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Trump Administration prepares reciprocal US tariffs amid trade war fears
Donald Trump's advisers on trade were finalizing plans for the reciprocal duties that the U.S. President has promised to impose against every country that imposes duties on U.S. imported goods, raising fears of an expanding global trade war. Trump shocked the markets on Monday with his decision to impose tariffs starting March 12 on all imports of steel and aluminum. Mexico, Canada, and the European Union condemned the plans, while Japan, Australia, and other countries said they wanted exemptions. Industries that depend on imports of steel and aluminum scrambled to reduce the expected cost increase. Last week, Trump imposed an additional 10% tariff for Chinese goods. This was effective on February 4. Chinese countermeasures took effect this week. He delayed the 25% tariff on goods coming from Mexico and Canada by a month, until March 4, to allow for negotiations about steps to secure U.S. border security and stop the flow of fentanyl. Many U.S. workers were pleased with the metal tariffs imposed on Monday, but manufacturing-heavy companies agonized about the next steps. They warned that the tariff increase would have a ripple effect across the supply chain, affecting businesses who rely upon the materials. White House officials are being tight-lipped regarding the timing or structure of the next tariffs. One source has said that the announcement could come later this week. Trump announced on Monday that he will announce reciprocal tariffs within the next two business days for all countries who impose duties on U.S. products. He also said he is looking into separate tariffs for cars, semiconductors, and pharmaceuticals. Experts in trade say that structuring the reciprocal duties Trump wants presents big challenges to his team. This may explain why the latest tariffs were not announced Tuesday. William Reinsch said Trump officials can choose between a simple 10% or 20% flat tariff rate or a messier option that requires separate tariff schedules that match U.S. rates to those of other countries. A source who tracks the work on tariffs reported that details are still being worked out as late as Tuesday. Damon Pike is a principal and trade specialist with BDO International's U.S. division. He said that the reciprocal tariffs Trump envisaged would be a massive undertaking given that the 186 member countries of the World Customs Organization have different duty rates. "At an international level, you'll find 5,000 different product subheadings at the 6-digit level. That's 5,000 times 186 countries. "It's like an artificial intelligence project," said he. Experts believe that Trump could use several statutes. These include Section 122 of Trade Act of 1974 which only allows a maximum flat rate of 15% for a period of six months or Section 338 of Tariff Act of 1929, which gives authority to take action against unfair trade practices that harm U.S. Commerce, but which has never been used. Trump could also use the International Emergency Economic Powers Act to justify tariffs on China, and those pending against Canada and Mexico. Pike added that, without IEEPA's help, it would take some sort of agency action before trade remedies could be imposed. "But everything seems to move quickly," he said. Reinsch stated that imposing reciprocal tariffs also ceded the control of U.S. tariff rates to other countries. "For instance, if Colombia had a high coffee tariff to protect their industry, we'd put a similar high tariff on Colombian Coffee, even though we do not grow coffee. "The only ones who would suffer are the U.S. consumer," he said.
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US Report: Palm oil jumps on rival oil that is stronger
Malaysian palm futures rose by more than 2% in the past 24 hours, following gains made by rival edible oils. A positive U.S. report about world agricultural demand and supply estimates also helped. By midday, the benchmark contract for palm oil delivery in April on the Bursa Derivatives exchange had risen 102 ringgit or 2.22% to 4,695 Ringgit ($1,051.28) per metric ton. The Malaysian market was closed for a holiday on Tuesday. A Kuala Lumpur based trader reported that the Crude Palm Oil Futures were lifted due to a stronger oilseeds rival market and a positive World Agricultural Supply and Demand Estimates Report (WASDE), oilseeds from the U.S Department of Agriculture. Dalian's palm oil contract, which is the most active contract in Dalian, increased by 1.19%. Chicago Board of Trade soyoil prices were up by 0.67%. As palm oil competes to gain a share in the global vegetable oil market, it tracks the price changes of competing edible oils. By February 9, 2024/25 soybean imports from the European Union, which began in the summer, had reached 8.36 million tons, a 10% rise compared to the previous season. According to the European Commission, imports of palm oil reached 1,73 million metric tons in the first quarter, which is a decline of 21% from the same time last year. In its February outlook, China's Agriculture Ministry kept its forecasts largely unchanged for corn, soya beans and other crops in the crop year 2024/25. However, there was a small revision in soybean planted acres from 10,321 million to 10,325 million. The oil price fell after an industry report revealed an increase in U.S. stockpiles of crude and as tariff fears weighed on sentiment. The palm ringgit's currency traded unchanged in relation to the U.S. dollar. Technical analyst Wang Tao suggested that the price of palm oil could retrace to between 4,494 and 4,523 ringgit a ton based on its wave pattern.
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Australia's Evolution Mining reaches a four-year profit high after beating estimates
The shares of Australia's Evolution Mining rose to a record high Wednesday, after the company's profit for half a year exceeded market expectations. The stock reached its highest level in November 2020, when it rose by 2.4% to A$6.370. The benchmark ASX200 closed 0.6% higher. Evolution, owned by AustralianSuper (the country's largest retirement fund), reported a net profit that more than doubled from the previous year to A$385,000,000 ($242.3million) for the six-month period ended December 31, 2009. Citi analysts said that the miner's profits were 11% higher than their expectations, and 20% higher than Visible Alpha consensus estimations. Lawrie Conway said, "We've seen the benefits of the Foundations laid in FY24...with record-breaking financial results and significant Cash Flow Generation achieved in the First Half," Evolution's CEO. Morningstar analysts stated that higher gold and copper price and increased sales volumes by Evolution more than offset a modest increase in costs. The firm based in Sydney's EBITDA doubled from A$917 to A$985.3 for the same period, exceeding Jefferies' estimate. Evolution, which operates six mines in Australia and Canada, has said that it is on schedule to meet its production forecast for fiscal year 2025 of 710,000-780,000 gold ounces and 70,000-80,000 tons of copper. Morningstar analysts wrote in a report that they "continue to forecast" gold sales volume to rise to 840,000 ounces by fiscal 2029. This is due to increased production at Red Lake, Mungari and other mines.
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Russell: The term critical minerals is meaningless and needs a new strategy.
It is now so common to use the term critical mineral that its original meaning has been lost. It is time to create a new definition of what is truly vital for a nation and what is simply important. The Mining Indaba conference held in Cape Town last week also made it clear that what's important to one country may not be as critical to another. What is a better way to define a critical mineral than by its name? It's simply a mineral you don't possess and worry you will not be able get it in the future. You need a certain mineral, but don't possess any domestic reserves. Your strong allies don't also have enough deposits, and you do not have control over the supply chain. This is a different mineral from what commodity analysts CRU call a core ore, which you may need now but are confident you can source in the future. Why is it important to distinguish between the two? Westerners tend to view core minerals as ones that can be left to the market to supply. They rely on private mining firms to explore, develop, and produce them on commercial terms. A truly critical mineral will require a different acquisition strategy, including direct funding of new mines, strategic relationships with the host country, and offtake agreements not dependent on market prices. China has shown that it is much better at focusing on minerals they deem critical. It invests in mines, infrastructure and processing plants in other countries, and also in its own country. China is the largest importer of commodities in the world. It dominates the global supply chain of minerals essential to the energy transformation, including lithium, cobalt and nickel. These four minerals are no surprise to China, but are they still important for China, given that China dominates the production and supply of these minerals? Beijing's approach to ensuring supply was more strategic than commercial. Copper, aluminium and graphite are also included on the list of critical minerals for the United States as well as the European Union. Iron ore, gold potash, and uranium are among the critical minerals on China's list. One could argue that these minerals are critical to China's economy, and are also ones in which Beijing has little influence on the supply chain. Consider iron ore as an example. China imports over 80% of what it needs. Of those imports, more than 90% are from Australia, Brazil, and South Africa. Beijing has no control over these resources, despite its ownership of some companies that mine iron ore. It is a price taker and has been for the last two decades. NEW TACTICS NEEDED The United States and Europe could be asked why copper is included on their list of critical minerals, when there is no threat to the supply. This is because most of the copper mined in the world is controlled by Western firms, which are located in countries with a strong Western alignment. Aluminium and lithium are also important, but cobalt's importance for energy transition is still being questioned. Nickel is a fascinating case. Both the United States and European Union consider it critical but have not done anything to guarantee supply. They have instead allowed Chinese-controlled mining and processing plants to dominate the Indonesian market, while others in countries such as Australia, a strong ally of China's, are closed due to low prices. It would make sense to continue to supply nickel from allies, even if the cost was higher. If Western countries are truly concerned about the security of minerals like graphite and tungsten, they must change their approach to developing mines. Western mining companies have difficulty securing long-term financing because they cannot guarantee the price that will be paid in several years, when a new mine is built and operational. They lose out to Chinese firms that are less concerned about commercial results. Western governments must also become more proactive when it comes to engaging countries in resource-based relationships, utilizing both soft power like aid programmes and direct benefits like market access to foster stronger resource relationships. It appears, however, that U.S. president Donald Trump has adopted the exact opposite strategy, abandoning all aid and threatening to impose widespread tariffs against both allies and enemy alike. The European Union appears to be moving at a snail's pace. It produces policies and reports about critical minerals, but does not seem to do much to develop the supply chains that it controls. These are the views of the columnist, an author for.
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Norway to Offer New Acreage Only for Floating Wind
Norway will not offer acreage suitable for bottom-fixed offshore wind farm development when it next announces new tenders, and will instead focus on floating wind options, it said on Monday.The government had previously said it would offer new areas in its North Sea bordering Denmark suitable for turbines fixed to the seabed, that may also connect to other countries via so-called hybrid cables."We believe that it is not the time to proceed with planning hybrid cables now," Energy Minister Terje Aasland said in a statement, citing high cost levels and the lack of a European framework for hybrid connections.A study by grid operator Statnett had shown that building out the area known as Soervest F would require government support regardless of whether the wind farms connected to Norway only or also other markets, he added.Aasland also said he was sceptical of further exposing the Norwegian power system to the challenges in other markets such as Germany.Instead, the government will prioritise floating offshore wind projects with single-point connections to Norway, the minister said.Norway, whose domestic power generation is dominated by cheap, abundant hydropower has some of the lowest electricity prices in Europe, but also saw an increase in the wake of the European energy crisis in 2022.A net exporter of power through subsea cables linking it with Germany, Britain, Denmark and the Netherlands, these connections have been blamed for lifting prices domestically.Last year, the country tendered its first offshore wind farm, Soerlige Nordsjoe II, located in the area now being scrapped for immediate further development.(Reuters - Reporting by Nora Buli, editing by Terje Solsvik)
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Aluminum prices fall amid Trump tariff fears
Aluminum prices dropped on Wednesday, amid fears of a global trade war following the 25% tariffs imposed by U.S. president Donald Trump on imports of steel and aluminum. The London Metal Exchange's (LME) three-month contract for aluminium fell 0.8%, to $2,624 per metric ton, as of 0340 GMT. This is down 1.3% compared to the three-week-high of $2,662.50, which was reached on Monday when tariffs announced. Morgan Stanley says that the tariffs on Monday will have the greatest impact on aluminum, which is used for transport, construction, and packaging. Net imports account for 82% of U.S. needs. Since February 7, the U.S. premium on aluminium over the benchmark global price at the London Metal Exchange jumped by a quarter to 35 cents a pound. It has also risen by 60% since Trump's re-election in November 2024. After Trump announced tariffs against U.S. imported goods, volatility in the aluminum market is expected remain high. We expect that the U.S. aluminum industries will struggle in the short-term to avoid tariffs, putting upward pressure for prices", ANZ Research stated. Trump has not yet imposed tariffs on the copper but he threatened duties last week, without providing any further details. The LME copper benchmark traded flat at $9361.5 per metric ton. The expectation of a copper tariff pushed the premium between U.S. Futures on Comex and the global benchmark LME to an all-time high on Monday. Lead increased by 0.2% at $1,983.5, while zinc gained 0.7%, reaching $2,840.5. Tin fell 0.2%, to $31,105. The aluminum contract at the Shanghai Futures Exchange shed 0.6%, reaching 20,560 Yuan ($2,813.20), its highest level since December 2024. The SHFE copper fell 0.6%, to 76800 yuan. Nickel dropped 1.2%, to 124070 yuan. Zinc was unchanged at 23,730, while lead fell 0.1%, to 17,130, and tin slipped 0.1%, to 257330 yuan. $1 = 7.3084 Chinese Yuan Renminbi (Reporting and editing by Rashmi Nandy and Sumana Naandy; Additional reporting and editing by Eric Onstad)
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MSCI removes Adani Green Energy from the key global index and adds Hyundai Motor India
MSCI has added one Indian company to its Global Standard Index late Tuesday, the carmaker Hyundai Motor India. Adani Green Energy was removed as part of the index revision for February 2025. Changes will be implemented at the close of the market on 28th February. MSCI's previous index reconstruction in November added five Indian companies to the global standard index. This increased India's weighting in the indicator that tracks emerging market countries from 17% to 20%. Overnight, the MSCI India Domestic Smallcap Index was rebalanced to include 20 Indian stocks, including Ola Electric Mobility and Sundaram Clayton, as well as Zaggle Prepaid Ocean Services. The MSCI Smallcap Index was reduced by 17 stocks. According to IIFL Capital the MSCI rejig may lead to an inflow of passive funds between $850 million and $1 billion to Indian markets. According to IIFL Capital, the weight of IndusInd Bank - a private lender that is already included in the global standard index - has increased. MSCI has added eight Chinese stocks and deleted 20 from the second largest economy in the world. As part of this review, 107 securities will be deleted and 23 added to the MSCI Global Standard Indexes.
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Iron ore prices rebound on fears of supply disruptions
Iron ore futures recovered on Wednesday as investors focused their attention back on concerns over possible supply disruptions by major producer Australia, and the prospects of growing consumer China. The new tariffs announced by President Donald Trump, which go into effect on March 12, have caused prices to fall by more than 1 percent. U.S. president Donald Trump significantly raised tariffs on imports of steel and aluminum on Monday, to a flat rate of 25% "without any exceptions or exclusions". This was done to help struggling industries in the U.S. while also risking a trade war on multiple fronts. As of 0247 GMT, the most traded May iron ore contract at China's Dalian Commodity Exchange gained 0.43%. It was now worth 824.5 Yuan ($112.83) per metric ton. As of 0308 GMT the benchmark March iron ore traded on the Singapore Exchange had risen 1.76%, to $107.75 per ton. This is the highest price since October 16, 2024. Investors' concerns about supply disruptions have been rekindled after Western Australia's Port Hedland - the world's largest export point for iron ore - will close at 6 pm (1000 GMT) because of tropical cyclone Zelia. This has boosted investor sentiment and lifted prices. Analysts said that the prices were supported by a growing demand and the weather conditions becoming more favorable for outdoor construction. CITIC Futures reported that hot metal production, which is typically used to gauge demand for iron ore, will increase steadily after the week-long Lunar New Year holiday in China. This is due to relatively good profitability. Coking coal and coke, which are both steelmaking components, also fell further on the DCE, by 0.62% each. The Shanghai Futures Exchange's steel benchmarks extended their losses. Rebar fell 0.42%, while hot-rolled coils eased 0.09%. Wire rod fell 0.28%, and stainless steel dropped 0.68%. ($1 = 7.3075 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
Reports of a rise in U.S. crude stocks cause oil prices to fall
The oil market edged lower on Wednesday, as an industry report revealed an increase in U.S. stockpiles of crude and worries about tariffs weighed on the sentiment. However, stronger refining margins tempered the market's decline.
Brent futures dropped 25 cents or 0.3% to $76.75 per barrel at 0408 GMT. U.S. West Texas Intermediate crude fell 28 cents or 0.4% to $73.04 per barrel.
Brent prices rose by 3.6%, while WTI climbed 3.7%.
According to Tuesday's American Petroleum Institute data, sources citing the American Petroleum Institute, crude oil stocks in the U.S. grew by 9.4 millions barrels during the week ended February 7.
API data shows that gasoline inventories dropped by 2,51 million barrels and distillate stock fell by 590 000 barrels.
The Energy Information Administration will release data later on Wednesday.
The EIA has increased its estimate of U.S. crude oil production, while keeping its demand forecast the same. The EIA now estimates that U.S. crude production will average 13,59 million barrels of oil per day by 2025. This is up from the previous estimate of 13,55 million bpd.
Prices fell on fears that the multiple U.S. Tariffs enacted, or even threatened, could slow global economic growth.
Overall, however, the price declines were limited by higher refining margins. LSEG data show that complex refining margins have clawed back the losses of January, averaging $3 a barrel in the last week.
"Prompt margins in refineries are healthy and reverse the margin trend from last month. June Goh is a senior analyst with Sparta Commodities and she replied to the question: "There's a strong demand for refineries running hard, especially as we move into turnaround season in Northwest Europe and Asia."
The macroeconomic outlook was dominated by traders awaiting the key U.S. Consumer Price Index data, which will be released on Wednesday at 1330 GMT. This will provide clues about the economic performance of the country and its potential impact on interest rate.
Jerome Powell, the chair of the U.S. Federal Reserve, said on Tuesday that he was not in a hurry to cut interest rates further but would do so if there were inflation.
Continued decline
Or the job market has weakened. (Reporting and editing by Christian Schmollinger, Kate Mayberry and Colleen Waye)
(source: Reuters)