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Lynas Rare Earths claims it was involved in takeover discussions earlier this year
A spokesperson for Australia's Lynas Rare Earths said that the company was involved in takeover talks earlier this year, but they did not proceed. Three people said that the talks led Lynas, through Chairman John Humphrey, to suspend its search to find a new CEO for Amanda Lacaze, who retired from her position in June. Lynas plays a major role in developing a Western supply network for metals that are crucial to electric cars, wind turbines and defence systems. It's also a big draw for?Australia. The country has committed to being a key mineral supplier to its allies. Any acquisition by a foreign company must be approved by the regulators of that country. The spokesperson responded in a written statement to a question regarding the takeover discussions that took place earlier this year. Lynas held post-results discussion with investors in Sydney, Melbourne and Brisbane this week. Lacaze left the company on January 13. Humphrey explained to investors why the CEO search took so long. The investors spoke on condition of anonymity due to the sensitive nature of the matter. Humphrey, according to one investor, told him that the CEO search was suspended for 4 1/2 months. How could they not disclose? Another investor agreed. "It is not a short time." Lynas didn't mention in its statement whether the CEO search was suspended. Because the search process had not been completed before Lacaze's retirement, Lynas appointed Pol Le Roux as interim CEO. It said that the CEO search is still ongoing. DIFFERENTIATING SUPPLY CHAINS Lynas had previously been in merger talks with MP Materials, based in the United States. The talks ended in 2024 when the companies couldn't agree on an appropriate valuation. It wasn't immediately clear which company had been involved in the discussions this year. The Australian takeover laws stipulate that an 'listed company' is not required to reveal that the CEO search was suspended. The company is required to disclose the suspension only if it constitutes "market-sensitive information." The news of the talks came as top-developed economies around the world scrambled to support the development and diversification of supply chains away from China, the dominant producer. Lacaze's shoes are likely to be hard to replace. Over her 12-year tenure, she oversaw the 12-fold increase in the?share prices of the company as it grew to a $16-billion company. Lynas reported last week a significant increase in its annual profit. This was aided by a record-high average selling price for?rare earth oxide and a strong demand. However, it fell short of?market expectations. The company also stated that it would expand its global supply chain. It is currently in discussions with mine suppliers from around the globe and will support the development of an American magnet supply chain.
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UK bond yields reach new 18-year high, increasing pressure on Healey
British government bond yields reached new 18-year-highs on Wednesday, following a global sell-off in response to the latest escalation of Iran's war. This added to the challenge faced by finance minister John Healey as he prepares his first budget. The yield on the 10-year gilts reached its highest level since June 2008. It hit 5,268% shortly after 7am GMT, an increase of about 4 basis point on?the day. This is on top of a 15-bps rise on Tuesday. Investors are worried about the inflationary effect of the rising oil prices due to the return of the Gulf conflict. The increase in debt servicing costs for the government comes at a delicate time for Britain's newly appointed Prime Ministers Andy Burnham and Healey, who are preparing their first budget for October 28. Pantheon Macroeconomics economists say that the increase in gilt yields has reduced Healey’s margin of error when it comes to meeting the government’s goals for improving public finances. In a client note, they told clients that "higher interest costs have reduced fiscal headroom to about PS13 billion (18 billion dollars) from PS23.6 in the Spring Statement." The Chancellor must either raise taxes or cut spending by PS11 billion a year to restore the margin of headroom. The markets will be nervous as the 'budget' approaches and the government continues to'make spending commitments. The cost of borrowing for shorter-term periods also rose on Wednesday, with the five-year gilt rate reaching its highest level since October 2023. It increased by 4 basis points to 4.7534%.
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The FOREX Dollar reaches a two-week high. Middle East conflict, rate paths and the Middle East are in focus
The dollar reached a two-week peak on Wednesday, as investors flocked to the U.S. dollar amid growing concerns over the impact of the energy crisis and diverging monetary policies?across major economies. After the largest exchange of fire for weeks, the U.S. and Iran were back in a war-like situation on Wednesday. The dollar tends to gain from higher oil costs because the U.S. is less vulnerable to energy shocks compared to other major economies. This attracts demand to the detriment of currencies like the euro and the yen. The Federal Reserve faces a growing threat of tightening policy in 2027, even though most economists believe the European Central Bank is nearing the end of their tightening cycle following next week's much-anticipated rate hike. George Brown, Schroders' senior economist, stated that the ECB will finish its rate-hiking cycle by the end of the year while the Federal Reserve is likely to just be beginning. He added that Schroders was positioned to take advantage of a weaker Euro and expected the single currency to drop to $1.10 per dollar by the end of the year. A sell-off of?U.S. Treasuries, which are influenced by inflation fears and concerns over the fiscal trajectory of the United States can have a negative impact on the dollar. Rising debt levels and persistent pressures to reduce prices may also weigh down the dollar. assets. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and other currencies) rose by 0.11%, reaching 99.76 after having reached 99.808, which was its highest level since August 17. The euro fell 0.16% to $1.1575 after reaching $1.1570 - its lowest level since August 20. The yield on the benchmark 10-year U.S. note reached a high of 4.812% - its highest since November 2023 - before falling to 4.804%. Japan's benchmark yield on the 10-year note extended its rally on Wednesday to 3.01% after reaching a milestone of three decades on Tuesday. According to CME Group’s FedWatch tool, the markets now price in a 70% chance of a Fed hike for September, up from 40% just a week ago. DOLLAR SLAVES BELOW 160-YEN After falling to its lowest level since July 31, the Japanese yen gained 0.45% to 159.50 dollars per yen. The yen was just above the psychologically significant 160-per-dollar barrier as markets weigh up the Bank of Japan rate path. BOJ Governor Kazuo Ueda said consecutive rate increases could be a possibility. The Treasury Department reported that U.S. Treasury Sec. Scott Bessent expressed strong support for "decisive monetary measures" to combat the yen's weakness during a meeting held with BOJ Governor Kazuo Ueda. The U.S. and Japan's rare joint intervention at the end July lifted the yen from its 40-year-low of 163,99, but it has since lost around half the gains made by the joint action. Tony Sycamore is a market analyst with IG. He said, "There seems little chance of a second round of coordinated intervention until the 'Strait of Hormuz' de-escalation takes some heat off of?the oil prices." Even after the central bank of New Zealand raised the official cash rate to 2.75%, the New Zealand dollar fell 1.01% to $0.5844. This is its lowest level since August 13. Analysts say market participants saw the decision as less hawkish that expected.
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Gulf Stocks Fall after US-Iran Exchange Strike
Gulf equities fell in the early trade on Wednesday, after the United States and Iran exchanged strikes over night. This dampened hopes for a rapid easing of tensions?in?the Middle East. Washington claimed to have carried out airstrikes overnight on Iranian targets, provoking a reaction from Tehran. This is the most serious escalation of tensions between the two nations in recent weeks. Iran's Revolutionary Guards claimed to have?fired missiles at an American military base in Jordan and alleged that they?had inflicted severe casualties. Iranian state media reported that a drone attack was also carried out on a U.S. military base in Bahrain as a retaliation to the U.S. attacks. Dubai's main index fell 0.6% with the majority of constituents in negative territory. Blue-chip ?developer Emaar Properties lost 1.3%, ?while toll-road operator Salik declined 1.1%. Qatar's benchmark fell 0.5% with almost all stocks trading lower. Industries Qatar dropped 1.2% while Qatar National Bank was down 0.5%. Saudi Arabia's benchmark stock index fell 0.3% due to a decline in utilities, healthcare and materials stocks. Saudi Arabian mining fell by 1.4% and ACWA Power by 1.3%. The National Shipping Company of Saudi Arabia and Rabigh Refining and Petrochemical Co. bucked this trend, both?increasing 2.1%. IFR reported that Saudi Arabia also raised $3.25bn through a two tranche sale of U.S. Dollar sukuks, its "second debt market transaction" this year. Orders were in excess of $15 billion and proceeds will be used to fund general budgetary requirements. Abu Dhabi's benchmark indices fell?0.7% led by shares in telecom, technology and industrial companies. First Abu 'Dhabi Bank, the UAE’s largest lender, dropped 1.3% while conglomerate Alpha Dhabi Holding fell 2%.
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What are Iran's options for retaliation as the US and Iran resume open warfare?
The United States launched another wave of attacks against Iran on Tuesday evening, six months after the conflict was declared deadlocked. This prompted Iran to fire missiles at what it called U.S. assets located in Jordan, Bahrain Kuwait and Iraq. Iran could retaliate in other ways if the conflict escalates or a U.S. The campaign to choke Iran's economic system intensifies. IRAN COULD 'EXPAND' ATTACKS on GULF STATES Iran has struck its neighbours repeatedly in response to U.S. strikes and has threatened to retaliate to anyone who takes part in U.S. attempts to strangle the economy of the country with "earthquake force". Since the beginning of the war on February 28, it has repeatedly targeted Jordan and Gulf states, focusing mainly on U.S. military bases. However, they have also hit energy infrastructures and other targets. Attacks on upstream oil and gas facilities could cause energy prices to rise, causing political damage to the Trump administration. It may also be more difficult to reverse attacks against shipping. The targeting of power and desalination plant in this hot, parched area would pose a serious risk to the U.S.-aligned Gulf countries that serve as important?financial centers for the global economic. IRAN COULD STOP MORE ENERGY LEAVING THE MIDDLE ESTATE Mohsen Rezaei is the former Revolutionary Guards Chief and Secretary of Iran's Supreme?National Security Council. He has threatened to stop oil exports, which was one of Tehran's major strategic approaches during the conflict. He stated that if the economic war continues, no oil will be shipped through the Strait of Hormuz and from anywhere else in the Persian Gulf. Iranian attacks and threats against shipping have already halted most traffic through Strait of Hormuz. This waterway carried a fifth of the world's energy prior to the conflict. Although some oil tankers passed through the Strait in recent weeks there is still a very small volume. During the six-month conflict, tankers attempting to leave the Gulf were repeatedly targeted by missiles, drones or speedboats. This has led to a rise in oil prices. The Houthi allies of Tehran have also restricted Red Sea shipping by threatening to block all Saudi Arabian shipping that carries crude oil to Asia via the Bab el-Mandeb strait, past the group's Yemeni base. According to industry sources, while the initial attacks only stopped a few vessels, more than half were still passing through'mid-August. The situation is 'difficult' for shippers, as Chinese shipping companies are now rerouting their ships away from Bab el-Mandeb. Additional attacks, like the one which targeted a vessel near the main Saudi Red Sea oil terminal in Yanbu, last week, or the drone strike near Suez Canal, early August, could increase oil market anxiety and crude oil price. IRAN COULD ATTACK WESTERN NATIONS DIRECTLY The Revolutionary Guards are willing to use alternative methods of attack, even though they cannot reach the West. U.S. officials said that Tehran is likely responsible for cyber attacks against water plants in Minnesota. Iran has not responded to these allegations. Western security services have also accused Iran recruiting locals to stage attacks in the West or try assassinations. Iran denies that.
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Strong dollar weighs down on industrial metals, causing copper and zinc to fall
Copper and zinc declined?on Wednesday as a stronger dollar and concerns?of higher interest rates for longer weighed down on the wider industrial metals complex. This offset support from tight supply. The benchmark three-month copper price on the London Metal Exchange fell 0.86% to $14,152 per metric tonne by 0700 GMT. Shanghai Futures Exchange's most traded copper contract fell by 1.35%, to 108.040 yuan (16,069.97 dollars) per ton. The dollar held steady after overnight gains as renewed hostilities erupted in the Middle East, pushing oil prices higher. Inflation concerns were revived and the bond market was sparked by a sale. Analysts from Sucden Financial wrote in a report that "base metals were under pressure due to the strong dollar and U.S. 10 year yield around?4.8%, which outweighed the support of tight physical conditions." The stronger the greenback, the more expensive commodities are for buyers who use other currencies. Data showing the?U.S. The factory activity in August slowed due to high input prices. This also affected demand expectations. In recent months, copper and zinc prices have been boosted by the tightening of supply. Both metals recorded their best month in August since January. LME zinc dropped 0.82% Wednesday, while SHFE Zinc was down 1.46%. Zinc marked for withdrawal means material under cancelled?warrants The highest level in over a year was reached on Tuesday when the tally of 30,875 tonnes. Base metals were also affected by the rising rate-hike expectations. According to CME's Fedwatch, rate traders now price in a 70% chance that the U.S. Federal Reserve is likely to raise interest rates during its September meeting. This was up from 37% just a week earlier. Kevin Warsh's hawkish remarks last Friday raised expectations of rate hikes. The impact of higher interest rates on metal demand can be felt by economic activity. Nickel dipped by 0.09%, and tin fell by 1.09%. Aluminium, lead, nickel and tin all fell on the SHFE.
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Sources say that aluminium producers are offering Japanese buyers lower Q4 premiums.
Four sources said that the top?global aluminum producers offered Japanese buyers a premium of $310-$325 per metric tonne for primary metal shipments in October and December, down by 18%-22% on the current quarter. Japan is the largest importer of light metals, and the premiums it agrees to each quarter for primary metal shipments over the London Metal Exchange cash price are the benchmarks in the region. Japanese buyers had agreed to pay a premium of $395 per ton for the period July-September The increase was between 12% and 13% compared to the previous quarter. A source from a Japanese trading firm said that the lower offers for October-December are due to a positive report on Middle East production, and softening premiums in Europe. The opening offers, while closer to "realistic" levels than the previous round, remained too high, given the weak spot prices, said another source from a Japanese rolling-mill. They added that buyers would be looking for a price below $300, as Asia's supply-demand balances are improving, in part due to increased Indonesian shipments. Aluminium stocks still at Japan's major ports According to Marubeni, the number of tons produced fell to a record low of 201,000 at the end July. Concerns over shipment disruptions due to the Iran war, coupled with strong demand for semiconductor-related products in Japan, ?continue to support the market, a producer source said. Because the discussions were private, sources refused to be identified. According to the?International Aluminium Institute, global primary aluminium production fell by 1.7% in July compared to last year, and Gulf production was down by 44%. In March, two smelters located in the Gulf region, which accounted for?9% global primary aluminum capacity, were attacked by Iran. This prevented them from exporting metal via their usual?channels. The quarterly negotiations between Japanese purchasers?and global manufacturers including Rio Tinto South32 and others began last week and will continue until the end of this month.
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These power and cooling companies are also riding the data centre boom, which is worth trillions of dollars.
Nvidia may be synonymous with AI, but a group of lesser-known power and cooling equipment providers is cashing in as developers rush to avoid infrastructure bottlenecks. The energy-hungry data centers have created a surge of demand for equipment from transformers to advanced cooling systems. This has created winners throughout Asia's supply chains, though earlier stock price gains have moderated. McKinsey predicts that data centres will be worth $7 trillion by 2030. Nvidia said 'last week' it expected AI spending to continue for many years. It is getting harder to build data centres quickly enough to meet the demand. According to Pivotale AI, hyperscalers want their facilities in six months. However, grid connection delays in emerging markets can be as long as eight years and as much as 24 months. Wing Kin Cheung is the CEO of digital service provider BodaData. He said, "Outside industry circles, people talk about (graphics processor units), but inside the circle people will most likely ask you about the lead times for generators and transformators." Transformers are used to convert grid electricity into a level suitable for cooling systems, power distribution units and servers. AI SCRUTINY DEPENDS The demand for transformers from leading suppliers, including South Korea's Hainan Jinpan Smart Technology and China's HD Han?Electric, is expected to increase in the first half 2026 due to AI infrastructure projects in North America. HD Hyundai Electric said recently that demand in Europe is increasing as U.S. Hyperscalers expand investments in markets such as Finland, Germany and Britain. Middle Eastern demand remains strong. The company's order backlog increased 23% from the previous six months to $8.5 billion by June 30, and said that it expected data centre demand to continue to be robust. The company said that it has a backlog of orders covering more than 3 years. "A substantial portion of the production capacity for major equipment is secured for the next three years," they added. We are also in discussions with key customers about orders for volumes scheduled to be delivered as far as 2030. Jinpan's new data centre orders have quadrupled in the first six months compared to a year ago, and its backlog has nearly tripled. Equipment makers also bet on technologies that improve efficiency and reduce environmental impacts as AI chips consume greater amounts of electricity. This is in response to the growing scrutiny from the public over data centres' water and electricity consumption. Bank of America estimated that?power consumption for each AI rack may reach more than 1.5 Megawatts at the end of 2030. This is nearly 100 times higher than a conventional rack. Solid-state transformers (SST) are a technology that is gaining more attention. They replace bulky copper and magnetic coils with semiconductors for the purpose of transforming and routing electricity. UBS believes SSTs can increase energy efficiency by 4%, and lower costs. The bank estimates that commercial adoption is still in its infancy, but they expect their penetration to reach 40% by 2030. They also predict that Chinese companies are likely to gain market share due to their technological expertise and lower costs. HD Hyundai Electric, Jinpan and Taiwan's Delta Electronics are all working to develop SSTs. Delta said that the demand for AI infrastructure solutions, such as cooling, power and data centres, remains strong. To meet this demand, it has expanded its production footprint in Thailand, China, and the U.S. COOLING RACE As operators struggle to control the heat generated by powerful AI chip, cooling systems are becoming a growing area. Matty Zhao is the Asia-Pacific Head of Research for Basic Materials, Oil and Gas at Bank of America. By 2030, liquid cooling is expected to account for 70% of new AI data centres compared to air cooling. This is up from 30% today. McKinsey claims that liquid cooling can reduce energy use by more than 27%. Developers also explore unconventional approaches such as floating facilities, undersea data centres, and servers in tunnels or caves. This opens up opportunities for a wider range of suppliers. HD Hyundai Electric stated that new opportunities for marine medium-speed engine sales are opening up with the growth of the data center self generation market and the floating data centers. Delta, local competitors Asia Vital Components, Auras Technology and Shenzhen Envicool Technology as well as China’s Shenzhen Envicool Technology are all benefiting from the strong demand for thermal management products. All of these companies are part of Nvidia’s ecosystem. Supply Chain Constraints Investors are questioning the high valuations of stocks amid increased competition, despite a surge in orders. Delta's shares have risen by more than 90% in the past year. HD Hyundai Electric has remained largely flat after a gain of over 100% last year. China's Jinpan has fallen by nearly 30%, while Envicool is down 20%. Both companies had soared 118% and 244% in 2025. Delta Chairman Ping Cheng stated in July that "even if revenues increase, I believe gross margins will likely remain at this level." There are many factors in the market including new product platforms and deployment delays, as well as component shortages. These issues could become more serious by the second half this year. Zhao, a Bank of America spokesperson, said that investors need to be aware of possible risks. She said, "Not everyone wins." You have to cherry-pick the leaders that get the actual customers.
China reopens highway to Tibet's disaster zone
China has fully reopened a road leading to the Gyirong Border?crossing?into Nepal, one week after sections?were washed out by catastrophic flooding. Heavy machinery can now reach the main disaster area for the first.
China airdropped equipment and supplies for frontline rescuers who had trekked through mountains to reach the site.
Chinese state broadcaster CCTV reported that a large number of heavy machines, as well as equipment to strengthen search operations, have now arrived in the area where an inspection complex for the Chinese border once stood.
CCTV showed footage of rescue crews and excavators and said that they had deployed rescue crews with life-detection equipment and?search dog's.
The crews are hampered in their progress by the persistent rain, and difficult terrain. They have to work within a narrow mountain canyon, which is hemmed between unstable cliffs, and a swift-flowing river.
The authorities, who have been monitoring the upstream lakes that could cause flooding if they burst said these risks have decreased but landslides are still a concern.
Authorities in Nepal said that the hope of finding any more survivors was fading. Nearly 4,000 people are still missing and at least 1,114 have died.
Over 30 Latvian tourists believed to be missing
China's official death toll in Tibet has remained at 16 since Sunday, with 546 people still missing. This includes 104 Indians and 49 Nepali nationals as well as 33 Latvians believed to have been part of two tour groups.
Karlis Eihenbaums said that the Latvian ambassador to China was in constant contact with the Chinese Foreign Ministry and authorities in Tibet for updates.
He said that embassy personnel had not visited the Tibetan disaster scene because information from Nepal indicated that the missing Latvians may have been swept away to the Nepali-side.
Many of the details about the tragedy in Tibet are only available from specific sources, mostly China's state controlled media.
The Foreign Ministry cited the loss of access to roads and communications in the area, as well as the major safety risks posed by secondary disasters as reasons why it had not allowed foreign journalists to enter the 'disaster zones'.
(source: Reuters)