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Trump tariffs raise US metals prices and industry is set to struggle
The price of industrial metals in America continued to rise on Tuesday. This was due to the impact of President Donald Trump’s 25% tariffs on aluminum and steel, as the industry will be unable source enough material domestically. The stated goal of new tariffs was to help struggling U.S. Metal Producers, but it will take some time to reopen and build new plants to compensate for the large amount of imports. Traders are raising the prices of U.S. Metals to reflect what automakers and other industries must pay for foreign metal once the new measures come into effect on March 12th. Morgan Stanley estimates that net imports will account for 82% of the U.S. demand. Since Trump's election, the U.S. premium on aluminium over the benchmark global price at the London Metal Exchange is up a quarter to 35 cents a pound. Analyst Volkmar Baur of Commerzbank said that "Aluminium production would need to be expanded massively in a very short time period to replace even part of the imported aluminum with domestic production." The American Primary Aluminum Association has praised Trump's tariffs. Mark Duffy said, "Today's a good day for the U.S. Aluminum Industry." U.S. data shows that domestic aluminium smelters only produced 670,000 metric tonnes of the metal in 2010, down from 3.7 millions in 2000. Meanwhile, U.S. demand for the metal was 4.3million tons. Morgan Stanley's Amy Gower said that the U.S. has curtailed production by 470,000 tons, but it could theoretically resume. According to our estimation, this process would take between 6-12 months depending on the amount of preparation work that has been done. She added that building new smelters could take even longer. PerenniAL CEO Brian Hesse said: "I'm not sure anyone in the U.S. would be more supportive of increasing domestic production of aluminum than I am, but we have to do it thoughtfully and over a period of several years." "You cannot cut off your nose to spite your face", added Hesse. His company distributes aluminium slabs, wire rods and billets used in wheels and window frames. STEEL, COPPER U.S. domestic prices of hot-rolled coil steel (a semi-processed material) have increased by almost 40% since last week. Analyst Andrew Jones of UBS said that if the supply growth was implemented, it would result in materially higher U.S. price. The negative impact of an escalating war on trade could have a greater impact. The global industrial metals price fell on Tuesday as a result of widespread fears over a potential trade war that could slow down economic growth and reduce metals demand. Trump didn't impose copper tariffs on Monday but he had threatened to do so last week. The expectation that copper was next led to the U.S. futures trading on Comex surpassing the benchmark global price on the London Metal Exchange on Monday, reaching a new record high. The price of iron ore fell slightly to $725 per ton on Tuesday, down from $930 per ton at Monday's close. However, it remains roughly twice its level as at the end January. (Additional reporting by Tony Munroe, Ernest Schneider, Melanie Burton, Hyunjoo Ji, Amy Lv, and Francesco Guarascio, in Hanoi, Beijing, and Seoul; editing by Kate Mayberry and Veronica Brown)
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Elliott buys Phillips 66 for $2.5 billion and pushes to sell midstream business
Elliott Investment Management announced on Tuesday that it had built a stake in Phillips 66 of more than $2 billion. The company plans to push operational changes and the sale of its midstream business. Phillips 66 rose 5.8% on the morning market. In March, activist investor revealed a $1 billion investment in Phillips 66. The company then announced a performance-improvement plan to increase shareholder returns and share prices. Elliott stated that Phillips 66’s plan “failed to materialize and it is now evident that urgent change is needed” and that its share price has lagged behind that of rival refiners. On Monday it was reported that the investor has a stake worth over $2.5 billion in Phillips 66. Phillips 66 didn't immediately respond to a comment request regarding Elliott’s plans for the midstream business. Elliott stated in a Tuesday statement that a streamlined Phillips could include the spin-off or sale of its midstream operations, the sale and/or interests of CPChem as well as the JET retail business in Germany and Austria. The investor stated that if the company sells or spins off its midstream division, it may command a valuation in excess of $60 billion. According to LSEG, Phillips 66's market capitalization was $51.09 billion at the stock's latest close. Elliott also stressed the need for new independent directors on Phillips 66’s board to bolster accountability, and conduct a management review. The hedge fund said Phillips 66 should commit to ambitious refining goals and prioritize profitability, at a moment when margins for refining have fallen for most U.S. refining companies. (Reporting and editing by Shinjini Ganguli in Bengaluru, and Shailesh Kumar)
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Sources say that Saratov's oil refinery in Russia has suspended operations following drone attacks
Industry sources say that the Rosneft owned oil refinery in Saratov, a city in southern Russia, has suspended fuel production due to safety concerns following drone attacks by Ukraine on Tuesday. They expect the plant will resume operations within a few days. The Ukrainian military announced earlier Tuesday that they had hit an oil refinery overnight in Russia's Saratov Region, causing fire. Roman Busargin said that the Ukrainian drone attack had damaged an industrial facility but failed to identify it. According to two industry sources, oil processing was suspended at the refinery but that key units had not been damaged. Rosneft didn't respond to a comment request. "There's nothing serious. The main processes are working fine. The processing has temporarily been stopped. In a few days, it will slowly return to normal," said an industry source. In 2024, the Saratov refinery will process 5.8 million tons of oil (116.160 barrels each day), which is equivalent to 2.2% in Russia's overall refining capacity. Last year, it produced 1.2 millions tons of gasoline, 1.9 Million tons of diesel fuel, 1,000,000 tons of fuel oil, and 300,000 tonnes of bitumen. David Goodman, Editor (Reporting)
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Ford CEO condemns "cost and chaos of Trump tariffs"
Ford Motor CEO Jim Farley stated that U.S. president Donald Trump's tariffs, both proposed and implemented, have caused "a great deal of cost and chaos," even though Farley believes Trump wants to strengthen the American automotive industry in general. Executives said Tuesday at an analyst conference that the automaker is looking into ways to build up its inventory in preparation for possible 25% tariffs on imported goods from Mexico and Canada. Trump had planned to implement these duties in early February, but then delayed them until March. Ford is not exposed in a significant way to the increased tariffs that Trump announced on Monday. Executives said that Ford gets the majority of its materials in the U.S. "President Trump talked a great deal about strengthening our U.S. auto industry, bringing in more production, and more innovation, so if the administration is able to achieve this, it will be a signature achievement. Farley stated that so far we are seeing a lot more cost and chaos. (Reporting and editing by Nora Eckert)
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Shell and Nigerian oil producers discuss Bonga North service contract
The head of a trade group for Nigerian oil producers said that Shell is in talks with Nigerian oil companies to secure up to 25 percent of the service contract for the Bonga North Deepwater Project. Shell announced its investment in the project in December. The project is expected to maintain oil and gas production in Bonga. The project will be connected to Shell's Floating Production Storage and Offloading facility (FPSO), in which it holds a majority stake. Later, the Nigerian government said that the total project value is $5.5 billion. Wole Ogunsanya is the chairman of the Petroleum Technology Association of Nigeria. He said that the group met with a Shell delegation in Nigeria on Monday along with the Nigerian organization responsible for increasing local involvement in the oil sector to discuss the possibility of securing 20% to 25% of service contracts for this multi-billion dollar project. We have real capacity and Nigerian companies already operate in India, the Middle East and other African countries. "We are capable of managing this project too," Ogunsanya stated at the Sub-Saharan Africa International Petroleum Exhibition and Conference 2025 (SAIPEC), in Lagos. Shell has declined to comment on this proposal. In 2010, Nigeria passed the Local Content Development Act, which requires oil companies to submit plans that demonstrate tangible benefits for the country. These include employment, resource processing and local industry involvement. Nigerian participation to oil and gas projects increased to 56% since the law was passed. The government plans to increase it to 70% by the year 2027. The law has helped oil majors divest from their onshore fields and give them to local companies. Shell estimates that Bonga North contains more than 300,000,000 barrels of recoverable oil equivalent (boe). The project will reach a peak production rate of 110,000 barrels of oil equivalent per day before the end the decade.
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Trump's squeeze results in concessions, some real and others not so much
Donald Trump, the U.S. president, has stepped onto the global stage. He has issued ultimatums and demanded that allies and enemies heed his demands. His threats, from large trade tariffs to outright resource grabs, are part of an approach to diplomacy that is often accompanied with explicit demands. Many of his target countries have made concessions. Some of the concessions were real, such as pledges to purchase more American products or invest in U.S.-based activities. Other times, they were a repackaging or a move that had already been made. This article will go into some detail about the responses that Trump has received since his January 20th inauguration. AMERICAN BORDERS Mexico's 10,000 National Guard soldiers, which it has sent to the United States border to stop the flow of drugs and control migration, are clearly a new addition to its border security. This was enough for Trump to drop his threat to impose steep tariffs on trade last week. The majority of experts are not sure if the reinforcements have any real impact. They reserve their judgement for now. Canada, which was also granted a tariff reprieve, had announced in December that it would invest C$1.3 billion (909 million dollars) on border security to combat fentanyl and other drugs, illegal migration, and organized crime. Justin Trudeau, in announcing the suspension of U.S. Tariffs on February 3, referred to a "new intelligence directive" that was backed up by C$200 Million. Justin Trudeau also promised to appoint a "Fentanyl Czar", a post that has not yet been filled. JAPAN JAPAN's large trade surplus with the United States is a long-standing irritant to Trump. He brought it up with Shigeru Shiba, Prime Minister of Japan during his first White House Visit last week. Ishiba, who pledged to increase Japanese investments in America to $1 Trillion and to purchase U.S. ammonia, gas and ethanol, signalled his willingness to support U.S. interest. SoftBank Group CEO Masayoshi Son is likely to have pledged $100 million in an investment during a December meeting with Trump. Ishiba mentioned that Toyota Motor Corp., and Isuzu Motors have new factories planned in the United States. Trump announced progress in the Nippon Steel attempt to acquire U.S. Steel, which was blocked at $14.9 billion. He stated that any bid should be in the form of an outright investment, not a purchase. Uncertainty remains about how Nippon Steel & U.S. Steel will revise the proposed deal. INDIA Trump previously labelled India a "very large abuser" of trade. India has been eager to emphasize its willingness to open its economic system. This is a message that Prime Minister Narendra Modi plans to convey during his two-day trip to the United States. Tuhin Kanta Pandey, Finance Secretary, said: "We do not want to send anyone a signal that we are protectionist." "Our position is that we do not want to increase the protection." Officials from the Indian government said that India was considering tariff reductions in at least 12 sectors, ranging from medical and surgical devices to chemicals and electronics, in order to boost U.S. imports and to align with New Delhi's plans for domestic production. Modi could also propose increased U.S. imports of energy and defense. EUROPE SECURITY Trump began to harrasse European NATO allies about the need to increase their defence spending during his first term, and it had some effect. Mark Rutte, NATO Secretary-General, said last week that a new pledge of military spending to be decided in this year will be "considerably higher" than the target of 2 percent of national production which many NATO Allies failed to meet a ten years ago. In Europe, the Ukraine conflict has also brought to light security concerns. It is still unclear how the governments, with their tight budgets, will fund this surge in defense spending. What will happen to Trump's claim that the United States should get a cut of the revenues generated by the future extraction from Ukraine's rare earths and critical minerals as a reward for its support of the war effort is even more uncertain. Ukraine floated the idea last year of opening up its vital minerals to investment from allies. Ukrainian President Volodymyr Zelenskiy stated in an interview last week that he is ready to make a deal. Zelenskiy stressed that Kyiv did not propose "giving away" resources but offered a partnership for them to be developed jointly. There is no way to know how many of these resources are on the Russian side of current frontlines. Reporting by Aftab Ahmad in New Delhi, John Geddie and Stephen Eisenhammer from Mexico City, Caroline Stauffer is in Canada. Writing by Mark John. Editing by Hugh Lawson.
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Save LGBTQ+ and climate data as Trump deletes
Government websites scrubbed under Trump orders Experts warn that green policies put vulnerable communities at risk Courts file lawsuits against the government for data removal Adam Smith Following a series of executive orders issued by President Donald Trump, thousands of U.S. Government web pages have been altered or removed. The orders target what the administration refers to as "gender ideologism extremism" (or environmental policies). To make rational and effective public health policies, you must have access to accurate, comprehensive data. Charles Gaba is a healthcare data analysts who works to support information on the Center for Disease Control and Prevention's (CDC) website. Health agency officials took offline datasets from the CDC late last month, including the Social Vulnerability Index and Environmental Justice Index used to quantify disproportionate risks of health among different demographics. The average person should consider this as censorship. The CDC, along with other federal agencies, has also purged data on HIV in transgender individuals and disparities in health among gay, lesbians, bisexuals and transgender youth. Benjamin stated that removing information would make it more difficult to track infectious diseases such as HIV and mpox and could have a severe impact on everyone. To stop the move, organizations such as Doctors for America and Minority Veterans of America filed lawsuits with the U.S. Government. The lawsuit filed by Doctors for America stated that "the removal of this data robs researchers of information they need to treat patients and develop policies and practices that protect the health and safety of vulnerable populations as well as the nation at large." Preserving Data The Office of Personnel Management (OPM), the U.S. Government's Human Resources agency, has told all departments to stop programs that promote gender ideology or "recognize" women as biologically female and men as biologically male. Academics and online preservation organizations, which keep a record of U.S. Government as it changes through time for historical research and educational purposes, have increased their efforts to backup information. Gaba created an online index of CDC sites using Internet Archive. This non-profit website allows anyone to backup a website simply by sending a URL. Other weaknesses exist in the process. The archived library may lead to broken or dead websites if the site has not been backed up completely, if malware is detected or if the server hosting the website is down. The main databases of public health were not saved. They had to be downloaded separately. The Public Environmental Data Project (PEDP), a coalition of volunteers that works to preserve public access federal environmental data, has archived the Climate and Economic Justice Screening Tool, developed by the Council on Environmental Quality. The federal agencies use the CEJST to identify areas with significant environmental, economic and social burdens. These communities need targeted investments from environmental initiatives. The Public Environmental Data Project has now replicated the Environmental Protection Agency’s ‘EJScreen’ tool which combines demographic and environmental indicators to assess higher-risk communities. The U.S. Government took it off-line between February 3 and 5. CHALLENGES ARCHIVE Archiving government data is nothing new. The End of Term Web Archive (which includes the Internet Archive, libraries, and research organizations) has been saving government websites for the past five presidential terms. The rapid policy changes of the Trump administration have increased the urgency. Katie Hoeberling is the director of policy initiatives for Open Environmental Data Project. The project promotes environmental data that can be used to facilitate community-driven governance, information sharing, and support. She said that taxpayer dollars had paid for CEJST, EJScreen and other software, so the public "deserves access" to them, whether it is for research, advocacy, litigation or just to help people better understand their environment. Legal means could be used to recover more data, such as the lawsuit filed by Doctors for America against the CDC and the Food and Drug Administration. The lawsuit claims that removing data on youth behavioral risks, HIV support, and FDA guidance regarding diversity in clinical studies would hamper vital research. The CDC refused to comment on this lawsuit. The FDA and HHS have not responded to a comment request on the lawsuit. Researchers are worried that even if the existing data is preserved, new data may not be collected. This could affect future research and policy accuracy. Benjamin added that Benjamin's statement about the inability to use information collected for a specific purpose for a different one was a good reminder of how even small differences can have a huge impact on areas like disease prevention.
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Nornickel, a Russian company, says that it is actively involved in talks with China on a JV
Nornickel of Russia, a major producer in the refined nickel and palladium industry, announced on Tuesday that it was in active discussions on a joint-venture in China, with potential investments being included in its early financial plans. The details of the discussions were not disclosed. In December, two sources familiar with the matter said that Nornickel was in talks with Chinese conglomerate Xiamen C&D to form a joint venture in China for processing Nornickel's raw copper material into metal. We are in active discussions with our Chinese partners and therefore cannot reveal the details just yet. We are including these funds in our financial model for 2025-2026, said Nornickel Vice President of Strategic Planning Sergey Dubovitsky during a conference call. He claimed that the $2.1 billion announced for capital investment by 2025 does not include any potential investments in Chinese projects. Nornickel is diversifying its production by establishing plants outside of Russia. This comes after the company diverted its sales to Asian countries in response to Western sanctions. Nornickel may not be directly sanctioned by the West, but some Western producers have been influenced to stop buying Russian metal. They also face complicated payments and limited access to Western equipment. Nornickel's 2024 net profit fell 37% to $1.8 billion due to Western sanctions and low metals prices. Dubovitsky didn't elaborate on whether the models were backed by the board of directors. The company stated that it planned to increase capital investments in 2026-2027, but not beyond the level of $2.5-3.0 Billion. Nornickel, who has been trying to reduce the stocks of metals that it couldn't sell due to Western sanctions, also reiterated Tuesday its intention to sell all of its production by 2025. The company's Chief Financial Officer, Sergey Malyshev, said: "We plan to sell all we produce this year and reduce our inventory by a portion." Vladimir Potanin, Nornickel's billionaire president, called the growth of net working capital due to the accumulation of inventories as a negative trend in recent years. On February 10, the company stated that they expected a global surplus of nickel in 2025, and that this year's global palladium markets would be balanced. It plans to produce between 204,000-211,000 tons of Nickel this year. (Reporting and writing by Anastasia Lyrchikova, Anastasia Teterevleva and Gleb Bryanski; Editing and reviewing by Jan Harvey and David Evans).
Aluminum and copper slump on fears of tariffs hitting growth
Investors worried about new U.S. trade tariffs, a possible global trade war and the impact on economic growth and metals prices have pushed down copper and aluminium prices.
By 1100 GMT, the London Metal Exchange's (LME) three-month aluminium was down by 0.6% to $2,642.50 per metric ton, while copper fell 1.1% to $9344.
U.S. president Donald Trump raised tariffs on imports of steel and aluminum on Monday by a substantial 25%, "without any exceptions or exclusions", which could spark a multi-fronted trade war.
Dan Smith, the head of research for Amalgamated Metal Trading, said that tariffs could be damaging to the U.S. economic system.
Smith was referring semi-fabricated aluminum because Trump's actions extend the tariffs also to downstream products which use metal made abroad.
The second phase is the retaliation by other countries. The U.S. exports are growing as well. So they will still be hit by this.
Aluminum imports from Canada, mainly, are a major source of aluminium in the U.S.
The price of primary aluminum in the U.S. is based on LME benchmark plus Midwest premium. It was up 3% last week to 35 cents per lb. This was the highest level since May 2022 after a 10% jump on Monday. Since Trump's election, it has risen by 60%.
We expect that any tariffs will result in higher prices for U.S. Manufacturers. This would be more likely to take the form of a higher U.S. Midwest Premium than a sustained increase in the LME Price," ANZ Research stated.
On Monday, the premium between U.S. Comex Copper Futures and LME Contracts reached a new record high amid fears that U.S. Tariffs would be imposed on copper.
The premium dropped to $800 per ton on Monday from $930, but is still twice as high as a week earlier.
Lead fell 1.2% to 1,975.50, while tin dropped 0.8% to 30,900. (Reporting and editing by David Evans; Additional reporting in Shanghai by Violet Li)
(source: Reuters)