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South Korea Minister says it has reached agreement with the US on nuclear fuel reprocessing
Cho Hyun, South Korean Foreign Ministry said that following the summit between U.S. president Donald Trump and South Korean president Lee Jae Myung earlier this week, both countries agreed to discuss nuclear reprocessing. Cho, in an interview broadcast live on television, said: "We run 26 nuclear power stations and buy and bring in fuel every time. We feel the need to be able to reprocess and make our own fuel using concentrates." "Cooperation with the U.S. will be essential in order to achieve this." We must change the nuclear agreement or use another method within the agreement between the countries. It is therefore very significant that we have decided to start discussions in this direction. A bilateral agreement prohibits South Korea from reprocessing spent nuclear fuel, which could be used to create nuclear weapons. Foreign Minister Cho said that South Korea is not interested in nuclear weapons, but rather industrial and environmental purposes. Cho said on Thursday, "Any talk of wanting to have our own nuclear weapons or having nuclear capabilities via revision (of the accord) would be something the U.S. couldn't accept in terms overall nuclear nonproliferation." Reporting by Joyce Lee, Hyunjoo Ji and Ed Davies.
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Top analysts and miners say that China has capped coal production in order to maintain prices.
According to an official from a major mining company and analysts, China has curbed coal production after an unexpected increase in supply during the first half of this year, which weighed down on prices. In July, China's production fell to its lowest level for over a month. In the first half of this year, it had increased by more than 5%. Prices in some areas of the country fell nearly 30%. Analysts say that the country increased inspections in July, to ensure that plants maintained their approved production capacity. An official of China Coal Energy, China's largest coal miner, said to analysts that the increase in supply has exceeded expectations, and this has caused prices to fall. "We have seen restrictions and regulations on production." Mysteel, a Shanghai-based commodities consulting firm, reported on Wednesday that 54 of the 153 mines in Shanxi with a total production capacity 61.1 millions metric tons annually have either suspended or reduced production. Shanxi, China's most coal-producing province. Mysteel cited China’s "anti-involution campaign" and inspections in multiple provinces. Involution is a term used to describe the alleged unsustainable competition between Chinese companies. The slogan "anti-involution" is used to reduce industrial overcapacity. Galaxy Futures analysts stated on Thursday that when prices fall below the cost level, mines reduce investments and upgrades leading to safety concerns. The National Development and Reform Commission and the Energy Regulator did not respond immediately to any questions. Analysts say that regulators have recently restricted production due to concerns about an accident that could make a bad impression before a military parade on September 3, marking the end World War Two. Mysteel reported that the Wanbolin mine, which produces 5 million tons per year in Shanxi, Taiyuan, was shut down on Wednesday for safety concerns. (Reporting and editing by Harikrishnan Nair; Colleen howe)
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Asia markets are rocky after Nvidia's drop, but China chipmakers blow up!
The Asian stock market experienced a volatile session Thursday, as concerns over the future of artificial intelligence leader Nvidia’s China business hit regional suppliers while sparking gains for its Chinese competitors. The MSCI broadest Asia-Pacific index outside Japan fluctuated between gains and losses. It was last down by 0.4% as U.S. Equity Futures were pulled lower by a 3.1% drop in the shares of the chip manufacturer, which is now the most valuable company in the world. Charu Chanana is the chief investment strategist for Saxo, a Singapore-based brokerage firm. 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. Early European trades saw pan-regional futures flatten out, while German DAX Futures rose 0.1%, and FTSE Futures rose 0.1%. The European single currency remained unchanged at $1.1642, maintaining a three-week streak of gains that pushed its gains for this month up to 2%. Traders lowered their expectations about the impact on French government borrowing rates due to the deepening crisis in the country. After Nvidia reported its results, S&P 500 futures dropped 0.1%, while Nasdaq's futures tumbled by 0.3%. 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. Mark Matthews of Bank Julius Baer's Asia Research Department in Singapore, who is the head of research, expressed concern that the data centre revenues, at $41.1 billion, fell short of analyst estimates of $41.3 billion. He said, "It was minor but it is strange for this company to miss." Taiwan Semiconductor Manufacturing Company fell 2.5% and Samsung Electronics dropped 1%. Nvidia's Chinese rivals surged. SMIC gained as much 9.3% and Cambricon Technologies shares, which almost tripled in value since mid-July added as much 8.2%. These two chipmakers boosted the STAR 50 Index of Chinese Growth Stocks to a gain of up to 5%. 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 last 0.7%. The shares of Mitsubishi Corp rose up to 3.2% after Warren Buffett’s Berkshire Hathaway announced that it had increased its stake. The Bank of Korea held rates at 2.5% as economists had expected. Hong Kong shares fell, with the Hang Seng Index dropping 0.9%. Meituan shares dropped as much as 11,4% after the Chinese food-delivery giant reported a decrease in profit for the second quarter 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 attempting to appoint key positions at the U.S. Central Bank. The president demanded a rate cut of several percentage points, and he threatened to fire Powell. He has since backed off from this threat. The yield on the benchmark 10-year Treasury note fell to 4,2227% from its U.S. closing of 4,238% on Tuesday. 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 0.2% to 147.135 against the yen. Brent crude dropped 0.8% on the commodities market to $67.49 a barrel. Gold prices were slightly lower. Gold was down 0.2% to $3391.60 a troy ounce.
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Document shows China wants to reduce steel production and prune overcapacity
According to an official document and a source familiar with the issue, China will try to reduce steel production from 2025 to 2026 as it tries to combat overcapacity, which has impacted prices and caused a global protectionist backlash. According to a document prepared by the ministries of industry and the environment, among others. The document stated that "the steel industry faces an excess of supply and insufficient demand for its products, resulting in a supply-demand balance that impacts development quality and efficiency." The document didn't set any targets for the output reductions promised by the government in earlier this year. The first seven months of the year saw a 3.1% drop in crude steel production. The Ministry of Industry and Commerce in China did not respond immediately to a request for comment. Sources familiar with the discussion confirmed that the document was accurate, stating it to be a final draft. The source requested anonymity because the subject is sensitive. Beijing's mixed signals sent to the steel industry about its aggressiveness in reducing excess capacity hampered a 2023 attempt to restructure that industry. Beijing's latest plan, which includes a goal of increasing the value-added in the steel industry by 4% per year, investing in new technology, and promoting steel in residential and infrastructure construction raises questions about Beijing’s intentions this time. (Reporting and editing by Clarence Fernandez, Amy Lv, and Lewis Jackson)
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UK Beef Farmers scramble to feed their hungry Herds despite the drought
David Barton, a farmer in the Cotswolds, west England, has been left with parched fields after months of heat and dryness. His 200 Salers, Herefords, and Sussexes have no choice but to graze on them. He kicked the ground and said "Look at it, dust." This is what you'd see in (the United) States or Australia. This is not what you see in England. It's ridiculous. According to UK Met Office data, it's because England has experienced its driest Spring in over 100 years. It also had the driest period between January and July since 1929. The UK Met Office says that summer 2025 is likely to be the warmest in the UK since records began, which will knock 2018 from the top spot. Barton stated, "This year has been extraordinary. I've never seen anything quite like it." Waitrose, an upmarket supermarket, and Hawksmoor, a restaurant chain, are among the customers of Manor Farm beef, which is in Barton’s family since three generations. He was forced to use his winter feed early this year like many other livestock farmers in England. This has dramatically increased his costs. Barton, who gave up grazing his cows two months ago to feed them a mixture of silage and hay, has been feeding the cows twice daily with this mix. After being fed, his herd still wants more food and runs after his tractor. WIDER CRISIS Barton’s situation is typical of the wider crisis facing British livestock farmers. Many are concerned about their animals' welfare and financial viability, despite already thin profit margins. According to the Agriculture Ministry, British beef production was valued at over 4 billion pounds ($5.4billion) in 2013. Barton spends about $1,000 a week ($1,351) more than he does normally at this time of the year on feed. He faces a costly winter due to the fact that his production costs are not usually linked to the price he sells. He said, "Unfortunately I will be forced to take this hit." Food prices have risen dramatically this year due to the crisis and rising producer costs. The official data released earlier this month revealed that UK food prices are 4.9% higher than they were a year ago, with beef being a major component. Brassicas like broccoli, cauliflower, and cabbage are in trouble, and there is a shortage of supply. Barton is the chair of the National Farmers Union’s national Livestock Board. He said that the UK government should have done more to support the industry. The industry is also suffering from the proposed changes in inheritance tax. He said that the government could have relaxed environmental regulations to allow land to be used for grazing sooner this year. Barton feared that some farmers who were financially strapped might be forced into reducing the size of their flocks. He said: "I am very concerned that farmers may decide to reduce the number of breeding cows, and that is just the last thing that we should do."
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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)
Australia authorizes growth of three coal mines
Australia authorized the expansion of 3 thermal coal mines late on Tuesday amidst accusations from the mining market that the centreleft Labor federal government is making it more difficult to do business.
Whitehaven Coal won approval to extend underground mining at its Narrabri thermal coal mine while Indonesian-owned MACH Energy Australia will broaden its Mount Pleasant project, according to the Department of Environment Modification, Energy, the Environment and Water website.
Yancoal Australia subsidiary Ashton Coal likewise won approval for its Ravensworth mine complex.
All three jobs were approved with conditions.
Minister for the Environment and Water Tanya Plibersek last month obstructed miner Regis Resources from developing a tailings dam pointing out threats to Aboriginal heritage, stimulating fury from the mining community about difficult and approximate rules.
But Monday's decision triggered outrage from environment activists and anti-coal group, Lock the Gate Alliance, said the relocation exposed the federal government's reckless neglect for Australian wildlife and environment change.
We are stunned that a federal government that came to power guaranteeing to halt extinction and act on environment modification has sunk so low, representative Carmel Flint said in a statement.
(source: Reuters)