Netanyahu gifts Trump letter nominating him for Peace Prize
The two leaders were having dinner at the White House on Monday evening, local time in Washington.
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Zawya
14 minutes ago
- Zawya
China's rare earth export controls are good for Beijing, bad for business
China's export restrictions on rare earths brought parts of the global auto supply chain to a halt and U.S. President Donald Trump to the negotiating table. But at home, they're a big headache for companies already struggling with a slow economy. Beijing curbed rare earth and magnet exports in April in retaliation against U.S. tariffs, driving down magnet makers' offshore sales at the same time as they face pressure from a weak economy and tough times in one of their key markets - EVs. The pain for magnet makers is unlikely to ease soon, even after the U.S. announced a deal with China on June 27 to get rare earths flowing again. Any agreement would take time to implement, said Baotou Rare Earth Products Exchange, a state-backed trading platform, noting that inventory was piling up in warehouses, in a post on WeChat 12 hours after the deal was announced. The export curbs led to a 75% drop in magnet exports in the two months after the restrictions were imposed and forced several global auto makers to pause some production. The restrictions caused a "crisis" for some local magnet makers, the Baotou exchange, based in Inner Mongolia, one of China's rare earths hubs, said in May. While China produces 90% of the rare earth magnets used worldwide and consumes most of them, exports ranged from 18% to 50% of total revenue in 2024 among the 11 largest publicly listed magnet producers by capacity, public filings show. "Their sales are now being squeezed from both ends – disrupted exports and flagging domestic demand," said Ellie Saklatvala, head of metal pricing at commodities information provider Argus. "They have temporarily lost an important part of their customer base, with no certainty about when they will regain it." Rare earths are politically sensitive in China and few major listed rare earth companies have commented directly about how the controls will affect their business. However, two rare earth magnet producers told Reuters revenue is expected to fall this year, speaking on condition of anonymity given the issue's sensitivity. "It will have a huge impact on the export business, although it's hard to tell exactly how much of a loss we will suffer for now," said one of the rare earth magnet producers, requesting anonymity due to the sensitivity of the matter. Small- and medium-sized producers cut production by around 15% in April and May, according to another source with knowledge of the matter, who also declined to be named. EXPORT CURBS' IMPACT UNDERESTIMATED Much like U.S. chipmaker Nvidia, China's rare earth magnet makers are victims of their own importance. Caught in the geopolitical crossfire of Washington's tariffs and China's retaliation, share prices of the listed magnet makers slumped in April after the export curbs were announced. However, they have climbed off their lows over the past three months. The rebound does not appear to be based on any reasonable forecast of the industry's future, said Cory Combs, head of critical mineral research at consultancy Trivium China. "I can see various market outlooks, more or less negative depending on the assumptions, but none of them yield a sustainable rise in share price like we're seeing," he said. Many magnet makers are also private, so share prices only tell a limited story, he said. Many producers already faced weaker conditions at home, including a price war among electric vehicle makers, a key customer segment, that has seen manufacturers demand discounts from suppliers. In addition, the highly customised nature of many magnet products makes it hard to resell cargoes domestically, forcing magnet makers to store them during the wait for licenses, four sources said, also speaking anonymously. CHALLENGES MAY SPUR CONSOLIDATION Listed magnet maker Baotou Tianhe Magnetics Technology Co noted the export curbs in its annual report released in late April, and said its export revenue could decline if the international situation deteriorated. Yantai Zhenghai Magnetics said last week it had received export licenses and production was normal. It referred investors to its upcoming financial filings for specific operating results. However, a quick return to the previous status quo is unlikely if the rare earth controls are implemented in a manner similar to those on other critical minerals including germanium and antimony, according to Argus' Saklatvala. China imposed export controls on germanium and antimony over the course of 2023 and 2024. Despite being used mostly by civilian industries, which in theory should face few issues getting licenses, exports have still not recovered fully, customs data shows. Europe is receiving only a tiny fraction of the antimony it imported from China before export controls were imposed last September. The shortages are already causing major problems for lead-acid battery makers, commonly found in gasoline engines. "Looking at China's recent export controls on other critical minerals – such as antimony – it is clear that it can sometimes take longer than expected for exports to resume and normalise," Saklatvala added. The large amounts of information required by export license authorities are a permanent change for the industry that will add delays and costs for producers, said David Abraham, affiliate professor at Boise State University, in Idaho. "In some sense, there's no going back," he said. In an industry that has hundreds of manufacturers, the pressures could lead to consolidation, he said. "I do not know if Beijing sees that as a bad thing, because further consolidation is helpful for controlling and understanding where materials go."
Zawya
an hour ago
- Zawya
Shares steady, dollar firms on US tariff letters; oil dips
TOKYO: Stock markets in Asia took in stride the latest twist in U.S. President Donald Trump's tariff roll-out on Tuesday, as the dollar held onto gains and oil retreated. Shares on Wall Street fell after Trump sent letters to 14 countries, including Japan and South Korea, unveiling sharply higher tariffs on imports into the United States, while also postponing their implementation to August 1. Japan's Nikkei stock gauge opened lower but then turned positive after Trump described that deadline as "firm, but not 100% firm" and said tariffs may be adjusted for some countries. The Aussie dollar rose ahead of a Reserve Bank of Australia decision later in the day. Market reaction to the tariff announcements was muted on memories of Trump's rapid walk back of his "Liberation Day" duties initially set out on April 2, said Tapas Strickland, head of market economics at National Australia Bank. "There's going to be a lot of volatility as the headlines start to emerge, as more of these letters come out, and as the negotiations really come to the fore ahead of that August 1 deadline," Strickland said on an NAB podcast. In April, Trump capped all of the so-called reciprocal tariffs with trading partners at 10% until July 9 to allow for negotiations. Only two agreements, with Britain and Vietnam, have been reached. In June, Washington and Beijing agreed on a framework covering tariff rates, restoring a fragile truce in their trade war. Tariffs on Japan and South Korea are now due to go up to 25% on August 1. Japanese Prime Minister Shigeru Ishiba called the hike deeply regrettable and said his nation would continue negotiations with the U.S. The European Union will not be receiving a letter setting out higher tariffs, EU sources familiar with the matter told Reuters on Monday. The EU still aims to reach a trade deal by Wednesday after European Commission President Ursula von der Leyen and Trump had a "good exchange," a commission spokesperson said. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.2% in early trade. Japan's Nikkei stock index rose 0.4% while South Korea's KOSPI jumped 1.5%. The dollar rose 0.2% to 146.36 yen, touching a two-week high. The euro was flat at $1.1741. The Aussie advanced 0.4% to $0.6516 before a meeting by the central bank where policymakers are widely expected to deliver a 25-basis-point cut. U.S. crude dipped 0.5% to $67.59 a barrel after surging nearly 2% on Monday. Spot gold edged 0.2% lower. In early trade, pan-region Euro Stoxx 50 futures were down 0.1%, German DAX futures were down 0.1% at 24,133, and FTSE futures slid 0.3%. (Reporting by Rocky Swift; Editing by Jacqueline Wong)
Zawya
an hour ago
- Zawya
Oil prices ease as traders assess US tariffs, OPEC+ output hike
Oil prices eased on Tuesday after rising almost 2% in the previous session, as investors assessed new developments on U.S. tariffs and a higher-than-expected OPEC+ output hike for August. Brent crude futures dropped 21 cents at $69.37 a barrel by 0041 GMT. U.S. West Texas Intermediate crude fell 24 cents at $67.69 a barrel. U.S. President Donald Trump on Monday began telling trade partners, which included major suppliers South Korea and Japan as well as smaller U.S. exporters like Serbia, Thailand and Tunisia, that sharply higher U.S. tariffs will start August 1, marking a new phase in the trade war he launched earlier this year. Trump's tariffs have prompted uncertainty across the market and concerns they could have a negative effect on the global economy and, consequently, on oil demand. However, there are some signs current demand remains strong, particularly in the U.S., the world's biggest oil consumer, which has supported prices. A record 72.2 million Americans were projected to travel more than 50 miles (80 km) for Fourth of July vacations, data from travel group AAA showed last week. Investors were bullish heading into the holiday period with data from the U.S. Commodity Futures Trading Commission released on Monday showing money managers raised their net-long futures and options positions in crude oil contracts in the week up to July 1. Regarding supplies, on Saturday the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, agreed to raise production by 548,000 barrels per day in August, exceeding the 411,000-bpd hikes they made for the prior three months. The decision removes nearly all of the 2.2 million-bpd of voluntary cuts and analysts at Goldman Sachs expect OPEC+ to announce a final 550,000-bpd increase for September at the next meeting on August 3. However, the actual output increase has been smaller than the announced levels so far and most of the supply has been from Saudi Arabia, analysts said. (Reporting by Stephanie Kelly; Editing by Christian Schmollinger)
