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India plans to establish a coal trading exchange
India is planning to set up a coal exchange in order to purchase and sell coal produced domestically, as the output of mines run by private companies continues to grow. The federal government issued a request for comments regarding the proposal. In the early 2000s, India, which is the fastest-growing major economy in the world, opened coal mining to the private sector, breaking the near-monopoly held by state-owned Coal India. By 2030, the privatised mines will produce between 350 and 400 million metric tonnes of coal. In a March 7 notice, the Federal Coal Ministry stated that "in the scenario of increasing availability of domestic coal within the country there is a need to introduce further reforms into the coal sector focusing on the promotion of competitive markets for the sale of coal." Coal India accounts for approximately three-quarters of the over 1 billion tonnes coal mined and is sold in the second biggest coal market after China. The notice stated that the proposed exchange would provide a marketplace where commercial miners, as well as those who mine for their own needs, could sell excess coal. It also added that the platform aimed to change the current "one-to many" sales model to a "many to many" one. (Reporting and editing by Tomaszjanowski)
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The EU is quick to retaliate against Trump's metals tariffs
The increased tariffs by President Donald Trump on all U.S. imports of steel and aluminum took effect on Tuesday, intensifying a campaign to reorder the global trade in favor for the U.S. Trump's decision to increase protections for American producers of steel and aluminum restores global tariffs at 25% on all metal imports. The duties are extended to hundreds of downstream metal products, including nuts and bolts, bulldozers blades and cans. Since Trump took office in January, his hyper-focus on tariffs has shaken investor, consumer and company confidence. Economists are concerned that this could lead to a U.S. economic recession and a further lag in the global economy. The European Commission (the executive arm of the European Union tasked with coordination trade issues) responded quickly, announcing that it would impose a counter-tariff on up to 28 billion dollars worth of U.S. products - with more of a symbolic impact than an economic one - as of next month. Ursula von der Leyen, President of the Commission, told reporters that she was "ready to engage in meaningful dialog" and had asked Trade Commissioner Maros SEFCIOC to resume his discussions with the U.S. She said: "We are firmly convinced that, in a world rife with geoeconomic and politic uncertainties, it's not in our interest to burden our economy with such tariffs." China's Foreign Ministry said Beijing would take the necessary measures to protect its rights and interest, while Japan Chief Cabinet Secretary Yoshimasa Haashi said that this move could have an impact on U.S. - Japan economic ties. Canada, Britain, and Australia, close U.S. Allies, have criticised the blanket duties. Canada is considering reciprocal measures, and Britain's Trade Minister Jonathan Reynolds said "all options are on the table" for a response in the national interest. The Australian Prime Minister Anthony Albanese said that the move "went against the spirit of the friendship between our two countries" but denied tit for tat duties. The most affected countries are Canada, as it is the largest foreign steel and aluminum supplier to the U.S. Brazil, Mexico, and South Korea have all enjoyed some exemptions or quotas. DENTAL FLOSS TO DIAMONDS For now, the 27 EU countries are less affected. The Kiel Institute in Germany estimated that the EU's output would be hit by only 0.02% because "only a fraction" of targeted products were exported to the U.S. The EU counter-measures, while impressively diverse and ranging from diamonds to bathrobes to bourbon, only cover about six days worth of goods and services in the huge EU-U.S. trade relationship. France's Europe minister Benjamin Haddad said that a trade conflict was not in anyone's best interest. You can also read about the warnings below. The EU could do more. He told TF-1 TV that, if we were to have to go even further, digital services and intellectual property would be possible to include. Trump threatened to double the duty on Canada's steel and aluminum exports. But he backed down after Ontario, Canada suspended its move to impose an additional 25% on electricity exported to Minnesota, Michigan and New York in the U.S. This incident shook the U.S. markets, which were already nervous about Trump's tariff offensive. The Asian and European stock markets were largely stable on Wednesday. However, Australia's benchmark index closed 9.6% lower than its record high for February. U.S. Steel producers welcomed the imposition of tariffs as it restored Trump's original metals tariffs of 2018. These tariffs had been weakened due to numerous country exclusions, quotas, and thousands of specific product exclusions. Steel Manufacturers Association president Philip Bell stated that by closing the loopholes that have been exploited over years, President Trump would once again supercharge an industry that is ready to rebuild America. Bell said that the revised tariff would allow steelmakers to continue creating new, high-paying American jobs and making greater investments in the knowledge that they won't be undercutted by unfair trade practices. U.S. ECONOMY FEARS The U.S. and Canada trade war escalated as Justin Trudeau was preparing to hand the power over to Mark Carney this week, who had won the Liberal leadership race last weekend. Carney stated on Monday that he would not be able to speak with Trump before he had been sworn in at the prime minister's office. Trump reiterated on social media that he wants Canada to be "our beloved Fifty First State." If U.S. tariffs continue, Canadian Energy Minister Jonathan Wilkinson said that Canada may take non-tariff actions such as imposing export duties on minerals or restricting oil to the U.S. Canada has dominated the U.S. Aluminum market with its abundant hydropower resources, which have allowed it to produce primary aluminum at a lower cost than the U.S. China is still the second largest supplier of aluminum and products made from it, but faces high tariffs in order to combat alleged dumping, subsidies and a 20% tariff imposed by Trump over the last month due to fentanyl.
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Britain is 'disappointed with US tariffs' but unlikely to take retaliatory action
The British government expressed its disappointment on Wednesday with the imposition of tariffs by President Donald Trump on imports of steel and aluminum, but it did not follow in the footsteps taken by other European Union member states. Britain had hoped that it could avoid tariffs in its small steel industry, which produces specialist products used by the defence and other industries. Trump suggested last month that the two countries could reach a bilateral deal to avoid tariffs. The British government also claimed that it should receive a special carve out because of its supply of essential goods to the U.S. construction, oil and gas sectors and defence industries. Trump imposed 25% global tariffs on all steel and aluminum imports on Wednesday, which he claimed would reorder the global trade to the United States' benefit. The EU has responded by announcing that it will impose counter-tariffs of 28 billion dollars worth of U.S. products, valued at 26 billion euros. Jonathan Reynolds, Britain's Business Minister said: "It is disappointing that the U.S. imposed today global tariffs on aluminium and steel." "We are focusing on a pragmatic and rapid approach to negotiate a wider economic deal with the U.S. in order to eliminate additional tariffs, and to benefit UK business and our economy." An official in Britain said that the government will not impose trade tariffs as a retaliation against the United States, but instead focus on obtaining an exemption. The British steel industry's head, UK Steel, asked if Trump understood that Britain is an "ally and not a enemy". "Our steel industry is not a danger to the U.S. but a partner of key customers who share the same values and goals in tackling global overcapacity, and tackling unfair trading," Director General Gareth Stace stated. Steel UK stated that the U.S. is Britain's second-most important steel export market after the EU. The U.S. accounts for 9% by value of UK steel exports and 7% by quantity. Reynolds stated that the government is working with the companies affected by these measures, and will investigate any further steps needed to protect UK manufacturers. Trump's increased duties on steel and aluminum imports went into effect on Wednesday, as previous exemptions, duty free quotas, and product exclusions had expired. (Reporting from Kate Holton, London; and Gnaneshwarrajan, Bengaluru. Editing by Jacqueline Wong and Lincoln Feast. Christina Fincher is the editor.)
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ERG 2024, a renewable energy company in Italy, has a profit that is on par with its growth but is cautious.
The renewable energy company ERG announced a core profit in 2024 that was in line with the expectations, but warned of market volatility which would likely affect this year's bottom-line. In a late-night statement, the company said that it had also reduced its guidance for 2026 from earlier estimates due to a more conservative approach towards the green energy policies of the Trump administration and the late approval in Italy of a new law governing the renewables sector. Last year, the group's adjusted core profit amounted to 535 million euro ($583.69m), which was within the guidance range of 520 million euro to 560 millions euros. The revenue was 738 million euro, which is similar to 2023's figure. The company estimates a core profit between 540 and 600 million euro in 2025. It cites volatility in market prices and volume. Capital expenditures are forecast to be between 190 and 240 millions euros. Net debt is projected to increase between 1.85 and 1.95 billion euro. "We strengthened the selective ‘Value Over Volume’ approach... by reducing investment for the next two-years and focusing our attention on assets that are currently under construction, organic developments, and repowering," said CEO Paolo Merli. The group reduced its capital expenditures over 2026 to 1 billion euro, a 20% reduction. It also reduced the growth of the asset portfolio to 4.2 gigawatts from 4.5 GW. ERG was owned by the Garrone family in Italy and was a leading oil company before it shifted its focus to renewable energies. It produces power from solar and wind sources. It entered the U.S. through a joint-venture - where it holds 75% of the shares - with Apex Clean Energy Holdings LLC, which has a wind farm as well as a solar power plant in its portfolio. ERG announced that it would return to its shareholders 1.15 euros per share between November 2024 and January 2025, consisting of 0.15 euros per share and 1 euro as dividend.
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UAE's EGA reports a lower net profit due to the suspension of bauxite from Guinea and UAE taxes
Emirates Global Aluminium (EGA), on Wednesday, reported a decline of 23.5% in its annual net profit in 2024 as a result of an impairment charge due to the suspension of exports following its operations in Guinea. In 2024, the UAE-based mined ore supplier said that profits were 2.6 billion dirhams (707,95 million dollars) compared to 3.4 billion dirhams (US$707.95 millions) in 2023. UAE has introduced a corporate income tax of 9% starting January 1, 2024. The company said it also expected the volatility of aluminium prices to continue this year due to tensions within global trade. U.S. President Donald Trump imposed 25% tariffs for all U.S. imports of steel and aluminum, which is a major market for United Arab Emirates' suppliers. EGA is jointly owned by the Abu Dhabi sovereign fund Mubadala, and Dubai sovereign fund Investment Corporation of Dubai. EGA reported in October that bauxite imports from its subsidiary Guinea Alumina Corporation were suspended by the customs. Guinea is the second largest producer of bauxite in the world after Australia. The company stated on Wednesday that the suspension led to a drop in exports from 14,1 million wet-metric tons of bauxite in 2023 down to 10,8 million wet-metric tonnes in 2020. EGA recorded a 1.8 billion dirham impairment on GAC's book value at year-end. In a statement, Abdulnasser Bin Kalban said that "we continue to seek a solution with the government to resume bauxite exports and mining." In the meantime, we will continue to take every step necessary to ensure our raw material supplies for our alumina refinery and smelting operation. The adjusted core earnings were 9.2 billion dirhams compared to 7.7 billion in 2023. This was due to higher aluminium and bauxite all-in prices, record production of aluminium and aluminum, and higher alumina costs, partially offset by lower bauxite output and higher alumina. $1 = 3.6726 UAE Dirham (Reporting and editing by Christian Schmollinger; Hadeel al Sayegh)
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China's steel production cut is a cause for concern after talks about reducing it resumed
Iron ore futures gave up their early gains on Wednesday as the market was shaken by renewed talks about China's plan to reduce crude steel production to curb oversupply in the industry. The May contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading session 0.32% lower, at 769.5 Yuan ($106) per metric ton. It had earlier reached an intraday peak of 785 Yuan a ton. As of 0744 GMT, the benchmark April iron ore traded on the Singapore Exchange had fallen 0.8% to $99.95 per ton after reaching its highest level since March 3, at $102,05 per ton. Market speculation suggested that China's output controls had been finalized, and would be announced later in the week. The National Development and Reform Commission of China, the country's state planner, has not responded to a request for comment. The state planner announced on March 5, that it would reduce crude steel production this year without specifying the volume to be reduced and when. Several market participants have speculated that the steel production could be reduced by 50 million tonnes this year. Reduced steel production will reduce the consumption of steelmaking raw materials. Investors bet that the demand for the main ingredient in steelmaking will increase in the near future after China's annual parliament meet. Analysts at Mysteel, a consultancy, said that some steel mills which had begun maintenance on their blast-furnaces gradually resumed operation due to decent margins and signs for improving demand. The benchmarks for steel on the Shanghai Futures Exchange have gained some ground. The benchmarks for steel on the Shanghai Futures Exchange rose. Coking coal and coke, which are used to make steel, also advanced on the DCE. They both increased by 0.8% and 0.06% respectively.
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Euro buoyed after Ukraine ceasefire proposal; tariffs squeeze stock
The euro rose to near 5-month highs Wednesday, as Ukraine was ready to accept a ceasefire lasting a full month. Meanwhile, stocks were thrown into turmoil by the back and forth of U.S. tariffs plans after levies against steel and aluminum imports began. European equity futures jumped by 1.1%, and FTSE Futures rose by 0.5% after news that the U.S. will restore military assistance and intelligence sharing with Ukraine following Kyiv's acceptance of a U.S. proposed ceasefire. In an interview published Wednesday, Sergei Lavrov, Russian Foreign Minister, said that Moscow would avoid compromises which could jeopardize the lives of people, Russian agencies reported. In Asia, the euro was unchanged at $1.0913 and hit its highest level since October at $1.0947 on Tuesday. The Russian rouble reached a seven-month peak on Tuesday. The U.S. tariffs on steel and aluminum of 25% went into effect on Wednesday. They had a relatively muted impact on share prices in Asian steel mills, and they drew countertariffs from Europe. MSCI's broadest Asia-Pacific share index outside Japan was flat, but fragile. Australia's benchmark closed down 9.6% from February's record high. Hong Kong, China and Taiwan markets were largely steady. South Korea and Taiwan rebounded. Japan's Nikkei remained stable after falling to a six-month low the day before. Wall Street's S&P 500 flirted with a 10% drop from the record-breaking closing high of February, but ended a volatile session around 0.8% lower. After Ontario halted plans to impose a surcharge for exported electricity, President Donald Trump threatened and then backtracked from a 50% increase in steel and aluminum tariffs against Canada. Dollar has fallen, Treasuries are up and stocks have been selling at their highest level in months. Traders worry that tariffs and policy uncertainties will harm U.S. economic growth. Bruce Kasman, J.P. Morgan's chief global economist, told reporters in Singapore that the U.S. economic outlook was heightened. Although we haven't yet changed our model forecast, the risk of a recession is now about 40%. "If the U.S. enters a recession, we will have a more complex story because you'll need to understand that the financial spillovers from the U.S. to the rest the world are often very large." Investors worried about the economy punished retailers with disappointing financial results. Dick's Sporting Goods shares plunged 5.7% after a gloomy outlook, and Kohl's Corp's shares fell 24% following a decline in sales. Travel stocks were also hit after Delta Air Lines slashed its profit forecast by half, and rivals United Airlines and American Airlines warned about deteriorating results and falling government bookings. The U.S. Inflation data for February will be released later in the day, but it's likely too early to see any impact of tariffs. The central bank meeting of Canada will be closely monitored to find out what the monetary policymakers at the forefront of Trump's Trade War are thinking. The market has priced in a seventh consecutive rate reduction, which was only a slight possibility two weeks ago. Overnight, the Canadian dollar fell to a low of C$1.445 before recovering. U.S. stock futures moved up 0.2%. The yen slipped from its five-month high, trading at around 148 dollars. The Australian dollar, which is sensitive to risk, was held at just under 63 U.S. Cents. Brent crude futures traded just below $70 per barrel. (Editing by Shri Navaratnam).
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ECB will tackle fundamental questions regarding strategy assessment
The European Central Bank has launched a new strategy assessment that will cover some major questions about its workings - such as whether massive bond purchases remain an effective policy tool or what role they should play in fighting climate change. The following are likely to be reviewed before the final report is due in mid-year, which could lead to incremental changes in policy. BOND BUYS In the decade prior to the pandemic, quantitative easing or bond purchases were a major part of ECB's policy. However, some policymakers have openly questioned its benefits. The ECB purchased trillions of euro worth of debt to boost inflation when prices were too low. However, 4 trillion euro of these assets remain on the books years after the stimulus program ended because it takes time to unwind. Isabel Schnabel, a member of the ECB's board, said that asset prices would remain distorted as bond holdings could only be unwound gradually. It means that starting QE is harder than it was in the past. ECB officials are being urged to recognize that while quick purchases of bonds can be effective during pandemics, the costs of long-term purchases outweigh the benefits. While profits may not be a core business, the massive QE has also led to record losses for the ECB, denying governments dividend income. Since the ECB has made it clear that it will intervene on markets if policy transmittal is impaired, some policymakers also call for a more clear distinction between instruments to combat inflation and those aimed a market stability. SPECIALLY FORCEFUL MEASURES The review will not question the ECB’s primary goal to target inflation at 2%, but it could raise whether falling short of this threshold in future is so severe that it would require extraordinary measures. The ECB strategy calls for "especially strong" action when the inflation rate is too low. This suggests that undershooting may be a greater problem than overshooting. Evidence suggests that prices are rigid on their way down and only large shocks can lead to deflation. Even in the decade of ultra-low inflation before the pandemic began, households and firms continued to expect modest price increases. Some argue that if the ECB really believes its 2% inflation goal is symmetrical, there shouldn't be a distinction made between undershooting and overshooting. A particularly forceful approach, which usually involves a large number of bond purchases, can also cause financial distortions. CLIMATE The ECB has committed to a "ambitious climate action plan" by 2021. The results have been modest. The government shifted corporate reinvestments to firms that had better climate performance, but these reinvestments are long gone. The bank has promised to adjust its remaining portfolio of corporate bonds based on climate concerns, but it faces a deeper existential question about what role it should have in climate policy. The U.S. Federal Reserve left the Network for Greening the Financial System recently because its work went beyond the Fed's original mandate. ECB head Christine Lagarde defended NGFS, but others, such as Belgian central banker Pierre Wunsch, called on the ECB limit its role in climate policy to avoid interference with policymaking. DIRECTION FORWARD In its last review, in 2021, the ECB included forward guidance or commitments regarding future policy actions as a tool in its toolbox. This guidance, however slowed the bank's reaction to the rapid increase in inflation in 2020, as it had already committed to a looser policy. Since then, policymakers have argued that the ECB shouldn't use forward guidance unless interest rates are at their lowest effective levels. (Reporting by Balazs Koranyi, Editing by Alexandra Hudson)
Iron ore prices rise as attention shifts to near-term demand
Iron ore futures rose Wednesday, as investors focused on near-term consumption after China's annual parliamentary meeting. However, lingering concerns about a global economic war dampened gains.
The May contract for iron ore on China's Dalian Commodity Exchange ended the morning trading 0.97% higher, at 779.5 Yuan ($107.78).
As of 0330 GMT, the benchmark April iron ore traded on Singapore Exchange rose 0.73%, to $101.5 per ton.
The price of a ton reached its highest level since March 3, at $102,05, earlier in the day.
Analysts at Jinrui Futures wrote in a report that "Iron Ore Arrivals last week fell short of expectations while Hot Metal Production accelerated, resulting in a dramatic reduction in portside inventory."
Iron ore stockpiles at Major Ports
Analysts at Jinrui Futures said that "prices of front-month contracts will benefit from a lingering expectation of increasing demand during peak construction season in march...but this does not reverse the glut of iron ore in 2013".
Analysts at Mysteel, a consultancy, said that some steel mills who had begun maintenance on their blast-furnaces gradually resumed operation due to decent margins and signs showing an improvement in demand.
Steel mills need to adjust production to balance supply and demand. They said that the pressure on exports of steel with increased trade frictions would likely pass on to domestic markets.
The benchmarks for steel on the Shanghai Futures Exchange have advanced. Rebar gained 0.34%. Hot-rolled coils rose 0.51%. Wire rod climbed 0.622%. Stainless steel gained 0.41%.
Coking coal and coke, which are both steelmaking ingredients, have also declined, by 0.23% and 0.25 percent, respectively.
(source: Reuters)