2024-08-29 00:47

This content was produced in Russia where the law restricts coverage of Russian military operations in Ukraine Some Western buyers have shunned Russian aluminium Deliveries to China reached record high Company is seeking to increase access to raw materials MOSCOW, Aug 29 (Reuters) - Russia's Rusal , the largest aluminium producer outside China, boosted its first-half adjusted net profit by 42% as cost reductions offset a decline in sales and prices, it said on Thursday. The Hong Kong-listed company has been under pressure as Moscow's actions in Ukraine have led some Western consumers to shun new deals for Russian metal even though Hong Kong-listed Rusal is not directly targeted by Western sanctions. In April, the London Metal Exchange banned Russian aluminium, copper and nickel produced from April 13 to comply with new U.S. and UK sanctions. "Uncertainty in the global economy and weak demand, worsening market conditions and new restrictions imposed on Russian metal traded in global markets, primarily premium ones, as well as weak global prices continued to put pressure on the company's operational and financial performance", Rusal said in a statement. Rusal's first-half sales decreased by 2.9% to 1.879 million metric tons, while production rose by 2.3% to 1.957 million tons as the Taishet plant has gradually increased output. However, Rusal said its deliveries to China touched a record high, and the Russian market reached its pre-Ukraine conflict volume. China has became the company's largest market after Russia, Rusal reported last year. Asia accounted for 42% of Rusal's revenue up from 33% in the first half of 2023 and 38.4% in 2023. The average price of aluminium on the LME reached $2,360 per ton in the first half of 2024, while the price of Rusal's metal fell by 2.2% to $2,447 per ton following a reduced premium. Combined with lower sales, that meant Rusal's revenue fell by 4.2% to $5.695 billion in the first half of 2024, while a 15.9% fall in costs to $4,385 billion, largely because of cheaper raw materials, ultimately saw profits increase. The cost of purchasing alumina fell by 5% to $992 million, Rusal said. It has sought to reduce its reliance on imported material after losing supplies from Ukraine and Australia. Last year, it bought a 30% stake in a Chinese alumina refinery and plans to build an alumina plant in Russia. Rusal's CEO Evgenii Nikitin said in a statement the company was further working on "material self-reliance" with a pilot operation for a second furnace at the Taishet anode plant, in Russia, was expanding bauxite production in Guinea, and seeking new deposits elsewhere. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) jumped by 171% to $786 million and adjusted net profit was $446 million compared with $315 million a year ago , opens new tab. Sign up here. https://www.reuters.com/markets/commodities/aluminium-giant-rusals-first-half-profit-rises-nearly-42-2024-08-29/

2024-08-29 00:20

Chinese lenders committed $4.61 bln to Africa in 2023 Annual figure marks first rise since 2016, study shows Beijing is experimenting with risk-mitigation strategy NAIROBI, Aug 29 (Reuters) - Chinese lenders approved loans worth $4.61 billion to Africa last year, marking the first annual increase since 2016, an independent study showed on Thursday. Africa secured more than $10 billion in loans a year from China between 2012-2018, thanks to President Xi Jinping's Belt and Road Initiative (BRI), but the lending fell precipitously from the start of the COVID-19 pandemic in 2020. Last year's figure, a more than three-fold increase from 2022, shows China is keen to curb risks associated with highly indebted economies, the study by Boston University's Global Development Policy Centre found. "Beijing appears to be looking for a more sustainable equilibrium level of lending and experimenting with a (new) strategy," said the university centre, which runs the Chinese Loans to Africa Database project. The new data comes as Beijing prepares to host African leaders next week for the Forum on China-Africa Cooperation, which takes place every three years. There were 13 loan deals last year involving eight African countries and two African multilateral lenders, the study found. Last year's biggest items include a nearly $1 billion loan from China Development Bank to Nigeria for the Kaduna-to-Kano Railway and similar size liquidity facility by the lender to Egypt's central bank. China has vaulted to the top bilateral lender for many African nations like Ethiopia in recent years. It has lent the continent a total of $182.28 billion between 2000-2023, the Boston University study found, with the bulk of the finances going to Africa's energy, transport and ICT sectors. Africa featured prominently in the initial years of BRI, as China sought to recreate the ancient Silk Road and extend its geopolitical and economic influence through a global infrastructure development push. China, however, started to turn off the cash spigot in 2019, a shift that was accelerated by the pandemic, leaving a series of incomplete projects around the region, including a modern railway meant to link Kenya with its neighbours. The reduction in loans was caused by China's own domestic pressures and growing debt burdens among African economies. Zambia, Ghana and Ethiopia have gone into protracted debt overhauls since 2021. More than half of the loans committed last year, or $2.59 billion, were to regional and national lenders, underscoring Beijing's new strategy, the study by Boston University found. "Chinese lenders' focus on African financial institutions most likely represent a risk mitigation strategy that avoids exposure to African countries' debt challenges," it said. Nearly a tenth of 2023 loans were for three solar and hydropower energy projects, the study found, illustrating a desire by China to move into funding renewable energy instead of coal-fired power plants. Still, the discernible trends in last year's figures did not offer a clear direction of China's financial engagement with the continent, the study showed, since Chinese institutions also wrote loans to ailing economies like Nigeria and Angola. "It remains to be seen whether China's partnerships in Africa will retain their quality," the Global Development Policy Centre said. Sign up here. https://www.reuters.com/world/chinas-lending-africa-rises-first-time-seven-years-study-shows-2024-08-29/

2024-08-28 23:25

Aug 28 (Reuters) - Federal Reserve Bank of Atlanta President Raphael Bostic on Wednesday said that with inflation down farther and the unemployment rate up more than he anticipated, it may be "time to move" on rate cuts, but he wants to be sure before pulling that trigger. Bostic said he will want to see confirmation from the monthly jobs report and two inflation reports due before the Fed's Sept. 17-18 meeting that the economic trends are continuing. "I don't want us to be in a situation where we cut, and then we have to raise rates again: that would be a very bad outcome" because it would undermine people's confidence in the Fed, he said at an event organized by the Stanford Club of Georgia and the Stanford Black Alumni Association–Atlanta. "If I'm going to err on one side, it's going to be waiting longer just to make sure that we don't have that up and down." The Fed has kept its policy rate in the 5.25%-5.50% range for more than year to bring down high inflation. Last week Fed Chair Powell said "the time has come" to reduce borrowing costs, given that price pressures have eased considerably and the labor market has cooled. For much of this year Bostic had said he expected the Fed would need to cut rates just once this year, likely in the fourth quarter. In recent weeks he has signaled his openness to starting earlier. Sign up here. https://www.reuters.com/markets/rates-bonds/feds-bostic-it-is-time-move-rate-cuts-wants-be-sure-2024-08-28/

2024-08-28 23:01

LONDON, Aug 28 (Reuters) - China's announcement of antimony export restrictions has added fuel to a red-hot market and opens another potential flash-point with the West for control of critical minerals. Antimony is a little-known metal with multiple applications. Its largest end-use is as a flame retardant, but it is also found in solar panels and lead-acid batteries. The U.S. Department of the Interior has designated it a critical mineral because it is also essential for armour-piercing ammunition, infrared sensors and precision optics. The Department of Defense was holding stocks , opens new tab of just over 90 metric tons (198,763 pounds) at the end of September 2022, according to the U.S. Congressional Research Service. The Annual Materials Plan , opens new tab for the current fiscal year allows for the purchase of up to an additional 1,100 tons. That is going to be a tough challenge if the world's dominant antimony producer limits global supply. There is an emerging pattern here. Last year Beijing flexed its metallic muscles with similar restrictions on exports of gallium, germanium and graphite in a tit-for-tat response to U.S. controls on exports of advanced semiconductor chips to China. Nor is antimony likely to be the last strategic metal to be weaponised for a potential trade war with the West. HOT MARKET Antimony prices have nearly doubled since the start of the year to a record $22,750 per ton, basis metal delivered to Northwest Europe. That's in part because of shrinking exports from major producers. China's exports are in medium-term decline due to higher demand from its solar energy sector, while Russian supply has been crimped by falling output and Western sanctions. The flow from other big producing nations such as Vietnam, Tajikistan and Myanmar has been disrupted by the re-routing of shipments from the Red Sea due to Houthi attacks on shipping. Analysts at Project Blue estimate the market was already looking at a 10,000-ton shortfall before China's restrictions. These new rules don't set explicit limits on exports but rather require exporters to apply for licences for dual-use civilian and military materials and technology, a process that typically takes two to three months in China. On paper, the controls are not targeted at any specific country but Chinese authorities can refuse licences to export to individual end-user companies or countries as they see fit. If gallium and germanium are anything to go by, expect a collapse in outbound antimony shipments once the new rules come into effect on Sept. 15, followed by a weak recovery in volumes. Chinese exports , opens new tab of the two chip metals fell by 74% and 63% respectively in the first quarter on a year-on-year basis. WARNING SHOTS China's export controls are more a signalling device than an outright trade attack at this stage. Beijing overplayed its critical metals hand in 2010 when it suspended shipments of rare earths to Japan. It lost a resulting World Trade Organization case and watched as high prices generated a wave of substitution away from rare earth magnets. This time, export controls are being used as warning shots to deter Western countries from implementing further restrictions on exports of next-generation technology such as artificial-intelligence computer chips. The messaging is aimed first and foremost at the United States, where there is bipartisan hostility to China's growing military and technology challenge. The U.S. remains critically dependent on China for antimony. It consumed 22,000 tons of antimony products in 2023. Domestic production amounted to just 4,000 tons, mostly in the form of antimonial lead recovered from spent lead-acid batteries and absorbed back into the battery chain. China accounted for 63% of U.S. imports of antimony metal and oxide last year, according to the United States Geological Survey (USGS). The next largest supplier, Belgium, just 8%. One domestic operator, Perpetua Resources (PPTA.O) , opens new tab, is hoping to reopen the Stibnite antimony mine in Idaho. The company has received backing from both the Pentagon and the U.S. Export-Import Bank. But, like many potential domestic critical metal producers, Perpetua is facing environmental opposition. First production at Stibnite is currently pencilled in for 2028, assuming Perpetua can navigate the permitting process. LENGTHENING LIST This is highly unlikely to be the last metallic warning shot fired by China. Next up could be tungsten, another minor metal with overlapping civilian and military applications and a supply chain dominated by China. China's Ministry of Commerce issued new rules , opens new tab for exporters of tungsten, antimony and silver in November 2023, including a minimum financial liquidity threshold and a full record of overseas shipments over the 2020-2022 period. The U.S. REEShore Act already prohibits the use of Chinese tungsten in military equipment starting from 2026, which makes the metal an obvious choice for a retaliatory gesture. However, China is not short of options when it comes to leveraging its dominance in critical metals production. It is the largest , opens new tabsource of supply for 26 of the 50 minerals currently classified as critical by the USGS, according to the Center for Strategic and International Studies think-tank. It's just a question of what comes next. The opinions expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/commodities/china-fires-latest-warning-signal-with-antimony-controls-2024-08-28/

2024-08-28 22:38

BRASILIA, Aug 28 (Reuters) - Gabriel Galipolo, picked to be the next head of Brazil's central bank, is a 42-year-old economist who has not always expressed mainstream orthodox economic views. His nomination by President Luiz Inacio Lula da Silva, confirmed on Wednesday by Finance Minister Fernando Haddad, was widely anticipated. If confirmed by the Senate, he will take over when Roberto Campos Neto's term ends in December. Galipolo is currently the bank's director of monetary policy and was previously the second-in-command at the Finance Ministry. His arrival at the central bank in July last year, appointed by Lula, sparked skepticism among many in the market, who worried about what they said was a lack of technical expertise, as well as his heterodox opinions on topics such as the need for state intervention to prioritize social needs and the suggestion that the central bank could act across the entire yield curve. Since then, however, economists have warmed to him, and he is now seen by many as the best option to succeed Campos Neto, not least because of his rapport with Lula. Lula has called Galipolo a "golden boy," saying he is "extremely competent" and has "unparalleled honesty." For the last two years, Lula has regularly voiced frustration about working with Campos Neto and complained about high interest rates. The benchmark rate is currently at 10.5%. But recently Lula appears to have softened his stance, saying of policymakers earlier this month, "If they need to hike interest rates, then they need to hike interest rates." That change in tone coincided with statements by Galipolo in which he emphasized that a rate hike was on the table for September's monetary policy meeting amid continued inflation risks. The comments provided some relief to investors who had been worried that once Lula had most of his appointees on the monetary policy committee, from next year, the central bank would be more lenient on inflation. One market player, speaking anonymously due to the subject's sensitivity, said the comments indicated Galipolo had shown "persuasive ability" with the president. A second source said Galipolo was "evolving rapidly" within the central bank and appeared to have aligned himself with the institution's essentially technical stance. Galipolo was introduced to Lula in 2021 by Luiz Gonzaga Belluzzo, a Lula adviser and economics professor at Unicamp, a Sao Paulo university known for heterodox economics. In one of three books Galipolo and Belluzzo co-authored, they criticized the ease with which multinational companies engage in interest rate and currency arbitrage, with subsidiaries borrowing at low interest rates in their home countries and profiting from leveraged investments in Brazilian interest rates. However, as director of monetary policy and responsible for the crucial foreign exchange desk, Galipolo has not implemented any changes to the central bank's exchange rate policy, refraining from intervening in the market amid a recent sharp weakening of the Brazilian real, which has lost more than 12% against the U.S. dollar this year . Galipolo has a master's degree in political economy from the Pontifical Catholic University of Sao Paulo. He previously served as an economic adviser to the Sao Paulo state government and CEO of Banco Fator. He also founded a consultancy on public-private partnerships. At the Finance Ministry, he earned goodwill in Congress as a good listener and negotiator, helping Haddad secure important victories, including the approval of a new framework for public accounts. "He's a good choice, he's already been vetted here, everything's fine, people liked him," said Senator Vanderlan Cardoso, chair of the Senate's Economic Affairs Committee, which must confirm his nomination before it is put to the full Senate. Sign up here. https://www.reuters.com/business/finance/galipolo-picked-run-brazils-central-bank-is-heterodox-economist-2024-08-28/

2024-08-28 22:08

DUBAI, Aug 28 (Reuters) - The European Union's mission in the Red Sea said on Wednesday there was no oil spill in the waters near the Greek-flagged tanker hit by a fiery Houthi militant attack off Yemen's coast. The mission, called Aspides, added that the Sounion was still anchored and not drifting. A U.S. official, speaking on the condition of anonymity, said the ship was leaking an unidentified substance. The Pentagon said on Tuesday that the tanker was still on fire in the Red Sea and appeared to be leaking oil. Reuters could not independently confirm that a leak had occurred. The Iran-backed Houthis targeted Sounion in multiple attacks near Yemen's port city of Hodeidah, at one point causing the vessel to erupt in a ball of flames. The attack set off alarm bells in the environmental community because Sounion is carrying 150,000 tonnes, or 1 million barrels, of crude oil. A spill of that size would be one of the largest from a ship in history, threatening to destroy the area's fishing industry and regional ecosystems, government officials warned. The Iran-aligned Houthis over 10 months have launched more than 70 attacks on commercial ships in solidarity with Palestinians in the war between Israel and Hamas in Gaza. Those assaults have sunk two vessels, killed at least three crew and disrupted global trade by forcing ships to avoid the vital Suez Canal shortcut. Sign up here. https://www.reuters.com/world/middle-east/eu-mission-red-sea-says-no-oil-spill-area-mv-sounion-2024-08-28/