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South Korea's trade minister claims that Trump's steel tariffs will hit the profits of companies
South Korea's trade minister Cheong Inkyo said Tuesday that the 25% tariffs being imposed by President Donald Trump on imports of steel and aluminum, which are due to take effect in March, will reduce U.S. demand for steel and erode profitability among steel exporters. The tariffs, he said, may provide opportunities for Korean exporters to find new markets. South Korea will "actively" consider whether there are any room for negotiation with the United States on tariffs, even though Trump increased tariffs on imports of steel and aluminum on Monday to flat 25% "without exemptions or exceptions". Cheong spoke at a Seoul meeting with steel company officials. South Korean steelmakers continued to lose money on Tuesday. POSCO Holdings fell for the second day in a row, closing down by 0.8%. Dongkuk Steel Mill also dropped 0.9%, reaching a new low of three months, while the KOSPI index rose 0.7%. EXEMPTIONS FOR 2018 During Trump's first year in office, South Korea and the United States agreed to a duty-free annual steel quota that would average 70% of the volume shipped to the U.S. from 2015-17. South Korea became the first U.S. ally to receive an exemption from steel tariffs for an indefinite period of time. Citi reported that "we see room for negotiations with the second Trump Administration if necessary." Citi estimates that U.S. Steel Tariffs will negatively impact South Korea's GDP by around 0.1% to 0.2%. According to data from the American Iron and Steel Institute, South Korea was the fourth largest steel seller in the United States last year behind Canada, Mexico and Brazil. Reporting by Hyunjoo Ji, Hyunsu Yaim and Jihoon Le; editing by Ed Davies and Kate Mayberry
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Macquarie, Australia's Macquarie bank, joins other major US banks to leave global climate coalition
Macquarie Group, Australia's largest bank, announced on Tuesday that it was leaving the Net Zero Banking Alliance. The NZBA is a global group of banks working to achieve net-zero emissions of greenhouse gases by 2050. Six major U.S. Banks - Goldman Sachs Wells Fargo Citigroup Bank of America Morgan Stanley JPMorgan and Bank of America - have left the alliance in the past few months. Macquarie didn't give a reason why it left the initiative. According to its website, the NZBA was formed in 2021 by the United Nations as a finance initiative. It consists of 134 financial institutions from 44 countries, with an asset total of $56 trillion. The other members of the alliance are HSBC, Barclays Bank, Deutsche Bank, and Singapore's DBS Bank. Macquarie had earlier in the day said that it saw minimal exposure to disruptions in U.S. green-energy sector as a result of President Donald Trump’s executive orders which prohibit or suspend federal funding for sustainable energies initiatives. Macquarie will update its climate-related activities in its annual report, due in May 2025. (Reporting and editing by Varun H K in Bengaluru, Adwitiya Shrivastava from Bengaluru)
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Impala Platinum anticipates further profit decline due to low platinum prices
Impala Platinum, a South African company, said that it expects its half year profit to drop by up to 49% over the next six months as metal prices remain low. Impala, which is the second largest producer of platinum group materials used to reduce emissions from automobiles, expects its headline earnings for the six-month period ending December 31 to range between 1.65 billion and 1.95 billion Rand ($89.39-$105.65 millions), down from the previous 3.26 billion Rand. The miner stated that its earnings had been negatively affected by the lower dollar prices for its metals, as well as a strengthening rand currency exchange rate. This more than offset the benefits of increased production and sales volume. Impala's refined production increased by 2%, to 1.79 millions ounces. Sales rose 5%, to 1.77million ounces over the past six months. Anglo American Platinum's biggest rival, Impala, is expecting its profit to fall by up to 46% for the financial year 2024 due to low metal prices, costs associated with restructuring, and a demerger from its parent. The company will announce its half-year results on 27 February.
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Bangladesh seeks long-term LNG contracts, to build new LNG import terminals
An adviser for the South Asian nation’s energy ministry told the India Energy Week Conference on Tuesday that Bangladesh is interested in long-term LNG deals with nations like Brunei. Muhammad Fouzul Kabir Khan said that the government is close to finalising a list of nations from which it will buy LNG on a spot basis. He also stated that two LNG import facilities are planned. The first will be an on-land terminal with a 1,000 million cubic foot per day capacity. The second will be a floating storage and regassification facility with a 600 million cubic foot per day capacity. Khan said Bangladesh was reviewing all the power deals made by the previous regime and that it will soon be launching a tender to auction off gas blocks. He also added there were good gas reserves onshore and offshore. The interim government of Bangladesh has accused Adani Power, the energy supplier, of violating a multibillion dollar agreement by refusing to pay tax benefits received by a central power plant in this deal from New Delhi. Dhaka still has money owing to Adani Power, despite increasing payments. A Bangladeshi official revealed that Adani Power has been asked to resume full supplies from its 1,600 megawatt plant in India after more than three month of reduced sales and supplies being halved because of low winter demand, payment disputes, and other factors.
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Sources say that the price of Saudi crude oil to China will fall in March, after prices reached a two-year high.
Trade sources reported on Tuesday that Saudi Arabia's crude supply to China will decline in March compared to the previous month after the kingdom raised its prices to their highest level in over two years. A tally of Saudi Aramco's allocations to Chinese refiners revealed that the company will ship around 41 million barrels in March. This is down from 43.5 million barrels in February. This is the second consecutive month that Aramco has seen its allocation to China drop. The sources stated that Sinopec, a joint venture between Aramco and the Chinese state-owned company, and Aramco’s joint venture Fujian Refinery, will lift less crude in March while Aramco will increase their supply to PetroChina, and private refiner Shenghong Petrochemical. Aramco increased the crude oil prices by a large amount for March deliveries to Asia and other parts around the world. The official selling price of flagship Arab Light crude was raised by $2.40 per barrel to $3.90 above the benchmark Oman/Dubai average. This is the highest it has been since December 2022. The latest U.S. energy sanctions, which targeted Russian energy traders in general, disrupted Russian supplies and increased shipping costs. OPEC+ is expected to continue production cuts during the first quarter of this year and gradually increase output from April onwards, according to delegates at the group's last-week meeting. Reporting by Siyi Liu in Singapore and Florence Tan; editing by Tom Hogue & Jamie Freed
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Wall Street Journal, February 11,
These are the most popular stories from the Wall Street Journal. These stories have not been verified and we cannot vouch their accuracy. Elon Musk led a consortium of investors to offer $97,4 billion for the nonprofit OpenAI. This raised the stakes in the battle between him and Sam Altman regarding the company behind ChatGPT. Donald Trump, the President of the United States, announced on Monday 25% tariffs on steel and aluminum imports to the U.S. He also reinstated global duties for allies like Canada, Mexico and South Korea, which were relaxed under the Biden administration. Elliott Investment Management, a activist investor group, has acquired a stake of more than $2 billion in Phillips 66. The firm plans to pressure the oil refiner into considering operational changes that will boost its stagnant share price. Hyatt Hotels announced on Monday that it will acquire Playa Hotels & Resorts, Inc. for $2.6 billion. This includes $900 million of debt. A U.S. Judge on Monday ordered that the Trump Administration fully comply with an earlier order lifting its general freeze on federal expenditures, after a Democratic group of state attorneys general said last week that some funds were still frozen. The Justice Department has directed federal prosecutors to drop all corruption charges against New York City Mayor Eric Adams. This high-profile case began during the administration of former U.S. president Joe Biden.
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Indian shares drop as US tariff worries and earnings concerns sour sentiment
Indian shares fell Tuesday, following other Asian peers as investor sentiment continued to be sapped by concerns about U.S. Trade Policy and low domestic earnings. As of 10:33 a.m. IST the Nifty 50 index was down 0.47% to 23,271, while the BSE Sensex fell 0.44%, to 76,975.9. The 13 major sectors all declined while the smaller smallcaps and middlecaps both lost 2.5% and 2.0%, respectively. The MSCI Asia ex Japan fell 0.3% as a result of concerns over President Donald Trump's trade policies. Trump raised tariffs for steel and aluminum imports by 25% on Monday, "without any exceptions or exclusions". He also said that he will announce plans in the next couple of days to impose reciprocal levies against several countries. According to UR Bhat of Alphaniti Fintech and other analysts, the ongoing decline in Indian equity markets is primarily driven by the uncertainty surrounding U.S. Tariffs. In the last four sessions, both the Nifty 50 (50) and Sensex (100) lost around 1.5%. So far in this year, foreign investors have sold Indian shares worth $9.94 Billion. HDFC Bank led the 1% drop in financials on Tuesday. Eicher Motors' loss was 6% due to a failure to meet quarterly profit and margin expectations. This was caused by higher costs and fewer sales of high-margin bikes. The auto index fell 1.3% as a result of the decline. Adani Enterprises, the flagship company of the Adani Group, rose 4% after Trump signed an order instructing the U.S. Justice Department on how to relax enforcement of a federal law that prohibits bribery. The United States accused Adani Group executives last year of participating in a $265-million bribery plan to win Indian solar energy supply contracts. The conglomerate denies the allegations. Adani has also signed an agreement to establish two affordable health campuses with the U.S.-based Mayo Clinic in Mumbai and Ahmedabad.
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Stocks of Chinese steelmakers fall as Trump's new tariffs increase uncertainty over exports
The shares of major listed steelmakers, the top steel producer in China, fell on Tuesday after President Donald Trump's new tariffs stoked fears about possible impacts on steel exports for this year. Trump raised the tariffs on imports of steel and aluminum to a flat rate of 25% on Monday, "without any exceptions or exclusions", in an effort to help struggling domestic industries. However, this move increases the risk for a multi-fronted trade war. Shares of Baoshan Iron and Steel, HBIS Co. Angang Steel, Hunan Valin Steel Co. Shandong Iron and Steel Co. Jiangsu Shagang Co. fell between 0.3% and 2.84%. The steel prices at the Shanghai Futures Exchange fell by more than 1 percent in the morning session. The fear is that the new tariffs could add to the uncertainty surrounding China's exports of steel this year. Trade tensions are already a threat, but the impact on Chinese direct steel exports to the U.S. will be limited due to the small proportion of trade flows. Customs data revealed that China's direct exports of steel to the U.S. in 2017 were 890,000 tons. This represents just 0.8% its total exports, which reached a nine-year record at 110.72 millions tons. China's strong steel exports helped offset the dwindling demand at home, which was hampered by the prolonged property crisis and lower than expected consumption in the infrastructure sector. In a recent note, analysts from consultancy Fubao stated that "both direct exports as well as transit trade would feel some impact" if the tariffs are implemented more strictly. Transshipment or transit trade is the practice of buying cheap steel from China and then reselling it to another country, such as the U.S., to avoid tariffs. The manager of an East China steelmaker who requested anonymity because he was not authorized to speak with the media warned about "a butterfly-effect on the market which takes time for it to manifest." The manager refused to divulge any further details. (Reporting and editing by Amy Lv, Lewis Jackson, and Lincoln Feast.
Trump's latest trade war salvo includes tariffs on steel and aluminum imports
On Monday, President Donald Trump raised the tariffs on imports of steel and aluminum to a flat rate of 25% "without any exceptions or exclusions". This was done to help struggling industries. However, it increased the risk that a multi-fronted trade war would occur.
Trump signed proclamations increasing the U.S. aluminum tariff rate to 25%, from 10%. He also eliminated country exceptions, quota agreements and hundreds of thousands product-specific exclusions. An official at the White House confirmed that these measures would go into effect on March 4th.
Tariffs will be raised to 25% for millions of tons imported steel and aluminum from Canada, Brazil Mexico, South Korea, and other countries, which had previously entered the U.S. without duty.
Trump told reporters that the move would simplify tariffs for metals, "so everyone can understand what it means." "It is 25%, without exemptions or exceptions." All countries are included, regardless of where they come from.
Trump said that he would "consider" Australia's request to be exempted from the steel tariffs.
These proclamations are extensions of Trump’s Section 232 Tariffs from 2018. They were made to protect domestic aluminum and steel producers on the basis of national security. An official at the White House said that the exemptions have weakened the effectiveness of the measures.
Trump will also impose a North American standard that requires steel imports be "melted, poured", and aluminum imports be "smelted, cast" in the region. This is to reduce U.S. metal imports from China and Russia.
A White House official confirmed that the order extends tariffs on downstream products using foreign-made steel. This includes fabricated structural steels, aluminum extrusions, and steel strands for pre-stressed cement.
Trump signed the order in the White House and announced that he would announce reciprocal tariffs for all countries who impose duties on U.S. products over the next two business days. He also said he had his eye on tariffs for cars, semiconductors and pharmaceuticals.
When asked about the threats of retaliation from other countries in response to his new tariffs Trump replied: "I'm not bothered."
Peter Navarro, Trump's adviser on trade and commerce, said that the new measures will help U.S. producers of steel and aluminum and strengthen America's economy and national security.
He told reporters that the steel and aluminium tariffs 2.0 would put an end foreign dumping and boost domestic production, as well as secure America's steel and Aluminum industries.
This isn't about just trade. It's to ensure that America will never have to depend on foreign countries for critical industries such as steel and aluminum."
In 2018, Trump began imposing tariffs on steel and aluminum under an anti-Cold War national security law. Later, he granted exemptions to several countries, including Canada and Australia. He also struck duty-free deals with Brazil, South Korea, and Argentina, based on their pre-tariff volume.
Joe Biden, the former president of the United States, who succeeded Trump, negotiated a similar duty-free tariff for Britain, Japan, and EU.
"We applaud President Obama for instituting the 25% tariffs on imports of steel and eliminating exclusions, carving outs, and quotas based on outdated data," said Philip Bell of the Steel Manufacturers Association.
Bell explained that these figures were based upon import levels from 2015-2017, which no longer reflect the current dynamics of the market.
Shares of U.S. and European steel and aluminum producers soared before the announcement, while those of European and Asian steelmakers declined. According to data from government and industry, the top three sources of U.S. imports of steel are Canada, Brazil, and Mexico. South Korea, and Vietnam follow.
In the first eleven months of 2024, Canada's extensive hydropower resources, which aid its metal production and manufacturing, accounted 79% of U.S. imports of primary aluminum.
U.S. Trade Partners warned that the new barriers will hurt U.S. Automakers, Shipbuilders and Other Industries.
Don Farrell, Australian Trade Minister, said that Australian steel and aluminium create thousands of American jobs and are vital to our common defense interests.
The U.S. Distillers warned the EU that steel tariffs may prompt them to increase duties on American whiskey.
Chris Swonger is the CEO of the Distilled Spirits Council of the United States. He said that a 50% tariff on America’s native spirit would have catastrophic consequences for the 3,000 distilleries in the United States.
The European Commission stated that it did not see any justification for these tariffs. President Ursula von der Leyen will meet U.S. vice president JD Vance on Tuesday in Paris during an AI Summit.
The South Korean Industry Ministry invited steelmakers to South Korea to discuss ways to minimize tariffs' impact.
RECIPROCAL TARIFFS
Trump has also promised to provide detailed information about his reciprocal tariff plan on Tuesday or on Wednesday. He has complained for years about the EU's tariff of 10% on auto imports. This is much higher than the 2.5% U.S. rate. The U.S., however, applies a tariff of 25% on pickup trucks. This is a major source of profit to Detroit automakers such as General Motors.
According to World Trade Organization statistics, the average U.S. tariff rate, weighted by trade, is 2.2%. This compares to 12.0% for India, 6.7% in Brazil, 5.1% in Vietnam, and 2.7% within the EU.
Indian officials claim that Indian Prime Minister Narendra Modi has been preparing tariff reductions ahead of his meeting with Trump on Wednesday. These could increase American exports. Trump called India "a very big abuser" of trade in the past, and his top economist Kevin Hassett referred to India as having "enormously" high tariffs during a CNBC interview.
Trump had threatened to impose 25% tariffs on all imports coming from America's largest trading partners Canada and Mexico. He said they needed to do more to stop the flow of migrants and drugs across the U.S. Border. Trump suspended the tariffs on March 1 after making some concessions in border security.
Data from the United States showed that last year, demand for aluminum far exceeded production in the country. This left it largely dependent on imports.
(source: Reuters)