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Lake Resources' shares in Australia surge after launch of strategic review
The shares of Australia's Lake Resources soared by more than 9% after the company announced a strategic review on its Kachi lithium project, located in Argentina. The lithium developer believes that the asset is undervalued, even though the long-term demand has increased for battery metals after a recent drop in the price of lithium carbonate. The price of lithium carbonate fell to its lowest level since August 2021 last month, due to a prolonged decline in demand from the electric vehicle industry. The benchmark index rose 0.1% to 0050 GMT, while Lake's stock is on course for its largest one-day gain since April 24. The company is considering a number of options, including the sale of a stake in the project or a possible sale or merger. The Kachi Lithium Brine Project is the largest independently-funded project in South America's "lithium triangular" region, with resources totaling more than 10.6 million metric tonnes of lithium carbonate. Lake Resources stated that recent examples of companies with Argentine Lithium projects receiving proposals far exceeding their current market valuations has influenced the decision to explore alternative strategic options. The review is more than five-months after the company agreed to sell its non-core assets of lithium brine in Argentina for nine million dollars. Reporting by Nichiket in Bengaluru, editing by Mohammed Safi Shamsi & Alan Barona
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US futures rise on China trade talks
U.S. stocks futures rose and Asian currencies rose as investors welcomed the news that a top-level meeting between U.S. officials and Chinese officials is scheduled for this weekend in Switzerland. This could be a chance to calm down the trade conflict. Scott Bessent, U.S. Treasury secretary, said on Fox News that he believes the goal is to de-escalate. S&P futures gained about 0.9%. This was a recovery from a drop in the cash session, when U.S. president Donald Trump seemed to have struck a more confrontational note. The stock markets of Japan and Australia have both edged up. The dollar increased a bit against the yen, but declined against other Asian currencies. The offshore yuan is close to reaching a six-month-high and the Australian Dollar has reached a five month-high and just above 65 U.S. Cents. Ray Attrill, head of Foreign Exchange Research at National Australia Bank, said: "It seems that both sides are willing to reach out and meet on a high-level. I wouldn't have thought it could be anything other than positive." It's positive for Asian foreign exchange in general. Asian currencies have been gaining on the dollar lately, led by a flying Taiwan Dollar, on speculations that a weaker greenback is part of Trump’s trade agenda, and as large investors reduce their dollar positions built up over years of purchasing U.S. assets. Gold dropped 1%, while oil rose 1%. Benchmark 10-year Treasury rates remained at 4.3238%. Later on Wednesday, the U.S. Federal Reserve will meet to set interest rate cuts. The markets indicate that there is almost no chance for a move to be made on Wednesday, and only 33% of a reduction in June. This is down from 64% one month ago. India and Pakistan are nuclear-armed neighbors and the fighting has been intense for more than 20 years. India fired gunfire and shells over the border in Kashmir, while India also hit targets in Pakistan. Attrill of NAB said that it would add another layer to the geopolitical tensions and likely cause India's currency to fall. The euro was supported above $1.13, with German conservative leader Friedrich Merz being elected chancellor after his alliance with Social Democrats suffered a shock defeat in the initial round.
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Oil prices rise on signs that Europe and China are increasing their demand and US production is decreasing
Prices rose on Wednesday as buyers returned to the market after the prices had fallen to new lows the previous week. Brent crude futures rose 37 cents a bar, or 0.6% to $62.52 a bar by 1215 GMT. U.S. West Texas Intermediate Crude was at $59.53 a bale, up 44 cents or 0.74%. The benchmarks fell to a 4-year low following OPEC+’s decision to accelerate output increases. This stoked concerns of an oversupply, at a time that U.S. Tariffs are causing concern about demand. The lower oil prices of recent weeks have led some U.S. companies like Diamondback Energy, Coterra Energy, and others to announce they will cut some rigs. Analysts say that this should increase prices over time by reducing production. Daniel Hynes, senior commodity strategist at ANZ Bank, believes that the latest announcements suggest that output will decline in the months to come. Last month, we warned that the falling oil prices and decreasing drilling activity could lead to a fall in U.S. output. Market sources cited American Petroleum Institute data on Tuesday to report that crude stocks dropped by 4.5 millions barrels during the week ending May 2. The U.S. Government will release data about stockpiles at 10:30 am ET. ET (1430 GMT). The average expectation of the analysts polled is that U.S. crude stock will decline by 800,000 barrels for last week. The signs that demand was improving also helped to support prices. China's consumers increased their spending on May Day and when the market returned from the holiday. Analysts expect companies in Europe to report a 0.4% increase in their first-quarter earnings. This is an improvement from the 1.7% decline analysts expected just a week earlier. As tariffs threaten the economy, it is expected that the Federal Reserve will leave interest rates unchanged Wednesday.
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Lynas CEO: Company is looking to buy rare earths in Malaysia and Brazil
Amanda Lacaze, CEO of Lynas Rare Earths, said that the company is looking at potential purchases of rare-earth deposits in Malaysia and Brazil. It also plans to work with developers who are still in the early stages to bring their mines on line. She said that the Macquarie Australia Conference, held in Sydney, was a forum where she discussed how to grow the world's second largest producer of rare earths outside China. She said that Lynas' processing facilities in Malaysia have a similar geology to many other parts of Southeast Asia. This includes Myanmar. Myanmar is an important supplier of rare earths to China. Yes, there are deposits in Brazil. Lacaze replied, "Yes we are looking into them." Lacaze stated that Lynas is open to working with companies in Malaysia to "put our script into action". Would we like to see these developed? Yes. We will facilitate this development. "Yes," she replied. A weekend election in Australia has brought back the Labor government, which had implemented a policy of stockpiling critical minerals like rare earths. Lacaze said that this is a "uneconomical" policy. She added, "You should focus on building a successful and strong business. One that relies on government funding for construction and then government financing to produce is likely uneconomic by definition." The administration of U.S. president Donald Trump has focused on the development of rare earth deposits. Last week, they signed a supply agreement with Ukraine. Rare earths can be used for industrial magnets as well as in certain defence applications. Lacaze explained that new supplies can be difficult to develop, and take years. "I want to run an advertisement in the Washington Post that says, 'Want Rare Earths?" She said, "Call 1800 Lynas." (Reporting and editing by Christine Chen, Melanie Burton, Christopher Cushing).
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Sources say that a major refinery in Venezuela has restarted a processing unit after an absence of 365 days.
Four sources said that Venezuela's Cardon refinery, the second-largest in Venezuela, has restarted a fluid catalytic reactor which was out of service due to a breakdown and a lack of raw materials for over a year. One source said that the 88,000 barrels per daily (bpd), or FCC cracker was processing 26,000 barrels per day on Tuesday. Meanwhile, a similar unit in Amuay, the largest refinery of the country, was processing 38,000 barrels a day. Sources said that the Paraguana Refining Center includes Amuay as well as Cardon refineries. On Tuesday, it processed about 187,000 barrels per day, or 20% of its installed capacity, which is 955,000 barrels per day. Cardon was operating one crude distillation unit, which processed about 50,000 barrels per day, against a capacity installed of 310,000 barrels per day. Source: Amuay was only processing 137,000 bpd crude oil, when it had a capacity to process 645,000 bpd. The Venezuelan state oil company PDVSA has not responded to a comment request immediately. According to a source, the refinery complex receives crude oil from upgrading companies Petropiar and Petromonagas, as well as the eastern coast of the oil-rich Zulia State. (Reporting and editing by SonaliPaul)
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Cenovus Canada confirms job cuts ahead of earnings in this week
Cenovus Energy, a Canadian oil and natural gas company, has reduced the number of employees in its workforce ahead of this week's release of its earnings report for its first quarter. In an email sent on Tuesday afternoon, the Calgary-based firm confirmed that it was cutting jobs. Cenovus announced that it had reviewed certain team structures and as a result, some employees and contractors have left the company. The job cuts are part of the effort to make the business more competitive in all areas and also because a number projects were completed. The company has not stated how many affected jobs there are. Cenovus has been underperforming analysts' expectations for most of the last 12 months. The company's profit fell in the fourth quarter 2024 due in part to the continued weakness of its U.S. refining division. Cenovus shares closed Tuesday at $16.33 each, up 1.4%. However, they have fallen by more than 25% from the beginning of 2025. Cenovus will report its earnings for the first quarter of 2025 on Thursday. In an April research report, TD Cowen stated that a "more optimistic" outlook for Cenovus going into the second half will be crucial to reversing investor sentiment towards the heavily discounted stock.
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Sources say that Niger security forces raid Orano offices, seizing phones.
Two sources said that security forces in Niger searched offices of local subsidiaries of Orano, securing phones and equipment. This comes months after Orano announced that authorities had taken control of the Somair mine. Ibrahim Courmo, the local director, was also arrested, according to a source close to Orano. Orano stated that it has "very little" information about the situation, as it lost operational control over its subsidiaries in December. The company released a statement late Tuesday that said: "It appears that Nigerien police officers intervened on Monday, May 5 at the headquarters in Niamey of the Somair Cominak and Orano Mining Niger subsidiary companies, seizing equipment." We are concerned by the current situation as we have been unable to reach the Orano representative on the ground in Niger. Orano announced on December 4, that the Niger military government, which took power in a coup 2023, has taken control of Somair, a mine of which Orano holds about 63%. The government owns the rest. Over the last year, Niger, Mali and Burkina Faso, two neighbouring countries have increased pressure on foreign mining firms. In recent months, Malian authorities arrested foreign executives and confiscated gold stocks during negotiations with mining firms. Burkina Faso’s junta promised last month to seize more industrial mines owned by foreigners. Orano announced that Niger had revoked a mining license for its Imouraren division in June 2024. GoviEx Uranium, a Canadian company, announced that it was stripped of the right to develop an uranium mine in Niger. The three Sahel nations are all led by military regimes that have been in power since 2020. They are trying to distance themselves from the former colonial power France, both economically and militarily. (Reporting and writing by Boureima Balima and Moussa Ashkar; editing by Stephen Coates).
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Suncor, Canada reports first quarter profit beating on strength in refining
Suncor Energy, a Canadian oil company, reported a first-quarter profit that was above analyst expectations on Tuesday. It benefited from increased refinery production and higher sales volumes. The positive results are part of a wider rebound in North American refinery margins. Imperial Oil, a peer company, posted record earnings for the first quarter last week. This was primarily due to higher margins in its fuel and refining business. Suncor reported that its refined products sales increased to 604,900 barrels a day during the third quarter, compared with 581,000 bpd in the previous year. The increase was due to a higher refinery output and Suncor's extensive retail and sales network. The refinery's utilization has also increased to 104%, up from 98% one year earlier. Suncor, based in Calgary, Alberta, increased its upstream production to 853 200 bpd during the third quarter, but sales volume dropped because of a large inventory. Rich Kruger, Suncor CEO, said that the integrated business model and the continuously improving cost structure enable the company to deliver free money flow and shareholder value, despite the volatile business environment. Around 80% of Canada’s crude oil and 40% of the natural gas produced in Canada are sold to the U.S. When Donald Trump, the president of the United States, announced tariffs against Canada, this interdependence was put in doubt. These duties were temporarily implemented in February but most of them were removed within a few days. Rich Kruger, the CEO of the company in February, said that the integrated nature and assets give the company an "natural hedge" from tariffs. According to data compiled and analyzed by LSEG, the company reported a profit adjusted of C$1.31 ($0.9509) for the quarter compared with an average analyst estimate of C$1.21 (per share).
ArcelorMittal views May as critical to new Brazil investment decisions
As it nears the end of the current investment cycle, the month of May is crucial for ArcelorMittal in deciding whether or not it will make new investments in Brazil.
ArcelorMittal is considering its next move in light of the approaching deadline for the extension trade protection measures implemented by the Brazilian Government and the import tariffs imposed by U.S. president Donald Trump.
Steelmakers have complained for years about unfair competition in Latin America’s largest economy. They claim that China floods their market with cheap materials and call on the government to take more action to limit these imports.
In April 2024, the Brazilian government raised the import tariff for some steel products from 10% to 25%, and adopted some import quotas that are free of surcharge. This measure is set to be renewed by the end this month.
Steelmakers criticized the increase as being insufficient.
"We will finish an investment cycle worth 25 billion reais in this year, and we have ambitions for at least 10 billion more in the next few years," said ArcelorMittal Brazil's head, Jorge Oliveira. He was referring to two cycles, one which began in 2022, and another that would last until 2029.
The impact of imports runs contrary to any group's investment appetite.
Oliveira stated that ArcelorMittal could postpone, or even cancel, investments up to 4 billion Reais announced in February for the Tubarao steel plant in Espirito Santo.
The project would have two effects: a postponement of the start date and an even worse outcome, the cancellation. Oliveira stated that we are in a critical period, citing possible consequences of not extending the measures approved last summer.
The executive stated that they expect the government to extend these measures "at least", but have been discussing alternative ways to strengthen them, as the existing ones "were insufficient".
Gerdau, Usiminas, and CSN are also large steelmakers in Brazil. (Reporting and writing by Alberto Alerigi Jr., Gabriel Araujo, Edward Tobin).
(source: Reuters)