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Copper prices rise on US rate cuts and Chinese demand
The copper price rose for the third session in a row on Friday. This was boosted by expectations of a U.S. rate cut following a central banking appointment, and positive economic data from China. The benchmark three-month LME Copper on the London Metal Exchange increased 0.2% to $9,000 a metric tonne in open-outcry official trading. This is a continuation of a recovery after it reached its lowest level in three weeks on 31 July. Donald Trump, the U.S. president, announced on Thursday his choice to fill the vacant seat at Federal Reserve. This boosted hopes for interest rate reductions and weakened the dollar. The dollar is weaker, making commodities priced in U.S. dollars less expensive for buyers of other currencies. Commodity Market Analytics' Dan Smith said that the weaker dollar was a major driver of August. The dollar is weakening and China looks to be in good shape. The fundamentals are positive at the moment. Data released Thursday showed that China's exports in July exceeded forecasts as manufacturers took advantage of the fragile tariff truce, between Beijing and Washington, to ship goods. The Shanghai Futures Exchange's most-traded copper contract rose by 0.1%, to 78.490 yuan (10,929) per ton. Smith said LME Copper was potentially bullish according to his algorithmic computer model, which aims to replicate fund activities that place buy and sell orders mostly based on momentum signals. He said: "I believe there is a possibility that copper will be a buy next week, with a potential upside of up to $10,000." U.S. Comex Copper Futures increased 0.7% to $4.43 a lb at 1215 GMT. This brings the premium of Comex over LME Copper to $62 a tonne. Investors were closely watching developments on the supply side. Codelco, the top copper producer in Chile, has asked for permission to reopen part of its flagship mining facility after a fatal incident last week. Other metals were mixed. LME aluminium, at official activity, was unchanged at $2,610 per ton. Zinc was also little changed, at $2,812.50. Tin was up 0.2% at $33,800. Nickel was down 0.3% at $15,075. Lead was down 0.6%, at $1,998. Click on to see the top metals stories ($1 = 7.1818 Chinese Yuan Renminbi).
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Kazakhstan will begin to produce its own nuclear fuel
Kazakhstan's atomic energy agency announced on Friday that the country, which is the largest producer of uranium in the world, will produce its own nuclear fuel to power nuclear power plants in Central Asia in the next few years. Kazakhstan has no nuclear power plants yet, but it does have uranium deposits that are second in the world only to Australia. In October, 71.12% supported the construction of nuclear power plants in Kazakhstan. Local media reported that Rosatom, a Russian company, began construction on Friday in the village of Ulken in Kazakhstan's southeast. The survey and engineering work will take at least 18-months, and the construction of this plant is expected to be finished in 2035. China is expected to build two more nuclear power plants in Kazakhstan. The government of President Kassym Jomart Tokayev has promoted nuclear power as a means to wean Kazakhstan’s growing economy away from coal-fired energy. Kazakhstan plans to reach a nuclear power of 2.4 gigawatts by 2035. Reporting by Mariya Goreyeva. Felix Light is the author. Mark Potter (editing by Felix Light)
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Gold hits record high as stocks rise on investors' interest in Fed reform
Gold futures rose after a report that U.S. imports were subject to duties. The world stock index traded at record highs, despite overnight weakness on Wall Street. In Europe, the shares were boosted by a string of strong earnings, as well as optimism about a possible negotiation of the U.S. tariffs which went into effect on Thursday. A series of changes in the Federal Reserve has made the outlook for the United States' monetary policy, which is a key component of global markets, even more uncertain. Policymakers at the Federal Reserve are divided over the impact of inflation, and the leadership of the central bank is changing. The U.S. president Donald Trump announced on Thursday that he will nominate Council of Economic Advisers chairman Stephen Miran to temporarily fill a vacancy at the Fed while the White House searches for a permanent member to the Fed's governing council and continues to search for a replacement chair. Miran shares the same views as Trump who criticized Jerome Powell, Chair of the Federal Reserve, for cutting rates "too late", despite the fact that growth was holding and inflation was ticking up. Ray Attrill of National Australia Bank, Sydney's head of FX Strategy said: "It locks-in a vote in favor of rate cuts for all meetings from now until the end of the month." He added that "markets are already traveling with a very high expectation of a rate reduction." There is a question over whether he will be able to ratify the agreement in time for September's meeting. The MSCI All-Country Index was up by 0.1% for the day. This was just below the record highs set two weeks ago. It was on track to rise 2% this week and achieve its best performance since June. Europe's STOXX600 was up by 0.2%. Zurich's SMI Index, which had shrugged off the 39% U.S. Tariff that took effect in Switzerland on Thursday, fell by 0.14%. Bloomberg News reported that Fed Governor Christopher Waller was the leading candidate to succeed Powell, whose tenure ends on May 15th 2026. The shock is real. Now the question is, how will it impact the economy and data and when? Samy Chaar, Lombard Odier's economist, said that up until now the impact has been less than expected. Tariffs are higher than what many feared in April. As a result, the relief over lower than expected duties could be short-lived. Chaar said that the European Union is a good example, as it now only has a 15% duty, instead of the 50% Trump had threatened. "That is the vulnerability of the market... It is focusing on good news, not getting 50% but only getting 15%. He said that the 15% was a shock to the system and would eventually show up in the data. U.S. Gold Futures reached a record after a Financial Times report that the U.S. has imposed tariffs for imports of 1 kg gold bars which constitute the bulk of Switzerland’s bullion exported to the U.S. Gold futures rose up to 2.3%, reaching a record high of $3,477. Spot gold was down 0.1% at $3,400 per ounce. U.S. Stock Futures both rose by 0.2%, suggesting a modest increase at the opening bell. Tony Sycamore is a market analyst with IG in Sydney. He said that the rally for stocks came "against... an emerging titanic dovish reversal at the Federal Reserve". After a weak auction of 30-year bond, this is the latest in a series of disappointing sales. The dollar increased by 0.1% to 147.24 yen. The dollar index, which measures the greenback's value against the currencies of major trading partners around the world, rose 0.2%, to 98.21.
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Rosatom begins development of an uranium mine in eastern Siberia
Rosatom, Russia's nuclear energy monopoly, has begun development of the Shirondukuyskoye Uranium Deposit in Eastern Siberia. The company plans to produce its first uranium in this deposit by 2028. The deposit, located near Krasnokamensk in the Russian region of the Far East, close to China and Mongolia borders and the city known as the "uranium capitol of Russia", has an estimated 8,000 tons uranium reserves and 40,000 tonnes of molybdenum. The division stated in a press release that "the development of the Shirondukuyskoye Deposit is an important step in the development and growth of Russia's Uranium Mining Industry". It added that "its mineral resource base not only will support planned uranium output volumes, but also ensure long-term development in Krasnokamensk." Russia is the sixth largest producer of uranium in the world, but it controls 44% global capacity for uranium enrichment. Russia imports uranium primarily from Kazakhstan. Rosatom intends to increase its domestic uranium output to 4,000 tonnes by 2030, up from 2,796 tones in 2024. Rosatom stated that the uranium production could increase by 2,000 tonnes per year with Shirondukuyskoye as well as two nearby Argunskoye or Zherlovoye. Russia is increasing the share of nuclear power in its energy production. Rosatom projects that nuclear energy will reach 25% of the country's total energy production by 2045, up from its current 20%. (Reporting and editing by Mark Trevelyan; Gleb Bryanski)
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Just Transition: EU Funds Saunas, Sport and Dance
The EU has set aside billions of dollars to help wean the EU off fossil fuels Critics question lack of project oversight Just Transition Fund to be inspected by auditors By Peter Yeung A number of European politicians, climate NGOs, and corruption watchdogs raised alarms over the EU's flagship Just Transition Fund. The JTF was set up to help energy workers and communities transition away from polluting industry. "We don't have any idea how money is spent by the member states." This is wrong. "It should be made public," said Monika Höhlmeier MEP, European People's Party Vice Chair of the European Parliament's Budget Control Committee. The European Commission has said that it doesn't know which companies or projects will benefit from the Just Transition Fund (JTF), a fund of 26.7 billion euros ($31 billion) launched in 2021 by the EU to assist member states with their transition away from dirty fossil-fuels. The JTF has so far allocated more than eleven billion euros to the EU 27 member states. This includes funding the production of hydrogen in Poland's coal-rich region, restoring Finnish boglands, supporting renewable energy in Greece, and developing green steels in Romania. Members can choose how they want to spend JTF funds under a model of "shared management", as long as it is "to enable regions and people" to "address the social, economical and environmental impacts that come with the transition towards climate neutrality". The Commission responded that it was not the responsibility of the countries to notify the EU authorities about their projects, either before or after they were financed. Critics say that this lack of accountability and transparency could lead to the misuse of EU funds, whether through fraud, corruption or financing projects which prove to be ineffective or irrelevant. The fund was launched by Commission President Ursula von der Leyen in order to "make sure that no one or region is left behind", as we move towards net zero. It is designed to help workers and communities who are dependent on coal mines and steel factories, and peat fields. According to an EU report, Europe's ambitious emissions reduction target of 2030 could result in the loss of nearly half a millon jobs. The coal sector is expected to be cut by half over the next five year period. Hohlmeier, a MEP, said that the JTF's lack of transparency could lead to the same mistakes as the EU Pandemic Recovery Fund 2021 which was riddled by fraud and failure. The European Court of Auditors, which is tasked with improving financial management, said that the JTF had serious flaws. It also lacked the focus it needed on delivery. It was found, for example, that states with similar funding needs could theoretically receive equal funding. "One could commit to, and succeed in, closing down carbon intensive operations while another could simply downsize them temporarily." Vincent Bourgeais is a spokesperson from the European Court of Auditors. He said that the Court would be auditing the fund in the next year. He said: "Rest assured, we'll be looking at this closely and doing our part to protect the EU's interests and make sure that taxpayers' funds are used wisely." Several JTF projects have already been scrutinized. JTF has also undertaken projects such as a nature-themed spa hotel, a laminated wood factory, a watersports centre, a music library, and a summer camp for children playing ice hockey. Brice Bohmer is the climate and environment director for Transparency International. This global anti-corruption non-profit organization. Bohmer called on the EU to ensure that "full transparency" is maintained over how and who receives money, to avoid any conflict of interest and to maximise impact. Estonia's Ministry of Finance has defended these projects by saying that the money diverted economic activity from fossil fuels which account for nearly half of Ida-Viru’s economic output. A spokesperson for the ministry said that residents could "reflect on... an environmentally sustainable future", and also strengthen their cultural heritage and social cohesiveness. The spokesperson said that such initiatives "clearly are not a waste of money... but rather a necessary step in ensuring a just, sustainable, people-centred transition to climate neutrality." A spokesperson from the Commission said that it does not comment on specific projects in Estonia, but rather has an "overview of expenditure" and then monitors its implementation. Before receiving funds, member states have to negotiate with the Commission their plans for shaping and directing projects.
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Tata Motors' quarterly profits plunge as tariffs and slow sales bite
Tata Motors, an Indian automaker, posted a 63% drop in profit for the first quarter on Friday. This was due to U.S. Tariffs that hurt their business which was already struggling with weak sales in India and its luxury car division. Tata Motors is India's largest seller of commercial and electric vehicles. However, its luxury division Jaguar Land Rover, which drives the company's profits, has seen a 11% drop in sales overseas. This was due to a temporary suspension of U.S. imports as well as the phase out of older Jaguar models. The latest U.S. tariffs on imports have squeezed the margins further, adding pressure to the business. Tata Motors announced on Friday that the U.S. tariff of 27.5% on UK and EU made cars and the planned phase out of legacy Jaguar models before a new launch had a negative impact on quarterly volumes and revenue. Jaguar Land Rover reported a profit for the year of 39.24 billion rupies ($447.8million), down from restated 105.14 bn rupees from last year. This includes a 49.75 billion rupies one-time gain, resulting from its sale of financing to non-bank lender Tata Capital. Tata Motors has not changed its JLR guidance, citing a U.S./UK trade agreement signed in May that will reduce the tariffs. The agreement allows the UK to export 100,000 cars per year to the U.S. for a 10% tariff, as opposed the 25% that other countries face.
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Reliance Infra, an Indian company, will recover $3.25 billion from New Delhi's consumers in unpaid electricity dues
Reliance Infrastructure, an Indian company, said that its New Delhi electricity distribution units would recover 284.83 billion rupees (3.25 billion dollars) in unpaid debts following a Supreme Court ruling this week. Dues are due because of historical tariff shortfalls where the electricity prices approved by regulators didn't fully cover costs. The amount will be recovered by consumers in four years, starting April 2024. This is likely to happen through increased electricity rates. The Supreme Court of India ordered on Wednesday that all electricity regulators in India clear any deferred payments and unpaid bills owed by power distribution companies. The court also ordered state regulators conduct audits and to submit recovery plans. Reliance Infra belongs to the Anil Ambani Reliance Group. He is the younger sibling of Mukesh Ambani, a billionaire. According to a court document, in New Delhi, three distribution companies, including a Tata Power unit, had accrued 272 billion rupees of unpaid dues by the end of fiscal year 2021. These had to be settled within four years, starting April 2024. The Delhi Electricity Regulatory Commission (DERC) will supervise the recovery process. This is expected to lead to higher electricity bills in the capital. Reporting by Sethuraman NR, New Delhi. Editing by Sonia Cheema.
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Chinese villages hit by the worst floods for generations claim they did not have warning
Over the years, Pingtou's residents, who live in a sub-tropical village of China, have experienced many typhoons, rainstorms, and other natural disasters. Nothing prepared them for the flooding that hit Pingtou this week, which was the worst in decades. On Friday, Guangdong residents were still dragging furniture and appliances from their homes that had been damaged by the recent downpour. At least four of these items collapsed. One villager in his fifties, who requested to be identified only by his surname Zhong, said that the older people here have never seen such flooding in their 100 years of living here. The floodwaters had never entered his house before, but they did so this time, destroying many of his possessions. The water marks on nearby walls were over a metre high. It wasn't immediately clear whether anyone had died in the village. Guangzhou's capital, Guangzhou province, experienced a record rainfall of 622.6mm (24.5 inches), almost three times the average monthly rainfall in August. State media reported that at least seven people died due to flooding in the city. China has experienced record rainfalls in the north and south, as well as heatwaves that lasted for a long time in its interior. The government announced 430 million Yuan ($59.9million) of new funding on Thursday for disaster relief. This brings the total amount allocated since April up to at least 5,8 billion Yuan. In Pingtou however, the villagers complained that they did not receive enough help from the local authorities in order to cope with the aftermath. Zhong claimed that he was informed by officials that no aid was available to help with the flooding. He said, "Not even a single bottle of mineral-water was provided." 'NO ALERTS' Residents of Pingtou said there were no flood alerts in their area, leaving them unprepared. The night of Tuesday's heaviest rain in Pingtou 73-year old Zhang was woken by her daughter-in law in the middle night. She rushed to the relative safety and security of her son’s two-storey house. The roof of Zhang’s house was a total collapse when the family awoke the following morning. Zhang said, "I have lived in this house for over 50 years." She stared at the household items covered in debris left behind by receding water. Hu Songlin, a fish and duck farmer just outside Pingtou said that the flood had washed away all the fish from his ponds. He estimated the immediate loss at around 120,000 yuan. Hua, his wife, said: "Now we will not be able earn a cent." Climate change is believed to be the cause of China's unpredictable weather, including droughts and floods. "We say global warming can cause heavier rain, but there is only so much available water," said Johnny Chan a professor from the City University of Hong Kong School of Energy and Environment. If one area gets more rain, then another will get less. What we are seeing is that some places will get a lot drier and others will become a lot wetter. $1 = 7.1827 Chinese Yuan Renminbi (Reporting and editing by Helen Popper; Additional reporting in Hong Kong by Florence Lo, Joyce Zhou and Ryan Woo)
Italy approves new subsidies of nearly $700 Million for EVs
The Environment and Energy Ministry announced on Friday that Italy approved new subsidies for electric vehicles worth nearly 600 million euros (698 million dollars) as sales are lagging.
The Ministry will cover up to 30% of total cost of new electric cars or commercial vehicles by offering up to 10,000 Euros to individuals, and up to 20000 Euros to small businesses.
Subsidies, funded by the European Union's post COVID recovery fund, will only be available to companies or individuals located in large urban areas. The goal is to reduce pollution and improve air quality.
The ministry stated that to qualify for the program, recipients will need to scrap a vehicle with an emission rating of Euro 5 or lower, and that is older than 2015.
The EU has been implementing regulations to reduce carbon emissions and phase out combustion engines cars, but EV sales in Europe are still struggling. High prices and a lack of charging stations are the main reasons for this.
Battery electric vehicles only accounted for 6% of all new car sales in Italy in June. This compares to over 15% throughout the European Union.
The bloc will review its ban on new petrol and diesel vehicles from 2035 next year under pressure from the automobile industry and some national government to slow down the transition. Reporting by Alvise Armillini, Editing by Joe Bavier. $1 = 0.8596 Euros
(source: Reuters)