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Russia expects a shortfall in scrappage fees as the car market struggles
The Finance Minister Anton Siluanov said to reporters Tuesday that Russia expects revenues from the scrapping of cars to be well below budgeted levels in this year. This could lead to some projects being abandoned. Moscow planned to raise taxes this year on imported cars by doubling the scrappage fee for all manufacturers and increasing support from the state for locally made vehicles. In Russia, both domestic manufacturers and importers of cars are required to pay an scrappage fee to cover future costs incurred by the state for managing the process of scrapping. The decline in car sales has shattered expectations. In 2025, Russia planned to double its revenue from recycling cars to 2.01 trillion Russian roubles (24.77 billion dollars). Siluanov, a reporter, said that the scrappage receipts this year are significantly different from the budget, but did not specify the magnitude of the difference. He said that if scrappage fees do not generate the required revenues, projects could be cancelled. According to the data of Russia's Industry and Trade Ministry, sales of new vehicles in January-April decreased by 27% compared to last year, to 404 016 units.
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The price of the aerospace material tantalite has risen to its highest level in two years due to unrest in Congo
Last week, Tantalite prices in Europe reached two-year highs, due to supply disruptions caused by tensions in the Democratic Republic of Congo (DRC), the world's largest producer of this mineral, which supplies the electronics industry and the aerospace industry. Tantalite The spot price of oats in Europe is currently trading between $100 and 105 cents per lb, which is its highest level since April 2023. This represents a 25% rise since the unrest began in January. Tantalite is a mixture of tantalum and other metals used in capacitors, medical equipment, and nuclear reactor components. A minor metals dealer said that the conflict in Eastern DRC makes it difficult to find tantalite with a legitimate tag. You may order material for a province not affected by conflict only to have the rebels take over that area two weeks after signing the deal. Since the M23 rebels, backed by Rwanda, launched a major offensive in the DRC, violence has increased. Sian Morris said that many Western smelters do not source tantalum from DRC or Rwanda. She is Argus' senior analyst of critical minerals. They are sourcing their materials from Burundi instead, Mozambique and Ethiopia. The supply of these countries is smaller and therefore they pay higher prices. According to the United States Geological Survey (USGS), Congo and Rwanda will account for more than 58% of global production of tantalum in 2024. This is equivalent to 1,230 tons. Burundi combined with Ethiopia and Mozambique accounted for only 4.6% of global supplies. Piyush Gheel, CRU Group Consultant, said that there are no swing producers who can bring tantalite production on quickly. This is except for artisanal mines, which have both ESG and traceability issues. The rich mineral resources of Congo have caught the attention of President Donald Trump and the U.S. His senior advisor for Africa stated on Monday that Congo and Rwanda had submitted a draft of a peace proposal. This is part of the process to end fighting and attract Western investment worth billions of dollars in eastern Congo.
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Duke Energy's electricity rates beat quarterly estimates
Duke Energy beat Wall Street's expectations on Tuesday for revenue and profit in the first quarter, thanks to higher electricity prices, increased retail sales, and a colder Winter. U.S. utilities are arguing for higher electricity bills, as the power consumption surges due to the growth of AI data centers and increased manufacturing in the United States. According to the U.S. Energy Information Administration (EIA), the U.S. power demand is expected to reach record levels in 2025 and in 2026. This will be largely due to the expansion of Big Tech's data centers. After years of stagnation, the U.S. Nuclear industry has also become popular as businesses look for clean energy sources to power data centers. Duke said that it had signed letters of agreement on projects totaling 1 gigawatts for data centers last month. Duke Energy is focusing on upgrading its existing infrastructure and building new power plants to meet the growing demand. Brian Savoy, Duke's Chief Financial Officer (CFO), said that these investments were very cost-effective. Duke Energy will create 1 gigawatt in capacity over the next few years through upgrades and the extension of the lives of nuclear power stations. The U.S. Nuclear Regulatory Commission renewed Duke Energy's Oconee Nuclear Station operating licenses by 20 years in late March. Duke Energy's nuclear plants will provide more than half of their electricity to customers in the Carolinas by 2024. These plants represented over 96% the company's clean power production. A colder-than-expected-winter also helped the utility as customers needed more electricity and natural gas to heat their homes. The adjusted earnings for its electric utilities segment in the first quarter were $1.28 billion compared to $1.02 billion at the same time last year. Gas utilities posted a profit adjusted of $349 millions in the first quarter compared to $284 million one year ago. LSEG data shows that the quarter's revenue came in at $8.25billion, exceeding analysts' estimates of $8.06billion. Charlotte, North Carolina based company reported an adjusted profit per share of $1.76 for the three-month period ended March 31 compared to analysts' average estimates of $1.60. Reporting by Pooja menon in Bengaluru, and Laila kearney in New York. Editing by Sahal muhammed and Nick Zieminski.
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Saudi Arabia, US to discuss deal in mining, mineral resources, cabinet says
Saudi Arabia will discuss with the United States a possible agreement on cooperation in the areas of mining and minerals, according to a Saudi cabinet statement released by the state news agency. The Saudi cabinet did not give any details about the "memorandum" which would be negotiated between the Saudi Ministry of Industry and Mineral Resources and United States Department of Energy, according to the statement. The statement is made ahead of the visit to Saudi Arabia by U.S. president Donald Trump next week. Saudi Arabia is rapidly expanding its mining industry as part of Vision 2030, its economic diversification plan, which aims at weaning the economy away from oil. Gold, phosphate and bauxite are its primary resources. Saudi officials also doubled the estimate of the kingdom's mineral reserves last year, mostly due to rare earths. Reports in April indicated that Saudi Arabia's largest mining company Ma'aden was considering forming a rare-earths processing partnership with at least one foreign firm, including a U.S. firm. Ma'aden has been weighing a possible partnership with the U.S. based MP Materials or China's Shenghe Resources. Australia's Lynas rare earths and Canada's Neo Performance Materials are also being considered, according to sources. Saudi Arabia also increased its international mining presence by launching Manara Minerals, a joint venture with Ma'aden. The joint venture will invest in mining assets overseas. Manara's major international venture was to become a shareholder of Vale Base Metals, a $26 billion copper-nickel spinoff company.
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Conab raises its forecast for Brazil's crop of coffee, seeing an 'off-year record'
Conab, the national food agency, said that Brazil's total coffee production in 2025 is expected to reach 55.7 million 60-kilogram bag. Citing a recovery in robusta production, Conab increased its forecast by 7.5% over its January estimate. Conab stated that the new forecast was also 2.7% more than the 2024 crop. This represents an all-time record for the total output of coffee during an "off year" in the bi-annual arabica cycle which alternates years with higher and lower production. Conab stated that the higher forecast was mainly due a recovery of conilon crops - a robusta coffee variety. The statement stated that the good estimate of the total harvest was influenced mainly by the 28,3% recovery in average yields for Conilon crops. It added that robusta production is expected to rise 27,9% on an annual basis to a record 18,7 million bags. Conab stated that "this result is due to the consistent climate during the most crucial phases of the crops which has benefited positive blooming and a large quantity of fruits per cluster." In 2023, when Arabica was in its previous low year, total production should be 1.1% greater than it is today. Conab anticipates that yields will be higher by 4.1% this year than they were in 2024, at 30 bags/hectare. This is also higher than the 28 bags/hectare Conab projected in January. The area of production, however, is expected to grow 0.8%, to 2,25 million hectares (8.687 square miles). The agency reported that the production of Arabica coffee is expected to be 37 million bags. This represents a 6.6% decline from the previous crop, but it's still well above the initial estimate for this year (34.7 million). Reporting by Leticia Ficuchima and Isabel Teles, Additional reporting by Oliver Griffin and Editing by Gabriel Araujo Mark Porter and Margueritachoy
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Euronext rebrands ESG to aid European defense firms
Euronext, the European exchange operator, announced on Tuesday a number of measures designed to encourage investment in the defence industry. These include helping companies list their shares on stock markets or launch new bonds more quickly. The move comes after a push by the Trump administration to reduce the reliance on U.S. weapons and increase investment in the sector. Stephane Boujnah, CEO and Chairman of Euronext, said that the company was responding to "a new geopolitical system" by renaming ESG, which is an acronym for Environmental, Social and Government-driven investments, as Energy, Security and Geostrategy. Euronext released a statement saying that "European aerospace companies and defence firms have expressed an urgent need to heavily invest in their innovation, production and capacity to guarantee Europe's autonomy strategic for the next decade." Euronext announced that it would review the ESG indexes' methodologies to reduce the current exclusions of defence companies. According to the company, in line with its regulatory guidelines, "Euronext encourages ESG rating agencies" to limit their concept of controversial weapons to only those activities that are prohibited by relevant international agreements. The exchange reiterated its plans to launch a new set of indexes focusing on energy, geostrategy and security, which were unveiled in march. Indexes can be used to measure the performance of different market segments. Indexes can be used to create funds. ANALYSTS ARE SCEPTICAL Euronext announced that it will also support initial public offerings in the sector via its new IPOready Defence program, which is set to launch in the third quarter and receive funding from the European Union. Thyssenkrupp is currently in the process to spin off and separately list its warship division TKMS. It said that it would analyze the potential impact of the initiative. The report stated that "the geopolitical environment requires decisive actions to strengthen military readiness in Germany and Europe." There were very few details about the steps that would be taken to encourage more companies to go public, and some analysts were skeptical. Reg Watson, an ING analyst, said that while promoting defence IPOs was helpful, at the end of day the market is what determines whether IPOs are successful or not. Boujnah, during a conference call with journalists, said that Euronext can now reduce the time required to list European defense bonds to only two days. The announcements made on Tuesday are part of a larger geopolitical shift, as Europe tries to increase its military spending following the statement by U.S. president Donald Trump that Europe must be more responsible for its security. In March, Ursula von der Leyen, President of the European Commission, said that the EU can mobilize up 800 billion Euros ($906 billions) to boost its defence industry. European asset managers are reassessing the policies they have on defence investments as politicians and clients pressure them to relax restrictions and fund the race to arm. Euronext operates exchanges at Amsterdam, Brussels Dublin, Lisbon, Milano, Oslo, and Paris.
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Constellation Energy's first-quarter earnings misses estimates due to rising costs
Constellation Energy, the largest U.S. energy company, missed Wall Street's expectations on first-quarter profits. The major U.S. utility was hit by rising costs for building and operating its electricity infrastructure. Interest rates that are higher for longer can increase the cost of utilities and make it more costly to invest in electrical grid infrastructure. The net income of the company fell by around 87% compared to a year ago, and was $118 million for the quarter reported. Constellation Energy reported that interest expenses increased by nearly 15% compared to a year ago, to $146 millions in the quarter January-March. Total operating expenses increased by 18.5% to reach $6.34 billion. Company executives say that inflation is driving costs up. Constellation CEO Joseph Dominguez stated on a earnings call that "it's obvious that we're playing a new game in terms of cost." Dominguez stated that certain natural gas plant constructions, for instance, had tripled their cost in some cases over the past decade. Constellation Energy said it expects the U.S. Tariff to have a 1-2% impact on its capex plan for 2025-2026. This includes fuel. Constellation continued to move forward with its power deals for data centers. This included the reopening the former Three Mile Island Nuclear Reactor and the $16.4 billion purchase of Calpine, a privately owned natural gas and geothermal energy company. Constellation shares recovered in early trading, rising by about 6% after a drop of nearly 5% during premarket trade. Constellation executives stated that the company is on track to complete the deal by the end the year, despite the fact that the Calpine acquisition has been met with opposition from consumer groups based in the Mid-Atlantic region. Last month, it defended the planned acquisition of Calpine before regulators. According to data compiled and analyzed by LSEG, the Baltimore-based utility posted a profit adjusted of $2.14 for the three-month period ended March 31. This was below analysts' expectations of $2.22. Reporting by Katha and Sumit in Bengaluru; Laila Kearney, in New York. Editing by Krishna Chandra Eluri.
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WEC Energy reports higher first-quarter profits on strong demand for power
WEC Energy announced a 16.4% increase in its first-quarter profits on Tuesday, thanks to increased electricity consumption from residential, commercial and industrial customers. According to the U.S. Energy Information Administration, power consumption will reach new highs by 2025 and 26. This is due to AI, data centers, and residential and commercial consumers. WEC Energy’s natural gas deliveries to Wisconsin, excluding the natgas for power generation, increased by 15.5% during the first quarter. We Power and Wisconsin Public Service are the company's natural gas units. WEC Energy reported that residential power consumption increased by 5.5%, and retail sales rose by almost 3%. LSEG data shows that the company's operating revenue for the first quarter rose by 17.5%, to $3.15 Billion, compared to analysts' expectations of $2.82 Billion. WEC Energy's operating costs increased 18.5%, to $2.21 Billion. Interest expenses rose 16.1%. The company that provides electricity and natural gas to almost 4.7 million customers across Wisconsin, Illinois Michigan and Minnesota has reaffirmed their annual profit forecast. WEC Energy, based in Milwaukee, increased its net income to $724.2 millions, or $2.27 a share, during the first quarter of this year, up from $622.3, or $1.97 a share, one year ago. (Reporting and editing by Shounak dasgupta in Bengaluru)
Argentex's collapse on untested currency swings: from rebound to rescue
Argentex’s chief executive Jim Ormonde, and its chief financial officer Guy Rudolph bought shares of the London-listed forex broker in early April as the stock recovered from a March plunge.
Ormonde was appointed 18 months ago amid a sagging stock performance. In a statement on April 2, Ormonde said that Argentex "reset" its 2024 goals and is now "well-positioned to return to profitable expansion." The company's shares have risen more than 50% in the past year.
The company's liquidity position plummeted in a flash, and the financial markets reacted with a dramatic shift.
Argentex became one of the most visible corporate victims in a matter of weeks as a result of the market volatility caused by the global war on trade. IFX Payments bought Argentex for a fraction of its value, and both the CEO and CFO are gone.
Argentex declined comment. IFX, a UK-based company, did not respond to requests for comments.
The 2nd of April was also known as "Liberation Day" when U.S. president Donald Trump announced sweeping tariffs in return against a number of countries. This triggered increased volatility among trading firms, with currency markets moving widely.
The Swiss franc, the safe haven currency, surged by 7% against U.S. dollars in April. Meanwhile, Deutsche Bank's currencies volatilty index, which measures currency fluctuations, rose up to 28% and reached its highest level for two years.
Argentex has navigated past big market crashes such as the decline of the pound against the dollar, Brexit and COVID-19.
According to two people who are familiar with the firm, despite having done stress tests and scenario modelling, the company had not planned for the rapid devaluation of the dollar against many major currencies. The information they shared was confidential, so the company asked that their names not be used.
One person said that Argentex is most vulnerable to sudden increases in the value of the Swiss franc, the euro, and the pound against the dollar.
ZERO-ZERO LINES
Argentex stated in its annual report for 2024 that it "performs regular stress tests to ensure the group is able to meet its current and future obligations if there were a significant change to the market."
According to this person, Argentex, when the market moved in its favor, was exposed to cash calls by its liquidity providers. It also found itself unable to ask for margins from many of its customers due to its zero-zero line.
Barclays and Citigroup declined to comment. They are two of Argentex's liquidity suppliers.
According to an ex-forex broker, this business model is used by smaller FX brokers in London. It does not require the customer to pay initial margin or additional funds to cover intra-day volatility. Smaller brokers instead include margin costs into the price they charge for trading.
The person stated that Argentex has paid out more than 20 million pounds (26.65 millions) in the 12 days following April 3.
Argentex's full-year financial statements show that at the end December of last year, it had 18.4 millions pounds in cash.
In its financial statements, the company stated that its cash flow position fluctuates significantly from month to month as a result of margin calls and working-capital movements.
One Argentex employee, speaking under condition of anonymity as they were not authorized for public comment, said that "zero-zero contract aren't necessarily the devil." They said that the issue was "ensuring the business is healthy enough to accept those contracts".
One of the two individuals said that the reasons for Argentex’s liquidity crisis were complex. It lacked a hefty financial balance sheet like its larger rivals, and was unable adequately to hedge its positions. The company was attempting to simplify its relationships with liquidity providers and implement a Treasury function to manage their positions when the markets were thrown into chaos by Trump's Tariffs. They also said that they were trying to boost its cash position through new products.
In April, the company announced that it would launch its digital account and payment businesses this summer.
Argentex, which was founded in 2012, received its authorization as an electronic-money institution (EMI) by the UK Financial Conduct Authority in 2018. According to Argentex's website, a quarter are from the financial industry.
According to company filings from 2024, the family office of John Beckwith - one of Britain's richest financiers - backed the company in 2013. Beckwith's Pacific Investments Management held a 17% stake in the company before the deal was announced with IFX, according to LSEG. Pacific Investments refused to comment.
EMIs have flooded London in the past decade. They offer payment services and enjoy a lower regulatory burden than banks.
FCA regulations require EMIs keep counterparty and liquid risks in check, including the risk that a party may not fulfill its obligations.
In a February letter to all CEOs and directors of payment firms, including EMIs (Electronic Money Institutions), the FCA stated that it was still concerned about risks for consumers and integrity of the financial system. The FCA gave EMIs a deadline of March 2025 for them to test their operational resilience in the event of a shock.
When contacted for this article, the FCA declined comment.
Argentex's other regulators in Australia, Dubai, and the Netherlands declined to comment on this matter or didn't respond to any requests for comments.
FIELDING OF BIDS
The company requested that trading be suspended on April 22. It revealed that its near-term liquidity was being affected by margin calls related to its foreign currency forward and options book after the rapid devaluation of the U.S. Dollar in response to U.S. Tariffs and Government Spending Cuts.
The company announced that it would need "an immediate injection of cash to ensure the Company’s continued solvency."
The board had rejected two of the three takeover offers, including one from IFX Payments. The board sought a bridging deal with IFX Payments to meet its liquidity needs.
Argentex had announced on April 25 that it had reached a deal to buy IFX for approximately 3 million pounds. CEO Ormonde was leaving immediately.
Argentex shares began trading again this week and fell 91%. The company announced that it had received a loan of 20 million pounds from IFX, and that Rudolph, the finance chief along with other board members had resigned. ($1 = 0.7505 pounds)
(source: Reuters)