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EU scraps tariffs on US products to allow for lower car duty
The European Commission on Thursday proposed removing duties on imports of U.S. Industrial Goods in exchange for reduced U.S. Tariffs on European Cars, which is a crucial part of the Trade Agreement between the EU and United States that was signed last month. The proposals are the first step taken by the EU to implement the framework agreement reached between U.S. president Donald Trump and Commission president Ursula von der Leyen, on July 27. In that agreement, the EU agreed to a 15% general tariff in order for a trade war not be a destructive one. From August 1, the United States has agreed to lower its tariffs on vehicles built in the European Union from 27,5% to 15%. The deal ended the conflict between two of the largest trading partners in the world. However, it was an asymmetrical agreement, as Washington retained tariffs on 70% EU exports while Brussels had to reduce its duties and purchase more U.S. products. Trump has repeatedly railed against Europe, claiming in February that the EU was "formed to screw up the United States". He has also been critical of the U.S. goods trade deficit with EU, which amounted in 2024 to $235 billion. The EU has generally accepted the deal, citing it as the lesser evil. Trump had planned to impose a 30% tariff on nearly all EU-imported goods. Two-thirds of industrial goods are already free from tariffs. According to the economic think tank Bruegel, the average EU tariff for U.S. products is 1.35%. However, cars are subject to a 10% EU tax. In addition to concessions for farm products, the EU's proposals include zero tariffs on potato, reduced rates for tomato and quotas that have zero or low tariffs. The list excludes beef, chicken, rice, and ethanol. "We're protecting our defensive interest there." "We are protecting our defensive interests there." The EU's proposed legislative will have to be approved both by the European parliament and a majority of EU members. This could take several weeks. The deal's supporters acknowledge that the U.S. tariffs are still high, but they point out that the European Union has a special arrangement whereby existing U.S. duty rates, like 2.5% for automobiles and up to 20 % for cheeses, will not be added to the 15% general rate. Steel, aluminum and copper tariffs are still at 50%. Digital services are barely mentioned in the agreement. Trump threatened on Monday to impose additional tariffs against all countries that have digital taxes or regulations. Reporting by Philip Blenkinsop, Editing by Helen Popper, Susan Fenton and Susan Fenton
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Nippon Steel invests $11 billion in U.S. steel profit through tech transfer
Nippon Steel, the Japanese steel company, plans to increase profits at U.S. Steel by investing $11 billion and transferring its advanced technology and operational techniques to expand capacity. The $14.9 billion acquisition of U.S. Steel by Nippon Steel was completed in June. This 18-month-long process had been slowed down due to the political changes during the transition from the Biden to Trump administrations. The investment and transfer of knowledge, which will run through fiscal 2028 and include a period up to 2026, are expected to increase U.S. Steel’s annual profit contribution from 80 billion yen to 250 billion in fiscal 2028. This is compared to an estimated 150 billion yen for 2026, and 150 billion yen this year. Takahiro Mori, vice chairman of Nippon Steel, said on Thursday that the real effects of the investment would appear after 2028. He added that profits could grow even beyond 250 billion yen. The refurbishment of No. 14 blast furnace at Gary Works in Indiana, as well as new electromagnetic steel sheet lines and other capacity expansions are planned. The Gary Works in Indiana has a 14-blast furnace, as well as new electromagnetic steel sheets lines and capacity expansions. Mori stated that "we are looking to build new mills from greenfield", citing options such as 3 million metric ton electric arc furnaces similar to Big River 2 in Arkansas. Mori, now the Chairman of U.S. Steel and the lead negotiator in the deal, said that the investment would increase U.S. Steel’s domestic crude-steel capacity from 17 million to 20 million tons. Nippon Steel now has a global capacity of 86 million tonnes per year, which is closer to the 100 million ton target it set for itself. Nippon Steel will announce a detailed investment plan later this year, as part of its new medium-term strategy. Nippon Steel announced in July that it would raise 500 Billion Yen via a subordinated credit to partially pay off a 2 Trillion Yen bridge loan which funded the deal. Mori stated that the steelmaker has also flexibility in hybrid financing, and may consider corporate bonds and convertible bonds. He said that he would assess the optimal timing and interest rates as well as whether dollar or yen denominations were preferable for the best financing strategy. Equity financing was also possible but within certain limits in order to avoid shareholder diluting. Mori stated that U.S. Steel will fund the initial $11 billion investment, and Nippon Steel will step in if funds are insufficient. He stated that U.S. Steel was assessing the impact from an explosion in August at its Clairton facility in Pennsylvania. This could reduce, but not significantly, Nippon Steel's expected profit contribution of 80 billion yen for the current fiscal year.
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StatsCan survey shows that Canada's wheat and barley production is down but canola, oats, and canola are up.
Statistics Canada released a report on Thursday that showed Canada's crops were in a wide range of conditions at the end of July. However, total production was close to expectations. Analysts said that this range and the heavy rainfall in August make it less likely than previous years to be able to predict production based on data from late July. After the report's release, Seges Markets analyst Lawrence Klusa said: "It was such a variable year." It's very hard to tell if the late rains have helped or hurt the crop. Model-based assessment predicts a canola harvest of 19,9 million metric tonnes, an all wheat crop of 35,6 million tons and a spring grain crop of 25,6 million tons. Statistics Canada estimates that wheat production will fall by 1.1% in Canada in 2025, compared to the production of 2024. Canola production, however, is expected to increase by 3.6%. This projection was based on satellite data and agroclimatic information. Barley production fell 1.9% in 2025. The durum production, which is the wheat used for pasta, was estimated at 6.1 millions tonnes. After the report, the ICE canola market fell. Traders believed that the actual size of the crop was a million tonnes larger than originally thought due to the excellent August weather. They expect Statistics Canada to revise this total upward. Tony Tryhuk, a trader at RBC Dominion Securities, said that "no one perceived the report as friendly." People who received moisture for late-seeded plants have really, truly benefited. StatsCan reported that crop conditions in the Prairies were varied, with some regions receiving less than average precipitation while others experienced prolonged temperatures above normal. According to the agency, prairie conditions were much lower than usual or much higher than average at the end July. Analysts and farmers said that August was a near-ideal month for canola pod filling, with cooler temperatures and frequent rain showers across the region. A significant area was affected by extreme heat and dryness in spring and early summer and lost much of its yield potential. In other parts of Canada, crop conditions were above average. In Ontario, rainfall was below-average while in Quebec it was above average. Model-based yields are used to calculate production estimates for Quebec and Ontario. Estimates of Prince Edward Island (PEI), Nova Scotia, New Brunswick, and British Columbia were all carried forward from July estimates.
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US stock indexes are mostly higher, but Nvidia shares fall; dollar weakens
The major U.S. indexes rose slightly on Thursday, despite Nvidia's shares falling amid uncertainty about its China business. Meanwhile, the dollar fell against the yen and euro as traders awaited a reduction in U.S. rates. Nvidia shares fell about 1.1% after the market closed on Wednesday. The trade war between the United States and China clouded the better-than expected revenue forecast released by the chip designer. Nvidia's forecast was better than Wall Street expected but disappointed investors used to big results. The Dow, S&P 500, and Nasdaq all rose slightly, while an index of semiconductor stocks increased by 0.4%. Peter Tuz of Chase Investment Counsel, Charlottesville, Virginia, stated that investors were mostly relieved by Nvidia’s results and guidance. He said that while there is some confusion about what will happen in China, Nvidia has "not said anything that points to a significant sloweddown" so this removed a major overhang or risk. Nvidia CEO Jensen Huang dismissed concerns about the end of a spending boom for AI chips, and said that opportunities would expand over five years. Tuz says that economic data is another positive for stocks. Tuz said that the day's data revealed the U.S. economic growth was faster than originally thought in the second-quarter, driven in part by business investments in intellectual property like AI. The Dow Jones Industrial Average increased 5.97 points or 0.01% to 45,571.20. The S&P 500 rose 5.11 points or 0.08% to 6,486.51 while the Nasdaq Composite grew 57.08 or 0.26% to 21,646.27. The MSCI index of global stocks rose by 1.53 points or 0.16% to 954.57. The STOXX 600 Index fell by 0.16%. Following Francois Bayrou’s gamble, European markets are likely to remain focused on France’s fiscal trajectory following his deeply unpopular plan to reduce debt via a vote of confidence next month. The euro rose 0.29% to $1.1671. The dollar fell 0.26% against the Japanese yen to 147. Investors want to know more about the prospects of interest rate reductions ahead of Federal Reserve's policy meeting on September 16-17. John Williams, the New York Fed's bank president, said on Wednesday that it was likely interest rates would fall at some stage. However policymakers must wait to see how the economy develops in the coming months before deciding if a rate cut is appropriate at the September meeting. According to CME's FedWatch, traders are currently pricing in 87% of the odds that a quarter point rate cut will occur in September. They see 137 basis point cuts in total by the end 2026. This week, the Fed will also be reporting on Friday about personal consumption expenditures in the United States - its preferred inflation indicator. Investors are still digesting the news about Federal Reserve Governor Lisa Cook. Cook filed a suit on Thursday, claiming that U.S. president Donald Trump does not have the power to remove Lisa Cook from her office. This could set up a legal fight that could reset norms long established for the independence of the U.S. Central Bank. As traders considered the prospects of Fed rate cuts, interest rate-sensitive yields on two-year bonds rose, but remained near a four-month-low. The yield on the two-year bond was up by 1.4 basis points to 3.637%. The benchmark 10-year bond fell 0.8 basis to 4.23%. U.S. crude dropped 0.89%, to $63.59 per barrel. Brent was down to $67.64 a barrel on the same day.
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Report: Brazil's main sugar-producing state could face extreme heat, which would reduce cane yields
EarthDaily reported on Thursday that Brazil's Sao Paulo State, which produces half of Brazil's sugarcane production, will likely face extreme heat and dry conditions next week, resulting in a further reduction of crop yields. The satellite-based agricultural monitor firm warned in advance of the increased fire risk in canefields due to the dry conditions. EarthDaily reported that "Climate model predictions point to an upcoming heat wave with temperatures averaging around 39degC (102/degF), which would likely worsen losses in sugarcane production and increase the risk of fires." This warning comes at a time when Brazil's sugar belt in the center and south is grappling with lower agricultural productivity for the 2025/26 harvest due to adverse weather conditions during planting in 2024. According to the Sugarcane Technology Center, through July, the productivity of the 2025/26 cycle was 9.8% lower than the previous cycle, at 79.8 tons per hectare. Total Recoverable Sugar, a key quality measure, fell 3% to 125.2 kilograms per ton. EarthDaily's data showed that the vegetation index in certain areas had also deteriorated. EarthDaily's crop analyst Felippe Reis said that the combination of intense heat, and in particular drought, is negatively impacting plant development. EarthDaily reported that both the ECMWF climate model and the GFS forecast temperatures above average across the majority of Brazil within the next few months. EarthDaily reported that in other parts of central-south including Parana, Mato Grosso do Sul and Mato Grosso do Sul the rain throughout August interrupted sugarcane harvesting for several days. Reis stated that the month would likely end with at the very least three days' worth of harvesting activity being halted in the area, which could reduce the amount of cane available to be crushed and affect the rate of sugar and alcohol production. Reporting by Roberto Samora; Writing by Oliver Griffin, Editing by David Gregorio
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Valterra Platinum plans underground mining to begin in 2026
An executive from Valterra Platinum said that the company will begin trial mining in an underground pit of its Mogalakwena mine, South Africa, late next year. Mogalakwena, located in Limpopo Province, north of Johannesburg is the largest open-pit Platinum Group Metals (PGMs) mine. It consists of five open pits. Ore from the Sandsloot mine, where an underground mine is currently being developed, has a higher grade. Since years, platinum miners in South Africa have been facing declining ore grades. Companies have been forced to mine deeper underground in order to maintain production, increasing costs and risks. Valterra's crown jewel, the mine contributes about 50% to the company's PGM output. The Sandsloot mine project is a sign of confidence in PGMs. PGMs are used in jewellery and autocatalysts. The price of white metals has mostly fallen in the last two years. This is due to the fact that battery-electric vehicles do not require them. Miners have therefore cut their supply. The company announced in July that it had begun the feasibility study of the underground project. It aims to complete the study and make an investment decision by the first half 2027. Martin Poggiolini told reporters on a Wednesday media tour that the company was also planning a "trial mining" in 2026. Poggiolini stated that if the capital budget is met, the first ore will be trucked to the surface from the upper part of the orebody. He added that a ramp-up to a production of 3.6 to 4 million tonnes per year could happen beyond 2030. Valterra said that it hoped to increase Mogalakwena concentrator production by 10% to 50% with the underground mine. Poggiolini, and Agit Singh from Valterra, the head of processing operations said that the company is increasing demand for existing markets, such as hydrogen production, fuel-cell electric cars, and creating new segments. Singh stated, "We have a really good level of confidence in the fundamentals surrounding the PGM industry in the short-term and definitely in the long-term." (Reporting and editing by Susan Fenton; Nqobile Dudla).
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Minister says that the Codelco-SQM Lithium deal will be completed before Boric's departure in 2026.
In an interview, Alvaro Garcia, the newly appointed Economy minister of Chile, said that he expects Codelco - a state-owned copper producer – and SQM - a local miner – to complete a major partnership deal with lithium before 2026 when the current administration leaves. Some presidential candidates have stated that they will review or cancel the deal if it is not completed before President Gabriel Boric leaves the office. This puts pressure on the administration to complete the crucial pillar in its pledge to increase the role of the state in lithium production. This is our immediate goal. "We expect that it will be finished before the end" of the administration, said Garcia. He was appointed last week as part of a cabinet reshuffle which made Nicolas Grau Finance Minister. Codelco, a Santiago-based company, and SQM originally expected that the joint venture would go into effect early in 2025. However, final steps took longer than expected. Due to SQM’s global presence, the deal needs approval from antitrust regulators around the world. SQM anticipates approval from China regulatory authorities in September or October. This partnership will give Codelco the majority of SQM’s lithium production on the Atacama Salt Flat. Codelco is the largest copper producer in the world. Garcia also said that he expects to see new operating contracts for lithium, including a partnership between Rio Tinto and the state-owned Enami. He did not provide any further information. He said that "companies have stated they are still interested." Accelerate Investment Garcia expects that a law to streamline the development permits, which has been long awaited, will also go into effect within days. Congress passed the legislation in July. However, the administration must wait for a court review because of challenges by legislators. Garcia stated, "Our information indicates that the court already agreed." The most important thing to do now is to determine how the regulations are to be implemented. Congress has delayed a second bill that would have accelerated the environmental assessment process, the longest part in Chile's permit process. Garcia did not give a new timeline for the legislation, but said that the first bill which deals with so-called sector permissions will already help to encourage investment. Garcia stated that "the process will become even more streamlined but the progress made in the sector permits area already expedites projects greatly."
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Sources say Phillips 66 will begin closing down its refinery in Los Angeles next week.
Phillips 66 will begin shuttering its 139,000-barrel-per-day Los Angeles-area refinery in September, people familiar with the matter said. Two sources have confirmed that the refinery in Los Angeles will begin to wind down operations next week for a permanent closure. Phillips 66 said last year it would shut down the facility by October 2025 and start winding down its operations. In an email statement sent on Thursday, a spokesperson for the company said that "the refinery units will start idling in Q4 2025 according to plan...our timeline remains unchanged." The company didn't provide a detailed timeline, but did note that the idling of the facilities is a multi-phased process. Refinery workers are expected to be laid off in December. About 600 workers and 300 contractors work at the facility in Los Angeles. The United Steelworkers Union represents over half of the hourly employees. The company refused to comment on its employee status. The exit of Phillips 66 will result in a void for motor fuel in California, which is the most populous state in the United States. Gas prices in California are consistently among the highest in the country, leading to a tense relationship with oil companies. Valero Energy announced that it also intends to close its Benicia refinery (145,000 bpd), one of the two refineries remaining in the state. About 20% of the gasoline in the state is produced by two refineries that are closing.
United Steelworkers union proposes next refinery worker contracts
Mike Smith, the chair of national oil negotiations for the union, told a meeting of more than 300 United Steelworkers union workers in Pittsburgh that they had approved proposals for labor negotiation with energy companies to begin in early 2026.
The current contract, which covers 30,000 workers for four years, expires just after midnight on February 1, 2026. USW members are employed at refineries which account for more than half of the nation's crude oil processing capacity.
USW negotiators, led by Smith, and including International Vice President Roxanne Bron and International President David McCall will begin meetings with Marathon Petroleum negotiators in January.
As the leading company in the national pattern negotiations, MPC is looking forward to productive negotiation with the USW. It is also committed to working towards a mutually satisfying agreement," said Marathon's spokesperson Jamal Kheiry.
The main issue is wage increases, especially for workers in refineries and chemical plants who earn an average of more than $50 per hour.
Smith stated, "I'd say that the wage proposals are important for the times we live in." Smith declined to provide more details about the union's proposed wage increases.
Smith also said that the cost of healthcare is a major concern.
He said, "We are trying to ensure good health care without having to bear the brunt of rising cost."
As with other industries, the union also has a proposal for artificial intelligence.
Smith stated that the AI proposal was to protect our industry as we tried to understand its impacts.
In order to bring the proposals to the table, a supermajority must be reached by local unions within 45 days.
Smith said that he couldn't predict at this time how easy or difficult the negotiations with Marathon might be.
He said, "It's early." No bargaining session can be easy or simple. "Our members are willing to do whatever it takes to get a contract that is fair for all of our members."
The USW achieved a wage increase of 2.5% in 2022. This was followed by 3% increases in the second and third year and a 3.5% raise in the fourth. (Reporting and editing by Leslie Adler; Erwin Seba)
(source: Reuters)