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Copper prices fall after Trump announces steep import tariffs of 50%
The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw a drop in copper prices on Wednesday. Traders may have not had enough time to send much to the United States after Trump's announcement on Tuesday of a 50% tariff on imported copper. The LME's three-month copper fell by 0.57%, to $9,735 a metric ton, at 0109 GMT. On the SHFE, the most traded copper contract dropped by 0.49%, to 79.090 yuan per ton. U.S. President Donald Trump announced he would announce a 50% duty on copper on February 2, hoping to boost U.S. manufacturing of a critical metal for electric vehicles, military equipment, power grids, and many consumer products. U.S. Comex Copper futures then jumped over 12%, reaching a new record high. U.S. commerce secretary Howard Lutnick stated that the tariffs on copper would be likely implemented by the end or August 1st. A metal analyst in Beijing from a futures firm said: "The announcement was like a thunderous boom in the middle night. It came out very suddenly, and the 50% tariff was much higher than expected." Analysts expect that the COMEX/LME premium will continue to rise, possibly to $3,000 per ton in the next few days to reflect the tariff of 50%. However, the window for shipment to the U.S.A. could be extremely tight if traders rush to ship copper there. The analyst in Beijing said that the current pressure on LME and SHFE could result in a higher premium through higher COMEX or lower LME prices. LME nickel dropped 0.18% at $15,015 per ton. Lead fell 0.17% at $2,053, tin rose 0.31%, to $33,500. Zinc increased 0.29% to $2728.5. Aluminium edged up 0.23% to $2592. SHFE nickel dropped 1.04% to an average of 119,340 Yuan per ton. Lead rose 0.85% to 17,260 Yuan. Zinc increased 0.52% at 22,120 Yuan. Aluminium increased 0.22% at 20,540 Yuan. Tin was up 0.2%, to 264 780 Yuan. Click or to see the latest news in metals, and other related stories.
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Investors await clarity on tariffs, which has led to a drop in oil prices from their two-week highs
Investors were trying to assess the impact of new developments regarding U.S. Tariffs. Brent crude futures fell 20 cents or 0.3% to $69.95 per barrel at 0121 GMT. U.S. West Texas Intermediate Crude fell 21 cents or 0.4% to $68.12 per barrel. The latest delay in tariffs by U.S. president Donald Trump gave some hope to the major trading partners Japan, South Korea, and the European Union, that deals could be reached to reduce duties. However, it left some smaller exporters, such as South Africa, confused and without clarity about the future. Trump has pushed the previous deadline of Wednesday back to August 1. He declared on Tuesday that "no extensions will be given." He said that he will also impose a tariff of 50% on imported copper, and introduce soon the long-threatened levies against semiconductors and pharmaceuticals. This will broaden his trade war which has rattled global markets. The tariffs may have caused concern about the oil demand, but the strong demand for travel over the 4th of July weekend has given hope. Last week, AAA data showed that a record number of Americans (72,2 million) were expected to travel over 50 miles (80 kilometers) during their Fourth of July holidays. The Energy Information Administration predicted in its monthly report on Tuesday that the U.S. would produce less oil than expected in 2025 due to the lower oil prices this year. In its report on short-term energy forecast, the EIA stated that it expects to see 13.37 million barrels of oil per day produced by the world's biggest oil producer in 2025. This is compared to last month's estimate of 13.42 millions bpd. The U.S. is expected to produce 13,37 million barrels per day in 2026. This is the same as the previous estimate. Five sources claim that OPEC+ producers will approve a big increase in output for September, as they finish both the unwinding and United Arab Emirates moving to a bigger quota. The group approved an increase of 548,000 bpd for August on Saturday. Analysts said that the actual increase in production has been lower than what has been announced so far, and the majority of the supply comes from Saudi Arabia. Geopolitical tensions continued to exist, which acted as a floor on prices. An official familiar with the matter said that four seafarers aboard the Greek-flagged and Liberian flagged bulk carrier Eternity C died in a drone attack off Yemen. This was the second incident of the day following months of calm. (Reporting and editing by Muralikumar Aantharaman; Arathy S. Somasekhar)
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Mars crude oil prices drop on zinc contamination sources
Six traders and a source in the industry said that the zinc contamination of the Mars crude oil stream has slashed the price of the U.S. flagship coastal crude on Tuesday. Mars, an offshore grade popular with U.S. refining companies, is a grade that has been a major supplier along the U.S. Gulf Coast. This comes at a time of tight supply due to the absence of heavy Venezuelan barrels. Mars was trading at a 10-cents discount to crude oil in the Cushing storage hub, Oklahoma. This is a reduction from a 75 cents premium on Monday. Shell, the company that operates the Mars platform did not respond to a request for comment. Two sources confirmed that the contamination was probably caused by an additive used at the platform. Zinc is not found in crude oil. Zinc in crude oil can cause corrosion and damage to refinery units. According to Energy Aspects, the Mars platform produced around 160,000 barrels a day in the past 12 months. The grade is shipped to Clovelly, Louisiana. Reporting by Arathy S. Somasekhar in Houston, Georgina McCartney and Shariq K. Khan in New York. Editing by Matthew Lewis.
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Texas nuclear project talks with "hyperscalers"
In documents released on Tuesday, Fermi, an Texas-based company that wants to build four nuclear reactors next to the U.S. Nuclear Weapons Complex, stated it was in talks with large data managers about leasing agreements for this project. Fermi is a company co-founded Rick Perry, a U.S. former energy secretary. It wants to build 4 AP1000 reactors in a facility that it calls a "hypergrid." The 11 gigawatt facility, powered by nuclear energy, natural gas and renewables, will be built in Amarillo, near the Department of Energy Pantex nuclear weapons factory and in partnership with Texas Tech University. Fermi stated in its application to the Nuclear Regulatory Commission that the regulator made publicly available on Tuesday that it was in discussions with many Big Tech firms, also known as "hyperscalers", on letters of intention and term sheets or preliminary documents which are normally non-binding. According to the application, hyperscalers will be tenants and not owners of any part of the plant. Fermi didn't immediately respond to questions about the financial arrangements that are being discussed with Big Tech companies, or who or how many Hyperscalers they is in discussions with. The two last reactors in the U.S. built were AP1000 in Vogtle in Georgia. According to the U.S. Energy Information Administration, they cost a combined total of $30 billion. These plants were years behind schedule and cost billions more than projected. Nuclear supporters say that lessons learned will reduce the construction time and costs for future AP1000 reactors. Fermi stated in his application that the Donald J. Trump Generating Plant nuclear complex, also known as the Donald J. Trump Generating Plant will be eligible for funding from the Department of Energy Loan Programs Office. In his first term, the only time that the president used the LPO was to finance the Vogtle plant. Other plans for financing construction and operations include equity contributions from institutional investors in infrastructure and real estate, structured bond offerings and clean energy tax credit.
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US expedites permit for proposed Tennessee coal mining
The Trump administration announced on Tuesday that it had approved a coal mine proposal in Claiborne County Tennessee under a process expedited to speed up federal environmental reviews for energy projects. The Department of the Interior announced in a press release that it had granted Hurricane Creek Mining LLC approval to mine coal at Bryson mountain, located in Claiborne County Tennessee. The agency stated that the mine would produce up to 1 million tons of coal in the next decade. The site has been mined in various periods between 1950 and 2010. The rush permit aligns with the goal of President Donald Trump to increase coal mines as part his energy dominance agenda. Although the project is located on private property, it must still be approved by Interior's Office of Surface Mining Reclamation and Enforcement. Hurricane Creek Mining was not available for immediate comment. Interior announced in April that it would implement a process of emergency permits for energy and mining project approvals, which typically takes months or even years. This week, the department has taken another step to support coal. Interior's Bureau of Land Management announced on Monday that it will be taking public comments on the opening of coal leasing in the Powder River Basin of Montana and Wyoming. The public can comment on the opening of lands that were off-limits for leasing by former president Joe Biden until August 7. Reporting by Nichola groom, Editing by Chizu nomiyama and Daniel Wallis
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Where does the US obtain its copper?
On Tuesday, U.S. president Donald Trump said that he would be announcing a new initiative. Imports of copper are subject to a 50% tariff Later in the day, a global industry, whose output is crucial for electric vehicles, military equipment, semiconductors, and a variety of consumer goods, was surprised. Trump had a February election. Ordered a Probe As part of efforts by the United States to rebuild its production of copper, there is a deadline of November for possible tariffs. The investigation, which was meant to evaluate the imports of copper concentrates, copper scrap, and copper alloys, was still ongoing. The U.S. Commerce Department's Howard Lutnick announced on Tuesday that the duties will likely be implemented by the end or August 1 of this year. What you should know about U.S. Copper Imports US IMPORTS Just over half of the refined copper that is consumed in the United States each year is produced domestically. Over two-thirds are mined in Arizona where the construction of a new massive mine has been held up for over a decade. The remainder of refined copper is imported, which amounts to just under 1 million metric tonnes per year. The White House has framed these new tariffs to counter China's dominance on the global market. However, in reality the United States imports the majority of its refined copper products from the Americas. According to the United States Geological Survey, more than 90% (90%) of copper refined imports were made by Chile, Canada, and Peru last year. GLOBAL PRODUCTION China is the world's largest copper refiner, but it gets most of its ore from Latin America. According to the USGS, Chile and Peru mined a combined third of global cobalt last year. China, however, is increasing its influence over the world copper mining industry through its major investment in mines located in the Democratic Republic of the Congo. Due to massive Chinese investments in the African nation's mining industry, the DRC has now overtaken Peru as the second largest copper producer in the world. The Chinese copper sector dwarfs the rest. Last year, the country operated dozens of copper-smelters. According to the USGS, there are only two primary copper-smelters in the United States.
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Stocks almost flat, yen continues to fall; Trump expands trade war
The major stock indexes showed little change on Tuesday, as investors digested Donald Trump's latest tariff announcement. Meanwhile, the yen continued to fall against the dollar due to planned 25% duties for goods coming from Japan. Trump expanded his global trade battle on Tuesday by announcing a tariff of 50% on imported copper and announcing that long-threatened duties on semiconductors, pharmaceuticals, and other goods would be coming soon. Freeport-McMoRan shares were up by 4%. Trump wrote to 14 countries on Monday, including Japan and South Korea. He warned that the United States would impose a sharply increased tariff rate for imports starting August 1. The market has not reacted as strongly as it did in the wake of Trump's announcement on tariffs in April. Market watchers predict that countries will seek to reach trade agreements with the United States prior to the new deadline. Sources said that European stocks held steady, and the European Union would not receive a letter outlining higher tariffs. The EU could also reach a deal with the United States by Wednesday. It's a slow day. Yesterday (Monday), people digested tariff news, and we noticed weakness. "People are on hold until second-quarter earnings start," said Peter Tuz of Chase Investment Counsel, Charlottesville, Virginia. S&P 500 companies are soon to report results for the quarter ending June 30. The Dow Jones Industrial Average dropped 156.46, or 0.35% to 44,249.90. The S&P 500 fell by 2.88, or 0.05% to 6,226.88. And the Nasdaq Composite grew by 13.72, or 0.07% to 20,426.23. The MSCI index of global stocks rose by 0.03 points, to 919.96. The pan-European STOXX 600 ended the day up by 0.41%. The hope of trade agreements boosted risk appetite on Tuesday, as MSCI’s broadest Asia-Pacific index outside Japan rose by 0.5%. Japan’s Nikkei recovered from its early losses and ended the day 0.26% higher. Southeast Asia's largest economies are facing some of the highest U.S. Tariffs. South Korean shares posted their biggest daily gain in the past two weeks, and the won strengthened by 0.4%. Since Trump in April capped what he termed reciprocal tariffs for trading partners to 10% for three-months, allowing for negotiation, the lack of progress has been a looming shadow over the markets. Two agreements have been made, with Britain, and Vietnam. In June, Washington and China reached an agreement on tariff rates. The minutes of the Federal Reserve's last meeting will be published on Wednesday. The central bank is taking a wait and see approach to monetary policies. The export-dependent Japanese currency, the yen, has fallen to a two-week-low of 146.65 against the dollar. It also fell against other currencies. The dollar gained 0.46% against the Japanese yen to reach 146.69. The Australian dollar rose as the central bank of Australia defied expectations by keeping its cash rate at 3.85%. The yield on the benchmark U.S. 10 year notes increased by 2.2 basis points to 4.417% from 4.395% on Monday. U.S. crude oil rose by 40 cents, settling at $68.33 per barrel. Brent settled at $70.15 a barrel, an increase of 57 cents.
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Rescue teams find three additional bodies following central Texas flooding
According to Kerr County officials, the death toll has risen to 87 as three more bodies were recovered by search and rescue teams in the hills of central Texas that had been ravaged by floods. Teams from the federal government, states adjacent to Kerr County, and Mexico have joined efforts in search of survivors. The local effort has been hampered by downpours and thunderstorms. The teams are working through the missing persons lists and have yet to find a survivor since Friday. At least 109 people, including dozens children, have died in the floods. At a press conference, Lieutenant Colonel Ben Baker from the Texas Game Wardens stated that the work was extremely dangerous and time-consuming. It's dirty. "The water is still there." The Guadalupe River was flooded by torrential rains that began before dawn Friday. It burst through its banks, killing dozens of people and leaving behind piles of trees, debris and cars. The local and federal emergency officials were questioned for days about whether or not they could have warned the flood-prone Texas Hill Country residents sooner. Sheriff Larry Leitha announced at a Kerr County press conference that 56 adults and 30 kids have died in the county. More than two dozen other victims are still unidentified. Authorities are still unsure if the 87th person is an adult or a child. Some flood victims slept at Camp Mystic near Hunt, a riverside Christian summer camp for girls. Five children and one counselor were still missing on Tuesday. The sheriff refused to answer questions regarding emergency management and preparedness in the county. He also declined to reveal who was responsible for monitoring weather alerts, issuing flood warnings or evacuation orders and distributing a flood order. He said that his office began receiving 911 calls at 4 am and 5 am on Friday morning, several hours after a local National Weather Service station had issued a flood alert. Leitha explained that they were in the process "of trying to put together" a timeline. According to local media and sheriffs, the floods have killed another 22 people. Seven of them were in Travis County; seven in Kendall County; five in Burnett County; two in Williamson County; and one in Tom Green County. A spokesperson for Republican President Donald Trump confirmed that he plans to visit the region devastated by flooding this week. Democrats in Washington are calling for an investigation to determine if the Trump administration's cuts at the National Weather Service impacted the agency's response. (Reporting from Jonathan Allen in New York, Rich McKay and Deepababington in Atlanta. Editing by Rod Nickel & Deepababington).
China's tightening grip on its rare earths sector
Smuggling was rampant in China when China, during a diplomatic spat in 2010, restricted rare earth exports from China to Japan.
When China imposed new restrictions on April of this year, it caused shortages in the auto industry within two months, leading to some to stop production.
Beijing, through quotas and consolidation, has transformed a sector that was once unruly, accounting for 90% of the rare earth processing capacity into a powerful diplomatic tool.
Here's a brief summary of the ways in which the number one producer of rare earths has tightened the grip on the industry.
CONSOLIDATION
China started its crackdown in the mining and processing sector 15 years ago. There were hundreds of miners. In 2013, ten producers controlled nearly all mining. Today, only two giants are state-owned: China Rare Earth Group (CREG) and China Northern Rare Earth Group High-Tech.
David Abraham, associate professor at Boise State University in Idaho, said that the consolidation process, which lasted for more than a decade, gave Beijing greater control while also curbing environmental damage caused illegal and reckless mining.
In the past, rogue miner's illegal supply chain delivered ore to non-authorised separation facilities. The finished products were then disguised and sent abroad.
In 2014, it was estimated that 40,000 metric tonnes of rare earth oxides had been smuggled abroad. This is half the amount exported by official means.
Magnet makers have not been consolidated as much as the upstream mining sector. There are dozens of magnet producers and processors in China, such JL Mag Rare-Earth, and Ningbo Yunsheng.
China has introduced a tracking system in its rare earth magnet industry since June. Companies are required to provide information, including customer details and volume of transactions. The ultimate goal is to track the entire chain.
QUOTAS
China's production quota system (introduced in 2006) has been used to control the supply, along with its consolidation.
Quotas are set for mining, smelting, and separation. They are usually issued twice a years and widely monitored to gauge global supply.
Beijing has gradually reduced the number of groups eligible for quotas. In 2024, there will only be two state-owned companies, as opposed to six before.
China's supply growth has been dramatically reduced since 2024, when the total mining production quota increased only 5.9% annually compared to a 21.4% annual increase in 2023.
Analysts and traders predict that mining output quotas will either remain flat this year or increase by as much as 5% compared to 2024.
Beijing restricts the export of technology as well. Since long, the tools and methods used to separate and extract rare earths are banned. It extended the ban in late 2023 to include technology used to manufacture rare earth magnets. Staff Reporting; Editing by Lewis Jackson, Sonali Paul
(source: Reuters)