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Mitsubishi Materials and JX Partners to merge Mitsubishi Materials' refined Copper Unit into PPC
Mitsubishi Materials, JX Advanced Metals and its partners announced on Tuesday their intention to integrate Mitsubishi Material’s copper concentrates procurement into Pan Pacific Copper. PPC, Japan's largest supplier of refined metals, is owned by JX to the tune of 47.8%. Mitsui Mining and Smelting holds 32.2% and Marubeni 20%. In a joint announcement, the companies stated that they proposed an integration to create a framework for boosting profitability through consolidation of copper concentrate procurement and cost reductions, as well as streamlining their sales operations. The conditions for buying copper concentrates from mines have significantly worsened as the competition with overseas smelters has increased. The details have not yet been finalised but PPC plans to take over Mitsubishi Materials targeted business via a company splitting or a similar technique, then transfer it to PPC's new company. Copper smelters in Japan are facing tumbling treatment charges and refining costs (TC/RCs), a shrinking smelting profit margin due to a lack of concentrate and an increase in smelting capacity from China. JX, a top copper smelter in Japan with 450 000 tons of production capacity per year, is likely to cut production by thousands of tons compared to earlier plans in fiscal 2025. The company will also unveil a roadmap by March for reducing smelting capacities. Mitsubishi Materials, a rival company, warned of a reduction in copper concentrate production as well. Last month, Japan and Spain issued a rare statement together expressing concern over the tumbling TC/RCs and warning that both smelters as well as miners could not develop sustainably in current conditions. (Reporting and editing by Louise Heavens, Yuka Obayashi)
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The state reserve agency reports that Bulgaria has enough gasoline to last a month, despite the US sanctions.
The chairman of Bulgaria's state reserves agency announced on Tuesday that the country has only one month's worth of gasoline left, as it prepares for the impending U.S. sanction against Russia's Lukoil. Lukoil owns Bulgaria's biggest oil refinery, and the majority of its storage and pipeline infrastructure. Last month, the U.S., Britain, and France imposed sanctions against Lukoil, and Rosneft - Russia's largest oil companies - over Moscow's conflict in Ukraine. This threatened their operations, which still stretch across Europe. The U.S. sanction, scheduled to start on November 21, has raised concerns over fuel supplies in Bulgaria ahead of winter, where Lukoil operates the Burgas refinery and hundreds of petrol station, an important part of its foreign business empire. Reservas de Gasoline e Del de 35 jours y 50 days. Assen Asenov, quoted by Bulgarian BTA as saying that Bulgaria has enough diesel to last for 50 days and 35 days worth of gasoline. Energy analysts say that Bulgaria has more crude oil and oil products in other countries but must import them before the Lukoil pipeline network is sanctioned. Martin Vladimirov of the Centre for the Study of Democracy, Sofia, the director of the Energy and Climate Program, said that 50% of the ready fuels and some of the crude are located in other EU nations. The government must activate these contracts as soon as possible. Since the announcement of the sanctions last month, Bulgaria has taken steps to ensure supplies. The ban was temporarily imposed on the export of certain fuels to EU members, including aviation fuel and diesel. Last week, the country's parliament passed a law allowing the government to buy the refinery from the U.S. and then sell it on to a buyer to protect the plant against sanctions. The Bulgarian authorities carried out inspections at the Burgas refinery this week and implemented security measures. They described it as a way to protect critical infrastructure. (Reporting and Editing by Angeliki Koutantou; Conor Humphries, Conor McAllister)
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CEZ CFO: Lower prices will impact 2026 results. No comment on possible buyback
Martin Novak, CEZ's Chief Financial Officer, said that a decline in electricity prices next year would reduce revenues and profits for the main Czech electric producer CEZ. Novak stated that CEZ's bottom-line will be helped by an expiring windfall tax at the end this year. However, the easing of prices for gas and electricity across Europe will have a negative impact on revenue. CEZ reported that on Tuesday, it had sold 79% of the domestic production planned for 2026 at a price of 94 Euros, a sharp drop from 121-124 Euros this year. It also presold 52% of production in 2027 at 83 Euros. Novak, in an interview with Bloomberg online, said that there is no doubt about the fact that profits will likely be lower because of the decline in prices. He said that the company's dividend payout ratio of 60-80% would still allow them to proceed with planned investments. This is especially true for gas heating and electricity plants, which depend on public assistance mechanisms. Novak refused to comment on the intention of a newly-formed group led by the populist ANO to buy out minority private shareholders who hold 30% of the shares in CEZ, the majority-state-owned company, through a buyback program, saying that no concrete plan had yet been developed. (Reporting from Jan Lopatka).
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Stocks increase as US shutdown ends; tech niggles persist
The dollar held steady on Tuesday as global shares rose, boosted by the relief that the U.S. shutdown will soon be over. However, gains were moderated by persistent concerns about the valuations of the technology sector. European shares rose early in trading. The gains were led by London's FTSE 100 which reached record highs. This was due to the pound falling after British employment data gave investors greater confidence that the Bank of England would cut rates next month in order to boost growth. On Monday, the U.S. Senate approved a deal that will restore funding to the U.S. government after its longest-ever shutdown. The U.S. Senate will release an array of economic data on everything from jobs to industrial output, which could cause some volatility in the markets. DATA DELUGE IS COMING "Obviously, there's still a lot to be done about the shutdown." "The House must pass it, and given the arithmetic of that House, this seems pretty certain," Investec Chief Economist Philip Shaw said. He was referring to Republican majority in House of Representatives. "The data flood is going to be an enormous market event." He said that one question to ask is whether data and analysis from the Fed are in line with each other. Jerome Powell, the chair of the Federal Reserve, warned against making assumptions about a possible rate cut in December, not least due to uncertainty regarding key employment and inflation data. STOXX 600 rose 0.6%, despite a 0.1% decline in S&P and Nasdaq Futures. This was against the backdrop of a weaker session in Asia. SHUTDOWN COMPROMISE CLEARS SENATE The agreement on the shutdown is now headed to the House. Speaker Mike Johnson said that he would pass it by Wednesday, and then send it to President Donald Trump for him to sign. Prediction markets such as online Polymarket have almost fully priced-in for the end week. According to UBP economist Carlos Casanova, the shutdown of nearly six weeks will likely have already reduced fourth-quarter GDP by between 0.4-1%. The market, I believe, is repricing the rebound one quarter in advance. The Nasdaq closed the day with its biggest daily gain since the middle of October, while the S&P 500 posted its biggest percentage gain in a single day since mid-October. A basket of U.S. tech companies with AI links rose 2.8% on Monday, the largest one-day gain since May. SoftBank Group in Japan, which released its quarterly results on Monday, revealed that it sold its entire stake of Nvidia in October for $5.83billion. STERLING WILT The pound had the worst performance on the currency market against the dollar. The pound fell nearly 0.4%, to $1.3128. Data showed that British wage growth had slowed, and unemployment increased in the three-month period ending September. Separate data also showed that consumer spending in October had slowed. The figures strengthen the argument for the BoE cutting rates next month. But they also reveal the uncertainty that is weighing down on British households, businesses, and the economy ahead of the annual budget due from Finance Minister Rachel Reeves on November 26. It is widely expected that the budget will contain even more tax increases. The Japanese yen reached its lowest level since February at 154.49 per dollar before paring back some of this loss to trade at 154.355 during European hours. Gold was comfortably above $4100 per ounce. Copper futures rose by 0.5% to $10.851 a ton, and Brent crude futures fell by 0.25% to $63.99 a barrel. Veterans Day was a day when the U.S. Treasury Market was closed. (Additional reporting in Singapore by Tom Westbrook; editing by Kim Coghill, Alex Richardson and Alex Richardson).
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EU accepts relaxation of green rules for farming subsidy reform
EU member states have reached an agreement with the European Parliament on a temporary overhaul of EU farming subsidies. The environmental standards will be weakened as part of plans for reducing regulations and paperwork. The EU will increase payments to smaller farmers, but they are exempted from the baseline requirements that tie their subsidies to environmental protection. In a late-night statement, Denmark's Minister of European Affairs Marie Bjerre stated that the move would help boost the competitiveness of the agricultural sector across Europe. Campaigners claim that the changes will make farmers more susceptible to climate change. In May, the EU Commission announced proposals to overhaul its policies after months of protests from farmers against issues such as strict EU regulations and low-cost imports. The EU Commission responded by reducing some of the green conditions that were attached to farm subsidies. It went even further with its new plans for Common Agricultural Policy. The Commission estimates that the revamp could save farmers as much as 1.6 billion Euros ($1.87 billion per year), while on-site inspections on farms would only be allowed once a year. Around 387 billion euro is the value of CAP, which represents around a third in total budget for 2021-2027. These plans are part of the "simplification-omnibus" EU proposals that aim to reduce paperwork and policies for businesses trying to compete against China and America, where President Donald Trump has aggressively cut regulations. Now the EU Council and European Parliament must formally adopt the provisional agreement.
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The Russian rouble is flat against the dollar after a spike in October foreign exchange sales
The Russian rouble is stable against the U.S. Dollar and weaker than the Chinese yuan after the central banks reported an increase in exporters' foreign currency sales last month. Some analysts attribute this to U.S. sanctioned. The rouble traded at 81.20 dollars in the over-the-counter market and at 11.43 yuan at the Moscow Stock Exchange, which was down 0.5% at 0840 GMT. The central bank of Russia announced Monday that foreign currency sales for October were up 68% compared to a month ago, reaching $8.2 billion. The central bank attributed the increase to exporters repaying their foreign debt. In a report published monthly, the central bank stated that "the rouble was stable in October, fluctuating within a range seen over the last six months". Some analysts attribute the increase to new U.S. Sanctions on Russian oil giants Rosneft & Lukoil. Finam, an Russian financial services firm, estimates that up to 35% domestic foreign currency sales are attributed to them. Analysts at Alor, an investment brokerage, stated that "we believe this is due to the U.S. sanctions; exporters are afraid of difficulties making payments and bringing money into Russia. They also try to buy relatively cheap bonds and to invest in deposits with high interest rates." On November 21, the U.S. sanctions against Rosneft, Lukoil and other oil companies will come into effect. Finam analysts predict that foreign currency sales may decline between 10% and 20% by early December. The rouble is supported by high domestic interest rates. Slower imports, and the continued sales of forex by the government. Many analysts expected the rouble to weaken, but its strength has surprised them. Goldman Sachs analysts stated that the rouble was surprisingly strong despite the erosion of the current accounts surplus. They suggested that carry trades were also supporting the currency despite strict currency controls. Goldman stated that "we now believe the rouble will remain well supported and the external funding constraint may be less restrictive than we previously thought." (Reporting and editing by Thomas Derpinghaus; Gleb Bryanski)
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Iron ore prices are on the rise amid new stimulus hopes and a softening of demand
Iron ore futures were traded within a narrow price range on February 2, as investors weighed the prospects of fresh stimulus coming from Beijing in the next month, against signs of a softening in demand in China's top consumer. The day-trading price of the most traded January iron ore contract at China's Dalian Commodity Exchange was 0.2% higher, closing at 763 Yuan ($107.12). Iron ore benchmark on the Singapore Exchange for December fell by 0.56%, to $101.6 per ton at 0813 GMT. Steven Yu, senior analyst at Mysteel, explained that the recent price drop caused a divergence in the market outlook. This led to a consolidation. Yu stated that "bulls" believe the annual decline in crude steel production year-to date has reduced the pressure to cut production in the remainder of the year. Also, they hope for stimulus measures which will be announced at the politburo in December. Official data released last month showed that China's crude-steel output dropped 2.9% on an annual basis in the nine-month period ending September. The October figures will be released on Friday. Beijing announced in March that it would restructure the vast steel industry by cutting output. China has set a cap on the growth of crude steel production annually since 2021 in order to reduce carbon emissions. Mysteel’s Yu stated that bears are betting on a lower demand, as some mills continue reducing production. Steelmakers are cutting back production due to a decline in steel demand, and high raw material costs. Coking coal, coke and other steelmaking components fell by 3.81% and 3.66% respectively. The majority of steel benchmarks traded on the Shanghai Futures Exchange suffered losses. Rebar fell 0.33%, steel prices dropped 0.84% and stainless steel fell 0.84%. Hot-rolled coils rose 0.03%. $1 = 7.1230 Chinese Yuan (Reporting and editing by Amy Lv, Lewis Jackson and Subhranshu Shu).
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The Gulf markets are gaining on US rate cuts
The Gulf's major stock exchanges rose early on Tuesday. This was aided in part by the rising expectations of a Federal Reserve rate cut in December and signs that the U.S. shutdown may be nearing its end. The U.S. economy lost jobs last week. Retail and government sectors were the main culprits. A survey released on Friday showed that the U.S. consumer's sentiment had fallen to its lowest level in 3-1/2 years at the beginning of November, due to concerns about the effects the shutdown would have on the economy. The shutdown has delayed important economic metrics including the non-farm employment report. Saudi Arabia's benchmark stock index rose 0.1%. This was helped by Al Rajhi Bank, which rose 0.7%, and Dar Al Arkan Real Estate Development (which jumped 4.9%). Both are on track to extend their gains after a sharp rise in quarterly earnings. Kingdom Holding, the investment company controlled by billionaire prince Alwaleed Bin Talal, saw its shares jump 3% after a 129% rise in profit for the third quarter. Saudi Aramco, the oil company, fell by 0.2%. In Asian trading, oil prices fell as concerns about oversupply outweighed the uncertainty surrounding U.S. sanctions against Russian oil giants Rosneft & Lukoil. Saudi Advanced Industries fell 6.4%, its largest decline since August. This was after it reported a 99% drop in the third-quarter profits. Dubai's main stock index rose 0.5% with Emaar Properties, a blue-chip developer, rising 1.9%. According to CME Group’s FedWatch tool, traders are pricing in an approximately 64% chance that the Fed will reduce rates by 25 basis point next month. The U.S.'s monetary policy changes have an important impact on Gulf markets where the majority of currencies are pegged with the dollar. Abu Dhabi's Index was flat. The Qatari Index rose 0.4% led by the 1.5% increase in Qatar Islamic Bank. (Reporting from Ateeq Sharif in Bengaluru, Editing by Thomas Derpinghaus.)
China's spy agency targets foreign attempts to "steal" rare earths
China's Ministry of State Security said Friday that foreign spy agencies have tried to "steal", rare earths. It also pledged to crackdown on infiltration and espionage targeting its vital mineral sector.
The spy agency claimed that foreign intelligence agencies and their agents colluded with domestic lawbreakers to steal rare earth items from China. This posed a serious risk to China's security.
The ministry reported that it had discovered attempts by an unknown country to circumvent export restrictions through forging labels, falsifying manifests and transshipping, which involves products being routed via third countries to their final destination.
Exclusively this month, it was reported that large amounts of antimony (a metal used to make batteries, chips and fire retardants) appeared to have been shipped into the United States through Thailand and Mexico following China's ban on U.S. exports.
In retaliation to U.S. Tariffs, China added several rare-earth magnets and other related products to its export restrictions list early in April.
Due to shortages, some automakers outside China were forced to temporarily suspend production.
China's rare-earths exports increased 32% from the previous month in June, a sign that the agreements made between Washington and Beijing last month to open up the flow of metals have been successful.
Nvidia’s plan to resume sales of its H20 AI chip in China was part the rare earth talks. (Reporting and editing by Kate Mayberry in Beijing)
(source: Reuters)