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ERG 2024, a renewable energy company in Italy, has a profit that is on par with its growth but is cautious.
The renewable energy company ERG announced a core profit in 2024 that was in line with the expectations, but warned of market volatility which would likely affect this year's bottom-line. In a late-night statement, the company said that it had also reduced its guidance for 2026 from earlier estimates due to a more conservative approach towards the green energy policies of the Trump administration and the late approval in Italy of a new law governing the renewables sector. Last year, the group's adjusted core profit amounted to 535 million euro ($583.69m), which was within the guidance range of 520 million euro to 560 millions euros. The revenue was 738 million euro, which is similar to 2023's figure. The company estimates a core profit between 540 and 600 million euro in 2025. It cites volatility in market prices and volume. Capital expenditures are forecast to be between 190 and 240 millions euros. Net debt is projected to increase between 1.85 and 1.95 billion euro. "We strengthened the selective ‘Value Over Volume’ approach... by reducing investment for the next two-years and focusing our attention on assets that are currently under construction, organic developments, and repowering," said CEO Paolo Merli. The group reduced its capital expenditures over 2026 to 1 billion euro, a 20% reduction. It also reduced the growth of the asset portfolio to 4.2 gigawatts from 4.5 GW. ERG was owned by the Garrone family in Italy and was a leading oil company before it shifted its focus to renewable energies. It produces power from solar and wind sources. It entered the U.S. through a joint-venture - where it holds 75% of the shares - with Apex Clean Energy Holdings LLC, which has a wind farm as well as a solar power plant in its portfolio. ERG announced that it would return to its shareholders 1.15 euros per share between November 2024 and January 2025, consisting of 0.15 euros per share and 1 euro as dividend.
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UAE's EGA reports a lower net profit due to the suspension of bauxite from Guinea and UAE taxes
Emirates Global Aluminium (EGA), on Wednesday, reported a decline of 23.5% in its annual net profit in 2024 as a result of an impairment charge due to the suspension of exports following its operations in Guinea. In 2024, the UAE-based mined ore supplier said that profits were 2.6 billion dirhams (707,95 million dollars) compared to 3.4 billion dirhams (US$707.95 millions) in 2023. UAE has introduced a corporate income tax of 9% starting January 1, 2024. The company said it also expected the volatility of aluminium prices to continue this year due to tensions within global trade. U.S. President Donald Trump imposed 25% tariffs for all U.S. imports of steel and aluminum, which is a major market for United Arab Emirates' suppliers. EGA is jointly owned by the Abu Dhabi sovereign fund Mubadala, and Dubai sovereign fund Investment Corporation of Dubai. EGA reported in October that bauxite imports from its subsidiary Guinea Alumina Corporation were suspended by the customs. Guinea is the second largest producer of bauxite in the world after Australia. The company stated on Wednesday that the suspension led to a drop in exports from 14,1 million wet-metric tons of bauxite in 2023 down to 10,8 million wet-metric tonnes in 2020. EGA recorded a 1.8 billion dirham impairment on GAC's book value at year-end. In a statement, Abdulnasser Bin Kalban said that "we continue to seek a solution with the government to resume bauxite exports and mining." In the meantime, we will continue to take every step necessary to ensure our raw material supplies for our alumina refinery and smelting operation. The adjusted core earnings were 9.2 billion dirhams compared to 7.7 billion in 2023. This was due to higher aluminium and bauxite all-in prices, record production of aluminium and aluminum, and higher alumina costs, partially offset by lower bauxite output and higher alumina. $1 = 3.6726 UAE Dirham (Reporting and editing by Christian Schmollinger; Hadeel al Sayegh)
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China's steel production cut is a cause for concern after talks about reducing it resumed
Iron ore futures gave up their early gains on Wednesday as the market was shaken by renewed talks about China's plan to reduce crude steel production to curb oversupply in the industry. The May contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading session 0.32% lower, at 769.5 Yuan ($106) per metric ton. It had earlier reached an intraday peak of 785 Yuan a ton. As of 0744 GMT, the benchmark April iron ore traded on the Singapore Exchange had fallen 0.8% to $99.95 per ton after reaching its highest level since March 3, at $102,05 per ton. Market speculation suggested that China's output controls had been finalized, and would be announced later in the week. The National Development and Reform Commission of China, the country's state planner, has not responded to a request for comment. The state planner announced on March 5, that it would reduce crude steel production this year without specifying the volume to be reduced and when. Several market participants have speculated that the steel production could be reduced by 50 million tonnes this year. Reduced steel production will reduce the consumption of steelmaking raw materials. Investors bet that the demand for the main ingredient in steelmaking will increase in the near future after China's annual parliament meet. Analysts at Mysteel, a consultancy, said that some steel mills which had begun maintenance on their blast-furnaces gradually resumed operation due to decent margins and signs for improving demand. The benchmarks for steel on the Shanghai Futures Exchange have gained some ground. The benchmarks for steel on the Shanghai Futures Exchange rose. Coking coal and coke, which are used to make steel, also advanced on the DCE. They both increased by 0.8% and 0.06% respectively.
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Euro buoyed after Ukraine ceasefire proposal; tariffs squeeze stock
The euro rose to near 5-month highs Wednesday, as Ukraine was ready to accept a ceasefire lasting a full month. Meanwhile, stocks were thrown into turmoil by the back and forth of U.S. tariffs plans after levies against steel and aluminum imports began. European equity futures jumped by 1.1%, and FTSE Futures rose by 0.5% after news that the U.S. will restore military assistance and intelligence sharing with Ukraine following Kyiv's acceptance of a U.S. proposed ceasefire. In an interview published Wednesday, Sergei Lavrov, Russian Foreign Minister, said that Moscow would avoid compromises which could jeopardize the lives of people, Russian agencies reported. In Asia, the euro was unchanged at $1.0913 and hit its highest level since October at $1.0947 on Tuesday. The Russian rouble reached a seven-month peak on Tuesday. The U.S. tariffs on steel and aluminum of 25% went into effect on Wednesday. They had a relatively muted impact on share prices in Asian steel mills, and they drew countertariffs from Europe. MSCI's broadest Asia-Pacific share index outside Japan was flat, but fragile. Australia's benchmark closed down 9.6% from February's record high. Hong Kong, China and Taiwan markets were largely steady. South Korea and Taiwan rebounded. Japan's Nikkei remained stable after falling to a six-month low the day before. Wall Street's S&P 500 flirted with a 10% drop from the record-breaking closing high of February, but ended a volatile session around 0.8% lower. After Ontario halted plans to impose a surcharge for exported electricity, President Donald Trump threatened and then backtracked from a 50% increase in steel and aluminum tariffs against Canada. Dollar has fallen, Treasuries are up and stocks have been selling at their highest level in months. Traders worry that tariffs and policy uncertainties will harm U.S. economic growth. Bruce Kasman, J.P. Morgan's chief global economist, told reporters in Singapore that the U.S. economic outlook was heightened. Although we haven't yet changed our model forecast, the risk of a recession is now about 40%. "If the U.S. enters a recession, we will have a more complex story because you'll need to understand that the financial spillovers from the U.S. to the rest the world are often very large." Investors worried about the economy punished retailers with disappointing financial results. Dick's Sporting Goods shares plunged 5.7% after a gloomy outlook, and Kohl's Corp's shares fell 24% following a decline in sales. Travel stocks were also hit after Delta Air Lines slashed its profit forecast by half, and rivals United Airlines and American Airlines warned about deteriorating results and falling government bookings. The U.S. Inflation data for February will be released later in the day, but it's likely too early to see any impact of tariffs. The central bank meeting of Canada will be closely monitored to find out what the monetary policymakers at the forefront of Trump's Trade War are thinking. The market has priced in a seventh consecutive rate reduction, which was only a slight possibility two weeks ago. Overnight, the Canadian dollar fell to a low of C$1.445 before recovering. U.S. stock futures moved up 0.2%. The yen slipped from its five-month high, trading at around 148 dollars. The Australian dollar, which is sensitive to risk, was held at just under 63 U.S. Cents. Brent crude futures traded just below $70 per barrel. (Editing by Shri Navaratnam).
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ECB will tackle fundamental questions regarding strategy assessment
The European Central Bank has launched a new strategy assessment that will cover some major questions about its workings - such as whether massive bond purchases remain an effective policy tool or what role they should play in fighting climate change. The following are likely to be reviewed before the final report is due in mid-year, which could lead to incremental changes in policy. BOND BUYS In the decade prior to the pandemic, quantitative easing or bond purchases were a major part of ECB's policy. However, some policymakers have openly questioned its benefits. The ECB purchased trillions of euro worth of debt to boost inflation when prices were too low. However, 4 trillion euro of these assets remain on the books years after the stimulus program ended because it takes time to unwind. Isabel Schnabel, a member of the ECB's board, said that asset prices would remain distorted as bond holdings could only be unwound gradually. It means that starting QE is harder than it was in the past. ECB officials are being urged to recognize that while quick purchases of bonds can be effective during pandemics, the costs of long-term purchases outweigh the benefits. While profits may not be a core business, the massive QE has also led to record losses for the ECB, denying governments dividend income. Since the ECB has made it clear that it will intervene on markets if policy transmittal is impaired, some policymakers also call for a more clear distinction between instruments to combat inflation and those aimed a market stability. SPECIALLY FORCEFUL MEASURES The review will not question the ECB’s primary goal to target inflation at 2%, but it could raise whether falling short of this threshold in future is so severe that it would require extraordinary measures. The ECB strategy calls for "especially strong" action when the inflation rate is too low. This suggests that undershooting may be a greater problem than overshooting. Evidence suggests that prices are rigid on their way down and only large shocks can lead to deflation. Even in the decade of ultra-low inflation before the pandemic began, households and firms continued to expect modest price increases. Some argue that if the ECB really believes its 2% inflation goal is symmetrical, there shouldn't be a distinction made between undershooting and overshooting. A particularly forceful approach, which usually involves a large number of bond purchases, can also cause financial distortions. CLIMATE The ECB has committed to a "ambitious climate action plan" by 2021. The results have been modest. The government shifted corporate reinvestments to firms that had better climate performance, but these reinvestments are long gone. The bank has promised to adjust its remaining portfolio of corporate bonds based on climate concerns, but it faces a deeper existential question about what role it should have in climate policy. The U.S. Federal Reserve left the Network for Greening the Financial System recently because its work went beyond the Fed's original mandate. ECB head Christine Lagarde defended NGFS, but others, such as Belgian central banker Pierre Wunsch, called on the ECB limit its role in climate policy to avoid interference with policymaking. DIRECTION FORWARD In its last review, in 2021, the ECB included forward guidance or commitments regarding future policy actions as a tool in its toolbox. This guidance, however slowed the bank's reaction to the rapid increase in inflation in 2020, as it had already committed to a looser policy. Since then, policymakers have argued that the ECB shouldn't use forward guidance unless interest rates are at their lowest effective levels. (Reporting by Balazs Koranyi, Editing by Alexandra Hudson)
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South Korean steelmakers are looking to U.S.-made products with higher value as Trump tariffs begin.
As major producers around the world prepare for Wednesday's increased tariffs, two major South Korean steelmakers have been evaluating their options to invest in new facilities. They said that the options included investing in operations in the U.S. The U.S. President Donald Trump’s decision to increase protection for American producers of steel and aluminum restores global tariffs that are effective at 25% on all metal imports. It also extends these duties to hundreds downstream products, such as nuts and bolts, bulldozers blades and cans. Canada, the largest foreign supplier of aluminium and steel to the U.S.A., Brazil, Mexico, and South Korea are the countries most affected. All of these countries have received some form of exemption or quota. A spokesperson for South Korean steelmaker POSCO said, "We will focus on products with high value-added and improve our technological capabilities in order to produce existing products at a more economical price." The spokesperson stated that "we are also reviewing investment proposals for upstream processes of steel in the U.S. and India but there has not been a final decision made yet." A spokesperson for local rival Hyundai Steel said that the company is considering building a new steel plant in the Southeastern region of the U.S., but no decision has been made. The increased tariffs by the U.S. would negatively impact the Korean steel industry. South Korea had previously enjoyed a duty-free quota on steel under an agreement reached in 2018, during Trump's inaugural term as president. The trade ministry announced on Wednesday that the government would prepare measures to support domestic firms in their expansion overseas and investment into new markets. The increased tariffs were also hoped for by firms that had a major presence in the U.S. or less exposure. A spokesperson for Australia's BlueScope, a steelmaker listed on the Australian stock exchange, said that the company expected to see a positive impact as the U.S. Tariffs came into effect. The company exports only 300,000 tonnes per year from its Delta, Ohio plant, despite producing more than 3 million tonnes of steel annually. The spokesperson said that the company is disappointed that Australia has not been granted an exemption. Anthony Albanese, Australia's prime minister, said that his country would not impose reciprocal duties on the U.S. because of the potential impact on inflation. He also stated that he will continue to lobby for a respite from the U.S. government. BlueScope's spokesperson stated that the company works closely with "the Australian diplomatic and trade staff in Canberra, Washington DC and a variety of senior representatives within Congress to ensure that the BlueScope Investment proposition is understood." The new tariffs could benefit Vietnamese companies as they were hit with levies of 25% in 2018. A steel trader in Hanoi said: "I believe Vietnam steel could benefit from this tariff." He declined to give his name because he wasn't authorised to talk to the media.
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Kings pull away from Islanders with penalty kill
Philip Danault scored two goals in five minutes to seal the victory for the Los Angeles Kings. They won 4-1 over the New York Islanders thanks to their strong penalty kill. Vladislav Gavrikov scored in the first period and Drew Doughty scored a shorthanded empty-netter in the third, for the Kings. They were 8-for-8 in penalty killing. Darcy Kuemper saved 33 shots for the Kings, and the Kings benefited from two potential Islanders power-play goals that were overturned by New York due to goalie interferance. The Kings won their third straight game to close the gap on the Edmonton Oilers, who are currently second in the Pacific Division. Anders Lee scored for the Islanders in the second period. They lost their second game in a row and ended a three-game West Coast trip with 0-2-0. New York is still five points behind Columbus Blue Jackets for the final wildcard spot in the Eastern Conference. Ilya Sorokin made 28 saves. Gavrikov gave the Kings an early lead with a sizzling shot fired under Sorokin’s glove arm at 4:27 in the first. Lee tied the score 8:37 in the second when his shot from a slot went past Kuemper's sticks. Danault's goal came just 37 seconds after the game had been tied. His teammate Warren Foegele had forced Islanders defenseman Ryan Pulock to make a mistake deep in New York. Duclair's potential game-tying score was overturned at 9:26 in the third period. Byfield scored an unassisted goal shorthanded with six minutes left, after Islanders' defenseman Tony DeAngelo snapped the stick he was holding to receive a pass. With 2:05 remaining in the second period, Lee's potential second goal was overturned. Sorokin left the game with just under four minutes remaining and Doughty sealed the victory with a goal with only 1:17 to go. Field Level Media
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Chinese consumers turn to Congolese copper off-exchange to ease supply shortages
Analysts and traders predict that China will import more refined off-exchange copper in this year as the output from Congo increases and consumers look to ease shortages and avoid a possible disruption of supplies of U.S. Scrap. The expected surge demonstrates the increasing reliance of China, as the largest copper consumer in the world, on the supply of refined metal from the Democratic Republic of Congo. DRC is now the second-largest producer of copper after years of massive Chinese investment. The Congo is a typical source of equivalent grade (EQ), copper, because the producers did not pay to register their metal on an exchange like the Shanghai Futures Exchange. This means that it cannot fulfill contracts on this market. EQ copper is cheaper than metal that has been registered, even though both meet the same specifications. Six traders and analysts involved in the Chinese market for copper said that they expect EQ's market share and import volume to increase again this year. According to Shanghai Metals Market, EQ copper was responsible for 62% (up from less than half) of China's imported refined copper last year. According to World Bureau of Metal Statistics data, the refined copper market is still tight. The global demand has outpaced supply for 9 of 12 month in 2024. Citigroup predicts a deficit of 136,000 tons in 2025. Small- and medium-sized Chinese manufacturers of wires and rods are attracted to the lower-priced, high-quality EQ Copper. They have been squeezed by high copper prices. The London Metal Exchange's (LME) prices have increased by 18% since last year, and 9% from the beginning of the year. "EQ has become quite popular in China during the last few years." A copper trader explained that the main reason for this is because EQ copper has the same quality as registered brands, but at a cheaper price. LSEG data and Chinese customs show that almost three quarters of Congo’s 2 million tonnes of refined copper went to China in the past year. According to SMM, the bulk of this was EQ-copper. Imports of refined copper from the DRC into China in 2024 will be seven times greater than in 2019. According to Fastmarkets data from March 4, the premium for EQ copper that has a minimum metal content of 99.9935% was between $3 and $15 per tonne. Fastmarkets data on March 4 shows that the premium for EQ copper with a metal content of a minimum 99.9935% over the LME price was $3-$15 per tonne. This discount is due to the lack of registration fees, but also because registered copper commands a premium price as its purity and quality are recognised by an exchange. A number of traders stated that they were unaware of any quality problems with EQ Copper. This increased reliance on Congolese scrap could compensate for a possible loss of U.S. scrap imported amid President Donald Trump’s tariff investigation into copper. China imported nearly 440,000 tonnes of copper scrap last year from the U.S. Imports are expected fall, and some traders already have suspended purchases due to concerns that the trade war may increase costs. The supply of refined copper is still limited, and this includes scrap, concentrate, anode, and blister. Jonathan Barnes, Principal Analyst at metals research firm Project Blue, said that we expect to see higher imports for abundant refined copper including EQ Copper in order to partially compensate for the tightness of other raw materials.
Gold prices hold steady as markets monitor inflation data
Gold was steady on Wednesday, ahead of an important U.S. data on inflation that could be used to gauge the Federal Reserve’s interest rate trajectory amid fears about economic slowdown and trade tensions. Attention was also focused on a possible ceasefire agreement in Ukraine.
As of 0300 GMT spot gold was unchanged at $2,916.69 per ounce. U.S. Gold futures rose 0.1% to $2922.30.
Tim Waterer, KCM Trade's chief market analyst, said that gold is in "consolidation mode" ahead of the next set of U.S. Inflation data.
Investors are awaiting the Consumer Price Index (CPI), which is due to be released later today, in order to determine the Fed's future interest rate stance.
Gold may lose its appeal if rising prices force the Fed's interest rate to remain higher. It is not a yielding asset.
The tariffs imposed by U.S. president Donald Trump are expected to increase inflation and economic unrest, which is why gold reached a record-high of $2,956.15 in February.
"I expect that gold will remain a preferred asset as long as investors are worried about tariff wars or a slowdown in growth. Waterer stated that the gold bias remains positive due to ongoing tariff dramas.
Trump defended his policies regarding tariffs on Tuesday, as he met with the CEOs of America’s largest companies. Many of these companies have seen their market values drop in recent weeks as fears about inflation and recession have soured investor and consumer sentiment.
Trump reversed his course on Tuesday after hours of announcing higher tariffs. He had pledged to double the tariffs on Canadian steel and aluminum to 50%.
The U.S. has agreed to resume its military assistance and intelligence sharing program with Ukraine, after Kyiv announced that it would accept the U.S. offer of a 30-day truce in Ukraine's conflict with Russia.
Spot silver fell 0.5%, to $32.76 per ounce. Platinum rose 0.4%, to $978.60. Palladium dropped 0.6%, to $940.53.
(source: Reuters)