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China softens its stance on export restrictions for rare earths
China announced that it would continue to cooperate with other countries in regards to its export control of rare earths, as shortages threaten auto and semiconductor manufacturers in Europe and India. China, which controls 90% of the global processing capacity of rare earth magnets, used in everything from cars and fighter jets, to home appliances and other products, imposed export restrictions in early April, requiring exporters obtain licenses from Beijing. Despite a few licences being granted to Volkswagen suppliers and others, Indian automakers claim they have not received any. They will be forced to cease production at the beginning of June. Lin Jian, a spokesperson for the Foreign Ministry, said Friday that the ministry was "ready to enhance dialogue and cooperation with countries and regions in the area of export control and remain committed to maintaining global production and supply chain stability." Chinese state media reported Wednesday that China could relax its restrictions on rare earths imports for Chinese semiconductor firms and European companies after meetings between industry representatives and the Ministry of Commerce, where the issue of shortages had been raised. The New York Times reported this week that in response to China’s restrictions on the export of minerals, the United States had suspended sales of certain critical technologies, including parts for COMAC, a state-owned aircraft manufacturer. (Reporting and writing by Colleen Waye, Liz Lee and Lewis Jackson, and editing by Christopher Cushing and Eliza Hardcastle).
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Sources say that the EU will propose a more flexible climate goal for July.
EU diplomats said that the European Commission would propose a new EU Climate Target in July, which will include flexibility for countries to meet. This is part of Brussels' efforts to combat mounting criticisms about Europe's environmental goals. Wopke hoekstra, the European Union's Climate Commissioner, confirmed Wednesday that he would present a 2040 EU climate goal on July 2 during a closed-door meeting with EU country representatives. Diplomats stated that the proposal would set an EU target to reduce net greenhouse gas emission by 90% from 1990 levels by 2040. The EU executive intends to make this target more flexible, and could lower the amount it expects from domestic industries. Diplomats explained that the flexibilities included setting a target of emissions reduction for domestic industries below 90% and letting the countries purchase international carbon credits to cover the remainder, in order to reach 90%. Un spokesperson for the European Commission declined to comment. The Commission has pledged not to stifle Europe's ambitious climate goals, despite increasing criticism from governments and legislators concerned about the costs for European businesses who are already struggling with high energy rates and looming U.S. Tariffs. Europe is the continent that warms up most quickly in the world. The Commission has been delaying its 2040 climate proposals for months and has weakened other green laws over the last few months in an attempt to calm political opposition. The EU countries have differing views on the 2040 target, which must be approved by both them and EU legislators. Finland, The Netherlands and Denmark support a 90 percent reduction in emissions. Italy and the Czech Republic are among those who oppose a 90% reduction in emissions. Germany has supported a 90% goal if countries are able to use international carbon credits in order to reach three percentage points. Diplomats say that the Commission is considering easing the requirements for countries to reduce emissions in certain sectors, giving them greater choice as to which industries will do the heavy lifting. The 2040 target will keep EU countries on course between their 2030 emission targets - which they're almost on track to achieve - and the EU’s goal to reach net zero by 2050. (Reporting and editing by Frances Kerry.)
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Prices largely stable but market risks persist
The Dutch and British wholesale prices of gas were mostly stable on Friday, as Norwegian flows stabilized and the low demand allowed storage to be refilled. However, the tighter market conditions continued to support these prices. LSEG data shows that the benchmark Dutch front-month contract was up 0.26 euros at 35.18 Euro per megawatt hour or $11.68/mmBtu at 0816 GMT. Auxilione, a consultancy, said that with the June contract ending on Friday, market attention is now shifted to July. The Dutch July contract increased by 0.14 euros to 35.40 Euro/MWh. The British front-month contracts were down 1.21 pence, at 83.25 pence/therm. Meanwhile, the weekend contracts were down 1.20 pence, at 82.30 pence/therm. Saku Jussila, LSEG analyst, said that prices are now largely at the same levels as before a Norwegian maintenance period which began last week. Data from infrastructure operators Gassco revealed that the total Norwegian export nominated volumes were down from 296 mcm/d (million cubic metres/day) on Thursday morning to 292 mcm/d by Friday morning. Analysts at Jefferies Equity Research stated in a monthly report that TTF gas prices rose almost 10% in May, driven by concerns about tariffs, the weather and the risk of further delays for upcoming LNG projects. They said that the gas demand in North-West Europe fell by 7%, or 33 mcm/day, over the last eight weeks. Analysts added that although the overall filling level is 19% or 12 billion cubic meters (bcm) below the five-year average, it has been higher than the average for the past five years. They said: "We continue seeing a tighter market in '25 due to increased European injection demand, lost Russian pipe imports (15bcm/yr) and LNG project delay." Gas Infrastructure Europe data shows that European gas storage sites are 47.2% full. The benchmark contract on the European carbon markets was up by 0.20 euros at 71.14 euro per metric ton. Nora Buli, reporting from Oslo; Nina Chestney, editing)
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What are the benefits of early and abundant monsoon rainfall in India?
India's Weather Office has predicted an above-average Monsoon Season for the second consecutive year in 2025. The annual rains will arrive at their earliest date in 16 years. Rains that began on the coast of Kerala, the southernmost state, eight days before the usual schedule, have now reached nearly half of the country. Why is the monsoon important? Monsoons bring about 70% of annual rains to a $4 trillion economy. Agriculture, which employs more than half the population of 1.4 billion people, provides about 16% of that. Rains are important for crops like rice, wheat and sugarcane. They also affect the economy as a whole, boosting growth and limiting inflation of food prices. Export restrictions on sugar could be eased if harvests are higher, as well as those for staples like rice and onions. In the event of a drought, food imports are required and export restrictions. Farmers who earn more money from bigger crops are more likely to buy appliances and jewelery during the festival and wedding seasons, which boosts consumption. WHAT IS THE RELATIONSHIP BETWEEN INFLATION, CENTRAL BANK POLITICS AND INFLATION? The central bank closely monitors the consumer price index in India, which makes up almost half of its total. In 2024, rains above average helped to keep food prices down. This allowed the Reserve Bank of India to lower lending rates. The RBI will be comforted by the forecast for above-average rains this year. It is likely to reduce interest rates in June, at its third consecutive meeting, and again in August to accelerate growth. What is the immediate impact of early arrival? Early monsoons helped to cool down temperatures in many parts of the country nearing the end of summer when electricity utilities are struggling to meet demand for air conditioning and irrigation of crops. Electricity prices briefly dropped to zero due to the sharp fall in temperatures. The sales of cold drinks, ice creams and other frozen treats have also begun to decline nearly three weeks sooner than expected. Rain is refilling reservoirs throughout southern and western India. This has eased supply concerns during a period when water usually runs out. Which Crops Will Benefit? Farmers will sow crops like paddy, cotton and soybeans earlier than usual, as the monsoon arrives in some areas nearly two weeks before normal. Rice, sugarcane and cotton will all benefit from the above-average rainfall. The yield of crops depends not only on rainfall volume, but also the distribution over the four-month period. Over-rainfall or extended dry spells can reduce yields. (Reporting and editing by Clarence Fernandez; Rajendra Jadhav)
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Iron ore posted a weekly loss due to softer China demand and trade uncertainty
The price of iron ore futures fell on Friday, and the weekly loss was attributed to a softer demand in China for this steelmaking component. Traders are bracing for more trade uncertainty. The Dalian Commodity Exchange's most traded September iron ore contract ended the daytime trading session 0.43% lower, at 702 Yuan ($97.65), a metric tonne. This represents a loss of 2.84% over the past week. As of 0704 GMT, the benchmark June iron ore traded on Singapore Exchange was $96.25 per ton down 0.66%. This week, the contract has fallen by 1.91%. The hot metal production, which is typically used as a gauge of iron ore demand to determine the market, has fallen for a third consecutive week. Data from Mysteel revealed that it was down 0.7% at 2.42 million tonnes on May 30. In a recent note, Galaxy Futures said that the seasonal demand for steel is at its peak and will continue to fall. Hexun Futures, a broker, says that iron ore prices remain somewhat stable as long as steel mills continue to make decent profits. A poll conducted on Friday showed that China's manufacturing activity probably contracted for the second consecutive month in May. This suggests that trade tensions between China and its major export markets weigh on manufacturers' minds. The tariffs imposed by President Donald Trump in the U.S. will remain in place after a federal appellate court temporarily reinstated the duties on Thursday. This reversed a decision made on Wednesday by a trade court to block the most comprehensive of the duties. Coking coal and coke, which are used to make steel, also fell, by 5.28% apiece and 2.13% respectively. The benchmark steel prices on the Shanghai Futures Exchange were flat. Hot-rolled coils fell 0.81% and rebars 0.34%, but wire rods rose 0.12%. Stainless steel gained nearly 0.6%. China's financial market will be closed Monday due to a public holiday. Trading will resume Tuesday, June 3rd. $1 = 7.1889 Chinese Yuan (Reporting and editing by Mrigank Dahniwala, Janane Venkatraman).
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After a village is destroyed by ice, floods threaten the Swiss valley
The water trapped behind a glacial debris mass that buried and blocked a village in southern Switzerland this week has led to warnings of the need for further evacuations due to the threat of flooding. The village of Blatten was engulfed by a deluge of millions cubic meters of rock, mud, and ice on Wednesday. The few houses left were later inundated. The village's 300 residents were evacuated in May when part of the mountain behind Birch Glacier started to crumble. The flooding increased on Thursday, as a mound of debris measuring almost 2 km (1,2 miles) wide clogged up the River Lonza. A lake formed among the wreckage. This caused fears that the morass might dislodge, leading to more evacuations. Local authorities warned residents of Gampel and Steg - villages located several kilometres along the Lonza Valley - to be prepared for an emergency evacuation. When conditions permit, the army will be ready with heavy equipment such as water pumps, diggers, and other heavy machinery to assist. Rescue teams are searching for a man aged 64 who has been missing since the landslide. Local authorities suspended their search for the man on Thursday, citing that the debris mounds are too unstable and warned of possible rockfalls. Scientists suspect that the event is a dramatic illustration of climate change's impact in the Alps. Residents are still struggling to comprehend the extent of destruction. (Reporting and editing by Lincoln Feast; Dave Graham).
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ASIA GOLD - Indian gold demand is lagging as prices increase, and wedding purchases are cooling
The physical gold demand in India this week was tepid, due to an increase in prices at home and the end of wedding season, which kept buyers away. Premiums in China, India's top consumer, were also down. This week, Indian dealers offered a discount Last week, the discount was up to $49, but this week it is down to up to $31 per ounce, including 6% import duties and 3% sales taxes. The wedding season has ended and the monsoon is here, so jewellers expect a seasonal drop in demand. This is why people are holding off on new purchases," said Mumbai-based bullion dealers with a private banking institution. On Friday, domestic gold prices traded at around 94.900 rupees for 10 grams after reaching a low of 90.890 rupees in the first month of this month. In China, bullion traded at a premium of $15 per ounce above the global benchmark spot rate, compared to premiums between $16 and $30 last week. Ross Norman, a independent analyst, said that the Shanghai Gold Exchange has seen its drawdowns reach the lowest levels of the year, while imports were exceptionally high in the past few weeks, suggesting that the Chinese domestic market is overstocked. Data from the Hong Kong Census and Statistics Department showed that China's total imports of gold via Hong Kong almost tripled in April compared to March, reaching their highest level for more than a month. Hugo Pascal is a precious metals dealer at InProved. He said that despite the lower volume of trading, gold bullish bets are still dominant on the SHFE. In Hong Kong, gold In Singapore, the price was $0.30 to $1.30 higher. Gold traded at par prices with a premium of $2.50. In Japan, bullion The premium was $0.50. (Reporting from Anmol Choubey and Rajendra Jadhav, in Bengaluru; additional reporting from Brijesh Patel; editing by Eileen Soreng).
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Base metals decline as dollar firms, US tariff optimism fades
The dollar strengthened on Friday, and the market's optimism faded after a court decision that reinstated some of the largest tariffs imposed in the United States by President Donald Trump. As of 0521 GMT, the London Metal Exchange reported that three-month copper was down by 0.1%, at $9,562.50 a metric ton. Red metal, which is used for power and construction, continues to gain 4.8% this month and looks set to have its best month since Sept. 2024. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper fell 0.3%, to 77 740 yuan per ton ($10 813). LME aluminium dropped 0.2%, to $2.445 per ton. Zinc fell 0.7%, to $2.656.50. Lead fell 0.6%, to $1.952, and nickel fell by 0.2%, to $15.335. Tin fell 1.4% to $30.790. Metals traders in Singapore reported that "the market rose yesterday on the optimism that the appeals court would be able to block Trump's tariffs. However, the rally faded as the appeals courts suspended the verdict." On Thursday, an appeals court in the United States temporarily reinstated Trump's most comprehensive tariffs. A day earlier, the U.S. Trade Court had ruled that Trump exceeded his authority by imposing these duties and ordered a blockade. Investors digested court's decision to maintain Trump's tariffs. The dollar index increased by 0.2% against rival currencies, making assets denominated in dollars more expensive for holders of other currencies. Investors are waiting for the Federal Reserve's preferred inflation indicator, the Personal Consumption Expenditures (PCE) Price Index Report due later that day. This could give them more insight into their policy direction. SHFE aluminium fell 0.2% to 20110 yuan per ton. Lead dropped 0.8% at 16,630 yuan. Nickel rose 0.9% to 128,810 yuan. Zinc lost 0.5% to 22250 yuan. Tin fell 2.6% at 251,120.
Financial Times - May 6
These are the most popular stories from the Financial Times. These stories have not been verified and we cannot vouch for the accuracy of these reports.
Headlines
US coal producer Peadbody has threatened to end deal with Anglo American
Eutelsat names a new CEO as Starlink's rival in Europe seeks funding
Credit Suisse will pay $511 Million for helping wealthy Americans to hide over $4 Billion
Santander earns 7 billion Euros from Poland sales
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Peabody Energy has said that if it is not satisfied with the resolution of issues surrounding Anglo American's Moranbah North Mine, then they may terminate their pending agreement to purchase some of Anglo American's Australian steelmaking assets.
The franco-british satellite operator Eutelsat has announced that Orange executive Jean Francois Fallacher will be replacing its CEO. This is a surprising move from a company known for its leading role in European defense communications.
The U.S. Department of Justice announced that a Credit Suisse unit has pleaded guilty in the United States to charges of helping ultra wealthy Americans evade tax and will pay an amount of $510 million.
Santander is selling stakes in its Polish retail banking business for 7 billion euros ($7.91billion) as part of a plan to reduce its exposure in the country. The proceeds will be used to buy back shares. ($1 = 0.8845 euro) (Compiled from Bengaluru Newsroom)
(source: Reuters)