2025-07-20 22:59

China tightens control over rare earth sector amid trade tensions Only two state-owned groups eligible for quotas last year China controls rare earth supply via quota system July 18 (Reuters) - China has quietly issued its first 2025 rare earth mining and smelting quotas without the typical public statement, sources with knowledge of the matter said this week, another sign of Beijing tightening its control over the crucial sector. The quotas are closely monitored as a barometer for the global supply of rare earths, a group of 17 elements used in electric vehicles, wind turbines, robots and missiles. China is the world's largest producer of the minerals and the government typically issues them twice a year to state-owned companies but they have been delayed this year. Sign up here. The government issued the first set of quotas for the year only last month, without the usual public statement, said the sources, with one of them saying the companies were told not to share the numbers for security reasons. These details are being reported here for the first time. The sources did not give the quota volumes. China is increasingly sensitive about rare earths and its control over the supply, which it has been willing to assert amid its trade discussions with the U.S. and European Union. Beijing added several of the elements and related magnets to its export restriction list in retaliation for U.S. tariff hikes, cutting off supply and forcing some automakers outside China to partially shutter production. In the previous four years, China's Ministry of Industry and Information Technology issued the first batch of quotas in the first quarter of the year in an announcement on its website. The Ministry did not immediately reply to a request sent by fax for a comment on why the information has not been publicly issued. Last year, China issued two batches of mining quotas for 270,000 metric tons, with annual supply growth slowing to 5.9% from 21.4% in 2023. The smelting and separation quota in 2024 was also in two batches, totalling 254,000 tons, up 4.2% from 2023. Beijing has used the quota system, first introduced in 2006, and corporate consolidation to tame the industry and give officials control over output. Beijing has narrowed access to the quotas, with only two state-owned groups - China Rare Earth Group and China Northern Rare Earth Group High-Tech - eligible last year, down from six previously. (600111.SS) , opens new tab The quotas were delayed this year partly because of a proposal in February to add imported ore into the quota system, which sparked opposition from companies that rely on imports and were concerned they could lose access to feedstock, according to the two sources and an additional source with knowledge of the matter. https://www.reuters.com/world/china/china-quietly-issues-2025-rare-earth-quotas-sources-say-2025-07-18/

2025-07-20 19:58

Ruling coalition now reduced to minority in both houses Opposition parties want looser monetary policy, tax cuts Yen, JGBs have sold off on expectation of fiscal largesse SINGAPORE, July 21 (Reuters) - Japan's upper house election on Sunday dealt a big blow to the ruling coalition and sets markets up for possible policy paralysis and a bigger fiscal deficit, much of which is already priced in, analysts said. The nation's ruling coalition lost control of the upper house, further weakening Prime Minister Shigeru Ishiba's grip on power even as he vowed to remain party leader, citing a looming tariff deadline with the United States. Sign up here. Japanese markets were closed on Monday for a holiday, but the rise in the yen and Nikkei futures showed investors had already priced in the election outcome. The Japanese currency has weakened considerably this year on expectations of changes to taxes and a bigger fiscal deficit. The election result, while not entirely a shock to markets, also comes at a tricky time for a country trying to get a tariff deal with U.S. President Donald Trump before an Aug. 1 deadline. Japanese government bonds (JGBs) plunged last week, sending yields on 30-year debt to an all-time high, while the yen slid to multi-month lows against the U.S. dollar and the euro. "I will not chase the coalition loss trades, and I suspect participants will spend some time analysing the implications of the loss, which could take time to materialize, and also refocus attention to the trade negotiations which is another major macro risk for Japan," said Rong Ren Goh, a portfolio manager in the fixed income team at Eastspring Investments. Investors expect it will be a while before it becomes clear whether the ruling coalition intends to continue as a minority government, or draw in a new partner. Among the most likely candidates is the Democratic Party for the People (DPP), which has urged the Bank of Japan to reverse course and again loosen monetary policy. Investors are bracing for the LDP to compromise heavily to accommodate opposition parties' desire for tax cuts. Ishiba's fate also remains an unknown, although he said on Sunday he intends to stay in his position. Within the Liberal Democratic Party (LDP), a leading candidate to replace Ishiba, should he step down, is Abenomics proponent Sanae Takaichi, who has advocated for a resumption of monetary easing by the BOJ. All three leading opposition parties back some form of consumption tax cuts, with the populist, right-wing Sanseito proposing a phase-out of VAT altogether. Those cuts would have to be paid for with increased Japanese government bond issuance. With debt about 2-1/2 times GDP, Japan is already the world's most indebted major country. Shoki Omori, chief desk strategist at Mizuho Securities in Japan, said in a note that he does not expect the LDP to force a leadership change, particularly while trade talks with the U.S. government are ongoing. "Against that political backdrop, prospects for an aggressive fiscal stimulus are limited....A meaningful supplementary budget, if one emerges, would not be debated until the autumn Diet session at the earliest," he wrote. If Ishiba resigns, the political uncertainty could be a trigger for foreign investors to sell Japanese shares and the yen, analysts said. Barclays analysts estimate a five percentage point cut to Japan's sales tax, currently at 10%, would lead to a 15-20 basis point increase in the 30-year yield. Japanese government 30-year yields are up 80 basis points (bps) this year and the yield curve is at its steepest in years, with the spread between 10-year and 30-year bonds above 150 bps. The yen has had a volatile first half of 2025 in a range of 140-160 per dollar. It rallied hard after the Bank of Japan's rate rise in January stoked expectations for a faster pace of monetary tightening, but has dithered since late April on political uncertainty, fractious tariff negotiations with the Donald Trump administration and the BOJ's dovishness. Long speculative positions in the yen are however still very large, making it likely that the currency will fall rapidly if Japan calls for a snap election or fiscal policy is loosened. The Nikkei 225 benchmark (.N225) , opens new tab, by contrast, is up more than 11% since April 2, when Trump unveiled his global tariffs. https://www.reuters.com/business/japan-ruling-partys-election-loss-is-price-investors-say-2025-07-20/

2025-07-20 16:15

MOSCOW, July 20 (Reuters) - Rosneft (ROSN.MM) , opens new tab, Russia's biggest oil producer, on Sunday slammed European Union sanctions on India's Nayara Energy refinery as unjustified and illegal, saying the restrictions directly threatened India's energy security. The European Union's 18th package of sanctions against Russia over the conflict in Ukraine, was approved on Friday and is aimed at dealing further blows to Russia's oil and energy industry. Nayara Eenrgy was one of the targeted companies. Sign up here. "The Nayara Energy refinery is a strategically important asset for the Indian energy industry, providing a stable supply of petroleum products to the country's domestic market. The imposition of sanctions against the refinery directly threatens India's energy security and will have a negative impact on its economy," Rosneft said. Rosneft said it holds less than 50% in Nayara and does not control the enterprise, which is managed by an independent board. It described the EU's justification for the sanctions as "far-fetched and false in context." "Nayara Energy is an Indian legal entity whose operations support the development of its assets," Rosneft said, adding that the company is fully taxed in India, has never paid dividends to shareholders, and reinvests profits into refining, petrochemicals, and retail operations. The Russian oil giant accused the EU of disregarding international law and third-country sovereignty, calling the move part of a broader effort to destabilize global energy markets and engage in unfair competition. https://www.reuters.com/business/energy/russia-rosneft-slams-eu-sanctions-indias-nayara-refinery-2025-07-20/

2025-07-20 13:34

CAIRO, July 20 (Reuters) - Saudi Arabia's ACWA Power company signed several memoranda of understanding with European companies to export renewable energy and green hydrogen from the kingdom to Europe, the Saudi energy ministry said on Sunday. The European companies included France's TotalEnergies (TTEF.PA) , opens new tab, Italy's Edison (EDNn.MI) , opens new tab and Germany's EnBW (EBKG.DE) , opens new tab. Sign up here. The Saudi company also signed separate agreements with other companies including Germany's Siemens Energy (ENR1n.DE) , opens new tab to develop energy transmission corridors. https://www.reuters.com/business/energy/saudis-acwa-power-signs-agreements-with-european-companies-export-renewable-2025-07-20/

2025-07-20 13:16

SEOUL, July 20 (Reuters) - Two people have died and five were missing in the South Korean county of Gapyeong on Sunday, after a landslide engulfed houses and campsites and flooding swept away vehicles amid heavy rainfall. This brings the nationwide death toll to 17 with 11 people missing since the rain began on Wednesday, forcing more than 13,000 people to evacuate. Sign up here. A landslide hit a campsite in Gapyeong, leaving a man in his 40s dead, two family members missing and 24 other people stranded, fire authorities said. One person was rescued near the campsite by a zip-line across a raging river, according to footage released by fire officials. In another video, a helicopter is seen airlifting a person to safety. South Korean President Lee Jae Myung ordered a swift assessment of the damage and the prompt designation of special disaster zones to increase state support. The rainfall is likely to stop on Sunday and be followed by a heat wave, the government weather forecaster said on Sunday. The heavy rainfall, which had earlier lashed southern parts of South Korea, moved north overnight, it said. https://www.reuters.com/business/environment/death-toll-rises-17-south-korea-rains-cause-landslide-floods-2025-07-20/

2025-07-20 12:59

Industrials top-performing S&P 500 sector this year Defense stocks boost group; RTX, Lockheed among Q2 reports in coming week One-fifth of S&P 500 to report, including Alphabet, Tesla NEW YORK, July 18 (Reuters) - The industrial sector has led the way for U.S. equities during a topsy-turvy year on Wall Street, but its strength will be tested as earnings season heats up. S&P 500 industrials (.SPLRCI) , opens new tab, which include aerospace companies, electrical equipment and machinery makers, transportation firms and building products companies, have gained 15% so far in 2025. That's the best year-to-date performance of the S&P 500's 11 sectors and more than double the gain of the overall index. Sign up here. Momentum for the industrials sector and the broader market will be in focus with a heavy upcoming week of second-quarter earnings, which includes reports from more than one-fifth of the S&P 500, led by Alphabet (GOOGL.O) , opens new tab and Tesla (TSLA.O) , opens new tab, the first of the "Magnificent Seven" megacap tech and growth companies to report. The S&P 500 has surged 26% since April, as investors shook off fears about a recession which had stemmed from President Donald Trump's "Liberation Day" tariff announcement. This earnings season "seems to be especially important because of the rebound that the market has had," said Chuck Carlson, chief executive officer at Horizon Investment Services. "I would think that that has built in a fair amount of optimism in terms of earnings." A number of industrials will be in the earnings spotlight as well. Aerospace and defense stocks have boosted the sector's performance this year, driven by heightened geopolitical tensions in the Middle East and Ukraine and fresh spending commitments by Germany and other nations. The S&P 500 aerospace and defense industry group (.SPLRCAED) , opens new tab has surged 30% this year. Defense companies to report in the coming week include RTX (RTX.N) , opens new tab, Lockheed Martin (LMT.N) , opens new tab and General Dynamics (GD.N) , opens new tab. GE Aerospace (GE.N) , opens new tab, whose shares have soared about 55% this year, raised its 2025 profit forecast on Thursday. Another industrial company spun off from legacy General Electric last year, GE Vernova (GEV.N) , opens new tab, has seen its shares skyrocket over 70% this year, making it the best-performing industrial sector stock. The power equipment maker's results are due Wednesday. The push for reshoring infrastructure and expansion of artificial intelligence, which has lifted demand for cooling systems and factory automation, are two themes that have supported a number of stocks in the industry, including Eaton (ETN.N) , opens new tab and Rockwell Automation (ROK.N) , opens new tab, said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. Another stock that has supported the industrial sector this year: Ride-hailing giant Uber (UBER.N) , opens new tab, whose shares are up roughly 50%. "Unlike many non-Tech groups, there are a lot of solid stories here that don’t rely on macro forces to deliver solid forward returns," Nicholas Colas, co-founder of DataTrek Research, said in a note on Wednesday. Large cap industrials still look attractive despite the group's recent run, Colas said. Indeed, while industrials have been viewed historically as closely tied to the fortunes of the economy, declines for a number of growth-cycle-linked stocks have weighed on the sector's performance. Shares of package delivery firms UPS (UPS.N) , opens new tab and FedEx (FDX.N) , opens new tab have posted sharp declines, while airlines including United Airlines (UAL.O) , opens new tab and trucking companies such as JB Hunt Transport Services (JBHT.O) , opens new tab are also negative for the year. "There are economically sensitive (areas) within industrials that are not doing well," said Walter Todd, chief investment officer at Greenwood Capital. Other industrial companies slated to report in the coming week are Honeywell (HON.O) , opens new tab, Union Pacific (UNP.N) , opens new tab and United Rentals (URI.N) , opens new tab. Beyond earnings, Wall Street will continue to focus on any developments on trade ahead of August 1, when higher U.S. tariffs on numerous trading partners are set to take effect. Investors will also be sensitive to news on the Federal Reserve, with Fed Chair Jerome Powell facing fresh pressure from Trump to resign as the president presses the central bank to lower interest rates. The Fed's next monetary policy meeting is July 29-30. The S&P 500 has climbed about 7% so far this year. The market has shown resilience despite "an incredible amount of uncertainty," said Eric Kuby, chief investment officer at North Star Investment Management Corp. "We continue to be surprised at how well stocks are trading given a lot of what would seem to be significant headwinds," Kuby said. https://www.reuters.com/business/aerospace-defense/wall-st-week-ahead-industrial-sectors-gains-be-tested-earnings-ramp-up-2025-07-18/