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ArcelorMittal claims $2 billion against Italy over steel plant dispute
ArcelorMittal is a multinational steelmaker that was the former owner Acciaierie d'Italia, an Italian steel company. On Thursday, it announced that it filed a 1.8 billion euro claim ($2.2 billion) against the Italian Government over losses?linked with its investment in ADI's factories. This filing is a 'tit-fortat' move after Italy's state appointed administrators of ADI (formerly known as ILVA) sought around 8 billion euros in damages from ArcelorMittal alleging it mismanaged ADI’s steelworks. Early in 2024, the government assumed control of ADI after ArcelorMittal. ADI has struggled to maintain its production due to high energy costs and low demand. In the government's ?case, Luxembourg-headquartered ArcelorMittal said in a statement on Thursday that ADI's government-appointed commissioners had served it ?with a summons to appear before a Milan court. It rejected all accusations, including that it had pursued a'strategic approach of running down the 'plants, destroying ADI’s business, and extracting profit from Italy. ArcelorMittal announced that it had invested around 2 billion euros to "turn around a structurally-challenged business." Much of this money was dedicated to meeting the environmental standards set forth by the government. It claimed that the government had made "omissions" and "illegitimate legislative intervention" which affected the terms?under which it purchased the plants, and caused the company to lose its investment. In December, sources close to the issue said that 'Italy selected U.S. Investment Fund Flacks as the exclusive buyer for ADI. The?government tried before to sell ADI’s steelworks to a consortium of Azeri companies Baku Steel, and Azerbaijan?Business?Development?Fund but could not reach an agreement. ILVA Taranto?steel was once Europe's biggest steel plant, but it has been hampered since 2012 by judicial investigation and asset seizure?related to its environmental impact. The future of ADI has become a key political issue for Italian Prime Minister Giorgia Melons, since a shutdown could have significant effects on the manufacturing sector in Italy.
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Microsoft falls, and oil prices rise on Iran-related fears
Oil prices rose on U.S. - Iran tensions, as global shares fell on Thursday. On Wall 'Street in the U.S. Stocks were down in the opening stages of trading. Microsoft shares fell more than 11%, which put the company on course for its largest daily percentage decline since March 2020. Investors were unnerved after the record expenditure on artificial intelligence in the last quarter. Meta Platforms' quarterly results showed a gain of over 8%, but this was overshadowed by the drop in Microsoft shares. This shows that investors are willingly to overlook massive AI expenditures as long as they are accompanied with strong growth. Tesla, a fellow "Magnificent 7" member, slid nearly 2% following its earnings report. Apple will post its results after the closing bell. Adam Turnquist is the chief technical strategist at?LPL Financial, based in Charlotte, North Carolina. The Dow Jones Industrial Average dropped 69.72, or 0.15 %, to 48.945.88. The S&P 500 fell 53.52, or 0.77 %, to 6,924.51 while the Nasdaq Composite lost 379.35, or 1.59% to 23,478.10. The MSCI index of global stocks fell 5.18 points or 0.49% to 1,046.49. This was its first decline in six sessions. The dollar index (which measures the greenback versus a basket currencies) rose 0.36%, its second daily gain after a recent bout with weakness. Meanwhile, the euro fell 0.22% to $1.1926. The dollar's strength was boosted by the Federal Reserve's decision to keep interest rates unchanged on Wednesday. Chair Jerome Powell cited a strong economy, and lower risks of inflation and unemployment, which indicated that the central bank would have plenty of time to cut rates. The U.S. economy reported on Thursday that initial weekly jobless claims had fallen, which indicated that layoffs were still low. However, soft hiring kept consumers pessimistic regarding the labor market. U.S. crude oil prices rose by 2.67%, to $64.90 per barrel. Brent was up to $70.31 a barrel, up 2.79 percent on the day, after rising more than 5%. Geopolitical tensions kept upward pressure on the gold price, which reached a record $5,594.82 per ounce. This was its ninth consecutive record high. Gold spot prices fell 4.13% to $5,176.45 per ounce, despite the gains.
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Dow forecasts weak revenues amid slow demand, and will cut 4,500 jobs
Dow will cut 4,500 jobs or 13% of its total workforce as part of a massive restructuring designed to boost profitability by at least $ 2 billion. However, the company's first-quarter revenues are expected to be below expectations due to persistently low demand. In the morning of Thursday, shares of the company dropped 5.8%. On a call after earnings, executives said that the job cuts would also reduce the roles and resources of third parties. The company is using automation and AI in order to improve efficiency and lower costs. Chemical producers around the world are reevaluating their strategies due to stagnant demand in Europe, rising production costs, and changing regulatory requirements. Dow has also been reevaluating its ownership of non-core assets throughout its global portfolio. This includes power and steam production, pipelines, and other assets. Jim Fitterling, CEO of Fitterling Corporation, said that the company will deliver the remaining $500 million in savings from the $1 billion cost-saving program by the end the year. Dow, which employs 34,600 workers and operates manufacturing sites across?29 countries, anticipates incurring $1.1 to $1.5 billion of one-time costs associated with the restructuring in 2026 and 2027. The company has not specified which sites or business units will be affected by the planned job cuts. DOWNBEAT EXPECTATIONS OF REVENUE According to data compiled and analyzed by LSEG, the company predicted first-quarter sales of $9.4billion, which is below analysts' averaging estimate of $10.33billion. Dow said that modest seasonal improvements in demand and the benefits of cost control during the quarter may be offset by planned maintenance and continued downward pressure on the market, particularly for the construction and building industry. The Michigan-based company reported a smaller-than-expected adjusted loss of 34 cents per share, compared with analysts' average estimate of a loss of 46 cents. (Reporting and editing by Sriraj Kalluvila in Bengaluru)
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Sibanye Stillwater wants to reduce its $2.2 billion debt in half by 2028
Sibanye Stillwater, a diversified'miner, said on Thursday that it aims to reduce its gross debt by 50% in the next two to three years. In a recent strategy update, the company said it also aimed to save 3 billion rands ($190.10 millions) annually by 2027. This is mainly due to an estimated 2,5% increase in production and a decrease in overheads. CFO Charl Ketter said that Sibanye will "aggressively" target debt reduction during a strategy update. Kayter said that Sibanye would refinance $500 million of a $675-million bond maturing in November 2026. Sibanye is now under the leadership of Richard Stewart, who replaced Neal Froneman, who had been CEO since October 2025. The company has seen a rise in gold and platinum prices, as well as a recovery in PGM prices. On Thursday, the spot gold price rose to a record high of $5,600 per ounce, mainly due to safe-haven purchases and weakening economic indicators in the United States. Platinum rose 1.4%, to $2,735.15 per ounce. It had previously reached a record-high of $2,918.80 an ounce on Monday. Sibanye intends to make a decision on its Burnstone Gold project in the first half 2026. The company had stopped work on Burnstone project in 2021 to conserve cash before a fall in PGM prices. But now, as bullion price continue to rise to record highs, it is advancing the project. Stewart said that Sibanye would now focus on organic growth. The company began in '2013 with three South African gold mines spun off by Gold Fields. It grew quickly through acquisitions, diversification, and PGMs. He said that the immediate focus of his strategy was to unlock the potential within our existing resources.
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Tesla to spend $20 billion on capital expenditures in a bid to move beyond human-driven vehicles
Tesla plans to double its capital expenditures to an all-time high of $20 billion this year, but only a small portion of that will be spent on the company's traditional business of selling cars to humans. According to comments made by executives on Wednesday's earnings conference, the company, which lost last year's global EV sales crown in China to BYD's BYD, will instead invest in yet-unproven businesses such as fully autonomous cars and humanoid robotics. Elon Musk, Tesla's CEO, announced that the company would stop producing its Model X SUVs and Model S sedans. Instead, it will use the space in its California factory for its Optimus robots. Musk also said in a separate post on his social networking site X that the robots would be produced in a higher volume at?Tesla’s Texas Gigafactory. He said, "This will be a big capex-year." "We are making huge investments for a future that will be epic." Vaibhav Tania, chief financial officer, said that the majority of the'record' investment would be used to build production lines for the Cybercab - a fully-autonomous vehicle without a wheel or pedals -, the Tesla semi-truck (long-promised), Optimus robots, and plants for lithium and battery production. Tesla's sales are still largely reliant upon human-driven EVs, but it is valued far higher than any other automaker. This puts it in a league with major tech firms. Investors' belief that Musk can deliver on his lofty promises to deliver robotaxis and robotoid robots, backed up by the company’s investment in AI, is a major factor. Microsoft, Alphabet, and Meta Platforms (parent company of Facebook) are also planning to increase capital expenditures this year. These companies will invest heavily in data centers and hardware in order to support AI models and customer demand. Scott Acheychek is the chief operating officer at REX Financial. REX Financial manages ETFs that have exposure to Tesla. He argues that Tesla's automobile business is?no more the main focus. He said that the "bigger story" is "the business model transition underway", as Tesla focuses more on autonomous driving. Tesla shares fell 1% at the opening of trading on Thursday. 'NECESSARY SPENDING' Andrew Rocco is a stock strategist for Zacks Investment Research. He said that he viewed $20 billion in spending as "necessary." Musk said that the spending plan gives him confidence in Musk's "sometimes erratic timelines." The $20 billion capital expenditure is significantly higher than the $11.3 billion recorded in 2024, which was the previous record. Taneja stated on the call that Tesla had more than $44 Billion in cash and investments that it could use to fund its investments. He said that this year's spending would not be the last. The company may look to pay for investments by borrowing more money or using other methods. Musk claimed that Tesla's spending on certain projects was not done for fun but "out of desperate need". Can other people please, for God's sake, in the name and spirit of all that is sacred, build this stuff? Musk was referring to the spending on cathode- and lithium-refining. "It is very difficult to build these things."
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US sources claim that the US has moved away from critical minerals price floors
Multiple sources have confirmed that the Trump administration has backed away from its plans to guarantee a price floor for U.S. Critical Minerals Projects, as a tacit acknowledgement of a lack in congressional funding and complexity of setting market prices, according to?. This shift comes at a time when a U.S. Senate Committee is reviewing a price ceiling extended to MP Materials in the past year. It marks a reversal of commitments made to the industry. Washington could also be set apart from other G7 countries discussing joint price support measures or similar measures to boost production of critical minerals that are used for electric vehicles, semiconductors and defense systems. Three attendees said that at a closed door meeting hosted by a Washington think tank this month, two senior Trump officials informed U.S. mineral executives that they would have to prove financial independence from government price support for their projects. Audrey Robertson, Assistant Secretary of the U.S. Department of Energy and Head of its Office of Critical Minerals and Energy Innovation told the executives that Audrey Robertson was not there to support them. "Don't expect that from us." A U.S. official said on Thursday that the administration may use its new power to negotiate individual price floors with businesses. Tariffs under Section 232 Imposing a market-wide floor price on certain minerals could achieve a similar goal. In premarket trading, shares of U.S. listed miners that produce critical minerals dropped between 3% to 8% on Thursday. Trilogy Metals fell 3.3%, MP Materials dropped 4.7% and Critical Metals and NioCorp Developments both lost more than 5%. Ramaco Resources dropped 6.4%, and USA Rare Earth fell?nearly 9 percent. Rare Australian Earth Shares Slide The price floor set by the MP is not affected. Robertson was joined in the International Trade Administration by Joshua Kroon. He is the deputy assistant secretary for textiles and consumer goods as well as materials, metals, and critical minerals at the Department of Commerce. Sources claim that Kroon and Robertson said at the meeting Washington was no longer able to offer floor prices. In a written statement, the Energy Department said that the story had been "false" and that it relied on sources who were either misinformed or intentionally misleading. The statement didn't elaborate on the errors that the department claimed to have found. The Energy Department did not respond immediately to a request for more information. MP Materials didn't respond to an emailed comment request, but after this story was published on Twitter said that there had not been any changes to its contract and the government obligations surrounding it. It said that any implication the U.S. government has changed its mind about MP Materials's contract is false. I did not suggest any part of the MP's agreement was at risk. The report today is inaccurate, false, and contradictory with the facts. The company said that it follows a pattern speculative, misleading reporting which "has mischaracterized government policies and caused unnecessary confusion on the market". Kroon and Robertson have not responded to any requests for comments. After the publication of the article, shares in Australian listed rare earths companies fell, and at one stage, those of Lynas Rare Earths - the largest company outside China - were down by more than 10%. A spokesperson for Lynas said that the company was benefiting by the U.S. decision, which has boosted rare earths prices. Price protection is important for producers who are currently in business, because it addresses the market's dysfunction immediately. She said that other policy instruments were available and had been used for early-stage projects. Reg Spencer, an analyst at Canaccord in Sydney, believes that the steep fall for shares related to rare earths was exaggerated. The comments were in line with his interpretation of White House policy, which is that the White House does not intend to support every rare earths project by using a floor price mechanism. Projects will be developed according to their merits," said he. The U.S. continues to support the development of a critical minerals supply chain in ex-China. He added that they may use different methods. Change in tact The current administration's stance contrasts with a closed-door July meeting, in which two officials told separate minerals executives in private that a price floor extended to MP Materials a few days earlier was "not an isolated event" and that they were working on other price support projects. Since then, the Administration has acquired equity in Lithium Americas and other companies, including USA Rare Earth, Trilogy Metals and USA Rare Earth. The government did not offer any price floors to these companies, which raised questions about its commitment to this financial tool. U.S. mining companies and processing firms have sought price floors and government backstops in order to compete with China. Industry executives claim that China's state producers can cut prices to punish competitors, undermine projects and discourage private investment. The White House has declined to confirm whether it intends to set new price floors. However, it said that it would continue to pursue tax cuts, deregulation and targeted investments in high-priority sectors "while being good taxpayer dollars." Price floors are criticized by critics who warn that they expose U.S. tax payers to financial risk, forcing the government to subsidise minerals when prices drop. This could result in long-term liabilities for taxpayers if prices continue to fall. Legal experts warn that guaranteeing minimum price could be challenged under U.S. budget, procurement and trade laws. This is especially true if such support is perceived as a market distortion, or if it lacks explicit congressional approval. Washington can still take other measures to support mineral projects and stabilize prices. These include stockpiling and equity investments, as well as local content stipulations. Price floors have been considered by other countries including Australia. MP DEAL IN THE SPOTLIGHT MP Materials' investment raised concerns from administration officials and Congress members that funding of a price-floor of at least $10 per kg for 2 types of rare Earths was not authorized by Congress. Two additional sources who were familiar with the discussion confirmed this. Since the MP investment, the economics have changed in the mineral markets. USA Rare Earth announced this week that it plans to purchase the same types of rare Earths on the open markets for $125 per kilogram. The MP investment included a guarantee purchase agreement. This caused confusion about whether Washington would guarantee price floors for others. Sources said that as the Trump administration looked at other equity investments it could make after MP, they realized it didn't have the authority from Congress to fund a floor price. According to two sources, this realization was partly sparked by an inquiry made by members of the Senate Armed Services Committee. They asked Pentagon staff to meet last year in order to explain the reasons why MP Materials received support for a price floor and the strategy the administration had adopted to invest in the minerals sector. A staffer of the committee confirmed that the request for a meeting was made, but refused to comment further. Reporting by Ernest Scheyder, Jarrett Renshaw. Melanie Burton and Vallari Srivastava contributed additional reporting from Melbourne and Bengaluru, respectively; editing by Veronica Brown and Lisa Shumaker.
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Silver breaks $120; gold has best month in 50 years
On Thursday, gold extended its record-breaking rally and was on course to?have?its best month performance since 1973 as investors flocked to the metal of safety. Silver also hit a new record, surpassing $120/oz. Gold spot was 2.1% higher, at $5.514.03 per ounce as of 8:52 am. After touching $5,594.82 earlier in the day (1352 GMT), spot gold was 2.1% higher at $5,514.03 an ounce by 8:52 a.m. Gold is up over 28% this month. U.S. Gold Futures for February Delivery were up 3.8% to $5,508.40. Gold demand is increasing, from crypto money to central banks. "Precious metals have been in the spotlight and investors are always looking for high returns," stated GoldSilver Central's managing director Brian Lan. The CEO of the crypto-group Tether announced on Wednesday that it would allocate between 10%-15% its investment portfolio to gold. Meanwhile, SPDR Gold Trust saw its holdings reach a 4-year high. U.S. president Donald Trump pressed Iran on Wednesday to negotiate a nuke deal while Tehran threatened to retaliate against the U.S. and its allies. This added to geopolitical uncertainties. Investors awaited Trump’s announcement about a new central bank chairman to replace Jerome Powell, who's term ends in may. The U.S. Federal Reserve kept rates the same on Wednesday. The markets expect the central bank to reduce rates next in June. Silver spot was up 2.3% at $119.24 per ounce, after hitting $120.44. The price of silver has risen by nearly 64% this year due to supply shortages and momentum buying. Silver, platinum, and palladium are relatively small markets compared to gold or the S&P 500. This makes them susceptible to speculative flows that have caused prices to be "totally disconnected" from where there is robust physical demand, said Guy Wolf. The spot price of platinum rose 3.2%, to $2.782.54 per ounce. It had previously reached a record-high $2.918.80 an ounce on Monday. Palladium also increased 0.2%, to $2.077.83.
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India is looking to increase its coking coal imports.
Vikram Dutt is the top official in the coal ministry of India. He said that India has a significant opportunity to import more coal from the United States, as it expands its steelmaking capability. Dutt stated that India had bilateral discussions with officials of the U.S. Department of Energy in advance of the India Energy Week event currently underway. About 85% of the world's second largest?crude-steel producer?s coking coal requirements are imported, and more than half comes from Australia. New Delhi is trying to diversify its supplies. About 10% of India's coal imports are currently imported from the U.S. India's coal is not suitable for steel production due to its high ash content. Kyle Haustveit of the U.S. Department of Energy said that the United States "actively tries" to support and increase its coal industry. Haustveit stated, "We are here to meet with the Indian Government to ensure that we're partnering through innovation and technology transfers." Haustveit and Dutt did not indicate how much India might increase its coking coal imports. Indian and U.S. government officials are also holding talks on a possible bilateral trade agreement, after last year's talks fell apart due to a breakdown of communication between the two countries. Sethuraman N.R., Kirsten Donovan (Editing)
Caterpillar sees a huge boost in AI sales as tariffs drag
Caterpillar’s fourth-quarter performance reflected the global economy. Sales were boosted by a surge in artificial intelligence spending, even though the equipment giant warned investors that they would be hit with tariffs of up to $2 billion over the next year.
The largest construction equipment company in the world reported that quarterly sales of its power and energy division, which manufactures generators, increased by more than 20%.
Caterpillar, along with other industrial giants, has relied on AI in order to boost investor sentiment. Its shares have gained 60% in the past year, which is roughly four times as much as the S&P500.
The AI boom has surpassed Caterpillar’s mainstay construction division as the largest Caterpillar business segment by sales.
On a recent earnings call, CEO Joe Creed stated that "prime power" systems are in high demand. These large generators provide constant, round-the-clock energy. Data-centers need more on-site electricity to keep up with their rapid growth.
Caterpillar shares, which are widely considered a bellwether of the global industrial economy, rose by about 4.4% at the start of trading.
TARIFF HEADWINDS
The company estimated tariff-related costs to be $2.6 billion by 2026. It said that the absolute value of tariffs in place last year was $1.8 Billion.
Last year, President Donald Trump's tariffs were a major factor in the price hikes and forecasts of industrial firms. Although many U.S. companies have told investors that tariffs this year are "manageable", early earnings season commentary indicates profit margins under pressure.
"Better-than-expected sales ?across business segments were hindered by tariff headwinds, limiting the margin expansion for the quarter," said Jefferies analyst Stephen Volkmann.
Volkmann said that he expected the headwinds will persist until 2026.
Caterpillar has outlined two scenarios for the annual operating profit margin. This is a continuation of a trend that was seen last year.
The company's target operating profit margin will be at the lower end of its range if tariffs are included.
Caterpillar announced a revised operating profit margin of 15% to 19% by 2024. This will increase to 21% to 25 % by 2030 depending on sales levels.
It earned adjusted profit per share at $5.16, up from $5.14 in the same quarter last year. Revenue increased to $19.1 billion, up from $16.2 billion.
According to LSEG data, analysts had on average expected the company would report a profit per share of $4.68 and revenue of $17.86 Billion.
Wall Street anticipates that the construction segment will return to growth by 2026. This is due to stronger dealer orders and stabilised non-residential building activity.
(source: Reuters)