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Sandvik, a Swedish company, aims to save $103 million annually
Sandvik, a Swedish manufacturer of metal-cutting equipment and mining equipment, said it aimed to save 1 billion Swedish crowns (about $103.3 million) annually by 2030. The company made the announcement in advance of its Investor Days on Tuesday. Sandvik said it will split its Manufacturing and Machining Solutions into two separate business areas and plan to implement restructuring measures within the Machining Business throughout 2025-2030 in order to improve its geographical footprint and increase its regionalisation. In 2024, Manufacturing and Machining Solutions will account for about 40% of Sandvik’s revenue. In recent quarters, it has been hit by a weak demand for its products in Europe and the automotive industry. Sandvik stated that the restructuring will cost 3 billion crowns in five years, due to consolidation of sites and other measures. Sandvik announced its long-term financial goals ahead of a two day capital markets event held in Sweden. These included a 7% growth in revenue and an adjusted operating profit margin (EBITA), which ranged from 20% to 22 %. After the announcement was made, its shares increased by about 0.9%.
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Sources say that US-led peace negotiations could increase Rwandan processing Congo minerals
Three sources said that Congolese minerals, such as tungsten tantalum, and tin which Kinshasa accuses Rwanda of exploiting illegally, could be legitimately exported to Rwanda under the terms of the peace deal being negotiated between the U.S. Kinshasa sees the pillage of its mineral wealth in eastern Congo as the key driver for the conflict between their forces and the Rwanda-backed M23 rebellions that has intensified ever since January. Kinshasa accuses Kigali smuggling over the border tens or millions of dollars of minerals each month, to be sold by Rwanda. Massad Boulos told the media earlier this month that Washington wants a peace deal between the two parties to be signed by the end of the summer. This agreement will also include mineral deals aimed at bringing Western investment worth billions of dollars to the region. He told X last weekend that the U.S. provided a first draft of a contract to both sides. However, its content has not been revealed. According to two diplomatic sources, and one U.N. official briefed on the matter by U.S. officials, the negotiations may lead to the refinement and marketing of minerals from what is now artisanal mine zones in eastern Congo from Rwanda. One of the diplomats stated that "their (Washington) point of views is simple: if Rwanda can legitimately profit from Congo's mineral through processing, then it will be less inclined to occupy and plunder their neighbour's minerals." "Industrialization for Congo would increase revenues, improve the traceability and combat the armed group that lives off the miner's wages." The foreign ministry did not answer questions posed by a government spokesperson from Congo. It has been long-established that the country wants to shift away from raw exports to local processing. Unnamed Congolese official said that no cooperation in minerals would be possible without the withdrawal by Rwandan troops, and "their proxy", which is a reference to M23. M23 controls more territory now than ever before in eastern Congo. The official added that Rwanda must also respect "our sovereignty, which includes our minerals." The negotiations may bring Rwanda a large inflow of money that will help clean up a sector of the economy that has been largely illegal. For its part, the U.S. would be able secure deeper access for itself and allies to Congolese minerals assets, which are dominated by China. In a statement released by the U.S. State Department, a spokesperson stated that Congo and Rwanda, in a joint declaration signed last month in Washington, had committed to creating transparent, formalized and licit end to end mineral value chains that linked both countries. investors." Boulos said last week that U.S. representatives had spoken with "probably 30" U.S. companies about "doing businesses in Rwanda in mining," including downstream processing. Separately, he said that the U.S. International Development Finance Corporation (an agency tasked with mobilising capital for U.S. national security and foreign policy goals by offering debt financing) would "provide full assistance on these transactions and investment". Companies that take the plunge in this region are at risk of losing money due to the long history and violence of the area. HEART CAUSES Sources said that the minerals projects will not stop a conflict which dates back to the Rwandan genocide of 1994. A mining agreement will not bring peace. Another diplomat stated that these projects would take three, five, or ten years. There are immediate issues and root causes which need to be addressed. Congo, the U.N., and the U.S. accuse Rwanda repeatedly of profiting illegally from the exploitation of Congolese minerals resources. Kigali strongly denies these allegations. Four years ago, an attempt to promote deeper official mining collaboration between Rwanda and Congo failed. In June 2021 the two sides signed a memorandum relating to the joint exploitation of Congolese Gold by state-owned Sakima, and private Rwandan company Dither. Kinshasa, however, suspended the agreement in June 2022 citing Rwanda’s alleged support for M23 as well as the rebel group’s capture of Bunagana, the strategic border city. Rwanda has denied supporting M23, but acknowledged deploying "defensive actions" in eastern Congo to combat Rwandan Hutu militas. Analysts claim that the Democratic Forces for the Liberation of Rwanda (DFLR), the group most often cited, is no longer a serious threat. According to a diplomatic source, Kinshasa was not seen as a trustworthy negotiating partner by Kigali. They said that the collapse of Sakima's deal was a concern for Rwandan officials. William Millman is an independent consultant in the tantalum and niobium industries who has visited both mines. "So, unless you have somebody with a large club, like the United States of America, they won't honour agreements." Reporting by Sonia Rolley and Daphne Psaledakis, both in Paris; Additional reporting from Andrew Mills and Jan Harvey in Doha.
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Orsted shares benefit from Equinor's US Offshore Wind win
The shares of Orsted, an offshore wind developer in Denmark, rose by 15% on Tuesday following the U.S. Administration's revocation of an order to stop work on a similar project undertaken by Equinor. This eased concerns about the Danish company’s U.S. development projects. Equinor announced late on Monday that the Trump administration lifted an order to stop work on its Empire Wind project offshore wind farm in New York. This was a relief for both the Norwegian company, and offshore wind energy in the United States in general. Equinor's share price, which is largely dependent on oil and natural gas, rose 1.5% to 0948 GMT. Orsted shares rose 15.1%. Equinor owns a 10% stake of Orsted. "We see a positive read-across here for Orsted as the Empire Wind stop-work order significantly raised market concerns about permitting/cancellation risks around Orsted's under-construction portfolio," analysts at Jefferies said in a note. They added that these concerns played a major role in reducing Orsted's value by 40%, or about $10 billion since the U.S. elections. Orsted is constructing the Revolution Wind project and Sunrise Wind project off Rhode Island, New York and Connecticut. Analysts at JPMorgan stated that "the reversal last night of the stop-order came as a huge surprise and will probably result in a very significant outperformance for Orsted today. This is exacerbated by short positions currently on the stock." Orsted still has many other problems to deal with. JPMorgan stated that this includes tariffs and cost concerns in the U.S., as well as the recent suspension of the British Hornsea 4 development project. (Reporting and editing by Nora Buli)
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India's Hindalco exceeds its quarterly profit forecasts on the back of rising commodity prices
Hindalco Industries reported a fourth-quarter profit that was above analyst estimates on Tuesday. The surge in commodity price is largely responsible for this. The company's net profit for the three months ended March 31 rose to 52.83 trillion rupees (618.05 million dollars). According to LSEG data, analysts had predicted, on average 44.97 billion rupies. Aditya Birla Group's company has benefited from the higher prices of copper and aluminium. During the quarter, benchmark prices for aluminium and Copper rose by 17% and 10% respectively. Mining companies tend to see their margins and selling prices increase as commodity prices rise. Hindalco’s copper business recorded a 9% increase in revenue, reaching 145.65 billion Rupees. Novelis, the unit that accounts for 61% Hindalco’s total revenue, announced a 13% increase in net sales during the quarter under review earlier this month. This boosted its parent’s revenue by 16%. Analysts see Novelis' adjusted earnings (EBITDA), which is the company's earnings before interest taxes, depreciation and amortization (before any other expenses) before these, as an improvement. Due to the uncertainty surrounding President Donald Trump's tariffs, the U.S. unit did not provide an outlook on margins and volume for the current financial year. Analysts said that Trump's 25% tariff on aluminum imports will have an impact of $40 million on Novelis first quarter earnings for the current financial period. ($1 = 85.4790 Indian Rupees) (Reporting and editing by Janane Vekatraman in Bengaluru)
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Gold prices fall as investors wait for more information on US tariff policy
The gold price fell on Tuesday, as the markets stabilized after Moody's unexpected downgrade of U.S. debt. Investors then focused their attention on further developments in Russia and Ukraine peace talks, and U.S. trade policy. As of 0836 GMT, spot gold was down by 0.2% to $3,223.69 per ounce. U.S. Gold Futures fell 0.2% to $3226. Ricardo Evangelista is a senior analyst with brokerage firm ActivTrades. He said that traders are focusing on the optimism surrounding the US-China Trade and the renewed hope for peace in the Russia/Ukraine conflict. Investors seem to have largely ignored the recent downgrade in the US credit rating from Moody's. Gold is likely to fall due to an increase in risk appetite, but its downside is limited by the lingering uncertainty. Moody's reduced the U.S. credit rating from "Aaa to "Aa1", reducing risk appetite. Gold, a safe haven asset, rose more than 1% the previous day. Donald Trump, the U.S. president, said Monday that Russia will begin negotiations with Ukraine immediately to reach a ceasefire. As they navigated an uncertain economic climate, U.S. Federal Reserve officials carefully considered the implications of the downgrade and the unsettling market conditions. Later in the day several Fed officials will be speaking, which could provide further insight on the economy and central bank policy. The markets are pricing in a rate cut of at least 54 basis point this year. "The gold prices are building up into a superzone over $3,200 and as long the price remains above that threshold, we will start to see more recoveries," said Carlo Alberto De Casa. Other metals, such as spot silver, rose 0.9% to $32.33, platinum increased 0.9% to $1,000.35, and palladium fell 0.1% to $974.18.
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Prices of palm oil will range from 3,750-4,050 Ringgit before recovering amid trade tensions
The Malaysian Palm Oil Council said that the price of crude palm oil is expected to fluctuate between 3,750 and 4,050 Ringgits in May, before recovering gradually amid the volatility on the vegetable oil markets and energy markets. MPOC stated that the increased volatility on the market was due to the escalating tensions in trade between the United States, China and OPEC. It said that the global vegetable oil demand will shift from June to September in favor of palm oil, which would limit further downward pressure on prices. It added that the reduction of palm oil import duties by India will enhance palm's competitiveness, support increased import volumes and potentially reduce demand for soybean oils. MPOC reported that the palm oil's competitiveness on China's domestic markets has improved since six months ago. The price difference between palm olein (palm oil) and soybean oils had been reduced to only $51 by May 16. This improved price parity will drive a recovery of Chinese palm oil imports in particular during the peak summer season demand period in June", it said. MPOC explained that the increased production of palms in April was due to the delayed harvesting caused by the monsoon. They also said that the production is expected to increase moderately from May to September due to the high basis effect. The report said that the decline in exports in March and April was a major factor in the rise in stock. The ASEAN region saw an 8% increase in exports. However, exports to all other regions decreased. The MPOC stated that the compressed margins in the biodiesel industry were limiting the global biodiesel blend to the minimum mandated levels, thereby dampening the overall demand. It said that U.S. production of biodiesel has declined, and the consumption of biodiesel feedstocks has also fallen sharply. It added that Indonesia's biodiesel use in March and April was on track to reach the country’s annual target of 13,7 million tons. (Reporting and editing by Ashley Tang)
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Clarios, a battery manufacturer, views the sites of a $1 billion critical minerals plant in the US
Clarios, the battery manufacturer owned by Brookfield, has been scouting sites for a critical minerals recovery and processing plant worth up to $1 billion in the U.S. Three states are being considered, according to a statement released on Tuesday. Clarios, in a press release, said that the plan was enabled by executive orders issued recently and the federal tax credits for advanced manufacturing. It is part of a strategy of the battery manufacturer to increase the supply of essential minerals within the U.S. The company has conducted preliminary site evaluations and is evaluating Indiana, Texas, and Utah for possible investment locations. Clarios CEO Mark Wallace said, "We are excited to announce our next step in increasing our investment in the United States." The plant will be able to extract antimony, as well as other essential minerals, from recycled materials. Antimony is a critical element for the production of night vision goggles and infrared sensors, as well as precision optics. However, it's in short supply outside China since China implemented export controls in September. This has fueled a rise in the global price of this strategic metal. The administration has stressed the importance of minerals to national security and growth in economics, as highlighted by recent executive orders that aim to increase supply and reduce dependence on foreign sources," said it. Clarios supports these national security goals and contributes to the resilience of U.S. Supply Chain by investing in mineral processing and recovery. Clarios canceled its plans to launch an initial public offering in the United States in January. (Reporting and editing by David Evans; Melanie Burton)
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ConocoPhillips CEO: US shale will plateau if current oil prices remain in range.
ConocoPhillips CEO Ryan Lance stated on Tuesday that U.S. shale production will plateau if oil prices stay where they are and will begin to decline when oil prices reach $50 per barrel. "The breakeven has probably not moved much." "I think that long-term if oil prices are in a range where they're comfortable - perhaps in the 70s or 65-75 - we will still see modest growth from the U.S.," Lance said, speaking at Qatar Economic Forum. We see a plateauing of production in the U.S. by the end of this year, unless we have a technological breakthrough. Don't bet on our industry. Qatar's Energy Minister Saad Al-Kaabi, who spoke alongside Lance at the event, said that if oil dropped below $60 per barrel, investment would decline and global energy requirements would not be met. He said that Qatar, which is one of the world's largest LNG exporters, "was not worried at all" by a glut in the supply of liquefied gas (LNG). Reporting by Andrew Mills, Federico Maccioni and Nayera Saba. Writing by Louise Heavens and Kirby Donovan.
Australia's central Bank cuts rates to a 2-year low of 3,85%
The central bank of Australia cut its cash rate on Tuesday by 25 basis points, to a new two-year low. It cited a bleaker global outlook as well as a cooling in domestic inflation. However, it remained cautious about further easing.
The Australian dollar dropped 0.4% to $0.6429. Three-year bond futures increased 2 ticks to $96.37. Swaps suggest a total of 57 basis point easing by the end the year.
The Reserve Bank of Australia concluded a two-day meeting by stating that the risks of inflation rising had decreased, while the international economy was expected to be affected by the developments abroad.
The markets had already priced in an easing, given the slowdown of inflation at home as well as a darker outlook for global trade following the announcement last month of U.S. import tariffs.
The board stated that "Inflation has fallen into the target range and downside risks have decreased as the international economy is expected to be impacted by the developments."
The board believes that this will reduce the restrictions on monetary policy. The board is still cautious about the future.
In the first quarter, headline consumer price inflation was unchanged at 2.4%. A key measure of core inflation (the trimmed average) slowed down to 2.9% and returned to the RBA target range of 2%-3% for the very first time since the end of 2021.
The global landscape has dramatically changed since the RBA's last meeting in April.
The global trade war of U.S. president Donald Trump has upset financial markets and disrupted business plans. Trump has imposed blanket import duties of 10% on the rest the world. After a tariff showdown that threatened global recession, Trump and China agreed to reduce the high duties placed on their goods for 90-days.
Australia exports a lot of resources to China. Tariffs on China's economy, the second largest in the world, could slow down its growth and reduce demand for commodities like iron ore.
The data flow has been mixed at home. Consumer spending is not rebounding as expected. The labour market remained strong, though, and the unemployment rate stayed low at 4,1%, where it has been for more than a year.
The first quarter saw a rise in wages, but this was mainly due to increases in government salaries and shouldn't lead to a spiral of rising prices.
The RBA said on Tuesday that global trade tensions would have a cascading effect, resulting in lower inflation and higher unemployment. This was even if interest rates were not cut as much as the markets had expected.
(source: Reuters)