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Demand worries, tariffs cause copper to fall more than a week's low
The copper price fell to its lowest level in over a week Wednesday, as inventories rose and investors were worried that looming U.S. Tariffs would hit demand. In open-outcry official trading, three-month copper at the London Metal Exchange fell 0.6% to $9,736 per kilogram, after reaching its lowest since July 18, at $9720.50. Analysts said that investors are waiting for details on planned U.S. copper tariffs of 50 percent and whether or not they will be implemented on August 1, as previously announced. U.S. Comex Copper Futures dropped 0.2% to $5.64 a lb. This brings the premium of Comex Copper over LME Copper to $2,694 a tonne. After the U.S. agreed to extend their 90-day trade truce, there was uncertainty over a possible trade war with China, the largest metal consumer in the world. Tom Price, Panmure Liberum's head of commodities strategy said: "I believe investors' engagement is at a standstill." Investors in other countries are actually pricing the demand risk associated with these tariffs, because metal suddenly becomes more expensive without any change in demand. "A 50% tariff is an astonishingly large number." The Shanghai Futures Exchange's most traded copper contract fell 0.1%, to 78.930 yuan per ton ($10,999.47). Stocks in LME warehouses were surging due to excess supply on the market LME data shows that. Market participants also awaited the announcement of the U.S. Central Bank's policy later that day, where rates are expected to remain unchanged. Price said that if they do not cut rates, commodities will be under pressure. LME aluminium increased 0.3% to $2.614 per ton in official activity, while zinc fell 0.5% to 2,792, lead dropped 0.6% to $2,000, nickel declined 1.5% to $16,080, and tin slipped 0.1% to $33,650. Click here to see the latest news in metals.
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Helion Energy begins construction of nuclear fusion power plant for Microsoft data centers
Helion Energy, an OpenAI-backed startup, and SoftBank Venture Capital's venture arm have begun construction at a site where a nuclear fusion plant will be built. The power plant is expected to supply Microsoft data centers with electricity by 2028. Helion Energy hopes to use the grid infrastructure already in place at the Rock Island Dam hydroelectric power plant near Malaga, Washington. The startup has yet to receive final permits from Washington, but it said that the work it's done puts it on course to sell electricity to Microsoft in accordance with a 2023 deal. Fusion is the process of ramming together atoms to release energy. It does not emit significant amounts of greenhouse gases, nor create large quantities radioactive waste. Scientists and engineers have yet to find a reliable way to generate more energy from fusion than is required to sustain and create the reaction. Helion has been working on this with its current prototype called Polaris. It is located in Everett Washington where it will build components for Orion, the machine that will be built at Malaga. David Kirtley (co-founder and CEO of Helion) said that Orion would connect to Washington's main power delivery networks. Kirtley stated that "we'll be able connect to the same grid upstream from the Microsoft datacenters." Microsoft has been saying for years that nuclear energy is a part of the mix of carbon-free sources of energy. They have also signed agreements to purchase power from conventional fission nuclear power. Melanie Nakagawa is Microsoft's chief sustainable officer. She believes that fusion is a long-term investment. Nakagawa said that "over the past three to four years you have seen different types of milestones be met by other companies, including Helion, in the fusion area." There's a lot optimism that this is the moment when fusion comes to fruition within this decade or soon after. (Reporting and editing by Christian Schmollinger in San Francisco, with Stephen Nellis reporting from San Francisco)
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Italy creates AI assistant that helps Italians assess landslide risk
A public research organization announced on Wednesday that climate change will likely lead to an increase in landslides. They also announced a new AI assistant which can help assess the risk. The environmental research and protection organization ISPRA stated that climate change increases the frequency of stronger thunderstorms, amplifies risks of landslides, and floods, and spreads them to areas which were previously less exposed. It said that the share of land at risk of serious landslides rose from 8.7% to 9.5% in 2021. About 2.2% or 1.3 million people live in this area. The institute stated that Italy remains one of the European countries with the highest risk of landslides. It cited recent natural disasters, such as the landslide in 2022 on the island Ischia near Naples and the flooding in Emilia-Romagna 2023. The institute stated that the new AI assistant will help users navigate through the IdroGEO platform, which is a public platform with maps and data updates on instabilities, and provide information and answer questions.
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AEP exceeds profit expectations, anticipates new capital plan of $70 Billion over five years
American Electric Power beat Wall Street expectations for the second quarter profit on Wednesday. The company said it plans to announce in the fall a new five-year capital program of approximately $70 billion, to meet U.S. energy demand growth. In premarket trading, shares were up 1% to $110.34. The U.S. Energy Information Administration said in April that U.S. electricity consumption would reach new records in 2025 and '26 due to data centers dedicated for artificial intelligence and cryptocurrency. This encouraged power producers to increase their investments. The company announced earlier this year that it would consider adding $10 billion to the $54 billion capital plan for the next five years as the demand for data centres increased in the service areas of the U.S. Electric Utility. The company's quarterly profits were boosted by higher electricity rates. Utility firms can obtain these increases through rate cases, where they appeal for power price hikes based on their investment or expenses in providing services. According to LSEG data, the Colombus, Ohio, based company reported a profit adjusted of $1.43 for the quarter ending June 30 compared with an average analyst estimate of $1.27. AEP provides service to 5.6 million customers across 11 states, including Texas and Ohio. It has the largest transmission system of electric power in the U.S. (Reporting by Tanay Dhumal in Bengaluru; Editing by Shailesh Kuber) The utility has reaffirmed that its adjusted profit for the full year is expected to be in the upper half. (Reporting and editing by Shailesh Kuber in Bengaluru)
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Entergy increases profit forecasts for the coming years due to power demand increase
Entergy has raised its profit projection for the second half of the decade as the U.S. energy landscape is reshaped by the rising demand for electricity from AI-driven data centres and electrification trends. The U.S. Energy Information Administration predicts that power consumption will reach new records in the United States in 2025 and in 2026. This is due to the rapid expansion of data centres dedicated to artificial intelligence, cryptocurrency and the use of electricity by homes and businesses for heating and transportation. The U.S. Electric Utility raised its adjusted profit projection for 2027 from $4.65 to 4.95 per share to an estimated range of $4.70 - $5.00 per share. It expects a profit of between $5.20 to $5.50 per common share in 2028. This is up from its previous forecast, which was $5.10 - $5.40. Drew Marsh, CEO of Xerox Corporation said: "We are well-positioned to seize significant opportunities ahead and create value for our shareholders." Entergy has also increased its capital expenditure plan for the next four years to $40 billion from $37 billion to meet anticipated demand from artificial-intelligence data centers. Utilities are adding billions to their capital budgets, as they receive massive requests from Big Tech companies looking for locations that could be suitable for data centers. The S&P Index tracking utilities increased 3.5% during the quarter ending June 30. Entergy reported a total retail sale of 35,534 gigawatt-hours (GWh) for the quarter. This includes a nearly 12% increase in industrial sales, compared to 34,444GWh one year earlier. According to LSEG data, it posted a profit adjusted of $1.05 for the three-month period ended June 30 compared to analysts' average estimates of 92c. Entergy, based in New Orleans, provides electricity to almost 3 million customers throughout Arkansas, Louisiana and Texas. (Reporting and editing by Shailesh Kuber in Bengaluru, Katha Kalia is based in Bengaluru)
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Gold prices rise as the dollar weakens ahead of Fed decision
Gold prices rose on Wednesday as investors waited for the Federal Reserve to announce its policy and make comments that might provide more clues about the timing of their next moves. As of 1056 GMT, spot gold was up by 0.1%, at $3,328.15 an ounce. U.S. Gold Futures rose 0.1% to $3,325.10. Gold became less expensive to holders of other currencies after the dollar index fell by 0.1%. "There is a combination of factors that are holding gold prices back." "From a geopolitical perspective, we seem to be making some progress in the tariff negotiation but no one is willing to commit to anything," StoneX analyst Rhona o'Connell stated. The focus will be on the developments between China and the United States after both officials have agreed to extend their 90-day truce on tariffs following two days in Stockholm of constructive discussions. Investors' fears were eased by the trade agreements reached with Japan and the European Union last week. This week, the risk sentiment on the stock market was also lifted. The Fed is expected to maintain rates on Wednesday despite President Donald Trump's repeated calls for them to be lowered. The markets will be watching Fed Chair Jerome Powell for further clues about the rate path. The markets have priced in two cuts by year's end, which is probably a bit too mild. "The Fed will not yield to political pressure, but it will interesting to see if the vote is unanimous today," O'Connell stated. In an environment of low interest rates, gold tends to perform well. Spot silver was down 0.6% at $37.97 an ounce. Platinum fell 0.5% to 1,388.59, and palladium rose 0.3% to $1,000.19. (Reporting and editing by Ronojoy Mazumdar, Emelia Sithole Matarise and Brijesh Patel in Bengaluru)
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The Russian ESPO premium oil prices in China remain stable despite US tariff threats
Four traders reported on Wednesday that premiums for ESPO blend crude oil loaded from Russia's Kozmino Port in late August or early September to be delivered into China have remained stable as buyers ignore the threat of higher U.S. Tariffs to meet a robust demand. Trump shortened the deadline on Monday for Moscow to reach a peace agreement with Ukraine or face secondary tariffs up to 100% within 10-12 days. The deadline for Russia is August 7 to 9. Cargoes destined for ESPO loading in September will be traded. The Russian oil market continued to operate as usual, according to traders. The premium of ESPO Blend to the international benchmark ICE Brent for cargoes that loaded at the end of August and beginning September was $2-2.20 a barrel, as higher refining margins boosted Chinese interest in buying crude oil. According to them, independent refiners from the eastern Shandong Province have increased crude processing rates slightly as margins improved. This month, state oil companies also increased their rates. As Middle East crude oil prices have risen, the traders who were not able to be identified publicly said that ESPO was considered by Chinese refiners to be the most cost-effective crude. Trade sources reported last week that Unipec, the trading division of Sinopec, had purchased 7-8 cargoes for August-loading ESPO. They did not give numbers from previous months. Sinopec didn't immediately respond to an'inquiry for comment. Last week, traders reported that Shandong Yulong Petrochemical had also purchased Urals crude from Russia. Traders said that the decline in exports in Russian Sokol crude produced on Sakhalin Island due to maintenance work at the oilfield in August has also supported ESPO price. Kpler data showed that most Sokol crude was exported to China, with the remainder going to India. (Reporting in MOSCOW by Siyi Liu and Florence Tan in SINGAPORE, Editing by Barbara Lewis and Florence Tan)
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Scientists say that coastal erosion in Chile could wipe out 10 beaches in a decade.
According to a group of scientists, the central and southern coasts of Chile, which stretch for thousands (miles) on the Pacific Ocean, are at risk of erosion, which could lead to the disappearance or 10 beaches within the next decade. In an interview conducted this month at the Renaca Beach near Vina del Mar, the director of the Coastal Observatory of Universidad Catolica said, "It's going to be very hard for these beaches in the next 10 year," Her team tracked erosion at 67 beaches and found that 86% of them are shrinking steadily -- even in spring and summer when they usually recover. The rate of erosion has doubled in the ten areas that already experienced high erosion rates in 2023. Martinez stated that the causes of the epidemic are both human-made and natural. She cited climate change as a major factor, pointing to the increasing frequency and intensity of swells, rising sea levels, downpours and heatwaves. Urbanization unchecked and degradation of river basins, which supply sand along the coast, have also played a role. Storm surges in Puerto Saavedra have created sinkholes on cliffs and roads, preventing some communities from accessing the area. Saltwater also damages forests. Martinez stated that "we're noticing cliffs and sand shores receding rapidly." Local businesses in tourist-friendly towns are already feeling its impact. Maria Harris, owner of a beachfront Valparaiso restaurant, said that last year was brutal. "The beach disappeared." "There was no distance between us and our sea." Construction continues along the coast, sometimes near dunes and wetlands. Martinez warns that the effects go beyond the environmental. She said, "We are transferring the costs of these disasters onto people, including fishermen, coastal communities and the tourism industry." (Reporting and writing by Nicolas Cortes, Carolina Fernandez and Daina Beth Solon and Lucinda Elliot; editing by Sandra Maler).
As dealmaking increases, activist investors will push for change.
In the months to come, activist shareholders will be more determined to press for corporate change. They'll also feel more confident to launch new campaigns now that the pace of deals is picking up.
Investors, bankers and lawyers predict a rise in corporate leadership disputes, operational improvements, and spin-offs during the second half 2025. They said that many global corporations would prepare for time-consuming and costly battles. However, some activist investors might be willing to compromise.
Alfredo Porretti is global co-head Shareholder Engagement and M&A Capital Markets for JPMorgan Chase. He said that the activity in the second half of the year would be more significant. "Activists have become more cautious, but they are still not taking action."
After an unusually quiet quarter in which only 59 campaigns were launched, the expected rebound of global company campaigns will come after a second quarter that was unusually quiet. This included campaigns from Hewlett Packard Enterprise, a U.S. IT company, and Kenvue Consumer Healthcare, whose products include Band-Aids, Tylenol, and Band-Aids.
The pace of investor campaigns to increase the price of shares slowed down by 16% between April and June compared to the first quarter. Barclays data shows that they were down by 32% compared to a year earlier.
Investors reported that many activists were on the sidelines during the second quarter due to concerns about the impact of U.S. president Donald Trump's tax and tariff policies.
Pam Codo-Lotti is the chief operating officer for Activism and Shareholder Advisory, Goldman Sachs. She said that "Activists reevaluated their public campaigns due to equity market volatility and macro-uncertainty in the second quarter."
People familiar with the work of established corporate agitators like Elliott Investment Management and Jana Partners, as well as newcomers that have never publicly pushed companies to perform better are looking ahead to new ideas.
Starboard Value, an activist group, bought a stake in Tripadvisor in the first few days of the second quarter with the intention to engage the management.
Activists target companies in the fall and winter, well before the annual meetings of the following year. They often start off with private discussions before making their demands public.
The companies are prepared for the anticipated onslaught.
Two directors of large American companies who were not allowed to speak publicly about the preparations said that board members with a negative memory of previous activist pressure are pressing management to hire advisors to assess vulnerabilities now and to take pre-emptive actions.
They said that long-serving directors could be replaced, or chief executives who are not keeping up with their peers may be fired.
In times of economic uncertainty and volatility, Ingo Speich said, "Shareholder activism is more likely to be due to weak points in companies." Ingo Speich is the head of sustainability at German asset manager Deka Investment. Poor governance is the main source of shareholder activism. Companies in transition are more vulnerable, and this opens the door for more shareholder activism.
In the first half 2025, 43% of activist campaigns have included a request for board changes. Mantle Ridge, an activist investor, successfully pushed board changes at Air Products and Chemicals and Elliott at Phillips 66.
Bankers and lawyers are expecting a rise in demand for the sale of companies or spinoffs. This was only a part of 33% of campaigns during the first half. Investor confidence is increasing, they said.
Goldman's Codo Lotti stated that "we expect public activism campaigns to increase in the second half, with renewed focus on M&A target, barring macro-headwinds."
Bankers and lawyers say that after making their name with loud public campaigns waged years ago by investors such as Carl Icahn and Bill Ackman, many activists now want to lower their profile and avoid the headlines.
According to a new study by SquareWell Partners, institutional investors who collectively manage $35 trillion in assets "overwhelmingly" view activism as an effective market force. 77% of them see it as catalyst for change, while 71% describe it as a driver of responsibility.
After establishing their reputation, activists might be willing to settle for a quiet settlement rather than engage in costly and messy proxy battles.
Jana Partners, for example, had long been pushing French-fry manufacturer Lamb Weston to make operational and board changes as well as possibly selling the company. The hedge fund avoided a high-profile fight in the boardroom by settling a dispute that placed four of their candidates on the board, and two others that both parties agreed upon.
Porretti, JPMorgan's Porretti, said that "peace is indeed breaking out as more settlements have been reached and board seats are going to activists." He added "but settlements can only be reached if both sides feel a little weak." Reporting by Svea Autumn-Bayliss and Emma-Victoria Farr, Frankfurt; editing by David Gregorio
(source: Reuters)