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Demand worries, tariffs cause copper to fall more than a week's low
The copper price fell to its lowest level in over a week Wednesday, as inventories rose and investors were worried that looming U.S. Tariffs would hit demand. In open-outcry official trading, three-month copper at the London Metal Exchange fell 0.6% to $9,736 per kilogram, after reaching its lowest since July 18, at $9720.50. Analysts said that investors are waiting for details on planned U.S. copper tariffs of 50 percent and whether or not they will be implemented on August 1, as previously announced. U.S. Comex Copper Futures dropped 0.2% to $5.64 a lb. This brings the premium of Comex Copper over LME Copper to $2,694 a tonne. After the U.S. agreed to extend their 90-day trade truce, there was uncertainty over a possible trade war with China, the largest metal consumer in the world. Tom Price, Panmure Liberum's head of commodities strategy said: "I believe investors' engagement is at a standstill." Investors in other countries are actually pricing the demand risk associated with these tariffs, because metal suddenly becomes more expensive without any change in demand. "A 50% tariff is an astonishingly large number." The Shanghai Futures Exchange's most traded copper contract fell 0.1%, to 78.930 yuan per ton ($10,999.47). Stocks in LME warehouses were surging due to excess supply on the market LME data shows that. Market participants also awaited the announcement of the U.S. Central Bank's policy later that day, where rates are expected to remain unchanged. Price said that if they do not cut rates, commodities will be under pressure. LME aluminium increased 0.3% to $2.614 per ton in official activity, while zinc fell 0.5% to 2,792, lead dropped 0.6% to $2,000, nickel declined 1.5% to $16,080, and tin slipped 0.1% to $33,650. Click here to see the latest news in metals.
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Helion Energy begins construction of nuclear fusion power plant for Microsoft data centers
Helion Energy, an OpenAI-backed startup, and SoftBank Venture Capital's venture arm have begun construction at a site where a nuclear fusion plant will be built. The power plant is expected to supply Microsoft data centers with electricity by 2028. Helion Energy hopes to use the grid infrastructure already in place at the Rock Island Dam hydroelectric power plant near Malaga, Washington. The startup has yet to receive final permits from Washington, but it said that the work it's done puts it on course to sell electricity to Microsoft in accordance with a 2023 deal. Fusion is the process of ramming together atoms to release energy. It does not emit significant amounts of greenhouse gases, nor create large quantities radioactive waste. Scientists and engineers have yet to find a reliable way to generate more energy from fusion than is required to sustain and create the reaction. Helion has been working on this with its current prototype called Polaris. It is located in Everett Washington where it will build components for Orion, the machine that will be built at Malaga. David Kirtley (co-founder and CEO of Helion) said that Orion would connect to Washington's main power delivery networks. Kirtley stated that "we'll be able connect to the same grid upstream from the Microsoft datacenters." Microsoft has been saying for years that nuclear energy is a part of the mix of carbon-free sources of energy. They have also signed agreements to purchase power from conventional fission nuclear power. Melanie Nakagawa is Microsoft's chief sustainable officer. She believes that fusion is a long-term investment. Nakagawa said that "over the past three to four years you have seen different types of milestones be met by other companies, including Helion, in the fusion area." There's a lot optimism that this is the moment when fusion comes to fruition within this decade or soon after. (Reporting and editing by Christian Schmollinger in San Francisco, with Stephen Nellis reporting from San Francisco)
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Italy creates AI assistant that helps Italians assess landslide risk
A public research organization announced on Wednesday that climate change will likely lead to an increase in landslides. They also announced a new AI assistant which can help assess the risk. The environmental research and protection organization ISPRA stated that climate change increases the frequency of stronger thunderstorms, amplifies risks of landslides, and floods, and spreads them to areas which were previously less exposed. It said that the share of land at risk of serious landslides rose from 8.7% to 9.5% in 2021. About 2.2% or 1.3 million people live in this area. The institute stated that Italy remains one of the European countries with the highest risk of landslides. It cited recent natural disasters, such as the landslide in 2022 on the island Ischia near Naples and the flooding in Emilia-Romagna 2023. The institute stated that the new AI assistant will help users navigate through the IdroGEO platform, which is a public platform with maps and data updates on instabilities, and provide information and answer questions.
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AEP exceeds profit expectations, anticipates new capital plan of $70 Billion over five years
American Electric Power beat Wall Street expectations for the second quarter profit on Wednesday. The company said it plans to announce in the fall a new five-year capital program of approximately $70 billion, to meet U.S. energy demand growth. In premarket trading, shares were up 1% to $110.34. The U.S. Energy Information Administration said in April that U.S. electricity consumption would reach new records in 2025 and '26 due to data centers dedicated for artificial intelligence and cryptocurrency. This encouraged power producers to increase their investments. The company announced earlier this year that it would consider adding $10 billion to the $54 billion capital plan for the next five years as the demand for data centres increased in the service areas of the U.S. Electric Utility. The company's quarterly profits were boosted by higher electricity rates. Utility firms can obtain these increases through rate cases, where they appeal for power price hikes based on their investment or expenses in providing services. According to LSEG data, the Colombus, Ohio, based company reported a profit adjusted of $1.43 for the quarter ending June 30 compared with an average analyst estimate of $1.27. AEP provides service to 5.6 million customers across 11 states, including Texas and Ohio. It has the largest transmission system of electric power in the U.S. (Reporting by Tanay Dhumal in Bengaluru; Editing by Shailesh Kuber) The utility has reaffirmed that its adjusted profit for the full year is expected to be in the upper half. (Reporting and editing by Shailesh Kuber in Bengaluru)
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Entergy increases profit forecasts for the coming years due to power demand increase
Entergy has raised its profit projection for the second half of the decade as the U.S. energy landscape is reshaped by the rising demand for electricity from AI-driven data centres and electrification trends. The U.S. Energy Information Administration predicts that power consumption will reach new records in the United States in 2025 and in 2026. This is due to the rapid expansion of data centres dedicated to artificial intelligence, cryptocurrency and the use of electricity by homes and businesses for heating and transportation. The U.S. Electric Utility raised its adjusted profit projection for 2027 from $4.65 to 4.95 per share to an estimated range of $4.70 - $5.00 per share. It expects a profit of between $5.20 to $5.50 per common share in 2028. This is up from its previous forecast, which was $5.10 - $5.40. Drew Marsh, CEO of Xerox Corporation said: "We are well-positioned to seize significant opportunities ahead and create value for our shareholders." Entergy has also increased its capital expenditure plan for the next four years to $40 billion from $37 billion to meet anticipated demand from artificial-intelligence data centers. Utilities are adding billions to their capital budgets, as they receive massive requests from Big Tech companies looking for locations that could be suitable for data centers. The S&P Index tracking utilities increased 3.5% during the quarter ending June 30. Entergy reported a total retail sale of 35,534 gigawatt-hours (GWh) for the quarter. This includes a nearly 12% increase in industrial sales, compared to 34,444GWh one year earlier. According to LSEG data, it posted a profit adjusted of $1.05 for the three-month period ended June 30 compared to analysts' average estimates of 92c. Entergy, based in New Orleans, provides electricity to almost 3 million customers throughout Arkansas, Louisiana and Texas. (Reporting and editing by Shailesh Kuber in Bengaluru, Katha Kalia is based in Bengaluru)
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Gold prices rise as the dollar weakens ahead of Fed decision
Gold prices rose on Wednesday as investors waited for the Federal Reserve to announce its policy and make comments that might provide more clues about the timing of their next moves. As of 1056 GMT, spot gold was up by 0.1%, at $3,328.15 an ounce. U.S. Gold Futures rose 0.1% to $3,325.10. Gold became less expensive to holders of other currencies after the dollar index fell by 0.1%. "There is a combination of factors that are holding gold prices back." "From a geopolitical perspective, we seem to be making some progress in the tariff negotiation but no one is willing to commit to anything," StoneX analyst Rhona o'Connell stated. The focus will be on the developments between China and the United States after both officials have agreed to extend their 90-day truce on tariffs following two days in Stockholm of constructive discussions. Investors' fears were eased by the trade agreements reached with Japan and the European Union last week. This week, the risk sentiment on the stock market was also lifted. The Fed is expected to maintain rates on Wednesday despite President Donald Trump's repeated calls for them to be lowered. The markets will be watching Fed Chair Jerome Powell for further clues about the rate path. The markets have priced in two cuts by year's end, which is probably a bit too mild. "The Fed will not yield to political pressure, but it will interesting to see if the vote is unanimous today," O'Connell stated. In an environment of low interest rates, gold tends to perform well. Spot silver was down 0.6% at $37.97 an ounce. Platinum fell 0.5% to 1,388.59, and palladium rose 0.3% to $1,000.19. (Reporting and editing by Ronojoy Mazumdar, Emelia Sithole Matarise and Brijesh Patel in Bengaluru)
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The Russian ESPO premium oil prices in China remain stable despite US tariff threats
Four traders reported on Wednesday that premiums for ESPO blend crude oil loaded from Russia's Kozmino Port in late August or early September to be delivered into China have remained stable as buyers ignore the threat of higher U.S. Tariffs to meet a robust demand. Trump shortened the deadline on Monday for Moscow to reach a peace agreement with Ukraine or face secondary tariffs up to 100% within 10-12 days. The deadline for Russia is August 7 to 9. Cargoes destined for ESPO loading in September will be traded. The Russian oil market continued to operate as usual, according to traders. The premium of ESPO Blend to the international benchmark ICE Brent for cargoes that loaded at the end of August and beginning September was $2-2.20 a barrel, as higher refining margins boosted Chinese interest in buying crude oil. According to them, independent refiners from the eastern Shandong Province have increased crude processing rates slightly as margins improved. This month, state oil companies also increased their rates. As Middle East crude oil prices have risen, the traders who were not able to be identified publicly said that ESPO was considered by Chinese refiners to be the most cost-effective crude. Trade sources reported last week that Unipec, the trading division of Sinopec, had purchased 7-8 cargoes for August-loading ESPO. They did not give numbers from previous months. Sinopec didn't immediately respond to an'inquiry for comment. Last week, traders reported that Shandong Yulong Petrochemical had also purchased Urals crude from Russia. Traders said that the decline in exports in Russian Sokol crude produced on Sakhalin Island due to maintenance work at the oilfield in August has also supported ESPO price. Kpler data showed that most Sokol crude was exported to China, with the remainder going to India. (Reporting in MOSCOW by Siyi Liu and Florence Tan in SINGAPORE, Editing by Barbara Lewis and Florence Tan)
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Scientists say that coastal erosion in Chile could wipe out 10 beaches in a decade.
According to a group of scientists, the central and southern coasts of Chile, which stretch for thousands (miles) on the Pacific Ocean, are at risk of erosion, which could lead to the disappearance or 10 beaches within the next decade. In an interview conducted this month at the Renaca Beach near Vina del Mar, the director of the Coastal Observatory of Universidad Catolica said, "It's going to be very hard for these beaches in the next 10 year," Her team tracked erosion at 67 beaches and found that 86% of them are shrinking steadily -- even in spring and summer when they usually recover. The rate of erosion has doubled in the ten areas that already experienced high erosion rates in 2023. Martinez stated that the causes of the epidemic are both human-made and natural. She cited climate change as a major factor, pointing to the increasing frequency and intensity of swells, rising sea levels, downpours and heatwaves. Urbanization unchecked and degradation of river basins, which supply sand along the coast, have also played a role. Storm surges in Puerto Saavedra have created sinkholes on cliffs and roads, preventing some communities from accessing the area. Saltwater also damages forests. Martinez stated that "we're noticing cliffs and sand shores receding rapidly." Local businesses in tourist-friendly towns are already feeling its impact. Maria Harris, owner of a beachfront Valparaiso restaurant, said that last year was brutal. "The beach disappeared." "There was no distance between us and our sea." Construction continues along the coast, sometimes near dunes and wetlands. Martinez warns that the effects go beyond the environmental. She said, "We are transferring the costs of these disasters onto people, including fishermen, coastal communities and the tourism industry." (Reporting and writing by Nicolas Cortes, Carolina Fernandez and Daina Beth Solon and Lucinda Elliot; editing by Sandra Maler).
Where does the US obtain its copper?
On Tuesday, U.S. president Donald Trump said that he would be announcing a new initiative.
Imports of copper are subject to a 50% tariff
Later in the day, a global industry, whose output is crucial for electric vehicles, military equipment, semiconductors, and a variety of consumer goods, was surprised.
Trump had a February election.
Ordered a Probe
As part of efforts by the United States to rebuild its production of copper, there is a deadline of November for possible tariffs.
The investigation, which was meant to evaluate the imports of copper concentrates, copper scrap, and copper alloys, was still ongoing.
The U.S. Commerce Department's Howard Lutnick announced on Tuesday that the duties will likely be implemented by the end or August 1 of this year.
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)