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China files a dispute with the WTO over Trump tariffs
The Geneva-based World Trade Organization announced on Wednesday that China had formally filed a complaint with the WTO over the tariffs placed by U.S. president Donald Trump on Chinese products. Trump ordered tariffs against goods coming from Mexico, Canada, and China on Saturday, demanding that they stop the flow of illegal immigration and fentanyl. Trump then froze tariffs on the two North American nations, but continued with those against China. China, to which Trump imposed a 10% tariff on exports of goods, had promised to contest the move at the WTO. China, in a statement quoted by the WTO said that the measures seemed to be inconsistent with U.S. commitments under the agreement which led to the establishment of the trade organization, pointing out the discriminatory nature the tariffs. The Chinese statement stated that "China reserves its right to raise any additional claims and measures regarding the issues identified herein in the course of consultations or at any future request for a panel." The document did not specify what those measures could be. The WTO's dispute resolution system has been paralyzed since December 2019 due to the collapse of the Appellate Body, which is the last word on disputes. The first Trump administration, as well as that of Joe Biden, blocked the nomination of new judges to Appellate body over what they deemed to be judicial overreach. The body cannot function without at least three judges. (Reporting and editing by Dave Graham; Kevin Liffey and Peter Graff.
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Sources: LME floortrader Sigma is in talks with brokerage to sell brokerage
Three sources familiar with the situation have confirmed that Sigma Broking is in discussions to sell its business, three years after it joined the London Metal Exchange. Sigma joined the LME, the oldest and largest industrial metals exchange in the world in 2022. It was the first new member to join the floor trading in 15 years. The LME clearinghouse's much higher capital requirements may have been a factor in Sigma's decision to sell. A second source stated that Sigma had hired advisors to help with the sale. According to a third source, the entire brokerage business, including its U.S., Dubai and Dubai units, was up for sale. This included metals, equity, fixed income, and all of its U.S., Dubai and Dubai units. The source said that six parties were interested. Three sources refused to be identified. Four industry sources claim that Sigma's clients are primarily investment funds. However, its business has recently been very thin. Sigma Broking, according to its most recent financial statements, recorded a loss after tax of 1,37 million pounds ($1.71million) for the 12-month period ending May 2023. After Societe Generale left the LME last year, the future of ring-trading was uncertain. Sigma was the only remaining member of the floor trading group who did not say that they were committed to open-outcry trade. Sigma declined to comment. The LME said that the floor will close if there are fewer than six ring members or if trading volume falls below 75% of the previous year. The LME's ring trading received a new vote of confidence when, in December, the British branch of U.S. broker Clear Street became a Category 1 or floor trading member. Clear Street Futures reportedly poached three metals traders at Sigma to build up its London operations. Marex, a LME broker, acquired Clear Street Futures in 2022, which was headed by Chris Smith. He had previously been the global CEO of ED&F Man Capital Markets based in London. Hong Kong Exchanges and Clearing Ltd. is the owner of LME.
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Sources say that LME floor broker Sigma is looking to sell a metals unit.
Two sources familiar with the situation have confirmed that Sigma Broking is one of the eight members of London Metal Exchange who are allowed to trade in the open-outcry trading floor. The company has been trying to sell off its base metals division for three years now. Sigma joined the LME, the oldest and largest industrial metals exchange in the world in 2022. It was the first new member to join the floor trading in 15 years. The second source stated that Sigma hired advisors to help with the sale. One of the sources suggested the reason for Sigma's decision to sell was partly due to the much higher capital requirements set by the clearing house at the LME. Both sources declined their names. Sigma did not respond immediately to a comment request. Four industry sources claim that Sigma's clients are primarily investment funds. However, its business has recently been very thin. Sigma Broking's most recent accounts show that it has a loss after tax of 1,37 million pounds ($1,71 million) for the 12-month period ending May 2023. The broker trades energy, carbon, soft commodities, and fixed income in addition to base metals. After Societe Generale left the LME last year, the future of ring-trading was uncertain. Sigma was the only remaining member of the floor trading group who did not say that they were committed to open-outcry trade. Sigma declined to comment. The LME said that the floor will close if there are fewer than six ring members or if trading volume in the second ring is less than 75% compared to last year. The LME's ring trading received a new vote of confidence when, in December, the British branch of U.S. broker Clear Street became a Category 1 or floor trading member. Clear Street Futures reportedly poached three metals traders at Sigma to build up its London operations. Marex, a LME broker, acquired Clear Street Futures in 2022, headed by Chris Smith. He was previously the global CEO of ED&F Man Capital Markets based in London. Hong Kong Exchanges and Clearing Ltd. is the owner of LME.
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GSK and gold miners share prices push Britain's FTSE 100 up
The UK's FTSE 100 rose on Wednesday, after two consecutive days of declines, boosted by gains made in the shares of gold and heavyweight GSK. Investors are now focused on this week's Bank of England rate decision. The blue-chip FTSE 100 closed 0.6% higher while the mid-cap FTSE 250, which is focused on domestic companies, rose 0.5%. GSK's share price jumped 7.6% following the launch of a 2-billion-pound ($2.5-billion) share buyback program and a boost in its long term sales target to almost $50 billion. Gold prices reached another record high, and precious metals miners surged by 3.6%. Fresnillo climbed by 5.8% after J.P.Morgan named it their "top pick." The Bank of England will announce its monetary policy on Thursday. Markets have already priced in a cut of 25 basis points. We expect the BoE will cut rates by 25bp, and we believe that their easing guidance is going to be stronger than what market expectations are. Geoff Yu is a senior market strategist with BNY. He said that at least one rate cut of 25bps per quarter would be necessary, as the growth risks are still heavily on the downside. Ferrexpo fell 8%, to the bottom of mid-cap index. The miner's losses extended to the second session. On Tuesday the miner announced that a civil suit worth 157 billion Hryvnias (3.77 billion dollars) had been filed against its Ukrainian subsidiary. (Reporting from Pranav Kashyap in Bangalore and Medha Singh; editing by David Gregorio.)
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Syrah Resources plans to restart production at its Mozambique plant in the first quarter
Syrah Resources' chief executive stated on Wednesday that the company hopes to resume production at its Balama project in Mozambique within the first quarter. This will eventually lead to the lifting force majeure. The company declared force majore in December, due to protests and civil unrest sparked by the Mozambique election results of October. This also caused it to default on U.S.-backed loan. The stability of the country has improved significantly. Shaun Verner, CEO and Managing Director of Syrah Resources, said that the last two to three weeks were much better than previous periods. We are working to resolve the dispute at the site, and we will try to resume production in this quarter. The outcome is not yet certain, but it's the goal. The company said that protests by farmers at the Balama Project began late in September, and they have been preventing the movement of supplies and people as well as disrupting operations. A clause called force majeure allows contracting parties to escape liability in the event of unexpected external circumstances which prevent them from fulfilling their obligations. Verner responded that any additional tariffs would be beneficial to the industry when asked about the impact of President Donald Trump's proposed 10% duty on all Chinese imports. He said that the 25% tariff on anode materials from China is a first attempt to help balance the increased volumes coming from China. He added, "But what we are seeking in the end is a level playing field that will allow us to compete as well as continue to diversify and increase the supply of products into the U.S. Syrah operates an anode material plant in Louisiana, United States. This material is a key component for battery and auto manufacturers. Syrah announced that its unit, Syrah Technology LLC, had filed a petition for anti-dumping duties and countervailing duties with the U.S. Department of Commerce as well as the International Trade Commission in December. The petition was submitted jointly with the North American Graphite Alliance and sought to investigate Chinese exports for natural and synthetic active anode materials used in lithium-ion battery batteries. China is the world's largest producer of graphite, which is used in the battery of electric vehicles.
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Anglo Platinum CEO anticipates spin-off investor interest
Amplats CEO Craig Miller stated on Wednesday that Anglo American Platinum has a lot of interest from investors as it prepares for its spin-off as a separate entity. The spin-off is part the group's restructuring plan, which aims to fight off a $49 Billion takeover bid by bigger rival BHP and focus on more lucrative copper and iron ore properties. Miller, without providing details, said that Amplats will be separated mid-year and the company's name will change. Amplats, the only PGMs producer in London will have a secondary listing on the London Stock Exchange, which could attract new investors. Miller said on the sidelines at the Mining Indaba Conference in Cape Town that there was a lot interest in the standalone business. "(London is) a lot simpler... Some fund managers may find it more appealing to invest through the London Stock Exchange." The price of white metals, used in autocatalysts, has dropped in the last two years. This is due to the increase in battery-electric vehicles that don't need them. Anglo American is selling its nickel assets in Brazil as part of a strategic reorganization. It plans to sell its De Beers diamond division. South Africa's Platinum Miners are among the largest earners of foreign currency in the country. However, the industry has reduced production and lost thousands of jobs due to lower demand. Amplats, which is the largest platinum miner in terms of value, says that the recent decline in demand for electric cars could be a factor in reviving interest. Miller stated that there is "a lot of interest" in PGMs due to their role in transportation. He said that a lack of investment in new platinum mines may limit the supply and support prices. Miller stated that there was no new supply of PGMs on the market. Reporting by Felix Njini in Cape Town and Clara Denina; editing by Veronica Brown, Elaine Hardcastle.
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USW union chief files motion for dismissal of lawsuit filed by US Steel and Nippon Steel
The United Steelworkers President David McCall has filed a motion for dismissal of a lawsuit brought against him by U.S. Steel & Nippon Steel. Last month, the two steelmakers sued McCall, Cleveland-Cliffs and its CEO Lourenco Goncalves "for their illegal, coordinated actions" to prevent the $14.9 billion transaction. Joe Biden, the former president of the United States, initially blocked this deal in January on grounds of national security. However, he delayed its implementation until June. The takeover of U.S. Steel by Japan's Nippon Steel has become highly political ahead of the U.S. Presidential Election in November. Both Biden and Donald Trump have pledged to end it. Under Biden's presidency, the deal was also subjected to a thorough antitrust investigation by the Committee on Foreign Investment in the United States. In a separate lawsuit, the companies also accused Biden of blocking a deal illegally. USW had opposed the deal for years due to concerns about job security and lack of transparency, despite Nippon’s numerous attempts to assuage their concerns. The USW has, however, shown its support for Cliffs. It was reported that Cliffs had partnered with Nucor, a peer, to prepare a possible all-cash offer for U.S. Steel. U.S. Steel, Nippon and Cliffs have accused Cliffs of colluding with Goncalves and McCall to allow Cliffs "monopolize domestic steel markets", by blocking any other attempts to purchase the 123-year old American steelmaker. McCall filed the motion with the Western District of Pennsylvania. USW called U.S. Steel's and Nippon Steel's lawsuit "frivolous, unsubstantiated" attack on the union because it exercised its rights under the first amendment.
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Sources say that financial industry groups are concerned about LME's OTC trading plans
Five sources familiar with the matter have confirmed that two financial industry groups raised concerns about the London Metal Exchange's (LME) plans to require members to conduct private transactions with clients on the LME platform. On its Select trading system, the LME wants to encourage its members to execute so-called OTC trades up to 10 lots. This is equivalent to, for example, 250 metric tonnes of copper. The LME also wants its members to hedge these trades using Select. COMEX is a part of the U.S. based CME Group, and it offers contracts for copper, aluminum, and other metals. COMEX doesn't require its members to conduct OTC trading on its system. In December, the Futures Industry Association and the Association for Financial Markets in Europe sent a letter together to the London Stock Exchange outlining the concerns of its members. This was an unusual move that followed a meeting of LME members who normally voiced their concerns and objections via working groups. LME brokers complain about a variety of revenue-raising measures, including trading and clearing fees and other costs such as reporting OTC transactions. In response to a comment request, AFME and FIA stated that they "recognize the LME's efforts to improve transparency and market structure" and were working constructively on these proposals. Three sources claimed that LME members also brought the matter to the attention of Britain's Financial Conduct Authority. The watchdog refused to comment or confirm whether it was consulted on the LME plans. The LME stated that it aims to increase transparency and liquidity and welcomed feedback from "all LME stakeholders" regarding a plan for modernising the market structure announced in September. The LME responded to a comment request by saying, "We are confident the planned measures will result in better outcomes for the entire market." The 148-year-old exchange said that "we expect some of our members will have to adapt their businesses models"... Full details of the proposed measures will be presented and formally discussed in the first half 2025. The LME initially published a "white paper" on its proposals. At the time, it was only planning to consult on necessary changes to its rulebook to implement these proposals. Sources in the industry say that members of the LME want to see the LME drop its plan to require its members to transact OTC for its most liquid monthly and three-month contracts up to 10 lots each on Select starting the second half 2025. LME members are also interested in how the number of 10 lots was calculated. They worry that it won't stop there, and the exchange may continue to raise the limit in order to attract more OTC trading. Some have suggested that the LME wants to stop brokers and banks from netting their buy and sale orders and hedging them on other exchanges such as COMEX. (Reporting and editing by Veronica Brown, Alexander Smith and Pratima Deai)
United Steelworkers Union chief files motion to dismiss suit by US Steel and Nippon Steel
The union announced on Wednesday that United Steelworkers president David McCall had filed a motion for dismissal of the lawsuit brought against him by U.S. Steel & Nippon Steel.
The two steelmakers sued in January, after the then U.S. president Joe Biden had blocked the Japanese company's bid of $14.9 billion for the 123 year-old American steelmaker.
The letter named McCall, Cleveland-Cliffs, and Lourenco Goncalves as the perpetrators of "illegal and coordinated" actions to prevent the Cliffs deal that would have allowed it to monopolize important steel markets.
"U.S. Steel and Nippon launched an unsubstantiated and frivolous attack on our union for simply exercising our First Amendment Rights," the union stated in a press release. The union argued that it was the "right" and the "responsibility of the union to speak out against mergers which hurt union members and the national security.
Nippon Steel declined comment. U.S. Steel stated in a press release that it will respond to the motion for dismissal shortly and continue to pursue their claim. It added that "there are no valid legal defences to this illegal conduct."
Biden blocked this deal for national security reasons, but he delayed its enforcement until the companies filed a separate lawsuit.
Both Biden and Donald Trump have vowed to end the proposed tie-up ahead of the November U.S. Presidential election.
USW refused to accept the deal because of its lack of transparency, and despite Nippon’s repeated attempts to assuage their concerns.
The union, however, has shown its support for Cliffs. It was reported that Cliffs had partnered with Nucor, a peer company, to prepare an all-cash offer for U.S. Steel.
Cleveland-Cliffs filed a motion to dismiss the lawsuit on Tuesday against the company and Goncalves.
McCall filed a motion in the Western District of Pennsylvania.
(source: Reuters)