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After Trump's halt to funding, Air Liquide may only pursue two of the six US hydrogen hubs.
Air Liquide, a French company, said that after Donald Trump frozen funding for clean energy projects in the U.S. Department of Energy's (DoE), only two of six hydrogen projects it had been awarded by the DoE might be implemented. Air Liquide has been selected as a partner in 2023 for six clean hydrogen hubs that are planned by the DoE. The DoE was going to allocate $7 billion under the bipartisan Infrastructure Law signed by the former President Joe Biden. However, Trump has placed holds on tens of billions of dollars in congressionally-approved spending, including those from the bipartisan law and Biden's Inflation Reduction Act (IRA). After meeting with American teams a couple of days ago, CEO Francois Jackow stated during a press call that two hubs centered around hydrogen from natural gases with carbon capture were on the top of the list of areas to be pursued. He added that the future of the four other hubs would be heavily dependent on the decisions made by the new administration on policies relating to renewable energy. Air Liquide, a beneficiary of the IRA has invested heavily in the U.S. Clean Energy Transition, including a partnership between Exxon Mobile and the Baytown facility of the oil giant to increase the production of ammonia and hydrogen with low carbon emissions. Jackow stated that the project with Exxon is not "absolutely determined yet", but both parties continue to work on it. A final decision should be expected in the second quarter of 2025. Air Liquide is not just about hydrogen, he said. It announced last year investments in industrial gas supplies for Micron Technology's U.S. electric car battery plant and LG Chem. Jackow stated that it is unlikely there will be any major announcements made in the battery industry in the next six-months, but he added he felt "extremely confident," with customers on whose projects his company already worked. Air Liquide, which accounts for around one third of the company's total sales in the U.S., is able to source materials locally, according to Mr. Bodinier. Reporting by Johan Bodinier in Gdansk and Antonis Pothitos; editing by Milla Nissi
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US tariffs solar panels imported from Southeast Asian countries (Nov 29, 2018)
U.S. Trade officials announced a new round on Friday of tariffs against solar panels imported from four Southeast Asian countries after American manufacturers complained about the unfairly low prices offered by these companies. The Commerce Department of President Joe Biden is making the second preliminary decision this year on a trade case filed by Hanwha Qcells in Korea, Arizona's First Solar Inc. and several smaller producers to protect billions in investments made in U.S. manufacturing of solar panels. The American Alliance for Solar Manufacturing Trade Committee accused the big Chinese solar panel manufacturers with factories in Malaysia and Cambodia as well as Vietnam, Thailand, and Vietnam of dumping their products on the market, causing the global price to crash. According to a preliminary report posted on the U.S. Commerce Department website on Friday, the agency determined dumping duties ranging from 21.31% to 271.2% depending on the company for solar cells from Cambodia. Jinko Solar has received duty of 21.31% on products produced in Malaysia, and 56.51% on those in Vietnam. Trina Solar, a Chinese company, received a dumping rate of 77.85% on products made in Thailand. The Commerce Department, on the other hand, did not specify any dumping margins for Hanwha Qcells made in Malaysia. The department calculated a subsidy rate for the company of 14.72 % in October. The Department's final decisions are scheduled for April 18 2025. The International Trade Administration will finalize their determinations on June 2, and the final orders should be expected on June 9. With these preliminary duties we are closer to addressing harmful unfair trade for years and protecting billions in investment into new American solar manufacturing, supply chains, and said Tim Brightbill. Partner at Wiley Rein, and lead counsel to petitioners. Jinko's and Trina's representatives were not available to comment immediately. The majority of solar panels used in the United States come from overseas. Approximately 80% comes from four countries that are the focus of the Commerce Department's investigation. This year, the Biden administration raised alarms over China's massive investments in factory capacity to produce clean energy products. Inflation Reduction Act by Biden, a landmark climate law, provides incentives to companies that manufacture clean energy equipment within the United States. This subsidy has led to a rush of new plans for solar factories. Donald Trump, the president-elect of the United States, has criticized Biden's landmark climate change law for being too expensive. However, he has also said that he will impose hefty tariffs to protect American workers. When a company sells its product in the United States for a lower price than its cost of production, or even less than it charges in their home country, this is called dumping. (Reporting and editing by Will Dunham; Additional reporting by Susan Heavey, Mrinalika Roy and Will Dunham; Editing and reviewing by Chizu Nomiyama, Mohammed Safi Shamsi and Will Dunham)
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EU approves state assistance to Engie's Belgian reactors to prolong their life span
The EU Competition regulators approved on Friday the Belgian plan to grant aid to French energy giant Engie's Belgian subsidiary to extend two nuclear reactors' lifespan, concluding an in-depth inquiry that began last July. In December 2023, Belgium and Engie signed a contract to extend the lives of two nuclear reactors in Belgium. These are Doel 4, near Antwerp, and Tihange 3, near Liege. This was to ensure the safety of electricity in Belgium and its neighbouring countries. In this agreement, Electrabel and the Belgian State will provide shareholder loans as well as inject equity totaling around 2 billion euro ($2,09 billion) in order to cover the capital costs of the extension. It also includes Electrabel transferring its liabilities related to long-term storage, final disposal and nuclear wastes and spent fuels to the Belgian government for a lump-sum payment of 15 billion euro. Engie's Belgian subsidiary Electrabel owns the majority of the reactors, while EDF subsidiary Luminus has a minority stake. The Commission stated that when it opened its investigation in July of this year, it would focus on both the financial arrangements and the proportionality of transferred liabilities. The Commission stated that it concluded the aid was necessary and appropriate for achieving the goal pursued. It also found the aid to be proportionate, since the amount of the assistance is kept to a minimum. The Commission has approved the Belgian state aid measure on this basis." $1 = 0.9554 Euros (reporting and editing by Dominique Vidalon, Jane Merrill)
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Why Trump has brought VAT into the trade dispute
Donald Trump, the U.S. president, says that value-added tax is largely responsible for the near trillion dollar deficit in trade between the United States and the rest of world. Over 170 countries, including the top U.S. trading partners in Europe, charge VAT. They claim that it has no effect. Who can you trust? In his February 13 memo on trade barriers, Trump gave the VAT a prominent place, listing it as one of "unfair, unfair, discriminatory or extraterritorial" taxes imposed on U.S. workers, consumers and businesses. The White House told reporters that the most harmful thing about VAT is the fact that it is added to imports from the United States, but European producers receive VAT refunds for exports to the United States. The official went on to say that "there's a good reason why Germany sells eight times as many cars as we do, and it is not American quality or craftsmanship." Trade experts have argued that VAT can be used to deter trade. The United States is one of only 19 countries with a single-stage tax, which is a sales tax that's only imposed once, and paid by the end consumer. Other countries include Cuba, Malaysian, North Korea and Somalia. As the name suggests, VAT is levied at every stage of the supply chains such as from the manufacturer to the retailer to the consumer. It is also due for imports into the EU, unlike the United States where the sales tax is only charged on the last transaction. It could discourage importers of U.S. products who are stuck with a large VAT bill when their goods arrive. Mairead Warren de Burca is the managing director of Alvarez & Marsal Tax, a London-based tax firm. She says that many European countries permit importers to defer payment of import VAT, while Britain and Ireland, Belgium, and The Netherlands do not require import VAT. This means cash flow will be unaffected. She said that import VAT can be recovered or offset with VAT collected further down the supply chains. In the end, VAT is collected at the final transaction. This is similar to the sales tax system in the United States. DOUBLE-WHAMMY? The White House's "double-whammy" argument also targets VAT exemptions for EU exports. According to the EU, this is because it's a tax that is based on where you consume. Washington, however, has not bought into this argument. Since 1971 they have been trying to set up systems that provide tax breaks to U.S. Exporters. The EU challenged them all, culminating with an eight-year dispute at the World Trade Organization that found these tax breaks to be illegal export subsidies. These U.S. laws were repealed. Zach Meyers is the director of research for the Centre on Regulation in Europe. He says that the differences in consumption tax between the EU and the United States, from zero to Seattle’s 10,35%, are a problem. He said that if the U.S. taxed consumption more heavily, they could lower taxes on production such as labour or corporate profit. This can reduce the tax burden on export-oriented industries. "The U.S. does not enjoy the same benefit." Trump has asked officials to conduct research on the subject. Warren de Burca, Alvarez & Marsal’s Warren de Burca, acknowledged that VAT is not an easy concept to understand. She said, "But the Americans are very intelligent." I hope they'll take my advice and look at these systems in order to determine that VAT isn't an impediment for trade. "Tariffs are, but VAT is not." Some see this as Trump's deliberate tactic to justify higher trade tariffs in a larger EU-U.S. standoff. This could eventually spread to other areas such as business taxation, and to fines that the EU may levy against American Big Tech. Trump wants to equalize the differences in tariffs such as the US import duty of 2.5% on cars compared to the EU's rate of 10%. He also wants to factor in the VAT and other costs for U.S. companies. It may be difficult for EU producers to accept a reciprocal import duty of 10% into the United States. If VAT is added, this could amount to a crippling tariff of around 30%. Niclas Poitiers is a research fellow at the Bruegel think-tank in Brussels. He said that the EU may consider reducing the import duty on cars, as stated by the EU Trade chief on Wednesday, but he said that overhauling the tax system to eliminate the VAT was a non-starter. Poitiers stated, "I believe this is more of a negotiation ploy (by the White House), rather than their being serious about the actual issue." "I don’t think they’re interested in global tax collaboration." (Reporting and editing by Mark John, Topra Chopra, Toby Chopra; Additional reporting by David Lawder from Washington).
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Copper prices fall amid concerns about China's demand and tariffs
Copper prices fell on Friday due to concerns about the demand in China following an increase in inventories and uncertainty regarding possible U.S. Tariffs. The price of three-month copper at the London Metal Exchange was $9,515 per metric ton as of 1100 GMT. It had reached its highest level for three months just a week earlier. Data showed that copper inventories in the warehouses monitored the Shanghai Futures Exchange, (SHFE), rose 13% during the last week. They had risen 162% since the end of January. The Chinese stock market rises on a seasonal basis during the Lunar New Year holidays. However, the data has added to the disquiet over Chinese demand following data earlier this week that showed home prices stagnated in January. China's property sector is the main driver of demand for industrial metals. SHFE copper dropped 0.5% to 77,000 Yuan per ton. The demand for copper has not been very strong after the holidays. "People are saying it's being held up a little by higher prices," Dan Smith, Amalgamated Metal Trading's head of research. LME copper has gained 9% this year. "The end to the war in Ukraine will be a bullish event for all, but Trump's tariffs and turmoil would offset that." "So you have these two dynamics that are difficult to quantify," Smith said. U.S. president Donald Trump announced that he will announce new tariffs within the next month, or even sooner. He added lumber and forest products, to his previous plans of duties on imported automobiles, semiconductors, and pharmaceuticals. The stronger dollar has also affected metal prices, making them more expensive to buyers who use other currencies. Other metals include LME aluminium, which fell by 0.8% to $2704 per ton. Nickel also declined, losing 1.1%, to $15,500. Zinc fell by 0.7% to 2,899; lead dropped 0.2% to 1,988; and tin, down 0.2%, to $33,345. ($1 = 7.2489 Chinese Yuan Renminbi)
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MORNING BID AMERICAS-Walmart clips Wall St, euro eyes German vote
Mike Dolan gives us a look at what the U.S. market and the global market will be like today. Wall Street was stung by Walmart's disappointing results. This cast a shadow over the U.S. consumers, just as the more buoyant European markets were awaiting the German election this weekend. In the last 24 hours, world markets were roiled by a slew of influences, including geopolitics and trade, as well as monetary policy, corporate earnings, and monetary policies that are often at odds. The biggest blow was caused by the retailer's failure to meet its profit and sales forecasts, citing the volatile political climate and the upcoming trade uncertainty. Walmart's stock fell 6.5%. This was despite a record-breaking rise of more than 80% in the last year. It also represents a strong performance since Donald Trump won the election. Amazon also lost almost 2% after last week's disappointing U.S. January retail sales. S&P500 lost almost 0.5% on Friday and futures were unable to hold their ground. Palantir, which offers software to visualize army positions and other services for governments, fell 5% when the Pentagon announced it would be looking at possible budget cuts in fiscal year 2026. Today's macro-diary is dominated by flash business surveys from February, and the results of AI chip giant Nvidia are due next week. In the Philadelphia Federal Reserve's latest surveys, the mid-Atlantic region saw manufacturing activity levels plummet this month to the lowest level in almost five years. Jobless claims also increased in the last week. Treasury yields fell on retail and business readings, even as Fed officials continued signaling caution over further easing of policy amid persistent inflation uncertainty. Scott Bessent's comments about the "long way off" of any increase in longer-term Treasuries as part of government debt issuance helped to further reduce debt yields. This is despite his criticism of former Treasury chief Janet Yellen's front-loading of debt into short-term maturity. He said, "We will see what the market demands." The dollar index fell to its lowest point of the year due to the decline in stocks and yields. However, the greenback recovered some of its losses on Friday. The dollar's drop was mainly concentrated against the yen of Japan, where speculation has increased about a Bank of Japan rate hike as early as next month. The Japanese inflation data released on Friday confirmed this talk. In fact, the headline annual price increases in Japan last month reached 4% for only the second time in two-years. Sayuri Shira, a former central bank member, said that March would be an 'excellent opportunity' to raise rates. In a bizarre twist, however, the yen has retreated after Bank of Japan Governor Kazuo ueda announced on Friday that the central bank is ready to increase its government bond purchases if interest rates for long-term bonds rise dramatically. Ueda’s remarks helped lower the 10-year Japanese Government Bond yield to 1.42%, from 1.455% earlier that day. It was its highest level since November 2009. Ueda’s comments are a subject of debate. They may reinforce speculations about the rate hike or signal concern over its impact. But Japan's Nikkei stock index ended higher. In Europe, the Sunday election in Germany is a major concern. This is despite tensions over Trump's surprising change of stance this week on Ukraine and the looming threat of tariffs. The German stock market has performed well this year largely because of the expectation that the new government would have the backing it needs to lift the 'debt-freeze' they imposed after the elections and increase defense and investment expenditure. The benchmark DAX in Germany was up 0.8% on Friday, after hitting a seven-month high early this week. The release of the business surveys that showed a slight increase in activity in Germany's Private Sector in February helped. As the vote approaches, the euro has retreated slightly from its near three-week high. The results of the vote will depend on the success or failure of smaller parties to clear the 5% threshold for entry into parliament. This is crucial to the calculation to determine whether a new government can get the two-thirds majority needed to change the debt clause. Sterling briefly reached a new year-high against the dollar following a surprising upbeat report on retail sales for January. After Alibaba's strong earnings report on Thursday, Chinese shares rose again. The Hang Seng closed the day 4% higher. The following developments should help to guide U.S. stock markets on Friday:
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Palm oil gains for the fifth week in a row on concerns over production
Malaysian palm futures gained on Friday, logging their fifth consecutive weekly gain. This is the longest winning streak in three years. Prices were supported by expectations of a weaker production. The benchmark contract for palm oil delivery in May on the Bursa Derivatives exchange gained 22 ringgit or 0.47% to 4,664 Ringgit ($1,056.16) per metric ton. This week, the contract rose by 1.57%. David Ng is a proprietary trader with Kuala Lumpur's trading firm Iceberg X Sdn Bhd. He said that the market was trading higher because of expectations for a lower output in Malaysia. This could lead to a reduction in overall stock levels. Dalian's palm oil contract, which is the most active contract in Dalian, increased by 0.95%. Chicago Board of Trade soyoil prices were down by 0.48%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price fluctuations of competing edible oils. The oil prices were slightly lower, but still on track for a weekly increase due to concerns about supply disruptions in Russia as well as an improved outlook for demand from the U.S. Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger. Farid Amir, a trade ministry official, said that the Indonesian government had not discussed restricting palm oil imports before the Muslim fasting months of Ramadan. Exports of palm oil products from Malaysia between February 1-20 were estimated to have fallen between 0.3% and 8% compared to the same period one month earlier. Four trade sources reported that Indian refiners cancelled orders for 70,000 tons of crude palm oils scheduled to be delivered between March and June due to a rise in Malaysian benchmark prices and negative margins for refining in India. ($1 = 4.4160 ringgit)
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Sibanye shares fall for the second time in two years
Sibanye Stillwater shares have fallen to their lowest level in this year's market after the company suffered its second consecutive loss for a full-year. Sibanye shares fell 9% by 0857 GMT, after the precious metals company reported a loss of $311 million last year. The Johannesburg-based miner, however, said that a rise in gold prices partially offset the impact from persistently low prices for platinum group metals (PGM). Sibanye’s profit fell $2 billion in 2023 due to a drop in the prices of platinum and palladium. These metals are used in manufacturing devices that reduce vehicle emissions. Sibanye has written down $500 million in its U.S. Palladium assets citing a decreased palladium price forecast, after a $2.6 Billion impairment charge taken in 2023. The rise in gold prices has led to an increase of 66% in the income at Sibanye’s South African gold mines. Gold mines in South Africa, some of which are the oldest and deepest in history, contributed to 45% of EBITDA or core earnings. Neal Froneman, outgoing CEO of Sibanye, said that while the company has diversified into PGMs and nickel, zinc, and lithium processing, gold mines act as "an insurance policy" in case industrial metal prices decline. Sibanye, a South African platinum miner, is one of the companies that has cut jobs and restructured its operations to squeeze out profits in spite of a drop in metal prices. Froneman stated that the Sibanye Board is reviewing updated information about the proposed Ryolite Ridge Joint Venture in Nevada with Ioneer. An investment decision could be taken before the end February. We've received the feasibility study and presented our assessment. He said that within a few days, we would be able inform the market about our decision.
Sibanye flags full-year loss after $500 million US impairment
Sibanye Stillwater said it expects to post a loss in the 2024 fiscal year, following a $500-million asset writedown on its U.S. Platinum Group Metal operations. This was mainly due to lower palladium prices forecasts.
The company expects to report losses per share between 0.1321 and $0.1461 rand (between 2.45 rand-$0.271) down from 13.34 rand in the previous year.
Sibanye stated that the impairment was also partially due to the suspension operations at the Stillwater West Mine and reduced mining at East Boulder Mine, which resulted in a projected U.S. production of 200,000 ounces.
The miner reported that the average dollar price of its U.S. platinum and palladium in 2024 was 21% less than the previous year.
Palladium's price has dropped dramatically to less than one-third of its peak in March 2022 of $3,440.76 an ounce. This was due to fears about supply following the invasion of Ukraine by Russia, the top producer.
Sibanye suffered a $2 billion loss in 2023 after a $2.6 million writedown of assets, mainly from the United States.
The company is scheduled to release its financial results by February 21.
(source: Reuters)