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Dollar and stocks are both on the rise this week as a result of hints about tariff relief
Investors focused on signs that the U.S., China and other countries were ready to end their trade war. The dollar rose for the first time in over a month. U.S. Futures are also rising after Alphabet, the parent company of Google and tech giant Alphabet, beat profit expectations. It also reaffirmed AI expenditure targets. This pushed its shares up by nearly 5% after-hours and pulled along other peers. European futures increased by 0.6%, while FTSE Futures were up by 0.2%. Overnight, Wall Street investors brushed aside mixed corporate results. The S&P 500 increased by 2%. The dollar has been beaten by a series of volatile events, including tariff announcements and reversals, and the flight of assets out of the United States. It is now trading at around $1.1330 to a euro and 143.6 Japaneseyen. Eli Lee, Chief Investment Strategist at Bank of Singapore said that the peak of tariff threats is likely to be behind us. Both sides have stated that they will not increase rates above current levels. The tit-for-tat tariffs, which began on April 2, when U.S. president Donald Trump announced hefty import duties, had threatened to stall the trade between two of the world's largest economies. They also prompted concerns about a possible slowdown in growth. The U.S. changed its tone this week and declared that the current situation is unsustainable. China, meanwhile, may exempt some U.S. imported goods from the 125% tariffs, in what could be the most significant sign of Beijing's concern about the potential economic consequences. UNEASY CALM Hong Kong's Hang Seng index rose 1%, and mainland China’s Shanghai Composite Index and blue-chip CSI300 also saw small gains. The Nikkei 225 index rose 1.8% in Japan on Friday. It has recovered all of its losses following Trump's announcement that the United States would be imposing the highest tariffs it had ever seen. Trump suspended most of these tariffs, with the exception of China, which will have a 10% tariff. In a client note, ING currency analyst Francesco Pesole said that there is a sense among market participants that they can now impose a more favourable stance from the U.S. Government. Investors will seek confirmation of a more optimistic view on U.S. Assets to justify further dollar gains. The U.S. Dollar Index was up 0.5% this week to 99.751. The markets in Australia and New Zealand closed due to a public holiday. The markets were not as calm on the surface. Procter & Gamble cut their forecasts or canceled them due to the increased uncertainty of consumers. Colgate-Palmolive will report earnings before the U.S. opens on Friday. After the close of Asia, BYD in China and Ping An in Japan are also expected to announce their earnings. Gold was steady at $3,349 per ounce, and analysts from Phillip Securities in Singapore noted that the Gold/S&P500 ratio, which is a measure of investor's gloom, had reached its highest level since the bear market driven by the pandemic of 2020. The 10-year yields remained at 4.30%, easing the pressure on the U.S. Treasury Market. It was heavily sold as Trump's tariffs rattled confidence in U.S. assets and leadership. After a Tokyo inflation rate that was higher than expected, Japanese yields increased along the curve.
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What next as China approaches peak aluminum production? Andy Home
China's aluminum production is approaching its capacity limit. From just four million tons in 2004, massive investment in primary metals melting capacity has boosted Chinese production from only four million to 43 million tons by 2024. This is 60% of global output. The West has increasingly resisted China's increasing dominance in the global aluminum supply chain, first through trade complaints and antidumping duties, and then more recently with U.S. Tariffs. China's semi-fabricated aluminum exports, which increased by 19% last year to a record of 6.2 million tonnes, were not affected. Things are about to get better. The world is about to change. Beijing's "Action Plan" on aluminium for 2025-2027 confirms that the cap will remain in place, and outlines a plan for what comes next. TOUCHING the ceiling According to the International Aluminium Institute, China's primary aluminum production increased by 2.6% on an annual basis in the first quarter 2025. The average annualised production was 44 million tonnes between January and March, only a million ton short of the cap of 45 million tons set in 2017. According to consultancy AZ Global, it is technically possible that the country's production could exceed the cap. The capacity of a smelter is measured by the amperage designed for the electrolysis process. "One of the first tasks of any plant manager will be to push the output above the rate," the article says. The smelter can produce more than its capacity by increasing the amperage. AZ China estimates China's capacity utilisation at 98.2%. This leaves little room for collective amperage to increase. China's average annual growth rate of 4.0% over the past five years is beginning to slow down. Going Green Chinese operators continue to build new smelters. However, the new capacity will have to be offset by closing older capacity. Beijing's policies in this sector focus on removing less-efficient capacity and ensuring that newer smelters use renewable energy sources. Aluminium production is moving from coal-rich regions to new energy hubs such as Yunnan, with its hydropower and Inner Mongolia which has a massive wind and solar power potential. The goal is to produce a greater amount of low-carbon metal. The action plan also calls for 30% of the national smelter's power to be generated by renewable energy by 2027. Beijing wants to boost production by recycling scrap to reach a target of 15 million tons annually in 2027. Reduced Exports A second offset is already in effect. In December, the government eliminated tax rebates of 13% for exports of aluminum products. This was done to keep more metal on the domestic market. Exports have slowed down sharply since then, with volumes outbound falling by 11% on an annual basis in January and Febraury. Analysts at Macquarie Bank predict that exports will fall by 8% between 2025 and 2030. A more dramatic collapse is unlikely, as the world outside China relies heavily on its products for around 15% of the total demand. Most Western buyers are likely to accept at least a part of the cost increase. It is possible that Chinese aluminum exports have reached their peak. REPRIEVE FOR WESTERN GENERALISERS? Combining a slowdown in Chinese production growth with reduced exports opens up a window for the rest the world's primary aluminum producers. Nearly a million tonnes of smelting capacity in the United States is idle. The 25% tariffs on aluminum imports imposed by President Donald Trump are meant to encourage restarts. After the surge in power prices that followed Russia’s invasion of Ukraine, 2022, around half of Europe's primary smelting capacities are out of operation. Although the structural changes implemented by the largest producer in the world may provide a reprieve for such plants, restarting idled capacities is also a matter of aluminium and electricity prices. After years of low investments, there is renewed interest in greenfield smelters being built in the West. Century Aluminum, a U.S.-based producer, has received $500m in government funding for a project that will launch the United States' first new smelter since 1945. Rio Tinto has been studying low-carbon projects for smelters in Finland and India. But the Chinese dominance will remain Due to a lack of expansion opportunities in China, Chinese producers also look overseas. Beijing's aluminum action plan calls on deeper cooperation with resource rich nations like Guinea, where Chinalco has a project in place to convert Guinea's bauxite into alumina. Shandong Nanshan Aluminium, which produces alumina in Indonesia, plans to expand their refining capacities and add a smelter that can produce 260,000 tons of alumina per year. China has stopped building its own capacity, but it appears that they have no plans to loosen their grip on a material classified by the United States as well as the European Union as a vital raw material. These are the opinions of the columnist, an author for.
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Holcim exceeds expectations for the first quarter ahead of Amrize's spin-off
Holcim, a Swiss construction materials manufacturer, reported a better-than expected first-quarter result on Friday in its final results before Amrize's spin-off from its North American operations. Holcim reported a recurring operating loss of 515 million Swiss Francs ($619m) for the quarter ended March 31. This was higher than the consensus estimate of 494 million Swiss Francs. Sales were stable at 5,54 billion francs compared to forecasts of 5.49 billion. In a press release, CEO Miljan Gutovic stated that "our disciplined M&A implementation continued with five acquisitions of value-adding companies." These transactions will strengthen the aggregates and ready mix businesses in Europe and North America and our specialty building solution in Latin America. Holcim plans to sell 100% of Amrize back to its shareholders. The separation is expected to be complete in June. The spin-off will be one of largest deals in global construction, initially targeting a valuation of $30 billion when announced in January 2024. Amrize plans to list on the New York Stock Exchange, the SIX Swiss Exchange, and the New York Stock Exchange. Last month, the company announced its post-split strategies. It stated that it aimed to achieve an average annual increase in earnings before taxes and interest of between 6% and 10% by 2030. The focus will be on Europe, Australia and North Africa as well as Latin America. Holcim, whose 2024 net sales were 16.3 billion Swiss francs, excluding North America would have an estimated total capital deployment capacity between 2025 and 2030 of 18-22 billion Swiss francs, according to the company. The cash will be used for large acquisitions as well as share buybacks. $1 = 0.8317 Swiss Francs (Reporting and editing by Kim Coghill, Varun H. K. and Ariane L.)
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Under supply pressure, oil prices are expected to drop weekly.
The market is headed for a decline this week due to concerns over the supply of oil. Brent crude futures rose 43 cents, to $66.98 per barrel at 0433 GMT. They are on course to drop 1.4% this week. U.S. West Texas Intermediate crude (WTI), which is also known as WTI, rose 42 cents a barrel to $63.21, but it was expected to fall 2.3% this week. Anh Pham, senior analyst at LSEG, said, "Oil prices are up today as the market reacts to signs that tensions have eased around Trump's Tariffs and a possible shift in Fed policy stance. This has contributed to a broader recovery of the market." The weekly price trend is down, but the outlook for demand remains uncertain due to ongoing trade tensions. "A stronger U.S. Dollar has also added to the pressure on crude prices," he said. Donald Trump, President of the United States On Thursday, the U.S. claimed that trade discussions between China and the U.S. were in progress. This was in response to Chinese claims that there had been no talks. China is considering Exemption Beijing has asked businesses to submit a list of eligible goods and some U.S. exports that are exempt from the 125% tariff. This is the most significant sign yet of Beijing’s concern about the economic impact of the trade war. Trump increased tariffs on Chinese products after Trump's announcement. The oil prices fell earlier this month as a result of the tariffs, which sparked concerns about global demand. The fear of an excess supply is growing. Earlier this week, it was reported that several OPEC+ member countries had suggested that the group increase oil production for a second consecutive month in June. In an interview with CBS News, Russian Foreign minister Sergey Lavrov stated that the United States and Russia were moving in the right directions to end the conflict in Ukraine. However, some specific aspects of a deal still need to be agreed. The easing of sanctions and a halt to Russia’s war in Ukraine could enable more Russian oil to reach global markets. Russia is a member of the OPEC+, which includes the Organization of the Petroleum Exporting Countries. It is also one of the largest oil producers in the world, along with the U.S. Abbas Araqchi, the Iranian foreign minister, said he would be willing to travel to Europe to discuss Tehran's nuclear program. The lifting of sanctions against Iranian oil exports is likely to be the result of successful talks with Europe and America. Iran is OPEC's third largest oil producer, behind Saudi Arabia and Iraq.
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Some European companies question US expansion amid tariff chaos
The erratic tariff policy of U.S. president Donald Trump is making some European smaller companies question whether they should expand into the U.S. Trump wants to encourage foreign companies to invest in the United States by imposing levies on steel, cognac, cars, and sandals. This will lead to new factories being built and thousands of American jobs. The announcements of rollbacks, exemptions, and other changes have made some smaller companies hesitant to commit. EuroGroup Laminations, an Italian company, pays no import duties on the rotors, stators, and other components it provides to U.S. automakers, such as Ford and GM. These products are produced in Mexico and comply with current import regulations. Marco Arduini, CEO of the company, said that even if the company had to move production to the U.S., it would be subject to tariffs on the type of steel it uses for its automotive parts. He said that avoiding potential U.S. Tariffs would not compensate for the extra costs or low availability of steel. U.S. Labour costs are also a concern, as they can be up to six-times higher in Mexico. Due to the current situation, including the possibility that tariffs could trigger a U.S. economic recession, ebm papst - a German motor and fan manufacturer - has put plans on hold to build a new U.S. facility or to expand an existing U.S. site. Klaus Geissdoerfer, CEO of the company, said that if there were an economic downturn on American soil, it could affect demand in a different way. Many economies are built on the strength of small and medium-sized businesses (SMEs), including Italy and Germany. Both countries are members of the European Union and major exporters into the United States. They may be able to react more quickly to new trade risks than larger companies because they have smaller financial cushions than their blue-chip counterparts. Marc Tenbieg is the head of DMB, the association representing Germany's SMEs. DMB said in separate comments that a few SMEs are currently re-evaluating their U.S. business as a result Trump's policies. Andrew Adair said that some member companies of the German engineering association VDMA have delayed purchases. He made the statement following a visit to the United States in early this month. He said that the industry appeared to be on pause at the moment. Trump, after weeks of threats announced a series on broad tariffs for goods imported into the United States by most other countries on April 2. The tariffs included a 20% on EU imports, which was then lowered to 10% as part of what Trump called a "90-day pause" following the selloff in U.S. stocks. Trump's statements that other countries "screwed" the U.S. over the years, reflecting his anger at U.S. Trade Deficits including one of 235.6 billion dollars with the 27-nation EU, have also raised the temperature in the diplomatic and political arena. LAPP in Germany, which produces everything from wires and cables to robotics for factory, has maintained its plans to double the production capacity at their New Jersey site by 2025. Matthias Lapp, CEO of Lapp & Co., said: "As a business family, we plan on the long-term, not just for elections." Tariffs have the potential to affect demand and inflation in the United States. RBC Capital estimates that imports account for 10% of U.S. consumer spending and that "it will be relatively difficult for consumers" to switch away from imported products. The consultancy AlixPartners believes that the average U.S. household's discretionary spending in a post tariff world will drop by more than 10 percent to $27,000. They recommend companies adopt a pause and monitor approach. Eurostat data show that in each of the past three years the EU exported an average of more than 500 billion euro of goods to the U.S. These were mostly pharmaceuticals and vehicles, but also machinery. Trump's primary targets are the steel, auto and car makers in the EU. The U.S. is still the EU's largest trading partner. However, the new tariffs have prompted some political resistance against taking on more exposure. French President Emmanuel Macron has asked European firms to temporarily suspend their planned investments. Industry groups urge European companies to instead focus on other foreign markets, such as India and Latin America. Sebastian Zank is the head of Scope's corporates rating production. He said, "We have seen how quickly things can change." Everyone will remain seated until the picture that emerges can be described as "sustainable."
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Japan creates an emergency economic package to ease the tariff pain
Shigeru Ishiba, Japan's prime minister, said on Friday that the government had compiled a package of emergency economic measures to mitigate any impact the new tariffs imposed by the United States on the Japanese economy and household. A government document revealed that the package included support for corporate finance as well as subsidies for lower gasoline prices of 10 yen per litre ($0.07) and partial coverage for electricity bills for three month starting in July. A broader range of companies will be eligible to receive low-interest loans from government-backed banks. Ishiba told a meeting of the tariff task force that he had instructed his cabinet members to do their utmost to help firms and households who were worried about tariff impacts. He said that tariffs could have an impact on industries such as steel and automobiles, which are important to the economy. The government will examine additional measures to boost the domestic consumption depending on how U.S. Tariffs affect Japan's huge automotive industry. Ryosei Acazawa, the Economy Minister, stated that Friday's package can be funded by a reserve account, which eliminates the need for an additional budget. Donald Trump, the president of the United States, introduced a 25% tax on imports of cars and trucks on April 2. He announced a 24 percent tariff on all Japanese products, which was later reduced to 10 percent for 90 days. Akazawa will be visiting Washington for a second round trade talks next week. According to the Nikkei Business Daily, Japan may increase soybean imports as part of negotiations. ($1 = 142.8400 Japanese yen) Reporting by Kentaro Yamazaki and Makiko Sugiyama; Additional reporting by Yoshifumi Takamoto; Editing and proofreading by Muralikumar Aantharaman, Christopher Cushing
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7-Eleven's owner says he will have to cut costs because US tariffs are hitting consumer confidence
Seven & I Holdings is the owner of 7-11 convenience stores. It said that it expected to have to look closely at its supply chain in order reduce costs, as U.S. customers grappled with the impact of U.S. Tariffs. Stephen Dacus, the new CEO of the Japanese retail conglomerate, told reporters that he believes they will be faced with a more challenging retail environment. Retailers will face a difficult challenge as tariffs are imposed or in the process of being imposed by President Donald Trump to reshape world trade. U.S. consumer confidence declined in April, and 12-month inflation expectations soared to their highest level since 1981. Dacus, a director from outside who will assume the role of CEO next month, said that the tariffs imposed by the United States will have the greatest impact on the consumer's behaviour, rather than on the suppliers. He said, "In this environment, you should look more closely at your supply chain and make sure that you are controlling your costs as much as possible." Seven & i, which has been reluctant to accept a $47-billion takeover offer from Canada's Alimentation Couche-Tard (ACT), is on a mission to increase corporate value. This strategy will be largely achieved by improving the U.S. convenience store division, which has more than 12,000 stores. Seven & i has 73% of its total sales in North America. Seven & i plans to list the North American subsidiary of its company in the second half 2026. However, this will depend on the market conditions and a possible delay, Dacus stated. He said that the initial public offering gave him the financial flexibility to increase investment in his stores. Quick service restaurants are more profitable, he added. It has also taken other measures, including selling its superstore division to Bain Capital. The company is also launching a share-buyback program worth approximately 2 trillion yen (roughly $14 billion) until fiscal year 2030. The company has engaged with its Canadian suitor, but thinks it will be hard to get approval from U.S. antitrust authorities. Dacus declined to comment about the current status of the negotiations. Dacus was previously the head of the special committee that examined Couche-Tard’s bid for takeover. Dacus stated that "my appointment as CEO was not related to the takeover bid." We don't discuss Couche-Tard in the management team, because we can't do anything about it. Seven & i shares were trading at around 2,100 yen in the morning on Friday, well below Couche-Tard’s offer price 2,700 yen a share. This indicates investor scepticism about a deal.
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China's premiums soar as Asia gold-discounts in India reach a near-nine-year-high
This week, gold discounts in India reached their highest level in nine years, as record prices discouraged buyers. Premiums in China also rose to an all-time high, leading to increased shipment to the largest bullion buyer in the world. This week, Indian dealers offered a discount The largest discount since July 2016 is up to $80 per ounce, including 6% import duties and 3% sales taxes. The discount last week was up to $74. Prices have increased and jewellery sales are down. Jewellers across the country feel the slowdown as shoppers are not buying the same amount of jewelry they used to. As of Friday, 0357 GMT, the spot gold price was trading at $3,333.73. This week, gold prices in India reached a new record of 99 358 rupees ($1,167) per 10 grams. A Mumbai-based dealer from a private bullion bank said that jewellers have not been active on the market because they received fewer orders in advance for the Akshaya Tiritiya festival. Next week, India will celebrate Akshaya Tirtiya, which is the second largest gold-buying holiday after Dhanteras. Dealers in China charged premiums between $44 and $50 per ounce above global benchmark spot price, the highest level since February 2024. The premiums were up from $15 to $21 per ounce last week. "The premiums are very healthy in China... Gold is being brought into the region in response to this high demand from around the world, said Joseph Stefans Group Head of Trading at MKS PAMP. Despite high prices, demand surged despite the price increase. In Hong Kong, gold In Singapore, the price was $2 higher than in Singapore. Gold traded at a premium up to $2.50 an ounce over the global benchmark. Brian Lan, managing Director at GoldSilver Central, said, "We have seen prices drop a little from their highs, so there was a slight increase in the number of clients who wanted to purchase." In Japan, bullion ($1 = 85,1100 Indian rupees) (Reporting by Anushree Mukherjee in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Mrigank Dhaniwala) ($1 = 85,110 Indian Rupees) (Reporting and editing by Anushree Mokherjee from Bengaluru; Rajendra Jadhav from Mumbai)
Petrobras reduces diesel prices first time in over a year
Petrobras, the state-run Brazilian oil company, announced on Monday that it would lower its refinery gate prices for diesel fuel for the first time since more than a calendar year. This is because local prices are currently higher than import parity.
In a press release, the company announced that it would reduce the price of diesel sold by distributors to 3.55 Reis ($0.6197 per liter) starting April 1. Gasoline prices will remain unchanged.
This is the first time the oil giant has changed the diesel price since February when they raised it by nearly 7%. It's also the first change since December 2023.
The good news is that the leftist president Luiz Inacio Lula has seen his approval ratings plummet in recent months due to high inflation.
Petrobras, under Lula's leadership, has implemented a new pricing policy that is designed to protect Brazilian fuel prices from the volatility of international markets, while maintaining a profitable sales model for the company.
Petrobras made the move in response to the strengthening of Brazil's currency against the U.S. Dollar this year. This occurred at a time when global oil prices were trading below the levels they were at the last price increase.
Petrobras diesel prices were above the import parity for most of this week and were 2% higher on Monday according to Abicom.
Magda Chabriard, CEO of Petrobras, said at an event in Rio de Janeiro, that the company will also lower the prices of jet fuel, but did not provide any further details.
(source: Reuters)