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Andy Home: Copper's high tariffs fail to lift other LME Metals
Doctor Copper isn't the same as it was before Donald Trump, President of the United States, announced an investigation in February into U.S. imported products. Tariff trade has thrown the global supply chain into disarray, causing a feast in the U.S. but famine elsewhere. London Metal Exchange (LME), copper is expected to close the first half with a gain 12%. Only the wild tin markets will beat it. However, the rest of the LME is still reeling from Trump's "Liberation Day", broader tariffs. The precious metals have been boosted by geopolitical turmoil and trade, but the industrial metals are still largely in the same place at mid-year as concerns grow about the impact of tariffs on global manufacturing. The LME scorecard for the first half 2025. COPPER – FEAST AND FAMILY CME's U.S. Copper contract currently trades at a premium of $1200 per metric tonne over the LME international price. Tariff trade has been extremely volatile in the past few months. However, the arbitrage window is still sucking up metals from around the globe. CME stocks have exploded and LME stock are in decline as physical copper is being redirected into the U.S. LME spreads are becoming turbulent as inventory shrinks. Cash-to-three month period is in steep reverse. Market participants expect Chinese smelters will increase exports in order to fill supply-chain holes, but the London Copper market remains a hazardous place for bears until this happens. The U.S. government will decide whether or not to impose import tariffs. This is a sign of more turmoil ahead of the deadline in November for the Section 232 investigations into U.S. imported goods to be completed. WILD TIN London's tin market is a roller coaster so far this season. Early April, three-month tin reached a high of $38,395 a ton. After the metals meltdown on "Liberation Day", it fell to $28,925. Due to the persistent pressure on supply, tin is now back above $33,500 a ton. The Bisie mine, in the Democratic Republic of Congo was quickly reopened after a short disruption. However, the Man Maw Mine in Myanmar continues to be affected by a longer-term disruption. Wa State authorities, who control the Man Maw Mine, have been in negotiations to obtain new licenses that will allow it to be reopened after almost two years. The flow of tin to China's smelters is still a trickle. China's imports of tin-concentrate fell by 36.5% between January and May, and the country's metal smelters feel the pinch. According to Shanghai Metal Market, refinery production in June was down 15% year-over-year. Since the middle of April the Shanghai Futures Exchange tin stocks have been steadily declining, while the LME inventories have halved in the first half year. Tin is the only LME-listed metal, other than copper, that trades in a significant backwardation. This shows the supply pressures in the market. ALUMINIUM SPLIT Trump's import tariffs of 50% have fractured the aluminium market, but their impact is more visible in the premiums for the U.S. Midwest than the arbitrage between similar CME and LME contracts. The LME price is now around $1,250 higher than what U.S. customers pay for their metal. The premiums are falling everywhere else, partly because of displaced metal flows as well as weak demand in Europe and Asia. The recent London market action has largely been a massive tug-of war for the available metal, against a background of falling exchange stock. It's difficult to distinguish the signal from noise when using aluminium. The LME's three-month price rose from $2,335 to $2600 per ton in April, but the gain year-to date is only a modest 3.0%, falling short of analysts' expectations for the beginning of 2025. NICKEL WEIGHED BY SURPLUS WEIGHED DOWN LME Nickel also ends the first half 2025 with little change from its January start point. The LME Nickel Stocks fell in May, for the first since March 2024. This is a sign of a possible slowdown in the accumulation of inventory. How long it will last remains to be determined. Nickel's electric dream has faded, as Chinese electric vehicles manufacturers have switched to non-nickel batteries. Indonesia continues to increase production and generate more metal. Analysts at Macquarie Bank say that the price of LME nickel three-month is just above $15,000 per ton, which is about the same as the cost to refine nickel from Indonesian nickel-pig iron. While the price of nickel may not be as high as it is now, any recovery will depend on Indonesia's ability to curb its growing nickel production sector. No one is holding their breath. ZINC WINDS DROPPING, LEAD GEARS ON. Due to its close relationship with the automotive batteries sector, the lead market has been cushioned from the tariff turmoil of this year. Lead is currently entering its seasonal peak demand period, which occurs when temperatures in the northern hemisphere are high and cause an increase in battery failures. LME lead has risen 6% since the beginning of the year. It is now catching up with zinc, the LME metal that continues to be the underperformer. According to the International Lead and Zinc Study Group, world zinc mine production increased by 5.1% in January-April. This supply surge has led to an increase in refined production, especially in China. The Group estimates that the global refined metals market recorded a 151,000-ton surplus of supply in the period. You don't need to look any further to see why galvanising is in such disfavor. It has fallen by 6% since 2025. These are the opinions of the columnist, an author for.
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India launches antitrust investigation of Asian Paints following complaint by billionaire Birla
According to an order, India's antitrust agency ordered an investigation of Asian Paints on Tuesday after Aditya Birla Group paints venture claimed that the country’s top paint manufacturer abused its dominant position in the market. According to the order, Asian Paints' initial review by the Competition Commission of India (CCI), showed that it had violated competition laws. Birla claims that Asian Paints abused its dominant position on the market by offering incentives and discounts to dealers, such as travel abroad in exchange for exclusivity. Birla claimed that Asian Paints increased the sales targets for dealers dealing with Birla's products. Birla also claimed that Asian Paints "forced" transporters and landlords to avoid doing business with Birla. The CCI's first review found that Asian Paints had "imposed unfair conditions on them (dealers)," which was in the nature exploitative conduct, the watchdog stated. It ordered its investigation unit to investigate the matter. Birla Opus, the paints division of Aditya Birla Group, Grasim Industries is led by billionaire Kumar Mangalam Birla. According to Forbes, Kumar Mangalam Birla is India's seventh-richest person. Asian Paints has a market share of 52% in India. The company has lost some of its Dominance Elara Capital data show that Birla Opus, launched in February 2024, grew quickly to reach a market share of nearly 7% by March. Asian Paints has not responded to the request for comment regarding the CCI order. Aditya K. Kalra, New Delhi; Chris Thomas, Bengaluru. Editing by Shreya B. Biswas.
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IDB aims to unlock more than $11 billion for sustainability goals
The Inter-American Development Bank wants to unlock at least 11 billion dollars in sustainable financing to help countries deal with events such as natural disasters, which put pressure on their currencies and hinder private-sector investments. Multilateral lenders are being pressed to find innovative ways to address climate change, biodiversity loss and other challenges as the United States and richer nations reduce official development aid. Ilan Goldfajn, IDB president, said that the IDB's actions would inspire the private sector to contribute more - a priority of the conference. He said: "We are not just announcing new ideas, we're launching the things that private sector has been asking for - credible tools, scalable platform, and real investment opportunities with impact and confidence." Support will include a platform that helps countries manage the risks of large domestic currency swings, which can discourage international investors because it is harder to predict return. The plan is to extend the program to other regions in the next three-year period and double the amount of money raised. FX EDGE is a credit line that will kick in if the value of a currency drops sharply. This usually happens during political crises, debt crises, or natural disasters. It ensures debtors are able to continue making payments for their loans, whether they're made in dollars or another currency. The platform will also allow for greater use of currency hedge instruments, such as derivatives, through local financial institutions and banks. These instruments are backed up by the IDB credit rating. 'AMAZONIA BONDS' The IDB, in collaboration with the World Bank will also issue "Amazonia Bonds" worth up to $1 billion. These bonds were tested last year and helped to curb deforestation in the world's largest rainforest. Brazil, Colombia, and Peru all try to protect a rainforest area covering more than 6,000,000 square kilometres (2,3,000,000 square miles), which is home to 10% of the known species of animals and plants. Goldfajn added that the IDB will also increase the number countries who can access a newly enlarged emergency relief fund of $5 billion called the Contingent Credit Facility for Natural Disasters. It will offer, along with other multilateral development institutions, more "Climate-Resilient Debt clauses", which allow countries to suspend their loan payments for a maximum of two years in case a major hurricane or drought occurs, or if any other natural disaster occurs, scientists believe that climate change has made it more likely. IDB estimates that the clauses will cover $4.2 billion by 2026. A separate Business Resilience Program run by IDB Invest will include similar clauses in contracts with private companies. The Regional Disaster Risk Transfer Program was also established to enable countries to transfer risks associated with extreme weather events onto the capital and insurance markets. IDB Invest's Business Resilience program would include debt clauses in contracts with private companies as a way to cushion them against climate risks. Goldfajn stated that "each of these are important in their own right, but when taken together they demonstrate how development banks can move the needle through tailoring risk to investors." (Reporting from Simon Jessop in London, Marc Jones in Seville and Barbara Lewis in Matthew Lewis's and Matthew Lewis's offices)
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Investors wait for Trump's tax bill to see if it will affect the stock market and dollar.
The dollar fell to multi-year lows and global shares dropped on Tuesday. It had just finished its worst half-year performance since 1970, and was ahead of the vote on President Donald Trump’s tax-cutting and spending legislation. The previous day, optimism about trade helped global share markets reach an intraday high. The Senate debate over Trump's proposed bill, which is estimated to add $3.3 billion to the United States debt pile, weighed down on sentiment. The European share market, which had a gain of 6.5% on a year-to date basis at the end of June, was down by 0.4% for the day. The tax-cutting and spending bill was expected to be voted on during Tuesday's Asian trading session, but the debate continued over the long list of amendments proposed by Republicans and minority Democrats. Trump wants to pass the bill before the Independence Day holiday on July 4. Investors are also looking forward to Thursday's key U.S. employment data as global trade negotiators rush to reach agreements before Trump's deadlines. Ray Attrill is the head of FX Strategy at National Australia Bank. He said on NAB's The Morning Call Podcast that the payroll data due later this week would "have a significant impact, I believe, on the sentiment regarding the timing of Fed rate reductions". POLITICAL DRAMA Futures for the S&P 500 index and Nasdaq fell 0.2%, indicating a slight pullback in the opening of trading later. Tesla shares fell 5% or more in pre-market trade after Trump suggested that the government's efficiency department review the subsidies provided to CEO Elon Musk's companies. Musk criticised Trump's proposed budget and social media exchanges between the two began to devolve into personal attacks as of early June. This political drama, which could be a resurgence of the bear story just as shares are starting to recover, said Matt Britzman. Senior equity analyst at Hargreaves Lansdown. Tesla is still among the top 10 most valuable Wall Street companies, but its value has dropped by around a third since December, when it reached a record-high. Nvidia, another heavyweight, is also on its way to becoming the most valuable business in history. It's market capitalisation is approaching $4 trillion. In pre-market trading, the chipmaker's stock was down slightly. The Bank of Japan’s tankan business sentiment index and a Chinese measure of factory activity showed that the largest economies in the area were likely to weather the tariff storm at least for the moment. Japan's manufacturing sector also grew for the first time since more than a month, but a significant drop in demand underscored the difficult trade outlook for Asia’s export-dependent economies. The dollar was weaker against the Japanese currency dropping by 0.8% to 143yen. Its value against the Euro was also little changed at $1.18. This is its lowest level since September 2021. In the first half of this year, the U.S. dollar lost more than 10 percent of its value against six other currencies. This is the worst performance it has had in at least fifty years. Brent crude futures rose 0.7% to $67.22 a barrel on the same day, reversing a previous decline. This was due to expectations that OPEC+ would increase their output in August. Gold spot rose by nearly 1.5%, to $3352 per ounce.
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HSBC increases average gold price forecasts 2025 and 26
HSBC increased its forecast for 2025 gold prices to $3.215 from $3.015 and that of 2026 to $3.125 from $2.915, citing elevated risk and government debt. Gold is more likely to rise in value during times of geopolitical and economic tension. This helped spot gold reach a record-high of $3,500.05 per ounce at the end of April. On Tuesday, spot gold traded at $3.348.50/oz as of 1146 GMT. In a Tuesday note, the bank stated that it expects a volatile and wide trading range between $3,600 and 3,100/oz throughout the remainder of the year, and prices at year-end of $3.175/oz in 2025, and $3.025/oz in 2026. Despite divisions in the Republican Party, U.S. Senate Republicans were still working to pass the tax-cut and spending bill of President Donald Trump despite the expected $3.3 trillion impact on the nation's debt. Treasury Secretary Scott Bessent has warned that as the deadline of July 9 approaches, countries may be informed about sharply increased tariffs. HSBC stated that, even if the gold price eases, levels above $3000 an ounce have strengthened gold's role of a safe haven as well as a portfolio diversifier. The central bank's gold purchase will be reduced if gold continues to rise above $3,300. It could also increase if gold falls below $3,000. The bank warned that further increases in gold prices above $3,500 would likely lead to a reduction in demand for jewellery, coins and small bars, especially in countries like India and China. Reporting by Anushree mukherjee in Bengaluru and Ishaan arora, Editing by Jan Harvey & David Goodwin
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Sources say that DOGE is now focusing on SEC policies and SPAC rules.
According to two sources familiar with the issue, President Donald Trump's Department of Government Efficiency has led the U.S. Markets Watchdog to relax Wall Street rules regarding blank-check companies as well as confidential reporting by private funds. Sources say DOGE officials, who are currently focused on cutting costs at the SEC and have been focusing on cost-cutting, have sought meetings in recent weeks with staff about relaxing regulations that some companies feel are burdensome. This includes reworking Biden's rules, which were adopted last year, on Special Purpose Acquisition Companies (SPACs), and requiring private investment advisers to disclose more confidential data, so regulators can identify systemic risks. These efforts, which were not previously reported, are a part of the administration's broader deregulation push, which aims to boost economic growth through reducing government oversight. In an executive order issued in February, Trump instructed DOGE officials to federal agencies to identify any regulations that the administration might seek to eliminate. This could be for a variety of reasons, including imposing "undue costs" or burdens on businesses. Sources who spoke on condition of anonymity about confidential discussions said DOGE's participation in drafting new policy had rankled some SEC official, raising questions over whether or not a White House initiative could be included in the core work an agency that has long been seen as independent. The SEC adopted regulations for private funds and SPACs under the Biden administration to protect investors against unscrupulous investment promoters. These regulations also prevent unchecked risks to the financial stability of the private fund sector. Taylor Rogers said that DOGE worked with the SEC to "more efficiently maintain fair markets and protect everyday investors". Under President Trump's leadership Chairman Atkins and SEC will make sure that the United States is the safest and best place to invest in the world. SEC spokesperson said: "The SEC works with DOGE to ensure that public funds are used as efficiently as possible." The SEC and White House declined to comment on the 'questions for this article. Current and former officials said that the White House's priorities are rarely radically different from the regulatory agenda of the Commission, which is headed by a president-appointed chairman. Experts said that the SEC has been treated like any other financial regulator - through both legal protections as well as decades of norms - for a long time. To avoid any political interference or even the appearance thereof, the agency has historically limited communication with the White House about rules. Trump and other key players within his administration believe that these agencies need to be directly under the White House's supervision. Trump has also fired officials who claimed they were legally protected from being dismissed in many cases. Amanda Fischer, director of policy and chief operating officer for Better Markets Financial Reform advocacy group, says that any DOGE involvement with SEC rulemaking raises concerns about possible conflicts of interest and political influences overriding the expertise and staff expertise. It's outrageous to have outsiders who were not chosen by the chairman, having a voice in the rule-making process," said Fischer. Fischer was previously the chief of staff for former SEC chair Gary Gensler. KICK IN THE PANTS? The DOGE's efforts are not known to have any impact. The SEC's new leadership may have already pursued traditional Republican views, which are reflected in the majority of the pressure to deregulate. In fact, Republican SEC commissioners Mark Uyeda & Hester Peirce both opposed what they called unnecessary regulatory burdens on SPACs & private funds in the past. Already, some movement is being made to dismantle such regulations. Last week, the SEC was in discussions with U.S. exchanges to relax some regulations for SPACs. These are shell companies that raise money through an IPO with the intent of buying a private company. SPACs, or listed shell companies, raise money to buy a private company in order to take it public. This allows the target to avoid a traditional IPO. SPACs were a booming business, and Lucid Motors', DraftKings' and Trumps social media operations all used this strategy. Under Biden, the SEC cracked down on this sector due to concerns about the lack of diligence compared with the more rigorous IPO and hidden costs for retail investors. SPACs are once again gaining in popularity. In one case, several people involved in Trump Media disclosed plans to pursue an SPAC deal this year in the tech industry, possibly involving crypto. The people involved in the Trump Media transaction did not reply to requests for comments. SPAC advocates were concerned about the SEC's new rules. They cited changes like the removal of the "safe harbor," which had shielded SPAC sponsors against legal liability if their financial projections were unrealistic or misleading. Uyeda, Peirce and others objected at the time to the changes. They said the rule would unnecessarily inhibit an investor tool that could be valuable. The Republican commissioners were also against the additional reporting requirements, Form PF, for private funds that SEC and an agency voted on in February 2024. The SEC decided earlier this month to delay the compliance of firms with these new requirements. Experts have said they are in favor of reducing outdated or old regulations, even when DOGE is involved. Adam Pritchard is a professor of law at the University of Michigan. He said: "I daresay that it is a departure in practice. But whether White House influences is a risk or opportunity depends on how you look at it." "I'm quite open to thinking that the staff might need a little nudge to make them repeal some of the laws. I bet Paul Atkins shares that instinct. Reporting by Douglas Gillison, Chris Prentice and editing by Pete Schroeder. Megan Davies, Anna Driver and Anna Driver.
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Governor of Izhevsk: Three dead and 35 injured after Ukrainian strike on Izhevsk factory
Alexander Brechalov, the regional governor of Izhevsk region, said on Tuesday that three people had been killed and 35 injured by a Ukrainian drone attack on a factory located in Izhevsk. Brechalov didn't name the facility targeted, but an official from the Ukrainian Security Service had earlier said that two long-range drones, operated by the Security Service of Ukraine, struck the Kupol factory, which manufactures air defense systems and drones, and started a fire. Videos shared by a Ukrainian official revealed that a column of black smoke billowed into the air from the site where a fire had broken out at a clustering of buildings. The official said that the production facilities and storage warehouses of the plant were affected. Could not independently verify this claim. Brechalov claimed he had informed Russian President Vladimir Putin of the incident. Kupol is part of the Almaz-Antey conglomerate, a state-owned defense conglomerate. Izhevsk also houses the world-renowned Kalashnikov defence manufacturing concern.
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Copper hits three-month record high due to stronger China data
The copper price hit a three-month high on Tuesday, as traders said that a stronger dollar and the improved manufacturing data in China helped to boost demand. The benchmark copper price on the London Metal Exchange was up 0.7% to $9,935 per metric tonne at 1008 GMT, from $9,984 earlier. This is the highest level since March 27. A private sector survey revealed that China's factory activities expanded in June due to an increase in orders, which lifted production after contracting in the previous month. The lower dollar makes metals priced in dollars cheaper for holders of currencies other than the U.S. dollar, and this could increase demand. Funds that trade using numerical models to generate buy and sell signals use this relationship. The low inventories also helped. Copper stocks in LME-registered warehouses At 91,250 tonnes have fallen 66% since mid-February. Copper inventories in warehouses monitored by Shanghai Futures Exchange (ShFE) are at 81.550 tons Since early March, the number of people who are enrolled in school has also dropped by 66%. In a note, Benchmark Mineral Intelligence analysts said that "overall availability is tight on both exchanges. This reinforces the strong demand and causes backwardation." Backwardation refers to the premium paid for contracts with shorter maturities over those that are closer. The premium for cash copper contracts on the LME over the next three months Last week, the price of a ton was $319. This is its highest level since October 22. The price has dropped to $120 per ton due to large copper deliveries. LME data indicates that 1,500 tonnes were delivered to the warehouses of Gwangyang, South Korea on Monday . But cancelled warrants and metal that is earmarked for shipment indicate that another 31,975 tonnes are due to leave the LME. LME stocks are depleted due to the threat by President Donald Trump of tariffs against U.S. imports of copper. This has pushed prices up on COMEX and created a premium over LME prices. Other metals saw little change at $2.044, with lead unchanged. Tin rose 0.4%, to $33,850, and nickel fell 0.2%, to $15185.
Mexico constitutional reforms most likely with super-majority in sight
Mexican Presidentelect Claudia Sheinbaum's judgment Morena celebration and coalition partners are close to protecting a supermajority in both chambers of Congress, which would lead the way to passing controversial constitutional reforms.
Below is a take a look at the possible relocations that have markets and investors worried, and caused a sharp decline in Mexican asset costs on Monday.
DESPERATE EFFORT
Sheinbaum's coach, outbound President Andres Manuel Lopez Obrador, proposed a series of constitutional reforms in February, a few of which critics argue would get rid of much-needed oversight bodies, wear down checks and balances and focus more power in the executive branch.
Now, with a two-thirds bulk locked in the lower house of Congress and within his grasp in the Senate, Lopez Obrador will overlap with the freshly chosen lawmakers in his last month in workplace in September. Lopez Obrador on Monday recommended he would make a desperate effort to ram them through before handing the baton over to Sheinbaum.
I'm going to talk it over with Claudia ... due to the fact that we presented the propositions that are in Congress, to see which of those efforts we can push for and get approved, Lopez Obrador said at his day-to-day interview.
Issue about the shakeup sent out stocks falling over 6%. and the peso as much as 4.3% lower.
INDEPENDENT OVERSIGHT BODIES
Amongst the proposed changes, Lopez Obrador wishes to scrap the. constitutionally-enshrined flexibility of details body INAI,. federal anti-trust agency COFECE, advancement evaluation firm. Coneval and telecoms regulator IFT.
It would likewise put the energy ministry in charge of energy. regulator CRE and national hydrocarbons commission CNH, both of. which are now independent and which, like the other autonomous. bodies, Lopez Obrador charges with promoting corruption.
OVERHAULING THE ELECTIONS AUTHORITY
Throughout his administration, Lopez Obrador often berated. and bumped heads with such firms, consisting of the National. Electoral Institute (INE), which he is looking for to entirely. overhaul.
As many as 700,000 people filled the streets of Mexico City. in February to demonstration of the proposed dismantling of the INE.
The reforms are a method of instituting electoral reform to. cement Morena's political hegemony; lowering the bar for public. referendums to obtain legal validity, stated Nicholas Watson,. handling director of consulting company Teneo.
Lopez Obrador has actually frequently utilized such referendums to. pursue contentious policies like cancelling a partly-built. Mexico City airport before he took workplace in a vote in which. just a portion of the public got involved.
STRUCTURAL MODIFICATIONS TO THE JUDICIAL, LEGAL BRANCHES
Lopez Obrador also wants huge modifications in the judicial system,. which would see popularly chosen Supreme Court justices,. circuit magistrates, district judges, and electoral authorities.
The number of supreme court justices would be cut to 9, from. 11. In addition, all magistrates and judges would need to be. restored in an extraordinary election to happen in 2025, part. of a series of moves critics state would reduce independent. courts.
Lopez Obrador has said the changes are needed because the. present judiciary serves a minority and sometimes arranged. crime at the expense of society.
His reforms would also cut the variety of members of the. lower home of Congress to 300, from 500 and slash the number of. senators to 64 from 128.
S&P Global Scores stated while greater centralization of. political decision-making and blended political signals under. Lopez Obrador had minimized the self-reliance of numerous firms,. important checks and balances throughout branches of federal government,. consisting of the judiciary, stayed.
Steps that deteriorate checks and balances might affect. private-investor self-confidence by creating perceptions of greater. risk, potentially impacting economic growth and sovereign. creditworthiness, it alerted.
LAUNDRY LIST
The proposed reforms, among which Lopez Obrador may need to. pick offered the tight window between the last legal. session under him and Sheinbaum's October inauguration also. consist of:
-- Expanded retirement benefits for senior citizens 65. years or older and disabled people
-- Improved trainee grants
-- Paid employment training for youths between the age. of 18 and 29
-- a restriction on genetically modified corn
-- a restriction on water rights in locations dealing with dry spell
-- a ban on open pit mining and fracking
A few of the reforms if authorized could intensify a worsening. budget deficit which experts state is likely to be a significant burden. for Sheinbaum once she takes workplace.
(source: Reuters)