2025-10-24 11:51
LONDON, Oct 27 (Reuters) - Copper has a long history of mine supply disruption, but this year is proving to be a particularly troubled one for a sector that has been racing to keep up with smelter demand. Several of the world's largest copper mines have experienced unexpected production hits and the cumulative impact will be felt in full force next year, according to the International Copper Study Group (ICSG). Sign up here. Tightness in the mined concentrates segment of the market will act as a hard brake on refined copper production growth in 2026, the Group said in its latest biannual statistical update , opens new tab. Even with demand growth expected to slow next year, metal production is projected to fall short by 150,000 metric tons. It's a significant revision from the Group's last meeting in April, when it was expecting a 209,000-ton supply surplus. MINE SUPPLY GROWTH STALLS With many copper mines operating in remote, challenging conditions, a degree of unforeseen disruption is hard-wired into the market's supply profile. This year, however, is proving to be an outlier of the worst kind with a string of accidents at several of the world's mega mines. Ivanhoe Mines' (IVN.TO) , opens new tab Kakula mine was hit by seismic activity and subsequent flooding in May. Chilean state producer Codelco's El Teniente mine suffered a fatal collapse in July and Freeport-McMoRan's (FCX.N) , opens new tab Grasberg mine experienced a devastating inflow of mud in September. The ICSG has unsurprisingly cut its 2025 mine supply forecasts, with growth now expected to be just 1.4%, down from a previous forecast of 2.3% and actual growth of 2.8% in 2024. This is still a pretty conservative call. Analysts at Citi and UBS, for example, are forecasting "no growth" and "negligible growth" respectively this year. HITTING THE BRAKES The loss of units will take some time to feed through to the refined segment of the copper market. The ICSG has actually lifted its assessment of metal production growth this year to 3.4% from April's 2.9% to reflect the surge in new Chinese smelter capacity. But growth next year will slow to a 0.9% crawl, with production constrained by a shortage of mined concentrates. Even that lowball figure flatters to deceive. Production from secondary recyclable sources is expected to rise by a robust 6.0% next year, while straight-to-metal mine output using leaching technology will increase by 2.2%. Primary production at smelters using concentrates as feed will by implication struggle to register any growth at all. The imbalance between raw material availability and smelter demand is likely to accentuate already fierce competition for copper concentrates. SURPLUS TODAY, GONE TOMORROW The ICSG concludes that despite tepid demand growth of 2.1% next year, the copper market is on course to register a supply deficit after two consecutive years of surplus. But not quite yet. This year is still expected to be a year of plenty, although the Group has trimmed the forecast production surplus to 178,000 from 289,000 tons at its April meet. Most of the surplus metal is in the U.S. due to the incentive created by the threat of import tariffs on refined copper, deferred until next year. Stocks of copper registered with U.S. exchange CME now exceed those held by the London Metal Exchange and the Shanghai Futures Exchange combined. However, even as global inventory has moved location, total exchange stocks have risen by 120,000 tons since the start of the year, with the strong likelihood there is more copper sitting in off-market storage in the United States. The current inventory cushion is acting as a counterweight to the market's bullish exuberance. But futures markets price in future expectations. The LME three-month metal price , currently bubbling just below the $11,000-per ton level, comes with a delivery date of January 2026. And next year is when the copper market looks set to feel the full impact of this year's string of mine supply shocks. Andy Home is a Reuters columnist. The opinions expressed are his own https://www.reuters.com/markets/commodities/copper-study-group-highlights-impact-mine-supply-hits-2025-10-24/
2025-10-24 11:43
MOSCOW, Oct 24 (Reuters) - Moscow, which for decades has run on caffeine, could be rediscovering its taste for tea as some shun coffee as a Western introduction and embrace the more traditional drink. Andrei Kolbasinov, founder of retro-chic teahouse chain Nitka, which means "thread" in Russian, says his business is all about trying to resurrect Russia's lost tea-drinking culture. Sign up here. "We are trying to revive modern Russian teahouses," he said. "Before the (1917) Revolution, there used to be a lot of them in Russia, especially in Moscow. Unfortunately, they all disappeared during Soviet times," Kolbasinov said. "Five years ago there were just coffee shops everywhere. We try to imagine how teahouses would look, had they continued existing," he said. His company runs three teahouses in Moscow and two more in other cities. While Russians are some of the biggest consumers of tea worldwide, they mostly do so at home, typically accompanying their brews with jam, lemon, and sweets. As in the rest of Europe, busy city dwellers are more likely to grab a coffee on the go than opt for a cup of tea. But with the country at loggerheads with the West over the conflict in Ukraine, even a simple tea shop reflects how the country has changed over the last three and a half years. Nitka customer Kirill, who did not give his last name, said: "Tea is ... well, it's more Russian I guess. It has this home warmth and cosiness." Kolbasinov said the rising popularity of his teahouses represented "a turn inward", as Russia rediscovers its own cultural traditions. Though a part of Nitka's tea is Russian grown, Western sanctions against Russia have complicated the country's tea imports, said Kolbasinov. For instance, some of Nitka's tea is sourced from Nepal, but sanctions have interfered with the complex supply chains that bind Russia to the landlocked South Asian country. Far more of the tea comes from Russia's neighbour and ally China, and from Georgia, where much of the Soviet Union's tea was grown before 1991. Neither country has imposed sanctions on Russia, and both have deepened economic ties with Moscow since 2022. https://www.reuters.com/world/some-russians-shun-coffee-western-favour-traditional-tea-2025-10-24/
2025-10-24 11:28
BERLIN, Oct 24 (Reuters) - A China trip by German Foreign Minister Johann Wadephul to China that was originally planned for Sunday will not take place, a spokesperson for his ministry said on Friday. "We are postponing the journey to a later time," the spokesperson told a regular news conference, adding that Germany was concerned about constraints placed on rare earth exports. Sign up here. It had also been impossible to arrange sufficient meetings for the trip, she added. She declined to say which country had cancelled the trip, adding that Germany regretted the development, including given China's importance in as a country, "which like no other has influence over Russia in its war against Ukraine". https://www.reuters.com/world/china/german-foreign-ministers-china-trip-cancelled-spokesperson-says-2025-10-24/
2025-10-24 11:07
Foreign buyers skip checks to ship parts before new rules hit China leads with 6 of top 10 global battery makers, led by CATL Delay may hit Reliance's battery and solar energy plans in India BEIJING/NEW DELHI, Oct 24 (Reuters) - Indian billionaire Mukesh Ambani's Reliance Industries (RELI.NS) , opens new tab is rushing to get its orders of battery components out of China ahead of new export curbs, two people briefed on the matter said, as concerns mount worldwide about how Beijing intends to enforce its widening export control regime. A team from Reliance has travelled to China to speed up the work, one of the sources said. Sign up here. Reliance and China's Ministry of Commerce did not respond to a request for comment. The people declined to be named due to the sensitivity of the situation. Chinese companies are world leaders in electric battery technology and to maintain that competitive edge Beijing introduced new rules this month requiring companies to seek permission before exporting battery supply chain equipment. The new curbs take effect on Nov. 8. At least a dozen other foreign customers of the Chinese battery sector are in a similar situation to Reliance, said the second source, who said some were foregoing quality assurance or other final stages of manufacturing to get goods shipped more quickly. "Who cares if it hasn't been painted yet or the screws haven't been checked," the second source said. "They are saying we'll do the testing once it lands, just get it out the door." CHINA HAS MAJOR ROLE IN BATTERY SUPPLY CHAIN Without the Chinese gear, Reliance cannot fulfill its plan to locally assemble or produce batteries to store energy from its mega solar power project being championed by the Indian government to cut dependence on fossil fuels, the person added. China's battery makers account for six out of the top ten players globally, according to consultancy SNE Research. The people did not say which Chinese companies supplied Reliance. CATL, China's largest battery maker, said in a statement to Reuters it was confident exports to its factories overseas would proceed smoothly under the new export regime. "The export of equipment and materials needed for our plants in Europe is progressing as planned," it said. China exported $48 billion worth of batteries in the first eight months of this year, up 26% compared to the same period last year, according to Chinese customs data. China's battery export action adds to concerns about the risk of being dependent on Beijing for key technologies that can become caught up in trade conflicts. China's export controls on rare earths have highlighted the risks of being dependent on one supplier. The curbs, introduced in April, led to shortages that threatened to cripple car production around the world. Chinese battery makers are reassuring foreign customers that nothing so drastic is likely to happen for batteries and export licences should be granted quickly and widely within a few months of the new regime starting, the second source said. But in the meantime foreign companies have to play a waiting game. "It is a very tense situation," said the first source. https://www.reuters.com/world/china/reliance-races-get-battery-gear-orders-out-china-ahead-export-curbs-sources-say-2025-10-24/
2025-10-24 11:00
LITTLETON, Colorado, Oct 24 (Reuters) - It's not just the U.S., Qatar and Australia that are vying for a share of the lucrative LNG export market. Malaysia wants a cut too, and is retooling its own power generation system to do it. So far in 2025, Malaysia has lifted its imports of thermal coal to a record and boosted coal-fired electricity generation to all-time highs, data from Kpler and Ember shows. Sign up here. Malaysia's coal binge allows the country - the world's 11th largest natural gas producer - to free up gas supplies for export in the form of liquefied natural gas, and generate valuable trade revenues in the process. The coal-for-gas adjustment comes at a cost, as the country needs to import a majority of its coal supplies, and it has resulted in a surge in power sector emissions to the highest on record this year. But the coal use boom is justified by the fact that the country rakes in roughly twice as much income from LNG exports as it spends on coal imports. On economic grounds alone, Malaysia's LNG export drive looks set to persist, even though the additional LNG volumes the country is looking to sell may add to already oversupplied global markets in the years ahead. IMPORT BOOM Malaysia produces between 3 million and 4 million metric tons of thermal coal a year, according to the U.S. Energy Information Administration (EIA), but imports around 30 million to 35 million tons a year, Kpler data shows. Those coal imports - mainly from neighbour Indonesia - cost around $5 billion to $6 billion a year, according to customs data. The burning of that coal - which generates roughly half of Malaysia's electricity - yields around 72 million tons of carbon dioxide (CO2) emissions each year, according to Ember. Yet by steadily increasing coal's share of its electricity generation mix from under 10% at the start of this century, Malaysia has been able to sharply cut natural gas' share of electricity production. Natural gas generated around 80% of the country's electricity in the early 2000s, but only accounts for around 30% of Malaysia's electricity supplies so far in 2025, Ember data shows. FREEDOM (TO SELL) GAS Reduced use of gas for domestic power generation has allowed Malaysia to boost gas supplies for export, which the country recognized was a valuable revenue earner decades ago. Indeed, for a brief spell in the early 2000s, Malaysia was the world's largest exporter of LNG, and since then it has consistently ranked in the top five suppliers of the super-chilled fuel. Until about a decade ago, Malaysia's energy firms relied on domestic gas supplies as both the primary source of domestic electricity and one of the country's most lucrative export items. Since then, however, authorities have worked to slow the growth of domestic gas use for power generation so that more of it could be diverted to LNG export hubs and then onto high-paying end-use markets such as Japan and South Korea. A key driver of Malaysia's decision to conserve gas was the realization that its domestic gas reserves have peaked and are now in terminal decline. Malaysia's proven gas reserves were estimated at around 1.15 trillion cubic meters around 20 years ago, but were last estimated at 910 billion cubic meters, according to Energy Institute data. MONEY MATTERS To extract maximum value from those reserves, Malaysia's national oil and gas company Petronas remains committed to boosting LNG export volumes, and plans to bring on a third floating LNG export facility in 2027, per company filings. While the exact terms of its LNG export deals are not reported, industry estimates put the country's annual earnings from LNG exports at around $12 billion. As those export receipts are roughly twice what it costs the country to import the coal it needs, the economic case to continue exporting LNG over the long term seems solid. That said, Malaysia's enduring need for gas as a key part of its overall energy mix means it is also an occasional importer of LNG, when the price is right and its power needs dictate. Malaysia has also agreed to make purchases of U.S. LNG as part of trade talks aimed at avoiding U.S. tariffs on Malaysian goods exports. Overall, however, Malaysia looks set to remain a regular net exporter of LNG for the foreseeable future. And given its closer proximity to key Asian buyers compared to the U.S. and Australia, the country's planned growth in LNG export volumes may pose a fresh headache for rivals as they try to map out how to profitably boost sales in the years ahead. The opinions expressed here are those of the author, a columnist for Reuters. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn , opens new tab and X , opens new tab. https://www.reuters.com/markets/commodities/malaysias-coal-binge-shows-what-nations-do-cash-lng-boom-2025-10-24/
2025-10-24 10:41
PRAGUE, Oct 24 (Reuters) - Czech populist party ANO, on track to form the next government after winning an election this month, said on Friday it could keep the outgoing cabinet's proposed 2026 deficit target in order to pass a budget before year-end. The outgoing centre-right government of Prime Minister Petr Fiala has brought public finances back within European Union rules. However, analysts expect fiscal loosening under ANO, which is led by billionaire former Prime Minister Andrej Babis. Sign up here. The outgoing government has submitted a central state budget draft with a deficit of 286 billion crowns ($13.74 billion), up from 241 billion seen in 2025. The next government could use that as a foundation to move the legislation ahead without delays, ANO official Alena Schillerova told reporters on Friday. The country would face a provisional budget limiting spending at the start of 2026 if lawmakers fail to approve a budget law by the end of December, which could hurt investments. FIGHT OVER BUDGET Fiala's budget bill fell through when parliament ended its term following an election on October 3 and 4, and ANO has pressed his government to re-submit the draft to avoid delays if the next administration has to start from scratch. Fiala has said he would consider this. Parliament would have to approve the re-submitted deficit target without changes to move the legislative process forward. ANO is in talks on forming a ruling coalition with the far-right SPD party and the right-wing Motorists that will have a majority in parliament. Babis is due to update the president on Monday on the talks. The new parliament first meets on November 3, and Babis's potential government is likely to be in place by December, perhaps sooner. CHANGES ONLY AFTER DEFICIT TARGET FIXED Schillerova said changes to the budget draft would be made in the bill's second reading, when money can be shifted among chapters, but overall revenue and spending figures cannot change. "We will definitely change (the current draft) in a second reading so that it is approved by the end of the year and we don't have to go into a provisional budget," she said. Approved budgets can still be amended later in the year. Fiala's government has cut the overall fiscal gap to around 2% of gross domestic product, below an EU ceiling of 3%. ANO campaigned on promises to cut taxes, lift wages and pensions, and spend on benefits such as mortgage subsidies. However, the Motorists back fiscal discipline and may temper some of ANO's spending aims. ($1=20.8210 Czech crowns) https://www.reuters.com/business/czech-2026-deficit-target-can-stay-unchanged-pass-budget-quickly-poll-winner-2025-10-24/
