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London copper prices rise as Trump raises new tariff concerns
London copper rose slightly on Wednesday but gains were held in check due to caution after U.S. president Donald Trump ordered an investigation into possible new tariffs on imports of copper, aimed at increasing U.S. manufacturing. As of 0842 GMT, the price for three-month copper at the London Metal Exchange had increased by 1.4% to $9,533 per metric tonne. The dollar recovered from an 11-week-low compared to major peers. This was helped by a recovery in short-term Treasury rates, despite a series of weak economic reports that weighed on investor confidence. Trump signed a White House order directing Commerce Secretary Howard Lutnick, to launch a national-security probe under Section 223 of the 1962 Trade Expansion Act. Trump used the same law in his first term, to impose global tariffs of 25% on steel and aluminum. Soni Kumari is a commodity analyst at ANZ. She said that the investigations would disrupt copper flows and cause uncertainty. Other metals saw a 0.8% rise in LME Aluminium to $2659.5. LME Zinc rose by 0.7% to $2831, Nickel climbed 0.7% up to $15435, Lead gained 1.1% at $2015, and Tin was up by 0.9% to $33,070. SHFE aluminium rose 0.3% to 20,615 Yuan ($2,839.88). SHFE copper fell 0.06%, to 77.020 Yuan. Zinc dropped 0.5%, to 23,565 Yuan. Nickel slid by 0.5%, to 124.130 yuan. Lead gained 0.06%, to 17,140 Yuan. Tin eased 0.6%, to 261,770 Yan.
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G20 Finance Chiefs' Meetings marred by absences and disputes
Some finance ministers did not attend a Group of 20 meeting in South Africa, while other high-ranking officials cut short their trips to the event marred by disagreements over climate change, debt, and inequality. It has never been easy to agree on a statement for a group that includes China and Russia, as well as the European Union, the United States, and other countries. The differences between the countries are more pronounced than ever before, and some of the finance ministers did not attend because they were preoccupied with their domestic politics. The finance ministers of many of G20's largest economies, including the U.S. China, Japan India and Canada, cancelled their attendance at the event. It was meant to bring together central bankers and them to discuss global economic issues. The EU's top economic official also did not attend. Their absence reduced the already small chances of reaching a consensus on a communiqué. It seemed that there was little chance of agreement on the issues that were deemed important by the South African president Cyril Ramaphosa: lack of climate finance from wealthy nations, reforming a financial system which penalizes poor countries, and growing inequalities. In his opening remarks, he stated that "in this time of global unrest and tensions escalating, it is more important than ever for the G20 members to work together." "The erosion in multilateralism poses a serious threat to the growth and stability of the global economy." Lesetja Kganyago of South Africa's Central Bank said that a number recent G20 meetings ended without agreement on any communique. He also stated that it was not a concern that some countries are represented by deputy ministers. He said that no one was in the room at the time saying, "I am going to bring up this issue but I feel I'm too young so they may ignore it." Alex van den Heever is a political scientist at University of Witwatersrand, Johannesburg. He said that the United States' absence from G20 discussions - they also refused to send their top diplomat to the G20 meeting of foreign ministers held last week – "makes [it] very difficult to see what people will do moving forward." CLIMATE WORMS South Africa had hoped that the G20 would be a platform to put pressure on rich nations to do more in order to combat climate change and give more money to poorer countries for their transition to green energy, as well as adaptation to worsening conditions. Ramaphosa stated last week that "those most responsible for climate changes have a responsibility... to support the least responsible". Kgosientsho RAMOKGOPA, Energy Minister, said on Tuesday, "What the American presidency effectively does is reconfigure (the conversation) (on green power by)... reintroducing aspects we thought were solved." "Where it goes is anyone's guess," said he, adding that certain countries may reconsider the pace and scale of their transition away from fossil fuels towards green energy. Others questioned the relevance of the G20 discussions after the G20's largest economy stepped out. Some analysts saw an opportunity to move forward without the U.S. Daniel Silke of the Political Futures Consultancy said that there could be synergies in large parts of what is left if the U.S. was excluded on certain issues. It's a chance for South Africa to play a leadership role. (Additional reporting and writing by Tim Cocks and Bernadette and Timothy Heritage; editing by Bernadette and Timothy Heritage).
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Sibanye withdraws from US lithium project following price slump
Sibanye Stillwater announced on Wednesday that it would not invest in the Rhyolite Ridge Lithium project in Nevada, U.S.A. after the price of rare metals plunged. After reviewing updated studies about the planned lithium mining, Johannesburg-based Sibanye decided not to invest in additional projects. Sibanye, without providing any further information, said that the lithium project "didn't meet the Sibanye Stillwater Investment hurdle rates at prudent price assumptions". After a glut of supply, the price of lithium used in batteries that power electric cars has dropped more than 80% since its peak, which was reached in November 2022. This forced companies to mothball their mines and to freeze projects. Sibanye has agreed to establish a lithium joint venture in 2021 with Ioneer, an Australian listed company. This is part of the company's diversification into metals for batteries. In accordance with the 2021 agreement, Sibanye would have to invest $490,000,000 for its 50% share in the Rhyolite project. Sibanye has also acquired a 6% stake in Ioneer following a $70 million strategic investment made in 2021. Ioneer stated in a separate press release that it was "pleased with the resolution of this matter, which allows us to move forward on the fully-permitted project and reach a final decision regarding investment". Ioneer announced that the project could quadruple U.S. Lithium production. It had received a vital federal permit, and finalised a loan of $996 million from the U.S. Department of Energy. It said that "Ioneer will continue to focus on bringing the world-class project to life and will seek a strong equity partnership who can assist in bringing the project into production."
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Ukraine bonds rally cautiously on US draft critical minerals deal
Ukraine's bonds gained modestly on Wednesday, after Kyiv and Washington agreed to the terms of an important draft minerals deal that is seen as crucial to Kyiv's efforts to win over President Donald Trump's Administration. Tradeweb data shows that the bonds denominated in dollars gained between 0.4 and 0.6 cents per dollar. Early European trading saw the 2029 maturity as the largest gainer. It was bid at 71.6cents. The draft agreement was still lacking in details. Sources familiar with its contents say that the document does not mention any U.S. guarantees of security or the continued flow weapons, but that the United States want Ukraine to be "free and sovereign". According to the deputy prime minister of Ukraine and the justice minister, who led the negotiation, the deal can be viewed as part of a larger puzzle, enhancing relations with the U.S. in order to strengthen Ukraine’s prospects following three years of conflict, said Oscar Christian Dahl Pedersen, at Danske Bank. In recent days, the bonds issued by Ukraine as part of the August 2008 restructuring agreement have experienced a roller coaster ride. After Trump falsely referred to Ukrainian President Volodymyr Zelenskiy as an unpopular "dictator", who had to quickly cut a peace deal or risk losing his country, the debt dropped sharply. The Ukrainian leader claimed that the U.S. President was in a "disinformation-bubble". In recent days, the bonds have recovered some of their losses. (Reporting and editing by Peter Graff. Karin Strohecker)
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President Prabowo launches Indonesia's first bullion banks
On Wednesday, Indonesian President Prabowo Subito opened two "bullion bank" that will offer gold deposit services in order to keep gold stocks onshore. The country is looking to expand its commodity sector outside of mining. Southeast Asia's biggest economy is among the top gold producers in the world, but Prabowo said that much of Indonesia's gold ends up overseas. The president stated that bullion banks can help save the state foreign currency by allowing all gold to be produced onshore. "We now realise that Indonesia is a wealthy country. Prabowo stated that the gold production of Indonesia has increased from 100 to 160 tonnes. The president stated, "We will now improve the ecosystem of service and we hope that we can accelerate deposits and increase gold reserves." Jakarta has granted licenses for Pegadaian to operate as a gold bank. Pegadaian is a pawnshop-affiliated subsidiary of Bank Rakyat Indonesia. Customers can now take advantage of gold trading, financing and deposit services. According to the regulations for bullion business, financial firms must have a minimum of 14 trillion rupiah (850 million dollars) in capital to be able to operate as a bullion banks.
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Saudi chemical group SABIC reports worse-than-expected quarterly loss
Saudi Arabian chemical giant SABIC announced worse-than-expected fourth quarter results on Wednesday, against a backdrop of margin pressures in the sector. Chemicals industry is struggling with low demand and high input cost, which has led to lower prices and squeezed profit margins. SABIC reported a net loss for the three-month period ending December 31 of 1,89 billion riyals (US$504 million), compared to a loss in the same period last year of 1,73 billion riyals. LSEG data indicates that analysts had predicted a profit of a bit more than 1 billion riyals. Salah Al-Hareky is the executive vice president of corporate finance. He told reporters that "fixed costs are usually higher in winter" and also during the fourth quarter. SABIC, which is 70% owned by Saudi Aramco and has a market capitalization of $70 billion, saw a net profit of 1,54 billion riyals for 2024, up from a loss of $2.77 billion in 2023. Chief Executive Abdulrahman Al-Fageeh stated that monetary easing helped to support the petrochemicals sector, but "overcapacity remains a challenge for polymers in particular". "Ethylene capacity growth is slower than demand growth, resulting in sustained pressure on capacity utilization rates." SABIC's EBITDA margin remained stable despite these market conditions. This shows its resilience in difficult market conditions," said he in the earnings release. SABIC's capital investment is expected to be between $3.5 and $4 billion in this year. The guidance for the next five years was $4 to $5 billion. Reporting by Pehsa Magd in Riyadh, and Yousef Saba in Dubai. Editing by Jacqueline Wong & David Goodman
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Dalian iron ore continues to hurt Chinese steel export prospects
The price of iron ore futures fell for the third session in a row on Wednesday. This was due to a gloomy outlook for Chinese exports, and increased trade tensions between China and the U.S. The May contract for the most traded iron ore on China's Dalian Commodity Exchange closed at 812 Yuan ($111.86), a decrease of 0.98%. In the early part of the session, the contract reached 803 yuan, its lowest since February 18. As of 0708 GMT, the benchmark March iron ore traded on Singapore Exchange was down 0.22% at $105.8 per ton. Last week, U.S. president Donald Trump signed a memo aimed at tightening restrictions on Chinese investments in strategic areas. This caused Chinese stocks to plummet on Tuesday. In a report, Hexun Futures, a Chinese consultancy, stated that the additional levies by Vietnam and South Korea will affect China's direct exports of steel, which in turn, will put pressure on prices. Last week, Vietnam announced that it would impose a temporary antidumping levy against some steel products imported from China. Meanwhile, South Korea has imposed tariffs provisionally on Chinese steel plates imports. Hexun added that the steel mills are now in full production and demand for raw materials is increasing. According to Chinese consultancy Lange Steel citing statistics by the China Iron and Steel Industry Association, in China, daily crude production at key steel companies increased 0.8% on a month-to-month basis to 2,151 million tonnes, while average daily steel production rose 4.2% to 2.037 millions tons. The Shanghai Futures Exchange saw a rise in most steel benchmarks. Rebar rose by 1.24%; hot-rolled coils increased by 1.18%; wire rod rose by 0.57%. Stainless steel fell 0.3%. Citi analysts wrote in a recent note that "China's expectations of a second round of government-mandated capacity reductions have been increasing in the past few months." Coking coal and coke, which are both steelmaking ingredients, showed marginal losses. They were down by 0.55% each.
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Sources: S.Korea’s SK Energy closes crude unit for 2 week overhaul
South Korea's SK Energy plans to restart the 170,000-barrel-per-day (bpd) crude distillation unit (CDU) at its Ulsan refinery in next two weeks after maintenance work, three trade sources familiar with the matter said on Wednesday. Sources said it is not clear if this shutdown was planned. WoodMackenzie, a consultancy, said on LinkedIn that the unit had been closed since Monday morning. Two sources stated that this shutdown would not affect the company's export programme in March for certain refined fuels, such as diesel, and that other CDUs on the site will likely be running at a higher rate to make up the production loss. SK Energy operates five CDUs in the refinery, with a combined capacity of 840,000 bpd. The company plans to shut its two 40,000-bpd residue hydrodesulphurisation units at the site, one after another between mid-March and mid-May, a fourth source said. A fifth source confirmed that the company's CDU, which produces 110,000 bpd of product per day, will also be closed from May to June for maintenance. In response to a question, an official from SK Energy responded on Wednesday that "SK Energy operates its plants flexibly based on the market demand", without commenting about the units.
Where does the US obtain its copper?
The U.S. president Donald Trump ordered on Tuesday a probe on possible tariffs on imports of copper to rebuild U.S. manufacturing of a critical metal for electric vehicles, military equipment, semiconductors, and a variety of consumer goods.
An official at the White House said that the investigation would examine imports of copper concentrates, scrap, copper, and copper alloys. The result should be available soon.
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.
(source: Reuters)