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Rio Tinto reports smallest first-half profits in five years
Rio Tinto announced its lowest first-half profit in five years Wednesday as iron ore price remained low due to concerns about oversupply and weak China demand. This was offset by higher earnings from the copper business. The price of iron ore fell in the first half as the top steel consumer, China, decreased its steel production and increased supply from Australia and Brazil. This reduced Rio Tinto's earnings. Morgan Stanley notes that the expectation of China reducing overcapacity and restocking the steel industry before the end of 2025 could lead to an increase in price to $100 per ton by the end the year. Rio Tinto, world's biggest iron ore producer reported earnings of $4.81billion for the six-month period ended June 30. This was below the Visible Alpha consensus estimate of $5.05billion. This was the lowest first-half performance for the company since 2020. It reported earnings of $5.75 Billion. Rio Tinto has declared a lower interim dividend for the first half year of $1.48 compared to the $1.77 per share it paid out last year. (Reporting from Sameer Manekar in Bengaluru and Rishav Chaterjee in Melbourne, Melanie Burton in Sydney; editing by Subhranshu SAHU)
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Asian stocks mix as investors prepare for tariff deadline
Investors were cautious on Wednesday after the U.S.-China trade talks ended without a substantive agreement, and before the Federal Reserve policy announcement. The gains made by MSCI's broadest Asia-Pacific index outside Japan in the morning have waned, and the index is now trading flat as traders digest corporate earnings reports. Early European trading saw pan-regional futures up 0.15%. German DAX Futures rose 0.31%. FTSE Futures were flat. Australian shares ended up 0.7%. Japan's Nikkei index fell 0.1%, and Hong Kong's Hang Seng Index dropped 1.3%. The euro rose from its one-month low to $1.1555 as the markets assessed the EU's deal with Trump. The next few days will be filled with several key central bank decisions and economic reports, as well as corporate earnings. This culminates in the August 1 deadline for tariffs set by U.S. president Donald Trump. Federal Reserve officials are expected to keep interest rates the same at their policy meeting on Wednesday. However, there could be some dissent from central bankers in favor of lower borrowing costs. Tom Kenny is a senior international economist with ANZ, Sydney. He said in a podcast that some officials were concerned about tariffs leading to higher inflation expectations and more persistent pressures on prices, rather than just a one-off shock. "Our expectation is the Fed will be able to reduce rates at its September meeting." Treasury bonds in the United States advanced ahead of a Fed meeting. The yields fell to their lowest level in nearly four weeks after a successful auction of notes with ten-year maturities that allayed concerns over dwindling demand for government debt. Last week, the yield on 10-year Treasury Notes was 4.328%. This is the lowest since July 3. The yield on two-year Treasury notes, which increases with traders' expectation of higher Fed Fund rates, was unchanged at 3.873%. Tariffs, corporate earnings Bank of Japan will likely keep its policy unchanged Thursday. The focus will be on the comments it makes to determine when the next rate rise will occur after a recent trade agreement between Japan and the U.S. opened the door for the bank's rate increases to resume. Some countries were preparing to negotiate with the U.S. until the last minute before Trump's deadline for a deal that would avoid "Liberation Day tariffs". On Tuesday, U.S. officials and Chinese officials agreed that they would seek to extend their 90-day truce in tariffs. However, no major breakthroughs had been announced. Officials in the United States said that it was up Trump to decide if he would extend the trade truce, which expires August 12, or if he wanted to see tariffs rise to triple digits. Two Indian government sources say that India will also face higher U.S. duties -- between 20 and 25 percent -- on certain exports, as it delays new trade concessions before the deadline of August 1. Three South Korean Cabinet-level Officials met with U.S. Secretary of Commerce Howard Lutnick to try and finalize a deal. Prices of oil rose after Trump set a short deadline for Moscow to end the war in Ukraine. Brent crude futures increased 14 cents or 0.2% to $72.40 per barrel. The earnings were mixed on Wednesday. UBS Group's profits exceeded analyst expectations. HSBC, however, missed estimates due to the mounting losses in China. German sportswear manufacturer Adidas also warned about the impact of U.S. Tariffs on its earnings. Microsoft and Meta, two of the biggest U.S. technology companies, are expected to release their earnings on Wednesday. This will set the tone and pace for the rest the week and earnings season. Chris Weston is the head of research for Pepperstone. He said, "It has been a good reporting season in the U.S., but now that the bar has been raised, these megacaps need to go all out and make a splash."
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Andy Home: Aluminium flow shifts after Trump doubles tariffs
Canadian aluminum smelters began diverting primary aluminium away from the United States as a result of the increasing import tariffs. These increased to 25% in march and to 50% in the month of June. Alcoa Corp., which has smelters in both the U.S. and Canada, told analysts during its quarterly earnings call that it had sold more than 100,000 tons of Canadian aluminum to customers outside the U.S. since March. U.S. primary aluminum imports dropped dramatically in April and in May, even before U.S. president Donald Trump surprised the world with his second surprise tariff in June. The import gap has been partially filled by the surge in shipments of recycled aluminium. This raw material, as a raw materials is only subject to Trump's lower tariffs. The physical market dynamics will likely remain fluid, depending on both the U.S. premium as well as Trump's willingness and ability to grant exemptions. PRIMARY INCOMES DOWN, SCRAP UPS Imports of primary aluminum in the United States reached a two-year record of 442,000 tonnes in March, as suppliers raced to meet the first deadline for tariffs. No one saw the second increase coming, and it was implemented almost immediately, so there was no time to get ahead of the new 50% tariff. In fact, the 268,000 tons of imports in May were the lowest monthly total since December 2022. The majority of the volume drop can be attributed to lower shipments from Canada. The biggest supplier of metal to the U.S. is redirecting the metal that has not been committed under annual contracts. In the case of Alcoa, this is about 30% of their Canadian production. Aluminum is being rerouted towards Europe. WBMS trade statistics show that Canada exported 11,800 tonnes to the Netherlands in March and 25,500 to Italy in April. The imports of scrap aluminium are increasing, meanwhile, due to the difference between the reciprocal tariffs and the aluminium ones. Arrivals in March-May totaled 227,000 tons, an increase of 40% over the same period in 2024. The European Commission activated its trade surveillance system before possible export restrictions. The European Commission has promised to make a decision before the end of September. MARKET WATCH In response to the double tariff increase, the U.S. Midwest Premium has risen from 24 cents ($520 per tonne) in January to an astounding 68 cents. William Oplinger is the CEO and president of Alcoa. He says that this amount does not cover the costs associated with tariffs on Canadian metal. He said that the Midwest premium should be between 70-75 cents per lb when you take into account both the tariff and base costs of transportation to U.S. customers. As buyers wait to find out if there will be any exemptions from the current blanket tariffs, they are reducing their inventory instead of making new purchases. Watch Politics Online It is their right. The Trump administration is reportedly considering lowering or eliminating aluminium tariffs on countries that sign up for broader trade agreements. This deal with the United Kingdom included a 25% reduction in import tariffs for both steel and aluminium products. According to European Trade Commission Maros SEFCIC, the newly-minted agreement with the European Union includes a potential carving-out for copper, steel, and aluminium. He said that European and U.S. negotiators found a common cause with China's overcapacity. For now, the higher tariff rate is still in place. However, both sides are working to create a "metals partnership" where tariffs would be replaced by a quota-based system. Canada's importance in the U.S. aluminum supply makes it strange that Canada is not included in this alliance. High SMELTER Restain Costs One thing is certain, even though the tariff landscape is constantly changing. It will be a while before the U.S. can reduce its dependence on imports. Two new smelter project are in competition with Big Tech to provide low-cost electricity. Even if the smelters can lock in their energy supply, it would take years to build. According to the United States Geological Survey, there are also around 670,000 tonnes of unused smelting capacities in the U.S. Many of the old machines need significant investment. Alcoa's Warrick smelter, in Indiana has a 50,000-ton per year line that is idle. It would cost around $100 million for refurbishment and another year to ramp up production. Alcoa's Oplinger said that a decision to restart production would require "that the tariffs remain in place for a long time" before it could be justified. Tariffs are likely to remain in some form, but the question of how many trading partners will be able to avoid paying a full 50% tariff is becoming more and more open. There won't be many U.S. Smelters restarted until the situation is clarified. There will be more volatility in the supply chain. These are the opinions of a columnist who writes for.
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Oil prices pause as markets consider Trump's ultimatum against Russia
After a spike in the previous session of over 3%, oil prices were down in Asian trade Wednesday as investors waited for developments regarding President Donald Trump's new deadline to Russia to end its war in Ukraine. Brent crude futures were up 8 cents or 0.12% to $71.81 a barge by 0419 GMT. U.S. West Texas Intermediate crude was also up 8 cents or 0.12% to $69.29 a barge. Brent crude, the September contract that expires on Wednesday, was up 18 cents to $72.69 per barrel. The settlements of both contracts on Tuesday were the highest since June 20, 2006. Trump announced on Tuesday that if Russia did not end the war in 10-12 days, he would begin imposing secondary tariffs on its trading partners of 100%. This is a move from a previous 50-day deadline. Vandana Insights, the oil market analyst, said that the $4-$5 per barrel premium for supply risk, which was introduced in recent days, can be expected to continue, unless Putin takes a conciliatory step. Treasury Secretary Scott Bessent said at a Stockholm news conference where the U.S. and EU were holding trade negotiations, that the United States warned China, which is the biggest buyer of Russian oil to stop buying it or face large tariffs. Analysts at JP Morgan said that India had signaled it would comply with U.S. Sanctions, which could put 2.3 million barrels of Russian oil per day in danger. The United States, the European Union and other countries have avoided a trade conflict with an agreement for 15% U.S. Tariffs on European Imports. This deal eases concerns over the impact of trade tensions on the economic growth as well as providing support for oil prices. After talks last week, foreign partners of Venezuela's state oil company PDVSA still await U.S. authorization to operate in the country sanctioned. This could bring some supply back to the market and ease the pressure on prices. Hari said that the oil market pays attention to the U.S. Trade Deals and Talks and the Fed but these are only marginal influences on sentiment. The U.S. Federal Reserve, despite President Donald Trump’s objections at the policy meeting on Wednesday evening, is expected to keep interest rates unchanged. The International Monetary Fund (IMF) raised its global growth predictions slightly for 2025-2026 on Tuesday. However, it warned that the world economy was facing major risks such as geopolitical tension, a rise in tariffs, and a larger fiscal deficit. Reporting by Mohi Nairayan in New Delhi; Additional reporting by Colleen Hough in Beijing. Editing by Muralikumar Anantharaman, Clarence Fernandez.
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Australia's IGO warns of more problems at Kwinana as revenue drops
IGO, an Australian lithium producer, reported a decline in its annual revenue on Wednesday. It also announced a charge for impairment relating to the troubled Kwinana Lithium Refinery in Western Australia. The Perth-based firm reported sales revenues of A$512.5m for the year ending June 30. This is lower than A$822.6m reported by the company a year earlier. IGO reported that the impairment charge, which is a cost a company incurs when an asset it owns loses value, could range between A$70 and A$90 (between $45.6 million to $58,7 million) for fiscal year 2025. The shares of the Australian producer of battery metals fell as much as 12 percent to A$4.40. This is on course for its worst day in 2022. The Kwinana plant is part of a joint venture called Tianqi Lithium Energy Australia, a partnership between IGO Australia and China's Tianqi Lithium. IGO Australia holds a 49 percent stake in the TLEA and Tianqi Lithium the remainder. The first lithium hydroxide facility to be built in Australia has struggled with production delays and operational problems amid a slump in the lithium price. IGO is not confident that this asset can achieve meaningful and sustained improvements. IGO said that it continues to work with its JV partner in order to determine the best future path for the plant. After a 90 percent drop in lithium prices in the past two years, some mines producing lithium for electric vehicle batteries have curtailed their operations or delayed expansion. The refinery that produces lithium hydroxide - a key component in batteries - posted a loss of A$28.7million despite the support provided by the Western Australian Government to boost the lithium sector. The company also said that Kwinana’s production for the full year was below the forecast due to operational issues which continued to affect the refinery’s output.
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TenneT Hires Asso.subsea for Cabling Work off Germany
Subsea cable services company Asso.subsea has secured the nearshore cable installation contract for three key projects under TenneT’s 2 GW grid program, including BalWin4, LanWin1, and LanWin5.The projects are located off the northwestern coast of Baltrum Island, in northern Germany, and mark the beginning of a new collaboration with Jan De Nul, acting as the main contractor, with TenneT as the end client.Each project involves the transportation and nearshore installation of a complex cable bundle comprising 2 x HVDC power cables, one metallic return cable, and one fiber optic cable.Installation will be executed in 2027 (BalWin4), 2028 (LanWin1), and 2029 (LanWin5) respectively.The scope of work includes cable transpooling from load-out ports in the Netherlands or Germany, nearshore installation operations using the cable laying vessel (CLV) Atalanti, which will be specially modified to accommodate the four-cable bundle configuration.Also, Asso.subsea will be involved in precision cable landing via beaching operations with spud cans, and cble free-lay in intertidal zones and wet storage of cable ends“These nearshore operations are highly sensitive to tidal conditions, requiring detailed planning and precise execution. Our in-house capabilities, vessel adaptability, and commitment to engineered solutions ensure that we’re ready to meet the unique demands of these technically challenging works,” said Asso.subsea.
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Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan
The 50-50 consortium between Allseas and Boskalis has been awarded a large contract by CPC Corporation Taiwan for the second offshore gas pipeline from Yongan to Tongxiao (YT2) in Taiwan.Under the contract, the consortium will design, construct, install and pre-commission the new YT2 36-inch offshore natural gas pipeline, which will run approximately 232 kilometers parallel to the existing YT1 pipeline, connecting the Yongan LNG terminal in the Southwest with the Tongxiao transfer station in the Northwest.The comprehensive scope of work includes trenching, pipeline installation with 34 crossings over existing and future infrastructure and assets, backfilling and two landfalls.Within the consortium, Allseas will carry out the pipeline installation and pre-commissioning, including the pre-lay installation of concrete mattresses. For these activities, Allseas will deploy two of the most advanced pipelay vessels in the industry.Boskalis will be responsible for the landfalls and associated microtunnelling activities, as well as nearshore and offshore trenching, backfilling, and the installation of rocks for the 34 pipeline crossings. For these activities, Boskalis will deploy two large hopper dredgers, a large backhoe dredger, and a subsea rock installation vessel.The total contract value for the landmark energy project, developed to accelerate energy transition and improve gas supply capacity in Taiwan, is approximately $1.4 billion (€ 1.2 billion).Project execution is scheduled to begin in 2026, with completion anticipated in 2028.
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Gold prices rise on lower Treasury yields, but Fed policy is still pending
The gold price edged upwards on Wednesday. This was supported by lower Treasury yields, and a slight drop in the dollar. Investors are now awaiting the U.S. Federal Reserve policy statement, which is scheduled to be released later that day, for further guidance on the future path of monetary policy. As of 0236 GMT, spot gold rose 0.1% to $3,329.27 an ounce. U.S. Gold Futures increased 0.1% to $3326.90. The Treasury yields are showing that there is a possibility that the Fed will start to lean towards the dovish end of the pendulum. Kelvin Wong, senior market analyst at OANDA, added that the strength of the dollar was also being moderated. On Wednesday, the benchmark 10-year Treasury yields were hovering near a 1-month low. Despite Donald Trump's repeated calls to lower rates, it is expected that the Fed will keep interest rates unchanged. The markets continue to price-in a possible rate cut in September. In an environment of low interest rates, gold tends to perform well. Wong stated that if gold prices rise above $3,350 before the end of the week, due to the release of U.S. employment and inflation data, this could swing the momentum in the direction of a price increase, at least on the short-term. After two days of talks, U.S. officials said that Trump would make the final decision. The International Monetary Fund slightly raised its global growth forecasts for 2025 and 2026 on Tuesday, citing stronger-than-expected buys ahead of a jump in U.S. tariffs on August 1 and a drop in the effective U.S. tariff rate to 17.3% from 24.4%. Silver spot fell by 0.1%, to $38.14 an ounce. Platinum lost 0.6%, to $1,386.31, and palladium increased 0.4%, to $1,262.99. (Reporting and editing by Harikrishnan Nair, Sumana Nandy, and Anmol Choubey from Bengaluru)
Russian rouble declines further vs dollar on Trump's new Ukraine deadline
The Russian rouble dropped further on Tuesday against the dollar, and the Chinese yuan, in response to U.S. president Donald Trump's announcement of a shorter deadline by which Moscow must agree to an end to its war in Ukraine.
LSEG based its data on quotes from over-the counter to calculate the rouble's weakest level in May since it was 82.44 per dollar at 1530 GMT.
Tuesday the central bank set the official rate of exchange for the dollar to 82.22 Russian roubles, the first time since mid-April that the rate has risen above 82.
Since July 24, the rouble has fallen 4.7% against dollar in four consecutive sessions. The central bank's 200 basis-point cut in the key rate to 18%, its largest decrease in three years, has also contributed to rouble's decline.
Trump, expressing his growing frustration at the Russian president Vladimir Putin's war in Ukraine and the lack of progress made by Moscow to end the conflict, said on Monday that Moscow had 10-12 days to take action to resolve the conflict. Otherwise, he would face the consequences.
In recent days, the dollar has been rising against the rouble. This is due to geopolitical reasons and Donald Trump's comments earlier, said Taras Skovortsov. CFO at Russia's biggest lender Sberbank.
He added, "Therefore it is hard to predict whether this wave will become something more significant or stop."
Sberbank predicts that the rouble will weaken towards the end the year to around 90 dollars.
The rouble fell by 0.8% against the Chinese Yuan, which is the most commonly traded currency in Russia. It now stands at 11.43. (Reporting and editing by Joe Baviern, Alistair Bell and Gleb Bryanski)
(source: Reuters)