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Andy Home: Crisis in Europe is a hindrance to future metals strategies for Europe
The European Commission identified 47 strategic project which it hopes will kickstart the critical minerals sector in the region and reduce its dependency on imports from China, especially. Even as European policymakers strive to create a future industrial base for the region, they face a crisis within its existing metals industry. The long-term decline in European steel and aluminum production has been accelerated by Chinese overcapacity, and high energy costs. However, the latest threat comes from the United States. The tariffs imposed by President Donald Trump, in particular the higher tariff on aluminum imports, could lead to a metal flood into Europe. Europe's response will be equally protectionist and lead to further fracturing in global trade patterns. BUILDING FOR FUTURE Europe's strategic project qualify for fast-track progress through the permitting phase - maximum 27 months in case of mine projects, and 15 months in case of processing projects. They also have access to both European and national funding. List is heavily geared towards battery inputs like lithium, cobalt and nickel, but includes other elements as well, such as germanium, gallium and tungsten. The list includes 14 of the 17 metals listed on the EU’s strategic metals. The projects in 13 states span the entire supply chain, from mining and processing to recycling to materials substitution. The EU should be able to meet its domestic production benchmarks of cobalt, lithium and nickel by 2030 and make "substantial" progress with other battery materials like manganese, graphite, and manganese. METLEN’s project in Greece, which covers the needs of the region by 2028, will be able to meet the current Chinese export restrictions on gallium. More is to come. The European Commission has received 46 requests for projects outside the EU. The European Commission said that a decision regarding the selection of these projects would be made at a future stage. CURRENT CRISIS The European ambitions to develop new energy metals are in stark contrast with the problems that Europe's traditional metals sector faces. The EU's steel production has fallen from 160 million tons in 2017 down to 126 millions in 2023. The Commission has stated that the current steel capacity utilization of around 65% was unsustainable. Around half of the remaining capacity has been idled in the region since 2021. In its "Action Plan", the Commission identifies that high power costs are a major problem for their industrial metals base. The power prices soared in 2022 following Russia's invasion in Ukraine. Although they have since dropped, they are still higher than their historical levels and far above those in the United States. There are a number of proposed solutions, from improving the efficiency of the network to facilitating longer-term contracts for power supply. The short-term goal is to "use all of the flexibility (of the state aid rules) in order to reduce costs for energy intensive industries." Tariff Turbulence Metal diverted from America washing up in Europe has prompted a focus on ways to stop further contractions in Europe's nonferrous and steel metals sector. According to the Executive Vice-President of the European Commission Stephane Sejourne, tighter steel import quotas may come as early as next month. The Commission is considering a "melted and poured rule" that would allow it to take action directly against the original metal producer, rather than the third-party converter. The Commission is preparing to implement some kind of safeguard measure in order to prepare for the plans for import restrictions. Many struggling operators are in a race against the clock. Paul Voss has called for "immediate and targeted interventions to stabilize the sector immediately." One of these interventions would be to stop the flow of recyclable material out of Europe. SCRAP WARS The U.S. 25% tariff on aluminum imports has been described as "without exemptions or exceptions", but it does not apply to scrap. The EU was already on course to export 1.3 million tonnes of aluminium scrap last year. This figure will likely rise as more scrap material is sent to the United States where it can be remelted into aluminum products, and the processors are able to pocket the premium. The threat of U.S. tariffs on copper is already causing European copper recycling companies to worry that more units are being sent to the United States, along with refined metal. The Commission promises to propose appropriate trade measures by the third quarter this year to ensure that more scrap remains in the EU. This will include reciprocal actions against both countries that impose metals tariffs as well as those who currently block the export of scrap. Geopolitics have not affected global scrap trading much, but this is about to change. SENSE OF URGENCY When it comes to critical metals, the European Union is catching up with the United States. The 27-member bloc does not have the same presidential powers as the Joe Biden or Trump administrations. The combination of metals action plans and strategic projects shows that the European Commission is aware of the importance of building for the future while protecting what they already have. As both corporations and lobby groups are quick to note, words must be followed by actions. To quote Voss, European Aluminium: "Strategy will not keep our operation running." These are the opinions of the columnist, an author for.
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Oil markets are waiting to see if Trump’s Russian oil tariff threats is a bluff
The oil markets shrugged Monday off the threat of U.S. president Donald Trump to impose tariffs on Russian oil buyers as the shock factor of the White House's barrage of threats begins to wear out with jaded traders. Analysts and traders have questioned the seriousness of Trump's proposal. Warren Patterson, ING's director of commodities strategy, said that the U.S. government's announcements on tariffs and other sanctions have a tired feel. He said that the market would not overreact until he could provide more concrete information. The price of oil fell on Monday. Brent crude futures, the most active, were down 0.3% to $72.55 per barrel at 0710 GMT. U.S. West Texas intermediate crude was also down by 0.4% to $69.09 per barrel. China and India are two of the largest buyers of Russian crude oil. Their consent would be essential to any secondary sanctions package that could seriously harm the exports of the world's number two oil exporter. India became the largest buyer of Russian crude oil after the Russian invasion of Ukraine. This accounted for 35% of India’s total crude imports by 2024. India's oil minister said in February that the country's refiners will buy Russian oil from companies and ships that are not sanctioned. This effectively reduces the number of vessels and cargoes available. Reports indicate that Chinese state-owned oil companies are avoiding Russian oil. Sinopec, Zhenhua Oil and two others have stopped purchasing it, while the other two have reduced their volumes due to renewed U.S. sanction. On Monday morning, however, several Chinese traders stated that they were not fazed at all by the new threat. All three people who spoke to said that Trump's propensity for brinksmanship made them discount what he said. One trader said, "No price response yet but the market is still bullish due to all the uncertainty in supply." It's difficult to predict the impact as Trump always bluffs. In response to a query about tariffs, the Ministry of Foreign Affairs of China said that its cooperation with Russia was neither directed by nor affected in any way by third parties. Analysts said that if the tariffs were to become a serious threat to the markets, they would focus on how strict the policy was to be implemented and if the Organization of Petroleum Exporting Countries (OPEC) would increase production to compensate for any decrease in Russian exports. Patterson said that the secondary sanctions on Venezuelan oil imposed last week can be used as a template for assessing the impact of similar policies against Russia. Chinese buyers had already stopped purchases before the sanctions took effect on Wednesday. Analysts and traders expect that some sales will resume, as buyers come up with workarounds until Beijing issues a blanket prohibition.
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Iron ore falls due to China demand concerns
Iron ore futures fell on Monday due to concerns about demand prospects in China, the top consumer, after steelmakers reduced production, reducing ore's need. At 0700GMT, the most traded May iron ore contract at China's Dalian Commodity Exchange fell by 1.47% and closed Asia afternoon trading at 773 Yuan ($106.59). Beijing has announced that it will reduce steel production due to an overcapacity. Although there has not been an official announcement yet, some steelmakers reduced their production to prepare for the official announcement. This helped reduce demand for iron ore. Prices are also being impacted by concerns over the demand outlook, which have been intensified by a global trade conflict sparked by new U.S. Tariffs. Coking coal and coke, which are both used in steelmaking, also suffered losses of 3.42% and 2.19 %, respectively. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell 1.03%, while hot-rolled coils dropped 0.79%, and wire rod was down 0.79%. Stainless steel also lost 0.85%. Singapore Exchange will be closed for the public holiday on Monday. $1 = 7.2521 Chinese Yuan Renminbi (Reporting and editing by Violet Li, Mei Mei Chu)
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Repsol will be protected by the government, says Spain's foreign minister
Spanish Foreign Minister Jose Manuel Albares announced on Monday that his government will defend the interests the Spanish oil company Repsol, after sources close to U.S. president Donald Trump claimed his government would revoke licenses granted to oil firms operating in Venezuela. Albares told Tele 5 that he had spoken to the CEO of Repsol and they were discussing and analysing their decision. He said: "We shouldn't rush until we have all the information about this decision. We need to know what it means, how it will affect us and the room for dialogue that exists in order to resolve the issue. Maurel et Prom, a French oil company, and Eni, an Italian one from Italy said that they received notification from the U.S. Government on the weekend that their respective licenses for operating in Venezuela had been revoked. Former President Joe Biden’s administration granted individual companies authorizations in recent years to procure Venezuelan oil from refineries located anywhere between Spain and India, as an exception to the U.S. sanctions regime against the South American nation. Sources close to the decision said that Trump's administration informed the companies last week it would revoke the authorisations. Reliance Industries in India and U.S. Global Oil Terminals are also among the companies who have received comfort letters and licenses from Washington. Global Oil Terminals. Reporting by Inti landauro, Editing by Alison Williams, and Ros Russell
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South African rand gains as gold reaches new peak
The rand of South Africa strengthened on Monday as the gold price reached a new high and the optimism about a budget agreement between the country's two largest partners grew. At 0728 GMT the rand was trading at 18,2375 per dollar, up 1.1% from its previous close. The rand's value fluctuated last week due to deadlock in budget negotiations, and concerns over U.S. president Donald Trump's proposed tariffs. The gold price reached a record high on Monday, as investors worried about a trade war around the globe and slowed economic growth in the world's largest economy turned to the safe haven asset. South Africa is one of the world's major producers of precious metals. This week, the focus will be on the African National Congress and Democratic Alliance. News24, a local news website, reported Monday that both parties were nearing a deal to pass the national budget. BusinessDay, however, reported that the talks are still in a deadlock. The Top-40 Index on the stock market was down by about 0.5% last. Early deals showed that the benchmark South Africa 2030 government bond yield was lower by 9.5 basis points, to 9.06%. (Reporting and editing by Bhargavacharya, Philippa Fletcher and Sfundo parakozov)
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Cal Fire warns of evacuations in the eastern part of California due to a growing wildfire
Cal Fire, the California Department of Forestry and Fire Protection said that a rapidly growing wildfire in California’s Eastern Sierra region has burned 1,000 acres and forced evacuations across multiple counties. Cal Fire reported that the Silver Fire, which erupted around 2:11 pm PT Sunday near Highway 6 & Silver Canyon Road, was still at zero percent containment. Cal Fire said that evacuation orders had been issued for a number of communities including Laws, in Inyo County; Chalfant, in Mono County; and White Mountain Estates. Also, a 30-mile stretch along U.S. Highway 6 has been closed. No immediate reports of structural damage or injuries have been made. Cal Fire says that the cause of this fire is still under investigation. Cal Fire posted a Facebook post late Sunday stating that more than 200 firefighters were fighting the fire. However, gusts of up to 35 miles per hours at Bishop Airport grounded several firefighting planes and complicated containment attempts. The National Weather Service forecasts southwest winds up to 65 mph with gusts of up to 25 mph for Monday in the region. Los Angeles, the largest city in California, suffered its worst fires ever earlier this year. The fires killed 28 people, damaged or destroyed more than 16,000 buildings, and caused extensive damage.
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KKR is the frontrunner for equity raise by UK's Thames Water
Thames Water has named U.S. Investment firm KKR the leading candidate to invest in new equity and help Britain's largest water provider avoid a government rescue. Thames Water, the poster child of Britain's broken-down water sector, has been fighting against financial collapse for over a year. It needs to raise 3 billion pounds ($3.9 million) in new equity, and restructure debt if it wants to survive past 2026. The company stated that KKR's offer included financial metrics which indicated "a material impairment" in senior debt. Discussions were still ongoing between the two parties and there was no guarantee a deal would happen. KKR was the preferred bidder among the six bidders that Thames Water said were interested at the end of March. Thames Water stated that the timetable for this deal is to reach agreement by the end of the second quarter, and complete the deal in 2025's second half. Three days earlier, Thames Water had announced that Alastair Cchran as chief financial officer was to be replaced. Leaving abruptly . The company stated that it was focusing on financial stability. The statement from Monday stated that "the company remains focused on putting Thames Water onto a more solid financial foundation, implementing the turnaround plan, and delivering a solution led by the market which is in the interests of the customers, UK tax payers, and the wider economic environment." The company said that some senior creditors were working on "alternative transactions structures" in parallel for the recapitalisation. Reporting by Sarah Young, Yamini Kalya and James Daverry in Bengaluru. Editing by Sherry Jabr-Phillips.
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Japan megaquake estimates could kill 300,000 and cause damage of $1.8 trillion
A government report on Monday said that Japan's economy may suffer a loss of up to $1.81 trillion if a megaquake, long anticipated off its Pacific Coast, occurs. This could cause devastating tsunamis and the collapse of hundreds or buildings, as well as the death of 300,000 people. Cabinet Office's report shows that the expected economic damages of 270.3 trillion Japanese yen or nearly half the country's gross domestic product (GDP) are up from the previous estimate which was 214.2 trillion. The new estimate took into account inflationary pressures as well as updated terrain and ground information, which has expanded the anticipated flood zones. The government predicts that there is an 80% probability of a large earthquake of magnitude 8-9 along the Nankai Trough, a zone of unstable seabed. In the worst case scenario, based upon a possible magnitude 9 earthquake, Japan will likely see 1,23 million evacuees, or 10% of its population. The report said that as many as 298,000 people may die from the tsunami and collapse of buildings if an earthquake occurs at night during winter. The trough runs approximately 900 km (625 miles) off the southwest coast of Japan, where the Philippine Sea Plate subducts under the Eurasian Plate. The accumulation of tectonic forces could lead to a massive earthquake roughly every 100-150 years. After a magnitude 7.1 quake at the edge, Japan issued the first ever megaquake warning last year. More than 15 000 people were killed by a magnitude 9 earthquake in 2011, which triggered a tsunami that was devastating and triple meltdowns of reactors at a nuclear plant in the northeastern part of Japan. ($1 = 149.0500 Japanese yen)
French and Benelux stocks: Factors to watch
Here are some company news and stories that could impact the markets in France and Benelux or even individual stocks.
EXMAR:
Exmar reported on Thursday a decline in FY IFRS revenues to $348.9 millions but an increase in IFRS EBITDA at $204.7 million. It will not be proposing a dividend in 2024.
FLUXYS:
Fluxys announced on Thursday that FY revenues and EBIT had increased to 608.8 millions euros ($657.0) and 133.9million euros, respectively. It proposes to pay a EUR 1.4 dividend per share.
HAL TRUST
HAL Trust reported that its NAV will increase by 2,20 billion euros in 2024 to 15,50 billion euros. The holding's net income for the FY was 1,21 billion euro, the company said.
UBISOFT:
Pan-European market data: European Equities speed guide................... FTSE Eurotop 300 index.............................. DJ STOXX index................................................................................ Top 10 STOXX sectors................................................ Top 10 EUROSTOXX sectors................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ Top 25 European pct gainers................................................................................................................................................................................................................. Main stock markets: Dow Jones. Pan-European market data: European Equities speed guide................... FTSE Eurotop 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurotop 300 sectors..................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt items......... CAC-40................. Paris items............ World Indices..................................... survey of world bourse outlook......... European Asset Allocation........................ News at a glance: Top News............. Equities.............. Main oil report........... Main currency report..... ($1 = 0.9266 euros)
(source: Reuters)