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Kremlin continues to speak to US despite Trump's threat of secondary sanctions against Russia
The Kremlin announced on Tuesday that Russia is continuing its dialogues with the United States despite threats from President Donald Trump of secondary sanctions against Russian oil if Moscow fails to work towards ending the war in Ukraine. Trump, who this week said he was "pissed" with Russian president Vladimir Putin, told journalists on Monday that he wanted the Kremlin to make a deal in order to end the conflict. Trump stated in the Oval Office, "I would like to see him reach a deal that will stop Russian and Ukrainian soldiers from being killed and also other people." "I want him to follow through and I believe he will," Trump said in the Oval Office. "I want to make sure that he follows through, and I think he will." Dmitry Peskov, a Kremlin spokesperson, told reporters Tuesday that when asked about Trump's recent remarks about wanting Putin do a deal with Ukraine: "We continue our contact with the American side." The topic is complex. We are dealing with a very complex issue, namely the settlement in Ukraine. This is a very complex issue that requires extra work. Trump's conciliatory approach towards Russia had made Western allies nervous as he attempted to end the conflict in Ukraine. Russia has publicly responded to Trump's overtures with caution, agreeing that it will halt its attacks on Ukrainian infrastructure for energy if Kyiv also does so. Both sides accuse the other of violating a moratorium. It cites a list of conditions that it believes must be met before it will proceed. Moscow has refused to sign a ceasefire that is broader than the one Trump wants. (Reporting and Writing by Felix Light, Editing by Andrew Osborn).
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Maruzen Petrochemical Japan to close ethylene unit at Chiba
Maruzen Petrochemical in Japan, a subsidiary of Cosmo Energy Holdings will close its ethylene plant in Chiba during the fiscal year 2026/27 and consolidate its production at Keiyo Ethylene - its joint venture with Sumitomo Chemical - the companies announced on Tuesday. The three companies released a joint statement saying that the move is intended to improve the utilization rate of Keiyo Ethylene. Keiyo Ethylene is owned by Maruzen and Sumitomo, respectively. Low operating rates have plagued Japanese ethylene plants due to a global oversupply caused by China's large-scale capacity expansions, as well as a declining domestic market. Energy transportation is also under increasing pressure from the industry to achieve carbon emissions net-zero. Maruzen Petrochemical, and Sumitomo Chemical, decided that they would optimize their ethylene production near Tokyo in the Chiba region to reduce costs and maintain competition. The Chiba unit of Maruzen, which began operations in 1969 has a production capacity of approximately 525,000 metric tonnes per year. Keiyo Ethylene was launched in 1994 and has a production capacity of 768 tons per annum. Last year, Idemitsu Kosan Japanese oil refiner and Mitsui Chemicals announced that they would consolidate their ethylene compounds in Chiba. Ethylene, a petrochemical, is used in the production of plastics like polyethylene to make plastic bags and containers. (Reporting and editing by Yuka Obayashi)
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Gold and stocks rise to record levels as investors wait for Trump tariff clarity
The global stock market rose on Tuesday, following Wall Street’s overnight gains. Gold reached a record high and Treasury yields dropped as markets waited for details about U.S. president Donald Trump’s reciprocal tariffs. The Japanese yen and Swiss franc held steady as demand for traditional safe-haven assets increased. The risk-sensitive Australian Dollar also rebounded, after the Reserve Bank of Australia kept interest rates unchanged, as expected, while warning of a "pronounced" uncertainty in the global economy. Investors anxiously await April 2, the day Trump has called "Liberation Day", where he promises to reveal a massive tariff plan. The Office of the U.S. Trade Representative published its annual report on Foreign Trade Barriers on Monday. It contained scores of policies and regulations of other countries that it considers as trade barriers. It was not clear how Trump's tariff reciprocity plans would be affected by the 397-page document. The Washington Post reported Tuesday that White House Assistants A proposal was drafted to impose tariffs on imports into the United States of about 20%. The European stock market recovered from a day of profit-taking. This was especially true for assets that were highly susceptible to U.S. Tariffs. The benchmark index rose by 5.1% during the first quarter of this year and was up by 0.9% at midday. Pharma and technology stocks led the rally. "We still do not know the countries that will be affected by the tariffs and at what rate. The administration may not yet have a final plan in place," said Jim Reid, a strategist at Deutsche Bank. Uncertainty has reached a high level. In the last few days, volatility measures for stock, bonds and currencies have increased sharply, reflecting the difficulty of trading in the unknown. S&P 500 futures fell 0.1% on Monday but the S&P 500 rose 0.55%, ending a losing streak of three days. Tony Sycamore is an analyst with IG. He said: "It's possible that a large portion of the rebound last night in key Wall Street indices could be attributed to month-end or quarter-end rebalancing, as well short-covering ahead of Trump Liberation Day. There's considerable uncertainty as to what will happen next." The U.S. stock markets are priced to reflect a slower growth rate and lower earnings. They are not priced for recession. If the U.S. enters a recession, U.S. stocks could easily drop another 10%." Gold reached a new record for the fourth consecutive session. It now stands at $3,148.88 an ounce. Kyle Rodda is a senior financial market analyst at Capital.com. He said that, in addition to the general risk aversion of investors, they are increasing their allocations to gold, as the Trump administration’s trade policy threatens the dollar’s special reserve status. The fundamentals of gold remain strong. DOLLAR UNDER SUBSTRESS As prices rose on Tuesday, yields on 10-year benchmark notes fell by nearly 8 basis points, to 4.169%. The dollar fell 0.4%, and the yen strengthened. The dollar has been under pressure for the past nine years due to investor caution. Its performance in the first quarter of this year against a basket currency was its worst in nearly a decade. The Aussie fell from its day-highs and traded flat for the day, at $0.625. The RBA kept rates at 4.1% after cutting them by a quarter-point in February, for the first cut in four years. In its statement, the RBA noted that "Geopolitical uncertainty is also pronounced", adding that U.S. Tariffs have an impact on global confidence. Matt Simpson, senior analyst at City Index, said that the RBA's announcement suggests it is inching toward its next cut but not in a hurry to announce one. Bitcoin grew 2% to $84,218. The oil prices rose, continuing Monday's 2% rise. Brent crude was 0.5% higher at $75.13 per barrel while U.S. Crude rose 0.5% to 71.84. Trump threatened to impose secondary tariffs against Iran and Russian crude oil at the weekend. He warned Iran that he would bomb the country if it did not reach an agreement with Washington on its nuclear program. Kevin Buckland, Himani Sarkar and Kim Coghill edited the article.
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Couche-Tard and 7-Eleven's store divestiture plans face an early obstacle
The plan of convenience store giants Couche-Tard & Seven & i to sell thousands of stores in North America, to reduce regulatory concerns before a possible merger, is being tested by rival bidders. According to several antitrust experts and people who are familiar with the situation, it is likely that the two store operators will struggle to attract offers from other convenience stores chains. They may be wary about their own antitrust risks from a potential deal. Seven & i is the owner of the 7-Eleven chain, which operates more than 12,000 convenience stores in the U.S. Sources said that so far, private equity firms have been the most interested in buying the stores. The potential for a headache for Canada’s Couche-Tard, and Japan’s Seven & i is that U.S. regulators frown on private equity firms buying divested stores as they are not likely to be long-term investors. Experts say that the U.S. Federal Trade Commission doesn't view private equity firms as attractive buyers of divested retail stores because the model is based on short-term profits. Michio Suzuki is an antitrust partner with Baker McKenzie, based in Tokyo. From their perspective, the buyer of the divested stores should be strong enough so that they can run them as a competitive unit. The companies have proposed a divestiture package that includes more than 2,000 U.S.-based stores. Experts said that there was no precedent in which private equity ownership of convenience store chains would be created after a large merger. Financial acquirers bought grocery and dollar store divested from larger retail mergers. However, they have had mixed success running these stores. When Dollar Tree bought Family Dollar for $9 billion in 2015, the FTC ordered the companies to divest hundreds stores. Dollar Tree selected investment firm Sycamore as the buyer of 330 stores. But two years later Sycamore sold them to Dollar General as it was no longer able to operate the stores as a standalone business. Sources familiarized with Couche-Tard & Seven & i argue that their divestiture packages consist of competitive stores across many states, which a private equity company can successfully operate. Five sources claim that buyout firms have shown early interest in the companies. They are eager to explore owning scaled-up convenience stores with a national footprint. Three sources stated that some firms are cautious when it comes to bidding for an asset that will be the result of a merger which is still not signed. KROGER ALBERTSONS FALLOUT In recent years, antitrust regulators around the world have been increasingly challenging large retail mergers. In order to avoid the overhang of a failed mega-deal in U.S. groceries, Couche-Tard & Seven & i took the unusual step before merging talks began: they preemptively shrank their combined potential business in North America. Seven & i wants to avoid a repetition of "the disastrous story" of Kroger/Albertsons. Seven & i received a warning from the FTC about an investigation of a possible merger with Couche-Tard - a rare occurrence before a formal deal is signed. The Kroger-Albertsons merger was announced for the first time in 2022. However, despite numerous attempts to convince U.S. Antitrust authorities to approve the deal - such as a $2.9 billion proposed divestiture of C&S Wholesale Grocers' 579 stores - this deal has not been approved. The FTC rejected C&S and called the divestiture packages a "hodgepodge" of unconnected shops. Alex Livshits is a partner with the law firm Fried Frank. He said, "Any target of a large-scale retail-store merger will take notice and become very cautious following that." Since August, 7-Eleven's owner has rejected Couche-Tard takeover attempts out of fear that it will suffer the same fate. The grocers gave up their $25 billion merger in December after significant regulatory opposition. This has been argued before as a cautionary story for retail mergers. Couche-Tard has agreed to the proposal of early joint regulatory work by Seven & I to alleviate potential antitrust concerns. Seven & I is the largest operator of convenience stores in the United States, with approximately 12,650. Couche-Tard is second-largest with about 7,100. Couche-Tard, with approximately 7,100 stores, is the second-largest operator in terms of convenience stores in the United States. The combined company would almost be seven times larger than the next biggest competitor, Casey's. There is a risk when you divest to a third-party that's legally binding, said Kathy O'Neill. She's a partner with Fried Frank and a former member of the Department of Justice's Antitrust Division. She said, "The agency may not like the buyer that you have selected or they might decide to divest more assets or store." Normally, companies seek regulatory approval after signing contracts. Experts said that the failure of the Kroger and Albertsons merger has provided a road map to successful regulatory approval in future retail mergers. It is a lesson on what not do. Experts said that Couche-Tard's and Seven & i's pre-emptive action also gives them the opportunity to get regulators on board with the idea. Reporting by Abigail Summerville and Anton Bridge, New York; Additional reporting by Rocky Swift, Tokyo; Editing and production by Anirban Sen, Edwina G Gibbs and Matthew Lewis.
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Iceland volcano erupts with lava and smoke
The volcano that caused the eruption Tuesday was located to the south-west of Iceland's capital. It erupted in a display of orange, red, and lava, causing some evacuations. However, air traffic continued normally. Since 2021, when long-dormant geological system reactivated, Iceland has seen 11 eruptions in the area south of Reykjavik. Icelandic Meteorological Office issued a warning: "An eruption has started." RUV reported that emergency services evacuated residents of Grindavik, a fishing town, and the Blue Lagoon spa nearby in the hours before the eruption, because geologists warned of its imminent arrival. As a result, there has been no disruption to air traffic due to the eruptions in the Reykjanes Peninsula. Icelandic experts believe that fissure eruptions - characterized by lava flowing from long cracks rather than one single opening in the earth crust - could continue for decades, if not centuries. A volcanic eruption in Grindavik in January 2024 caused damage to homes and roads, prompting a mass exodus at the time. However, some residents have since returned. (Reporting and editing by Terje Solsvik; Louise Rasmussen)
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Solidcore Gold Mines looks to Gulf finance in post-Russian strategy
Solidcore, a Kazakh gold miner, is looking at issuing bonds to fund investment in Kazakhstan, including new projects estimated to cost $350 million. The company's CEO Vitaly Nesis said that Solidcore was considering issuing these bonds to the Gulf region. Solidcore (formerly Polymetal International) is the second largest gold miner of Kazakhstan. In 2024, the company was forced to sell its Russian assets which accounted for 70% of its production. This happened after U.S. sanctioned its operations in Russia. Mercury Investments, a government-owned fund in Oman, was the largest shareholder of this new company. Its five-year investment program had to be designed from scratch by its newly-listed Kazakhstan-based parent. Nesis said that the main strategic result of 2024 will be the launch of a full-fledged Investment Program. He said that they were "very actively" considering the possibility of issuing exchange traded bonds in Gulf countries. Nesis stated that the UAE and Oman exchanges could be a possible option for bond placement. Bank loans and share issuance are also on the table. There is the Muscat stock exchange, Dubai and Abu Dhabi. We are examining different forms including traditional bonds and sukuks (Islamic bonds). "We are actively working together with rating agencies because this direction is very promising," Nesis stated. Nesis estimated that the company's investment into the new Syrymbet Tin project will be around $250 million. Solidcore's Tokhtar Gold Project in Northern Kazakhstan, which is still in the exploration phase, is estimated to be worth $50-100 Million. The company intends to invest over $1 billion, excluding M&A, until 2029. It will focus on the Ertis Pressure Oxidation Hub in Kazakhstan. Solidcore's 2024 net profit almost doubled due to record gold prices, but Nesis says the gold rally might not last. We believe that gold prices are unlikely to remain at their current levels even on a medium-term basis. Nesis stated that they plan conservatively when making plans. Nesis stated that the company was looking at possible acquisitions of production assets both in Uzbekistan as well as Oman. Nesis stated, "We're taking our first steps into the M&A world and laying the foundation for future growth of the company." Nesis said that, despite high gold prices, the company did not plan to pay dividends so long as its shares remained in the National Settlement Depositary of Russia (NSD), a part of the Moscow Stock Exchange.
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Copper returns to its previous high after a two-week slump on the back of positive data from China
The price of copper rose on Tuesday, after four sessions in which it fell, boosted by positive data coming from China, the world's largest metals consumer. However, uncertainty over U.S. Tariffs limited gains. The benchmark three-month copper price on the London Metal Exchange increased 0.4%, to $9,745 a metric ton, by 0930 GMT. This was a rebound from the lowest level in over two weeks, reached in the previous session. Two surveys conducted on Monday and Tuesday revealed that China's manufacturing industry was growing faster than expected. This is in contrast to the weakening activity seen elsewhere in Asia. The Caixin/S&P Global Manufacturing PMI showed a pick-up in activity on Tuesday, as factories raced to deliver goods to their customers before U.S. Tariffs went into effect. A day earlier, a PMI official showed that manufacturing activity was growing at the fastest rate in over a year. Nitesh Sha, commodity strategist with WisdomTree, said: "The PMI data definitely supports the strong momentum that is coming from China." I do believe that China will continue its efforts to push against the wind, and to provide stimulus to its domestic economy in order to stimulate domestic growth in order to counter the loss of possible exports. The market was held back by the reciprocal tariffs that U.S. president Donald Trump said he would introduce this week. He also stated on Sunday that they will be applied to all countries. The copper price was also supported by a lack of copper concentrate. This has led to negative charges for copper concentrate treatment and refining (TC/RCs). The TC/RCs are an indicator of the availability of copper concentrates. They are a major source of income for smelters. Low TC/RCs indicate a tight supply. LME Tin added 0.3% to 36,745 tons, near its highest since June 2022. This was due to fears that supply disruptions could be caused by an earthquake that occurred in Myanmar's tin-rich region last Friday. Other metals include LME aluminium, which fell 0.6% to 2,519 per ton. Zinc also slipped to 2,842, while lead dropped 0.3% to $2,000, and nickel rose 1.1% to 16,100. (Reporting and editing by Janane Vekatraman; Additional reporting in Shanghai by Violet Li)
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Gold reaches record highs as tariff fears boost safe-haven demand
Gold's record-breaking run reached another high on Tuesday. Investors are bracing for President Donald Trump to announce reciprocal tariffs. Gold spot was up 0.3% to $3,131.56 per ounce, at 0914 GMT. It had earlier reached a record-high of $3,148.88. U.S. Gold Futures rose 0.3% to $3,159.10. "Trump's tariff remarks and his increasingly volatile position on Russia's conflict against Ukraine are proving to be the perfect chaos for a new record gold price," surpassing the COVID Pandemic of five years ago. Adrian Ash, the head of research at BullionVault, an online marketplace, confirmed this. Trump announced Sunday that his reciprocal tariffs, which will be announced Wednesday, would apply to all countries and not just a few. Goldman Sachs raised the likelihood of a U.S. economic recession from 20% to 35% on Monday and said that it expects more rate cuts from the Federal Reserve as Trump's Tariffs shake the global economy. This year, gold, which is traditionally seen as an insurance against inflation and uncertainty, has increased by more than 15 percent. In a low-interest rate environment, non-yielding gold tends to perform well. The market is closely watching the Federal Reserve's policy decisions on April 2, as there are many economic indicators that may impact them. If rate reductions are confirmed, it will provide further support to gold's upward trend, said Alexander Zumpfe a precious metals dealer at Heraeus Metals Germany. Bullion's rally has been boosted by the strong demand of central banks and geopolitical unrest in Europe and the Middle East, as well as increased flows into exchange-traded gold funds. Gold closed its strongest quarter in 1986 and rose over $3,100/oz. This is one of the biggest upswings ever seen in the history of precious metals. Investors will also be watching the U.S. data on job openings on Tuesday, and Friday's non-farm payrolls in the U.S. Silver remained at $34.06 per ounce. Platinum fell by 0.4% to $988.35 and palladium rose 0.3% to $985.86.
Trump could use the 2019 investigation to justify tariffs against auto imports
Former U.S. officials and industry experts say that Donald Trump will likely use the investigation he conducted during his first term to justify impending auto tariffs. Trump told reporters on Monday at the White House that the long-promised auto tariffs could be announced in the "next few days". This is even before the April 2 announcement of reciprocal tariffs against the countries responsible for most of the U.S. Trade deficit.
The White House did not provide a specific timetable or any details about the anticipated tariffs. When asked about the timing of the announcement, an administration official said: "I would take him at his words."
Bloomberg News reported the announcement of auto tariffs could be imminent.
As early as Wednesday
A 25% auto import tariff - which Trump floated in February – would shock a global auto industry already reeling under the uncertainty created by Trump's rapid-fire threats of tariffs and his occasional reversals.
The Center for Automotive Research says that tariffs could increase the price of a new car by thousands of dollar, affecting sales of new vehicles and leading to job losses. This is because the U.S. automotive industry relies heavily on imported parts.
In 2024, the U.S. will import $474 billion in automotive products, including $220 billion worth of passenger cars. Mexico, Japan South Korea Canada and Germany were all close U.S. Allies.
Trump told reporters in February that his administration would impose auto tariffs of "around 25%" but he agreed later to exempt cars from Canadian and Mexican tariffs. This was due to pressure from three major U.S. automobile manufacturers.
U.S. commerce secretary Howard Lutnick told Fox Business last week that there would be no exceptions to the auto tariffs. This could cause tensions with countries such as Japan and South Korea, who have trade agreements and do not charge tariffs on U.S. vehicles. Trump has been raging against unfair treatment for U.S. auto exports on foreign markets. He often singles out the European Union which charges a duty of 10% on imported vehicles, four times that of the U.S. 2.5% tariff. The U.S. collects a 25 percent tariff on pickup trucks imported from other countries than Mexico and Canada. This tax makes these vehicles very profitable for Detroit automakers.
GROUNDWORK DONE FOR QUICK A ACTION
In 2019, the Commerce Department completed an investigation of foreign auto imports in accordance with Section 232 of Trade Expansion Act of 1964. The Department found that "excessive imports" of foreign autos could weaken the domestic industrial base, and even threaten national security.
The report said that the U.S. Defense Industrial Base is dependent on American automakers to develop high-tech products for military vehicles. It also stated that the loss of market share has eroded investment in new cutting-edge technologies.
The report suggested three possible remedies: negotiations with other countries; tariffs up to 25% on automobiles and certain parts, and tariffs up to 35% for light utility vehicles.
Trump threatened to impose 25% tariffs on cars at the time, but he never took action. He allowed the tariff authority resulting from the investigation to expire. However, trade lawyers have said that the administration could argue the findings of the investigation are still relevant.
Ryan Majerus is a former Commerce Department employee now working at the law firm King & Spalding. He said that the Trump administration can use the Section 232 autos report and its recommendations as a basis for tariffs.
He said that they were at a stage where they could implement their report quickly, and rely on the success of the Section 232 litigation from the first term. Trump could also launch a fresh investigation, determine the 2019 key findings to be the same and reset tariff authority. A senior executive in the industry said that Trump could also revive a 1930 law that allowed him to impose tariffs of up to 50 percent on imports that were found to be discriminatory against U.S. trade.
Beth Baltzan who was a senior advisor to the former U.S. trade representative Katherine Tai under the Biden administration said that a higher rate of tariff would encourage those making cars in North America, to select more U.S. components to take advantage of the tariff-free U.S. Mexico-Canada Trade Agreement.
She said that the current 2.5% rate was so low, producers just paid it. The higher 25% tariff on truck parts worked to keep components sourced in North America. The tariff wall actually drives the North American sourcing patterns that the pro-American manufacturers want.
She said that if Trump's aim was to lower tariffs in a reciprocal manner, it would be a mistaken assumption, given the current trade flows, and the "profitability of the North American market." (Reporting and editing by Dan Burns, Paul Simao and David Shepardson. Additional reporting by David Shepardson.
(source: Reuters)