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Commodities ignore Trump's noise and focus on fundamentals of trade: Russell
The best way to navigate the challenges that the U.S. president Donald Trump's inconsistent and erratic trade policies are posing for the global commodity markets is to ignore the noise and concentrate on the fundamentals. While the media focuses on every headline-grabbing announcement or social media post regarding new and retaliatory duties from the U.S. president and his administration the commodity markets continue to do what they have done in the past: adapt to rapidly changing conditions. It's important to distinguish between commodities that are already affected by Trump's policies and those likely to be impacted in the future. There may also be those who will not suffer direct effects, but could feel indirect effects due to a slower world economy. Steel and aluminum are included in the first group, with Trump's 25% tariffs now on all metal imports. Steel and aluminum prices are likely to rise in the United States as domestic producers cannot increase production significantly. The tariffs will be imposed on the consumers, who are likely to see the price of metals sourced from the United States increase as the local producers match the prices of imports. It is possible, in the long term, that U.S. producers of aluminium and steel will either increase their capacity and output or that foreign producers may build plants in the United States. If this is the case, it will depend on how companies view the tariffs and whether the U.S. economic situation is strong enough to justify the investment. Tariffs may cause some trade flow reordering for countries that do not sell metals to the United States. However, the greater risk is a global economic slowdown due to the reduction of trade, inflation, and competitive advantage. Trump is targeting crude oil and the copper industry, but from different perspectives. Trump has said he plans to impose a tariff on imports of copper, which is causing inventories to move from Asia and Europe into the United States. This in turn increases the price for U.S. Copper relative to other benchmarks around the world. This is a simple arbitrage game that will likely end as soon as the tariffs go into effect or not depending on what Trump decides. The global copper market will likely be relatively stable this year, as the Chinese economy is expected to have a greater impact, being the largest importer and producer of the metal in the world. MILITARY METALS One example of ignoring the noise and looking at the fundamentals is Trump's reported plans to build metals refinery facilities on U.S. Military bases in order to secure a supply of vital minerals. Trump is right to be concerned about China's control of much of the sourcing, processing, and distribution of minerals that are critical, including metals like copper, lithium, and cobalt as well as other minor metals, such as tungsten, and rare earths. It is not clear if building refineries on military bases is the best solution. Trump's actions do not seem to increase U.S. resources. Trump's bullying tactics and tariffs against friends and enemies alike have ruined the reputation and image of the United States. Anthony Albanese, Australia's Prime Minister, urged Australians to purchase local goods rather than U.S. products in response to Trump's tariffs. Albanese, in a radio broadcast on Thursday, said: "Buy Bundy instead of some American products... You can make an impact." Albanese was referring to the famous domestic rum. Australia has large reserves of many critical minerals. However, with Trump's treatment of the country as an enemy in trade it is becoming increasingly difficult to find cooperation for investment into developing mines and processing. Crude oil may also be affected by Trump’s policies but from a geopolitical perspective rather than tariffs. Prices will rise if Trump uses sanctions to reduce Iran's crude oil exports to zero. If he is able to achieve a deal for peace in Ukraine, this will likely be at Russia's terms, and may result in a easing of sanctions that could boost supply. If the trade war escalates, there is also a risk that U.S. oil exports will be included in retaliatory duties. This would force a reordering of global flow. The United States, the largest LNG shipper in the world, is at risk of getting caught up in trade wars. This has already begun with China's tariffs which will likely end Beijing's purchase of U.S. goods. Gold has quietly benefited from Trump's actions. Its price has risen to new highs, as investors look for a safe-haven. The fact that Trump hasn't mentioned gold in his list of tariff targets is important. Much of the current rise of precious metals, which is about 15%, since November's election win to Wednesday's closing price of $2,932.06 per ounce is due to U.S. investor buying. Metals Focus reports that from December to February, 600 metric tonnes of gold were transferred into CME-approved vaults. This has led to a tightening of the physical supply of gold in Asia, which is the region with highest demand. Gold is in some ways the poster child of how commodities should respond to Trump. Don't over-analyze the situation. Assess it, and act accordingly. These are the views of a columnist who writes for.
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Gold gains, but stocks fall as tariffs slash inflation relief
Stocks fell in Asia on Friday, reversing gains made earlier, as concerns about the impact of President Donald Trump’s trade policies surpassed early optimism based on a tepid U.S. inflation reading. The safe-haven Japanese yen rose, and U.S. Treasury yields fell. Crude oil prices fell as well. Hong Kong's Hang Seng fell 1.4% at 0545 GMT and mainland Chinese blue-chips dropped 0.7%. The Nikkei index of Japan gave up gains as high as 1.4% in order to trade flat last week, while Taiwanese stocks dropped by 1.1% and South Korea’s KOSPI fell by 0.4%. The Australian stock benchmark fell 0.5%, and now stands 10% below its February 14 record high. This confirms a technical adjustment. Futures indicate that Wall Street will open lower at reopening, with S&P futures down 0.5% and Nasdaq forwards down 0.8%. The price of the STOXX50 futures for Europe fell by 0.5%. The Wall Street rebound was led by the resurgent U.S. technology shares on Wednesday, after new data revealed that U.S. consumer price growth had slowed to its lowest rate since October of last month. Inflation figures were closely monitored following recent economic data that showed a softer tone, but they did not reflect the full impact of Trump's tariff campaign. Michael Brown, Senior Research Strategist at Pepperstone, said: "This market is still one that I feel cannot hold gains for the time being. This should be a huge old red flag to any potential dip-buyers out there." "Alongside my bearish equity tilt, I still favor a bullish view on bonds, especially as risks are increasingly tilting to the downside for U.S. economy." Trump's increased duties on all U.S. imports of steel and aluminum took effect on Tuesday, intensifying a campaign to reorder the global trade in favor of the U.S. In a note to clients, TD Securities analysts stated that "uncertainty continues in the air" as the outlook for inflationary consumer prices is still clouded by the trade policy developments. The impact of the recent tariffs on Chinese, Canadian, and Mexican products and the expectation of future announcements suggests that the worst is still to come. Gold prices rose by 0.5%, reaching $2,947.06, close to the previous record set on February 24, at $2,956.15. Treasury yields in the United States declined. The two-year yield fell by 2 basis points, to 3.974%. It had risen as high as 4,005% on Wednesday. The yen increased by 0.4%, to 147.70 dollars per yen. The euro fell 0.1% to $1.0879. Crude oil eased off after Wednesday's rally. Brent futures fell 0.3% to $70.77 per barrel while U.S. West Texas Intermediate futures dropped 0.4% to $67.34 a barrel. Kevin Buckland reported; Jacqueline Wong, Sam Holmes and Sam Holmes edited.
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South African coal miner Exxaro names a new CEO amid a profit slump
Exxaro Resources, a South African miner of coal, announced that veteran mining executive Ben Magara has been appointed as its new CEO, following the departure Nombasa Tsengwa. Magara is a former CEO at platinum miner Lonmin, and former executive of Anglo American. He will take over the CEO role on April 1, 2025. He will replace acting CEO Riaan Kopseschaar who will continue to serve as finance director. In a press release, Chairman Geoffrey Qhena stated that the new CEO will be expected to guide the coal miner in the face of declining profits as a result of lower prices for fossil fuels and to drive Exxaro’s diversification into transition minerals to green energy. South African miner, Exxaro, reported that its profit dropped to around 7 billion rand (381.44 millions) in 2024 from almost 11 billion a few years earlier. Exxaro reduced its dividend from 10.10 to 8.7 rands per share. Magara was the CEO of Lonmin, a platinum miner acquired by Sibanye Stillwater rival in 2019. He succeeds Tsengwa who resigned following a board investigation that was launched into her governance practices.
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Oil slips amid macroeconomic concerns despite firm demand expectations
The oil prices fell on Thursday, after an earlier surge on the back of a bigger-than-expected drop in gasoline stocks in the United States. Markets weighed macroeconomic worries against a firm demand in near-term. Brent futures dropped 5 cents, to $70.9 a bar by 0426 GMT. U.S. West Texas Intermediate crude oil futures lost 10 cents, to $67.58 a bar. Both benchmarks rallied about 2% on Wednesday as U.S. government data showed tighter-than-expected oil and fuel inventories. Analysts had predicted a 1.9 million barrel drop in gasoline stocks, but the actual decline was 5.7 million. Distillate stocks were also lower than expected - despite gains for crude oil stocks. Hiroyuki Kikakawa, Nissan Securities Investment's chief strategist, said that declining U.S. gas inventories increased expectations of a seasonal increase in demand for spring. However, concerns over the global impact of tariff wars on the economy weighed heavily on the market. He added that "with strong and weak factors moving simultaneously, it is difficult for the markets to lean in one direction." Donald Trump warned on Wednesday that he would escalate a global war of trade by imposing further tariffs on European Union products, while major U.S. trade partners announced they would retaliate against trade barriers already put in place by the U.S. President. Trump's focus on tariffs has shaken investors, consumers, and business confidence in the U.S. and raised recession fears. The Organization of the Petroleum Exporting Countries (OPEC) said that Kazakhstan was the leader in the OPEC+ group for a significant increase in crude production in February. This highlights the difficulty the producer group faces in enforcing adherence of agreed output targets. JP Morgan analysts noted that concerns about the sluggish demand for jet fuel weighed on markets. They also pointed out that U.S. Transportation Security Administration (TSA) data revealed passenger numbers in March had decreased by 5% compared to last year, after a stagnant February. The overall market was not as weak as expected due to the strong demand outlook. Analysts at JP Morgan said that the strong demand from the U.S. and Ukraine's 377 drones that targeted Russian energy infrastructures and military installations helped to support prices. They added that "as of March 11th, global oil demand averaged 102 million barrels a day. This is an increase of 1.7 million barrels compared to last year and exceeds our projection for the month."
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Singapore iron ore prices rise as China's demand remains resilient in the near term
Singapore iron ore contracts rebounded Thursday due to a wave short-covering, as the near-term Chinese demand remained resilient. However, concerns about the global trade war limited the upward trend. As of 0325 GMT, the benchmark April iron ore traded on Singapore Exchange was trading at $101.5 per metric ton. The iron ore market is essentially moving between $95-$110 per ton. Every time they drop below $100, the short-covering activity will soon kick in, said a Beijing-based trader, who requested anonymity because he was not authorized to speak to the media. In the short-term, the hot metal production is still recovering. Therefore, it's unlikely that we will see a dramatic fall in prices, although the downward pressure on prices will be stronger in the second half. Analysts at Hongyuan Futures stated in a report that hot metal production, which is typically used to gauge demand for iron ore, will increase in March, due to the attractive steel margins. However, the most traded May iron ore contract at China's Dalian Commodity Exchange closed morning trade 0.13% higher than its previous closing price of 775.5 Yuan ($107.18). Prices for the main steelmaking ingredient fell on Wednesday, as the market's mood was dampened by the renewed talk of China's plans to reduce crude steel production to combat the oversupply problems plaguing the industry. The National Development and Reform Commission of China, the state planner in China, did not reply to a request for comment. Coking coal and coke, which are used to make steel, also advanced on the DCE. They rose by 1.59% and 1.14 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have gained ground. Rebar rose by 0.71%. Hot-rolled coil gained 0.89%. Wire rod increased 0.7%. Stainless steel edged up 0.33%.
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Zinc at a 7-week high due to Nyrstar's production cut; metals are down on concerns about tariffs
London metals were mostly lower on Thursday, despite aggressive Trump tariffs. Zinc surged to more than a seven-week high after Nyrstar cut production in Australia. The U.S. president Donald Trump slammed Canada on Tuesday for its retaliation to his previous tariffs. He doubled the import duty for Canadian steel and aluminium, and kept rates at 25% for all other nations, and removed prior exemptions, exclusions, and quotas. As of 0341 GMT, the price for three-month zinc at the London Metal Exchange increased by 0.3% to $2932 per metric ton. The price of zinc reached a seven-week high earlier in the session, after Nyrstar announced on Wednesday that it would be cutting 25% from its Hobart Zinc operations in Australia starting in April. The company, owned by commodity traders Trafigura, said that its Australian assets are still facing significant financial challenges because of the worsening market conditions for raw materials, increased costs and negative treatment charges. In an email, Nyrstar said that the zinc smelter at Hobart is one of the largest in the world. It has a capacity of 260,000 metric tonnes per year. The company did not provide the most recent output figures. LME copper rose 0.1%, to $9,777 per ton. LME aluminium fell 0.2%, to $2698.5 per ton. Lead dropped 0.1%, to $2080. Tin eased by 0.1%, to $33,400. Nickel was down by 0.9%, to $16,495. The price of SHFE copper increased by 0.8%, to 79.490 yuan. (This is $10,892.44) A metric ton. SHFE aluminium, however, was unchanged at 20,930. $1 = 7.2307 Chinese Yuan Renminbi (Reporting and editing by Sumana Niddy and Janane Venkatraman).
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All Gas from Conrad’s Mako Field to be Sold to Indonesia’s PLN
The Indonesian Ministry of Energy and Mineral Resources (MEMR) has issued a directive to Conrad Asia Energy, the operator of the Mako Gas field offshore Indonesia, stating that all gas produced from the field would be sold to state-owned PT PLN Energi Primer Indonesia (PLN) due to strong domestic demand for gas in Indonesia.As a result of the MEMR directive, Conrad is working to finalize a Gas Sales Agreement (GSA) with PLN, which is a subsidiary of Indonesian state-owned electric utility company PT Perusahaan Listrik Negara (Persero).The Mako Joint Venture partners include Conrad with 76.5% operating stake, Coro Energy with 15% working interest, and Empyrean Energy with 8.5%.The Mako gas price will be linked to the Indonesian Crude Price (ICP), which is akin to Brent oil-linked liquified natural gas (LNG) pricing. This structure will be economically equivalent to the pricing previously approved for Mako gas to be sold both domestically and for export, thereby underpinning the value of gas from Mako.“With a new government in Indonesia committed to providing gas powered electricity under its New Energy Plan, directing Mako Gas for the domestic market makes strategic sense. Empyrean is encouraged that this new development will lead to further short-term momentum for the Mako Gas Field and Duyung PSC,” said Tom Kelly, Empyrean’s CEO.As part of the Mako project, Conrad has announced that it understands that MEMR will direct PLN to build the required approximately 7 km gas spurline with an investment value of approximately $50 million to link the West Natuna Transportation System (WNTS) with Pemping Island and subsequently to markets in Batam.The building of the pipeline and anticipated significant growth in gas demand, provides a spur to future exploration of the Duyung PSC Prospective Resources and gives a ready means to commercialize additional gas volumes.Natural gas is an essential transition fuel in the energy mix across Asia and the sale of all Mako's contingent resources gas resources represents an important project inThe new Government of Indonesia is formulating its New Energy Plan 2024-2034 under which it will prioritize gas exploration and production to meet rapidly rising domestic energy demand.Around 15 GW of gas power capacity across Indonesia is planned to be built until 2034, especially to support the base load capacity.The MEMR directive is anticipated to support potential farmout arrangements in Duyung and Financial Investment Decision (FID) for Mako.
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US agency reduces its estimate of Vietnam’s rare earth reserves by a major amount
The U.S. Geological Survey revised down its estimate for Vietnam's rare-earth reserves from 22 million to 3.5 millions metric tons. If confirmed, this could have an impact on the country's ambitions of becoming a rare-earths powerhouse. Rare earths have multiple applications, including in electric vehicles, autobatteries and renewables. They are also used in electronic and military product. In a report published in January, the revision has dropped Vietnam to sixth place on the USGS list of the countries with the biggest reserves, behind China, Brazil and India. Australia, Australia, Russia, and Australia are also included. USGS stated in an email that the updates to the 2025 Mineral Commodity Summaries of Vietnam are based on revised data, new information, and government reports. In recent years, the government has cited its rare earth reserves as an advantage for future technology development. However, mass production has yet to commence. According to a USGS report, Vietnam only extracted 300 tons of rare-earth oxide equivalents last year. This is a flat rate from the year before. Hanoi's relations with Washington reached their highest diplomatic status in 2023 as the U.S. signed deals with Vietnam for semiconductors and essential minerals. When Nguyen Hong Dien, the trade minister of Vietnam, meets with trade and energy officials in the U.S. during his trip this week.
After board shakeup, Couche-Tard launches charm offensive against Japan's Seven & i
Alimentation Couche-Tard wants to convince the Japanese people to accept its $47 billion offer for Seven & i. It also wants to address the antitrust concerns which have become a major stumbling-block in its bid to purchase the 7-Eleven owners.
Canada's Couche-Tard which owns Circle-K has been pursuing Seven & i since months despite the cold reception it received from the Japanese retailer. If the deal goes through, this would be the largest foreign acquisition in Japan's history.
On Thursday, executives from Couche-Tard held their first press conference at Tokyo. This was months after announcing a takeover bid for Seven & i. They also highlighted the Canadian firm's recent efforts to woo a Japanese audience sceptical about a foreign acquisition.
Artisan Partners, a U.S.-based shareholder, has repeatedly urged the Japanese company, Seven & i, to be more active in its engagement with Couche-Tard.
Seven & i repeatedly stated that possible antitrust issues in the United States could make the proposed acquisition difficult.
Couche-Tard stated this week that it is confident there is a "clear pathway" to overcome regulatory hurdles in the U.S. and expressed frustration over 7-Eleven's "limited involvement."
Couche-Tard said that it was working with Seven & i to develop a plan for divesting some of its stores in the United States.
Stephen Dacus, the newly appointed CEO of Seven & i, has stated that there are significant regulatory obstacles in the way. Both firms have about 20,000 convenience stores between them.
Couche-Tard is offering to pay $18.19 for each share of Seven & i. This represents a 23% premium on the Japanese company’s Thursday share price, which was 2,196 yen (about $14.82).
Anti-Trust Issues
The trip of Couche-Tard's management to Tokyo, and its engagement with Seven & i regarding antitrust concerns, show the extent to which dealmakers will go to secure deal certainty in the face of U.S. regulator scrutiny.
Deal advisers say it is rare for transactions to engage in detailed discussions about divestment before a deal has been agreed upon or a confidentiality agreement signed.
Kathy O'Neill is a partner with the law firm Fried Frank. She said, "I have never seen a situation where the divestiture package was set in stone before the merger agreement was executed and the buyer baked into it."
She said that preparing a divestiture plan before the merger agreement is reached could help reduce the chance of surprise, and save time and energy spent on chasing down a deal.
Tim Cornell, a litigation associate and member of Debevoise & Plimpton’s Antitrust Group agreed that the airing antitrust concerns prior to a deal being announced was not normal.
He said that buyers would test the waters in certain situations with regard to a divestiture plan, especially if they have identified this as what's needed. Couche-Tard sweetened their offer in October, and said they were committed to the deal after a competing $58 Billion management buyout proposal by Seven & i’s founding family did not materialise. (Reporting and writing by Abigail Summerville and Anton Bridge, respectively; editing by Sumeet chatterjee and Jamie Freed).
(source: Reuters)