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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."
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Reliance Industries Q4 profits beat estimates due to retail and digital boost
Reliance Industries, India's largest company, beat expectations for its fourth-quarter profits on Friday as strong performances in its retail and digital business offset the weakness in its Oil-to-Chemicals (O2C), unit. According to LSEG, the Mukesh Ambani conglomerate reported a consolidated net profit of 194.07 trillion rupees (2.27 billion dollars) for the three-month period ended March 31. This was higher than analysts' expectations (188.77 trillion rupees), according to LSEG. The company reported that the EBITDA (earnings before taxes, depreciation and amortization) of its mainstay O2C businesses fell by 10% as a result of a weakness in transportation fuel cracks. The EBITDA of its digital services segment, including Jio's telecom unit, grew 18%. Jio Platforms reported a quarter-on-quarter increase of 25.7% compared to a year ago, thanks in part to the cellular tariff increases implemented last year. Jio Infocomm’s average revenue per customer (ARPU), a key metric in telecoms, rose 13.5% to 206.8 rupees. The company reported that net additions improved following the impact on the tariff increase, adding 6.1 million new subscribers in the quarter of January-March. Retail's EBITDA grew by 14% in the first quarter of this year, driven primarily by increased efficiencies and better product mix. Reliance Retail, Jio and the Energy Segment have been the main drivers of the company's earnings in the last two quarters. Lower margins and lower demand has hit the energy segment. Jamnagar, a complex that houses two refineries, with a combined daily capacity of 1.4 million barrels, has been historically the heart of Reliance’s O2C operation and a major profit generator. The O2C segment has been impacted by a decrease in the refining margins and the chemical margins in fiscal year 2024-25. "FY2025 was a challenging business year, due to the weak macroeconomic environment and shifting geopolitical terrain. "Significant demand-supply differences in downstream chemical markets have resulted in multi-year low profit margins", Chairman Mukesh said in a press release. V Srikanth, the company's Chief Financial Officer, said during a conference call that it has also installed a Gigawatt-scale assembly line for solar photovoltaic modules (PV). The company has set out to build a factory that can produce solar PV modules from start to finish. It aims to have a capacity of 10 GW. (Reporting and editing by Sethuraman N; Anil D'Silva).
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Brazil's Vale has not seen any material impact from the trade war.
The Brazilian miner Vale announced on Friday that the ongoing trade war has not had a material effect on its operations or sales. However, it pledged to continue monitoring it closely in light of uncertain market conditions. Vale is the largest iron ore producer in the world and its top client is China. China has been involved in a dispute with the United States over President Donald Trump’s tariffs. On a conference call with analysts, Vale executives stated that it was still too early to discuss the impact of the trade war on the price of iron ore. The Chief Executive, Gustavo Pimenta acknowledged, however, that a possible global economic slowdown could have an impact upon commodity markets. Vale said it wasn't the right time, given the uncertainty of the market, to discuss the possibility of paying extraordinary dividends - an investor remuneration policy it adopted in recent years. The mining giant's shares traded in Sao Paulo fell about 2% Friday. They were among the largest fallers of Brazil's benchmark index Bovespa which was essentially flat. (Reporting and editing by Gabriel Araujo, Roberto Samora)
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China denies Trump's claims of negotiation, and eases some US tariffs
China exempted certain U.S. exports from its steep duties in a Friday sign that the trade conflict between the two world's largest economies may be easing. However, Beijing swiftly knocked back U.S. president Donald Trump's claim that negotiations were underway. Business groups claim that China has allowed certain U.S. pharmaceuticals to enter without the 125% duty Beijing imposed on imports of the U.S. earlier this month as a 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 in recent days has signaled that it is trying to de-escalate its confrontation with China. Trump himself also told TIME that there were talks taking place, and that Chinese president Xi Jinping called him. He said, "I don’t think that it is a sign weakness on his part." China denies that any discussions are taking place. "China and the U.S. do NOT have any consultations or negotiations on #tariffs." The U.S. must stop confusing people," wrote the Chinese Embassy to Washington on social media. Trump announced tariffs for dozens of countries in addition to China. These tariffs will be suspended until July 9th. This has sparked a scramble by U.S. trading partner to reach individual trade agreements with Washington before the deadline. It's a tall task, considering that previous trade deals took years to negotiate. Trump 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 separately that he has made "200 deals", which he said would be finished within three to four week, but he refused to give specifics. He said that he would be happy if tariffs remained between 20% and 50% in a year. Trump has claimed that his thickets of trade barriers would revive U.S. Manufacturing Industries that have been eroded by global competition. The majority of economists warn, however, that this would increase prices for U.S. consumer and raise the risk of recession. U.S. stocks include Down roughly 10% Since Trump's return to office in January, indexes have lagged in other countries while the dollar has dropped at an unprecedented rate. Stocks in Europe and Asia headed for a Second straight week of gains Investors were encouraged by signs that the U.S. was willing to end its trade war with China. Wall Street's major indexes increased slightly as investors sought clarity in the U.S. China trade dispute. Trump has imposed tariffs on autos, steel, aluminum, and other imports 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 discussions at this week's spring meetings of the International Monetary Fund (IMF) and World Bank, as finance ministers sought to meet with U.S. Treasury Sec. Scott Bessent. Bessent characterized Initial talks with South Korea Seoul called Thursday's "good start" and "very successful." Next week, further discussions will take place. Switzerland has also stated it You will be satisfied Bessent's initial meeting. The U.S. Trade Office said that it was "constantly engaging" with Japan and others, but Trump would decide whether or not they proceed. Kristalina Georgeeva, the IMF's head, warned this week that they could lead to a rift between countries. Severe slowdown (Reporting by bureaus worldwide; Writing by Andy Sullivan; Editing by Chizu Nomiyama and Marguerita Choy) Reporting by Bureaus Worldwide; Writing by Andy Sullivan, Editing by Chizu nomiyama and Margueritachoy
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China waives some tariffs on U.S. products, but denies Trump’s claim that negotiations are underway
China exempted certain U.S. exports from its steep duties in a Friday sign that the trade conflict between the two nations could be easing. However, China quickly slammed U.S. president Donald Trump's claim that negotiations were under way. Business groups claim that China has allowed certain U.S. pharmaceuticals to enter without the 125% duty Beijing imposed on imports of the U.S. earlier this month as a 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 in recent days has signaled that it wants to de-escalate tensions between the two world's largest economies. Trump himself also told TIME that talks are taking place, and that Chinese president Xi Jinping called him. He said: "I don’t think that it is a sign weakness on his part." China denies that any discussions are taking place. "China and the U.S. do NOT have any consultations or negotiations on #tariffs." The U.S. must stop confusing people," wrote the Chinese Embassy to Washington on social media. Trump announced tariffs for dozens of countries in addition to China. He suspended them until July 9, but has since re-imposed them. This has sparked a rush among U.S. trade partners to reach individual deals with Washington by the July 9 deadline. Trump told reporters in the White House he was close to reaching a deal with Japan. 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 separately that he has made "200 deals", which he said would be finished within three to four week, but he refused to give specifics. He said that he would be happy if tariffs remained between 20% and 50% in a year. The U.S. trade representative said that it held a successful meeting with South Korea last Friday. Trump has claimed that his thickets of trade barriers would revive U.S. Manufacturing Industries that were wiped out by global competition. Economists warn, however, that this would increase prices for U.S. customers and increase the chance of recession. Trump has imposed additional tariffs on autos, steel and aluminum in addition to country-specific duties. He also proposed additional levies for pharmaceuticals and semiconductors. The dollar rose for the first time in over a month on Friday, and European and Asian shares headed to a second consecutive week of gains. Investors were encouraged by signs that the U.S. was willing to ease off its trade war with China. Wall Street's major indexes started slightly lower.
Despite tariffs, some European companies are hesitant to expand in the US
The erratic tariff policy of U.S. president Donald Trump is making some European smaller companies question whether it's worth expanding into the U.S. Trump wants to encourage foreign companies to invest in the United States by imposing levies on steel, cognac, cars, and sandals. This will create new factories, and thousands of American jobs. The auto and pharmaceutical sectors have been quick to announce or consider expansions. However, some smaller companies are hesitant about committing.
EuroGroup Laminations, an Italian company, pays no import duties on the rotors, stators, and other components it provides to U.S. automakers, such as Ford and GM. These products are produced in Mexico and comply with current import regulations.
Marco Arduini, CEO of the company, said that even if the company had to move production to the U.S., it would be subject to tariffs on the type of steel it uses for its automotive parts.
He said that avoiding potential U.S. Tariffs would not compensate for the extra costs or low availability of steel. U.S. Labour costs are also a concern, as they can be up to six-times higher in Mexico.
Due to the current situation, including the possibility that tariffs could trigger a U.S. economic recession, ebm papst, a German motor and fan manufacturer has halted plans to build a new U.S. plant or to expand an existing U.S. site.
Klaus Geissdoerfer, CEO of the company, said that if there were an economic downturn on American soil, it could affect demand in a different way.
Many economies are built on the strength of small and medium-sized businesses (SMEs), including Italy and Germany. Both countries are members of the European Union and major exporters into the United States.
They may be able to react more quickly to new trade risks than larger companies because they have less financial cushioning.
Marc Tenbieg is the head of DMB, the association representing Germany's SMEs.
DMB said in separate comments that a few SMEs are currently reviewing their U.S. business as a result Trump's policies.
Andrew Adair said that some member companies of the German engineering association VDMA have delayed purchases. He made this statement following a visit to the United States in early August.
He said, "The industry appears to be on hold at the moment." Trump announced a series broad tariffs on goods from other countries imported into the United States on April 2. The tariffs included a 20% on EU imports, which was then lowered to 10% as part of what Trump called a "90-day pause" following the selloff in U.S. stocks.
Trump's statements that other countries "screwed" the U.S. over the years, reflecting his anger at U.S. Trade Deficits including one of 235.6 billion dollars with the 27-nation EU, have also raised the temperature in the diplomatic and political arena.
LAPP in Germany, which produces everything from wires and cables to robotics for factory, has maintained its plans to double the production capacity at their New Jersey site by 2025.
Matthias Lapp, CEO of Lapp & Co., said: "As a business family, we plan on the long-term, not just for elections."
Tariffs have the potential to affect demand and inflation in the United States.
RBC Capital estimates that imports account for 10% of U.S. consumer spending and that "it will be relatively difficult for consumers" to switch away from imported products.
The consultancy AlixPartners believes that the average U.S. household's discretionary spending in a post tariff world will drop by more than 10 percent to $27,000 and recommends companies adopt a pause-and-monitor approach.
Eurostat data show that in each of the three previous years, the EU exported an average of more than 500 billion euro of goods to the U.S. These were mostly pharmaceuticals and vehicles, but also machinery. Trump's primary targets are the steel, auto and car part manufacturers in the EU.
The U.S. is still the EU's largest trading partner. However, the new tariffs have sparked some political resistance against greater exposure. French President Emmanuel Macron has asked European firms to temporarily suspend their planned investments.
Industry groups urge European companies to instead focus on other foreign markets, such as India and Latin America.
Sebastian Zank is the head of Scope's corporates rating production. He said, "We have seen how quickly things can change."
Everyone will remain seated until the picture that emerges can be described as "sustainable."
(source: Reuters)