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Vale reports largest iron ore production in the second quarter since 2018.
The Brazilian miner Vale announced?on?Tuesday its highest second-quarter production figure since 2018. Production?of steelmaking _material increased?0.8% compared to a year ago and came above analysts' expectations. Vale, a world-leading iron ore producer, reported an iron ore production of 84.3 millions metric tons in the April-June period, which is above the Visible Alpha consensus estimate of 82.2million tons. The miner said iron ore production was supported in the period by a'record-breaking second quarter performance in its S11D Complex, and added volumes from Capanema, and 'VGR1 Projects, located all in Brazil. Vale has maintained its projections of producing between 335 and 345 millions tons of iron ore in this year. Its other estimates for yearly production have also remained unchanged. ?Vale reported that iron ore sales in the third quarter included fines, pellets, and run-of mine. This represents a 3.1% increase due to higher production and stock sale. According to a?estimate compiled by Visible Alpha, analysts expected 78.2 millions tons. According to Vale’s report on output and sales, the average realized price of iron ore fines increased 11.6% from last year to $95 per ton. However, it fell by 0.8% in comparison to?the first-quarter due to "negative impact" of pricing mechanisms. Vale will?release its second-quarter financial results? on July 30. Reporting by Andre Romani from Sao Paulo, and Marta Nogueira from Rio de Janeiro. Editing by Chris Reese, Natalia Siniawski and Natalia Siniawski
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Groupo Mexico's quarterly profit increases 79% due to higher copper prices
The mining?and transport conglomerate Grupo México announced on Tuesday that its second-quarter net profit had risen?nearly 79 percent compared to a year ago, thanks primarily to higher prices. According to a filing, the net profit of the group, which is a major copper producer, was $2.20 billion on revenues that rose 35% to $5.71 Billion. Analysts polled by LSEG predicted a net profit of $1.66 billion, but revenues came in slightly higher than the $5.65 estimate. The company produced 257.537 metric tons of copper in the first quarter. This is down 3.7% compared to the same period last year. Asarco unit. The increase in Mexico operations was partially offset. The price of the red metal also increased by 30.5% from $4.72 to $6.16 a pound. Sales at the key mining division increased 41.3% compared to a year ago. The mining unit has maintained its guidance for 2026 to produce 1.034 millions tons of copper. Grupo Mexico also raised $1.25bn through a 10-year senior secured?bond issuance?last month and plans to use these funds for the Tia Maria Copper Project in?Peru. By the end of the second quarter the project was 42 percent complete. The goal is to begin operating by the second half of this year. Grupo Mexico is a copper producer in the world that is largely controlled by German?Larrea. Conglomerate runs transport and infrastructure units. (Reporting and editing by Daina Beth Sool)
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New York City and US states sue EPA over climate regulation regarding hydrofluorocarbons
On Tuesday, the Trump administration was sued by 18 'Democratic-led States, Washington D.C., and New York City, over a federal?rule? they say will harm climate change by giving companies a longer time to stop using hydrofluorocarbons as dangerous chemicals in commercial refrigeration equipment. The petition filed in the federal appeals courts of Washington, D.C., challenges a decision by the Environmental Protection Agency to delay deadlines for companies that want to replace hydrofluorocarbons, also known as HFCs, with climate-friendly refrigerants. The rule, according to opponents, would increase harmful greenhouse gas emission?and undo a part of the American Innovation and Manufacturing Act that called for a 85% reduction in the HFCs before 2036. In December 2020, President Donald Trump signed this law less than a month before the end of his first White House tenure. The "Phasedown?of Hydrofluorocarbons' rule is set to go into effect on July 27, 2019. In a press release, the EPA stated that it has a long-standing policy of not commenting on pending litigation. The petition also names EPA Administrator Lee Zeldin. The Trump administration has'scaled back' a number of environmental initiatives and standards. This includes reducing the support for clean energy, and repealing a scientific finding from the Obama administration that climate change is a threat to public health. HFCs can be found in many products, including air conditioners, refrigerators, freezers, large supermarkets, and equipment for manufacturing semiconductors. A RULE IS SAID TO BECOME A THREATEN TO CLIMATE PROGRESS States stated that one provision in the EPA rule allows supermarkets, convenience shops and bakeries to continue using remote condensing system whose refrigerants have more than nine-times the global warming potential previously allowed. In a webcast announcing the lawsuit, California Attorney General Rob Bonta stated that "the EPA's rule would undo our progress and penalize businesses that?have complied" with the law. Bonta accused Trump of "again putting the profit of the industry over the health of the American people and our future." The petition is led by the attorneys general from California, Massachusetts and Washington state. Attorneys general from Colorado, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont, Wisconsin, Washington, D.C., and New York City also joined them. The EPA stated in a regulatory filing that the rule would help it achieve its goal of reducing the cost-of-living for American families and not forcing companies to use technology which increases the price of food and semiconductors. The deregulation drive would also further Trump's executive order of January 31, 2025, which calls for "unleashing the prosperity through deregulation." Jonathan Stempel, New York reporter
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Oil prices increase after recent US-Iran strikes and Houthi blockade, FOREX Dollar advances
The?U.S. The dollar rose on Tuesday, and was set to gain for a fourth consecutive session as the latest attacks in the Middle East drove oil prices higher and raised concerns about persistent inflation. After 'threats' from Yemen's Iran aligned Houthis two oil tankers transporting Saudi crude to Asia reversed their course in the Red Sea. A widening Middle East war has disrupted the'shipping' through two of the most important energy chokepoints. U.S. Military said Monday that they had completed their latest round of Iran strikes, marking the 10th night in a row of attacks. U.S. crude climbed 2.09% to $84.97 per barrel. Brent rose to $90.90 a barrel, up 1.88 % on the day, after reaching $91.99 - its highest level since June 11. The optimism that a lasting peace agreement could be reached between Iran and the U.S. helped to spark a decline in crude prices at the beginning of May. Recent subdued U.S. data on inflation also cooled expectations for a rate increase by its policy meeting next week. Oil prices have fallen in recent days due to tensions in the Middle East. Several Fed officials have expressed concern about inflation, including Kevin Warsh. The dollar index, which measures greenbacks against a basket currencies, rose by 0.17%, to 101.16. Meanwhile, the euro fell 0.11%, to $1.1402. The dollar was set to record its longest daily gain streak since mid-May. Erik Bregar is the director of FX risk management and precious metals at Silver Gold Bull, Toronto. "The Fed is hawkish. I don't believe the marketplace fully understands that yet. And the longer this conflict continues in the Middle East the greater the risk of the Fed sounding more hawkish." Even though the conflict continues, diplomatic efforts to find a solution continue. On Monday, a senior Iranian official said that Tehran received a mediator's proposal for a 10-day truce. U.S. president Donald Trump warned that there would be consequences if Yemen's Houthi movement, which is aligned with Iran, follows through on their threat to impose an economic blockade in the Red Sea. CME FedWatch reports that expectations for the Fed to raise rates by at least 25 basis point at its next meeting have risen to 21,9%. This is up from 11% the previous week, but still well below the 38.5% of a month earlier. Markets are pricing a 68.2% hike for the September meeting. The Canadian dollar fell 0.27% against the greenback, to C$1.411, from the one-month high reached on Monday. This was after the U.S. imposed new tariffs of 50% on many Canadian products, in response to Ottawa’s “discriminatory” treatment of American cars, alcohol, and dairy products. BURNHAM GOVERNMENT BEGINS WITH POUND FALLING Sterling?declined 0.39%, to $1.3376. This was its fourth consecutive session of declines as investors weighed up the prospect of increased government spending, and how John Healey, the new finance minister, will?finance this. Andy Burnham, Britain's 7th?prime Minister in the last decade, was sworn in as Prime Minister on Monday. He reiterated his commitment of sticking to fiscal rules set by previous governments. John Healey was named the new Finance Minister. He is the former Defence Secretary. The data on the labor market showed that Britain's job market appeared to have stabilised at low levels. Official data showed wage growth and unemployment were stable in the three-month period to May, and payrolled employment was little changed in June despite recent political turmoil. Jack Meaning, UK Chief Economist at Barclays said in a note that the data today point to a labor market with low wage pressure. However, it is not deteriorating significantly at this time. The focus will be on the European Central Bank's meeting, which is due to take place later this week. The economists polled expect the central to keep?interest rates stable this time but will still raise them at least one more time later in the year. The Japanese yen fell 0.41% to 163.14 dollars, the lowest level since December 1986. Traders continue to be on the lookout for any signs of government intervention.
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Gold profits on the hope of a de-escalation of Middle East conflict
Gold rose more than 1%?Tuesday? on hopes of a diplomatic break between the U.S. Spot gold rose 1.6% by 2:00 pm EDT (1800 GMT) to $4,068.29 an ounce, while U.S. Gold Futures for August Delivery settled at $4,076.40, a?1.5% increase. Edward Meir, Marex analyst, said that commodities were higher on the expectation of a possible cease-fire being negotiated in the Middle East. He added that technical buying is likely to continue in the short term. Prices are also expected to remain range-bound. On Monday, a senior Iranian official said that Tehran received a mediator's proposal for a 10-day truce in an effort to salvage the interim agreement. The increased oil prices caused by the Gulf supply disruptions are putting pressure on gold prices, as they fuel inflation fears and increase bets for higher interest rates. Gold is often viewed as a hedge against inflation. However, the high interest rate increases the cost of owning the metal. Investors are now awaiting?the U.S. Federal Reserve interest rate decision, and Chairman Kevin Warsh's remarks?following a two-day meeting of the central bank next week. According to the CME FedWatch Tool, traders are pricing in a 68% probability of a rate increase?in September. The psychologically important $4,000?mark seems to be holding on the gold markets... Commerzbank stated that interest rate concerns are likely to slow down a stronger recovery in the U.S. Silver spot rose by 4.1%, to 58.72 dollars per ounce. Platinum gained 1.9%, at $1.623.63, and palladium jumped 2.4%, at $1.282.25 (Reporting from Noel John, Bengaluru. Editing by Sahal Muhammad and Jonathan Ananda.)
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Oil reaches 5-week high; shares of chipmakers gain.
The Nasdaq, chipmaker shares and major stock indexes all rose on Tuesday amid the rising tensions over the Iran conflict. Oil prices also reached a five-week high. Benchmark 10-year U.S. Treasury Yields hit a two-month peak as traders pondered whether the new spike in oil prices would affect consumer prices, and increase the likelihood of Federal Reserve rate hikes. Two oil tankers transporting Saudi crude from the Red Sea to Asia have reversed their course after being threatened by Yemen's Iran aligned Houthis. U.S. Crude?rose by 2.32%, to $85.16, and Brent rose by 2.08% to $91.08 a barrel. Bruce Zaro of Granite Wealth Management, Plymouth, Massachusetts said that investors aren't necessarily expecting the war to end any time soon, but they may think its impact on oil prices is overdone. Investors also awaited corporate earnings, as Alphabet, Intel and other companies were due to report. Market watchers are interested to see if the AI trade can continue to grow, especially with high profit expectations for the second quarter. Zaro stated that earnings are "really key" to how the market will perform in the short-term. The semiconductor index was up over 5%. The index closed Friday at a level that was more than 20 percent below the record high set in late June. The Dow Jones Industrial Average rose by 395.97 or 0.76% to 52,235.23. The S&P 500 gained 63.60 or 0.85% to 7,506.88. And the Nasdaq Composite advanced by 342.90 or 1.34% to 25,850.97. European stocks are up, and technology and mining shares have gained. The pan-European STOXX 600 Index was up by 0.56%. MSCI's global stock index rose by 11.29 points or 1.02% to 1,116.79. The yield of the benchmark 10-year U.S. notes increased by 3.62 basis points to 4.634%, and then reached 4.640%. This is the highest level since May 20. Money markets indicate that traders are pricing at least one rate hike by the Fed this year. The trade was also in focus. The Canadian dollar fell 0.15% against the greenback, to C$1.409, as the U.S. imposed a 50% tariff on a range of Canadian goods in response to Ottawa's?discriminatory?treatment of American cars, alcohol, and dairy products. U.S. trade negotiators and Mexican counterparts will hold a third round bilateral talks in order to?move forward with the revision of the North American trade agreement. The dollar index (which measures the greenback against a basket including the yen, the euro and other currencies) rose by 0.17% at 101.12 while the euro fell 0.05% to $1.1408.
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Italy will use EU budget leeway in 2027-2028 to fund energy relief measures
Italy plans to use the so-called "escape clause" of the European Union budget rules in order to fund measures that will reduce energy costs by 2027 and 2028. Meloni met with senior coalition members and there was a "broad consensus" about a proposal that would use EU flexibility to help families, businesses and individuals cope with the rising cost of energy over the next 2 years. In March 2025, following Russia's invasion in Ukraine, the European Commission decided that all EU members could increase their defence spending up to 1.5% of GDP each year for four years until 2028. Italy was a strong advocate for the Commission to give EU governments fiscal flexibility to cushion the impact of higher energy costs. Last month, as a compromise, it was decided that EU countries could use 0.3% GDP (out of 1.5% GDP extra allowed for defense) to fund investments?that help transition fossil fuels into?green energy. Meloni's plan to invoke the clause one year before the 2027 general elections suggests that 'Italy' is prepared to abandon efforts to reduce its budget deficit to below the 3% GDP threshold and to exit the EU’s ongoing excessive deficit procedure. According to the 'latest multi-year budget plan', Italy was targeting a ratio of deficit-to GDP of 2.9% in 2019 and 2.8% by 2027. (Reporting and editing by Gianluca Smeraro, Keith Weir and Giuseppe Fonte)
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Gold profits on the hope of a de-escalation of Middle East conflict
Gold prices rose by?more? than 1% on Tuesday, amid hopes for a diplomatic breakthrough with Iran. This could lower energy costs and calm expectations about a Federal Reserve that is hawkish. Spot gold rose 1.7%, to $4.077.09 an ounce, by 11:20 am EDT (1520 GMT), whereas U.S. Gold Futures for August Delivery rose?1.6%, to $4.080.20. Edward Meir, Marex analyst, said that commodities were higher on the expectation of a possible cease-fire being negotiated in the Middle East. He added that technical buying is also a factor in gold's price rise after it broke above the short-term downward trend in place since 6 July. Prices are expected to remain range-bound for the near future. On?Monday, a senior Iranian official said that Tehran received a mediator's proposal for a 10-day truce in an effort to salvage the interim agreement. The increased oil prices caused by the Gulf supply disruptions are weighing down on gold prices, as they fuel inflation fears and increase bets for higher interest rates. Gold is often seen as a hedge against inflation. However, the high interest rate increases the cost of owning the metal. Investors are now waiting for the U.S. Federal Reserve to announce its interest rate decision, and Kevin Warsh's remarks following the central bank's two day policy meeting next Monday. According to the CME FedWatch Tool, traders are pricing in a 68% probability of a rate hike in September. The psychologically significant $4,000 gold mark is holding strong on the market. Interest rate concerns in the U.S. Interest rate concerns in the?U.S. (Reporting by Noel John in Bengaluru; Editing by Sahal Muhammed) (Reporting from Noel John, Bengaluru. Editing by Sahal Muhammad)
The European renewables market is driving the battery storage boom
The battery storage capacity in Europe is expected to increase five-fold between now and 2030. This will bring increased returns for energy companies, traders, and project developers, as new projects become cheaper.
The use of wind and solar energy has increased to around a third in Europe's mix. However, because they are intermittent sources, there is also a demand for backup batteries.
Battery technology has also made great strides. Smaller battery packs can store more power and lower costs.
According to estimates from the industry, even the anticipated leap in capacity will not be enough to meet national demand and balance energy grids.
Aurora Energy Research predicts that capacity will rise to more than 50 gigawatts by 2030, which represents investments worth approximately 80 billion euros (82.80 billion dollars).
The European Association for Storage of Energy estimates that 200 GW of storage will be required by 2030.
According to Aurora Energy Research, a total of 10.8 GW in Europe's battery capacity has already been added by 2024.
Some investors have been disappointed by the renewable energy industry in general. In Europe, wind turbine manufacturers have seen their profits eroded by technical issues, supply-chain problems, rising costs, and planning disputes.
After the oil price recovery, following a slump in demand caused by pandemic locksdowns, energy majors are also under pressure from shareholders to focus on fossil fuels.
Battery storage is a great way to earn money.
Project operators can secure what is known as ancillary contract from grid operators who pay them for helping to balance the system. For example, capacity market contracts pay generators and battery owners for being available during times of high demand.
Price volatility on the wholesale energy market offers traders the opportunity to make a lot of money.
When the amount of wind or solar energy produced exceeds the demand on the grid, the electricity price can go negative. Battery operators are paid to store power in case it is needed.
The traders can make money if they can charge their battery at a low price because the prices are negative, and then sell it at a higher price at sunset at six o'clock. This is what Roberto Jimenez said, the executive director of BW ESS. BW Group, whose global infrastructure company includes BW ESS.
LSEG data shows that the number of hours with a price below zero or at a negative value in Britain's electricity day-ahead market reached a record 176 in 2024. It predicts a nearly four-fold rise to 792 hours by 2026.
Similarities are seen across Europe. LSEG predicts that the number of German negative hour will increase from less than 500 in 2024 to over 900 in 2026.
MAJOR PROFITS
BW ESS and oil giant Shell have an agreement for the 331 MW capacity of a battery project in Britain. Shell will pay a fee of fixed amount to BW ESS for the battery to be available to Shell when it sees a business opportunity.
TotalEnergies, another major, bought German battery storage firm Kyon Energy in the last year. The first project, a 200-megawatt-hour project, will begin operating in 2026 with an investment of 75 million euros.
TotalEnergies spokesperson said that the German market is interconnected with 11 other countries. This provides ample opportunity for trans-border electricity trade.
In order to attract investment, new markets will also offer initial revenues that are contracted. Italy's grid operator Terna announced that it will conduct a first auction for battery storage capacity before the end of 2025. The projects are expected to become operational by 2028.
Statkraft is Europe's biggest renewable generator. It has a portfolio of large batteries, including projects in Britain and Ireland. It has said that it will bid in the Italian auction.
RETURNS ARE RISING, COSTS ARE DRIVING DOWN
RBC analyst Joseph Pepper stated that the growing revenue from contracts and trade has pushed UK batteries revenues to their highest levels in two years. They are now at approximately 90,000 pounds ($112,617) each MW per annum.
The price of battery storage has also decreased due to the oversupply of batteries from China, and the shrinking size of the battery packs as a result of technological improvements.
Pepper said that the cost to build a project in Britain had fallen by around 30% over two years, and is now just a little above 500,000 pounds for a 2-hour project.
He said that the result of a British project will be returns in the range of 12%.
The main driver (to improve returns )...) is the large decrease and reduction of CAPEX for Batteries, said Tom Vernon. Statera Energy has over 1 GW in pipeline projects that are in operation or under construction in Britain.
This trend is likely to continue. Goldman Sachs analysts said that average battery prices could drop to $80/kWh in 2026 from $153 per Kilowatt-hour in 2022. ($1 = 0.9662 euros) ($1 = 0.7992 pounds)
(source: Reuters)