Latest news with #supplycrunch
Yahoo
23-07-2025
- Business
- Yahoo
EU Wrestles With China's Chokehold Over Crucial Defense Supplies
(Bloomberg) -- European metals traders are engaged in an increasingly frantic scramble to secure rare-earth metal supplies after it became all but impossible to directly source them from China. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Milan Corruption Probe Casts Shadow Over Property Boom While defense manufacturers say they can rely on stockpiling and diversified supply chains to keep their operations running, with traders turning to the secondary market, the supply crunch may soon start to bite unless a solution is found. The seeds of this crisis were planted in early April, when Beijing cut off exports of critical minerals, such as terbium, yttrium or samarium, usedin missiles, satellites and fighter jets — and implemented a far more restrictive system to oversee their release. China holds a quasi-monopoly over the mining and processing of many critical minerals, and the country's ability to choose winners and losers has nudged leaders in Brussels towards an alarming realization, according to people familiar with their thinking: Europe's ability to protect itself relies heavily on China. 'Companies and politicians view this topic differently, and governments obviously have to look at the bigger picture,' said Jakob Kullik, a researcher studying metals supplies at the University of Technology in Chemnitz, Germany. 'That's why I would be careful about what companies report, because the market figures tell a different story.' There isn't a quick fix to securing Europe's critical mineral supply. While European Commission chief Ursula von der Leyen has vowed to respond firmly to what she has described as blackmail by China, a longer-term plan requires substantial investment and political will — neither of which the 27 member states are able to generate easily. Under the new licensing system, Beijing holds veto power over which countries and sectors can access its rare earths. Like other nations that supply dual-use materials, it also requires applicants to fill out questionnaires certifying what they will ultimately be used for. Since April, China has approved a total of 1,500 six-month licenses to individual companies, and rejected an EU request to grant multi-year licenses, according to European officials. While Chinese officials have eased off on export restrictions somewhat since a squeeze in April, that's still not enough to offer confidence to their European counterparts. EU officials have described the new system as cumbersome and unsustainable, and asked Beijing to eliminate its questionnaires, which could be used to gauge the contents and size of military arsenals. But they concede that little is likely to change. When EU and Chinese officials meet in Beijing this week to celebrate 50 years of diplomatic relations, rare earths will be a top agenda item — although expectations of any grand resolution are low. Some fear that China might use access to critical minerals as a way to extract concessions from the bloc on pending trade investigations or tariffs on electric vehicles, the people said. That's in part why some officials are pushing the EU to threaten China with restrictions on exports of French aircraft parts or semiconductor equipment from the Dutch chip equipment company ASML Holding NV, they added. But a tougher approach faces a multitude of challenges. There's no consensus within the bloc on how to counter China or how far possible retaliation should go, and the EU commission has also been undermined by member states negotiating directly with Beijing to secure deals for their own industries, the people said. Countries striking out on their own are following a trajectory set by the US, which decided to conduct its own talks with Beijing after rare earth imports came to a halt. That culminated in a trade truce in June, with the US agreeing to lower tariffs and remove export controls on chip design software, aircraft parts and ethane shipments in order to keep imports flowing. Total mineral exports rose to 3,188 tons in June, according to Chinese data, more than double the 1,238 tons in May. Some defense companies have started stockpiling components, while others have expressed confidence that their supply chains are sufficiently diversified. Yet some industry experts believe that firms are downplaying the situation or are failing to fully grasp how serious it may be. A more structural solution — such as getting companies directly involved in extracting and processing raw materials — remains risky and requires a kind of expertise that is all but lost within Europe. In the meantime, Chinese officials, aware that they have the upper hand, have adopted more blunt rhetoric towards their European and American counterparts. Chinese Foreign Minister Wang Yi told EU foreign policy chief Kaja Kallas earlier this month that Beijing doesn't want Russia to lose the war in Ukraine because the US would then shift its attention to China, according to people familiar with the exchange. China has said that it has played no role in the conflict in Ukraine and rebuffed accusations from the Group of Seven that it is supplying Russia with materials critical to sustaining its war effort. Should China further tighten restrictions on rare earth exports, it could not only hinder the EU's defenses against Russia. It would also highlight Beijing's leverage over the European defense companies that arm Ukraine — and China's ability to control the provision of weapons to Kyiv. As the geopolitical tradeoffs and risks become clearer, EU leaders are thinking more seriously about how to reduce the bloc's mineral dependency on China. The strongest legislation to date, the Critical Raw Materials Act, entered into force last year but has been criticized by industry for failing to pull together the necessary funding. The act includes proposals to create domestic supply chains for minerals and to recycle more rare-earth elements from used electronics. Traders agree that in order to make this work, significant financial incentives would be required, partly because sending electronic waste back to China is cheaper than recycling in the European Union. One potential role model for how Europe might de-risk is Japan, which was cut off from Chinese rare earth exports in 2010. Japan responded by tasking a government agency to invest in overseas mining operations, and has built up supply chains in places including Australia and France. If the situation with China continues to escalate, Europe may need to pursue a similar approach, said Kullik, the politics researcher. He suggested that the bloc should aim to build rare-earth processing plants on the continent with the long-term goal of developing strategic stockpiles. After that, he said, the EU would have to adopt its own protectionist measures. 'If a conflict really comes about,' he said, 'that would be the only logical solution.' --With assistance from Arne Delfs, James Mayger, Michal Kubala and Alberto Nardelli. Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Burning Man Is Burning Through Cash A Rebel Army Is Building a Rare-Earth Empire on China's Border It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan What the Tough Job Market for New College Grads Says About the Economy ©2025 Bloomberg L.P.
Bloomberg
23-07-2025
- Business
- Bloomberg
EU Wrestles With China's Chokehold Over Crucial Defense Supplies
European metals traders are engaged in an increasingly frantic scramble to secure rare-earth metal supplies after it became all but impossible to directly source them from China. While defense manufacturers say they can rely on stockpiling and diversified supply chains to keep their operations running, with traders turning to the secondary market, the supply crunch may soon start to bite unless a solution is found.
Yahoo
12-07-2025
- Business
- Yahoo
Petrol stations run dry after oil refinery collapse
Petrol stations are running out of fuel after the collapse of one of Britain's biggest oil refineries cut off vital supplies. A financial crisis at the Lindsey Oil Refinery, owned by Prax Group, has unleashed chaos across a string of forecourts near the plant in Lincolnshire, some of which have been unable to secure any supplies for more than a week. The supply crunch has been triggered by a halt in fuel deliveries from the site, which was taken over by the Official Receiver after Prax collapsed. This has left many local petrol stations in disarray as they battle to source more expensive alternatives to remain open, leading to unexpected financial losses. Tom Dant, managing director at Gill Marsh forecourts in Lincolnshire, said his three garages were without fuel for at least eight days in the wake of Prax's failure. 'It is a complete mess,' he said. 'The communication has been less than poor. We can't get anything from the refinery. They have no tankers or drivers, which means there is no way that they can supply us.' Mr Dant remains locked into a five-year supply contract despite Prax's failure, preventing him from sourcing a new fuel partner. This means he has to rely on more expensive short-term supplies, which he said have already cost him £50,000 in lost profits. Bullwinkle's Garage, another nearby forecourt in Lincolnshire, is also facing similar problems. A spokesman for the business said they went five days without any petrol because of the collapse. Both petrol station businesses said they were blindsided by the company's failure, echoing complaints made by Ed Miliband, the Energy Secretary, earlier this month. At the time, Whitehall officials said they were repeatedly assured that the refinery was not under immediate threat. However, Mr Dant questioned why ministers were not aware of the problems at Prax sooner. It comes after The Telegraph revealed that the company had been battling cash flow problems for more than a year owing to a £250m tax liability with HMRC. It is understood that Prax had approached the Government for support in 2024, although their request was denied. Signs of financial stress had also emerged at the company earlier this year when Prax started pulling direct debits from customers days earlier than planned. 'For us, how has it reached the point that the Government let them run an £250m unpaid tax, and it had not been probed before now?' said Mr Dant. Mr Miliband has since ordered a full investigation into the circumstances behind Prax's collapse, including 'the conduct of the directors'. This is likely to raise questions over why the owners of the refinery, Sanjeev Kumar and Arani Soosaipillai, were paid a £3.6m dividend the year before it collapsed. The Telegraph revealed last week that authorities are currently unclear as to the whereabouts of Mr Soosaipillai, who is the chief executive of Prax. The Official Receiver was contacted for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Telegraph
12-07-2025
- Business
- Telegraph
Petrol stations run dry after oil refinery collapse
Petrol stations are running out of fuel after the collapse of one of Britain's biggest oil refineries cut off vital supplies. A financial crisis at the Lindsey Oil Refinery, owned by Prax Group, has unleashed chaos across a string of forecourts near the plant in Lincolnshire, some of which have been unable to secure any supplies for more than a week. The supply crunch has been triggered by a halt in fuel deliveries from the site, which was taken over by the Official Receiver after Prax collapsed. This has left many local petrol stations in disarray as they battle to source more expensive alternatives to remain open, leading to unexpected financial losses. Tom Dant, managing director at Gill Marsh forecourts in Lincolnshire, said his three garages were without fuel for at least eight days in the wake of Prax's failure. 'It is a complete mess,' he said. 'The communication has been less than poor. We can't get anything from the refinery. They have no tankers or drivers, which means there is no way that they can supply us.' Mr Dant remains locked into a five-year supply contract despite Prax's failure, preventing him from sourcing a new fuel partner. This means he has to rely on more expensive short-term supplies, which he said have already cost him £50,000 in lost profits. Bullwinkle's Garage, another nearby forecourt in Lincolnshire, is also facing similar problems. A spokesman for the business said they went five days without any petrol because of the collapse. Prax collapse Both petrol station businesses said they were blindsided by the company's failure, echoing complaints made by Ed Miliband, the Energy Secretary, earlier this month. At the time, Whitehall officials said they were repeatedly assured that the refinery was not under immediate threat. However, Mr Dant questioned why ministers were not aware of the problems at Prax sooner. It comes after The Telegraph revealed that the company had been battling cash flow problems for more than a year owing to a £250m tax liability with HMRC. It is understood that Prax had approached the Government for support in 2024, although their request was denied. Signs of financial stress had also emerged at the company earlier this year when Prax started pulling direct debits from customers days earlier than planned. 'For us, how has it reached the point that the Government let them run an £250m unpaid tax, and it had not been probed before now?' said Mr Dant. Mr Miliband has since ordered a full investigation into the circumstances behind Prax's collapse, including 'the conduct of the directors'. This is likely to raise questions over why the owners of the refinery, Sanjeev Kumar and Arani Soosaipillai, were paid a £3.6m dividend the year before it collapsed. The Telegraph revealed last week that authorities are currently unclear as to the whereabouts of Mr Soosaipillai, who is the chief executive of Prax.
Japan Times
30-05-2025
- Business
- Japan Times
Some retailers hesitant to buy stockpiled rice on quality concerns
As the government releases more of its stockpiled rice to ease a supply crunch and bring down prices, concerns are mounting over the quality and taste of the older harvests. 'I'm worried about the taste. If elderly customers think the rice is bad and stop eating it, it could harm their health,' said Hidehisa Shinohara, 47, who owns a 78-year-old rice shop in Tokyo's Kita Ward. While stockpiled rice from the 2022 harvest has been distributed to large supermarket chains, the current focus on the older batch from 2021 has sparked hesitation among smaller, regional retailers. When the government started auctioning stockpiled rice harvested in 2021 and 2022 in March, buyers showed strong preference for the fresher batch due to concerns over the aging of the grain and the possibility of a deterioration of flavor. While Shinohara is considering applying to buy the stockpiled rice from the government, he expressed misgivings. 'There's this impression that we're just getting leftovers from the big supermarket chains,' he said. A manager at a small supermarket in Tokyo's Adachi Ward echoed those concerns, saying, 'We don't expect quality from this batch, so we won't apply.' The issue has also stirred political controversy. During a Lower House agriculture committee session on Wednesday, Yuichiro Tamaki, the leader of the opposition Democratic Party for the People, criticized the policy, likening the aging rice to livestock feed. 'After a year, it'll be sold as feed for livestock. Of course it's going to be cheap,' he said, arguing that the sale of rice from the government's stockpiles fails to align with consumer demand for affordable, high-quality rice. Under the current policy, the government's stockpiled rice is repurposed for livestock feed after five years. Lawmakers from both opposition and ruling parties have widely criticized Tamaki over his remarks for being inconsiderately framed, given the circumstances. Kenta Izumi, the former leader of the Constitutional Democratic Party of Japan, on Thursday weighed in on social media platform X, writing, 'That wasn't appropriate phrasing for the situation.' Tamaki later clarified on X that his comment referred to this existing framework, noting that farm minister Shinjiro Koizumi 'has also used the term 'livestock feed rice' to explain the same policy.' Koizumi sought to address doubts by sampling rice balls made from stockpiled rice harvested between 2021 and 2024 at a ministry tasting session on Thursday. He noted one batch was 'a bit firm' — which was later identified as being from the 2021 harvest — but said, 'They all tasted good.' Information from Jiji added
