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Putin claims that Russia may be able to mine its own lithium
On Friday, Russian President Vladimir Putin stated that Russia had the capability to mine its own lithium. "We have yet to mine lithium." How can we progress without it? We can. We could have done this 10 or 15 year ago," Putin said at a conference in Moscow on advanced technologies. Polar Lithium is a joint venture of Russian metals giant Nornickel with state-owned nuclear power firm Rosatom. In June, the company announced that it would accelerate its one lithium production project by three to four years. The project was originally scheduled to be completed by 2030. Polar Lithium is developing the Kolmozerskoye Lithium deposit, which is the largest lithium deposit in Russia and located in the northwest part of the nation. Russia wants to reduce its dependency on lithium imports. Since 2022, after sanctions against Moscow were imposed over Ukraine, supplies of lithium carbonate from Chile and Argentina has dried up. Russia now relies on Bolivia and China for its supply. Polar Lithium's goal is to build a full-scale production facility for lithium-ion battery materials in Russia. (Reporting and writing by Dmitry Antonov; Felix Light Editing, Andrew Osborn).
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Holcim North American business will be renamed Amrize following spin-off
Holcim, a Swiss company, announced on Friday that it has named its North American building material company Amrize, and plans to list the company this year. Holcim plans to sell its North American operations to its shareholders by the first half 2025. This is one of the largest deals on the global construction markets this year. The name was derived from the combination of the words "ambition", "rising" and Chairman Jan Jenisch said it was a significant step in creating an independent company. After the spin-off, Jenisch will become CEO of Amrize. Holcim is listing Amrize at the New York Stock Exchange, under the symbol AMRZ as well as the SIX Swiss Exchange. Holcim stated last year that the North American business could be valued at around $30 billion. In 2023 it had revenues of approximately $11 billion. Jenisch wants its sales to reach $20 billion annually by 2030. This will be achieved primarily through organic growth and acquisitions. (Reporting and editing by Dave Graham.)
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After Trump's halt to funding, Air Liquide may only pursue two of the six US hydrogen hubs.
Air Liquide, a French company, said that after Donald Trump frozen funding for clean energy projects in the U.S. Department of Energy's (DoE), only two of six hydrogen projects it had been awarded by the DoE might be implemented. Air Liquide has been selected as a partner in 2023 for six clean hydrogen hubs that are planned by the DoE. The DoE was going to allocate $7 billion under the bipartisan Infrastructure Law signed by the former President Joe Biden. However, Trump has placed holds on tens of billions of dollars in congressionally-approved spending, including those from the bipartisan law and Biden's Inflation Reduction Act (IRA). After meeting with American teams a couple of days ago, CEO Francois Jackow stated during a press call that two hubs centered around hydrogen from natural gases with carbon capture were on the top of the list of areas to be pursued. He added that the future of the four other hubs would be heavily dependent on the decisions made by the new administration on policies relating to renewable energy. Air Liquide, a beneficiary of the IRA has invested heavily in the U.S. Clean Energy Transition, including a partnership between Exxon Mobile and the Baytown facility of the oil giant to increase the production of ammonia and hydrogen with low carbon emissions. Jackow stated that the project with Exxon is not "absolutely determined yet", but both parties continue to work on it. A final decision should be expected in the second quarter of 2025. Air Liquide is not just about hydrogen, he said. It announced last year investments in industrial gas supplies for Micron Technology's U.S. electric car battery plant and LG Chem. Jackow stated that it is unlikely there will be any major announcements made in the battery industry in the next six-months, but he added he felt "extremely confident," with customers on whose projects his company already worked. Air Liquide, which accounts for around one third of the company's total sales in the U.S., is able to source materials locally, according to Mr. Bodinier. Reporting by Johan Bodinier in Gdansk and Antonis Pothitos; editing by Milla Nissi
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US tariffs solar panels imported from Southeast Asian countries (Nov 29, 2018)
U.S. Trade officials announced a new round on Friday of tariffs against solar panels imported from four Southeast Asian countries after American manufacturers complained about the unfairly low prices offered by these companies. The Commerce Department of President Joe Biden is making the second preliminary decision this year on a trade case filed by Hanwha Qcells in Korea, Arizona's First Solar Inc. and several smaller producers to protect billions in investments made in U.S. manufacturing of solar panels. The American Alliance for Solar Manufacturing Trade Committee accused the big Chinese solar panel manufacturers with factories in Malaysia and Cambodia as well as Vietnam, Thailand, and Vietnam of dumping their products on the market, causing the global price to crash. According to a preliminary report posted on the U.S. Commerce Department website on Friday, the agency determined dumping duties ranging from 21.31% to 271.2% depending on the company for solar cells from Cambodia. Jinko Solar has received duty of 21.31% on products produced in Malaysia, and 56.51% on those in Vietnam. Trina Solar, a Chinese company, received a dumping rate of 77.85% on products made in Thailand. The Commerce Department, on the other hand, did not specify any dumping margins for Hanwha Qcells made in Malaysia. The department calculated a subsidy rate for the company of 14.72 % in October. The Department's final decisions are scheduled for April 18 2025. The International Trade Administration will finalize their determinations on June 2, and the final orders should be expected on June 9. With these preliminary duties we are closer to addressing harmful unfair trade for years and protecting billions in investment into new American solar manufacturing, supply chains, and said Tim Brightbill. Partner at Wiley Rein, and lead counsel to petitioners. Jinko's and Trina's representatives were not available to comment immediately. The majority of solar panels used in the United States come from overseas. Approximately 80% comes from four countries that are the focus of the Commerce Department's investigation. This year, the Biden administration raised alarms over China's massive investments in factory capacity to produce clean energy products. Inflation Reduction Act by Biden, a landmark climate law, provides incentives to companies that manufacture clean energy equipment within the United States. This subsidy has led to a rush of new plans for solar factories. Donald Trump, the president-elect of the United States, has criticized Biden's landmark climate change law for being too expensive. However, he has also said that he will impose hefty tariffs to protect American workers. When a company sells its product in the United States for a lower price than its cost of production, or even less than it charges in their home country, this is called dumping. (Reporting and editing by Will Dunham; Additional reporting by Susan Heavey, Mrinalika Roy and Will Dunham; Editing and reviewing by Chizu Nomiyama, Mohammed Safi Shamsi and Will Dunham)
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EU approves state assistance to Engie's Belgian reactors to prolong their life span
The EU Competition regulators approved on Friday the Belgian plan to grant aid to French energy giant Engie's Belgian subsidiary to extend two nuclear reactors' lifespan, concluding an in-depth inquiry that began last July. In December 2023, Belgium and Engie signed a contract to extend the lives of two nuclear reactors in Belgium. These are Doel 4, near Antwerp, and Tihange 3, near Liege. This was to ensure the safety of electricity in Belgium and its neighbouring countries. In this agreement, Electrabel and the Belgian State will provide shareholder loans as well as inject equity totaling around 2 billion euro ($2,09 billion) in order to cover the capital costs of the extension. It also includes Electrabel transferring its liabilities related to long-term storage, final disposal and nuclear wastes and spent fuels to the Belgian government for a lump-sum payment of 15 billion euro. Engie's Belgian subsidiary Electrabel owns the majority of the reactors, while EDF subsidiary Luminus has a minority stake. The Commission stated that when it opened its investigation in July of this year, it would focus on both the financial arrangements and the proportionality of transferred liabilities. The Commission stated that it concluded the aid was necessary and appropriate for achieving the goal pursued. It also found the aid to be proportionate, since the amount of the assistance is kept to a minimum. The Commission has approved the Belgian state aid measure on this basis." $1 = 0.9554 Euros (reporting and editing by Dominique Vidalon, Jane Merrill)
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Why Trump has brought VAT into the trade dispute
Donald Trump, the U.S. president, says that value-added tax is largely responsible for the near trillion dollar deficit in trade between the United States and the rest of world. Over 170 countries, including the top U.S. trading partners in Europe, charge VAT. They claim that it has no effect. Who can you trust? In his February 13 memo on trade barriers, Trump gave the VAT a prominent place, listing it as one of "unfair, unfair, discriminatory or extraterritorial" taxes imposed on U.S. workers, consumers and businesses. The White House told reporters that the most harmful thing about VAT is the fact that it is added to imports from the United States, but European producers receive VAT refunds for exports to the United States. The official went on to say that "there's a good reason why Germany sells eight times as many cars as we do, and it is not American quality or craftsmanship." Trade experts have argued that VAT can be used to deter trade. The United States is one of only 19 countries with a single-stage tax, which is a sales tax that's only imposed once, and paid by the end consumer. Other countries include Cuba, Malaysian, North Korea and Somalia. As the name suggests, VAT is levied at every stage of the supply chains such as from the manufacturer to the retailer to the consumer. It is also due for imports into the EU, unlike the United States where the sales tax is only charged on the last transaction. It could discourage importers of U.S. products who are stuck with a large VAT bill when their goods arrive. Mairead Warren de Burca is the managing director of Alvarez & Marsal Tax, a London-based tax firm. She says that many European countries permit importers to defer payment of import VAT, while Britain and Ireland, Belgium, and The Netherlands do not require import VAT. This means cash flow will be unaffected. She said that import VAT can be recovered or offset with VAT collected further down the supply chains. In the end, VAT is collected at the final transaction. This is similar to the sales tax system in the United States. DOUBLE-WHAMMY? The White House's "double-whammy" argument also targets VAT exemptions for EU exports. According to the EU, this is because it's a tax that is based on where you consume. Washington, however, has not bought into this argument. Since 1971 they have been trying to set up systems that provide tax breaks to U.S. Exporters. The EU challenged them all, culminating with an eight-year dispute at the World Trade Organization that found these tax breaks to be illegal export subsidies. These U.S. laws were repealed. Zach Meyers is the director of research for the Centre on Regulation in Europe. He says that the differences in consumption tax between the EU and the United States, from zero to Seattle’s 10,35%, are a problem. He said that if the U.S. taxed consumption more heavily, they could lower taxes on production such as labour or corporate profit. This can reduce the tax burden on export-oriented industries. "The U.S. does not enjoy the same benefit." Trump has asked officials to conduct research on the subject. Warren de Burca, Alvarez & Marsal’s Warren de Burca, acknowledged that VAT is not an easy concept to understand. She said, "But the Americans are very intelligent." I hope they'll take my advice and look at these systems in order to determine that VAT isn't an impediment for trade. "Tariffs are, but VAT is not." Some see this as Trump's deliberate tactic to justify higher trade tariffs in a larger EU-U.S. standoff. This could eventually spread to other areas such as business taxation, and to fines that the EU may levy against American Big Tech. Trump wants to equalize the differences in tariffs such as the US import duty of 2.5% on cars compared to the EU's rate of 10%. He also wants to factor in the VAT and other costs for U.S. companies. It may be difficult for EU producers to accept a reciprocal import duty of 10% into the United States. If VAT is added, this could amount to a crippling tariff of around 30%. Niclas Poitiers is a research fellow at the Bruegel think-tank in Brussels. He said that the EU may consider reducing the import duty on cars, as stated by the EU Trade chief on Wednesday, but he said that overhauling the tax system to eliminate the VAT was a non-starter. Poitiers stated, "I believe this is more of a negotiation ploy (by the White House), rather than their being serious about the actual issue." "I don’t think they’re interested in global tax collaboration." (Reporting and editing by Mark John, Topra Chopra, Toby Chopra; Additional reporting by David Lawder from Washington).
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Copper prices fall amid concerns about China's demand and tariffs
Copper prices fell on Friday due to concerns about the demand in China following an increase in inventories and uncertainty regarding possible U.S. Tariffs. The price of three-month copper at the London Metal Exchange was $9,515 per metric ton as of 1100 GMT. It had reached its highest level for three months just a week earlier. Data showed that copper inventories in the warehouses monitored the Shanghai Futures Exchange, (SHFE), rose 13% during the last week. They had risen 162% since the end of January. The Chinese stock market rises on a seasonal basis during the Lunar New Year holidays. However, the data has added to the disquiet over Chinese demand following data earlier this week that showed home prices stagnated in January. China's property sector is the main driver of demand for industrial metals. SHFE copper dropped 0.5% to 77,000 Yuan per ton. The demand for copper has not been very strong after the holidays. "People are saying it's being held up a little by higher prices," Dan Smith, Amalgamated Metal Trading's head of research. LME copper has gained 9% this year. "The end to the war in Ukraine will be a bullish event for all, but Trump's tariffs and turmoil would offset that." "So you have these two dynamics that are difficult to quantify," Smith said. U.S. president Donald Trump announced that he will announce new tariffs within the next month, or even sooner. He added lumber and forest products, to his previous plans of duties on imported automobiles, semiconductors, and pharmaceuticals. The stronger dollar has also affected metal prices, making them more expensive to buyers who use other currencies. Other metals include LME aluminium, which fell by 0.8% to $2704 per ton. Nickel also declined, losing 1.1%, to $15,500. Zinc fell by 0.7% to 2,899; lead dropped 0.2% to 1,988; and tin, down 0.2%, to $33,345. ($1 = 7.2489 Chinese Yuan Renminbi)
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MORNING BID AMERICAS-Walmart clips Wall St, euro eyes German vote
Mike Dolan gives us a look at what the U.S. market and the global market will be like today. Wall Street was stung by Walmart's disappointing results. This cast a shadow over the U.S. consumers, just as the more buoyant European markets were awaiting the German election this weekend. In the last 24 hours, world markets were roiled by a slew of influences, including geopolitics and trade, as well as monetary policy, corporate earnings, and monetary policies that are often at odds. The biggest blow was caused by the retailer's failure to meet its profit and sales forecasts, citing the volatile political climate and the upcoming trade uncertainty. Walmart's stock fell 6.5%. This was despite a record-breaking rise of more than 80% in the last year. It also represents a strong performance since Donald Trump won the election. Amazon also lost almost 2% after last week's disappointing U.S. January retail sales. S&P500 lost almost 0.5% on Friday and futures were unable to hold their ground. Palantir, which offers software to visualize army positions and other services for governments, fell 5% when the Pentagon announced it would be looking at possible budget cuts in fiscal year 2026. Today's macro-diary is dominated by flash business surveys from February, and the results of AI chip giant Nvidia are due next week. In the Philadelphia Federal Reserve's latest surveys, the mid-Atlantic region saw manufacturing activity levels plummet this month to the lowest level in almost five years. Jobless claims also increased in the last week. Treasury yields fell on retail and business readings, even as Fed officials continued signaling caution over further easing of policy amid persistent inflation uncertainty. Scott Bessent's comments about the "long way off" of any increase in longer-term Treasuries as part of government debt issuance helped to further reduce debt yields. This is despite his criticism of former Treasury chief Janet Yellen's front-loading of debt into short-term maturity. He said, "We will see what the market demands." The dollar index fell to its lowest point of the year due to the decline in stocks and yields. However, the greenback recovered some of its losses on Friday. The dollar's drop was mainly concentrated against the yen of Japan, where speculation has increased about a Bank of Japan rate hike as early as next month. The Japanese inflation data released on Friday confirmed this talk. In fact, the headline annual price increases in Japan last month reached 4% for only the second time in two-years. Sayuri Shira, a former central bank member, said that March would be an 'excellent opportunity' to raise rates. In a bizarre twist, however, the yen has retreated after Bank of Japan Governor Kazuo ueda announced on Friday that the central bank is ready to increase its government bond purchases if interest rates for long-term bonds rise dramatically. Ueda’s remarks helped lower the 10-year Japanese Government Bond yield to 1.42%, from 1.455% earlier that day. It was its highest level since November 2009. Ueda’s comments are a subject of debate. They may reinforce speculations about the rate hike or signal concern over its impact. But Japan's Nikkei stock index ended higher. In Europe, the Sunday election in Germany is a major concern. This is despite tensions over Trump's surprising change of stance this week on Ukraine and the looming threat of tariffs. The German stock market has performed well this year largely because of the expectation that the new government would have the backing it needs to lift the 'debt-freeze' they imposed after the elections and increase defense and investment expenditure. The benchmark DAX in Germany was up 0.8% on Friday, after hitting a seven-month high early this week. The release of the business surveys that showed a slight increase in activity in Germany's Private Sector in February helped. As the vote approaches, the euro has retreated slightly from its near three-week high. The results of the vote will depend on the success or failure of smaller parties to clear the 5% threshold for entry into parliament. This is crucial to the calculation to determine whether a new government can get the two-thirds majority needed to change the debt clause. Sterling briefly reached a new year-high against the dollar following a surprising upbeat report on retail sales for January. After Alibaba's strong earnings report on Thursday, Chinese shares rose again. The Hang Seng closed the day 4% higher. The following developments should help to guide U.S. stock markets on Friday:
Thames Water debt lifeline offers relief, but challenges remain
Thames Water, Britain’s largest water supplier, with 16 million customers secured a lifeline of 3 billion pounds on Tuesday. This prevented nationalisation, and gave it time to fix its finances. It increased its chances of survival.
History
Margaret Thatcher’s Conservative government privatised Britain’s water and sewage industry in 1989. Thames Water, after a period as a publicly listed company was purchased by German utility RWE and Australian financial services group Macquarie in 2001.
Thames' debt increased from almost 11 billion pounds to nearly 2.7 billion pounds during the Macquarie ownership period, which many analysts now blame for the collapse of the company's financials.
HOW DID IT REACH THE BRINK?
Thames Water's investors, a group including Canadian, British, and Abu Dhabi-based pension funds, and China-based companies, called the company "uninvestible" by March 2024. They blamed the regulatory regime for its low prices and heavy penalties.
Investors in Thames Water refused to invest more money at a time of inflation reaching 11% by the end of 2023. The company's finances were on the verge.
Thames Water, a company that serves customers from London and the surrounding area, is unable to increase prices in order to stabilize its finances.
In October, a group holding 12 billion pounds in senior debt offered a new 3 billion-pound loan. The court approved it on Tuesday.
BALANCE SHEET
This new money will support Thames Water's financial position until May 2026. It gives it the time to raise equity and restructure debt.
Thames Water said that it needed 3.25 billion pounds in new equity. Last year, the company began a process of attracting investors. According to court documents, this is expected to be completed by June.
Thames Water announced on February 11 that "the company has received proposals" from various parties.
The government could revert to its special administration regime - a temporary nationalisation - if the company is unable to restructure and secure new investments.
Future Prices
Thames Water's viability depends in part on the amount it can charge its customers.
Thames Water, according to the water regulator Ofwat, can raise bills by only 35% between 2025-2030. This is less than the 53% increase the company claims it needs.
The company filed an appeal on 14 February, beginning a lengthy process that it hopes will lead to a decision that allows it charge more and, thereby, help stabilize its finances, attract more investors, and invest more into its infrastructure.
ENVIRONMENTAL FAILURE
Thames Water has been at the center of a scandal about sewage spills.
After years of discussion about the failures of the privatised water sector to strike a balance between investment and the environment, as well as value for money, the government has now laid out plans for reforming the sector.
Climate change and an increasing population have also added to the challenges faced by Thames Water, whose pipes, pumping station and treatment works are some of them over 100 years old.
Thames Water investors claim that the fines imposed on it for environmental violations are so large they have wiped out any financial gains.
The rating agency Moody's estimated that Thames Water could face penalties averaging 80-90 millions pounds per year between 2025-2030.
Thames Water predicted that it would need to spend 22 billion pounds on improving its infrastructure over five years. Ofwat, however, only allowed 17 billion pounds. Some creditors believe that this puts the water company into a losing situation.
(source: Reuters)