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EU wants to strengthen its defences against economic threats such as China's export restrictions
The European Commission announced plans Wednesday to strengthen the European Union's resilience to threats like a shortage of rare earths by enhancing existing trade measures, and utilizing new defenses to boost economic security. The EU executive has outlined what it calls an "economic security policy" for the bloc of 27 nations, which are battling U.S. tariffs and Chinese regulations that have stifled supplies of rare earths and chips. The bloc is keen to maintain its position as a global leader in manufacturing, but it risks falling behind China and the United States when it comes to new technologies such as AI and batteries. The Commission is looking to work more closely with EU member states and businesses to examine EU supply chains, the rules for inbound investments, its defence and aerospace sectors, as well as its strengths in new technologies, critical infrastructure, and its ability to develop. Maros SEFCIOVIC, Trade Commissioner, said: "We are starting the process... because we have been tested a lot this year and I don't think it will stop on January 1st." "We have started the process... because we've been tested a great deal this year and I don’t think that will stop on January 1st." Sefcovic stated that the Commission will look at ways to accelerate the implementation of existing trade actions, such as antidumping and antisubsidy duty, which can currently only be used after a year-long investigation. The new measures could be designed to counter unfair competition and market distortions including overcapacity. They would encourage companies in high-risk industries to have multiple suppliers and set preferences for EU-based firms to be used in public procurements in strategic sectors. The EU will also prioritize support for EU companies that are reducing their foreign dependence in key sectors or technologies. It will prevent "high risk entities" from benefiting from EU funding and improve inbound investment screening. Sefcovic stated that the EU will likely learn from Japan's response to China's suspension of rare earth exports due to a territorial dispute in 2010, which was to diversify, recycle more, build reserves, and form partnerships. Stephane Sejourne, vice president of the Commission, said that some diversifications measures could be made mandatory by the EU. He said that European companies should stop buying Chinese products for reasons of economic safety, just as Japanese, U.S. and Indian companies do. (Reporting and editing by Frances Kerry, Julia Payne, Philip Blenkinsop)
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Zelenskiy calls for urgent renewal of the supervisory board in the defence sector
The Ukrainian president Volodymyr Zelenskiy announced on Wednesday that he has urged the Minister of Defence Denys Shmyhal, to renew supervisory boards within the defence sector urgently in order to restore investor confidence following a recent corruption scandal. Ukraine is currently engulfed in a scandal involving a $100 million kickback scheme, allegedly perpetrated by senior energy officials. A former business partner of Zelenskiy has also been suspected of being involved. This is the biggest scandal in Ukraine since Zelenskiy was elected president of Ukraine on a mission to eradicate corruption. Kyiv must eliminate corruption and strengthen the rule of law in order to be eligible to join the European Union. The Ukrainians view this as a crucial requirement for their future, as they fight off Russian invasion. Zelenskiy stated on Telegram that "management and oversight of the internal processes within companies is carried out by supervisory boards, and this has to be 100% guaranteed." After the termination of the majority of supervisory board powers today, he said that the formation of supervisory boards for state-run energy firms must take place by the end this month. Last month, the government announced that they planned to appoint by the end this year a new board of directors at Energoatom - the state nuclear firm at the center of a scandal involving corruption. Zelenskiy told Prime Minister Yulia Shvyrydenko that the pace of transformation was satisfactory. However, he said there must be full transparency within management. "New members must be appointed to the Supervisory Boards in December, following a fair and transparent procedure." The Ukrainian energy sector is dominated by state-owned companies, such as Naftogaz (oil and gas company), Ukrenergo (power grid operator), and Energoatom (nuclear energy company). (Reporting and writing by Yuliia Dyesa, editing by Andrew Heavens, Timothy Heritage, and Pavel Polityuk)
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Sources: Former Pornhub owner is interested in Lukoil's assets
Two sources with knowledge of the matter claim that Bernd Bergmair (former majority owner of adult entertainment group Pornhub) has approached the U.S. Treasury to buy international assets from sanctioned Russian oil giant Lukoil. As part of its efforts to press Moscow to end the war in Ukraine, the U.S. imposed Sanctions on Lukoil - Russia's largest private oil producer. Exxon Mobil, Chevron, and other oil giants have approached U.S. authorities to get permission to speak to Lukoil. Bergmair, through his lawyer, declined to say which assets he is interested in. He also refused to confirm whether he has already approached Lukoil or if he is part of a consortium. He said: "Clearly, Lukoil International GmbH is a good investment. Anyone would be lucky to own those assets." "I do not comment on potential investment as a matter. Due to the sensitive nature of the issue, the sources refused to identify themselves by name. Since the U.S. Treasury gave companies permission to start talks with Lukoil last month, interest in Lukoil’s foreign assets is growing. Treasury cleared talks until December 13 and any deal would require approval. Lukoil International GmbH is based in Vienna and owns refineries throughout Europe, oilfields across Kazakhstan, Uzbekistan Iraq, Mexico, as well as hundreds of retail fuel station locations around the globe. According to 2024 filings, the assets are estimated at $22 billion. When asked whether Bergmair spoke with the Department, a spokesperson for U.S. Treasury declined to comment. Bergmair was a Goldman Sachs investment banker who moved to private investments in the 1990s. He was the majority shareholder of MindGeek, a Luxembourg-based company with websites such as Pornhub and RedTube. It was sold to a Canadian firm in 2023, for an undisclosed amount. The Sunday Times Rich List, which ranks Britain's richest in 2021, estimated that his wealth was at least PS1.2billion.
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As markets wait for US data, gold and silver prices ease from record highs.
The gold price remained stable on Wednesday, as traders awaited U.S. Economic indicators to gauge Federal Reserve policy direction. Silver prices also declined from their record highs. After losing over 1% the previous session, spot gold dropped 0.1% at 1128 GMT to $4203.58 per ounce. U.S. Gold Futures for February Delivery were up 0.3% to $4,234.60. Ole Hansen is the head of commodity strategy for Saxo Bank. He said, "Pay attention to key U.S. statistics that could cement expectations about a rate cut in December which would be supportive of metals." Investors await the U.S. ADP November employment figures at 13:30 GMT, and Friday's delayed Personal Consumption Expenditures data for September. Brokerages are projecting a policy easing as a result of weaker U.S. data and dovish Fed signals. CME's FedWatch shows that there is now an 87% probability of a rate reduction next week. Gold that does not yield a return tends to do well when interest rates fall. Silver fell 0.5%, to $58.15 per ounce. It had previously reached a record-high of $58.94. Hansen said that silver is supported by tight supply, momentum buying, and short-covering following last Friday's breakout above $54.50. He added that overbought condition posed a risk to bulls in the near term. Silver, a precious metal and an industrial metal, has risen by 101% in the past year. Its inclusion on a U.S. critical mineral list is also a factor. This year, gold has gained 60%. Palladium fell 0.5%, while platinum rose 0.6%, to $1.647.75 per ounce. Reporting by Pablo Sinha, Bengaluru Editing Mark Potter and David Goodman
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Copper reaches record highs on concerns about supply and a weaker dollar
The copper price reached a new record on Wednesday, thanks to the weaker dollar and concerns about supply. Benchmark LME 3-month copper rose 1.7% to $11,333 per metric tonne by 1102 GMT, after reaching a record high at $11,434.50. Copper is looking bullish, after hitting new highs. Algorithmic models are flashing buy signals. Dan Smith, managing Director of Commodity Market Analytics, said that there's a good chance the price could rise to $12,000 per ton. Data showed that business activity in Europe expanded at the fastest rate in over two years in November, adding to the bullish mood. LME data on Tuesday showed that there were net cancellations of 50 725 tons of copper in Asian warehouses. This brought the LME's available or on-warrant copper stock to its lowest level since July, at 105 275 tons. Smith said that despite the Comex premium to the LME benchmark, there is still a strong interest to export copper to the U.S. Comex copper prices are rising due to the premium of Comex over LME. That is already a record. The LME cash premium over the 3-month contract reached $69 per ton on February 2, its highest level since mid-October. This indicates some tightness of supply in the near term. The expectation of a rate cut from the U.S. Federal Reserve in the coming week, as well as the weaker dollar, also helped to support the rise in base metals. Dollar-priced materials are more appealing to buyers who use other currencies due to the weaker dollar. Low interest rates improve the prospects of metals that are dependent on growth. Other LME metals include aluminium, which rose by 0.5% to 2,880 dollars a ton. Zinc was up by 0.2% at $3,066, while lead gained 0.5%, reaching $2,005. Tin climbed 1%, to $39 505, and nickel grew 0.7%, to $14 895. (Reporting and editing by David Goodman.)
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SNB to maintain negative rates despite inflation decline
Economists on Wednesday said that the Swiss National Bank would not opt for negative interest rates next week or until 2026, despite the fact that inflation was below expectations and at the lower end of its target range. Official data revealed that the annual inflation rate in Switzerland unexpectedly fell by a tenth of a percent point to zero in November, slightly below expectations. A poll of analysts found that the consensus was that last month's inflation rate would be unchanged, at 0.1%. The SNB has set a price stability target of 0% to 2% for inflation. This 0% figure is the lowest since May. DATA IS THE LAST READING OF INFLATION BEFORE RATES ARE DETERMINED The central bank refused to comment on these figures, the last inflation data before it announces the next interest rate decision at its December 11th meeting. Even with the economic downturn, economists believe the SNB will maintain its benchmark rate at 0% until 2026. Karsten Junius is an economist with J.Safra Sarasin and he also believes that there will be no policy change in 2026. Rudolf Minsch is the chief economist of economiesuisse and he also predicts that central bank will keep interest rates zero for the next week, as well as throughout 2026. Swiss inflation should increase to 0.4% in next year. He said that negative interest rates have unwanted effects and are used only when an urgent need is present, which we do not see. SNB HAS A HIGH THRESHOLD FOR CUTTING RATES Alessandro Bee, an economist at UBS, said that he expects the SNB to maintain rates at 0% until 2026. He also predicted a slight increase in Swiss inflation next year due to increased wages. The market expects that the bank's benchmark rate will remain unchanged next week. Officials of the SNB have previously stated that they expect inflation will rise in the future. They also said that they would tolerate an inflation rate below 0% for a temporary period. (Writing and editing by John Revill, Dave Graham, Aidan Lewis, Miranda Murray)
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Fortescue collaborates with Chinese steelmaker to develop green iron technology
Fortescue, an Australian company, announced on Wednesday it would work with China Baowu's subsidiary, the largest steelmaker in the world, to investigate new green technologies for accelerating the decarbonisation of the steel industry. Fortescue, which is the fourth largest iron ore supplier in the world, signed a contract with China's Taiyuan Iron and Steel Group in November for a pilot project on plasma-enhanced hydrogen-based iron and steel metallurgical technologies, according to a company statement posted on WeChat. The project will develop a technology to eliminate the pre-treatment of raw materials, such as iron ore pelletizing, coking and sintering. These processes are typically major contributors to carbon dioxide emissions during steelmaking. The collaboration involves the design, construction and operation of an industrial test line that can produce 5,000 tons of hot iron, a product from a blast-furnace. Agustin Pichot, Fortescue’s Chief Executive Officer for Growth and Energy, said: "We are exploring technology for green-smelting using Fortescue’s Pilbara Iron Ore." The decarbonisation of steel will increase the demand for high-grade iron ore. This is a challenge for Australian miner, who mainly supply low to medium grade iron ore. Fortescue said it would provide the capital for this project. Fortescue and another subsidiary of China Baowu partnered earlier this year to develop green iron technology. (Reporting and editing by Amy Lv, Lewis Jackson)
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India's JSW Steel will move Bhushan Power Steel's business to a JV with JFE Steel
India's JSW Steel is selling the steel business from its Bhushan Power and Steel unit to a joint venture of equal stakes with Japan's JFE Steel, for 244.83 Billion Rupees ($2.72 Billion), in order to fund its growth. After the announcement made on Wednesday, shares of JSW Steel, India's largest steelmaker in terms of market capitalization, fell. The shares closed 1.6% down, making them among the biggest percentage losers in the Nifty Metal Index. In September, India's top court approved JSW's acquisition of Bhushan Power and Steel. This decision capped months of legal battles that saw the court reverse its earlier decision to reject this deal. JSW Steel announced that JFE Steel would invest 157.50 billion rupies in the JV. JFE Steel stated in a separate press release that the JV aims to increase crude steel production to 10 million tonnes at integrated steelworks by 2030. The two steelmakers have pledged to invest in a separate joint venture to increase production of grain-oriented electric steel. Analysts claim that the increase in steel demand has been attributed to increased manufacturing and infrastructure spending in India. Reporting by Anuran Sahu, Manvi Pan and Hritam Mukerjee from Bengaluru. Editing by Mrigank Dahniwala
IG Metall: Forced layoffs in Thyssenkrupp's restructuring are the last resort, says IG Metall
The most powerful German union, IG Metall, said on Wednesday that compulsory layoffs will remain a measure of last resort for conglomerate Thyssenkrupp. It also added that an agreement on this matter has been extended until 2028.
Thyssenkrupp announced earlier this year that it would become a holding company and divest stakes from all its businesses through spin-offs or divestments, as well as listing to simplify its structure.
IG Metall stated that as a consequence, an agreement was reached whereby all layoffs were made in a responsible and socially conscious manner with the primary focus on cutting costs. This agreement was extended to September 30, 2028.
Juergen Kerner is the deputy chairman of Thyssenkrupp’s supervisory board, and vice-head of IG Metall. He said: "The extension to the basic agreement represents an important achievement in uncertain times."
It creates security for the employees and ensures co-determination during the restructuring of the Group. It is important that the employees' interests are taken into consideration fairly and on an equal basis, especially in light of the upcoming restructure.
Thyssenkrupp has entered into negotiations to sell its steel division in India to Jindal Steel International. The company is also cutting jobs by up to 11,000, either through outsourcing or reducing the number of employees. (Reporting and editing by Ludwig Burger.)
(source: Reuters)