Thai Baht's Surge at Risk From Turmoil, Top Forecaster Says
The local currency may trade at 32.30 per dollar at the end of the year and into the first quarter of 2026, said Christoper Wong, senior FX strategist at Oversea-Chinese Banking Corp. That implies the baht would be just 0.7% stronger than its level on Monday, after surging more than 5% in the four months through June.
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19 minutes ago
- Yahoo
Analysis-China's rare earth export controls are good for Beijing, bad for business
(Reuters) -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." (Reported by Reuters staff; Editing by Lewis Jackson and Sonali Paul)
Yahoo
26 minutes ago
- Yahoo
Factbox-How China tightened its grip over its rare earth sector
(Reuters) -When China restricted rare earth exports to Japan in 2010 during a diplomatic spat, a wild west domestic industry undermined Beijing with rampant smuggling. In a sharp shift that reflects how China has massively tightened control over the sector since then, when it imposed new restrictions in April this year, automakers worldwide faced shortages within two months leading some to pause production. Through consolidation and quotas, Beijing has turned a once-unruly sector, responsible for 90% of rare earth processing capacity, into a powerful source of diplomatic leverage. Here is a summary of how the world's number one rare earth producer has tightened its grip over the industry. CONSOLIDATION When China began its crackdown on the sector some fifteen years ago, there were hundreds of miners and processors. By 2013 ten producers controlled almost all mining. Today, there are just two state-owned giants: China Rare Earth Group and China Northern Rare Earth Group High-Tech. The decade-plus process of consolidation gave Beijing greater oversight while also curbing some of the environmental damage caused by illegal and reckless mining, according to David Abraham, affiliate professor at Boise State University, in Idaho. In the past an illegal supply chain of rogue miners delivered ore to unauthorised separation facilities, with the finished products then disguised and shipped abroad. Roughly 40,000 metric tons of rare earth oxides were estimated to have been smuggled overseas in 2014, half as much again as official exports. Magnet makers, however, have not consolidated in the same way as the upstream mining and refining sector, with dozens of producers and processors across China, including JL Mag Rare-Earth and Ningbo Yunsheng. However, China introduced a tracking system for its rare earth magnet sector from June, requiring companies to submit information including customer details and transaction volumes. It ultimately aims to track the entire supply chain. QUOTAS In conjunction with consolidation, China has also used its production quota system, introduced in 2006, to control supply. The quotas cover mining, smelting and separation. Typically issued twice a year, they are widely monitored as a barometer for global supply. Beijing has gradually narrowed access to quotas and in 2024, only the two state-owned groups were eligible, compared to six previously. China has dramatically slowed down supply growth from 2024 when the total mining output quota grew only 5.9% year-on-year, versus an annual rise of 21.4% in 2023. Analysts and traders expect mining output quotas this year to either stay flat or rise by up to 5% from 2024's level. Beijing also restricts exports of technology. The tools and means to extract and separate rare earths have long been banned. In late 2023 it extended that ban to the technology used to make rare earth magnets.
Yahoo
27 minutes ago
- Yahoo
North Korea bars Western influencers from trade fair tour
North Korea has barred Western influencers from joining a delegation of tourists to an international trade fair in October, a China-based tour operator told AFP on Monday. Diplomatically isolated North Korea has welcomed sporadic groups of international visitors in recent months, including hundreds of foreign athletes in April for the first Pyongyang International Marathon in six years. China has historically been the biggest diplomatic, economic and political backer of North Korea, which remains under crippling international sanctions. Travel agency Young Pioneer Tours (YPT) said on Saturday it would take a group of foreign tourists on a trip to the authoritarian state from October 24 to November 1. However, the tour would not be open to journalists, travel content creators or influencers, the company said on its website. YPT co-founder Rowan Beard told AFP the curbs on creators were "a specific request from the North Korean side". "We anticipate that once the country officially reopens, there may be stricter scrutiny or limitations on influencers and YouTubers joining tours," Beard said. The company had "no visibility" on when Pyongyang would restart official media delegations, he said. Several online influencers have shared slickly produced videos from inside North Korea in recent months. Chad O'Carroll, founder of specialist website NK News, said many influencers tend to have larger audiences than professional journalists, but "they are normally working without editors and tend to gain extra views through sensationalist-style content". "North Korean authorities likely see few benefits and major risks with allowing social media influencers to visit the country, given what we saw earlier this year," O'Carroll told AFP. "The result is a community of potential visitors who, in DPRK authorities' minds, are not likely to produce content that is favourable to state interests," he said, using North Korea's official name. - Lavish gifts - The YPT tour, priced at 3,995 euros ($4,704), will depart from the Chinese capital Beijing and take in the Pyongyang Autumn International Trade Fair, North Korea's biggest international business exhibition. Participants will have a "unique chance" to stroll through more than 450 trade booths exhibiting machinery, information technology, energy, pharmaceuticals, consumer goods and household items. YPT also said the Pyongyang Chamber of Commerce would "hold a VIP presentation for us for an in-depth overview and insights into the (North Korean) economy". The itinerary also includes major sights in Pyongyang as well as the first Western visit in more than five years to Mount Myohyang, which boasts a museum of lavish gifts presented to former North Korean leaders. Chinese people used to make up the bulk of foreign tourists and business visitors to the isolated nuclear nation before it sealed its borders during the Covid-19 pandemic. However, numbers have not rebounded despite Pyongyang's post-pandemic reopening, a trend that some analysts have attributed to Beijing's anger at North Korea's explicit support for Russia's invasion of Ukraine. mjw/pbt/dhw
