Latest News
-
The tsunami warning in Japan brings back memories of the Fukushima catastrophe
Residents along the Pacific coast of Japan rushed for higher ground as tsunami warnings were issued following a massive quake off Russia's Far East. The earthquake brought back painful memories from the 2011 nuclear disaster and earthquake. The television banners read "TSUNAMI!" EVACUATE!" As tsunami waves approached Japan, broadcasters issued similar warnings. They cut their regular programming and focused on evacuation orders. "Do not stare at the screen." Evacuate now!" A news presenter from the public broadcaster NHK yelled. The warnings brought back memories of the March 11th, 2011 earthquake. More than 15,000 died when a 9.0-magnitude earthquake triggered a tsunami that ravaged the Fukushima Nuclear Power Plant and caused a radiation disaster. Residents were unable reach higher ground as waves dozens of meters high surged along the northeastern coast of the country. Residents recalled these events on Wednesday as evacuation warnings are issued. A woman from Fukushima said to NHK: "Everyone evacuated higher ground when the earthquake struck previously, so I considered doing the same." After the evacuation warning, workers in low-lying parts of Tokyo Electric Power’s Fukushima Nuclear Facility suspended decommissioning and fled higher ground. The spokesperson stated that the evacuation was not a safety issue. Over 2 million people were told to move to safer areas along the Pacific Coast. Locals called the 2011 disaster "3.11", and many recalled the lessons learned. They braved the heatstroke risk in the intense summer months to reach higher grounds. TV Asahi reports that a woman aged 58 died in Japan's Mie Prefecture when her car fell from a cliff as she evacuated. A representative of the Japan Meteorological Agency has warned that tsunami waves may continue to strike for up to a week. NHK reported that a male postal worker from Iwate Prefecture said, "I worked at the same office 14 years ago." This time, we all said "let's evacuate immediately." (Reporting and editing by Saad Saeed; Satoshi Sugiyama)
-
Iron ore prices fall as China's stimulus fades
Iron ore futures prices fell on Wednesday, as expectations of further stimulus from China's top consumer faded. This erased gains made earlier in the week that were based on the prospect of an extension of the tariff truce between America and Asia. The September contract for iron ore on China's Dalian Commodity Exchange ended the day 0.44% lower, at 789 Yuan ($109.95) per metric ton. As of 0700 GMT, the benchmark September iron ore price on Singapore Exchange dropped by 0.91% to $100.80 per ton. The readout by Xinhua, the state media for the July Politburo that sets the course of economics for the remainder of the year, said China will keep its policy stable without specifying any concrete measures. This disappointed those who expected Beijing to take some steps to support the property market that is still struggling, and has been dragging down economic growth as well as consumption of industrial materials such steel. After two days of constructive talks, both sides in Stockholm described as productive, U.S. officials and Chinese officials decided to extend their 90-day trade truce. Treasury Secretary Scott Bessent has quashed any expectations that Donald Trump would reject the extension. The International Monetary Fund also raised its forecast of China's growth to 4.8% this year from 4.0%. This boosted sentiment and contributed to price increases. After a jump of over 6% in the morning, gains in coking coal, a steelmaking ingredient, and coke, slowed in the afternoon. They were up by 2.71% and 4.4% respectively. The benchmarks for steel on the Shanghai Futures Exchange have gained some ground. Rebar rose by 0.42%. Hot-rolled coils climbed by 0.81%. Wire rod gained 0.2%. Stainless steel gained 0.31%. ($1 = 7.1762 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson and Janane Vekatraman).
-
Chinese refiner Yulong buys first Canadian TMX crude oil cargoes
Trade sources report that China's Shandong Yulong Petrochemical purchased its first Canadian crude oil cargoes via the Trans Mountain Pipeline (TMX) to be delivered in September and October, diversifying its supply. Two sources confirmed that Yulong purchased an Access Western Blend cargo from Macquarie for September delivery, at a discounted price of $1.50 per barrel compared to the November ICE Brent. It also bought a cargo from Totsa for October delivery, at a comparable discount to the December ICE Brent. Each cargo contains approximately 550,000 barrels. Yulong didn't immediately reply to an email asking for comment. Macquarie and TotalEnergies don't comment on commercial issues. Yulong made its first purchase of Canadian crude oil in September, when the refinery began processing 200,000 barrels per day. The AWB bitumen is a heavy, highly acidic diluted version of bitumen that's produced by Canadian Natural Resources (CNR) and MEG Energy. Trade sources reported that Yulong also made a recent purchase of Urals crude oil from Russia. They said that the refiner usually buys West African crude and Russian Far East ESPO-grade crude. (Reporting and editing by Florence Tan in Singapore, Siyi Liu in Singapore)
-
Rio Tinto reports smallest first-half profits in five years
Rio Tinto announced its lowest first-half profit in five years Wednesday as iron ore price remained low due to concerns about oversupply and weak China demand. This was offset by higher earnings from the copper business. The price of iron ore fell in the first half as the top steel consumer, China, decreased its steel production and increased supply from Australia and Brazil. This reduced Rio Tinto's earnings. Morgan Stanley notes that the expectation of China reducing overcapacity and restocking the steel industry before the end of 2025 could lead to an increase in price to $100 per ton by the end the year. Rio Tinto, world's biggest iron ore producer reported earnings of $4.81billion for the six-month period ended June 30. This was below the Visible Alpha consensus estimate of $5.05billion. This was the lowest first-half performance for the company since 2020. It reported earnings of $5.75 Billion. Rio Tinto has declared a lower interim dividend for the first half year of $1.48 compared to the $1.77 per share it paid out last year. (Reporting from Sameer Manekar in Bengaluru and Rishav Chaterjee in Melbourne, Melanie Burton in Sydney; editing by Subhranshu SAHU)
-
Asian stocks mix as investors prepare for tariff deadline
Investors were cautious on Wednesday after the U.S.-China trade talks ended without a substantive agreement, and before the Federal Reserve policy announcement. The gains made by MSCI's broadest Asia-Pacific index outside Japan in the morning have waned, and the index is now trading flat as traders digest corporate earnings reports. Early European trading saw pan-regional futures up 0.15%. German DAX Futures rose 0.31%. FTSE Futures were flat. Australian shares ended up 0.7%. Japan's Nikkei index fell 0.1%, and Hong Kong's Hang Seng Index dropped 1.3%. The euro rose from its one-month low to $1.1555 as the markets assessed the EU's deal with Trump. The next few days will be filled with several key central bank decisions and economic reports, as well as corporate earnings. This culminates in the August 1 deadline for tariffs set by U.S. president Donald Trump. Federal Reserve officials are expected to keep interest rates the same at their policy meeting on Wednesday. However, there could be some dissent from central bankers in favor of lower borrowing costs. Tom Kenny is a senior international economist with ANZ, Sydney. He said in a podcast that some officials were concerned about tariffs leading to higher inflation expectations and more persistent pressures on prices, rather than just a one-off shock. "Our expectation is the Fed will be able to reduce rates at its September meeting." Treasury bonds in the United States advanced ahead of a Fed meeting. The yields fell to their lowest level in nearly four weeks after a successful auction of notes with ten-year maturities that allayed concerns over dwindling demand for government debt. Last week, the yield on 10-year Treasury Notes was 4.328%. This is the lowest since July 3. The yield on two-year Treasury notes, which increases with traders' expectation of higher Fed Fund rates, was unchanged at 3.873%. Tariffs, corporate earnings Bank of Japan will likely keep its policy unchanged Thursday. The focus will be on the comments it makes to determine when the next rate rise will occur after a recent trade agreement between Japan and the U.S. opened the door for the bank's rate increases to resume. Some countries were preparing to negotiate with the U.S. until the last minute before Trump's deadline for a deal that would avoid "Liberation Day tariffs". On Tuesday, U.S. officials and Chinese officials agreed that they would seek to extend their 90-day truce in tariffs. However, no major breakthroughs had been announced. Officials in the United States said that it was up Trump to decide if he would extend the trade truce, which expires August 12, or if he wanted to see tariffs rise to triple digits. Two Indian government sources say that India will also face higher U.S. duties -- between 20 and 25 percent -- on certain exports, as it delays new trade concessions before the deadline of August 1. Three South Korean Cabinet-level Officials met with U.S. Secretary of Commerce Howard Lutnick to try and finalize a deal. Prices of oil rose after Trump set a short deadline for Moscow to end the war in Ukraine. Brent crude futures increased 14 cents or 0.2% to $72.40 per barrel. The earnings were mixed on Wednesday. UBS Group's profits exceeded analyst expectations. HSBC, however, missed estimates due to the mounting losses in China. German sportswear manufacturer Adidas also warned about the impact of U.S. Tariffs on its earnings. Microsoft and Meta, two of the biggest U.S. technology companies, are expected to release their earnings on Wednesday. This will set the tone and pace for the rest the week and earnings season. Chris Weston is the head of research for Pepperstone. He said, "It has been a good reporting season in the U.S., but now that the bar has been raised, these megacaps need to go all out and make a splash."
-
Andy Home: Aluminium flow shifts after Trump doubles tariffs
Canadian aluminum smelters began diverting primary aluminium away from the United States as a result of the increasing import tariffs. These increased to 25% in march and to 50% in the month of June. Alcoa Corp., which has smelters in both the U.S. and Canada, told analysts during its quarterly earnings call that it had sold more than 100,000 tons of Canadian aluminum to customers outside the U.S. since March. U.S. primary aluminum imports dropped dramatically in April and in May, even before U.S. president Donald Trump surprised the world with his second surprise tariff in June. The import gap has been partially filled by the surge in shipments of recycled aluminium. This raw material, as a raw materials is only subject to Trump's lower tariffs. The physical market dynamics will likely remain fluid, depending on both the U.S. premium as well as Trump's willingness and ability to grant exemptions. PRIMARY INCOMES DOWN, SCRAP UPS Imports of primary aluminum in the United States reached a two-year record of 442,000 tonnes in March, as suppliers raced to meet the first deadline for tariffs. No one saw the second increase coming, and it was implemented almost immediately, so there was no time to get ahead of the new 50% tariff. In fact, the 268,000 tons of imports in May were the lowest monthly total since December 2022. The majority of the volume drop can be attributed to lower shipments from Canada. The biggest supplier of metal to the U.S. is redirecting the metal that has not been committed under annual contracts. In the case of Alcoa, this is about 30% of their Canadian production. Aluminum is being rerouted towards Europe. WBMS trade statistics show that Canada exported 11,800 tonnes to the Netherlands in March and 25,500 to Italy in April. The imports of scrap aluminium are increasing, meanwhile, due to the difference between the reciprocal tariffs and the aluminium ones. Arrivals in March-May totaled 227,000 tons, an increase of 40% over the same period in 2024. The European Commission activated its trade surveillance system before possible export restrictions. The European Commission has promised to make a decision before the end of September. MARKET WATCH In response to the double tariff increase, the U.S. Midwest Premium has risen from 24 cents ($520 per tonne) in January to an astounding 68 cents. William Oplinger is the CEO and president of Alcoa. He says that this amount does not cover the costs associated with tariffs on Canadian metal. He said that the Midwest premium should be between 70-75 cents per lb when you take into account both the tariff and base costs of transportation to U.S. customers. As buyers wait to find out if there will be any exemptions from the current blanket tariffs, they are reducing their inventory instead of making new purchases. Watch Politics Online It is their right. The Trump administration is reportedly considering lowering or eliminating aluminium tariffs on countries that sign up for broader trade agreements. This deal with the United Kingdom included a 25% reduction in import tariffs for both steel and aluminium products. According to European Trade Commission Maros SEFCIC, the newly-minted agreement with the European Union includes a potential carving-out for copper, steel, and aluminium. He said that European and U.S. negotiators found a common cause with China's overcapacity. For now, the higher tariff rate is still in place. However, both sides are working to create a "metals partnership" where tariffs would be replaced by a quota-based system. Canada's importance in the U.S. aluminum supply makes it strange that Canada is not included in this alliance. High SMELTER Restain Costs One thing is certain, even though the tariff landscape is constantly changing. It will be a while before the U.S. can reduce its dependence on imports. Two new smelter project are in competition with Big Tech to provide low-cost electricity. Even if the smelters can lock in their energy supply, it would take years to build. According to the United States Geological Survey, there are also around 670,000 tonnes of unused smelting capacities in the U.S. Many of the old machines need significant investment. Alcoa's Warrick smelter, in Indiana has a 50,000-ton per year line that is idle. It would cost around $100 million for refurbishment and another year to ramp up production. Alcoa's Oplinger said that a decision to restart production would require "that the tariffs remain in place for a long time" before it could be justified. Tariffs are likely to remain in some form, but the question of how many trading partners will be able to avoid paying a full 50% tariff is becoming more and more open. There won't be many U.S. Smelters restarted until the situation is clarified. There will be more volatility in the supply chain. These are the opinions of a columnist who writes for.
-
Oil prices pause as markets consider Trump's ultimatum against Russia
After a spike in the previous session of over 3%, oil prices were down in Asian trade Wednesday as investors waited for developments regarding President Donald Trump's new deadline to Russia to end its war in Ukraine. Brent crude futures were up 8 cents or 0.12% to $71.81 a barge by 0419 GMT. U.S. West Texas Intermediate crude was also up 8 cents or 0.12% to $69.29 a barge. Brent crude, the September contract that expires on Wednesday, was up 18 cents to $72.69 per barrel. The settlements of both contracts on Tuesday were the highest since June 20, 2006. Trump announced on Tuesday that if Russia did not end the war in 10-12 days, he would begin imposing secondary tariffs on its trading partners of 100%. This is a move from a previous 50-day deadline. Vandana Insights, the oil market analyst, said that the $4-$5 per barrel premium for supply risk, which was introduced in recent days, can be expected to continue, unless Putin takes a conciliatory step. Treasury Secretary Scott Bessent said at a Stockholm news conference where the U.S. and EU were holding trade negotiations, that the United States warned China, which is the biggest buyer of Russian oil to stop buying it or face large tariffs. Analysts at JP Morgan said that India had signaled it would comply with U.S. Sanctions, which could put 2.3 million barrels of Russian oil per day in danger. The United States, the European Union and other countries have avoided a trade conflict with an agreement for 15% U.S. Tariffs on European Imports. This deal eases concerns over the impact of trade tensions on the economic growth as well as providing support for oil prices. After talks last week, foreign partners of Venezuela's state oil company PDVSA still await U.S. authorization to operate in the country sanctioned. This could bring some supply back to the market and ease the pressure on prices. Hari said that the oil market pays attention to the U.S. Trade Deals and Talks and the Fed but these are only marginal influences on sentiment. The U.S. Federal Reserve, despite President Donald Trump’s objections at the policy meeting on Wednesday evening, is expected to keep interest rates unchanged. The International Monetary Fund (IMF) raised its global growth predictions slightly for 2025-2026 on Tuesday. However, it warned that the world economy was facing major risks such as geopolitical tension, a rise in tariffs, and a larger fiscal deficit. Reporting by Mohi Nairayan in New Delhi; Additional reporting by Colleen Hough in Beijing. Editing by Muralikumar Anantharaman, Clarence Fernandez.
-
Australia's IGO warns of more problems at Kwinana as revenue drops
IGO, an Australian lithium producer, reported a decline in its annual revenue on Wednesday. It also announced a charge for impairment relating to the troubled Kwinana Lithium Refinery in Western Australia. The Perth-based firm reported sales revenues of A$512.5m for the year ending June 30. This is lower than A$822.6m reported by the company a year earlier. IGO reported that the impairment charge, which is a cost a company incurs when an asset it owns loses value, could range between A$70 and A$90 (between $45.6 million to $58,7 million) for fiscal year 2025. The shares of the Australian producer of battery metals fell as much as 12 percent to A$4.40. This is on course for its worst day in 2022. The Kwinana plant is part of a joint venture called Tianqi Lithium Energy Australia, a partnership between IGO Australia and China's Tianqi Lithium. IGO Australia holds a 49 percent stake in the TLEA and Tianqi Lithium the remainder. The first lithium hydroxide facility to be built in Australia has struggled with production delays and operational problems amid a slump in the lithium price. IGO is not confident that this asset can achieve meaningful and sustained improvements. IGO said that it continues to work with its JV partner in order to determine the best future path for the plant. After a 90 percent drop in lithium prices in the past two years, some mines producing lithium for electric vehicle batteries have curtailed their operations or delayed expansion. The refinery that produces lithium hydroxide - a key component in batteries - posted a loss of A$28.7million despite the support provided by the Western Australian Government to boost the lithium sector. The company also said that Kwinana’s production for the full year was below the forecast due to operational issues which continued to affect the refinery’s output.
How Trump's tariffs impact on corporate profits and inflation
Analysts said that the tariffs imposed by Donald Trump on Canada, Mexico, and China could have a significant impact on corporate profits and the direction of inflation, economic development, and stock market performance.
Mexico-exposed stocks recovered some of their losses after Trump agreed that he would delay the new tariffs for Mexico by one month. However, investors are still evaluating the impact of the tariffs.
COMPANIES AND PROFITS
Goldman Sachs estimates that the announcements will reduce their S&P 500 earnings-per-share (EPS) predictions by approximately 2% to 3 %. The company said that every five percentage points increase in U.S. Tariff rates could reduce the EPS between 1% and 2%.
Barclays analysts warned that tariffs on Canada, Mexico, and China would have a negative impact on the S&P 500 if they were fully implemented. The materials and discretionary sectors are most at risk.
Citigroup stated before the announcement that a small shock to import prices in a narrow scenario would likely result in a reduction of 50 basis points in S&P's gross margin. However, broader tariffs may see margins decline by 250 basis points.
BlackRock warns that exporters' profit margins could be affected if high inflation rates cause interest rates to rise and a dollar surge reaches its peak in 2022.
AUTOMAKERS
According to Daniel Roeska of Bernstein, the U.S. automobile industry could be facing an extra cost of $40 billion per year, or an increase of 7% on average for each car. Goldman Sachs estimated that Canada and Mexico accounted for almost one-fifth the value of U.S. automobile consumption and production before the tariffs.
RBC analysts wrote in a Jan. 28 note that the surcharges on Mexican imports may prove to be a problem to General Motors and could lead to a shift of production to the U.S.
Stifel, following Saturday's announcement, said that Volkswagen and Stellantis are the two most vulnerable European automakers. The impact could be as high as 8 billion euros (8.25 billion dollars) on Volkswagen's revenue and 16 billion euro for Stellantis'.
Stifel said that the impact of the measures taken by companies could be significantly lower.
Steelmakers
J.P. Morgan has said that European steelmakers whose U.S. supply chains are integrated with Mexico and Canada, as well as Europe, will be directly affected.
Analysts point out that ArcelorMittal and its Finnish counterpart Outokumpu are exposed to Mexican steel and Canadian steel. Acerinox, on the other hand, has a high U.S. production.
J.P. Morgan analysts stated in a note dated Feb. 3, that 70% of U.S. aluminium imports come from Canada.
SPIRITS: Beverages, spirits, like mezcal and tequila make up almost 12 billion dollars in U.S. trade.
Analysts at J.P. Morgan said that the tariffs announced on February 1 will have a major impact on Diageo and Campari.
J.P. Morgan reported that AB Inbev, Heineken, and Remy Cointreau have the greatest EBIT exposure in the two markets. Carlsberg and Remy Cointreau have the most EBIT exposure in China.
J.P. Morgan estimates that around 85% of the consolidated sales of Corona Beer maker Constellation Brands come from imported Mexican beer. Piper Sandler estimates that tariffs could have a negative impact on Constellation's fiscal 2026 earnings by $3.75 to $3.75 a share if they last the full fiscal year.
OTHERS
BofA Global Research stated on January 29 that tariffs against Mexico could harm appliance distributors like Whirlpool.
Masco and Fortune Brands, both construction products companies, have a certain exposure to China. BofA stated that they have multiple suppliers for many of their products, and price increases could help them overcome some of the tariff obstacles.
Builders FirstSource may benefit from tariffs on Canadian imports of lumber in the short term, but this would be offset by a decrease in homebuilding starts.
INFLATION- Barclays' strategists say that the tariffs may lift the Fed’s preferred inflation indicator, the personal consumption expenditures index, by 35-40 basis point on an annual basis, over a 12-month period.
Goldman Sachs estimated that tariffs would increase the U.S. PCE index by 0.9% if they were implemented. This is excluding volatile products such as energy and food.
(source: Reuters)