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COP30 Brazilian presidency calls for new global climate governance
According to a letter released by the Brazilian presidency on Thursday, COP30, which is this year's global climate summit, has called for new global governance mechanisms in order to help countries implement their commitments and curb global warming. The summit in the Amazonian town of Belem, in November, will mark the 10th anniversary since the Paris Accord when signatories agreed that warming should be kept well below 2 degrees Celsius compared to pre-industrial levels. Many nations are still struggling to bring their plans to life and reduce carbon emissions to the level necessary to prevent the planet from reaching catastrophic levels of warming. In a letter from the COP30 Presidency, it is stated that "the international community must investigate ways in which climate cooperation can be improved to accelerate" the implementation. Luiz inacio Lula da So, the Brazilian president, first made this proposal during the G20 summit held in Rio de Janeiro last November. Lula suggested at the time creating a “United Nations Climate Change Council” to help countries implement the commitments they made in 2015 to combat climate change. Lula stated that "negotiating new commitments is pointless if we do not have an effective way to accelerate the implementation" of the Paris Agreement. "We need stronger climate governance." Andre Correa do Lago will be the Brazilian ambassador at COP30. Correa do lago said that the UNFCCC Climate Convention has been the subject of decades-long debates. However, it lacks the implementation capability. Lago, a journalist on Wednesday, said: "The UNFCCC or the Paris Agreement do not have the power or the mandate to move this forward. We propose to reconsider how institutionally we can strengthen implementation." The COP Presidency Letter suggests that this discussion should take place at the United Nations General Assembly and not COP30. The letter says that "debates at U.N. General Assembly can explore innovative governance approaches for endowing international cooperation with the capabilities of rapid sharing data, knowledge, and intelligence as well as leveraging networks, aggregate efforts, and articulating processes, mechanisms, and actors both within and outside the U.N." According to sources in the Brazilian Government, the creation of an U.N. Lula has discussed the creation of a Climate Council in his diplomatic talks with world leaders. However, there are no immediate results expected in the near future. One source stated that "it's still a first convincing effort." (Reporting by Lisandra paraguassu; editing by Manuela andreoni, Lincoln Feast)
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US and Britain to announce tariff agreement on Thursday
Thursday is expected to see the United States and Britain announce an agreement to lower tariffs for some goods. This will be the first such deal since U.S. president Donald Trump began imposing levies to countries all over the world. Trump announced on Truth Social on Thursday that he will hold a news conference in the Oval Office at 10:00 a.m. ET (1400 GMT), to discuss a "major deal" with representatives of an important and highly respected country. A spokesperson for the British government said that Prime Minister Keir starmer will give an update about U.S.-UK trading talks later on Thursday. Two British sources familiar with the situation have said that the outline of an accord will be announced. A spokesperson for Downing Street said that the United States was an essential ally to our national and economic security. The Prime Minister will provide an update on the progress of negotiations between our two countries. On Tuesday, a British official said that both sides were trying to reach an agreement on lower tariff quotas (a portion of exports that are subject to lower duty) on steel and automobiles. These two sectors were affected by 25% U.S. duties. In exchange, Britain will likely agree to lower their own tariffs on U.S. automobiles and reduce a digital tax that impacts U.S. technology groups. It refused to lower food standards to allow U.S. producers to have greater access to the market. It was not clear what the status of Trump's 10% "baseline tariff" on Britain and most other countries would be. It will have political significance for both countries, despite the potential narrowness of any agreement. Investors are watching to see if Trump can deescalate the trade war he started after the global tariffs threatened to reignite inflation and slow economic growth. The British government tries to minimize the worst effects of Trump's tariffs, without compromising its efforts to reset the trade relationship with the European Union. The UK also signed a new deal with India this week. Trump's trade conflict has shaken financial markets, and fears of recession have been raised. Central bankers and executives are grappling with sometimes chaotic policymaking which is affecting world supply chains as well as a wide range of industries. Last month, the International Monetary Fund slashed their growth forecasts for China, the United States and the majority of countries. They cited the impact U.S. Tariffs, and warned that increasing trade tensions could further slow down growth. U.S. officials and Chinese officials will also be holding talks in Switzerland this Saturday. This could be the first step to resolving the potentially damaging trade conflict between the two largest economies in the world. Trump's top officials are in a frenzy of meetings with trading partner since the president imposed the 10% tariff on April 2, along with higher "reciprocal tariff rates" for many trading partners. These rates were suspended later for 90 days. The United States has not imposed additional tariffs on Britain because the country imports more than it exports. Reporting by Alistair Smout, writing by Kate Holton, editing by Topra Chopra
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Outokumpu Finland meets profit forecasts amid muted demand and tariff uncertainty
Outokumpu, a Finnish stainless steel manufacturer, expects that global uncertainties due to U.S. Tariffs will impact its operating environment during the second quarter after its core earnings exceeded market expectations in the previous one. The European steel industry, which is already facing challenges from a weak demand, high costs, and the competition of cheaper Chinese imports are now faced with the added challenge of recent tariff increases on their exports to America. In a recent press release, Outokumpu said that "geopolitics, as well as other important uncertainties related to tariffs," could impact the global economic environment and, consequently, the operating environment of the company, its deliveries, metal prices and foreign exchange rates. Analysts had predicted an average of 48.9 millions euros for the adjusted profit before taxes, depreciation, and amortization (EBITDA). In a statement, CEO Kati Ter Horst stated that "Stainless steel demand was muted throughout the quarter and tariffs created further uncertainty." Outokumpu’s stainless steel deliveries increased 11.4% quarter-onquarter despite being affected by a strike. It is expected that they will be either level or increase by as much as 10% in the second half of this year. The group confirmed its previous estimate that the one-week strike had a negative impact on EBITDA of around 15 million euros. Outokumpu's core earnings in Americas, where it generated almost a third its sales in 2014, increased by 22% compared to the previous quarter. In Europe, they grew from a loss of 6 million euro in 2024 to a profit in 2016 of 6 millions euros. Outokumpu stated that despite a rise in orders at the start of the year in Europe, the company's key market was still in a "wait and watch" mode. Outokumpu, the second largest stainless-steel producer in the United States, said that the economic outlook was uncertain, with a low consumer confidence level and rising inflation expectations. Outokumpu expects adjusted EBITDA for the second quarter to be "at a level similar or higher" than that of the first. The group said that it had also saved 11 million euros out of the 50 million euro target for the year. $1 = 0.8845 Euros (Reporting from Jagoda Drlak, Gdansk. Editing by Milla NissiPrussak).
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China lowers gold import quotas to arrest yuan rallies
Two people with first-hand knowledge of the situation said that China's central banks has allowed some commercial banks in China to purchase foreign currency for the payment of gold imports within recently increased quotas. Gold import quotas set by the People's Bank of China (PBOC) for China's largest banks determine the amount of bullion that enters the world's biggest consumer of precious metal. In the past, it has adjusted these quotas in order to calibrate dollar demand. Sources said that the PBOC had raised these quotas on gold imports in the last month, and now has allowed banks to purchase dollars to finance gold imports. This move follows a series of stimulative measures announced by Chinese officials on Wednesday. These included interest rate reductions and a large injection of liquidity as Beijing intensifies its efforts to mitigate the economic damage brought on by the US-China trade war. One source said that it could help the lenders to meet the increased demand for gold, while also slowing down the rate of appreciation of the yuan. The new quotas are being implemented at a moment when the price of gold is surging against a backdrop of volatility in the market caused by President Donald Trump's tariff war. This has also led to a rise in the yuan, as well as other Asian currencies. Investors are unwinding carry trades and moving money from U.S. assets back to Asia. Sources spoke under condition of anonymity as they were not authorized to speak about the issue. The PBOC has not responded to a comment request. Gold imports may prevent a sudden rise in the yuan. This would be a double blow to exporters who are already feeling the pressure of the increasing trade tensions between Washington DC and Beijing. As evidenced by the drop in new export orders for April, damage from high tariffs on Chinese products under U.S. president Donald Trump is starting to affect economic activity. Last month, gold, which is traditionally seen as an investment to protect against political and economic uncertainties, reached a record high of $3.500 per ounce, thanks to fears about tariff wars and a strong demand for investments in China and other countries. Official data released on Wednesday showed that despite high gold prices in April, China's Central Bank increased its gold reserves for a sixth consecutive month. (Reporting and editing by Beijing and Shanghai Newsroom, Vidya Rangeanathan and Saad Saeed)
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China lowers gold import quotas to arrest yuan rallies
Two people with first-hand knowledge of the situation said that China's central banks has allowed some commercial banks in China to purchase foreign currency for gold imports as part of recently increased quotas. Gold import quotas set by the People's Bank of China (PBOC) for China's largest banks determine the amount of bullion that enters the world's biggest consumer of precious metal. In the past, it has adjusted these quotas in order to calibrate dollar demand. Sources said that the PBOC had raised these quotas on gold imports in the last month, and now has allowed banks to purchase dollars to finance gold imports. One source said that the move could be used to help meet the demand for gold, while also slowing down the rate of appreciation of the yuan. The new quotas are being implemented at a moment when the price of gold is surging against a backdrop of volatility in the market caused by President Donald Trump's tariff war. This has also pushed the yuan, and other Asian currencies, higher as investors unwind carrying trades or move their money back from U.S. assets to Asia. Sources spoke under condition of anonymity as they were not authorized to speak about the issue. The PBOC has not responded to a comment request.
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China's steel exports will be slashed by a trade war, causing a surplus at home
Analysts and traders say that China's steel imports will plummet in the second quarter. This could exacerbate an existing supply glut in China, while the trade war, and the wave of protectionism it has spawned, are crimping export markets. Eight analysts and traders predict that second-quarter shipments by the world's biggest steel producer and exporter will fall up to a fivefold from the first quarter. They also expect the export situation to worsen later in the year. This would also mean that second quarter 2024 shipments will be lower than they were in 2024. The steel exports are being hit twice by Washington's tariffs, which have choked off the transshipment business, in which third countries resell Chinese Steel to the U.S. Top customers such as South Korea and Vietnam also impose their own duty to prevent steel from then being rerouted to their markets and dumping. A Chinese steel trader, who spoke under condition of anonymity because he was not authorized to speak with the media, said: "It is certain that total exports in Q2 will decline." "One could look to the Middle East, Africa, and South America for alternative outlets. But the problem is that no country has such a large capacity." China's increasing steel exports helped offset the weak demand in the property sector. Any decline would redirect steel home, lowering prices, eroding profitability, and reducing steelmakers' appetite for inputs such as iron ore. The first-quarter exports reached their highest level since 2016, as mills raced to ship steel out of the United States before the rumoured tariffs became official. The trade war between Washington, D.C. and Beijing has unleashed a wave of protectionist sentiment that has shocked many. Last month, the Chairman of China’s largest listed steelmaker Baosteel said that exports in this sector were under "unprecedented pressure" and more steel being left at home will intensify oversupply. According to a survey conducted by Mysteel in April, overseas orders for one of China's largest exporters fell between 20 and 30 percent last month as compared to the previous month. Ge Xin said that there are concerns about the impact of the trade war on products that heavily rely on steel like electric vehicles and home appliances. This could weaken the demand for steel outside the real estate sector. It takes time for this impact to filter through the steel industry upstream. This is likely reflected by the data from the second quarter, when the home demand was seasonally lower, thereby aggravating the glut of supply.
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JFE Holdings, Japan's largest investment company, aims to invest nearly $3 billion overseas in growth.
JFE Holdings (parent of Japan's second largest steel manufacturer) has set aside 400 billion Japanese yen ($2.8billion) to invest overseas over a three-year period. It expects the domestic demand to remain weak, and that China's exports will continue to pressure global markets. The company stated that its key strengths outside Japan include its partnerships with JSW Steel Limited India and Nucor Corporation North America. It also plans to increase its exposure overseas through strategic local partners. It added that "in parallel with considering large scale overseas investments, such as the acquisition of raw materials interests, promising opportunities will be pursued through local partnerships in growing markets to capture increasing steel demand abroad." JFE aims to increase its consolidated profit by 700 billion yen in fiscal 2035 from 135.3 billion last year. It expects that the steel business will remain challenging due to the declining demand in Japan, the increasing exports from China, and the uncertainty for the global economic situation resulting from U.S. Tariffs. JFE Holdings reported a net loss of 54% for the year ending March 31. This was below LSEG's forecast of 105.4 Billion Yen. The company also posted lower steel production due to weaker domestic and international demand. The company projected a profit for fiscal year of 75 billion yen. JFE stated that in addition to the low demand at home and U.S. Tariff measures, which are a major risk to its exports to North America, there is also a "significant risk" from the auto and construction machine sectors.
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Short covering and Indian buying of palms is limiting the decline in prices.
Malaysian palm futures fell Thursday, reaching their lowest level since September. However, strong Indian buying and short-covering helped to erase some of the early losses. By midday, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for July delivery had fallen 1 ringgit or 0.03% to 3,727 Ringgit ($874.27) per metric ton. Anilkumar bagani, the research head at Mumbai-based Sunvin Group and a vegetable oil broker, said that "the futures opened lower than expected but quickly gained some ground on the back of Indian purchasing and short covering following a significant drop in recent months." He added that India is the first country to purchase palm oil because of its attractive prices compared to other oils, such as soyoil. Dalian's palm oil contract, which is the most active contract, fell by 0.63%. Chicago Board of Trade soyoil prices were up by 0.49%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils. Dorab Mistry, an industry analyst, said that Malaysian palm futures will likely continue to decline from June through November and trade at a level near the two-year low price of 3,500 Ringgit as a recovery in production results in a buildup of stocks. The day's oil prices rose, boosted by the hope of a breakthrough at upcoming U.S. China trade talks. Palm oil is more appealing as a biodiesel source because crude oil futures are stronger. The palm ringgit's trade currency, the U.S. Dollar, fell by 0.71%, making the commodity more affordable for buyers who hold foreign currencies. According to Wang Tao, technical analyst, palm oil could test support at 3,702 Ringgit. A break below this level would open the door for a move towards the range of 3,638-3662 Ringgit.
Suncor, Canada's largest oil company, says it may reduce its capital expenditure in 2026 if oil prices remain low.
Suncor Energy, Canada's second largest oil producer, said that a recent campaign to cut costs had helped it weather the lower oil prices in the world. However Suncor Energy did not rule out cutting capital expenditures next year if economic conditions continue to be weak.
Rich Kruger, CEO of Suncor, told analysts in a conference call on Tuesday that Suncor had not altered its capital budget range for 2025 of C$6.1billion ($4.43billion) to C$6.3billion and planned to spend less next year - between C$5.7billion - already. Kruger stated that the 2026 budget would be cut if needed.
He said, "If we feel that the business environment warrants it further, then that is exactly what will be evaluated."
The global oil price hit a 4-year low Monday, after the Organization of the Petroleum Exporting Countries (OPEC+) and its allies agreed to a second accelerated increase in oil production for June.
Since Donald Trump was inaugurated in January, his unpredictable tariff policy has also had a significant impact on the oil price.
Kruger stated that Suncor has become more resilient and able to withstand commodity price fluctuations due to its efforts to reduce operating costs.
He said, "It allows us to execute our plans without having to hit the gas or the brakes."
Under Kruger's leadership, Suncor's financial results have improved dramatically under his leadership. He was hired by the company in 2023.
The company announced a first-quarter profit on Tuesday of C$1.7billion, or C$1.31 a share. This was higher than analysts' expectations. It also achieved its highest ever first-quarter production, of 853,000 barrels / day.
Suncor has also had its best ever first quarter in terms of refinery sales and throughput.
Kruger stated that Suncor was well underway with its efforts to increase revenue from its chain Petro-Canada retail station. This includes closing some locations, renovating and upgrading at other stations. The company wants to increase earnings by C$200m by the end 2026.
Kruger responded that continued growth of the Petro-Canada chain is another way to protect the company from oil price volatility.
He said: "I wouldn't say never. But right now, that is an extremely valuable part of our operations." (1 Canadian dollar = 1.3783 dollars) (Reporting and editing by Nia William in Calgary)
(source: Reuters)