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Malaysia declares that China is willing to assist in rare earths processing
Malaysia said that China is willing to offer technical and technological assistance to Malaysia in the rare earths industry, but it only wants to work with state-owned companies. Malaysia is working to improve its rare earths processing and mining capabilities to capitalize on the growing global demand for these critical minerals, which are used in many products such as semiconductor chips, electric cars, and military equipment. China, which is the top rare earth miner and processor in the world, has tightened export restrictions to protect its position. Malaysia's Natural Resources and Environmental Sustainability minister Johari Abdul Ghani stated in a written parliamentary response that Chinese President Xi Jinping conveyed Beijing’s willingness to assist Malaysia in its ambitions for rare earths during a trip to Kuala Lumpur last April. Johari stated that "technology safeguarding was of great importance for China and he (Xi), requested that the collaboration only include government-linked businesses." He added that discussions were still in their early stages and that no agreement had been reached between the two nations. Johari stated that China's help in this matter was vital, given its global dominance in particular in the separation and purification of rare earth elements. Johari, who was referring to the rare earths processing facility operated by Australian miner Lynas, in Malaysia's Pahang State, said that it would enhance Malaysia's image in the sector, as the only nation to have both Chinese and non Chinese processing technology. Malaysia has banned exports of rare earths in their raw form, and only allows shipments of rare earths that have been processed. This is to prevent exploitation of the resources. Johari responded separately on Wednesday by stating that Malaysia has 16.1 million tons of rare earths deposits. This is according to an estimate from the Minerals and Geosciences Department in Malaysia for 2019. He warned, however, that further research is needed to determine the amount of coal that can be mined. Policies are in place to prohibit mining in protected areas, permanent forests and environmentally sensitive zones. (Reporting and editing by Martin Petty; Rozanna latiff)
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Oil prices fall as the market weighs US summer demand
The price of oil fell on Thursday, after a rise in the previous session. Investors weighed the expectations for a lower U.S. demand as the end to the summer season is nearing. They also focused on India's reaction to the punitive U.S. duties. Brent crude futures fell 63 cents or 0.91% to $67.43, while West Texas Intermediate crude futures (WTI) dropped 62 cents or 0.97% to $63.55. Both contracts rose in the previous session after the U.S. Energy Information Administration announced that U.S. oil inventories dropped by 2.4 millions barrels during the week ending August 22. This was in contrast to analysts' expectations, which were based on a poll of a 1.9 million-barrel draw. Oil prices are dropping this morning, as traders reassess the rally yesterday that was fueled by the EIA Report," said Priyanka Sackdeva. She is a Phillip Nova senior analyst. She added that "while U.S. crude inventory levels did continue to decline, the rate of declines was slower than last week, when they dropped more sharply, which tempered bullish momentum." ? ? The drop in prices was a sign of strong demand for the long Labor Day weekend coming up. Tony Sycamore, IG's market analyst, said that this is usually the unofficial end to the summer driving season, and the beginning of lower U.S. consumer demand. After President Donald Trump doubled the tariffs on Indian imports up to 50% on Wednesday, traders are closely watching how New Delhi reacts to Washington's pressure to stop buying Russian crude oil. Sycamore said that India is expected to purchase crude oil from Russia in the near future, which will limit the impact of new tariffs on the global supply. The market has also been impacted by the increased supply that is coming on the market, as some major producers have removed voluntary cuts. This offsets some of the supporting elements, such as the fact that Russia and Ukraine are intensifying their attacks on each others' energy infrastructure. Overnight, Russia carried out a massive drone strike on the energy and gas transportation infrastructure in six Ukrainian regions, leaving over 100,000 people without electricity, Ukrainian officials reported on Wednesday. Oil prices have also been supported by the prospect of an interest rate reduction in the near future, which could boost the economy and increase oil demand. John Williams, the New York Federal Reserve Bank president, said that rates are likely to fall at some point. However policymakers need to wait for upcoming economic data to decide whether a rate cut is necessary at the Fed meeting on September 16-17.
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The UK's net-zero mission is hampered by high electricity prices
The only British aluminium coil factory has invested millions to reduce its carbon footprint, save energy and protect itself from some the highest electricity prices in the world. When Bridgnorth Aluminium falls below the threshold for government subsidies that help businesses pay their bills, they ramp up everything to make sure they don't miss out. Our finance guy told us at the end the year that it was okay to keep the lights on more. "It's kind of strange and counterproductive," Adrian Musgrave said, head of sales for Bridgnorth Aluminium. The paradoxical situation is caused by the high electricity prices in Britain and the fragmented support that successive governments have provided to large industrial power consumers. According to the International Energy Agency (IEA), large energy-intensive companies in Britain spent four times as much on electricity in 2013 than businesses in the U.S., and double what their competitors in France or Germany paid. According to over 25 industry experts, including business owners, energy managers, and policy analysts, the high power prices are not only a barrier to Britain's move towards cleaner energy, but also to its goal to reach net zero energy by 2050. High power costs, they said, have prevented companies from investing in more efficient equipment, stopped them from switching to low-carbon electricity, and prevented others from competing with their foreign competitors to build the wind farms and pylons needed for a future of net zero. Rachel Solomon Williams, the head of Aldersgate Group which helps companies and governments decarbonise, said that this was the biggest barrier in the UK to achieve net zero. It will be a major obstacle to net zero if the electricity costs are not addressed. The new Labour centre-left government in Britain sees energy transition as an opportunity to boost the economy, by creating highly-skilled manufacturing jobs and innovative firms that can export their knowledge. ROLLERCOASTERS RUNNING ON FOSSIL FUEL Gas is the most expensive fuel in Britain, even though Britain generated more than half of its electricity last year through renewable sources such as wind and sun. The wholesale electricity price is set every 30 minutes based on the cost of last energy used to meet demand. Even if wind and solar provide 99% of power, gas-fired plant is needed to reach 100%. The average electricity bill is made up of about 40% levies. In Europe, other countries use the same pricing structure based on marginal costs in wholesale electricity markets. However, in France for example, the majority of the country's power is nuclear, meaning that gas prices are set less often. The British government wants to bring the cost of energy more in line with the big European markets. To do this, it has proposed that grid charges be removed from the most intense users. Bridgnorth has trained its staff to reduce energy consumption. The lights are dimmed when the factory isn't in use. And the furnace fans have been redesigned with smaller motors that consume less energy. It receives a portion of its power from an nearby anaerobic digester that produces clean energy out of food waste. The company would like to install a solar panel on the site and make other improvements to its electricity, but this would put it below government assistance threshold. It would like to recycle scrap in order to create a circular economic system, but the high cost of energy has limited its investment. Musgrave explained that the monthly energy expenditure was 1 million pounds ($1.35 millions), and you can see how important it is to factor energy into strategic planning. Bridgnorth participates in the British Industry Supercharger Scheme, which exempts companies that spend more than 20 percent of their output on electricity and those who make core products like steel, glass, and chemicals. Bridgnorth makes large sheets of aluminium rolled and carefully monitors its production and energy costs to ensure it doesn't fall below the 20% threshold and lose 3 million pounds in support each year. A spokesperson for the British government said that the UK was investing in order to "get off the rollercoaster" of the fossil fuel markets. After a decade of inaction, they announced that "we are cutting the electricity costs of thousands of businesses up to 25%. This will make them more competitive, and unlock growth." This is just a bunch of nonsense Bridgnorth Aluminum is not the only company struggling to remain competitive and navigate a shift to net-zero emissions while facing such high electricity costs. Grainger & Worrall is just over a half-mile away. They are pioneers in "gigacasting", a method used by electric car makers like Tesla to produce large lightweight structural parts all at once. To eliminate waste it recycles the sand, but this takes a lot of energy. Duncan Eldridge, Chief Executive, said: "It makes us less competitive. It's bizarre, but the right thing to be doing." "We are spending more on electricity and less on capital investments," said Duncan Eldridge, Chief Executive. Jonathan Duck, the Chief Executive of Amtico in Coventry, also located in Britain's historic industrial heartland said that energy costs had become so high, the company crunched numbers to determine if there were any alternatives to the grid. Conclusion? The conclusion? He said, "I am scratching my head, thinking, 'Well, this is just bonkers.' The structure of the market encourages me to build my own gas-fired electricity station, but that is not the future." Amtico decided not to build the factory because it didn't feel "morally correct". 7 Steel UK in Cardiff, the Welsh capital, uses an electric-arc furnace to produce the low carbon steel used for wind farms and electricity poles. This is a very radical approach. It shuts down its furnace when wholesale prices are too high. Production can sometimes be halted for several days. Due to high costs and low demand, the furnace operated at only 70% of its capacity last year. Gabriella Nizam is the head of sustainability at 7 Steel. She said, "Decarbonisation in the UK relies on steel. Yet we don't appear to grasp that concept." 'IN SURVIVAL MODE' In January 2023, to prevent non-fossil fuel generators from making excessive profits due to high electricity prices the government introduced an windfall tax. The tax is set to expire in March 2028. The governments of the past have also considered ways to break the connection between electricity and gas prices. One way is to offer renewable energy to consumers directly in the form of a green power pool, rather than via the wholesale market. Michael Grubb is an expert in energy policy at University College London. He said that while the government acknowledged that this could work, they had not tried it and thought it too radical. He said that "their priority was to maximize investment." Green energy advocates, as well as many policy experts, say that Britain is currently in an expensive investment phase for its energy transition. Prices will drop when more renewables are brought on line and less gas is used to meet demand. It is a problem for the moment, but it will eventually be resolved. Britain has been a leader in reducing emissions. It built one of the largest offshore wind sectors in the world to phase out coal. Ember data shows that the UK aims to generate 95% of domestic electricity by 2030 from low-carbon resources, and 65% came from non-fossil fuel sources in 2017. High electricity prices are a barrier to the UK's goal of net zero. Nissan, the Japanese automaker, says that its British facility has the highest electric costs in its global facilities. This is threatening to its ability of making EVs at this plant. IHG, the largest hotel company in the world, has said that its British hotels are unable to adopt hot water heat pumps in order to reduce emissions like those in Europe and Southeast Asia, due to the prohibitive costs. Many companies, especially in heavy industries, are concerned about how long they will be able to compete with their international competitors if high electricity prices prevent them from making investments. Nizam, 7 Steel's Nizam, said: "We are always in survival mode." "We'll eventually get there but what will the sector look like by then?" ($1 = 0.7402 pounds)
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Morning bid Europe-Nvidia kills buzz as profits are merely amazing, not legendary
Gregor Stuart Hunter gives us a look at what the future holds for European and global markets. Tech stocks have fallen after Nvidia announced earnings that would make any CEO kill for. The chip designer, a leader in AI, beat analysts' expectations and forecast revenue for Q3 that was higher than Wall Street predictions. A miss on data center revenue and concerns over China forecasts caused its shares to fall more than 3% after-hours. Kyle Rodda is a senior market analyst for Capital.com. He said that Nvidia's results were not perfect, but they had to be free of flaws. The stock was trading at a high price, so any bad news would be punished. After two days of gains that helped push U.S. stocks to record highs, S&P500 e-minis and Nasdaq eminis both fell by 0.1% after Nvidia’s results. MSCI's broadest Asia-Pacific share index outside Japan fluctuated between gains and losses, with the last one being down by 0.3%. Spillover As the chill spread across the Asian tech industry, Taiwan Semiconductor Manufacturing Co fell 1.7% and Samsung Electronics dropped 0.7%. This may give a hint as to what Dutch chipmaker ASML can expect in the European session. Nvidia's Chinese rivals surged. SMIC gained 8.3%, and Cambricon Technologies added another 7.1%. The company announced on Wednesday that it had turned a profit. Both chipmakers pushed up the STAR 50 Index of Chinese Growth Stocks by as much as 5%. Reducing Expectations The yield on 30-year French bonds fell from its highest level since November 2011, as traders reduced their expectations that the political crisis in France would increase the cost of borrowing for the government. The Nikkei stock index rose 0.6% after Kyodo reported that Japan's chief trade negotiator Ryosei Acazawa had cancelled his planned trip to the United States to finalize the details of the trade agreement agreed last month. The following are key developments that may influence the markets on Thursday. * Earnings: Pernod Ricard, CD Projekt, Brunello Cucinelli * Eurozone data: Money-M3 Annual Growth for July * August Business Climate, Economic, Industrial, Services and Consumer Confidence.
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CIP, Petrovietnam Team Up for Offshore Wind Project in Vietnam
Copenhagen Infrastructure Partners (CIP) has signed a joint development agreement with Petrovietnam to collaborate on the development of an offshore wind project in Vietnam’s south-central region.The project - in early development phase and subject to relevant regulatory approvals - is expected to be among Vietnam’s first offshore wind initiatives and represents a significant step in the country’s efforts to diversify its energy mix and accelerate its green transition toward a sustainable energy future.CIP is developing the project together with Copenhagen Offshore Partners, CIP’s exclusive offshore wind development partner.The joint development agreement builds on the memorandum of understanding signed in March 2024 by both parties and combines CIP’s global offshore wind expertise with Petrovietnam’s deep local market knowledge and offshore operational capabilities.Since 2024, working teams from both organizations have coordinated closely and shared knowledge and technical expertise while exploring opportunities for potential joint projects.“This agreement is a significant step forward in our partnership with Petrovietnam and confirms our Growth Markets Fund II’s long-term commitment in Vietnam.“By combining CIP’s global experience and expertise in offshore wind with Petrovietnam’s proven offshore expertise and deep understanding of the local market, we are well positioned to deliver one of Vietnam’s first offshore wind projects and to establish the groundwork for future offshore wind projects in Vietnam,” said Robert Helms, Partner at Copenhagen Infrastructure Partners.“Petrovietnam and CIP have built a meaningful partnership working closely and effectively to reach this important step. The Joint Development Agreement demonstrates our mutual trust, commitment and shared vision in supporting Vietnam’s energy transition. Together we not only aim to develop successful offshore wind projects, but also to build a clean energy value chain in Vietnam,” added Le Manh Hung, Vice President and Deputy CEO of Petrovietnam.
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Investors wait for US data to get more Fed signals
Gold prices were stable on Thursday as investors waited for U.S. economic reports that may shed more light on Federal Reserve interest rate policy. As of 0257 GMT spot gold remained at $3,390.27 an ounce after reaching its highest level since August 11, earlier in the session. The price of U.S. December gold futures was flat at $3.447.40. Kyle Rodda is Capital.com's Financial Market Analyst. He said, "We have a lot more interest in gold due to the issues surrounding institutional trusts as well as risks regarding Fed's independence." Investors await the release of Friday's Personal Consumption Expenditures Price Index (PCE), the preferred inflation measurement of the U.S. Fed. "But we are really looking for more to push the price over critical level of $3.400... The U.S. data PCE will be very significant. We remain bullish on the gold market. "I think that all fundamentals are moving in the right directions," he said. The economists polled expect that the PCE Price Index will rise by 2.6% in July, a similar increase to the previous month. According to CME FedWatch Tool, the markets expect a rate cut of 25 basis points at next month's Fed policy meeting. Gold that does not yield is usually a good investment in an environment with low interest rates. John Williams, the New York Fed Bank president, said that it is possible for interest rates to fall at some point. However policymakers must wait to see how the economy develops in order to determine if a rate cut should be made next month. Other metals, such as spot silver, rose by 0.3%, to $38.72 an ounce. Platinum remained unchanged at $1,348.07, while palladium increased 0.3%, to $1,095.26.
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After military parade, curbs are lifted and iron ore prices rise in the hope of increasing demand.
Iron ore prices rose on Thursday due to a resilient demand, and anticipation that steelmakers would restock after China's military parade. However, concerns about steel consumption continued to limit gains. As of 0233 GMT, the most traded January iron ore contract at China's Dalian Commodity Exchange rose by 0.51% to $781 yuan (US$109.19) per metric ton. The contract has seen a 0.3% rise so far in August. As of 0223 GMT the benchmark October iron ore traded on the Singapore Exchange had risen by 0.48% to $102.95 per ton. This represents a 3% increase so far in this month. Qingwei Xie is an analyst with Shanghai Metals Market. The production restrictions in Hebei this week have led to a decline in the buying interest of steelmakers, said Xie. For better air quality for Beijing's military parade to mark the end of World War Two on September 3, steelmakers in China's largest production hub Tangshan, in the northern region's Hebei Province, have been asked to limit production. Hot metal production, an indicator of iron ore demand, was high. This signaled a steady demand, which supported ore prices. "Hot Metal output will probably climb after the end of this round of production controls." "The anticipation that the U.S. Federal Reserve would cut interest rates in September has also lent a little support to ore price," said SMM's Xie. Despite the price increases, there was caution about whether steel demand would pick up in the next month. Coke and other steelmaking materials, such as coking coal, fell by 1.25% and 1.61 %, respectively. The benchmark steel prices on the Shanghai Futures Exchange are mixed. Rebar was 0.16% higher than before, hot-rolled coil increased by 0.12%, and wire rod grew 0.24%. Stainless steel fell 0.62%. Baoshan Iron & Steel Co, China's largest listed company in the steel industry, has warned of increasing pressure on exports due to rising trade protectionism.
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Officials: Three killed in a night-time Russian attack against Kyiv
Officials said that the Ukrainian capital Kyiv was subjected to a massive Russian attack during the night, with 12 people injured, at least three of them being children, and several buildings damaged in different districts. Three deaths were reported by the military administration of the city, and they occurred in districts that are geographically separated. Mayor Vitali Klitschko confirmed that two children were among the injured. The list of damaged buildings was long, and included several apartment blocks in high-rises. Images posted online show smoke rising from buildings and apartments on fire. Could not verify images immediately. Klitschko stated that two high-rise apartments had been damaged in the eastern suburbs. (Reporting and editing by Ron Popeski, Himani Sarkar, and Lincoln Feast.
Nvidia's earnings results cause a drop in the Asia markets
Asian stocks shook on Thursday, as worries about the future of its China operations offset the blowout earnings by artificial intelligence giant Nvidia. The dollar also remained weak as investors betted on a rate cut in the near term.
The MSCI broadest Asia-Pacific index outside Japan fluctuated between gains and losses and ended the day down by 0.2%. U.S. equity contracts were affected by the after-hours drop in the shares of the chip-designer, which is now the most valuable company on the planet.
Charu Chanana is the chief investment strategist for Saxo, based in Singapore.
She added that "we should expect some spillover" even though it's unlikely to harm investor confidence.
The cleanest beta for Nvidia is from Asian chipmakers, especially those in Korea and Taiwan. They will feel the drag.
After Nvidia released its results, S&P 500 futures dropped 0.2% while Nasdaq fell 0.4%.
Investors' concerns about Nvidia were centered on its China operations, which were caught in the middle of the trade war between Washington, DC and Beijing.
Goldman Sachs analysts wrote in a report that they expect the stock price to drop modestly after a quarter in line and guidance, against the backdrop of high expectations going into the conference call. Management noted that no H20 products were shipped to China during the quarter.
After Kyodo reported that Japan's chief trade negotiator Ryosei Acazawa had cancelled his planned trip to the United States where he would have been expected to finalize the details of the agreement reached last month, Japanese stocks fluctuated from gains to losses. The Nikkei was up by 0.4%.
The Bank of Korea held rates at 2.5% as economists had expected.
Hong Kong shares fell, with the Hang Seng Index dropping 1%. Meituan shares dropped 9.7% after the Chinese food-delivery giant reported a decline in its second-quarter profits on Wednesday.
The dollar is on the defensive in the currency market as traders bet more heavily that interest rates will drop next month. This follows the recent pivot of Federal Reserve Chair Jerome Powell to a more dovish stance, and President Donald Trump's move to take control of the largest central bank of the world.
Trump announced earlier this week that he was firing Federal Reserve Governor Lisa Cook. This caused some investors to worry about the Fed’s independence. Cook's attorney said that she would file a suit against the White House.
Trump pressed the Fed for lower interest rates in his first term as president. He has intensified this campaign in recent years while seeking appointments to key positions at the U.S. Central Bank. The president demanded that the rates be cut several percentage points, and threatened to fire Powell. He has since backed off from this threat.
The yield on 10-year Treasury Notes fell to 4.2362% from its U.S. closing of 4.238% Wednesday.
According to CME Group’s FedWatch tool, the market currently prices a probability of 88.7% that a 25 basis point rate reduction will occur at Fed's meeting on 17th September. This is up from 61.9% one month ago.
The dollar fell 0.1% to 147.275 against the yen, but the euro was up by 0.1% at $1.16475. This is an attempt to continue a winning streak of three weeks that has pushed its gains for this month up to 2.02%.
Brent crude dropped 0.5% on the commodities market to $67.74 a barrel.
Gold prices were slightly lower. Gold was down 0.2% to $3391.60 a troy ounce.
(source: Reuters)