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US gold magnet: Banks fly bullion to US from Asia-focused hubs in order to benefit from premium
Gold is being flown into the United States by global bullion banks from Asian trading hubs, such as Dubai and Hong Kong. They are doing this to take advantage of the high premium on U.S. futures gold prices over the spot price. Gold is traditionally transported eastward by bullion banks from the West in order to satisfy the demand of China and India. These two countries are the largest consumers worldwide, representing almost half the global consumption. In recent months, the fear of U.S. tariffs on imports by President Donald Trump drove Comex futures prices above spot prices. This created a lucrative arbitrage. A Singapore-based dealer for a major bullion bank said, "Gold prices have skyrocketed, and demand in Asia has virtually disappeared." Gold spot prices reached a new record on Monday. He said: "A sweet opportunity in the U.S. has arisen, and almost every bank is grabbing it -- moving the gold to Comex delivery in order to cash in on arbitrage." COMEX gold inventory The price of gold has risen by almost 80% in the last few months, or more than 38 billion dollars at current prices. Supplies are coming from London and Switzerland, as well as Asia. The premium of Comex futures prices over spot price widened to around $40 on Monday. This compares with discounts up to $15 in India, and one as low as $1 in China. A Mumbai-based dealer said that the cost of shipping gold from Asian hubs into the U.S. was a fraction when compared to current Comex premiums. He said that a leading bullion firm even transported gold from a duty-free zone of India to the U.S. Normal situations: Many banks import gold to India and store it in customs free zones. They only pay import taxes after they realize the demand. The cargo can be moved overseas without having to pay taxes. A bullion dealer in Dubai said that as retail demand on Asian markets was slowed by high prices bullion banks even began sourcing gold in Dubai from refiners, which is usually a major India supply hub. This helped them meet their demand for the U.S. He said that the U.S. was like a magnet for gold, attracting it from around the globe. (Reporting and editing by Veronica Brown, David Evans and Veronica Brown; Additional reporting and editing by Polina Deitt and Ashitha Shivprasad)
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Anglo CEO focuses on value while working on De Beers spinoff
Anglo American CEO Duncan Wanblad stated on Monday that the company is working hard to maximize its value in case a new M&A bidder comes along. He also expects significant progress on a much-anticipated spin-off of De Beers' diamond business this year. Anglo American, a London-listed company, rejected a hostile bid of $49 billion from BHP in May. BHP was focusing on Anglo’s copper assets. Anglo has since streamlined its operations by selling coal assets and agreeing on the separation of its platinum business. It still needs to find partners for the UK fertiliser project, which requires massive amounts of funding to get it to commercial production. A weak diamond demand could make it a good idea to spin off De Beers. Anglo stated in May that it would take 18 to two years for the spin-off of this unit. Analysts have said that timeline is too ambitious. Wanblad said, however, that plans to divest De Beers would "substantially be completed" by the year 2025. He said this on the sidelines the Indaba Mining Conference in Cape Town. Botswana has offered to increase its 15% stake. Wanblad stated that Botswana had expressed a desire to raise its stake, and also indicated they would do this on commercial terms. However, he declined to specify how large a stake Botswana desired. Anglo may find that it is even more aggressively pursued by De Beers for its copper assets, which are long-lasting and vital for the transition towards greener energy. Copper is also needed for data centres, as artificial intelligence requires them. Takeovers can be a quick way to increase profits for both the company being targeted and its shareholders. The latter have the final word in any deal. Wanblad stated that "consolidating the industry per se is not a good idea for the global population because it results in less work being done." He continued, "My job is to get the best value from this company for shareholders and that's exactly what I do." "If this company is valued at its full value and someone makes a premium offer to buy it, that's fantastic." Reporting by Felix Njini and Clara Denina, Editing by Veronica Brown & Barbara Lewis
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How Trump's tariffs impact on corporate profits and inflation
Analysts said that the tariffs imposed by Donald Trump on Canada, Mexico, and China could have a significant impact on corporate profits and the direction of inflation, economic development, and stock market performance. Mexico-exposed stocks recovered some of their losses after Trump agreed that he would delay the new tariffs for Mexico by one month. However, investors are still evaluating the impact of the tariffs. COMPANIES AND PROFITS Goldman Sachs estimates that the announcements will reduce their S&P 500 earnings-per-share (EPS) predictions by approximately 2% to 3 %. The company said that every five percentage points increase in U.S. Tariff rates could reduce the EPS between 1% and 2%. Barclays analysts warned that tariffs on Canada, Mexico, and China would have a negative impact on the S&P 500 if they were fully implemented. The materials and discretionary sectors are most at risk. Citigroup stated before the announcement that a small shock to import prices in a narrow scenario would likely result in a reduction of 50 basis points in S&P's gross margin. However, broader tariffs may see margins decline by 250 basis points. BlackRock warns that exporters' profit margins could be affected if high inflation rates cause interest rates to rise and a dollar surge reaches its peak in 2022. AUTOMAKERS According to Daniel Roeska of Bernstein, the U.S. automobile industry could be facing an extra cost of $40 billion per year, or an increase of 7% on average for each car. Goldman Sachs estimated that Canada and Mexico accounted for almost one-fifth the value of U.S. automobile consumption and production before the tariffs. RBC analysts wrote in a Jan. 28 note that the surcharges on Mexican imports may prove to be a problem to General Motors and could lead to a shift of production to the U.S. Stifel, following Saturday's announcement, said that Volkswagen and Stellantis are the two most vulnerable European automakers. The impact could be as high as 8 billion euros (8.25 billion dollars) on Volkswagen's revenue and 16 billion euro for Stellantis'. Stifel said that the impact of the measures taken by companies could be significantly lower. Steelmakers J.P. Morgan has said that European steelmakers whose U.S. supply chains are integrated with Mexico and Canada, as well as Europe, will be directly affected. Analysts point out that ArcelorMittal and its Finnish counterpart Outokumpu are exposed to Mexican steel and Canadian steel. Acerinox, on the other hand, has a high U.S. production. J.P. Morgan analysts stated in a note dated Feb. 3, that 70% of U.S. aluminium imports come from Canada. SPIRITS: Beverages, spirits, like mezcal and tequila make up almost 12 billion dollars in U.S. trade. Analysts at J.P. Morgan said that the tariffs announced on February 1 will have a major impact on Diageo and Campari. J.P. Morgan reported that AB Inbev, Heineken, and Remy Cointreau have the greatest EBIT exposure in the two markets. Carlsberg and Remy Cointreau have the most EBIT exposure in China. J.P. Morgan estimates that around 85% of the consolidated sales of Corona Beer maker Constellation Brands come from imported Mexican beer. Piper Sandler estimates that tariffs could have a negative impact on Constellation's fiscal 2026 earnings by $3.75 to $3.75 a share if they last the full fiscal year. OTHERS BofA Global Research stated on January 29 that tariffs against Mexico could harm appliance distributors like Whirlpool. Masco and Fortune Brands, both construction products companies, have a certain exposure to China. BofA stated that they have multiple suppliers for many of their products, and price increases could help them overcome some of the tariff obstacles. Builders FirstSource may benefit from tariffs on Canadian imports of lumber in the short term, but this would be offset by a decrease in homebuilding starts. INFLATION- Barclays' strategists say that the tariffs may lift the Fed’s preferred inflation indicator, the personal consumption expenditures index, by 35-40 basis point on an annual basis, over a 12-month period. Goldman Sachs estimated that tariffs would increase the U.S. PCE index by 0.9% if they were implemented. This is excluding volatile products such as energy and food.
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Holcim CEO: Holcim will not be affected by U.S. Tariffs and is optimistic about the construction market.
Holcim, a Swiss supplier of building materials to the United States, does not anticipate any negative impact from President Donald Trump's new tariffs. Instead, it hopes to benefit from an increase in infrastructure spending by the U.S. Gutovic said in an interview that the cement maker will increase capital expenditures and acquisitions in order to take advantage of the infrastructure spending trends and reshoring in the United States. This is its largest market. When asked what effect tariffs would have on Holcim, Gutovic replied: "I don't see any impact because our business is local (in the U.S .),". How will this affect us, since we produce locally and source the spare parts, equipment locally? "I don't see it." Gutovic, Holcim's CEO since May, said that the company will list its North American operations in the first half 2025. According to Holcim, the spin-off could be the largest transaction in global construction this year. It could also give Holcim North America a market value of $30 billion. Gutovic stated, "I do not see any difficulties from the point of listing." "We're committed to making this happen by H1." Holcim plans to expand its business in the United States through organic growth and acquisitions this year, according to him. Gutovic said that there is a huge demand for bridges, tunnels, and roads to be refurbished. Last year, we saw a good deal of momentum in the reshoring...and this was from data centres to factory." He added, "And it goes on." The best is yet ahead. Last week, Holcim's German competitor Heidelberg Materials pledged to do many more deals in the U.S. during this year. They also identified that country as a major growth driver. Holcim has acquired 35 companies in North America in 2018 and expanded its footprint by building new factories in Indiana, Utah and Utah. The company's North American workforce increased by 50% between 2020 and 2023, to around 16,000 employees. It aims to achieve annual sales of around $20 billion by 2030 - up from $11 billion annually in 2023. Gutovic stated that "we are investing both in M&A as well as organic growth." We need to consider both sides. "We have the firepower to handle both." Reporting by John Revill, Editing by Susan Fenton
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FEATURE-As climate costs rise, U.S. communities turn to the courts
Eleven U.S. States, as well as dozens of counties and cities file lawsuits Climate action lawsuits demand payment Supreme Court declines to review a key case By Carey L Biron The U.S. Supreme Court now has given tacit approval to legal efforts that allow local officials to use public nuisance laws or consumer protection laws to ask major oil and gas companies for funds to cover climate change related losses and upgrades. Richard Wiles of the Center for Climate Integrity said that "the Supreme Court's ruling creates a path for communities and state to seek climate justice in state courts." The Center for Climate Integrity has supported such local options. We expect more state and local governments to go to court as a result of the Los Angeles fire and climate damage affecting communities all over the country. The Jan. 13 decision, which comes just days before President Trump returns to the White House offers a new avenue for local climate action in a time where federal attention on the issue has changed rapidly. Trump declared an "energy crisis" as one of his first acts. This could have allowed him to bypass certain environmental regulations, and accelerate approvals for oil production. The court's decision was in response to a suit filed by officials from Honolulu in Hawaii. They claimed that oil companies knew about climate impacts but hid them for decades. This is now causing local governments problems such as flooding, erosion, and water system concerns. The Supreme Court refused to stop the process that had been started by a lower court. This disappointed oil industry groups. In an email, Ryan Meyers, the general counsel of an industry group called American Petroleum Institute said that this coordinated campaign was a waste of taxpayers' resources and a distraction away from important issues. The court system should not be involved in climate policy debates. In addition to Honolulu's lawsuit, 11 states as well as dozens of counties and cities have filed suits either seeking damages for the adaptation efforts they have undertaken or claiming that the oil industry has deceived consumers about its products and their effects on climate changes. As a result of this, our residents are facing the devastating effects of increasing storms and flooding, as well as rising costs for protecting our city's infrastructure. Hoboken has filed a lawsuit for "climate accountability", which was added last year to a similar suit by the state. 'GAME CHANGER' Locally led accountability suits have been made possible by scientific advancements that, according to their supporters, provide insight into the cause of a specific weather event - including its source - as well as whether climate change was responsible. This "attribution" science is "a game changer for climate change", said Delta Merner. She leads the Science Hub for Climate Litigation, an organization of think tanks, at the Union of Concerned Scientists. She said that advances in the last five years have helped researchers better understand how climate change is affecting human health, ecosystems, crop yields, and more. Merner stated that the lawsuits were a powerful tool to help local communities. The new suits are seeking a precedent which could transform how corporate responsibility is addressed for climate change. Merner stated that "these cases show the direct harm felt by local communities." We're localizing a climate approach that translates well to global issues. It helps us understand the costs of climate changes on local communities. The legal strategy is still complex. A state judge dismissed a New York City lawsuit claiming that major oil companies misled residents about climate change. This was just days after the Supreme Court ruling. A Maryland circuit judge dismissed a Baltimore case similar to this one last year. Mark Miller, senior attorney at the Pacific Legal Foundation who filed a brief before the Supreme Court on the Honolulu Case, said that "Lawsuits such as this increase energy costs for Americans, when the majority of reasonable Americans are aware of the ongoing national power grid crises." According to him and others, the issues in question are not the province of local authorities but rather the federal government. "The energy grid crises, and whether local or state governments can worsen that crisis through lawsuits such as this one, or if this is a federal policy-area reserved for the federal government... rises to a level of national importance." 'LEGAL DUTIES TO PROTECT Many local officials believe that the financial and other costs of climate changes are high, and will only get worse. A heat wave in 2021 in the Pacific Northwest led to hundreds of deaths, both in Oregon and Washington. Multnomah County officials, including Portland, declared a climate crisis. Roger Worthington, an lawyer with Worthington & Caron, said: "This heat dome incident caused death and injury. It stretched county resources and had a huge impact on productivity, infrastructure, and productivity. Basically, electrical wires melted." Worthington has now led a lawsuit for the county, accusing oil companies, industry groups and consultancies, as well as a local gas company, of being responsible for the heat wave. Worthington stated that "Multnomah County is legally obligated to protect the people of its county and their property." The lawsuit seeks civil damages of $50,000,000 plus future damages of $1.5 billion, as well as an estimated $50 billion for upgrading infrastructure and health services. Worthington stated that the county views the case as one of fairness.
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European EV Group calls on EU to adhere to CO2 targets 2025
A European industry group that represents automakers, charging companies, and battery manufacturers said Monday the EU should not waive fines for automakers who miss their targets but instead stick to its CO2 emission regulations until 2025 and offer incentives to purchase EVs. E-Mobility Europe stated that new research by the British firm New Automotive showed the 2025 emissions rules for cars would lead to a nearly 65% increase in the sales of fully-electric vehicles in the European Union in this year. Without these rules, sales should have increased 33%. The group stated that a number new EVs under 25,000 Euros ($25,660), including the Renault R5, Fiat Grand Panda and Hyundai Inster, should be available this year. E-Mobility Europe Secretary General Chris Heron said the EU could use the money raised from tariffs on Chinese-made electric vehicles or funds from the coronavirus outbreak to provide incentives for consumers. Heron stated that "with targets in place there will be an enormous push to sell electric vehicles this year." If Europe's governments join in, we could end up having a year without fines. According to the EU's CO2 emissions targets for 2025, more than a fifth of automakers sales must be electric. However, EVs accounted only for 13.6% new car sales in 2020. The European auto industry estimated that it could be fined 15 billion Euros if they fail to meet these targets. They have asked the European Commission for a waiver of those fines. E-Mobility Europe, formerly known as Avere, is a membership that spans across the entire EV ecosystem. It includes Tesla, Chinese battery manufacturer CATL, and Dutch fast-charging firm Fastned. Fastned CEO Michiel Langezaal estimates that charging companies have so far invested 10 billion euro in infrastructure. Investors will be reluctant to provide funds if the EU abandons its goals. Langezaal stated that it is important to maintain the targets to ensure that the entire industry makes the transition. Otherwise, the infrastructure will not be built.
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Communities in the U.S. are turning to the courts as climate costs rise
Eleven U.S. States, as well as dozens of counties and cities file lawsuits Climate action lawsuits demand payment Supreme Court declines to review key case By Carey L Biron The U.S. Supreme Court now has a tacit approval of legal efforts that allow local officials to use public nuisance laws or consumer protection laws to ask major oil and gas companies for funds to cover climate change related losses and upgrades. Richard Wiles of the Center for Climate Integrity said that "the Supreme Court's ruling creates a path for communities and state to seek climate justice in state courts." The Center for Climate Integrity has supported such local options. We expect more state and local governments to go to court as a result of the Los Angeles fire and the climate damage that has affected communities all over the country. The Jan. 13 decision, which comes just days before President Trump returns to the White House offers an additional opportunity for local climate action in a time where federal attention on the issue has rapidly changed course. Trump declared an "energy crisis" as one of his first acts. This could have allowed him to bypass certain environmental regulations, and accelerate approvals for oil production. The court's decision was in response to a suit filed by officials from Honolulu in Hawaii. They claimed that oil companies knew about climate impacts but hid them for decades. This is now causing local governments problems such as flooding, eroding soil and water system concerns. The Supreme Court refused to stop the process that had been started by a lower court. This disappointed oil industry groups. In an email, Ryan Meyers, the general counsel of an industry group called American Petroleum Institute said that this coordinated campaign was a waste of taxpayers' resources and a distraction away from important issues. The court system should not be involved in climate policy debates. In addition to Honolulu's lawsuit, 11 states as well as dozens of counties and cities have filed suits either seeking damages for the adaptation efforts they have undertaken or claiming that oil companies have misled the public regarding their products and climate change. As a result of this, our residents are facing the devastating effects of increasing storms and flooding, as well as rising costs for protecting our city's infrastructure. Hoboken has filed a lawsuit for "climate accountability", which was added last year to a similar suit by the state. 'GAME CHANGER' Locally led accountability suits have been made possible by scientific advancements that, according to their supporters, provide insight into the cause of a specific weather event - including its source - as well as whether climate change was responsible. This "attribution" science is "a game changer for climate change", said Delta Merner. She leads the Science Hub for Climate Litigation, an organization of think tanks, at the Union of Concerned Scientists. She said that advances in the last five years have helped researchers better understand how climate change is affecting human health, ecosystems, crop yields, and more. Merner stated that the lawsuits were a powerful tool to help local communities. The new suits are seeking a precedent which could transform how corporate responsibility is addressed for climate change. Merner stated that "these cases show the direct harm suffered by local communities." We're localizing a climate approach that really translates into these global issues and helps us to see the tangible costs associated with climate change for local communities. The legal strategy is still complex. A state judge dismissed a New York City lawsuit claiming that major oil companies misled residents about climate change. This was just days after the Supreme Court ruling. A Maryland circuit judge dismissed a Baltimore case similar to this one last year. Mark Miller, senior attorney at the Pacific Legal Foundation who filed a brief before the Supreme Court on the Honolulu Case, said that "Lawsuits such as this increase energy costs for Americans, when the majority of reasonable Americans are aware of the ongoing national power grid crises." According to him and others, the federal government is responsible for the issue at hand rather than the local authorities. "The energy grid crises, and whether local or state governments can worsen that crisis through lawsuits such as this one, or whether this policy-area is reserved for the federal government... rises to the status of a national question." 'LEGAL DUTIES TO PROTECT Many local officials believe that the financial and other costs of climate changes are high, and will only get worse. A heat wave in 2021 in the Pacific Northwest led to hundreds of deaths, both in Oregon and Washington. Multnomah County officials, including Portland, declared a climate crisis. Roger Worthington, an lawyer with Worthington & Caron, said: "This heat dome incident caused death and injury. It stretched county resources and had a huge impact on productivity, infrastructure, and infrastructure - basically electrical wires melted." Worthington has now led a lawsuit for the county, accusing oil companies, industry groups and consultancies, as well as a local gas company, of being responsible for the heat wave. Worthington stated that "Multnomah County is legally obligated to protect the people of its county and their property." The lawsuit seeks civil damages of $50,000,000 plus future damages of $1.5 billion, as well as an estimated $50 billion for upgrading infrastructure and health services. Worthington stated that the county views the case as one of fairness.
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Nigeria blocks oil export permits to producers that do not meet refinery quotas
Nigeria's upstream regulator of oil said Monday that it will deny export permits to producers who do not meet their stipulated quota for local refineries. This includes the Dangote Refinery in Nigeria, Africa's biggest. The Petroleum Industry Act of Nigeria, which governs the oil industry in Nigeria, requires oil producers to supply domestic refineries with a certain volume of crude oil before they export it. This requirement is called the domestic crude supplies obligation. Oil producers claim that they haven't complied because refiners don't offer competitive prices. The Dangote Refinery has called on the regulators to enforce the law. In a statement released on Monday, the Nigerian Upstream Petroleum Regulatory Commission stated that Gbenga Komolafe (the head of the commission) wrote to oil exploration companies and production companies reminding them of their obligations as well as penalties for non-compliance. The commission stated that it met with refiners and producers last week. Komolafe stated that refiners accused producers of not fulfilling their obligations under the Supply Obligation, while producers claimed refiners were offering them insufficient prices and forcing them to explore alternative markets. Komolafe has warned that "the diversion crude cargoes designated for domestic refineries contravenes the law, and the Commission will subsequently disallow export permits of designated crude cargoes for domestic re-fining." According to an oil regulator's schedule, Nigerian refineries will need 770,500 barrels per day in the first half 2025. The Dangote Refinery is expected to need 550,000 bpd. (Additional reporting and writing by Isaac Anyaogu, Editing by Rod Nickel.)
K-pop's profligate CD output draws fire as South Korea hosts plastic waste talks
Kpop music may be South Korea's buzziest export however the industry unnecessarily creates mountains of plastic in its home market by producing CDs that most fans don't even listen to, critics state.
What the fans have an interest in are the photos of band members that include the CD and basically function as trading cards, often ending up being collectors' products. The catch is, each CD will usually include pictures of just one band member, it's not clear what images will be in the CDs and fans frequently purchase multiple CDs until they get their favourite band member.
The practice, while very profitable for K-pop agencies, is hugely inefficient, says Kim Na-yeon of activist group Kpop4planet.
The group plans to highlight the issue while South Korea hosts United Nations settlements over a treaty to control plastic waste next week and will take part in a demonstration to raise awareness about the environment crisis this Saturday.
Most people listen to music through streaming and a lot of don't. even have CD players, stated Kim.
Certainly, just 8% of South Koreans use physical albums to. listen to music, according to the Korea Creative Material. Agency's 2024 white paper on the music industry.
It's not uncommon for some fans to purchase state 10 CDs, keep the. pictures however throw out a lot of the real CDs. Some will even purchase. much more as often a purchase will immediately put the purchaser. into a lotto for tickets to meet-and-greets with band members.
Kim Do-yeon, a 24-year-old K-pop fan, stated while it wasn't. ideal for the environment, she typically purchases numerous CDs including. the same music from her favourite band.
I purchase numerous CDs due to the fact that each variation is packaged. differently - in particular, the pictures are various, she. said.
Such marketing strategies from K-pop companies have indicated that. in South Korea, sales of physical albums - which are practically all. CDs - have almost tripled over 3 years to more than 119. million in 2023, according to South Korean album sales tracker. Circle Chart.
That's been a major aspect behind a 13% jump in global. physical album incomes in 2015, according to the Worldwide Music. Report by industry body IFPI.
The amount of plastic used by K-pop companies has thus. surged, hitting about 800 metric heaps in 2022, a 14-fold. boost from 2017, according to a declaration from South Korean. legislator Woo Won-shik that cited environment ministry information.
The problem of K-pop's marketing strategies has actually likewise been debated. in parliament's environment and labour committee meetings but. the practice shows no sign of ending.
K-pop agencies emphasise that they are using recycled or. environment-friendly materials and have actually begun releasing sustainability. reports.
Asked to respond to the criticism of the market's CD. marketing practices, HYBE, K-pop supergroup BTS'. company, said it prepared to significantly broaden its offerings of. so-called Weverse albums, where fans gain access to music and digital. material such as photos by acquiring by means of a QR code.
Other K-pop agencies SM Entertainment and JYP. Entertainment did not respond to Reuters demands. for comment while YG Entertainment referred to its. sustainability report.
Kpop4planet argues that the firms owe it to the fans to do. more and that unless there is a modification in their CD marketing,. using recycled product in CDs is tantamount to. greenwashing.
The majority of K-pop fans are young, they're the future generation in. their teens or 20s who will be directly impacted by a climate. crisis, said Kim Na-yeon.
(source: Reuters)