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Andy Home: Aluminium is the base metal analysts' bullish pick for 2025
Analysts predict that the London Metal Exchange's (LME) pack of base metals will be the most successful in 2025. They also forecast a shortage of light metal this year. Analysts who participated in the base metals survey of January also expect higher cash prices this year for zinc, copper, and tin compared to 2024. Nickel remains the ultimate conviction, even though the average LME Cash price has fallen by nearly 22% in the past year. Nickel oversupply is expected to continue in both 2019 and 2020. Analysts are focusing on supply dynamics to determine the likely winners and losers for this year, but there is a gloomy macro-picture hanging over the industrial metals industry. Since the last quarterly survey in October, all median forecasts have been reduced for lead, copper, tin and nickel. This is due to concerns about the impact of a trade war on demand. ALUMINIUM BULLS According to the median forecasts of 33 analysts who participated in the January survey, the average LME cash aluminum price is expected to rise by 4.9% in 2024, and then another 6.3% in 2025 to $2,573.50 a metric ton. The result was not much different from October's poll, indicating a growing conviction in the metals' bullish prospects. The higher price forecast comes from a shift in the market dynamics towards a shortage of supply. Analysts have shifted their consensus from a surplus of 100,000 tons to a deficit of 8,000 tonnes in 2025. The average price per ton will increase to $2,626 in 2026. The recent tightness on the alumina markets has boosted the price of aluminium, but the greater structural constraint to supply is China's cap on smelter capacities. China's annualised production was close to 45.0 million tons by the end of 2024. It's not clear how the rest the world will fill in the gap if the largest producer of the world has reached the end of its expansion potential. ZINC PRICE Rally Sighted Fading Zinc, the second most valuable metal this year, is expected to see a 4.2% increase in the average cash price to $2.895 per ton. Analysts also raised their expectations for zinc prices from the poll conducted in October, compared to the general trend. You can see how the story of zinc has changed over the past three months. The market was expected to have a massive oversupply, but it has been surprisingly tight due to a shortage of mined concentrates that drags down the global metal production. Analysts expect that zinc prices will weaken in 2025 and 2026. Zinc is the only LME metal that analysts expect to see its price fall next year. Zinc's price premium will also decrease over lead, its sister metal. Lead prices are expected to remain steady at $2,050 this year and in the future. DIALING BACK COPPER Analysts have reduced their expectations of copper's potential growth. The median forecast for the cash price this year is lower by 4.8% than the poll from October. Copper is the LME Metal most sensitive to macro sentiment. The macro-economic outlook has become even more turbulent since U.S. President Donald Trump imposed 10% tariffs on Chinese imports. China's carefully calibrated response gives some hope for a successful trade negotiation. However, copper is especially sensitive to any negative effects on China as the largest buyer of red metal in the world. This year will be no different. The market spent a lot of time last year searching for signs of resurgence in China's massive manufacturing sector. Tariffs, and the possibility of further ones in the future, have muddied the waters. THINGS CAN ONLY GET BETTER FOR NICKEL Since October, the median nickel forecast has been downgraded to $16,265 a ton. This is due to the increasing LME stock levels. Analysts don't expect much more downside after the market has already dropped so dramatically over the past year. According to the consensus, LME cash nickel will average $15.550 per ton during the current quarter. It is expected to rise steadily to $16,750 by the fourth quarter. Price recovery is forecast to continue through 2026, with a cash median price of $17.637 per tonne. Indonesia, which is the dominant producer in the world, may slow down its production to stabilize prices. UNPREDICTABLE Tin The tin market has been particularly volatile over the past couple of years, and it's hard to predict what the future holds for this soldering material. Median forecasts indicate a modest 2,6% increase in the average price for this year compared to 2024. This masks an extremely wide range of expectations ranging from $23,750 per ton to $33,000. In 2026, the range is even larger at $21,000 to $37,000. This is a good example of how hard it is to understand this small, but deeply opaque market. These are the opinions of the columnist, an author for.
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Trump's tariffs are only going to make Nissan even more hurt
Nissan is the Japanese automaker most likely to suffer from Donald Trump's possible tariffs against Mexico and Canada. Nissan has the least financial resources. Although it is unclear if the U.S. president will actually follow through on his 25% levies, after agreeing to the 30-day pause Monday, the impact would be severe for Japan's third largest carmaker. The company is currently struggling to turn around and in merger talks with Honda. Nissan, Toyota, and Honda are all the biggest automakers in America. The three Japanese automakers produce some of the most popular U.S.-made models in Canada and Mexico. Analysts and industry experts claim that the tariffs will have a significant impact on all three. Toyota and Honda, however, are more prepared than other manufacturers to deal with the tariffs. They have the financial resources and the ability to raise prices and pass some of the tariff costs on to consumers. James Hong, Macquarie's head of mobility research, said that Nissan is barely profitable in the automotive industry. The majority of models that Nissan builds in Mexico to export to the U.S. is compact cars such as the Sentra or Kicks. These are aimed at consumers who are cost-conscious and can't afford higher prices. Nissan could be in serious trouble if the tariffs are not removed. If the merger is successful, it could be a burden for Honda too. Nissan did not respond immediately to a comment request. The company stated on Jan. 22, that it was unable to speculate on the impact of potential policy changes. However, it said it would continue to focus on producing quality vehicles. Hong estimates that Nissan's operating profit would be completely wiped out if it didn't take action to respond to the tariffs. For example, re-routing Mexican cars to other markets like Brazil, increasing prices or reducing production. According to S&P Global Mobility, Nissan gets 27% of their U.S. sales through Mexico, while Honda gets 13% and Toyota 8%, respectively. S&P Global Mobility estimates that 43% of Volkswagen's U.S. sales come from Mexico. FRESH BURDEN Trump's decision would make what was once a major advantage for Japan's automakers - a low cost production base close to the U.S. Nissan began manufacturing cars in Mexico in 1966 when it opened the first plant outside Japan. Toyota, Honda, and Mazda followed. Nissan opened its first U.S. plant in 1983, in Smyrna Tennessee. If the tariff is added to the cost of a car that's reasonably priced, the consumer will not want to purchase it. "So, for example, 10% is added to the cost of the car while the remainder is borne by the company," explained an executive from a Japanese automaker who was not Nissan. The executive said that since production in Mexico could not easily be stopped, another option was to sell cars produced there in Latin America and elsewhere. He declined to be named because the matter is sensitive. Hyundai, a South Korean automaker that does not have plants in Mexico or Canada, is aware of the problem facing Japanese automakers. Hyundai's CFO stated that even if Trump introduced duties on all markets outside of the U.S. the South Korean automaker does not expect to be as badly hit as its Japanese competitors, during a recent call. Nissan's planned partnership with Honda is also affected by the threat of tariffs. Christopher Richter, senior Japan automotive analyst at CLSA brokerage said: "This complicates a merger that is already hard to execute." Nissan and Honda will announce further details on their proposed merger by the middle this month. Both companies aim to join forces by 2026. This would be a pivotal moment for Japan's automotive industry, and highlight the danger that Chinese EV manufacturers pose to traditional carmakers. Nissan is also suffering from a slump in sales in China and the U.S. It announced in November that it would cut 9,000 jobs, and 20% of global production capacity. Toshihiro Mize, Honda's CEO, said that Nissan had to turn around its fortunes before the merger could take place. Honda would not be rescuing Nissan. Nissan's junior partner Mitsubishi Motors is considering whether to join the merger. This complicates the plan. The tariffs could not have come at a worse time for automakers, given the global disruption that the industry is facing. CLSA's Richter said that Mr. Trump does not seem to understand the fact that it is impossible to change auto production overnight. "In the interim, they will try to charge the consumer the most they can in order to offset this and eat as less of the tariffs as possible." Reporting by Daniel Leussink, Maki Shiraki. Hyun Joo Ji in Seoul has contributed to the reporting. David Dolan, writer. Mark Potter (editing)
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ADM 2025 Outlook clouded by biofuel policies and trade tensions
Global grains trader Archer-Daniels-Midland is slashing costs and cutting staff to weather a commodity downturn made more challenging by uncertainty about U.S. biofuels policies and a brewing trade war, the company said on Tuesday. ADM's problems follow a scandal in accounting that occurred last year, which forced the company twice to revise its financial statements. A federal investigation was also launched. ADM posted its lowest fourth-quarter profit for six years on Tuesday and predicted that 2025 could see a third consecutive year of earnings decline. ADM announced that it will eliminate up to 700 positions and cut costs by up to $750,000,000 in the next 3 to 5 years. It is joining rival agribusiness Cargill to tighten its belt. CEO Juan Luciano stated that it was hard to predict the outcome of ADM's international trading business if President Donald Trump’s orders to increase tariffs on Canada and Mexico, or China, spark widespread retaliation by the top three purchasers of U.S. agricultural goods. China retaliated with limited tariffs against the new U.S. duties on Chinese products on Tuesday. Beijing's tariffs excluded crops. Trump has suspended tariffs on Canadian goods and Mexican products for a month. Luciano added that "the issue" is the retaliatory actions. He said that ADM was on a list of grain trading companies who could benefit from the current trade turmoil. ADM can still provide crops from Brazil to a market that has halted its imports of U.S. agricultural products. However, such interruptions may reduce the trading margins. ADM expanded its global grain distribution and origination footprint in 2018, when China cut its U.S. soya bean purchases. This prompted the company to tap into its Brazilian supply chain for that country. Luciano stated that ADM, along with other crop processors, were waiting for policy guidance on the size and scope tax credits available to U.S. producers of biofuels. These tax credits could boost oilseed crushing margins and biodiesel production. ADM, a pioneer in ethanol production and for many years the leading producer of ethanol in the United States, supplies biofuels to Marathon and other companies through its massive processing facilities.
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Third Point's Loeb anticipates favorable stock investing environment, says letter
Billionaire Daniel Loeb believes that 2025 will be a better year for stock investments despite Trump's unconventional approach to announcing new policies and implementing them. Loeb told clients that his hedge fund Third Point was already reaping benefits in a letter sent to them on Tuesday. The firm's flagship TP Offshore Fund had risen 3.3% in the first month of the year after finishing the previous year with a 24.2% gain. Third Point employs a wide range of strategies, from stock selection to activist campaigns and investments in credit. It is one of Wall Street's top hedge funds. Loeb, for instance, said that the firm had rotated its investments into consumer discretionary companies, financial institutions, and industrial firms, which helped to fuel returns in a rally following an election. Loeb stated that emotions must be removed from the equation when making investments. The Trump administration has imposed tariffs against Canada, Mexico, and China in its first two weeks of office. They have also called for the creation of a Wealth Fund, and issued dozens executive orders. The new policies will have a positive impact on certain sectors. He expects an increase in corporate activity, such as M&As and other corporate transactions that feed our event-driven framework. Third Point, a leading investment firm, made a major new investment, in Siemens Energy stocks. Siemens Energy is primarily a manufacturer of wind turbines and electrical grid equipment. The demand for gas turbines, grid equipment, and data center power will help to fuel the core business of Siemens Energy. Loeb, who is a partner at Third Point, has also highlighted liability management exercises (LMEs), which are a strategy that companies use to restructure their debts and avoid bankruptcy as "the most engaging distressed credit opportunities." He stated that LMEs represented half of the current corporate credit portfolio or $700 million. He said that he expects this area to become an important source for alpha over the next few months. Loeb predicted that banks would sell more mortgage and consumer portfolios this year, as M&A will pick up due to fewer regulations. Third Point is an opportunistic purchaser, looking to get unlevered yields of the high single-digits. Loeb added that Third Point would be an opportunistic purchaser, hoping to receive unlevered yields of high single-digits. Loeb stated that banks will likely sell their consumer and mortgage portfolios this year as Washington is expected to be a friendly M&A environment. Third Point, he said, will be an opportunistic purchaser looking for yields of unlevered securities in the high single-digits. (Reporting and editing by Chris Reese, Cynthia Osterman, and Svea Herbst Bayliss)
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Arabica coffee nears $4 per lb, a new record.
The rally in Arabica coffee continued into Tuesday. It set a new record for the ninth consecutive session, as roasters rushed to secure supplies while farmers refused to sell. Recent gains in arabica futures on ICE have been attributed to an expected production slump in Brazil, the top coffee producer. This follows a 70% increase in arabica futures last year. During the ICE trading session on Tuesday, Arabica futures, used as a benchmark for global prices, reached a record price of $3.8990 a lb. The price of the lb rose 0.6% to $3.8335, which brings their gains this year up to about 20%. Dealers reported that speculative buyers are dumping coffee in large quantities, which has caused panic buying by farmers and roasters to hold back sales, hoping for higher prices. One dealer stated that the natural target this week would be to test the $4/lb level. The Brazilian drought last year has contributed to the expected decline in Arabica production. However, some experts believe that the current harvest may not be as bad compared to a year ago, due to recent rains. Brazil produces almost half of the arabica in the world. Brazilian exporter Comexim predicted a slightly lower crop in 2025 than the previous season at 63.2 millions bags. The price of Robusta, a cheaper variety that is used mainly to make instant coffees, increased by 0.5%, to $5,548 per metric ton. It peaked last week at $5840, which was the highest since the contract began trading in 2008. When coffee prices reach this level, the fundamentals become less important. Speculators are going to speculate. After the cocoa rally and what happened with cocoa, many would be interested in coffee," Rabobank wrote in a note. Rabobank also added that the market is concerned about U.S. President Donald Trump imposing trade tariffs against South American countries which are major coffee producers. Other soft commodities saw New York cocoa futures fall 0.4% to $10.865 per ton after losing 5% the previous week. London cocoa fell 0.7% to 8.694 pounds a ton. White sugar increased 2.5%, to $526.80 per ton, while raw sugar was up only 0.4 cents, or 2.1%. (Reporting and editing by Maytaal Teixeira and Marcelo Angel; Alan Barona, Alexander Smith, and Paul Simao)
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Overview of Iran's Energy Industry and Infrastructure
A U.S. official has said that U.S. president Donald Trump will again reimpose the "maximum" pressure on Iran, and reduce its oil exports to zero. Iran is the third-largest producer of oil in the Organization of Petroleum Exporting Countries. It extracts around 3.3 million barrels of crude oil per day, or about 3% of the global output. Here are some interesting facts about the energy industry of the country, its exports, and the impact that previous Western sanctions had on it. OPEC AND SANCTIONS According to OPEC, Iran's oil output peaked in the 1970s. In 1974 it reached a record 6 million barrels per day. This was over 10% of the world's output. The United States first imposed sanctions against Tehran in 1979. Since then, several waves of U.S. sanctions and European Union sanctions have been aimed at the country. In 2018, the United States tightened its sanctions after Trump pulled out of a nuclear agreement during his first term as president. Iran's oil sales fell to near zero in some months. Analysts say sanctions were not enforced as strictly under the administration of Trump's successor, President Joe Biden. Iran was able to evade them. Iran is exempted from OPEC production restrictions. Who is the main buyer of Iranian oil? Iran's crude oil exports reached a record high of 1.7m bpd, the highest level since 2018. This was largely due to strong Chinese demand. China claims it does not recognize sanctions against its trading partners. China's private refiners are the main buyers of Iranian crude oil, and they have very little financial exposure to the United States. Iran has been evading sanctions for years by hiding satellite positions and transferring ships from one vessel to another. PRODUCTION and INFRASTRUCTURE FGE consultancy estimates that Iran refines around 2.6 millions bpd crude and condensate, and exports about 2.6million bpd crude oil, refined products and condensate. According to FGE the country produces 34 billion cubic foot of gas every day. This is 7% of world production. The gas is used exclusively in the domestic market. Iran's hydrocarbon facilities are concentrated primarily in the southwest. For oil, they are located in Khuzestan Province and for gas and condensate produced from South Pars Field in Bushehr Province. Kharg Island is the main port of export for 90% of its crude oil. Analysts believe Saudi Arabia and the other OPEC countries could compensate for a drop in Iranian production by pumping more. However, the normalisation of relations between Riyadh and Tehran suggests that the kingdom might be less willing to do this.
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Donald Trump Jr. accused illegal duck hunting in Venice
According to two Italian Green Party lawmakers, Donald Trump Jr. broke Italian and European Union laws on environmental protection when he hunted a duck near Venice in December. Andrea Zanoni is a member of Veneto's regional assembly. Luana Zanella is a national parlamentar. They have filed separate questions in the parliament urging the regional and national authorities take action. Zanoni, in a post on Facebook, said that he saw footage of Trump Jr. standing next to a dead ruddy shaddy, a protected animal, in an EU conservation zone "Natura 2000", in the lagoon at Venice. The video shows Trump Jr. holding a ruddy shaduck (Tadorna ferrruginea), a duck which is extremely rare in Europe and protected under the EU Birds Directive as well as the Italian law protecting wild fauna. Zanoni stated that the law punishes anyone who kills or holds this animal. Hunting is allowed in Italy, but it's strictly regulated. In the video Zanoni mentioned, Trump Jr. is seen on a duck-hunting trip in marshlands around Venice, promoted by Field Ethos. This outdoor activities brand that he founded. In the video, he describes his hunting bounty as "lots of teal, wigeon (ducks)." The video shows him catching "a duck that is not common in the area and I am not sure what its name is" before concluding "incredible shot". Andy Surabian is a spokesperson for Trump Jr. He said that the hunting party had all the proper permits and were hunting in an area where they were allowed to do so. It was not clear how the duck was killed. Surabian stated in a press release that "Don takes all rules, regulations, and conservation very seriously on his hunts and intends to fully cooperate with any investigation." The Field Ethos video has a voiceover that says that the expedition was on private land. Hunting is only done once a week, and precautions are being taken to protect the local environment. The video is not dated. However, a shorter version of the video was uploaded to YouTube on December 31, 2024 by Field Ethos. Italian media reported that Trump Jr. visited Venice with his girlfriend in December. ANSA reported that Environment Minister Gilberto Pichetto Fratin said he was awaiting a report on the alleged incident, after he learned about it through press reports. (Reporting and editing by Alison Williams, David Gregorio and Alison Williams; Additional reporting by Angelo Amante & Giulia Segrit.
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The President of Lebanon says that he hopes TotalEnergies resumes oil and gas exploration as soon as possible
According to a press release from the president's offices, Lebanon President Joseph Aoun told Qatari Premier Sheikh Mohammed Bin Abdulrahman Al Thani on Tuesday that he hoped TotalEnergies would soon resume oil exploration off the coasts of Lebanon. In 2023, the state-owned QatarEnergy will join France's TotalEnergies (ENI.MI), and Italy's Eni in a consortium of three to search for oil and natural gas in two marine blocks off Lebanon's coast. Two sources who were directly involved in the matter said that no hydrocarbons had been found after the exploratory drilling offshore in 2023. TotalEnergies didn't respond to a comment request immediately. The plans to drill in Lebanon were halted until the ceasefire agreement between Israel and Hezbollah militant group was signed towards the end last year. After the two-year presidential vacuum was ended by the January election of Western-backed President Aoun, reconstruction plans including oil and gas exploration await formation of a Lebanese new government. Reporting by Menna A. Alaa El Dn and Nayera Abdallah, Editing by David Goodman
Trump appoints McKinsey attorney to be General Counsel at Commerce Department
According to U.S. Senate Records, President Donald Trump nominated Pierre Gentin as the general counsel of the U.S. Commerce Department. Gentin is currently chief legal officer at consulting firm McKinsey & Co.
Trump nominated several other officials for the Department of Commerce on Monday. Neil Jacobs was named to lead the National Oceanic and Atmospheric Administration. Arielle Roth was named to head the Commerce National Telecommunications and Information Administration. This agency is responsible for a fund of $42,5 billion to ensure universal access to high-speed internet by 2030.
Trump nominated Washington-based trade lawyer Jeffrey Kessler on Monday to head the Bureau of Industry and Security at the Commerce Department, a crucial post in the U.S. vs. China tech war. Kessler was a partner in the law firm WilmerHale and served as Assistant Secretary for Enforcement and Compliance during Trump's initial term. First reported that he was being considered.
Wednesday, the Senate Commerce Committee will vote on Howard Lutnick’s nomination as head of the department. Commerce will be faced with a number key issues under Trump, including export control on U.S. AI chip and other efforts against Chinese tech companies. It will also have to oversee nearly $40 billion worth of subsidies for semiconductor manufacture.
Jacobs, a scientist in atmospherics, was appointed to run NOAA on an interim basis during Trump's initial term after Barry Myers, then the CEO of AccuWeather, had been nominated. Myers later resigned citing health issues. Trump proposed to cut NOAA's funding by 17% during his first term. The agency produces daily and long-term forecasts to aid in agricultural planning, as well as emergency response for severe weather like hurricanes.
The White House nominated Paul Roberti to lead the Pipeline and Hazardous Materials Safety Administration. Roberti was a U.S. Transportation Department employee during Trump's initial term and served as the chief economic and policy advisor at the Rhode Island Division of Public Utilities and Carriers. (Reporting and editing by Rod Nickel, Stephen Coates, and David Shepardson)
(source: Reuters)