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Gold takes a break from profit-taking and targets eighth weekly gain
Gold prices fell on Friday, as investors took profits off the previous session's high. However, they were still set to make an eighth consecutive weekly gain due to strong demand for safe-haven assets amid fears over U.S. president Donald Trump's proposed tariffs. As of 10:07 am, spot gold fell 0.3% to $2.930.85 per ounce. ET (1507 GMT). Bullion is up around 1.7% after reaching a record of $2,954.69 last Thursday. U.S. Gold Futures dropped 0.4% to $2.945.20. Alex Ebkarian is the chief operating officer of Allegiance Gold. He said, "It was just a classic movement with new all-time highs and profit taking... but" gold's fundamentals remain strong. The price of gold has reached two new record highs in the past week, with prices trading above $2,950/oz. Investors' appetite for bullion is on the rise, as uncertainty surrounding global economic growth, and political instability, have highlighted investor appetite. The demand for gold at the moment is primarily driven by western investors and central bankers. Investors in ETFs appear to be jumping aboard the bandwagon," Commerzbank analyst said in a report. Trump announced a new round of tariffs earlier this week, including duties on lumber and wood products. This is in addition to the previously announced plans for duties on imports of cars, semiconductors, and pharmaceuticals. The tariffs are in addition to the 10% additional tariff imposed on Chinese imports, and the 25% tariff imposed on steel and aluminum. Ebkarian stated that the role of gold as a safe haven has not been fully realized, because the money is still sitting on the sidelines. Investors also monitor the U.S. Federal Reserve interest rate trajectory, as Trump's policies have been viewed by many as inflationary. A higher inflation rate could force the Fed to keep interest rates high, reducing the appeal of gold that doesn't yield. Silver spot was down 0.6% to $32.74 per ounce, and palladium dropped 0.9% to $968.78. Both metals are headed for gains this week. Platinum fell 1%, to $969.05. It is expected to decline by a week. (Reporting and editing by Maju Samuel in Bengaluru, Anmol Choubey from Bengaluru)
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Sources say that European military supplier KNDS is considering an IPO in the midst of a boom in the defence sector.
Two people with knowledge of the matter said that KNDS, a military defence system provider, is looking at an IPO as soon as the end this year. This comes as Europe's push to boost its defence sector sparks a rally. Sources, who spoke on condition of anonymity, said that the Franco-German firm has begun early discussions with advisers regarding a possible listing at Frankfurt in 2026 or 2025. They added that the Banks are yet to be named. The French state-owned holding agency (APE), declined to comment. KNDS, as well as its German family shareholders Wegmann-Group, did not immediately respond to requests for comments. The talks take place amid a recovery in the defence sector after U.S. president Donald Trump stated that Europe would have to increase its military resources significantly. After the U.S. urged European leaders to increase their military budgets, Germany's Hensoldt and Europe's largest ammunition manufacturer Rheinmetall led this week's gains. Rheinmetall's value has increased dramatically since the Russian invasion of Ukraine. It is now worth approximately 39 billion euros (40.87 billion dollars), up from 4 billion euros back in February 2022. KNDS formed in 2015 through the merger of German Krauss-Maffei Wegmann, a family-owned company famous for its Leopard tanks, and French state-owned Nexter. According to the website, both the German family and French Government remain joint owners. One person suggested that a complex shareholder structure could result in the company only floating a small portion of its shares. This would allow the company's family and state supporters to retain control stakes. They also warned that the company may decide not to list as a public business. At the time the article was published, it wasn't clear which shareholders would sell their shares in an IPO scenario or what valuation they might be seeking. According to LSEG Datastream on February 20, world defence companies are trading at 25,8 times expected earnings compared to 18 times three year ago. Iveco, Thyssenkrupp and other world defence companies trade at around 8 times the same valuation metric. KNDS is a manufacturer of battle tanks, armoured vehicle, artillery system, weapons station, ammunition, military bridges and battle management systems. It also produces battle management systems and protection and training solutions. According to its website, it generated revenue of 3.3 billion euro ($3.45 billion). KNDS, an investor in German gearbox manufacturer Renk, listed its shares last year at a valuation 2.15 billion euro and is expected to have sales of 1.1bn euros by 2024, according to preliminary results. KNDS increased its stake in Augsburg-based Renk last week to 25,1%. Renk's shares have risen 62% since the company made its debut on the stock exchange a year earlier. KNDS has approximately 9,500 employees worldwide and is incorporated in The Netherlands. According to its website, it supplies armies around the world with production lines located in France and Germany, and has various industrial partnerships. ($1 = 0.9543 euros)
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Savannah resumes lithium prospecting as Portugal overturns injunction
Savannah Resources announced on Friday that it will immediately resume prospecting work at its lithium project located in northern Portugal, after the government assisted it in overturning a precautionary order filed by landowners. Savannah, a London-based company, believes that the Barroso Project's deposit of lithium-bearing spodumene is the largest in Europe. The latest prospecting results indicate a deposit larger than the 28 million metric tonnes of high-grade battery lithium previously estimated. The EU's goal to reduce its dependence on countries like China for strategic raw material could hinge on this project. Savannah was forced to stop prospecting at Barroso in two weeks' time after the court ordered that the government revoke its permission for the company to enter land owned by others. Savannah said that in a press release, the government filed a "reasoned solution" citing a wider public interest and the court ended up overturning an injunction. Savannah's statement stated that the government claimed any delay in the work "would be more expensive and detrimental to public interest". It added that the company expected to compensate for the delays over the rest of the program. Savannah has only one venture, Barroso. It hopes to begin commercial production in 2027. The project will also complete its final environmental licensing and feasibility study in the second half this year. Reporting by Sergio Goncalves, Editing by Aiden Lewis
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Analysts at JPMorgan do not expect a special Aramco distribution this year
JPMorgan stated in a Friday research note that Saudi Aramco will not have a performance-linked payout this year, following a more balanced cash cycle for 2024 after earlier bumper results which supported the special payout. The past 18M (18-months) have delivered high-performance-linked dividends, funded by premium financials for FY22/23. We remind you that this cycle will end with YE24 (2024). We forecast that there will be no special distributions in 2025 following a more evenly balanced cash cycle of 2024," said the note. Aramco has announced that it will report its results for 2024 on March 4 and expects to declare a total of $124.3 billion in dividends, including $43.1 billion of performance-linked dividends. Saudi Arabia, which holds 81.5% directly of Aramco and also receives royalties and taxes, is dependent on Aramco's dividends. The Public Investment Fund, which is the sovereign fund of Saudi Arabia, owns 16% more of Aramco. It also receives dividends from Aramco as PIF invests billions to divert the economy from oil. Last year, the government sold a portion of its long-time cash cow in order to raise $12.35 Billion from Aramco's second share offering following its record debut for 2019.
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Putin claims that Russia may be able to mine its own lithium
On Friday, Russian President Vladimir Putin stated that Russia had the capability to mine its own lithium. "We have yet to mine lithium." How can we progress without it? We can. We could have done this 10 or 15 year ago," Putin said at a conference in Moscow on advanced technologies. Polar Lithium is a joint venture of Russian metals giant Nornickel with state-owned nuclear power firm Rosatom. In June, the company announced that it would accelerate its one lithium production project by three to four years. The project was originally scheduled to be completed by 2030. Polar Lithium is developing the Kolmozerskoye Lithium deposit, which is the largest lithium deposit in Russia and located in the northwest part of the nation. Russia wants to reduce its dependency on lithium imports. Since 2022, after sanctions against Moscow were imposed over Ukraine, supplies of lithium carbonate from Chile and Argentina has dried up. Russia now relies on Bolivia and China for its supply. Polar Lithium's goal is to build a full-scale production facility for lithium-ion battery materials in Russia. (Reporting and writing by Dmitry Antonov; Felix Light Editing, Andrew Osborn).
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Holcim North American business will be renamed Amrize following spin-off
Holcim, a Swiss company, announced on Friday that it has named its North American building material company Amrize, and plans to list the company this year. Holcim plans to sell its North American operations to its shareholders by the first half 2025. This is one of the largest deals on the global construction markets this year. The name was derived from the combination of the words "ambition", "rising" and Chairman Jan Jenisch said it was a significant step in creating an independent company. After the spin-off, Jenisch will become CEO of Amrize. Holcim is listing Amrize at the New York Stock Exchange, under the symbol AMRZ as well as the SIX Swiss Exchange. Holcim stated last year that the North American business could be valued at around $30 billion. In 2023 it had revenues of approximately $11 billion. Jenisch wants its sales to reach $20 billion annually by 2030. This will be achieved primarily through organic growth and acquisitions. (Reporting and editing by Dave Graham.)
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After Trump's halt to funding, Air Liquide may only pursue two of the six US hydrogen hubs.
Air Liquide, a French company, said that after Donald Trump frozen funding for clean energy projects in the U.S. Department of Energy's (DoE), only two of six hydrogen projects it had been awarded by the DoE might be implemented. Air Liquide has been selected as a partner in 2023 for six clean hydrogen hubs that are planned by the DoE. The DoE was going to allocate $7 billion under the bipartisan Infrastructure Law signed by the former President Joe Biden. However, Trump has placed holds on tens of billions of dollars in congressionally-approved spending, including those from the bipartisan law and Biden's Inflation Reduction Act (IRA). After meeting with American teams a couple of days ago, CEO Francois Jackow stated during a press call that two hubs centered around hydrogen from natural gases with carbon capture were on the top of the list of areas to be pursued. He added that the future of the four other hubs would be heavily dependent on the decisions made by the new administration on policies relating to renewable energy. Air Liquide, a beneficiary of the IRA has invested heavily in the U.S. Clean Energy Transition, including a partnership between Exxon Mobile and the Baytown facility of the oil giant to increase the production of ammonia and hydrogen with low carbon emissions. Jackow stated that the project with Exxon is not "absolutely determined yet", but both parties continue to work on it. A final decision should be expected in the second quarter of 2025. Air Liquide is not just about hydrogen, he said. It announced last year investments in industrial gas supplies for Micron Technology's U.S. electric car battery plant and LG Chem. Jackow stated that it is unlikely there will be any major announcements made in the battery industry in the next six-months, but he added he felt "extremely confident," with customers on whose projects his company already worked. Air Liquide, which accounts for around one third of the company's total sales in the U.S., is able to source materials locally, according to Mr. Bodinier. Reporting by Johan Bodinier in Gdansk and Antonis Pothitos; editing by Milla Nissi
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US tariffs solar panels imported from Southeast Asian countries (Nov 29, 2018)
U.S. Trade officials announced a new round on Friday of tariffs against solar panels imported from four Southeast Asian countries after American manufacturers complained about the unfairly low prices offered by these companies. The Commerce Department of President Joe Biden is making the second preliminary decision this year on a trade case filed by Hanwha Qcells in Korea, Arizona's First Solar Inc. and several smaller producers to protect billions in investments made in U.S. manufacturing of solar panels. The American Alliance for Solar Manufacturing Trade Committee accused the big Chinese solar panel manufacturers with factories in Malaysia and Cambodia as well as Vietnam, Thailand, and Vietnam of dumping their products on the market, causing the global price to crash. According to a preliminary report posted on the U.S. Commerce Department website on Friday, the agency determined dumping duties ranging from 21.31% to 271.2% depending on the company for solar cells from Cambodia. Jinko Solar has received duty of 21.31% on products produced in Malaysia, and 56.51% on those in Vietnam. Trina Solar, a Chinese company, received a dumping rate of 77.85% on products made in Thailand. The Commerce Department, on the other hand, did not specify any dumping margins for Hanwha Qcells made in Malaysia. The department calculated a subsidy rate for the company of 14.72 % in October. The Department's final decisions are scheduled for April 18 2025. The International Trade Administration will finalize their determinations on June 2, and the final orders should be expected on June 9. With these preliminary duties we are closer to addressing harmful unfair trade for years and protecting billions in investment into new American solar manufacturing, supply chains, and said Tim Brightbill. Partner at Wiley Rein, and lead counsel to petitioners. Jinko's and Trina's representatives were not available to comment immediately. The majority of solar panels used in the United States come from overseas. Approximately 80% comes from four countries that are the focus of the Commerce Department's investigation. This year, the Biden administration raised alarms over China's massive investments in factory capacity to produce clean energy products. Inflation Reduction Act by Biden, a landmark climate law, provides incentives to companies that manufacture clean energy equipment within the United States. This subsidy has led to a rush of new plans for solar factories. Donald Trump, the president-elect of the United States, has criticized Biden's landmark climate change law for being too expensive. However, he has also said that he will impose hefty tariffs to protect American workers. When a company sells its product in the United States for a lower price than its cost of production, or even less than it charges in their home country, this is called dumping. (Reporting and editing by Will Dunham; Additional reporting by Susan Heavey, Mrinalika Roy and Will Dunham; Editing and reviewing by Chizu Nomiyama, Mohammed Safi Shamsi and Will Dunham)
After Trump tariffs, Brazil's Gerdau steelmaker rethinks its Mexico mill
The CEO of Brazilian steelmaker Gerdau said that the company may decide to increase its production capacity in the United States rather than build a new facility in Mexico. This is because tariffs imposed by President Donald Trump are affecting global trade.
Gerdau announced in 2013 that it was looking at installing a special steel mill for Mexico. The new mill would have a capacity of 600,000 tons per year and require an investment between $500 million and $600 million.
Gerdau originally expected to make a final decision on investment by the end 2024, and start construction this year. However, it has postponed that decision to July.
"We are reviewing our analyses in light what is happening", Chief Executive Gustavo Werneck said on an earnings call. "Special Steel is an important segment for us here in the Americas."
Werneck, citing the Michigan and Arkansas units of the company, said: "We're looking at the option of building the mill two-stages or increasing the production capacity in the United States."
The U.S. president Trump raised the tariffs on imports of steel and aluminum to a flat rate of 25%, "without any exceptions or exclusions". He also threatened to raise tariffs against other major trading partners like Mexico and Canada.
Gerdau will benefit from tariffs as it has production units in the U.S. and previously promoted its large footprint as a hedge to protectionism by Trump.
Werneck said that the tariffs would lead to an improved production mix and increased profitability in the U.S.
The company is currently operating 70% of its capacity in the U.S. or approximately 4 million tons each year.
Gerdau, Brazil’s largest steelmaker based on market capitalization, reported a 9% drop in its adjusted fourth-quarter net profit compared to a year ago, falling below the market's expectations.
The company, which has mills in the Americas, announced that it will segment its earnings by region starting with the first quarter of the year 2025 - Brazil. North America, and South America.
Analysts at Scotiabank stated that Gerdau North America would be the clear winner, at least for the short-term, following President Trump's announcement of steel tariffs. However they noted the Brazilian unit may be negatively affected.
Gerdau shares traded in Sao Paulo rose by 0.7% Thursday, following the Bovespa index. (Reporting and writing by Alberto Alerigi Jr., Editing by Elaine Hardcastle).
(source: Reuters)