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Angola's Finance Minister says that country stress testing for lower oil prices and IMF program is more likely
Angola runs stress tests to assess the impact of a drop in oil prices on the government's finances, said Finance Minister Vera Daves de Sousa on Friday. She added that this situation makes a request for a loan program from the IMF more likely. After U.S. President Donald Trump's announcement of sweeping tariffs, Brent oil futures briefly fell below $60. This was the lowest level for four years. The contract closed at $66.91 per barrel on Friday. Daves de Sousa said in an interview at the International Monetary Fund Spring Meetings in Washington that "we are rolling out stress tests scenarios." De Sousa explained that a decline of less than $45 in oil prices would require an additional budget. She said that the government is working to improve tax administration, increase enforcement of property taxes and mitigate the effect of lower oil prices. Many smaller and riskier emerging countries, including Angola have felt the impact of recent volatility in fixed income markets, particularly U.S. Treasuries. Angola was forced to pay $200m earlier this month when JPMorgan issued an margin call on a $1billion total return swap, a loan that the lender issued in December and which was backed by dollar bonds issued by Angola. De Sousa stated that she was in discussions with JPMorgan about measures that could be taken to avoid a margin call. She also said that investors and rating agencies had not given her any negative feedback on the payment. She said that there were no negative connotations. Instead, they were surprised at how quickly we had been able to raise such a large amount of money. The government is currently examining the possibility of requesting an IMF financing program. De Sousa, when asked about Chinese loans backed with oil, said that the government would have to pay another $8 billion. It expected to be in a position to pay this back by 2028, rather than 2030-2031 as originally anticipated. Angola is also borrowing more money, mainly from China's EXIM Bank, but this money was not secured by collateral, it was concessional, and allocated to specific projects, such as improving internet capability in rural areas, or improving education. De Sousa stated that Angola would love to tap into international capital markets, but does not plan to do so for the time being. We want to go on the market but with the way things are going, this isn't the right time. We will keep an eye on it to make sure we are prepared for the next time. De Sousa said that officials from the Trump administration had confirmed in Washington, in meetings held there, their commitment to fund the Lobito railway corridor without specifying the exact amount. The project is designed to transport vital minerals from central Africa's copperbelt into the West. (Reporting and editing by Paul Simao; Karin Strohecker)
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The global trade situation is further complicated by the contradictory statements of US and China.
In an interview published Friday, U.S. president Donald Trump claimed that tariff negotiations with China were in progress, but Beijing denied there were any talks taking place. This is the latest in a string of contradictory signals about what progress has been made in de-escalating a trade conflict that threatens to sap global economic growth. Trump told TIME that talks were underway and that Chinese President Xi Jinping called him. He repeated this claim to reporters on his way out of the White House to Rome for the funeral service of Pope Francis. China responded in a statement from its foreign ministry posted by the Chinese embassy in the U.S., "China and the U.S. have NOT been in consultation or negotiations on #tariffs." "The U.S. shouldn't be creating confusion." Speaking to reporters on Air Force One, Trump said that it would be a great win for the United States if China opened its markets to U.S. goods and that tariffs might help make this happen. "Free China. "Let's go into China and work it," he said. "That would be fantastic. It would be great, but I am not sure I will ask for it. They don't want the door open. The back and forth added to the uncertainty over the current state of play regarding Trump's erratic policy. Not only in regards to China, but as it pertains the dozens countries scrambling for their own deals to relieve the burden of hefty import tax he unleashed after returning to the White House. His team of negotiators conducted what was a lightning round trade talks with the foreign officials that had flooded Washington this week to attend the spring meetings for the International Monetary Fund (IMF) and World Bank Group. While Trump officials, including Treasury Secretary Scott Bessent, touted signs of rapid progress, their counterparts, such as the finance chiefs from the IMF, were more circumspect. They were also urged to return home urgently in order to reduce the risk posed by the tariffs. Paschal Donohoe, Irish Finance Minister, said: "I am walking away from these meeting with a clear understanding of what is at stake, and the risks there are for jobs, growth, and living standards around the world." The meetings here reminded me why we must leave no stone unturned over the next few months and weeks to find ways to reduce uncertainty. DE-ESCALATION There were some signs of de-escalation, even though it was unclear whether or not deals would be struck to prevent the imposition of higher tariffs in early July. China has exempted certain U.S. products from its high tariffs. Business groups claim that Beijing allowed U.S. pharmaceuticals to enter China without paying the 125% duty it imposed in response to Trump’s 145% tariffs. A list of 131 categories of products that are allegedly being considered for exemptions is also circulating in some business and trade groups. The list includes chemicals, vaccines and jet engines. China has yet to make a public statement on the matter. Trump's administration also signaled in recent days that it was looking to defuse tensions with China. Bessent said both sides view the current situation as untenable. Trump also told reporters in the White House that an agreement with Japan was close. Analysts see this as a test case for other bilateral agreements, even though the talks may be difficult. Many expect Shigeru Shiba, the Prime Minister of Japan, and Donald Trump to announce an agreement when they meet in Canada at the G7 Summit in June. Trump told TIME he made "200 deals", which he said would be finished in three to four weeks. He declined to give specifics. He said that if tariffs remained between 20% and 50% in a year, he would call it a victory. Trump has claimed that his thickets of trade barriers would revive U.S. Manufacturing Industries that have been hollowed by global competition. However, economists warn that this would increase prices for U.S. customers and the risk of recession. U.S. stock indexes are on track to gain a week, even though they have fallen by about 10% since Trump took office in January. They lag other countries' indexes, and the dollar is falling at an unprecedented pace. The dollar rose for the first time in over a month on Friday, while European and Asian shares were headed to a second consecutive week of gains. Investors took comfort from signs that the U.S. was willing to end its trade war with China. Wall Street's major indexes grew slightly as investors sought clarity on the U.S./China trade front. Trump has imposed additional tariffs on autos, steel and aluminum in addition to country-specific duties. Trump has also proposed additional levies for the pharmaceutical and semiconductor industries. According to industry estimates, this could lead to a 12.9% increase in drug prices across the U.S. The tariffs of Donald Trump dominated the IMF meetings in this week. Finance ministers vied for one-on-1 meetings with the U.S. Treasury secretary. Bessent described the initial talks with South Korea on Thursday as "very succesful." Seoul referred to it as a "good beginning." Next week, further discussions will take place. Switzerland said that it was also satisfied with the initial meeting between Bessent and Switzerland. The U.S. Trade Office said that it was "constantly engaging" with Japan and others, but Trump would decide whether or not they proceed. The IMF's Kristalina Gheorgieva warned that the lack of progress in other countries could lead to a serious slowdown of global growth. Reporting by Bureaus Worldwide; Writing by Andy Sullivan, Dan Burns and Editing by Chizu Nomiyama, Marguerita Choy
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Dollar gains and tech shares are boosting the stock market
The majority of stock indexes rose on Friday. The Nasdaq was up over 1% during afternoon trading, as shares related to tech gained. Meanwhile, the dollar is headed for its biggest weekly gain in more than a month. Alphabet, the parent company of Google, saw its shares rise 1.5% on Nasdaq after exceeding profit expectations and reaffirming AI spending targets. This earnings season, uncertainty surrounding the impact of U.S. president Donald Trump's tariff offense and the global trade tensions that resulted have dominated the results calls. Trump claimed in an interview published on Friday that tariff talks with China were in progress, but Beijing denied there were any discussions taking place. This is the latest of a series conflicting signals about what progress has been made in de-escalating a trade battle that threatens to sap global economic growth. Trump told Time magazine there were talks taking place, and that Xi Jinping, the Chinese president had called him. The tit-for-tat tariffs, which began on April 2, when Trump announced hefty import duties, had threatened to stall the trade between two of the world's largest economies. They also sparked concerns of a global slowdown. Chip Rewey of Rewey Asset Management in New Jersey, an investment adviser registered with the state, said: "This week, you may have felt some relief that the worst-case scenario of Trump's tariff actions will not come true." We haven't yet returned to the highs. "I think we'll be somewhere between those two ranges for a long time." The S&P 500 is expected to rise for the week while Europe's STOXX 600 has risen more than 2% in the past week. The Dow Jones Industrial Average increased 14.98 points or 0.04% to 40,108.31. The S&P 500 gained 33.83 points or 0.62% to 5,518.60. And the Nasdaq Composite increased 182.65 points or 1.07% to 17,349.66. The MSCI index of global stocks rose by 4.47 points or 0.54% to 824.28. The pan-European STOXX 600 ended with a gain of 0.35%. The Nikkei 225 index rose 1.8% in Japan on Friday. It has recovered all of its losses following Trump's announcement that the United States would be imposing the highest tariffs it had ever seen. Trump suspended most of these tariffs, with the exception of China, which will have a 10% tariff. The dollar has recovered slightly in relation to the euro and the yen after taking a hit due to the tariff news. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and others) rose by 0.07%, reaching 99.49. Meanwhile, the euro fell 0.1%, at $1.1377. The dollar gained 0.66% against the Japanese yen to reach 143.56. The price of gold, which has risen this year due to investors seeking safe haven assets that are not tied to the dollar, was last down by 1.94% on Friday, at $3,283.21 per ounce. The yield on the benchmark 10-year U.S. notes dropped 3.7 basis points, to 4.268% from 4.305% at late Thursday. U.S. Treasury rates declined after recent hopes that the U.S. China trade war would ease and investors considered the possibility of the Federal Reserve lowering interest rates if economic activity slowed.
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Burkina Faso grants mining license to Russia's Nordgold project
The military-led West African Government announced that Burkina Faso had granted an industrial mining license to Russian miner Nordgold to develop a gold project. This was to capitalize on the record high gold prices and strengthen an economy that has been hit by insecurity. The move is a sign of the deepening economic relations between Russia and Burkina Faso as the junta which seized power in Burkina Faso in 2022 continues to pivot away from its traditional Western allies toward Moscow. The Niou gold deposit is located in Burkina Plateau-Central's Kourweogo Province. It covers an area of 52.8 square kilometers (20.44 square miles). This area was previously owned by Jilbey Burkina and now belongs to Nordgold. Nordgold operates the Bissa, Bouly and Bouly mines. The Council of Ministers announced late Thursday that it expected the Niou Mine to produce approximately 20,22 metric tonnes of gold in its eight-year lifespan. Jilbey Burkina retains 85% of the project while the Burkinabe Government will own the remaining 15%, without any financial contribution. This is in line with the new mining regulations in the country. The council of ministers stated that the project would contribute over the course of its life 51.5 billion CFA Francs ($89million) to the budget and 7.06 billion CFA Francs to the mineral wealth fund. The geopolitical instabilities and the trade policies of U.S. president Donald Trump have driven gold prices up by more than 25% this year. Burkina Faso is a major producer of gold. The country has been fighting jihadist militants in Burkina Faso since 2015. Swissaid, a non-governmental organization that analyses mining, estimates the country's production at over 57 tonnes in 2023. There are several mining companies in the region, including Endeavour Mining and IAMGOLD from Canada and West African Resources Ltd. The cooperation with Nordgold, and other industrial mines are important for Burkina Faso's government as it faces budget constraints. Ulf Laessing is the head of the Sahel program at the Konrad Adenauer Foundation in Germany. He said that the Niou project would be located in an area of large artisanal mines and could deprive people who work as artisanal gold miners from important income. The government stated that the mine would create 204 jobs and also help sustain employment at Bissa Gold SA, which is located nearby. (Reporting from the newsroom, with additional reporting by Maxwell Akalaare Adombila. Editing by Maxwell Akalaare Adombila and Portia Crowe.
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LyondellBasell's quarterly profit forecast is missed due to weak volume
LyondellBasell missed Wall Street's expectations of quarterly profit on Friday due to maintenance downtime, lower volumes and its largest segment, supplying raw materials for the automotive, construction, and electronics industries. The chemical industry has been suffering due to a slump in demand and the rising cost of raw materials, particularly in Europe. Businesses are also being forced to reconsider their strategy in the region due to the strict regulatory environment. LyondellBasell has launched a $500 million initiative to increase earnings in order to navigate the continued macroeconomic volatility. The company stated on a earnings call that they have cut costs by around $300 million due to portfolio management measures such as refining exits from businesses and a strategic review of their European operations. LyondellBasell said it will provide an update on five European assets that are still being reviewed by the middle of the year. Eastman Chemical announced on Thursday cost-cutting initiatives in response to the market volatility. This was partly due to renewed trade concerns resulting from President Donald Trump’s tariff policies. The business activity in the Eurozone barely increased in February as a slight increase in services barely compensated for the ongoing decline in manufacturing. LyondellBasell’s largest segment in terms of sales volume, olefins and polyolefins, Americas, reported core adjusted earnings of $251 millions, down from the $521 million earned last year as higher feedstock prices impacted margins. The adjusted core profit for its Intermediates & Derivatives segment, which produces oxyfuels, intermediate chemicals and intermediate chemicals, dropped 69.9% from the previous period to $94 millions. In the second quarter, the company anticipates that seasonal demand will improve across all businesses. According to data compiled and analyzed by LSEG, on an adjusted basis the company reported a quarterly profit in the amount of 33 cents. This was below analysts' estimates of 43 cents. (Reporting and editing by Vijay Kishore in Bengaluru, Shailesh Kumar, and Pooja Menon)
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The FX effect has a negative impact on the pre-tax profits of Chilean miner Codelco
Codelco Chile, the largest copper producer in the world, reported on Friday a slight increase in production for the first quarter. However, this was not enough to offset the exchange rate effects that caused the company's profits to plummet. Codelco reported a 53% decline in pre-tax profits compared to the same period last year, falling to $213 millions for the first quarter of the year. The state-owned company said that its own production increased by 0.3% to total 296,000 metric tonnes, while total production, including its stakes at Freeport's El Abra and Anglo American Sur, as well as Teck's Quebrada blanca, rose 1.6% to total 324,000 metric tonnage. The miner aims to increase output for the second consecutive year after it fell to a quarter century low in 2023. Codelco reported that rains in the first quarter and a nationwide power outage in February reduced copper production by 10,000 tonnes. Codelco reported that core earnings (earnings before interest, tax, depreciation, and amortization, or EBITDA) fell by nearly 12%, to $1.35billion, as the peso currency lost value. The Chilean Peso increased by 2.76 percent from March 2024 until March 2019. Codelco said that the company had experienced rising costs as a result of planned maintenance at mines and plants, as well higher operating costs in equipment leasing. These costs were partially offset by lower input costs, such as power and fuel. The miner stated that the Andesita segment is expected to begin production at El Teniente in the second quarter, followed by Andes Norte in the third. The ramp-up at Rajo Inca in Codelco’s Salvador Division is expected to finish in the third quarter. Reporting by Fabian Cambero, Natalia Siniawski and Alistair Bell; editing by Kyrry Madry and Alistair Bell
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Dollar gains and stock prices mostly rise on the hopes of a trade war ease
Investors were comforted by signs that the U.S./China trade war was easing. Alphabet, the parent company of Google, saw its shares rise 1.7% on Wall Street after exceeding profit expectations and reaffirming AI spending targets. There is uncertainty surrounding the impact of Donald Trump, U.S. president. Tarif This earnings season, the focus has been on global trade tensions and their impact on offensive. China has exempted certain products from the steep tariffs it imposes on U.S. imported goods. However, Beijing refuted Trump's claim that trade negotiations are underway. The tit-for-tat tariffs, which began on April 2, when Trump announced hefty import duties, had threatened to stall the trade between two of the world's largest economies. They also sparked concerns of a global slowdown. Chip Rewey is the CIO at Rewey Asset Management in New Jersey, an investment advisor registered with the state. We haven't yet returned to the highs. "I think we'll be somewhere between those two ranges for a long time." The S&P 500 is expected to rise for the week while Europe's STOXX 600 has risen more than 2% in the past week. Investors digested an interview Trump gave to Time magazine in which he claimed that high tariffs on imports from abroad a year hence would be a "total win". The Dow Jones Industrial Average dropped 132.71, or 0.33 percent, to 39,960.69. The S&P 500 rose by 4.96 points or 0.09% to 5,489.56, and the Nasdaq Composite gained 55.24, or 0.32 percent, to 17,221.29. The MSCI index of global stocks rose by 1.54 points or 0.19% to 821.40. The pan-European STOXX 600 Index rose by 0.35%. The Nikkei 225 index rose 1.8% in Japan on Friday. It has recovered all of its losses following Trump's announcement that the United States would be imposing the highest tariffs it had ever seen. Trump suspended most of these tariffs, with the exception of China, which will have a 10% tariff. The dollar was slightly higher against the yen and euro, after a turbulent few weeks that saw tariff announcements and reversals, as well as a flight from U.S. assets. The dollar index (which measures the greenback in relation to a basket including the yen, the euro and others) rose by 0.05%, reaching 99.47. Meanwhile, the euro fell 0.04%, at $1.1384. The dollar gained 0.77% against the Japanese yen to reach 143.72. The price of gold, which has risen this year due to investors seeking safe assets that are not tied to the dollar, was last down by 1.94% on Friday, at $3,283.21 per ounce. U.S. crude climbed 0.19% to $62.91 per barrel. Brent rose to $66.71 per barrel, up by 0.24% for the day. The yield on the benchmark U.S. 10 year notes dropped 4.9 basis points from Thursday's 4.305% to 4.257%.
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China's Baosteel Q1 Net Profit Jumps 26.4% due to Lower Costs
Baoshan Iron & Steel Co., China's largest listed steelmaker reported a 26.4% increase in net profit for the first quarter of this year, thanks to lower costs. However, it warned that rising trade tensions pose a persistent risk. In a filing with the Shanghai Stock Exchange, the company known as Baosteel said that it had earned approximately 2.43 billion Yuan ($333.43 millions) over the past quarter. This is up from 1.93 million Yuan during the same period of 2024. Baosteel reported that despite the challenges of a weak steel market and falling prices, it managed to reduce costs due to the more dramatic fall in the price of coking coal than steel. The report said that steel prices fell 9.9% and coking coal prices dropped by 36.1% in the last quarter. Baosteel reported in a separate filing a 38.4% annual decline in its net profits in 2024, which fell to 7.36 billion Yuan. Baosteel, a subsidiary owned by the China Baowu Steel Group (the world's biggest steel producer in terms of output), is the largest steelmaker in the world. Between January and March, the company produced 11.55 million metric tonnes of iron. It plans to produce 48.79 and 52.61 millions tons of iron in 2025. The company received orders for 1.55 million tonnes of steel last quarter, after shipping a record 6.07 million tonnes of steel in 2024. This represents a 3.9% increase year-on-year. The company stated that "in 2025 the external environment will be more complex and uncertain, and trade tensions risks will remain prominent... Profitability will continue to face downward pressure due to the mismatch between demand and supply."
Andy Home: Copper market is wary of the US tariffs that will follow.
Since President Donald Trump's February order to investigate U.S. imports of copper, the price of copper has been rising. How long will this last, and how difficult will it be to come down?
It's a race to get as much copper through U.S. Customs as possible before tariffs are implemented. Copper tariffs will come, there's no doubt about that. The question is when and at what level?
Bets are that the copper levies would be 25 percent, which is the same rate as imposed on steel and aluminum imports.
The market believed it had 270-days, which is the maximum time for a Section 232 investigation. It's no longer so sure.
The impact of wider reciprocal trade tariffs, due to be announced Wednesday on what Trump has called "Liberation Day", is uncertain.
The confusing and conflicting tariff situation has divided market opinion. Some analysts have called for higher copper price, while others warn of an impending crash.
'TRUMP TIME'
The CME spot price of copper reached a record high of $5.199 per lb, surpassing its previous peak of $4.199 during the May 20,24 squeeze.
The London Metal Exchange cash price only reached $10,100 per ton. This is a far cry from its peak in May 2024 of $10,900.
Bloomberg reported that tariffs could be implemented in weeks, not months as expected.
This possibility should not have been a surprise. Peter Navarro, White House Trade Advisor, said that at the time the Section 232 announcement was made the investigation would be finished "in Trump's time".
The apparent confirmation that "Trump Time" is a thing has left traders confused about the best time to ship physical copper to the U.S.
PHYSICAL FLOODS
According to Mercuria, up to half a a million tonnes of copper may be headed to the U.S. in order to take advantage of the unprecedented arbitrage opportunities.
Will it arrive in time?
Physical arbitrage is complicated due to the CME's restrictive list of acceptable delivery brands.
Since February's Section 232 declaration, LME stocks have dropped from 258,425 to 106,900 tonnes, and around half the total inventory is now awaiting physical loading-out.
The LME's warehouse system is a mix of Chinese and Russian steel, so it's unlikely much of it will reach the U.S.
LME stocks are instead diverted to buyers who are willing to exchange the South American brands of copper that dominate the CME list of good-delivery.
It may take more time than you think to switch locations and brands in the physical supply chain.
BULLS AND BEARS
If copper tariffs were to arrive sooner than expected, the pull of copper towards the U.S. could be less strong and last shorter than anticipated.
This means that any shortages in other parts of the world will also be less severe than expected.
The markets are bracing themselves for the uncertainty that will be caused by the U.S. reciprocal trade tariffs, which are expected to be announced in the coming week.
The way micro- and macro-tariffs interact on the copper market has divided opinion.
Goldman Sachs remains in the bulls' camp and has maintained its forecasts of LME copper prices for three, six, and twelve months at $9,600 per ton and $10,700.
Citi has, on the other hand, cut its short-term forecast of $10,000 per ton to $9,500 and expects an average price of $8,800 for the second half.
BNP Paribas is still too optimistic. They predict a price drop to $8,500 a ton as soon as the copper tariffs come into effect and arbitrage trading stops.
You're not alone if you have questions about copper.
The price outlook is still unclear until Doctor Copper and the rest of the world get more clarity about Trump's tariffs.
Do not hold your breath.
These are the opinions of the columnist, an author for.
(source: Reuters)