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As trade tensions increase, RPT-Chinese Lithium Company halts exports of tech products
The Chinese company stopped exporting an equipment that was used to process lithium metal for electric vehicle batteries. This is the clearest indication yet that manufacturers have already implemented export controls suggested by Beijing. According to documents and a source who has direct knowledge of this matter, Jiangsu Jiuwu Hi-Tech informed customers last month that it would cease exporting a piece filtration equipment called a sorbent on February 1. Analysts say that China is the largest producer in the world of sorbents used to extract the lithium metal from brines and other solutions. However, the size of the market can be difficult to determine due to Beijing's unwillingness to share information. Jiangsu's decision shows Beijing is changing its behaviour despite the fact that the proposal is still only a suggestion. Beijing had threatened to restrict exports of certain battery and lithium technologies, including sorbents. If approved, the companies would require government licenses to sell overseas. A senior executive from another lithium extraction company, speaking under condition of anonymity as well, stated that Jiangsu New Materials and Sunresin New Materials - another major sorbent manufacturer - are in negotiations with the government about the proposal. Jiangsu representatives and Sunresin representatives did not answer questions. Sunresin chairman stated a month earlier that the company's plans for overseas expansion included transferring technology. Beijing has not discussed the proposal in public since its release last month. Those in the industry believe it already acts as a deterrent for exporting items listed to countries that are not friendly. An international lawyer in China who represents clients working in the clean energy sector said that it had a "chilling" effect. The lawyer, who spoke on condition of anonymity due to the sensitive nature of the matter, said that officials from China's Ministry of Commerce visited several companies in order to discuss the proposal. In one case, they warned against a $1 billion deal being negotiated. The person said that banks also ask for additional approvals before they sign off on export financing for items on the list. China's Ministry of Commerce has not responded to any questions. Although it's unclear just how strict the curbs will be, this proposal shows Beijing's willingness and ability to leverage its dominant position in the mining and processing industry for lithium and other vital minerals. The Western auto industry has been affected by China's ban on antimony exports, which was announced in December. A spokesperson from Tianqi Lithium Energy Australia (the joint venture between China’s Tianqi, and Australia’s IGO, which controls the largest lithium mine in the world and the major lithium refinery) said that it was considering its options and taking advice about Beijing's proposed export. BUILDING A SUBTLE SUPPLY CHAIN Any disruption in Chinese sorbent exports could affect the plans of Western oil producers who want to extract lithium by limiting their technology options. Exxon Mobil, for example, has looked into the possibility of using Chinese processing equipment in its planned lithium operation, located in Arkansas, the U.S., according to two sources who are familiar with these plans. Exxon declined comment. Koch Industries, which is the largest shareholder in Standard Lithium in Arkansas, has agreed to use sorbents made by China's Xi'an Lanshen New Material Technology for its North American operations in 2023. A spokesperson for Koch declined comment. A number of Western sorbent manufacturers claim they can take on Chinese competitors, despite the fact that none of them have the same market experience as their Chinese counterparts. Their equipment is also yet to be commercialized. Brian Menell is the CEO of TechMet which invests in Western lithium producers and mining companies. He said, "We must completely change technologies and innovate production and processing without being reliant on China. It has a 20 year head start and controls this game." Francis Wedin, Chairman of Vulcan Energy Resources which has developed their own sorbent technologies that they plan to use in Germany said would-be producers of lithium were lining up. He declined to name them, but said that they were large lithium companies in North and South America. (Reporting from Ernest Scheyder and Lewis Jackson, respectively in Houston and Beijing; Additional reporting by Melanie Burton and Amy Lv, respectively in Melbourne and Beijing; Editing by Veronica Brown & Barbara Lewis).
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Trump announces 25% tariffs on automobiles, pharmaceuticals, and chips
U.S. president Donald Trump announced on Tuesday that he plans to impose tariffs on auto imports "in the vicinity of 25%", as well as similar duties on pharmaceuticals and semiconductors. This is the latest of a series measures that threaten to disrupt international trade. Trump announced on Friday that levies will be imposed as early as April 2. This is the day after his cabinet members are expected to present him with a report outlining a variety of options for import duties, as he attempts to reshape international trade. Trump has been pointing out unfair treatment that he claims is being given to U.S. auto exports on foreign markets for a long time. For example, the European Union charges a tariff of 10% on imported vehicles, which is four times higher than the 2.5% U.S. tariff rate for passenger cars. In contrast, the U.S. imposes a 25 percent tariff on pickup trucks imported from other countries than Mexico and Canada. This tax makes these vehicles very profitable for Detroit's automakers. DUTIES OF PHARMA, CHIPS Trump told reporters Tuesday that tariffs for pharmaceuticals and semiconductors would start at "25% and higher" and will increase substantially over a period of one year. He didn't give a specific date when he would announce these duties, but said that he wanted to give drug and chip manufacturers some time to build factories in the United States so they could avoid tariffs. Trump imposed an additional 10% tariff on imports from China since his inauguration, in response to China's failures to stop the fentanyl trade. Trump also announced and then delayed by a month the 25% tariffs on imports from Mexico and Canada that are not energy-related. Trump has also announced that 25% of all steel and aluminum imports will be taxed starting on March 12, eliminating any exemptions for Canada and Mexico. The European Union, and other trading partners are no longer exempt. Trump announced that the tariffs will also apply to hundreds downstream products made from steel and aluminum. These include electrical conduit tubes, bulldozers blades, and more. He instructed his team last week to develop plans to impose reciprocal duties that match the tariffs of each country, product by product. SHELVED CAR TARIFFS A 25% auto import tax would be a game changer for an auto industry already struggling with the uncertainty created by Trump's tariff drama. In 2018 and 2019, during Trump's first tenure, a similar drama unfolded when the Commerce Department carried out a national-security investigation into auto imports. They found that the imports weakened the industrial base in the United States. Trump threatened to impose car tariffs at the time of that investigation, but he did not act, and allowed tariff authority from this probe to expire. Some of the research done for the 2018 investigation could be updated or reused as part of an automotive tariff initiative. Reporting by Andrea Shalal from Palm Beach, Florida; Nandita BOSE in Washington. Writing by David Lawder. Editing by Lisa Shumaker & Lincoln Feast.
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Fibre cement maker James Hardie's quarterly profit falls 15%
James Hardie Industries (the world's largest fibre cement manufacturer) reported on Wednesday a 15% drop in its third quarter profit due to a decline in raw materials at its North American operations. The North American division of the company has been negatively affected by the rising mortgage rates, volatile expectations for interest rates and high home prices. North America's net sales fell from $727 million to $719.3 millions, due to a weaker homebuilders' market. The company stated that it planned to expand its growth and margins across all regions in fiscal year 2026. The Dublin-based company posted a net profit of 153.6 million dollars for the three months ending December 31. This is down 15% from a similar quarter last year. This was a significant improvement over the Visible Alpha consensus estimate, which was $148 million. In a recent note, Citi's vice president, Samuel Seow, stated that the (building) market is still tough. There are few signs of growth and volumes continue to decline. James Hardie has also forecast its capital expenditure for fiscal 2025 to be $420 millions, down from a previous forecast range between $420 and $440 million. Aaron Erter, CEO, said that while it's too early to predict the results of fiscal year 2026 yet, "we are planning on sales growth and an increase in adjusted earnings before taxes, depreciation and amortization (EBITDA), across all our segments and for our company as a entire." (Reporting from Roshan Thomas in Bengaluru and John Biju; Editing by Mohammed Safi Shamsi).
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Bloomberg News reports that BP is considering selling its $10 billion Castrol lubricants division.
Bloomberg News, citing sources familiar with the situation, reported Tuesday that oil major BP was considering a possible sale of its lubricants division, Castrol. The deal could be worth $10 billion. The report stated that BP was considering a sale of its business. It also said that Elliott Management had identified the unit as a potential asset for disposal. Elliott declined to make a comment, and BP didn't immediately respond to a comment request. The report last week stated that Elliott was pushing the oil company, after acquiring a 5% stake in it, to take radical actions to transform its performance, including a large divestment program. It engages with the company ahead of Capital Markets Day scheduled for 26 February. Bloomberg reported that the company could announce its potential divestment at Capital Markets Day. The shares of BP were set to make their largest daily gain in the past two years on Monday after reports that an activist shareholder would push for board changes and strategic shifts in order for returns to increase. Last Wednesday, the company reported a 61% year-over-year drop in its fourth-quarter profit, the lowest period since 2020's fourth-quarter, when pandemic lockdowns lowered demand for oil. According to BP, Castrol is used by customers in more than 150 countries, including the automotive, maritime, industrial, aerospace, and energy production industries. Reporting by Devika Nair in Bengaluru, editing by Alan Barona
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As CEO promises accountability, Chevron employees are laid off in a long-awaited process.
A video was shown to Chevron's employees at a town hall meeting held last week. The video highlighted the success of the oil giant in Colorado, where it is the largest producer of oil and natural gas in the state. In less than 30 minutes, the executives announced their plans to reduce up to 20% of global staff. Chevron, despite progress made in safety and financial performance has fallen behind its competition, the company's leaders informed employees at a meeting held on February 12th. On the webcast, they stated that Chevron's business was becoming too complex, costs were creeping up, and it had difficulty making quick decisions. Review of presentation slides as well as a recording from the Town Hall that was broadcast to all staff members worldwide. Chevron plans to reduce its workforce by up to a fifth - or 8,000 employees - after oil prices have been in the 70-80-per-barrel range for the majority of the last year. The oil prices and the refining margins are lower than last year but enough to generate a profit of $18,3 billion for Chevron in 2024, down from $24.7billion in 2023. The layoffs are the culmination of a difficult 18 months for Exxon Mobil, the U.S.'s second largest oil producer. Exxon Mobil, along with CNOOC and Hess partners in Guyana challenged the deal at court. Arbitration is still pending on the deal. Four Chevron employees said the layoffs had been widely anticipated internally. Some employees even admitted that the move was needed to compete with Exxon, and other rivals. "I think this will be a positive thing," said an employee of Chevron, who asked to remain anonymous because they weren't authorized to speak in public. It's hard to go through, but we were the last major company (to make cuts). "Everyone was wondering when Chevron will do it." Chevron announced in November that it would aim to reduce costs up to $3 billion by 2026. This will include changing the way and where work is done. Chevron's spokesperson stated that changes in the company structure would improve efficiency and results. The spokesperson stated that "while these changes are needed, the decision to decrease our workforce is not easy." Shell, a UK-based oil company, planned to reduce its oil and natural gas exploration and production workforce by 20% in an effort to cut costs. This was reported in August. Last month, rival UK oil major BP announced that it would cut 3,000 contract positions and 4,700 employee jobs. Three Chevron workers said that they have experienced several rounds of layoffs in their careers due to the nature of the oil-and-gas industry. One of the employees said that layoffs during COVID-19 were even worse. The employee stated, "They always said it would be the last time." Due to China's rapid rise in electric vehicle sales, the world's biggest crude importer. This country has been driving the global oil demand for more than a decade. Nick Hummel is an analyst at Edward Jones and said that uncertainty about the global economy, China's demand, and oil prices could limit future oil prices. Mass layoffs are common in the oil sector after oil prices plummet. One Chevron employee was dismayed at the timing of layoffs in a time of relative price stability. The person who refused to reveal his name but identified himself as a Chevron employee said, "It's a biting feeling." "Oil prices appear stable, but then they drop the hammer." ACCOUNTABILITY Kim McHugh read out questions from employees during the town hall. Employees asked if Chevron executives will be held responsible for their company's poor performance. People feel that they are held accountable. "How is leadership held accountable?" McHugh stated. Mike Wirth, CEO of the company, said that he was looking for transparency and action from his leadership team. When things don't go well, do I get a nice excuse and a bunch of reasons, or do I get a plan?" He said. Wirth, in response to a second question, said that Chevron, as part of its efforts to simplify the business, will also clarify who has decision-making authority and hold them accountable. McHugh said that after several previous reorganizations staffers want to be reassured that the latest restructuring is successful. She told the CEO, "I believe the employees would like me to say that you've committed to give us simplicity." We don't want to have to do this again. Reporting by Sheila Dang in Houston, Ernest Scheyder in New York, Arathy Sommesekhar, Marianna Pararaga, and Nia William.
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Energy shares boost TSX as investors digest inflation data
Investors digested the news that inflation increased in January as they drove up Canada's main index of stocks. The Toronto Stock Exchange S&P/TSX Composite Index closed at 25,648.84, up 165.61 or 0.65%. As traders assessed the impact of drone attacks on an important conduit for Kazakhstan's exports, heavyweight energy prices rose by 1.4%. The traders were cautious, as the talks to end Ukraine's war could boost Russian supply. Financials added 0.8% as well, led by iA Financial & Royal Bank of Canada. Analysts at Bay Street expect big banks to report strong results for the first quarter next week. However, they note that the outlook is uncertain for the remainder of 2025 because of the risk of a trade war between the U.S. Materials rose by 1.2%, as the price of gold soared due to persistent demand for safe haven assets. Separately the annual inflation rate for Canada in January increased slightly from December to 1.9%. As shown by Tuesday's statistics, while the lower prices were a relief, they have been partially offset by higher costs for gasoline and natural gases. The yields on Canada's benchmark 10-year bond and 5-year bond reached three-week highs earlier in the morning, exerting pressure to the equities. Stephen Brown, Capital Economics' deputy chief North America economics, said that there is "clear evidence" of underlying inflation pressures building. We still believe that the Bank of Canada will cut rates next month despite the threat of tariffs hanging over the economy. However, it's a very close call. As global attention turned to developments in the Ukraine conflict between U.S. president Donald Trump and Vladimir Putin, the threat of tariffs receded. Fortuna Mining, on the other hand, lost 8.3% in value after CIBC lowered its rating to "underperform", from "neutral." CLICK CODES TO GET CANADIAN MARKETS UPDATES: TSX Market Report Canadian Dollar and Bond Report Global Stocks Poll for Canada Canadian Markets Directory (Reporting and editing by Shreya Biwas and Richard Chang; reporting by Pranav Kahyap and Nivedita Bali in Bangalore)
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US SEC asks India for help in Adani Fraud Probe
A court filing on Tuesday revealed that the U.S. Securities and Exchange Commission had requested Indian authorities' assistance in its investigation into Adani Group founder Gautam Adani and Sagar Adani regarding alleged securities fraud and $265 million bribery schemes. The SEC informed a New York District Court that its efforts were continuing to serve the complaint on Gautam and Sagar Adani and it was seeking assistance from India's Ministry of Law and Justice in order to serve this complaint. Both men are in India and neither is under U.S. custody. Adani Group did not immediately respond to an inquiry for comment. Outside of regular business hours, the Indian government was not immediately reachable. Federal prosecutors in Brooklyn unveiled an indictment last year accusing Adani bribing Indian government officials to persuade them to purchase electricity produced by Adani Green Energy, a subsidiary company of the Adani Group, and then misleading U.S. Investors by providing reassuring data about the anti-corruption policies of the company. Adani Group called the accusations "baseless," and promised to pursue "all legal remedies." (Reporting and editing by Lisa Shumaker; Kanjyik Kalra, Aditya Kalra)
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US EPA gives West Virginia authority over carbon capture
The U.S. Environmental Protection Agency granted West Virginia, the fourth such state to receive this authority, formal authority on Tuesday to oversee carbon-capture projects in the State. The agency has signed a final regulation granting West Virginia primary enforcement authority (also known as primacy) to allow so-called Class VI Wells to accelerate approvals and progress the development of massive Carbon Sequestration Projects. As one of my very first acts as EPA administrator, I'm proud to have signed this rule, which will allow West Virginia to be independent in regulating and granting permits, and also work to protect our environment and drinking waters, said EPA administrator Lee Zeldin. Carbon capture and storage (CCS) is a new technology that pulls carbon dioxide emissions out of industrial sources, before they can reach the atmosphere. They are then stored underground. The EPA has approved only a few of the carbon sequestration plans or projects that are in progress. North Dakota, Wyoming, and Louisiana have also been given the authority to supervise their own CO2 injection permits and oversight. Texas oil, gas, and industrial groups asked Zeldin last week to expedite the state's application for primacy. Texas is reviewing 43 projects, which represents one-third of the total number of U.S. applications. The 2022 Inflation Reduction Act of the Biden administration contains billions in subsidies. This includes a lucrative tax credit of $85 per metric tonne for storing carbon dioxide in geological formations. Energy experts believe that despite the President Donald Trump's vow to eliminate the IRA (Biden's landmark legislation on climate change), such subsidies are likely to survive because of strong support by Republican states and legislators. (Reporting and editing by Leslie Adler; Valerie Volcovici)
Petronas Preps for Sabah-Sarawak Gas Pipeline Decom Op
![Petronas Preps for Sabah-Sarawak Gas Pipeline Decom Op](https://img.oedigital.com/images/maritime/w800/petronas-preps-for-sabahsarawak-gas-pipeline-decom-op-156492.jpeg)
Malaysia's Petronas will decommission the Sabah-Sarawak gas pipeline, the state energy firm said on Tuesday in its activity outlook report.
The 500 km natural gas pipeline in Malaysia connects Kimanis in Sabah to Bintulu in Sarawak and has been operational since early 2014.
For the next three years, Petronas' decommissioning plans include the plugging and abandonment of about 153 wells and the abandonment of about 37 offshore facilities, according to the report.
In November last year, the company lifted the force majeure on gas supply to the Dua Malaysia LNG terminal after it was shut in 2022 following a leak in the Sabah-Sarawak pipeline.
(Reuters- Reporting by Nikita Maria Jino in Bengaluru; Editing by Shounak Dasgupta)