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NextEra receives a loan from the US of up to $1.9 Billion for the restart of Iowa Nuclear Plant
NextEra Energy announced?on Tuesday that it had secured a U.S. Department of Energy Loan of up to $1.9 Billion to support the restart of the Duane Arnold Energy Centre in Iowa as the country sought to increase power generation capacity to satisfy rising demand. Google, owned by Alphabet, signed a 25-year contract last year with the nuclear plant to 'buy power. The surge in electricity demand from AI data centres is putting pressure on the U.S. power grids. It also spurs interest in extending existing nuclear plant life and bringing shut-down reactors online. Gregory Beard is the director of the Energy Dominance Financing office at the Department of Energy. He said that Duane Arnold was "exactly" the type of investment needed to help "restore American leadership in nuclear energy, improve our energy security and provide the reliable, affordable power Americans require for the future of our nation." The Duane-Arnold Energy Center in Iowa, which had operated for 45 years, was shut down in 2020. The plant is scheduled to resume operations in early 2029. Although there are efforts underway to restart three U.S. Nuclear Centers, including Holtec's 800MW Palisades Plant in Michigan (which is not linked to a tech deal), no nuclear power plant that has been mothballed has yet to resume operations. The Energy Department granted Holtec a $1.52 billion loan in 2024. The company had originally?said that the plant would restart by late 2025. However, it has now been delayed. The Trump administration announced last year that it had lent Constellation Energy Corp. $1 billion for the restart of a nuclear reactor in a Pennsylvania plant formerly called Three Mile Island. The plant's separate unit was shut down in 1979 following an accident which froze the nuclear industry. Constellation and Microsoft signed an?agreement in late 2024 to restart the 835 megawatt reactor that shut down in 2019. Microsoft's data centre would be able to use less electricity after the restart.
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Ukraine steelmaker Metinvest's bonds tumble after missile strike shuts plant
On 'Tuesday', the bonds of Ukraine's biggest steelmaker, 'Metinvest', experienced some of their largest falls since Russia invaded in early '2022. This was after one of 'the firm's main plants' was severely damaged by a Russian missile strike. Metinvest announced at the weekend the five deaths caused by the strike at its Kamet Steel Plant in the eastern Dnipro Region. The plant was forced to halt all production. Metinvest only controls two steel mills in Ukraine. Tradeweb data revealed that the firm's bonds on the international market were down as much as 4.44 cents per dollar, as U.S. Investors got their first opportunity to react on Tuesday following the announcement of the strike after Monday's Labor Day holiday. Metinvest's maturing bond 2029 was set to fall the most -- barring an inflated end-of-year move in December 2022 -- ever since its initial slumps post-invasion of late February or early March. The?bonds of the Ukrainian government were also lower, although not as dramatically following weekend talks between 'U.S. The?bonds of the Ukrainian government were also down, although not as dramatically after weekend talks between?U.S. Both Russian and Ukrainian officials have?also shown little sign of progress in ending this now 4-1/2 year-long conflict.
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Andy Home: China's aluminium dominance is not limited to its home market.
China's aluminum smelters are booming this year. Shanghai's aluminium price has risen to three-month highs. Raw material costs have been historically low, and margins remain strong. Each producer is encouraged to run their plant at full capacity. Indeed, national output has exceeded Beijing's 45-million-metric-ton capacity cap for the past couple of months, as smelters flex their full production ?potential. However, the mandated ceiling remains in place. Chinese producers have embraced this reality and are investing heavily in smelter projects abroad. While Donald Trump claims that the United States needs more aluminum "desperately", the world's biggest producer consolidates its position as the dominant player in the global supply chains. At the Limit China's cap on capacity dates back to 2017 when the sector was experiencing a boom. It seemed that everyone wanted to build an aluminium smelter. This put a greater strain on the power system of China. Beijing marked a line of 45 million tons in the sand. Wen Xianjin is the vice-chairman of the China Nonferrous Metals Industry Association. He said that by the end of this year, the authorities would have stopped 5.37 million tonnes of "illegal capacity" and 6.19 millions tons of "noncompliant capacity". The new rule required that, if you want to build a greenfield plant with the same capacity as an existing one, you must close it. Since then, the regulations have been?enforced with a stern hand and led to an upgrade in smelter technologies as new plants have replaced older ones. This technology is being used now. According to consultants AZ Global "the physical limit of an aluminium smelter is not immutable". Operating improvements can easily increase actual output above nameplate capacity. This collective capacity creep is the reason why national production has been above 45 million tons since March. AZ Global estimates China's smelters were operating at?99.7% their actual capacity of 45.26 millions tons in August. Ironically, China's smelters benefit from their own capacity limit and the lack of a "complementary" limit on domestic production. The price of the main input for?the smelting is at a bombastic level. It is not important whether China's smelters are able to maintain these levels of capacity usage, but any potential production increase is very limited. Powering Up in Indonesia Chinese producers now understand that they must go overseas if they wish to expand. The majority of investment has been directed to Indonesia where aluminium smelters are located in the same industrial parks built by China for nickel processing. Tsingshan Group has partnered with Chinese aluminium producers Huafon Group (the powerhouse behind Indonesia’s nickel boom) and Xinfa Group (the Xinfa Group) to construct the Hua Chin smelter and Juwan smelter, respectively. Existing infrastructure in power and logistics has enabled rapid construction. Hua Chin's annual capacity was 480,000 tons last year. In May, it applied to list the "HCAI" trademark at the London Metal Exchange. Juwan exported its first aluminum to the U.S.A. in March. PT Alamtri Resources Indonesia - in which China's Zhejianglygend Mining has a minority interest - did the same thing in June. CAPACITY SWAP Other Chinese aluminum smelter project are popping up in other countries. Xinfa, a Kazakhstani company, is preparing a full cycle industrial park in Kazakhstan with a planned?aluminum capacity of 2.4 millions tons?per annum. East Hope Group, meanwhile, is working on an integrated project that runs from bauxite to aluminium. A Chinese consortium led Hebei Huatong Wire and Cables Group supports a new smelter at the Barra do Dande free-trade zone in Angola. The first phase of the 120,000-ton project was built using equipment that had been transferred from China. This was likely an older smelter which was replaced by a newer one. China's aluminium market reach is extended further in the West thanks to its location along the Atlantic. Due to the Iran 'war, the Gulf has lost its production. This ratio has risen to 63%. As long as the West is unable to respond in a similar manner, this new generation of Chinese backed smelters can cement their dominance. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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MMG faces EU Antitrust Warning over Anglo American Deal, Sources say
EU regulators are about to issue a warning to Hong Kong listed mining and metals company MMG regarding its plans to purchase 'Anglo American’s Brazilian nickel business due to 'competition concerns. This move reflects the growing concern of the European Union about its reliance on China to supply critical minerals for defence, technology, and renewable energy. Beijing also uses export control measures?on these critical mineral supplies. According to the people, the European Commission, acting as the EU's "competition enforcer", is planning to send this month a document known as a "statement of objections" or "charge sheet", which will outline the concerns that must be addressed in order for the deal to pass. The 'people' spoke on condition of anonymity as the matter was not public. MMG may be able to stave off charges by offering remedies. However, this is unlikely, according to one person. MMG and the EU antitrust watchdog declined to comment. Anglo American repeated comments made two weeks earlier. In a press release, it said: "The evidence that we have provided shows that this transaction does not pose any?competition issues to the EU market. It should be approved unconditionally." The report stated that "over the past year the market has benefitted from a significant'structural expansion of FeNi supplies from a number of producers. At the same time, European customers have demonstrated how easily they can switch suppliers." The European Commission said in November that the deal could allow MMG to divert ferronickel away from Europe, and undermine the competitiveness for European stainless steel production.
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Imports of crude oil from China remained weak in August. Can this trend continue? Russell
China's crude oil imports by sea increased in August compared to July, but they remained 40% below the levels before the Iran conflict. According to Kpler, commodity analysts, China's largest oil importer saw seaborne arrivals increase from 6.93 million barrels per day in July to 7.14 million barrels per daily (bpd) during August. The imports in August were 4,27 million bpd less than the average of 11,41 million bpd for the three months leading up to the U.S.-Israeli attack on Iran, which took place on February 28. China is absorbing the majority of the Middle East's lower crude oil volumes, as its exports are falling due to the restricted flow through the Strait of Hormuz. While there are disagreements over the exact amount of crude oil and refined product that is getting through the narrow waterway, it's certain that the number is well below the 20 million bpd prior to the conflict. Asia's crude oil imports by sea were 22,64 million barrels per day (bpd) in August. This was down from 23,40 million bpd a month earlier, but still 4.29 million or 16% below the average 26.93 million barrels per day in the three-month period ending in February. The decline in Asia's seaborne imports of oil in August is only 20,000 barrels per day more than China's arrivals. The extent of the drop in crude oil imports is surprising. Most participants on the crude oil market expected Beijing to reduce its imports as a response to higher prices due to the conflict with Iran. China is known to cut imports during price surges, but boost them when prices drop. Benchmark Brent crude futures rose 75% since the beginning of the conflict, reaching a four-year peak of $126.41 per barrel on April 30. On September 4, they moderated, but the price remains above what most Chinese refiners are willing to pay. It is unclear whether China will keep limiting its imports despite the high prices or if its refiners are looking to secure cargoes to avoid having to use their inventories. IRAN, RUSSIA FLOWS Answering that question involves several factors. First, China's smaller independent refining companies are losing their access to Iranian crude because the U.S. blockade prevents any new Iranian crude from leaving the Gulf. The oil in tankers is also delivered and depleted. These refiners will either need to pay more or reduce their processing rates for the cargoes they receive from other suppliers. China buys more oil from Russia, a country also under Western sanctions. However, this puts China in direct competition with India, as refiners have replaced Middle East crude with Russian crude to replace the Middle East's limited supply. Kpler data shows that China's seaborne exports to Russia in August reached 1,68 million bpd, up from 1,40 million bpd during July, and the highest since March. China also purchases about 1 million barrels per day via pipelines. A factor to consider is whether China's refining companies try to export refined fuels given the high profit margins that are currently available in Asia for products like?diesel or gasoline. Exports of middle and light distillates reached 963,000 barrels per day in August. This is up from the average of 713,000 barrels per day for the three-month period prior to the beginning of the Iran War. The increase in light and middle distillates in August almost exactly matches the increase of crude imports. This may be just a coincidence but it illustrates the larger point that, if China increases product exports, then it will also have to increase crude oil imports. China's decision not to import crude oil has played a significant role in preventing the price of oil from rising since the beginning of the Iran War. Its lack of exports from 'April to June' is another factor that keeps fuel prices high in Asia. It may be better for the Chinese market to export more fuel than buy more crude oil, given the potential shortage of refined fuels in Asia. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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Solvay and One Investment Management discuss rare earths partnership
Solvay, a Belgian chemicals company, is currently in discussions with One Investment Management regarding a possible strategic partnership for its rare earths division. Solvay announced this on Tuesday. OneIM, led by Rajeev Misra (former SoftBank executive), would gain exposure to rare-earths processing. This would complement its existing investments in this sector, which is dominated primarily by China. Sources with knowledge of the situation said that Solvay has been in talks with OneIM about Solvay’s rare earths operations since March. The West is looking to reduce its reliance on China as a supplier of rare earth minerals. These minerals are essential for the energy transformation, electronics, and defence industries. In response to an email from a customer, Solvay confirmed that it was currently in discussions with OneIM about a possible strategic partnership regarding its rare-earths business. At this stage, it is impossible to know if these discussions will lead to an agreement or transaction. If and when it is appropriate, a further announcement will follow. Solvay published a later statement about the discussions to?the Stock Exchange. OneIM had no immediate comment. Solvay shares rose 3% after the news. They were in the red before the story. SOLVAY FRENCH PLANTS A LEADER IN THE 1980S Solvay’s unit for rare earths includes a French processing plant that was once among the largest in the world. The processing expertise of the company is considered to be a strategic asset, even though it only represents a small part of Solvay's business, which includes chemicals such as soda ash and silica. The 78-year old processing plant of the company in La Rochelle, France on the Atlantic coast, set the benchmark in global rare earth prices during the 1980s. It is also one of only two plants outside China that can separate 17 rare earth elements. OneIM, run by Misra - former CEO of SoftBank Group Vision Funds - has invested in many rare earths companies. Some of these have already signed supply agreements with Solvay. Misra stepped out of SoftBank in 2022 and founded OneIM with Yanni PIpilis, other former SoftBank executives. Assets worth $11.8 billion are managed by the alternative investment manager with offices in Abu Dhabi and London, New York, Tokyo and Tokyo. ONEIM OFFERS A STRING OF RARE EARTH INVESTIMENTS OneIM announced late last month that it would be a cornerstone investor in Viridis Minerals and Mining by committing up to $75,000,000 to the company developing a rare-earths mine in Brazil. Viridis had signed a letter with Solvay two months earlier proposing a partnership. This included supplying rare Earths from Viridis' mine to Solvay’s processing plant. OneIM also invested in private U.S. rare-earth magnet producers. In January, $200 million was invested in Noveon Magnetics and in August an undisclosed amount in Vulcan Elements. Solvay signed a contract in November of last year to supply rare earths to Texas based?Noveon. Only a few Western companies have proven technology in each of the seven stages, from mining to magnet manufacturing. China controls 90% of the global magnet production capacity. Solvay’s Speciality Chemicals division includes rare earths and fluorine. These two chemicals accounted for 15 percent of Solvay’s sales in the last year, out of a total of EUR4.3 billion ($5billion). Solvay reported its second-quarter core earning above market expectations late in July, and CEO Philippe Kehren stated that it planned to invest EUR15 to EUR20 millions of additional investments to further expand the La Rochelle plant. He added that the industrial scale separation of heavy rare Earths such as dysprosium, and terbium would begin in autumn.
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MMG faces EU Antitrust Warning over Anglo American Deal, Sources say
EU regulators will warn the?Hong Kong listed mining and metals?MMG about its plans to purchase Anglo American's Brazilian Nickel business? based on competition concerns?, according to three people familiar with this matter. This step is a reflection of the growing concern in Europe about China's export controls on vital minerals that are essential to renewable energy, defence and technology. According to the people, the European Commission, which is the EU's competition enforcer is about to issue a "statement of objections" or a "charge sheet",?outlining the concerns and issues that need to be addressed before the deal can be approved. The?people spoke under condition of anonymity as the?matter has not yet been made public. MMG may be able to stave off charges by offering remedies, but this is unlikely according to one person. MMG and the EU antitrust watchdog declined to comment. Anglo American declined to comment as well, but pointed out a statement it issued two weeks ago in which they said that the deal should be cleared without condition. The European ferronickel industry has 'benefited from an important structural expansion in ferronickel supplies from a number of producers,' while European customers have demonstrated how easily they can switch suppliers. The EU steel measure, it said, had capped Chinese imports into the EU. Therefore, Chinese stainless steel could not be redirected towards the EU. In November, the Commission said that the deal would allow MMG to divert ferronickel away from Europe. This could undermine the competitiveness and efficiency of European stainless steel producers.
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Solvay and One Investment Management discuss rare earths partnership
Solvay, a Belgian chemicals company, is currently in discussions with One Investment Management regarding a possible strategic partnership for its rare earths division. Solvay announced this on Tuesday. OneIM, led by former SoftBank executive Rajeev Mitra, would gain exposure to 'rare earths processing. This deal would complement its existing investments in this sector, which is dominated primarily by China. Sources with knowledge of the situation said that Solvay has been in talks with OneIM about Solvay’s rare earths operations since March. Rare earth minerals play a crucial role in the energy transition and electronics industries. The West is looking to reduce its reliance on China as a supplier. In response to an email from a customer, Solvay confirmed that it was currently in talks with OneIM regarding a possible strategic partnership for its rare earths business. At this stage, it is impossible to know if these discussions will lead to an?agreement? or?transaction. If and when it is appropriate, a further announcement will be made. OneIM didn't immediately respond to a comment request. Solvay’s rare earths division includes a French processing plant that was once among the largest in the world. The processing expertise of the Solvay business, which manufactures chemicals such as soda ash, and?speciality plastics used in aircraft and cars, is considered an asset. The company's processing plant, which is 78 years old and located on France's Atlantic Coast in La 'Rochelle, set the global benchmark for rare earth prices during the 1980s and 1990s. It's one of only a few plants outside China that can separate 17 rare earth elements. OneIM is run by Misra - former CEO of SoftBank Group’s Vision?Funds - and has invested in several rare earths companies. Some of these have already signed supply agreements with?Solvay. Misra stepped out of SoftBank 'in 2022, to start OneIM with Yanni Pipilis, and other former SoftBank executives. Assets worth $11.8 billion are managed by the alternative investment manager with offices in Abu Dhabi and London, New York, Tokyo and Tokyo.
Copper prices record high due to weak supply outside US
The 'price of copper' continued to rise on Tuesday. It reached a record high on speculative purchases on the backs of tight supply outside the U.S. and weak mine production.
In open-outcry official trading, three-month copper on the London Metal Exchange rose 1.3% to $14,503 per metric ton, breaking the previous record.
LME copper is up 18% in this year. This is largely because a large amount of metal has been moving to the U.S., anticipating?tariffs to be imposed on refined copper.
Alice Fox, an analyst at Macquarie, stated that falling inventories outside of the U.S. - including in China - were the 'drivers' behind the gains.
The resurgence of tensions in the Middle East has sparked concerns about acid prices and availability. Also, the bullish narrative regarding demand for data centres continues.
The Shanghai Futures Exchange's most traded copper contract rose by as much as 1.5 percent to 110,890 Yuan, its highest level since January 30.
COMEX inventories in the U.S.
The analyst of Chinese broker Everbright Futures stated that the still-elevated price spread between the?COMEX and LME suggests physical copper is continuing to flow into the United States. This has exacerbated the tightness of supply in markets outside of the U.S.
Since late May, copper stocks in LME registered?warehouses are down?nearly 40 percent. SHFE inventories have also fallen.
Zinc prices also rose, with LME zinc at $4,002 per ton up 0.5%, its highest level in over?four years.
Other LME metals include?aluminum, which rose 0.2% at $3,318.50 per tonne, lead, up 0.2% at $1,904, and nickel, up 0.5% at $16,805. Tin also gained 0.1%, to $55,175.
(source: Reuters)