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Europe's largest pension investor aims to boost private markets
APG's chief investment officer for Private Investments told? that the current credit market flux is a good opportunity to buy. APG invests approximately 600 billion euros ($702.00) for clients, including ABP (the Netherlands' largest pension fund). Patrick Kanters stated that around 26% of APG's assets are in private markets, but this would increase after the ongoing changes in investment rules in The Netherlands. The Future Pensions Act has been implemented in phases, starting in 2023. This allows funds based in the Netherlands to take more risks, such as reducing money held in low-yielding, liquid government debt. The new system, which is based on the assumption that people will live?longer? and have more jobs in their lifetimes, gives younger workers a pot of money that can grow?much faster. APG currently has 10% of its assets allocated to real estate, 5-6% to infrastructure (which would increase to 10% with time), 8% to private equity, a significant jump from the historical 6%, and less than 1% to natural capital assets, such as forestry. It also has a "relatively small" private debt holding of 1,5%, which can rise over time to between 2%-4% depending on the client. Based on the current assets of the company, this could result in a rise from 9 billion to more than 24 billion euros. Dutch pension funds will begin to transfer money from their clients to the new pots in 2019. They have until January 1, 2020 to complete the switch. The move comes at a time when the market is experiencing increased volatility. This was after a number of retail funds in the U.S. were hit with heightened redemption requests due to concerns about falling returns and AI's impact on software companies. Kanters stated in an interview earlier this month that "some sub-markets have corrected, and this can provide opportunities for the future." "These types of investments require a long-term investment horizon." For APG, the focus was on investing where capital was scarce, structures were robust and underwriting discipline was strong, including in real ?assets and infrastructure-related financing, Kanters said. "The quality of the manager, the deal structure, and the downside protection are more important to us than sector-specific calls." APG's private debt investments include real asset credit and structured credit. Direct lending, non-performing loans, and speciality financing are also included. APG's private debt investments are mainly concentrated in Europe, with a market-average of 30%. The U.S. is still the largest and most established private bond market in the world. Kanters stated that for a long-term investment like ours, looking to diversify and build a bigger portfolio, it's difficult to ignore this depth and breadth. He said that Asia offered high-quality managers and attractive returns.
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Chilean copper miner Codelco and contractors fined following deadly mine collapse
According to inspection records obtained through public records requests, Codelco, a Chilean state copper mining company, was fined after the deadly collapse of its El Teniente Mine last year. Three contractors, whose employees were killed or seriously injured, were also sanctioned. Six contract workers were killed and others injured in a rock explosion at El Teniente underground copper mine in July. The sanctions, which had not been reported before, were imposed months after the underground seismic event. The files were obtained from the Chilean labor ministry by means of open-records request. These fines in Chile are notified to the employer directly and are subject to administrative challenges or reductions. They are usually not disclosed publicly. At the time, the then-Labor minister Giorgio Boccardo announced that his office, along with the mining regulator Sernageomin would investigate whether there had been any violations of labor safety rules. A quake measuring about 4.3 on the Richter scale halted all underground operations in the vast mine complex, causing rescue efforts and safety checks. Codelco incurred a large production cost as a result of the collapse. The company said that the slow restart of underground operations and the shutting down of underground operations in El Teniente reduced copper production by tens thousands of tons. This disrupted shipments during a period of tight global supplies. The accident also highlighted the geotechnical risk? facing Chile's aged underground mines. Contractors fined more than CODELCO The records reveal that the three contractors received fines totaling about $87,000, while Codelco only paid out $20,000, reflecting Chile's system of split liability for subcontracted works. Under Chile's labor law, while the principal company, Codelco, can be penalized for overarching failures in safety, contractors are directly responsible, as employers, for reporting accidents, risk assessment and worker assignment, among other compliance duties. Labor inspectors found that Codelco did not have a written procedure detailing how seismic warnings are used to determine whether or not work should be halted or restricted. According to a separate record of sanctions, after the accident, regulators found that Codelco had violated labor laws when workers were seen entering or preparing for entry into underground areas, while the mine suspension was still in effect. According to Chilean labor laws, serious or fatal accidents can result in fines of up to 150 UTM (a Chilean tax unit linked to inflation) or approximately $11,000 today. In a 2007 case, the regulator imposed a penalty of 340 UTM, or roughly $26,000 today, on a construction company following a fatal accident. Workers' safety specialists and labor advocates have questioned if such small 'penalties' are enough to deter major employers. In 2011, after a mining accident, a Chilean House of Representatives investigation commission reported that it was essential to increase the fines to deter mining companies from violating safety regulations. Since then, proposals to increase fines for workplace accidents that are serious or deadly have failed. CODELCO DETAILS CHANGES Codelco said that since the collapse it has tightened safety procedures to restart work at El Teniente. This includes adding safety briefings before shifts begin, improving communication underground, increasing checks on worker's locations, and reviewing protective gear. Later, it was revealed that an independent panel headed by a former Anglo American chief executive officer was investigating what caused the accident. They were also looking at whether management problems or workplace issues played a part. Codelco stated in a press release that the seismic alert system had been?active on the day of accident and that they have appealed against the fine imposed by the Labor Ministry. The company said that a "legal proceeding is ongoing related to the supervision of worker entry during work stoppage", and it was waiting for a ruling from the authorities. Codelco announced in August that Andres Musik, the El Teniente mine's manager, would be leaving his position. In February, three senior executives were let go after an internal audit revealed inconsistencies or concealment in the aftermath of a rock explosion at the mine a few years ago. SUBCONTRACTORS WILL GET LARGER FINES Zublin, a Strabag subsidiary, was among the three firms that were fined for failing to report an employee's death in 24 hours. Inspectors discovered that the company was aware of the death within two hours but did not notify the labor authorities until evening the next day. The report stated that it is important to immediately notify the authorities to ensure safety for remaining workers. The Austrian company didn't immediately respond to our request for a comment. SalfaCorp, a Chilean construction company, was sanctioned for the death of one of their workers in the Andesita mine sector. Inspectors said the company, among other things, failed to report the fatal accident immediately to the authorities. Salfa also failed to adequately protect its workers, according to the records. SalfaCorp didn't immediately respond to an inquiry for comment. The Chilean?labor regulator fined Constructora Gardilcic as well, the contractor who was not listed and whose workers had been?killed or injured at the Recursos North area of the mine. Inspectors found that the company failed to report the accident on time, filed injury reports late and had a poor safety plan. The authorities also found that Gardilcic failed to adequately account for the risks of violent rock explosions outside designated danger areas and placed some workers into jobs they weren't cleared to perform. Gardilcic didn't immediately respond to an inquiry for comment. LONG ROAD Ahead Codelco said that the areas most affected by the accident would remain under strict restrictions as criminal, regulatory and technological investigations continue. The company has promised a gradual restart that will be approved by the regulator, but it is unclear when normal operations can resume at the mine. (Reporting and editing by Christian Plumb, Aurora Ellis, and Kylie Madry)
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Starmer, the PM of Britain, says that the UK will not support a blockade of Strait of Hormuz.
Keir Starmer, British Prime Minister, said on Monday that despite the pressure he was under 'Britain will not be drawn into the Iran war or a blockade of Strait of Hormuz. He told BBC Radio 5 Live that he did not support the blockade, and added that it was important to get the Strait opened. Starmer stated that it was vital to get the Strait fully and completely open. We have put our efforts there in recent years and will continue to do so. He said that Britain had minesweepers operating in the area. While he couldn't discuss operational issues, the military capabilities were "concentrated from our perspective on opening the Strait". After weekend talks to end the Iran war failed, the U.S. Military announced that it would block all maritime traffic into and out of Iranian ports and coastal zones on Monday. Central Command of the United States announced that the U.S. Blockade would begin at 10 am ET on Monday (1400 GMT) and "will be enforced impartially against vessels of all nations entering or departing Iranian ports and coastal?areas, including all Iranian ports in the Arabian Gulf and Gulf?of Oman." The U.S. Central Command said that the blockade would begin at 10 a.m. ET (14:00 GMT) on Monday. The U.S. Military has said that vessels?transiting through the Strait of Hormuz between non-Iranian and Iranian ports won't be hindered. Donald Trump announced on Sunday that U.S. Forces?would intercept all vessels in international waters who had paid tolls to Iran. Trump posted on Twitter that "no one who pays an illegal toll on the high seas will have safe passage." He also said: "Any Iranians who fire at us or at peaceful vessels will be BLOWN OUT!" (Reporting and editing by Paul Sandle, Michael Holden, and Sam Tabahriti)
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Kuwait raises May crude prices for Asia, pricing document shows
Kuwait raised its official selling price for Kuwait Export Crude in Asia to $17 per barrel over the average 'Oman/Dubai quotations' from $0.50 in April. After weekend talks failed to?clinch a deal? to end the Iran War, the U.S. Military announced it would blockade maritime traffic in Iranian ports and coastal regions. This could jeopardize a fragile?two-week truce. Documents showed that the producer increased the Kuwait Super Light Crude OSP for May to $17 per barrel over Oman/Dubai prices, up from $1.15 in April. Middle East producers have boosted official prices for Asia for May. Saudi Arabia set the price of its Arab Light crude for Asia at a record $19.50 per barrel over the Oman/Dubai benchmark, while Iraq raised the price of its Basrah Medium oil for Asia by $17. Middle East crude is now the most expensive in the world - after the U.S. and Israel war against Iran disrupted shipping along the Strait of Hormuz - a vital artery that supplies about a 'fifth of all the oil around the globe. This month OPEC+ has agreed to?raise?oil production quotas by 206,000 barrels a day for May. It is a modest increase that will largely be on paper, as the key members of OPEC+ are unable to increase production due to their involvement in the Iran War. Analysts expect the oil market to be in deficit this year due to a drop in global production. This is compared to pre-conflict predictions of a comfortable surplus. (Anjana Anil in Bengaluru, and Pablo Sinha at the Editing Department of Christopher Cushing and Clarence Fernandez.)
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Gold falls as Hormuz Blockade boosts dollar and dents Fed rate-cut bets
Gold fell to a new low of?nearly one week? on Monday as a stronger dollar and a surge in oil prices above $100 following the U.S. move to blockade Iranian port fuelled inflation fears, prompting traders back off their expectations of Federal Reserve rate reductions this year. As of 0735 GMT spot gold was down 0.4% to $4,730.75 an ounce. It had hit its lowest level since April 7 earlier that day, at $4643. U.S. Gold Futures for June Delivery fell 0.7% to $ 4,753.30. The dollar gained 0.3% after the?U.S. The Navy prepared to blockade the Strait of Hormuz, which could limit Iranian oil shipments following the collapse of?peace negotiations between the U.S. The Iranian Revolutionary Guards warned that any military vessel approaching the Strait would be considered a breach of ceasefire and treated harshly and firmly. Tim Waterer is the chief market analyst for KCM Trade. He said that "Ceasefire Optimism?has unraveled following the failure of the peace talks. The dollar and oil price have pushed up, and this has pushed gold backwards." Since the U.S. and Israel war against Iran began late in February, spot gold has dropped more than 11%. Gold's appeal is usually boosted by inflation and geopolitical risks, but high interest rates are a drag on this non-yielding precious metal. The greenback price of bullion is also more expensive for holders other currencies. Waterer stated that "as soon as oil prices?return above $100, the focus quickly shifts to possible central bank rate increases to curb inflation. This interest rate outlook is what is affecting gold's performance." The traders now see very little chance for a 'U.S. Rate cuts are unlikely this year as the higher energy prices could feed into inflation, limiting the scope for "monetary easing". Investors priced in two Fed rate reductions for 2026 before the start of war. (Reporting by Noel John in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Sonia Cheema) (Reporting and editing by Rashmi aich, Subhranshu Sahu, Sonia Cheema).
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Iron ore reverses a six-day decline on the back of surging oil and feedstock demand
Iron ore futures recovered?on Monday after a six-session decline to a?one-month low. The market was supported by surging oil prices and higher feedstock demands. The September contract for?iron ore on the?China's Dalian Commodity Exchange (DCE), rose by 1.26%, to 763.5 Yuan ($111.75), per metric ton. As of 0710 GMT, the benchmark May iron ore traded on Singapore Exchange was up 1.08% at $104.6 per ton. SteelHome data shows that iron ore inventories at major Chinese ports decreased by 0.16% in a week, according to the latest figures. According to Mysteel, continued portside destocking along with rising hot metal output keep prices stable. Mysteel data showed that iron ore imports at 47 Chinese ports fell by 536.100 tons due to disruptions in Australian supplies. Imports should improve this week, as supply disruptions have eased. On 'Monday, oil prices rose above $100 per barrel as the U.S. Navy prepared to block ships reaching Iran through the Strait of Hormuz. This could limit Iranian oil exports after Washington and Tehran failed in their efforts to end the conflict. As shipping costs increase, it is expected that rising oil prices will support iron ore. The Brazilian mining company Vale announced on Friday that it will start building a waste rock and tailings processing plant for the state of Minas Gerais in the southeast this year. The plant will be able to produce 2 million tons per year of iron ore and is expected to start operations in the next few months. It's part of the company's plan to reuse previously discarded materials. Coking coal and coke, which are both steelmaking ingredients, have gained a lot of ground. The Shanghai Futures Exchange saw a rise in most steel benchmarks. Rebar rose 0.19%. Hot-rolled coils firmed up 0.21%. Stainless steel increased 0.69%. Meanwhile, wire rod dropped 0.12%. ($1 = 6.8325 yuan) (Reporting by Ruth Chai; Editing by Subhranshu Sahu)
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BOJ's Ueda urges vigilance to counter the impact of Middle East War
Kazuo Ueda, the Bank of Japan governor, said that the economic and price development was roughly in line with the bank's predictions. He called for caution in assessing the impact of the escalating conflict. The Middle East tensions have caused a sharp rise in crude oil prices and instability on the global financial markets. Ueda, who was quoted by Ryozo Himino in a speech that he read out, said: "We must be vigilant for future developments." Markets were watching the speech closely for any hint that the BOJ would raise interest rates during its next policy meeting, which will be held on April 27-28. The markets are volatile due to fading hope of an early end to Iran's war. Ueda said that a gradual economic rebound was keeping inflation?on track to hit the BOJ’s 2% target, with companies offering substantial pay increases during this year's salary negotiations. He said that rising crude oil costs would harm Japan's economic growth. A protracted Middle East conflict could also affect factory production due to supply chain disruptions. He said that while higher oil prices would increase energy costs in the short term, they could also exert upward and downward pressures to underlying inflation. If the output gap widens, it could have a negative impact on underlying inflation. Ueda added that if the rising price of crude oil increases the public's expectations for medium- and long-term prices, this could increase underlying inflation. Ueda stated that "given the lingering uncertainties over the Middle East situation, we will examine how future developments impact the economy, price?and financial condition, as well the risks and likelihoods of our baseline predictions materialising," Ueda on the outlook for monetary policies. The BOJ's reference to Middle East unrest is a departure from its March guidance when it said that the BOJ would raise rates in accordance with the improvement in the economy and price levels.
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Budget for the spring election increases subsidies on energy and fuels
The government of Sweden announced a spring mini-budget that will slash fuel taxes, and increase electricity subsidies. This is to help ease the burden on households who are paying higher energy costs due to the war in Iran. The additional spending will be 7.7 billion crowns (825 million dollars) ahead of the September parliamentary elections. This is on top of an 80 billion crowns in new spending announced last September in the full year budget bill for 2026. "Sweden's on the right track." The Swedish economy remains strong despite war and uncertainty overseas. We continue to build safety barriers. Since the United States and Israel attacked Iran, oil prices have risen. In response, Tehran has launched missile attacks across the Gulf and closed the Strait of Hormuz. Sweden's economy is so far largely untouched by any major impacts, but a prolonged conflict could increase inflation, slow growth, and raise interest rates. The spring budget includes a temporary increase in electricity subsidies to households. This will cost 2.4 billion crowns, and the reduction of fuel taxes is 1.6 billion. Additional measures include funding for the?Swedish space programme, healthcare, and job creation. ELECTION BOOST Sweden's September budget included tax cuts, more money for healthcare, schools and defence to boost the sluggish economy and win back voters who were still feeling the pinch from high inflation. The political balance in Sweden is complicated ahead of the election. The left has a slight edge over the right but both sides may struggle to form a governing majority. Sweden Democrats, a populist anti-immigration party, could become part of the government if the right wins. Sweden's public finances are rock solid, unlike most of Europe. Eurostat predicts that debt will peak at 38% of GDP by 2028, compared to the current EU average of 88%. (1 dollar = 9.3309 Swedish crowns). (Reporting and editing by Terje Sollsvik, Anna Ringstrom & Simon Johnson)
London Aluminium hits four-year peak on Middle East Supply Woes
Prices for 'three-month' aluminium on the London Metal Exchange hit a four-year high of $3,569. Supply fears returned after a stalemate in the 'U.S. vs. Iran peace talks. The benchmark 'three-month' aluminium on the London Metal Exchange reached $3,555 per metric ton at 0729 GMT. This was up 1.61% from its previous high of $3 569.
The Shanghai Futures Exchange's most traded aluminium contract closed the daytime trading up 0.55% to 24,760 yuan (about $3,623.38) per tonne. After the failed weekend peace talks, the U.S. Military announced that it would begin a blocking of all maritime traffic entering and leaving Iranian ports and coastal regions on Monday. This will put the fragile two-week truce in danger.
In a recent note, ING analysts stated that the rising geopolitical risk in the Middle East has intensified concerns about shipments and production of aluminium. Elevated energy prices are adding to the upward pressure on aluminium and reinforcing costs support for smelters, they said.
Last month, the conflict forced local aluminium producers to reduce their output. It also disrupted the supply of aluminium by closing down Strait of Hormuz.
Before the Iran War, this region supplied roughly 9% global aluminium. Copper prices rose amidst falling stocks and improved demand from China's top consumers. Shanghai copper reached a new high, while London copper gained 0.35 percent.
Yangshan Copper Premium
Nickel, zinc, and lead all fell 0.16%, while tin dropped 1.21%.
Nickel grew 2.61% for other?SHFE Metals. Lead fell 0.63%. Tin dropped 0.87%. Zinc slipped 0.63%.
(source: Reuters)