover short positions by buying stocks as long as there are no negative news. After U.S. president Donald Trump announced a ceasefire agreement on Monday night, the Nikkei ended Tuesday higher after snapping a three-day loss streak. The truce seemed fragile. It took Israel and Iran hours to admit they had accepted the ceasefire, and both accused the other of violating its terms. Investors viewed the ceasefire as a sign that tensions were de-escalating, and the U.S. stock market rose more than 1% over night. Chip-related stocks rose, following a 3.8% increase in the U.S. Philadelphia Semiconductor Index. Advantest gained 3.32%, while Tokyo Electron rose 3.26%. These two companies were the main contributors to the Nikkei's gains. SoftBank Group, a technology investor, fell by 1.73% and weighed the Nikkei down the most. Olympus fell 10.6% after U.S. Food and Drug Administration sent out an alert about certain medical devices manufactured by the medical equipment manufacturer. Toyota Motor shares fell 1.18%. On the Tokyo Stock Exchange, more than 1,600 shares traded on its prime market rose 45%, fell 50%, and remained flat 4%.
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FT reports that EDF is considering asset sales in light of the increased push for nuclear power.
The Financial Times reported that the new head of EDF, the French state-owned utility, is considering selling some assets in order to satisfy government demands for new investments in nuclear reactors. The FT, citing sources familiar with the matter, reported that Dalkia and Edison may be among the units to be sold. The FT reported that renewable assets are also being considered, except for EDF's hydropower projects. France is the main nuclear champion in Europe, as it sources around 70% of its electricity from this source. EDF's nuclear power fleet generates about 70% of France’s electricity. Bernard Fontana, the new CEO of EDF, was appointed in March after President Emmanuel Macron lost patience with Luc Remont's former leadership due to disagreements over how to build new capital intensive nuclear reactors and provide power. The FT reported that Fontana told insiders he was looking to determine which assets were not profitable and did not match the strategic priorities of the energy group. He added that the sale might come after this review, but he had not yet decided which parts of his business should be sold. EDF didn't immediately respond to our request for comment. Could not verify the report immediately. Reporting by Rhea Rosa Abraham in Bengaluru, edited by Anil D’Silva
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UK's Babcock upgrades medium term forecast as defence needs rise
The British defence engineering firm Babcock updated its medium-term forecast on Wednesday. It expects to benefit from UK plans to increase spending on defence and energy to counter rising geopolitical instabilities. Keir starmer, British Prime Minister, pledged on Tuesday to increase overall defence and security expenditure to 5% by 2035. He cited volatility as a result of the wars in Ukraine and the Middle East, and tensions with China. Babcock, which maintains Britain’s naval fleet and builds new warships, as well as providing weapons systems and nuclear engineering, has said that it now expects an operating margin underlying of at least 9 percent in the medium-term, up from a minimum of 8% previously. This is a new age for defence. Babcock CEO David Lockwood stated in a press release that there is a growing recognition of the importance of investing in energy security and defence capabilities to both safeguard populations and drive economic growth. Babcock expects an operating margin of 8 percent for the current year. This is up from 7.5% recorded in the 12 months ending March 2025. The company announced that it would buy back 200 million pounds ($272.46 millions) of shares. Babcock shares have doubled since the beginning of this year, thanks to Britain's commitment to increase defence spending. This is a far better performance than Britain's bluechips index, which has risen by 8%.
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Wall Street Journal, June 25,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. Investigators cite Boeing’s defective manufacturing and insufficient regulatory oversight as factors that contributed to the January 2024 737 MAX incident. Xero, a New Zealand-based accounting software company, has agreed to purchase New York payments firm Melio for $2.55 billion. This is the largest outbound deal the Kiwis have made in the past decade. Iberdrola, a Spanish power utility, has named Pedro Azagra Blazquez as its new chief executive officer. He replaces Armando Martnez Martinez, who quit as CEO. Amazon has expanded its Same-Day and next-day delivery service in the United States to include thousands of smaller cities and towns. McDonald's and Krispy Kreme, a donut manufacturer in the United States, announced on Tuesday that they will end their partnership by the middle of July due to the struggle the companies have had managing the costs involved with the venture. A U.S. Intelligence report revealed that military strikes against Iranian nuclear facilities delayed Tehran's plans by only a few weeks. (Compiled Bengaluru Newsroom)
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Andy Home: LME's position rules are a reflection of a changing metals market
London Metal Exchange (LME) has tightened the regulatory screws against holders of long positions at a time when both copper and aluminium contracts are in turmoil. The unique date structure of the LME exchange has been under severe stress as traders have increased their bets despite LME inventory being depleted. It's not a coincidence that these two contracts have been the most affected. Tariffs and sanctions have caused massive distortions in the physical markets for copper and aluminum. The LME, having just recovered from the 2022 nickel crisis, is keen to avoid another one. Since it cannot do much about tariffs or sanctions either, managing the effects is the best option. As with any 148-year-old market, there is always the danger that tinkering with such a complex eco system can have unintended consequences. CORNERING the Future The copper market's turmoil this week is a classic example of a massive clash of positions ahead of the cash date. On Monday, the "tom-next spread", which is a position roll for overnight, blew out to $69 per metric tonne. This helped to inflate backwardation over the cash-to-3-months period The price of a ton has increased to $397, the highest since 2021. The week began with one entity having a cash position of 80-90% or more of the available stocks. They are designed to stop anyone from cornering the market and distorting prices with positions that are so dominant. The LME Special Committee introduced new rules on Friday that extend the lending cap beyond the cash date to the next monthly prompt. These are temporary, at least for the moment. The recent pressure on the aluminium markets was not focused on the LME rolling cash date, but rather on the monthly prompt date for June. It's clear that this is not the only position with a mega-long term contract which has caused concern to LME senior management. The LME stated that there have been "several occasions" where significant positions were held in the near-by prompt dates, and the special committee "at times" has directed holders to reduce their holdings "relatively to the prevailing stock level," it said. The rub. Copper and aluminium are in short supply. TARIFF DISTORTION Since the beginning of 2025, LME copper stock has shrunk by 65% to 94.675 tons. The amount of tonnage available is at a 2-year low of 54.500 tons. This isn't due to a diminished global availability, but rather reflects an enormous redistribution in global inventory. Since February, when U.S. president Donald Trump began a Section 232 investigation into U.S. imports of copper, physical metals have been flowing to the United States in order to take advantage of the premium commanded by CME's U.S. Customs-cleared Copper Contract over the LME’s international product. The U.S. imported refined copper in April jumped above 200,000 tonnes, marking the highest arrival rate of this decade. LME warehouses were emptied to fuel this physical tariff trading. CME stocks have nearly doubled to 184 464 tons this year, their highest level since August 2018. SANCTIONS IMPACT The prospect of U.S. Tariffs has disrupted global copper flows. However, sanctions against Russian metal have disrupted those for aluminium. The LME suspended all deliveries after April 2024 when the United States and Britain announced sanctions against Rusal, a Russian producer. The Russian metal that was already part of the LME could be traded, but it wasn't as popular as other brands. Since then, there have been several dogfights over the available non-Russian stock. Each involved large positions and spread volatility. The LME's aluminium stock is now at its lowest level since October 2022. The majority of the physical stock that was awaiting loading has been removed, and what is left is mostly Russian metal. No sign of a replenishment is imminent. LME off warrant stocks, which usually rise when visible inventories fall as metal is redirected to cheaper warehouse agreements, are also lower than at the beginning of the year. Since March, there haven't been any significant new deliveries to the LME warrant. Since last year, the Russian liquidity has dried up and other brands may be reluctant to give them up in LME clearing. The LME's global supply function is dependent on a fluid, globally distributed physical supply chain. This simply does not exist at this time. Reduced Incentives LME's lending guidelines has always been criticized for favoring holders of short positions over those with long positions. The regulatory focus is further distorted by extending the lending restrictions to dominant long positions in the first month of the curve. Remember that the 2022 Nickel Blow-Out was caused by a dominant short, not a dominating long. The LME has stepped up its efforts to avoid another crisis, given the mismatch that is growing between the size of the position and the available inventory. It is possible that removing what the LME considers as distortions to the price-setting function of the exchange may reduce the financial incentives for metals to be delivered to the supposed market of last recourse. It's important to note that the United States is not receiving any Russian aluminum or copper. The author is a columnist at
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Sources: Some Japanese buyers are willing to pay an extra $108/t for Q3 Aluminium.
Four sources said that some Japanese aluminium buyers agreed to pay an extra $108 per metric ton over the benchmark price, a 41% reduction from the current quarter. This was due to the weak demand and abundant supply. This is a decrease from the $182 paid per ton in April-June. It marks the second consecutive quarter of declines and the lowest figure since the January to March quarter in 2024. The price is below the initial offers made by producers around the world of $122 to $145.00 per ton. Japan is the largest Asian importer for premiums and light metals For primary metal shipments, it agrees to each quarter pay over the benchmark London Metal Exchange cash price that is set as the benchmark for the area. Source at a trading firm said that despite concerns about the impact of U.S. Tariffs, so far the effect has been minimal and the premium has fallen sharply because supply-demand conditions are weak. Three major Japanese ports have large stocks of aluminium Marubeni Corp. said earlier in the month that the total amount of coal produced at the end May was 331,000 tonnes, an increase of 3.3% compared to the previous month. A second source from an end-user stated that "there was no significant change to local demand" but the local spot price has fallen during negotiations. It even reached $80, forcing producers abandon their initial offer. Due to the sensitive nature of the issue, the sources refused to identify themselves. Late May, Japanese buyers and global suppliers including Rio Tinto South32 began quarterly pricing discussions. Some buyers are still in negotiation. (Reporting and editing by Tom Hogue; Yuka Obayashi)
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The price of iron ore continues to fall due to a rise in supply and a drop in demand during the off-season
The price of iron ore futures fell for the second consecutive session on Wednesday as increased shipments out of Australia and Brazil and a slowing in seasonal demand by China, the top consumer, weighed on sentiment. The September contract for iron ore on China's Dalian Commodity Exchange ended the morning trading 0.85% lower, at 699.5 Yuan ($97.58). As of 0349 GMT, the benchmark July iron ore traded on Singapore Exchange was down 0.46% at $92.55 per ton. According to Chinese consultancy Mysteel, the total volume of iron-ore shipments by top suppliers Australia, Brazil, and South Africa increased from June 16-22 to reach a record high. Rio Tinto, Australia's world-leading iron ore producer has received all the necessary approvals from government for its Hope Downs 2 Project. The joint venture project Hope Downs 2 between Rio Tinto, Hancock Prospecting and others will have a production capacity of 31 millions tons per year. Rio Tinto said it would invest over $13 billion in new mines, plants and equipment. ANZ analysts say that iron ore prices have continued to decline despite signs of a steady supply. ANZ added that, as Chinese imports of ore will likely fall even further over the summer months, construction activity in China is expected to slow. According to the World Steel Association, the global steel production fell by 3.8% between May and a year ago. China's central bank has stated that it will "guide the financial institutions on both the demand and supply side of consumption" as part of its efforts to boost the domestic consumption. Coking coal and coke, which are both steelmaking ingredients, also fell, by 0.69% each. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Hot-rolled coils fell 0.35% and rebar and wire rod by around 0.5%. Stainless steel increased 0.77%. ($1 = 7.1683 Chinese yuan). (Reporting and editing by Michele Pek, Lucas Liew)
Asia markets stabilize, dollar drops following Middle East truce
The Asian stock market stabilized on Wednesday, as crude oil hovered at multi-week lows. A ceasefire between Israel & Iran boosted sentiment even though hostilities were threatening to flare up.
As oil prices fell, the bond market was less exposed to inflation.
Israel has said it will take strong action against Iranian missile attacks that followed after U.S. president Donald Trump announced the end of hostilities.
According to an initial U.S. Intelligence Assessment, the U.S. airstrikes didn't destroy Iran's nucleonic capability, but only pushed it back a few months. This contradicts Trump's previous comments that Iran’s nuclear program had been “obliterated”.
The Nikkei 225 and Australia's benchmark index were both flat, but Taiwan's index rose 1%.
Hong Kong's Hang Seng index rose by 0.6%, while mainland Chinese blue-chips fell by 0.1%.
The U.S. Stock Futures are little changed.
The MSCI global stock index remained stable after reaching a new record high over night.
Brent crude rose 81 cents per barrel to $67.95, following a drop of up to $14.58 in the two previous sessions. U.S. West Texas Intermediate Crude added 70 cents per barrel to $65.07
The markets have shrugged off the tenuous cease-fire between Israel and Iran, according to Kyle Rodda senior financial market analyst at Capital.com.
He said that "Realistically the markets do not care if there is a continuing conflict between the two nations, which is mainly air strikes." It's really the threat of a wider war with a deeper US involvement and an Iranian blocking of the Strait of Hormuz, that matters. For now, it seems that the risks are low.
The yield on the two-year U.S. Treasury fell to its lowest level since May 8, at 3.787%.
The U.S. Dollar Index, which measures currency against six major counterparts fell 0.1% to 97.854.
The dollar fell 0.1% to 144.70 Japanese yen.
The euro rose 0.1% to $1.1625 and is now back at the overnight high level of $1.1641, which has not been seen since October 20,21.
Federal Reserve chair Jerome Powell stated on Tuesday that tariffs may begin to raise inflation this summer. This period will be crucial for the U.S. Central Bank when considering interest rate reductions. Powell was speaking at an hearing before the House Financial Services Committee.
The data showed that consumer confidence in the United States unexpectedly declined in June, indicating a softening of labour market conditions.
According to CME FedWatch, the markets continue to price in an 18% chance of the Fed cutting rates in July.
(source: Reuters)