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Xi praises Belarus, which is under sanctions, as China's true ally
Xi Jinping, Chinese president, praised Belarus for being a true Chinese friend when he met Alexander Lukashenko on Wednesday, the leader the sanctions-hit European country. He also urged his Russian ally, Alexander Lukashenko to join Beijing and oppose "hegemony" and "bullying". Lukashenko made his first visit to Beijing since he won the presidential election in January, which extended his 31-year reign of the former Soviet Republic. Western governments rejected his win as a fake. Belarus' economy has suffered from Western trade tariffs and sanctions due to its support of Russia's conflict in Ukraine. Minsk has become increasingly orientated towards the east after being cut off from Western markets. Minsk had allowed Russian forces use its territory as a staging ground for their invasion of Ukraine. Xinhua reports that Xi congratulated Lukashenko on his reelection in Zhongnanhai in Beijing. He also added that China and Belarus are "true partners and friends." "The friendship between China and the United States has been enduring for a very long time. The mutual political trust is unbreakable," Xi stated. Xi said that both countries must also "oppose hegemony and bullying and defend international fairness, justice and equity". Belarus' official news agency BelTA quoted Lukashenko saying, "You have accurately highlighted the main feature of our times - the unprecedented Western pressure on us, in particular on the People's Republic of China." Lukashenko stated, "Today, many countries including Belarus are looking at you, Beijing." Last month, Xi met with Vladimir Putin in Russia. He vowed that they would remain "friends of iron" in a world no longer dominated by America. Since Donald Trump's return to the White House in 2017, Washington has increased its pressure on Russia and China. Moscow is being urged to end the conflict in Ukraine quickly, while Beijing faces new tariffs. Lukashenko has been to China 15 times in the past years and has relied on Beijing for credit and investment despite Belarus being considered part of Moscow's traditional influence sphere. Minsk also looks to Beijing for assistance in transforming and upgrading its industries. Last year, Minsk became a BRICS member state and a partner nation. Despite China's pledge to increase bilateral cooperation, there are still economic imbalances. China's surplus in trade with Belarus increased by 47.6% from the previous year to $4.77bn, according to Chinese data. China's exports of cars, digital TV receivers, and washing machines outweighed its purchases of Belarusian goods, including farm fertilisers. (Reporting from Beijing by Ryan Woo and Melbourne by Lidia Kelly; Additional reporting provided by Beijing Newsroom. Editing by Jacqueline Wong, Raju Gopalakrishnan and Jacqueline Wong)
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Austria's Voestalpine predicts small profit increase, dented due to tariffs
Voestalpine, an Austrian specialty steelmaker, forecasted a modest increase in its core earnings for the year on Wednesday. It attributed this to a direct impact from U.S. Tariffs and high levels of uncertainty caused by the trade war. Voestalpine's annual report stated that President Donald Trump’s tariffs will have a negative impact on earnings of a few millions euros in the mid-double digits during the first quarter of 2019. The steel manufacturer, which supplies primarily the automotive industry with its products, expects to earn between 1.4 and 1.55 billion euro ($1.59 billion to $1.76 billion), before interest, tax, depreciation, and amortization. This compares with 1.35 billion euro in the previous years and the analysts' median estimate of 1.5 billion Euros in an LSEG survey. Voestalpine reported a lower revenue for the full year, due to a challenging economic climate and reorganization. These measures, it said, should increase its core earnings for the next year. The company's revenue dropped from 16.68 billion euros to just 15.7 billion euro a year ago. Analysts polled at LSEG expected a lower drop, to 15.85 billion euro. $1 = 0.8800 Euros (Reporting and editing by Milla Nissi-Prussak in Gdansk)
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As trade uncertainty persists, Asian stocks are rising and the dollar is fluctuating.
The dollar weakened as U.S. tariffs on steel and aluminum increased, and Asian stocks rose. This marks the latest chapter of the trade war which has roiled the markets throughout the year. Investors have been focused on the pace and lack of progress in trade negotiations. The deadline for U.S. trade partners to submit proposals for deals in order to avoid Trump's "Liberation Day", hefty tariffs, is Wednesday. The European Stock Futures market pointed to an opening higher as the European Central Bank began its two-day meeting, where it was expected to reduce rates on Thursday. South Korea's currency and stocks surged in Asia after the liberal candidate for president Lee Jae Myung won his election. This victory raised expectations of a rapid economic stimulus and market reforms, as well as easing policy uncertainties. The benchmark KOSPI rose more than 2%, reaching its highest level since August 2024. The MSCI broadest Asia-Pacific share index outside Japan was nearly 1% higher. Japan's Nikkei gained 0.8% while Taiwanese stocks rose 2%, after artificial intelligence giant Nvidia helped boost U.S. stock prices on Tuesday. The data showed that U.S. jobs opened up in April but that layoffs also increased, which indicates a slower labour market due to tariffs impacting the economy outlook. Investors have been watching a potential phone call between U.S. president Donald Trump and Chinese leader Xi Jinping this week, as tensions simmer between the two world's largest economies. Trump accused China on Friday of violating the Geneva Agreement to reduce tariffs and trade barriers. Beijing has said that it will protect its interests, and that this accusation is unfounded. The blue chip index in China rose by 0.58% on Wednesday, while Hong Kong’s Hang Seng index rose by 0.56%. The Trump-Xi negotiations remain the focus of attention, even though markets may have become numb to headlines about trade. "A grand deal seems unlikely, but any escalation may still cause a bout risk aversion", said Charu Chanana. Chief investment strategist at Saxo, Singapore. Trump also signed an executive order that will take effect on Wednesday the surprise announcement he made last week, that he would increase tariffs for steel and aluminum imports from 25% to 50%. Thierry Wizman is a global FX & Rates Strategist at Macquarie. He said: "We think that the steel & aluminum tariffs are a good example of other strategic tariffs which are likely to'stick.'" "With this, there is still little incentive for a U.S. Dollar rally to take root." DOLLAR WEAKNESS Investors have fled U.S. assets in search of safe havens this year, including gold, as they anticipate trade uncertainty to have a negative impact on the global economy. The Organisation for Economic Cooperation and Development (OECD) has revised its March estimates, due primarily to the impact of the Trump administration’s trade war. The dollar rose 0.18% against the yen on Wednesday to 144.225. The euro was unchanged at $1.1368. The dollar index (which measures the U.S. currency against six major currencies) was 99.31 on Monday, not too far away from the six-weeks low of 98.58 that was reached on Monday. The index has fallen 8.5% in the past year. Oil prices fell in commodities due to a loosening of the supply-demand equilibrium following an increase in OPEC+ production and lingering worries about global economic prospects because of tariff tensions. Brent crude futures fell 0.38%, to $65.38 per barrel. U.S. West Texas Intermediate crude crude dropped 0.41%, to $63.15 a barrel. Gold's gains this year have been staggering, reaching 28%, thanks to safe-haven flows.
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Palm oil prices fall due to a projected buildup of stocks and weaker rival oils
Malaysian palm futures fell on Wednesday, as the market anticipated that stocks would rise for a third consecutive month in the month of May. They were also pressured by the declines in edible oils on Chicago and Dalian. By midday, the benchmark contract for palm oil delivery in August on the Bursa Derivatives Market had fallen 8 ringgit (0.2%), to $3,926 ringgit (US$923.11) per metric ton. A Kuala Lumpur based trader stated that "if end stocks rise, this will pressure palm oil futures price, which is why the markets are down." A survey on Wednesday showed that Malaysian palm oil inventories will rise for the third month in a row in May. This is due to a modest increase in production, despite strong export demand. AmSpec Agri Malaysia, an independent inspector, estimated that exports of palm oil products from Malaysia had risen by 13.2% in the month of May. Cargo surveyor Intertek Testing Services predicted a 17.9% increase. Dalian's palm oil contract fell 0.88%, while the most active soyoil contract decreased 0.03%. Chicago Board of Trade soyoil prices fell by 0.45%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils. In May, India's imports of palm oil reached a six-month record. The price of oil fell in Asian trade due to concerns over rising OPEC+ production and tensions on tariffs, which threaten global economic prospects. However, worries about Canadian supplies provided a floor. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures. The palm ringgit's trade currency strengthened by 0.31% to the dollar. This made the commodity slightly cheaper for buyers who hold foreign currencies. Technical analyst Wang Tao stated that palm oil could retest the resistance level of 3,968 Ringgit per metric tonne. A break above this would lead to an increase to 3,998 Ringgit.
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Top sources of U.S. imports of steel and aluminum
On Wednesday, the U.S. tariffs on steel and aluminum imports doubled as President Donald Trump intensified a global trade conflict. Here is a list of major trading partners that will be affected. STEEL: About a quarter (25%) of the steel used in America is imported. The bulk comes from Mexico and Canada, or other close allies such as Japan, South Korea, and Germany. China is the largest producer and exporter of steel in the world, but it only sends a small amount to the United States. In 2018, tariffs of 25% were imposed on Chinese steel, which effectively shut the market out. Last year, China exported 508,000 tons of steel net to the U.S. This is 1.8% of all American steel imports. ALUMINUM: The U.S. relies more on imports for aluminum. Approximately half of the aluminum used in the U.S. comes from imports, the majority of which is Canadian. Canadian aluminum imports exceeded the combined total of nine other countries by 3.2 million tonnes last year. United Arab Emirates (UAE) and China are the next two largest importers, with 347,034 metric tons and 222,872 respectively. According to global standards, the U.S. aluminium smelting sector is relatively small. According to the U.S. Geological Survey, the total smelter capability in the country is just 1.73% the global total.
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Wall Street Journal, June 4,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. The Chinese government's stranglehold over rare-earth magnetic materials has led to the closure of many factories in Europe and North America. The White House on Tuesday sent Congress a $9.4 Billion rescission package that codifies some of the spending cuts made by Trump's administration. In essence, it asked lawmakers to reverse expenditures they had previously voted in law. Post Holdings has agreed to purchase 8th Avenue Food & Provisions, including assumed debts, for $880,000,000. This will reunite the company with private brands that it had previously owned. Elon Musk, SpaceX's CEO, said on X Tuesday that the Texas-based firm is expected to generate $15.5 billion of revenue by 2025. North Face and Cartier informed their customers in recent days that their names and emails had been stolen. Victoria's Secret was forced to close its website for 3 days after another cyber-attack and delay the announcement of quarterly earnings that had been scheduled for this week. - Meta is turning to nuclear power for the massive amounts of electricity it needs to fuel its artificial-intelligence ambitions.
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Dutch car-sharing firm adds Renault electric vehicles capable of powering the local grid
This week, MyWheels, a Dutch car-sharing company will add the first 500 Renault EVs that are grid-connected to its fleet. The technology is gaining traction in Europe and the number of cars capable of strengthening power grids has increased. The Vehicle-to Grid technology (V2G) allows electric cars to store energy and deliver it to the grid during times of high demand. It has been around for several years, but it was only recently that the technology became commercially viable. This was due to smart charging and batteries capable of sustaining intensive use. MyWheels' roll-out will be the biggest V2G car sharing scheme in Europe, and the addition of the most V2G enabled cars in the region. Kees Koopen, investor at We Drive Solar (the Dutch manufacturer of the chargers) said that the project was a response to the growing concern over grid stability following a major power outage in Spain and Portugal in this year and the sabotage of power supply during the Cannes Film Festival this year. Koolen said that it felt like the project in Utrecht, Netherlands had cost approximately 100 million euros (114 million dollars) to develop. Global Market Insights estimates that the global V2G market will reach $80 billion by 2034, up from $3.4 billion. The Netherlands has been a pioneer in the adoption of V2G due to its ambitious plans to electrify and heat their transport systems, while moving towards renewable energy. Nissan, a Japanese automaker, has recently delivered dozens of Leaf and Ariya models with V2G capabilities to France and Spain. MyWheels reports that 500 Renault V2G compatible cars, including the electric R5, will hit the roads by next year. The cars will be charged bidirectionally by We Drive Solar when not in use. Operators will receive payment for the electricity consumed and sold back to the grid. As grids become more electrified and renewable energy sources are added, they have become unstable. Our research shows that the vehicle-to grid technology could enable the electric vehicle fleet to be a significant asset for the grid. Electric vehicles have a vast storage capacity, said Madeleine Brolly. She is an advanced transport analyst with Bloomberg New Energy Finance. She added that standardisation will be a key challenge for manufacturers to adopt the technology at large scale. (Reporting and editing by Dominique Patton, Christian Schmollinger and Dominique Patton; Gilles Guillaume and Anna Hirtenstein)
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PMI data shows that the growth of non-oil businesses in the UAE slowed down in May.
A survey released on Wednesday showed that growth in the UAE’s non-oil sector has slowed down to its lowest pace in almost four years. Demand remained high but moderated from recent peaks. The S&P Global UAE Purchasing Managers' Index fell from 54.0 to 53.3, its lowest level since September 2021. However, it remained above 50.0, the threshold for growth. In May, the rate of growth in production was the lowest in 44 months. This reflects a softerening in the non-oil sectors despite the fact that demand conditions were still supportive. The sub-index for output dropped to 57.3 from 59.4 readings in April and was the lowest since September 2021. Although the pace of growth in new orders remained strong, the sub-index fell to 56.2 in may from April's reading of 56.9 and was the lowest in seven months. David Owen, Senior Economist at S&P Global Market Intelligence said that although businesses continue to be pleased with the strong demand they receive from clients, some reports indicate that competition pressures and a weaker trade due to US tariffs have weighed down on growth. In the survey, firms reduced their inventories to a record low as they streamlined their holdings in response to a slowing economy. Backlogs fell to their lowest level in 16 months, which indicates a slower pace of demand. The business outlook for the future is subdued. The optimism level has fallen to its lowest since January. The growth of Dubai's private non-oil sector remained stable, with the headline PMI in May at 52.9, the same level as in April. However, demand momentum increased, with new orders growing at a faster pace than ever before. (Reporting and Editing by Toby Chopra).
The US construction sector's spending fell in April due to a decline in single-family housing.
The U.S. Construction spending fell unexpectedly in April. This was due to a decrease in expenditures on single-family projects, as well as higher borrowing costs.
Census Bureau of the Commerce Department reported on Monday that construction expenditures dropped by 0.4% following a 0.8% decrease in March, which had been downwardly revised. The economists polled had predicted that construction spending would rebound by 0.3% following a previous 0.5% decline reported in March.
In April, spending decreased by 0.5% on an annual basis.
Spending on private construction fell by 0.7%. Residential construction investment fell by 0.9%. Outlays for new single-family homes declined by 1.1%.
The economic uncertainty caused by President Donald Trump’s aggressive trade policies, such as the recent doubled of steel and aluminium duties from 25% to 50%, is also limiting home construction. The new housing stock is at levels not seen since 2007, and the supply of pre-owned homes is at its highest level in over four years. This leaves builders with little room to start building.
In April, the expenditure on multi-family housing decreased by 0.1%. Investments in non-residential private structures such as offices and factories decreased by 0.5%.
Spending on public construction projects increased by 0.4%. Spending by state and local governments increased 0.3% while federal spending jumped 2.7%. Lucia Mutikani, reporting; Andrea Ricci, editing
(source: Reuters)