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London copper prices rise as the dollar falls
The copper price in London rose on Friday. Supported by a weaker dollar, the prices are poised to rise for a week, but gains will be limited because of uncertainty surrounding U.S. Tariffs. As of 0334 GMT, the benchmark copper price on London Metal Exchange (LME), was up by 0.2%, at $9,516 per metric ton. This week, it has risen by 0.7%. The U.S. Dollar was weak on Friday, and it is expected to record its first weekly decline in five weeks versus the Euro and the Yen. This makes commodities priced in greenbacks more attractive for buyers who use other currencies. Investors have been forced to seek safe havens because of the weakness of the dollar. The U.S. has agreed to reduce tariffs on a tit-for -tat basis and implement a 90 day pause in actions. However, it is unclear what will happen after this temporary truce. Soni Kumari, ANZ Commodity Strategy Director, said that there are still many uncertainties about what will happen following the 90-day truce. Market will consolidate around the current range of $9,400 to $9,000 per metric tonne. Once we see a slowdown in copper imports to the U.S., prices will drop a little. Other London metals included aluminium, which was up by 0.2%, at $2,462, zinc, up by 0.2%, lead, up 0.5%, and nickel, up 0.01%, at $15,495. Tin rose 0.3% to $22,475. The Shanghai Futures Exchange's (SHFE) most-traded contract for copper was down by 0.1% to 77,830 Yuan ($10806.6) a tonne. SHFE aluminium fell by 0.1%, to 20,170 Yuan per ton. Zinc rose 0.1%, to 22,455 Yuan. Lead was up 0.3%, at 16,830 Yuan. Nickel was 0.7% lower, to 122660 Yuan. Tin was down 0.6%, to 264230 Yuan. ($1 = 7,2021 yuan). (Reporting and editing by Mrigank Dahniwala, Sonia Cheema).
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Dollar strength and slowing Chinese steel production are causing a decline in iron ore prices
The price of iron ore futures eased on Friday, and the prices were expected to decline modestly for the week due to a stronger dollar and a slowdown in demand for steelmaking materials from China, which is regarded as he biggest consumer. As of 0301 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange fell by 0.28% to $725 yuan (US$100.67) per metric ton. This week, the contract has fallen by 0.55%. The benchmark June ore price on the Singapore Exchange fell 0.2% to $98.8 per tonne, and has lost 1.26% this week. Mysteel, a consultancy, said that "the inventories of finished products held by Chinese traders...decreased by 398.500 tonnes in one week" during the week between May 16-22. According to Mysteel, the pace of stock decline has slowed due to a combination of rains and heat in China. Everbright Futures, a broker, stated in a report that on the demand side three new blast-furnaces were reopened and six others were refurbished. Everbright said that the hot metal production, which is typically used to gauge demand for iron ore, fell by 11,700 tonnes month-on-month in May to 2.436 millions tons. Analysts at ANZ say that "supply growth has disappeared as producers remain cautious of the weak demand and are increasing use of scrap steel." This should limit the downward movement of iron ore prices. The stronger dollar also pushed up prices. After three days of losses the dollar gained strength on Thursday, making assets denominated in dollars less affordable for holders of other currencies. Coking coal and coke, which are both steelmaking ingredients, were down by 2.87% and 1.31 %, respectively. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell by 0.1%, while hot-rolled coil, wire rod, and wire rod all declined around 0.2%. Stainless steel rose 0.27%. ($1 = 7,2016 Chinese Yuan) (Reporting and editing by Eileen Soreng; Michele Pek)
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London copper prices rise as the dollar falls
The copper price in London rose on Friday due to a weaker dollar. However, the gains were limited by the uncertainty surrounding U.S. Tariffs. As of 0225 GMT, the benchmark copper price on London Metal Exchange (LME), was up by 0.3% to $9,527.5 per metric tonne. The week-end gain was 0.8%. The U.S. Dollar was weak on Friday, and it is expected to record its first weekly decline in five weeks versus the Euro and the Yen. This makes commodities priced in greenbacks more attractive for buyers who use other currencies. Investors have been forced to seek safe havens because of the weakness in the US dollar. The U.S. has agreed to reduce tariffs on a tit-for -tat basis and implement a 90 day pause in actions. However, it is unclear what will happen after this temporary truce. Soni Kumari, ANZ Commodity Strategy Director, said that there are still many uncertainties about what will happen following the 90-day truce. Market will consolidate around the current range of $9,400 to $9,000 per metric ton. Once we see a slowdown in copper imports to the U.S., prices will drop a little. Other London metals saw a 0.3% increase in aluminium at $2,464.5 per ton. Zinc rose 0.7% to 2,715, while lead was up by 0.5% at $1,980. Nickel was up by 0.3% to 15,540. Tin rose 0.4% to $32,500. The Shanghai Futures Exchange's (SHFE) most traded copper contract was up 0.03% to 77,930 Yuan ($10,822.71) a ton. SHFE aluminium remained unchanged at 20,195 Yuan per ton. Zinc rose 0.5% to 22,540 Yuan. Lead was up 0.2% to 16,820 Yuan. Nickel was down 0.3% at 123,130 Yuan. Tin fell 0.3% at 264,990 Yan. ($1 = 7.2006 Yuan) (Reporting and editing by Sonia Cheema).
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Tariffs crossfire on Toyota, Nissan and Ford suppliers in Japan
Hiroko Suzuki’s father sparked a U.S. Trade War four decades ago by converting the family business, which produced auto parts, into niche products. The tariffs that the Trump administration has imposed are so extensive, they threaten Hiroko Suzuki's own efforts to diversify her 78-year old company into medical products. Shigeru Shiba, Prime Minister of Japan, has described the U.S. Tariffs, which include 25% on automobiles as a "national crises" for the fourth largest economy in the world. Ryosei Takazawa, Japan's chief trade negotiator headed to Washington for a third round on Friday. Companies like Kyowa Industrial in Takasaki (north of Tokyo) are showing signs of concern. They make prototype parts and race car components. Kyowa Industrial, which employs around 120 people, is one of six auto suppliers who expressed concern about the impact of tariffs on Japan's automobile industry. What are we going do? Suzuki, Kyowa’s third generation president, remembered thinking about the tariffs when they were announced. This is going to be bad. Kyowa's and other auto suppliers' problems illustrate a long-term shift in Japan. The country no longer floods consumer electronics with chips, but is now reliant on a car industry that faces fierce Chinese competition. This is a stark contrast to the 1980s when the U.S. placed trade barriers against a rapidly growing Japan and its exports. This report is based upon interviews with 12 people including senior government officials and bankers. It provides a firsthand account of the way one company is dealing with the uncertainty and the pressures on the automotive supply chains at a time when there is great disruption. Kyowa, along with thousands of small auto suppliers, has been pursuing a "monozukuri", or "making things" approach to production for decades. This culture of incremental improvements and assembly-line efficiency based on Toyota's methods helped Japan become a giant. The shift to battery powered smart cars means that software, an area in which EV manufacturers such as Tesla, and China's BYD excel at, is now a more important selling point. Kyowa began developing neurosurgery tools in 2016, after Suzuki (now 65) realized that the growth of EVs was going to have a negative impact on demand for engine parts. The company began selling the devices in the U.S., but found that Trump's tariffs applied to medical equipment as well. Suzuki is worried that automakers may force suppliers to lower prices in order to offset tariffs. She hasn't had that happen to her yet. Subaru Corp. supplier says his company might have to look for partners outside of the U.S. Since Trump's announcements on tariffs, major automakers have offered a muted level of support to suppliers. Toyota, Nissan, and Ford, among others, sent letters last month to U.S. subsidiaries of Japanese suppliers, asking for their cooperation against tariffs. The letters were not previously reported. Nissan instructed suppliers to adhere to the previously agreed price. It claimed that it was not "obligated" to pay for tariffs, but would take a portion of the cost up to four weeks in order to secure its supply chain. It said it could seek to recover support payments made to suppliers later. Nissan did not provide any support. According to two suppliers who reviewed the correspondence under condition of anonymity, automakers did not send follow-up letters. Nissan said it worked with suppliers to reduce the impact of tariffs and costs, including by localisation. Toyota stated that it would protect its dealers, employees, and suppliers while maintaining customer trust in order to navigate the uncertainty caused by tariffs. Ford said it was working closely with its suppliers to assess the exposure of their products and possibly reconfigure processes. Toyota stated in its letter that it understands the "complexity of financial burden" some suppliers face and asked them to share and identify mitigation measures. Toyota said it would work "in good-faith" with suppliers. Denso is one of the Toyota suppliers that has not provided earnings predictions for the upcoming year. They cited uncertainty. Julie Boote is an analyst with research firm Pelham Smithers Associates. She said that the trade war was an "emergency", which would accelerate consolidation in Japan's automotive industry. She said that in order for these automakers to survive they will need to work together. Squeezed on Cost Japanese manufacturers have traditionally pushed smaller suppliers into lowering their prices, according to Sayuri Shirai. She is a former Bank of Japan Board member and now a Professor at Keio University. She said that if the tariffs are kept in place for a longer period of time, they would cause more harm to regional economies already weakened by the demographic decline. Japan's risks are clear. Tokyo's economy contracted in the first three months of the year, and it has taken emergency measures to reduce the impact of tariffs. "Automobile exports to Japan are too important for a 25 percent tariff to remain in place," said David Boling. He is now director of consulting firm Eurasia Group. Boling stated that the U.S. will not go below the 10% agreed upon with Britain. Trump imposed a 25% tariff for automobiles, and a later 24% tariff on Japanese goods. The tariff on Japanese goods was reduced to 10% for 90-days, but that period ends in July. Akazawa said on Tuesday that Japan is sticking to its guns, and wants tariffs removed. The White House declined to comment. The U.S. State Department spokeswoman said that the Trump administration wants trading partners to align themselves with U.S. efforts in order to achieve "fairness, balance and protection of U.S. national and economic security." Two senior Japanese officials said that the auto industry in Japan was becoming a laggard. They suggested using tariffs to make sweeping changes and catch up to EV competitors. The trade ministry stated that the auto industry in Japan must adapt to the significant changes to the competitive environment, regardless of the U.S. Tariffs. Japan's Tier 1 auto suppliers purchase parts from Tier 2 suppliers and so on. The bottom of the chain can consist of little more than a neighborhood workshop that produces a single component. Officials from the government have urged small companies to innovate, consolidate and gain scale. A team of automotive industry experts supports 200 companies at Ashikaga Bank. Around 80% are Tier 2 suppliers or below. Unauthorized member of the team said that they were worried about tariffs leading to higher vehicle costs and a decrease in Japanese car sales to the U.S. which would affect the bank's customers. Shinichi Iizuka of Toa Kogyo - a suspension manufacturer in Subaru's hometown, Ota near Takasaki - said that the burden of tariffs will be shared between consumers, car dealers and automakers. Subaru sells 70% of its cars in the U.S. where it is reliant on local production and imports. Subaru announced on Monday that it would be raising prices for several U.S. model lines. Subaru CFO Shinsuke Toda said this month that the company was willing to discuss with suppliers how they could share their burdens, but added that the situation remained uncertain. It's Personal Suzuki's desire to diversify Kyowa Industrial to include medical devices is similar to the pivot her father made during the trade tensions of the 1980s, when Kyowa shifted away from mass-production of lower-profitable auto components to concentrate on prototypes and racing engine components with higher margins. Suzuki took over the company in 2000, and her father passed away in 2013. Suzuki planned to establish a U.S. sales record for medical equipment before Trump's tariffs to ease entry into other markets. She said that with the introduction of U.S. tariffs, her team had considered shifting production to the U.S. where costs are higher, or shifting sales focus to Asia. Suzuki stated that Kyowa was in discussions with potential distributors from Singapore and Hong Kong due to the uncertainty surrounding Trump's announcements. Kyowa still gets 70% of its business from automakers. The rest comes from chip-equipment manufacturers and the Japanese space program. It provides parts to Formula One racecars, General Motors, and most Japanese automakers. Sales are modest at 2 billion yen per year ($14 million). According to Teikoku Databank, Kyowa still has a larger market share than the other three quarters of Japan's 68,000 auto-supply companies. Suzuki's love for America is a personal issue, as she grew up listening rock music in the U.S. Armed forces radio. She also studied English at university and has a deep attachment to America. She recalls watching Aerosmith perform live in Japan at their first concert. "Japan has a long-standing history of friendship with America." She said, "I hope they can come up with a solution."
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Gold heads have the best week for more than a year on US fiscal concerns
Gold's best weekly gain since more than a week was expected on Friday as a weaker dollar and growing concerns over the deteriorating outlook of the world's largest economy increased the metal's appeal as a safe haven. As of 0204 GMT, spot gold rose 0.3% to $3303.92 per ounce. Bullion is up 3% this week, and on track to have its best performance weekly since early April. U.S. Gold Futures increased by 0.2% to $3.303.00. Dollars have lost over 1% this week, and are on track for their worst performance in a single week since April 7. This makes gold priced in greenbacks cheaper for those who hold other currencies. Tim Waterer, KCM Trade’s Chief Market analyst, said that "this week, trade optimism gave way to concerns about the U.S. fiscal situation. The resulting hesitancy toward U.S.-based assets has brought gold back into the picture with investors." Gold can likely remain above $3,000 while U.S. tariffs, U.S. Debt and geopolitical tensions continue to swirl around financial markets. The Republican-controlled U.S. House of Representatives passed a sweeping tax and spending bill on Thursday, embedding much of President Donald Trump's policy agenda and adding trillions of dollars more to the national debt. The Senate, where Republicans hold a 53-47 majority, will now consider what Trump called a "big and beautiful bill". The U.S. Treasury Department reported a soft demand on Wednesday for the sale of $20 billion in bonds with a 20-year maturity. Investor sentiment had already been weakened after Moody's reduced the U.S. triple A credit rating. Gold is used to store value in times of political and economic uncertainty. Iran's foreign minister Abbas Araqchi has warned that the U.S. will be held legally responsible for any Israeli attack against Iranian nuclear facilities. This comes after a CNN report stating that Israel was preparing to strike Iran. Silver spot rose by 0.1%, to $33.12 per ounce. Platinum gained 0.4%, to $1.084.99, and palladium fell 0.1%, to $1.013.63. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Sumana Nandy)
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Oil prices fall on stronger US Dollar, possible increase in OPEC+ output
The oil prices fell on Friday due to a stronger dollar and the likelihood that OPEC+ would increase crude oil production. Brent futures dropped 37 cents per barrel to $64.07 by 0015 GMT. U.S. West Texas Intermediate Crude Futures fell 39 cents to $60.81. Brent fell 2% in the past week and WTI dropped 2.7%. The U.S. Dollar strengthened Thursday against a basket of foreign currencies, thanks to the House of Representatives' passage of the bill by President Donald Trump for tax and expenditure cuts. Oil is usually traded inversely to the dollar, because a stronger dollar makes the commodity costlier for buyers outside the United States. Bloomberg News' report that OPEC+ would consider a large increase in production at a June 1 meeting also pushed the oil price lower. The report cited delegates as saying that delegates discussed the possibility of increasing production by 411,000 barrels per day (bpd). However, no agreement was reached. OPEC+ was reported to have accelerated oil prices. The price of oil was also affected by a large crude oil stockpile in the U.S. that occurred earlier in the week. The Tank Tiger storage broker reported that the demand for crude oil in the United States has risen in recent weeks, to a level similar to the COVID-19 epidemic. This is as traders prepare to receive a surge in supply from the Organization of the Petroleum Exporting Countries (OPEC) and its allies in the coming months. Baker Hughes will release data on Friday that can be used to predict future oil and gas supply. (Reporting and editing by Tom Hogue; Laila Kearney is the reporter)
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Official: US panel split over Nippon Steel bid but sees path forward
The White House said that a national security panel had divided opinions on its recommendation to Donald Trump regarding Nippon Steel’s bid for U.S. Steel. However, most members of the panel believe any security concerns posed by this deal can be addressed. According to an executive order Trump signed last month, the Committee on Foreign Investment in the U.S. on Tuesday submitted a report to Trump regarding the national security implications of the proposed merger. The document was submitted by Nippon Steel after it increased its investment pledge in U.S. Steel from $14 billion to $14 trillion in a desperate bid to get approval. The White House official stated in a press release that "we've received the reports and the President will examine the recommendations of each agencies to determine if further action is needed on this issue." The CFIUS agencies did not agree on their recommendations, but the majority believed that any risks could be mitigated through mitigation, the person said, declining to give his name because the matter wasn't public. Nippon Steel refused to comment. U.S. Steel didn't immediately respond to an inquiry for comment. The recommendation is in line with the executive order that was signed by Trump last week, and which instructed CFIUS to determine whether the measures proposed by companies would mitigate the national security threats previously identified by CFIUS. In the April directive, it was also requested that a statement be made describing each agency's position as a CFIUS member as well as its reasons. Trump has 15 days from now to decide on the fate of this transaction. However, the timeline may slip. In January, after a CFIUS review of the previous deal, Joe Biden, then President of the United States blocked it on grounds related to national security. Companies sued each other, claiming that they had not received a fair evaluation process. The Biden White House rejected this view. This week, it was reported that Nippon Steel had said if the merger were approved, they would invest up to $14 billion in U.S. Steel operations. That includes $4 billion for a new mill. (Reporting and editing by Leslie Adler, David Gregorio, Alexandra Alper)
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Official: US panel split over Nippon Steel bid but sees path forward
The recommendation of a national security panel to President Donald Trump regarding the bid by Japan's Nippon Steel for U.S. Steel was divided, but the majority of panel members believed that any security risks presented by the deal could be addressed, according to a White House spokesperson. According to an executive order Trump signed last month, the Committee on Foreign Investment in the U.S. on Tuesday submitted a report to Trump regarding the national security implications of the proposed merger. The document was submitted by Nippon Steel after it increased its investment pledge in U.S. Steel from $14 billion to $14.75 billion as a last ditch effort to win approval. The White House official stated in a press release that "we've received the reports and the President will examine the recommendations of each agencies to determine if further action is needed on this issue." The CFIUS agencies did not agree on their recommendations, but most believed that any risks could be mitigated through mitigation, the person said, declining to give his name because the matter wasn't public. Nippon Steel refused to comment. U.S. Steel didn't immediately respond to an inquiry for comment. (Reporting and editing by Leslie Adler, David Gregorio and Alexandra Alper)
Rio Tinto reports that 19.35% of its shareholders voted in favor of dual listing review
Rio Tinto announced on Thursday that 19,35% of shareholders voted in favor of a review of their dual-listed company structure.
According to UK regulations, the company would have been required to consult with more shareholders if a vote was cast of more than 20%.
Palliser Capital, an activist investor, has been campaigning for Rio Tinto to merge the London-listed and Sydney-listed companies into one holding company in Australia.
Palliser claims that removing the current structure would unlock value of $28 billion for Rio Tinto London shareholders.
The AGM in London on April 3 was a vote by British shareholders of the world's biggest iron ore mining company.
About 77% of Rio Tinto investors are listed in London, but Australian-listed shares trade at a 25% premium, largely due to the tax benefits available to Australian shareholders.
Rio Tinto’s board unanimously recommended that the company vote against the resolution. They cited tax concerns and said a unified list is not necessary to give it strategic flexibility.
Palliser’s motion received the support of influential proxy advisory firms Institutional Shareholder Services and Glass Lewis, as well as more than 100 shareholders, including Norway’s sovereign wealth fund Norges Bank Investment Management.
BHP, the rival company, ended a dual-listed structure similar to that of BHP in 2022. It now has an Australian primary listing six years after activist Elliott started its campaign for one listing.
(source: Reuters)