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Andy Home: Copper market suffers for ignoring its TACO hedge
The copper market has the tariffs right, but the products are wrong. The traders did not expect U.S. president Donald Trump to make a proclamation that "will address the effects of imports of copper on America's National Security". Imports of semi-manufactured copper products, such as wires and tubes, will face a 50% tariff starting Friday. The tariffs will not apply to refined copper until at least January 2027. The tariff trade that has dominated the copper market in February has collapsed. CME's U.S. Contract plummeted more than 20% after the news. This wiped out the high premium that was previously over the London Metal Exchange price. After traders sent huge tonnages of metal through the wide arbitrage gap, the United States now has a surplus of metal that it does not need. The copper market has forgotten Trump's tendency of reversing his most extreme threats. To borrow a popular investor meme, it has been TACOed, which is short for Trump Always Chills Out. Targeted Products for Copper Tariffs on semifinished copper products are applied to between 400,000-500,000 metric tonnes of U.S. imports per year. The United States imports a lot more refined copper. Last year, imports were just under 900,000. Canada is the U.S.'s largest copper supplier, but its supplier base is diverse. Copper tubes were imported from 32 countries last year, for instance. Tariffs will be applied to all copper-intensive products, including cables, connectors, and electrical components. This is likely to include more suppliers. The new tariff wall will be good for domestic processors if they can cover the quality and range of products currently imported. In the next few months, we will know how many exemptions specific to products have been granted. SCRAP WARS GET HOTTER Export restrictions will also be placed on concentrates mined in the United States and recyclable copper. A quarter of domestically-produced "copper input materials" will be required to be sold in the United States from 2027. This rate will increase to 30% in 2020, and then 40% in 2029. Even if Grupo Mexico were to reactivate its inactive Hayden plant, Arizona, it may be necessary to have more capacity available than the three domestic smelters currently operating. To encourage domestic recycling, "high-quality copper scrap" must also meet a minimum requirement of 25%. The exact types of scrap that qualify for the measure are not known, nor is it clear how the measure will work in reality. However, the move represents an escalation of the simmering scrap battles. To stop "scrap leakage," the European Union also considers export quotas for recyclable copper. China is the primary target, as it is the largest purchaser of secondary raw materials in the world. In 2024, the country imported 2,25 million tons copper scrap, the highest total ever since 2018, when authorities tightened the purity requirements on imported material. Imports are already slowing down this year due to a drop of 42% in shipments coming from the United States because of the high CME premium. The global scrap market is experiencing a growing resource nationalism, which will lead to structural changes in the recycling of materials. Can we have our COPPER back now? Not for refined copper as everyone expected. The United States has now ceased to need the copper that was shipped by large trade houses. It may have been a lucrative trade for those involved, but it is no longer necessary. CME warehouses now hold 232.195 tons of copper. This is the highest amount since 2004. Due to traders' last-minute rush to beat the August 1 deadline, metal is still arriving every day. Tariffs have a huge impact on the supply chain of other countries. China exported nearly 260,000 tons (or 78,800 tons) of refined copper from March to June. This is a significant increase over the previous four-month period. A portion of the copper was delivered to meet a shortfall on the London Market caused by the raid of LME stocks on brands that could be shipped to the United States. It was mostly non-Chinese steel that was shipped to the United States from warehouses under bonded storage. Shanghai Futures Exchange's stocks have plummeted to 73 423 tons, their lowest level since last December, due to China's booming exports. The physical supply chain may take longer to adjust than the futures trade. Analysts have already run the numbers to see if it makes sense to reverse the flow of copper back out of the United States. SAME TIME THE NEXT ANNUAL? What is the end of the copper tariff? Most likely not, as the reference explicitly mentions the option of a stepped tariff on imported refined copper starting at 15% in 2020 and increasing to 30% in 2030. The outcome will be determined by the report on the state and future of the domestic markets that Commerce Secretary Howard Lutnick is scheduled to deliver at the end of next June. It is also dependent on whether Trump decides to change his mind before then. Tariff Man is a great way to find out. These are the opinions of a columnist who writes for.
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Southern Co beats quarterly profit estimates, raises five-year capital plan
Utility Southern Co increased its five-year plan for capital expenditures by $13 billion, to $76 billion, to meet the growing energy demands in the U.S. after exceeding Wall Street's expectations for second-quarter profits. As power demand increases across the nation, utilities add billions of dollars in capital investment plans for upgrades to electrical grid and infrastructure. The U.S. Energy Information Administration predicts that power consumption will reach record levels in 2025 and in 2026, due to data centres dedicated to artificial intelligence, cryptocurrency and the use of electricity by homes and businesses, as well as the reduction in fossil fuels used for transportation and heating. Southern Co, based in Atlanta, Georgia, posted a profit adjusted of 92 cents for the three-month period ended June 30 compared to analysts' average estimates of 90 cents. Profits rose due to an increase in retail sales for commercial and industrial products and a higher demand for electricity. Kilowatt-hours sold in the industrial segment of the company grew 2.8% from the previous year, while sales in the commercial sector grew by 1.3%. Southern Co's operating revenues increased 7.9% in the third quarter to $6.97 Billion. The company's operating costs increased by 15%, to $5.21 Billion. Southern Co, the U.S.'s second largest utility, supplies power to six states: Alabama, Georgia Illinois, Mississippi Tennessee and Virginia. (Reporting from Bengaluru by Sumit S. Saha; editing by Maju Samuel.)
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Coal India's profit drops due to weak power demand
Coal India (which produces about 80% the coal in India) reported a decline in quarterly profits on Thursday, as shipment volumes and price fell amid weak demand for electricity. The company's net profit for the first quarter of 2018 fell 20% on an annual basis to 87.43 trillion rupees (998 million dollars). Revenue from operations fell 4.4% to 358,42 billion rupees. In the first half 2025, coal-fired electricity generation in India declined by almost 3%. Meanwhile, overall power output growth declined by 1.5% as a milder summer -- driven by earlier-than-expected monsoon showers -- reduced demand for coal. Coal India’s average realisation per ton from the so-called electronic auction sales was 2,331.51 Rupees in June-quarter. This is lower than the 2,410.94 Rupees in the previous period. However, the overall average price of coal supplied increased by two rupees. The company sells its products to domestic customers on long-term contracts. It gets 10% of sales from e-auctions. ($1 = 87.6040 Indian Rupees) (Reporting and editing by Manvi Pan and Anuran Sahdhu in Bengaluru)
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EXCLUSIVE-Indian state refiners pause Russian oil purchases, sources say
Industry sources claim that Indian state refiners stopped buying Russian crude oil last week, as the discounts have narrowed in this month. Donald Trump has also warned other countries against purchasing oil from Moscow. India, which is the third largest oil importer in the world, is the top buyer of Russian crude by sea. This revenue stream for Russia, as it continues to wage war against Ukraine, has been vital for the country. Four sources familiar with the refiners’ plans to purchase Russian crude have told us that the country's state-owned refiners, Indian Oil Corp., Hindustan Petroleum Corp., Bharat Petroleum Corp. and Mangalore Refinery Petrochemical Ltd., have not purchased Russian crude for the last week or so. IOC, BPCL HPCL MRPL, and the Federal Oil Ministry did not respond immediately to'comments. Sources said that the four refiners buy Russian oil regularly on a delivery basis, and they have resorted to spot markets as a replacement for supply. They are mostly buying Middle Eastern grades like Abu Dhabi's Murban oil and West African crude oil. Reliance Industries, a private refiner, and Nayara Energy are owned in majority by Russian entities, including Rosneft. They have signed annual agreements with Moscow, and they are the largest Russian oil buyers for India. Trump announced 100% tariffs against countries that purchase Russian oil, unless Moscow agrees to a major deal of peace with Ukraine. Sources say that Indian refiners have withdrawn from Russian crude due to the decline in Russian exports, and the steady demand. This is because of the Western sanctions imposed against Moscow for first time in 2022. Even buyers who adhere to the price cap are concerned that the latest EU curbs will complicate international trade, including fund-raising. India reiterated its opposition against "unilateral sanction". Trump announced on Wednesday that he would impose a 25% duty on all goods imported from India starting August 1. He also said negotiations are ongoing. He warned against possible penalties for the purchase of Russian oil and arms. Trump reduced the deadline for imposing secondary sanctions on buyers of Russian goods to 10-12 from 50 days, if Moscow fails to agree to a peace agreement with Ukraine. About 35% of India’s total supplies are supplied by Russia. In the first half 2025, private refiners purchased nearly 60% of India’s average 1.8 millions barrels per day Russian oil imports, while state refiners, which control 60% of India’s total 5.2 million bpd refinery capacity, purchased the rest. Reliance bought Abu Dhabi Murban oil for loading in October of this month. This was an unusual move from the refiner.
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PPL misses quarterly profit estimates on higher operating costs
Utility PPL's second-quarter profits missed Wall Street expectations on Thursday due to higher operating costs and interest charges. In April, more than 450,000 Pennsylvanians were left without electricity after a storm system caused severe weather in the central U.S. This increased costs for utilities such as PPL and FirstEnergy, which operate in Pennsylvania. Operating expenses for the company were $1.62 billion, up about 9% from a year ago. Interest expenses for the quarter were up 9% to $199 million compared to a year ago. Interest rates that are higher for longer can be a burden on utilities, as they make it more expensive to invest in critical infrastructure like electrical grids. Utility said that its earnings were also affected by the milder weather conditions during the quarter reported, which were more favorable a year ago. PPL Corp produces and delivers electricity for nearly 3.6 millions customers in Pennsylvania, Kentucky, and Rhode Islands. According to LSEG, the company reported an adjusted profit per share of 32 cents for the quarter that ended on June 30. This compares with an average analyst estimate of 38 cents. Reporting by Pranav Dhumal and Tanay Mathur in Bengaluru, editing by Shailesh Kuber
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Trump's scrap-copper quotas are too small to affect the market
Analysts say that proposed limits on U.S. copper scrap exports, which are intended to reduce the reliance on foreign production, will not have a significant impact as exports are already below the cap. Copper is an essential material for power generation, transmission and artificial intelligence industries. It can also be used in data centres and electric vehicles. The White House announced new tariffs on Wednesday. It said that it would require 25 percent of the high-quality scrap copper produced in the U.S.A., which is the largest scrap exporter in the world, to be sold domestically. This was done to increase the production of refined, copper from scrap. The executive order didn't define high-quality, nor did it specify when domestic use would be required. However, a separate report by the Secretary of Commerce stated that the requirement for domestic use would start in 2027. Goldman Sachs analysts wrote in a note published on Thursday that trade flows would not change because "high-quality scrap is likely kept in the country already." Duncan Hobbs is the Research Director for commodity merchant Concord Resources. He said: "If we look at the copper scrap markets as a group, there's not much to see because the US already consumes upwards of 40 percent of copper scraps in its own metal manufacturing." Last year, the United States exported copper scrap worth $4.5 billion. Around half of that amount went to China. Exports to China, the United States' largest customer, have fallen sharply since the trade war began. This has masked any impact of Trump's new proposal. According to U.S. Customs data, the value of scrap copper exported to China in may was just $7.4 millions, down from $248.9 million a year ago. Chinese customs data revealed that the volume share of China’s scrap copper imports to the US fell from 20,8% in January to 1% in July.
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India's TVS Motor beats its quarterly profit forecast and seeks alternative rare-earth materials
TVS Motors, India's largest electric two-wheeler manufacturer by sales, beat its quarterly profit expectations on Thursday due to strong local sales and exports. It also said that it would seek alternatives for rare-earth magnetic materials in light of China’s export ban. The company that also produces three-wheelers had previously flagged challenges with securing magnets which are crucial for electric motors. China, which is the largest producer of rare earth magnets in the world, implemented export restrictions in April. Some shipments have resumed to the U.S., Europe and other countries. However, Indian companies are still waiting for Beijing's approval. TVS will be looking for "HRA-free", cerite-based and magnet-free alternatives, which don't include heavy rare-earth elements, as well as alternative countries, said K N Radhakrishnan, the chief executive of TVS, in a conference call following its earnings. Mahindra said it would use alternatives like light rare earths and ferrites. TVS Motors' overall two-wheeler sale rose by 17%, to 1.2 million units, in the quarter that ended June 30. This was largely due to a growing share of premium models such as the Apache Series, which accounts for about 25% of the total revenue. Exports, which account for nearly a quarter of the company's total revenue, increased by 39%. Jupiter's scooter maker's profits jumped by 34.9% compared to a year ago, reaching 7.79 billion rupees (88.92 millions dollars) in the second quarter. This was higher than analysts' estimates of 7.63 billion, according to data compiled and analyzed by LSEG. The revenue from operations increased by 20.4%, to 100.81 milliards of rupees. This is higher than analysts' estimates of 99.36 trillion rupees. Analysts say TVS is moving towards a "richer mix of products," with high-margin models like bikes and scooters with high engine capacities gaining ground over entry-level versions. This change helped to boost its core earnings, as the operating EBITDA increased from 11.5% in the previous year to 12.5% during the first quarter.
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ICE, the parent company of NYSE, beats expectations as volatility fuels record revenues
Intercontinental Exchange (parent of the New York Stock Exchange) beat its second-quarter profit expectations on Thursday as increased volatility led to record revenue. During periods of volatility, exchanges flourish as investors rebalance their portfolios in order to take advantage of opportunities and mitigate risks. This increases trading volume. The sweeping tariffs of U.S. president Donald Trump sparked volatility in April. Meanwhile, tensions in the Middle East increased in June. The volatility index (a barometer of market uncertainty, and Wall Street’s most watched gauge of investor anxiety) spiked in April to record highs before easing off as the markets calmed down due to optimism about potential trade deals. Total net revenue grew 10% in the third quarter to $2.54 billion, with a 27% increase in revenue from energy-related products. According to estimates compiled and analyzed by LSEG, ICE's adjusted earnings per share were $1.81, a record, exceeding Wall Street expectations ($1.77). Energy trading volumes have been supported by OPEC+ policy changes and shifting commitments in the U.S. ICE's average daily volume of energy (ADV), which includes Brent, gasoil and natural gas, as well as other crude and refined product segments, grew by 27%, reaching a record quarterly. The volatility in the oil and gas market led traders and investors, to purchase and sell more futures, options, and credits tied to Brent crude and U.S. Natural gas as well as European gas. New markets for carbon credits and renewable credits also added to activity. ICE's listing business saw a 1% increase in revenue for the quarter, primarily due to large offerings like stablecoin issuer Circle. The U.S. IPO Market saw a significant increase in activity in the second quarter after a brief lull during April. Companies that had delayed their listings due to tariff tensions accelerated their listings. The increase in IPOs is good for exchanges that charge fees to list stocks.
According to a lobby group, uncertainty over tariffs has halted oil shipments from Brazil into the US.
Roberto Ardenghy of the oil lobby group IBP told reporters on Wednesday that energy companies in Brazil have suspended oil exports to the United States following President Donald Trump's announcement of 50% tariffs against Brazil.
The U.S. is Brazil's largest export market. Oil was exempted from the 10% tariff on Brazilian exports in April, but it remains unclear if the commodity will be exempted under the new tariff of 50% that is set to take effect on Friday.
Ardenghy said, "This time there is no way to know." IBP represents Brazilian oil companies such as Petrobras, Shell, TotalEnergies ExxonMobil, Equinor, and TotalEnergies.
Ardenghy stated that "business involving cargo which has to leave Brazil and go to the U.S.A. is suspended."
Ardenghy stated that instead of shipping oil to the United States companies store it on production vessels floating or cargo ships.
He said that because it takes about 21 days for an oil shipment from Brazil to reach the U.S., it was stopped when it became impossible to get to their destination by August 1.
He said that if there was no exemption, Brazil would likely redirect shipments towards Europe and India.
He added, "But for now, all is on hold as we wait for the 1st of August."
According to data collected by StoneX, the consultancy group, government data shows that Brazil will export 1.78 million barrels of oil per day in 2024. Of this, 243,000 barrels of oil per day are going to the United States.
Petrobras, Brazil’s state-owned oil company and the country’s top oil producer and supplier, said that it had exported 8% of the oil in its second quarter.
Magda Chambriard, Petrobras' Chief Executive, said earlier this month that the company could redirect oil sold to the U.S. to Asia and Pacific if higher U.S. Tariffs on Brazil are implemented. (Reporting and writing by Marta Nogueira, editing by Leslie Adler).
(source: Reuters)