2025-02-10 11:49

Tariffs likely to boost US demand for domestic steel Steel import costs to rise by about $150 per ton - Citi ArcelorMittal plans to build manufacturing facility in Alabama NEW YORK, Feb 10 (Reuters) - Shares of U.S. steel and aluminum producers rose on Monday, while their European and Asian counterparts fell a day after President Donald Trump announced plans to impose fresh metal import tariffs. On Sunday, Trump said he would impose a 25% tariff increaseon all steel and aluminum imports into the U.S. on top of existing duties and a further set of reciprocal tariffs later in the week. He was expected to unveil the new tariffs on Monday or Tuesday. American producers gained. Cleveland-Cliffs (CLF.N) , opens new tab jumped nearly 18%, Nucor (NUE.N) , opens new tab added nearly 6%, and Steel Dynamics (STLD.O) , opens new tab rose nearly 5%. Century Aluminum (CENX.O) , opens new tab added 10%, Alcoa (AA.N) , opens new tab rose 2.2% and U.S. Steel (X.N) , opens new tab gained nearly 5%. "It's not surprising that the companies that would directly benefit from this are experiencing market gains right now, that happened last time, although those gains were lost as global market realities eventually catch up with these firms," said Christine McDaniel, senior research fellow at Mercatus Center and a former Deputy Assistant Secretary at the Treasury Department. American steelmakers have been grappling with subdued demand for their products as an influx of cheaper imports forced them to cut prices and idle mills. Nearly a quarter of all steel used in the U.S. is imported, with the bulk of it from neighboring Mexico and Canada or close allies in Asia and Europe such as Japan, South Korea and Germany. Steel manufacturers are trying to bring their supply chain closer or into the U.S. to offset the impact of a tariff hike, which Citi Research said would raise import costs by about $150 per ton. "Tariffs give them a temporary advantage but then you can't really escape the reality of the global marketplace plus U.S. manufacturers who consume steel and aluminum are now facing higher prices," McDaniel said. ArcelorMittal (MT.LU) , opens new tab, the world's second-largest steelmaker, is planning to build a manufacturing facility in Alabama to supply to the automotive sector, one of the largest buyers of domestically produced steel. South Korea's Hyundai Steel (004020.KS) , opens new tab also plans a plant in the U.S. Shares of ArcelorMittal (MT.LU) , opens new tab, and Voestalpine (VOES.VI) , opens new tab fell 2% each, while Germany's Thyssenkrupp (TKAG.DE) , opens new tab and Salzgitter (SZGG.DE) , opens new tab were trading flat. Additional tariffs on aluminum imports should boost U.S. domestic production to around 1 million metric tons a year from nearly 750,000 metric tons, J.P.Morgan analysts said, similar to the rise seen during the 2018 tariff war. Shares of Asian steel producers also fell, with India's Tata Steel (TISC.NS) , opens new tab down 3.2% and JSW Steel (JSTL.NS) , opens new tab down 2.3%. The U.S. will still depend heavily on imports to meet its annual aluminum demand of about 5 million metric tons. The metal is widely used in the aerospace sector, which has been grappling with supply chain challenges. In his first term, Trump imposed tariffs of 25% on steel and 10% on aluminum, but later granted several trading partners duty-free exemptions, including Canada, Mexico and Brazil. "The higher tariffs at that time were associated with the higher producer prices and raising the input cost, and it did also save some jobs in steel and aluminum but it cost a lot more jobs in the downstream sectors," McDaniel added. Sign up here. https://www.reuters.com/markets/europe/german-steelmakers-tumble-trump-threatens-tariffs-2025-02-10/

2025-02-10 11:43

BP's shares have underperformed sector Set to report earnings on Tuesday BP Capital Markets Day later this month expected to announce strategy change LONDON, Feb 10 (Reuters) - Shares in BP (BP.L) , opens new tab rose by 7% on Monday, and were on track for the biggest daily gain in two years, as investors anticipated that activist shareholder Elliott Management will press for board changes and strategy shifts to boost returns. BP CEO Murray Auchincloss, appointed in January last year, has struggled to reverse the company's underperformance. Expectations Elliott's acquisition of a stake will spur reform on Monday drove shares up by 7% to 463.70 pence by 1223 GMT. If the gains hold, the share will mark the biggest daily increase since February 2023. Investors have questioned BP for lacking a clear strategy to grow its oil and gas business and deliver high returns to shareholders. Its stock last year dropped by almost 16%. Among other energy majors, Shell (SHEL.L) , opens new tab fell nearly 4%, and ExxonMobil (XOM.N) , opens new tab rose 8%. With a market value of about 69 billion pounds ($85.57 billion), BP's valuation is less than half that of Shell. The underperformance also made the British company a potential takeover target. Abu Dhabi National Oil Company (ADNOC) considered buying it last year. "Given the circumstances around the changes to its previous CEO, we think any activist would call for a change in the Chairperson at the very least," RBC Capital Markets analyst Biraj Borkhataria said. BP and Elliott have declined to comment. RESTORING CONFIDENCE? Auchincloss has been trying to restore investor confidence in the company's strategy, following the resignation of his predecessor Bernard Looney in September 2023 for failing to disclose relationships with employees. "In terms of strategic business reviews, we would expect a push to effectively split up the core oil and gas segment to some of BP's transition growth engines, in order to help minimise capital into these areas," Borkhataria said. BP, set to report its fourth-quarter earnings on Tuesday, last month warned of weaker results. It also delayed its investor day to February 26 from February 11 because Auchincloss needed a medical procedure. Auchincloss is expected to use the capital markets day (CMD) to announce his new strategy. Since taking office, he has slowed investments in renewables and low-carbon energy and focused on higher-return oil and gas projects. "Reports of Elliott taking an activist position in BP emerge at an interesting time with its CMD only two weeks out. Management was already under pressure into this event—this development, if true, adds to it," brokerage TD Cowen analysts said. Elliott has become one of the most influential activist investors with about $70 billion in assets. "Given Elliott's track record, we believe its involvement could lead to board changes (for BP), portfolio rationalisation, and capex prioritisation on upstream projects, aiming to maximise free cash flow generation," Jefferies analyst Giacomo Romeo said. A source familiar with the matter told Reuters on Saturday Elliott had built a stake without disclosing its size. Bloomberg News earlier reported U.S.-based Elliott was seeking to boost shareholder value by urging BP to consider transformative measures and called Elliott's stake in the company "significant". ($1 = 0.8064 pounds) Sign up here. https://www.reuters.com/business/energy/bp-shares-hit-highest-since-august-after-elliott-builds-stake-2025-02-10/

2025-02-10 11:40

Green groups have criticised biomass electricity production Drax says supports the changes Britain's largest renewable generator, Drax provides baseload for grid LONDON, Feb 10 (Reuters) - The UK government and Drax (DRX.L) , opens new tab have agreed a deal that will halve the energy producer's subsidies over 2027-2031, while ensuring the group uses more sustainable sources of woody biomass, the two sides said on Monday. Drax is Britain's largest renewable power generator. With the help of government subsidies that run until 2027, it has converted four former coal plants to use biomass to provide around 6% of the country’s electricity. Following a consultation on extending the subsidies, the government said it "cannot allow Drax to operate in the way it has done before or with the level of subsidy it received in the past". "Biomass currently plays an important role in our energy system, but we are conscious of concerns about sustainability and the level of subsidy biomass plants have received in the past," Energy Minister Michael Shanks said in a statement, which did not disclose the exact figures of the subsidy. Green groups have questioned whether the company's practice of using wood pellets to produce electricity is sustainable, saying production of the pellets can contribute to deforestation. Under the new agreement, the government said Drax should increase the proportion of woody biomass that comes from sustainable sources to 100% from 70%. Material sourced from primary forests and old growth forests will be excluded from subsidies and Drax will be fined if it does not meet the criteria, the government added. Drax said it already meets the criteria of using biomass from 100% sustainable sources. The company says it only uses wood residuals or byproducts from trees primarily used for lumber, adding that demand for wood from sustainably managed forests can help to increase forest growth. Shares in the group were up 3% in morning trade. "Drax supports these developments and will continue to engage with the UK government on the implementation of any future reporting requirements," the group said. Once Britain's biggest coal-powered generator, Drax now relies on biomass to provide baseload power. Under the new agreement, Drax will be supported to operate at a maximum load factor of 27%, less than half of current levels, and will provide low-carbon power only when it is "really needed". The government said the new deal would save consumers 170 million pounds ($211 million) in subsidy each year of the agreement compared with the alternative of procuring natural gas to ensure steady supplies. ($1 = 0.8065 pounds) Sign up here. https://www.reuters.com/sustainability/climate-energy/uk-cuts-subsidies-biomass-power-producer-drax-2025-02-10/

2025-02-10 11:39

HONG KONG, Feb 10 (Reuters) - HongKong Post said on Monday it would resume parcel services to the United States starting from February 11. HongKong Post made the announcement in a statement after U.S. authorities confirmed that they would not impose additional tariffs on mail items containing goods from HongKong Post to the U.S. The Hong Kong government reiterated its disapproval of the United States' imposition of additional duties on products of Hong Kong, it said in the statement. Sign up here. https://www.reuters.com/business/hongkong-post-will-resume-parcel-services-us-feb-11-2025-02-10/

2025-02-10 11:28

MEXICO CITY, Feb 10 (Reuters) - Mexico's inflationary environment is expected to allow policymakers to keep cutting the benchmark interest rate, the head of the Bank of Mexico told Reuters, as the fight to bring down inflation has entered a new phase. Banxico, as the Mexican central bank is known, cut the key rate by 50 basis points to 9.50% on Thursday, double the 25-basis-point cuts it had made since it began lowering borrowing costs from a record high of 11.25% in March 2024. "Our work is not over. The fight against inflation is now in a new phase," Banxico Governor Victoria Rodriguez said in an interview late on Sunday. Last week's rate reduction brought Mexico's interest rate to its lowest since September 2022 as annual inflation in Latin America's second-biggest economy slowed to 3.69% in the first half of January. That is the lowest level for headline inflation since early 2021 and is within the bank's target of 3%, plus or minus one percentage point. "In order to face the challenges of this new phase, we need lower (interest) rates," Rodriguez added. Mexico's peso currency and domestic stocks have suffered extended volatility amid the threat of U.S. tariffs on its neighbor's exports, even though the strictures were paused until March 1, following a pact between the two. "We are confident authorities of both countries will work to find greater cooperation and lasting solutions, although we, of course, remain attentive to what might be said in March," said Rodriguez. Some analysts have warned the tariffs could throw Mexico into recession and trigger "stagflation" - high inflation, stagnant growth and elevated unemployment. Banxico could act if needed to ensure the orderly functioning of Mexican financial markets, Rodriguez said, underscoring the importance of trade ties for both nations. "Trade integration has been an important driver of growth, as has Mexican participation in U.S. production chains, which has allowed U.S. consumers to have access to products at competitive prices," said Rodriguez. Sign up here. https://www.reuters.com/world/americas/bank-mexicos-governor-says-inflation-fight-enters-new-phase-2025-02-10/

2025-02-10 11:24

LONDON, Feb 10 (Reuters) - Britain's Treasury Select Committee has asked nine big banks and and building societies for details of recent systems failings, including the impact on customers, following outages at Barclays BARC.L and Lloyds Banking Group LLOY.L earlier this month. The cross-party group of lawmakers asked banks on Monday for the number of instances and the amount of time in hours each of them had suffered IT failures which prevented customers from using their services. In the letter to Barclays, the Committee asked about the outage which began on Friday 31 January, including how customer service teams responded to distressed consumers and what action the bank's board took to rectify the issue. The bank on February 3 said a technical issue had impacted customers, delaying payments, without going into details about the reasons. Such outages can prevent bank customers from paying vital bills or buying food they need, said lawmaker Meg Hillier, Chair of the Committee. "For it to happen at a major bank such as Barclays at such a crucial time of year is either bad luck or bad planning," she said. "Either way, it’s important to learn what has happened and what will be done about it." Sign up here. https://www.reuters.com/world/uk/british-lawmakers-demand-banks-explain-outages-following-barclays-disruption-2025-02-10/