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Aluminum and copper prices drop on possible Trump tariffs
Prices of aluminium and copper fell in London Friday, as a result of a stronger dollar. The markets were preparing for U.S. Tariffs to be imposed on Canada and Mexico by the United States as early as this Saturday. The London Metal Exchange's (LME) three-month copper was down by 0.8% to $9,055.50 per metric ton at 1106 GMT, while aluminium fell 1.1% to 2,598. LME copper is on course for a fall of 2.4% this week. This will be its worst week in over two and a half months. However, it remains set to record its first monthly increase since September, with a gain of 3.3% in January. "One down, and 11 more to go." Alastair M. Munro, broker at Marex, said that January 2025 reminded him of the turbulent nature of the first month of the year. Donald Trump, the president of the United States, reiterated on Thursday his threat to impose 25% tariffs on imports from Canada or Mexico. This helped boost the U.S. dollar, making metals priced in dollars more expensive for buyers with other currencies. This also increased the overall level of uncertainty, which drove more investors to safe-haven investments. "The truth is that the majority of fund interest lies elsewhere, in commodity markets such as agriculture, energy and precious metals, where they have a better picture. Munro explained that our space is dominated by high-frequency traders. The recent concerns about global economic growth also affect industrial metals. U.S. inflation figures on Friday are expected to give clues as to the interest rate outlook. The U.S. Federal Reserve kept rates unchanged on Wednesday and said that it would not rush to reduce them until inflation and job data indicated otherwise. Other metals saw a 0.9% drop in LME zinc to $2,767.50 per ton. Lead fell by 0.7% to 1,953 and tin dropped 0.6% to $30,005. Nickel was down 0.9% to $15,255. Chinese metals consumers are closing their main markets for Lunar New Year until February 5. Reporting by Polina Devlin in London, Editing by David Goode)
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Exxon exceeds Q4 expectations with higher Permian and Guyana output
By Sheila Dang HOUSTON - Exxon Mobil beat Wall Street's fourth-quarter profit estimate on Friday as higher oil and natural gas production offset lower prices for oil and lower refining margins. Profit for the fourth quarter was $7.39 Billion. According to LSEG, profit per share was $1.67. This beat analyst expectations of $1.56. The number one oil producer in the United States reported total earnings of $33,46 billion for full-year 2024, down from $38.57 billion the year before. The No. After closing the acquisition of Pioneer Natural Resources, in May, the company became the largest U.S. oilfield in 2024. Exxon has boosted its profits due to low production costs and lucrative projects in Guyana, despite the lower oil price and the decline in profits from fuel. The company announced earlier this month that lower oil refining profits would reduce earnings between $300 and $700 millions compared to third quarter. Even though demand for gasoline and Diesel lagged expectations, the startup of new oil refining companies by other companies in Asia & Africa resulted in a higher global fuel supply. Kathryn Mikells, Exxon's Chief Financial Officer said in an interview that the refining industry is still under pressure due to the increased supply. She said, "That is what we are watching as we look forward to 2025." The company had previously stated that impairments would cost around $600 million during the fourth quarter. Mikells explained that the charges are a result of selling non-strategic investments, such as a joint venture with Nigeria. She said that the largest U.S. producer of oil continues to anticipate a decision in September on its arbitration challenge against Chevron's purchase of oil producer Hess. Chevron would be able to gain a foothold on Guyana's petroleum projects if it proceeds. Exxon, CNOOC and Hess, the partners of Hess in the Guyana joint venture, claim that they have the contractual right to purchase Hess’ stake. In 2024, the total return to shareholders via dividends and buybacks was $36 billion. This is up from $32 in 2012. Exxon’s $36.2 billion in free cash flow covered the shareholder distributions. This is a key part of Big Oil’s strategy to attract investors. Sheila Dang, reporting from Houston; Simon Webb and Michael Perry, editing)
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EU lifts gas price cap in energy crisis
The European Union's gas price cap, which was introduced during the Russian gas crisis of 2022, will expire this Friday. It has not been activated since its conception. The cap would apply if the gas prices rose to an unusually high level, in response to months of rising energy prices due to Russia's cutting of gas supplies following its invasion of Ukraine. The cap is designed to kick-in if European Gas Prices reach 180 Euros per Megawatt Hour - a price level that the benchmark EU hasn't reached since 2022 when the energy crisis hit Europe. On Friday, the benchmark front-month contract for gas at the Dutch TTF Hub was trading above 52 Euros/MWh - its highest price since late 2023 but still well below the prices of the energy crisis in 2022. The European Commission's decision that the price cap will expire signifies the end of Europe's worst energy crisis. Gas storage in the EU is full despite cold snaps and other countries have increased their non-Russian supplies. One EU diplomat stated, "We never got to the point where we had to test the effectiveness of the instrument again." Germany was among the countries and industries that were divided on this issue. They were concerned about how it could disrupt energy markets, or hinder Europe's ability in attracting gas supply from competitive global markets. Eurogas, the industry association, said that it supports the gradual phase-out of the emergency measures implemented during the energy crises. Andreas Guth, Eurogas's head of business development said: "It is hard to determine the true effectiveness of these actions and they could create market distortions." Italy and other countries wanted the EU price cap to be kept, but redesigned to lower prices.
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Apple rallies as the dollar rises in anticipation of tariffs
Mike Dolan gives us a look at what the U.S. market and the global markets will be like this week. As January comes to an end, the world markets are bracing for the U.S. tariff increases that could come as early as this weekend. This is causing the dollar to rise in anticipation while interest rates in Europe continue to fall. Apple, the most valuable company in the world, rallied by 4% before today's bell despite the currency market's anxiety. Index futures added to the gains made on Wall Street Thursday. Apple's positive outlook for the future was impressive, even though it missed its quarterly earnings target. Donald Trump, the U.S. president, stole the show yet again yesterday late as he kept the markets guessing on the size of the 25% import tariffs promised on Saturday for Canada and Mexico. We may or we may not. "We're going make this determination probably tonight," Trump replied when asked if the tariffs would include Canadian and Mexican oil. Trump stated that the level of North American duty "may or not" increase over time. He said this to encourage the two biggest U.S. trading partner to stop illegal migration and shipments of the drug fentanyl. The Canadian dollar has fallen to near-five-year lows, after a loss of 1% during a week of lowering the Bank of Canada's rate. The Mexican peso recovered from the steep drop it had experienced in the previous session, but was still on course for its worst performance weekly since October. The dollar rose more generally, while the euro hit 10-day lows after the European Central Bank cut interest rates by a quarter-point on Thursday. The ECB's easing efforts were justified by the news that the German and French economies contracted in the fourth quarter of last. In addition, January inflation data from France and Germany's main states was also below expectations. Sources at the ECB said that another rate cut will likely be implemented in March, without much opposition from policymakers. This is before the debate on future easing intensifies. Some reports suggested that the central bank might stop referring to its monetary policies as "restrictive", after the March decision. European stocks continued to rise to new heights in the midst of earnings season. Novartis was up 2.4% following a big quarterly income boost. The S&P500's near 8% dollar gain in January is nearly twice as much as the gains of euro zone stocks. The earnings deluge on Wall Street and the curveball from China this week on the DeepSeek AI model has distracted some from the macro-political picture. Intel's report also received a positive response overnight. IBM's 13% increase in earnings on Thursday was its largest daily percentage gain since 1998. IBM lost 6% to Microsoft due to cloud computing concerns, but it also saw a 13% gain. Big Oil dominates the corporate updates of Friday. Chevron's earnings were below expectations as its refining division suffered a first-time loss since 2020 due to weak margins. The Fed was on hold and the economic data were mixed. The fourth-quarter growth in gross domestic product slowed down to 2.25 percent, as was expected following the trade report of the previous day, but jobless claims for each week fell more than predicted. The Fed will release its preferred personal consumption expenditures inflation indicator (PCE) on Friday. The annual core PCE inflation rate should have remained at 2.8%. Treasury yields in other countries were slightly higher than 4.5%. Investors sought out gold as a safe haven due to increased U.S. trade concerns. The following developments should help to guide U.S. stocks on Friday:
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India's Vedanta beats core profit expectations for Q3 on high metal prices
Vedanta, an Indian mining company, reported a core profit for the third quarter that was above market expectations on Friday. This was largely due to a good showing by its zinc and aluminium businesses. The shares of the company closed at 2.1%, despite being only marginally higher before the results. The conglomerate that converts metals into oil reported a core profit of 112,84 billion rupees, which is earnings before interest, tax, depreciation, and amortization. According to data compiled and analyzed by LSEG, analysts expected an EBITDA average of 104.53 trillion rupees. The core profit margin increased to 34%, from 29% the year before. This was due to EBITDA for aluminium and zinc increasing by 58% each and 28%. Two brokerages reported that domestic aluminium prices increased by 17% and zinc prices nearly 22% in accordance with the benchmark prices of aluminium and zinc on London Metal Exchange. Vedanta’s net profit increased 76% year-on-year, to 35.47 billion Rupees. This is in line with analyst estimates of 35.27 trillion rupees. The revenue from operations grew by more than 10%, to 385.26 bn rupees. This was higher than expenses, which increased about 3%, to 331.34 bn rupees. This week, Vedanta subsidiary Hindustan Zinc exceeded quarterly expectations due to higher zinc prices. ($1 = 86,6300 Indian Rupees) (Reporting and editing by Varun H. K.)
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Indonesia plans to build new nuclear power stations with a 4.3 GW capability in a bid for cleaner energy
An adviser to Prabowo Subito, the president of Indonesia, said that Indonesia is planning to build nuclear power stations with a capacity of around 4 gigawatts in an effort to produce cleaner energy. Indonesia has a current installed capacity of more than 90 GW. More than half is powered by coal, and less than 15 % by renewable energy. The country currently does not have any nuclear power, which is controversial in a land prone to earthquakes. Hashim Djojohadikusumo is Prabowo’s brother and a close advisor. He told a sustainability conference that Indonesia will also build floating modular reactors. However, he did not specify the timeline or how many. Last year, another official stated that Indonesia was planning to have nuclear plants operational by 2036. He said, "This is a response to the challenges presented by climate change." Nuclear power plants do not emit CO2, but they produce toxic waste, which some governments and campaigns say should make atomic energy not green. Hashim criticised in his speech the G7 Just Energy Transition Partnership, announced in 2022. This partnership promised Indonesia $20 billion for reducing its emissions. He said that the funds were only minimally disbursed. He added, "JETP has failed." Hashim said that Prabowo’s government will not close all coal-fired power plants by 2040. It would only stop building new ones. Indonesia is one of the largest thermal coal exporters in the world. Coal power generation is also a major source of emissions. (Reporting and editing by David Evans; Stanley Widianto)
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Chevron's refining division posts its first loss in 4 years, missing earnings estimates
Chevron Corp. reported earnings for the fourth quarter below Wall Street expectations on Friday, as low margins forced its refining division into a first-time loss since 2020. The second largest U.S. oil company posted total earnings for the three-month period ending Dec. 31 of $3.24 Billion, up from $2.26 Billion in the same time last year. The company's adjusted earnings per share, which were $2.06, fell below the Wall Street estimate of $2.11, due to weak fuel sales. Fuel sales profits fell across the industry in 2012, as demand for oil slowed down after the pandemic and the economic situation in China and the United States, two of the largest oil consumers, deteriorated. Chevron’s downstream business suffered a loss of $248 million during the fourth quarter of 2024. This compares to a profit made of $1.15bn in the same time period last year. Margins softened in both the U.S. and international markets, but weak jet fuel demand aggravated troubles for the Houston-headquartered company's domestic business. Chevron reported that U.S. fuels sales were down 3% on an annual basis. Chevron's fourth-quarter oil production was relatively unchanged, at 3,35 million barrels equivalent per day (boepd), as compared to 3.39 million boepd one year earlier. Reporting by Seher dareen and Arunima kumar in Bengaluru, Editing by Saumyadeb chakrabarty
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Markets prepare for Trump tariffs and US inflation data
The global stock market stabilized on Friday following a volatile week, thanks to the introduction of a Chinese artificial intelligence (AI) model that is low-cost. Investors braced themselves for U.S. Tariffs against Canada and Mexico starting as early as this Saturday. Apple's relatively strong sales forecasts overnight helped to support the market sentiment. European stocks rose 0.4% early in trading while Wall Street futures rose between 0.4 to 0.7%. Investors reacted badly to the AI model of Chinese firm DeepSeek on Monday, sending shares in high-profile technology names like Nvidia and Oracle plummeting. The tech stocks have recovered some of their losses. Microsoft and Meta CEOs defended their massive expenditures to remain competitive in the AI sector. Investors are also focused on the looming threat of U.S. President Donald Trump to impose 25% tariffs on Mexico, Canada and other countries. This has helped boost the dollar and gold prices and put pressure on the Mexican peso as well as the Canadian dollar. Michael Nizard is the multi-asset Chief Investment Officer at Edmond de Rothschild. He said that markets are undervaluing the risks associated with Trump's tariffs. Europe may be his next target. After the Federal Reserve kept rates unchanged on Wednesday, the U.S. inflation figures due on Friday will be closely scrutinised to determine the direction of interest rates. The data released on Thursday indicated that the U.S. economy slowed down in the fourth-quarter, but was still robust enough to allow investors to expect the Fed will only lower rates gradually this year. The U.S. Dollar Index was up last 0.1% for the day, and is on track to gain 0.7% on a weekly basis. As expected, the European Central Bank cut rates on Thursday. The market expects the Bank of England to follow suit next Monday. Both the euro and the sterling fell slightly on Friday. The yen last traded in Japan at 154.71 dollars. Recent yen gains are due to expectations of more rate hikes from the BOJ in this year. Ryozo Himino, the BOJ's Deputy Governor, said that the BOJ would continue to increase rates if prices and the economy move in accordance with central bank forecasts. Gold rose to a record of $2,800.99, and was flat for the day. Brent crude futures fell 0.3% to $76.7 per barrel. U.S. crude oil futures fell 0.2% to $72.62 per barrel. The stock markets of mainland China, Hong Kong, and Taiwan were closed to celebrate the Lunar New Year. The MSCI Asia-Pacific broadest index outside Japan fell 0.1% but is still on track for a gain of about 1% this month.
Marico, India's largest company, misses profit forecasts as costs outweigh price-led growth
Indian consumer goods maker Marico reported a smaller-than-expected quarterly profit on Friday, as higher raw material costs and marketing spends overshadowed price increases-led growth.
Parachute Coconut Oil's profits were impacted by rising prices for raw materials such as copra and vegetable oils. The company is also facing intense competition, and continues to invest heavily in marketing and advertising.
Marico's third-quarter expenses increased 17.7%, to 23,18 billion rupees (267.54 millions dollars)
The net profit for the year was 3.99 billion rupees (46.05 millions), up from 3.83 billion rupees. According to data compiled and analyzed by LSEG, analysts expected a profit in the range of 4,02 billion rupees.
The revenue, however, was 27.94 billion rupees. This is a 15.4% increase from the previous year, mainly due to an improved rural demand and higher product prices.
Marico announced that it would increase the prices of its products to compensate for an expected "firmness in commodity prices". It noted that copra prices were up 38% during this financial year.
The company also stated that its revenue will increase by double-digit percentages in the medium term, as it increases its market share across all its brands.
Hindustan Unilever, the industry leader and Dove soap maker, reported results below expectations last week. They also forecast further margin pressures.
(source: Reuters)