2025-02-06 07:12
Steelmaker's annual loss widens to $274 mln Seeks government help on scrap metal, imports, rail and power costs Plant closure could affect at least 3,500 workers Feb 6 (Reuters) - ArcelorMittal South Africa (ACLJ.J) , opens new tab has delayed the closure of its long-steel plant operations by a month pending talks with the government to try to save the business, it said on Thursday. The company had planned to start winding down the loss-making long-steel business by the end of last month, but has delayed it due to "continuing discussions with the South African government" as well as higher than anticipated orders, it said. It added it would announce the talks' outcome before the end of this month. "We have asked the government to normalise a few things, which are electricity and rail costs, and to act quicker in terms of border protection for the steel industry," ArcelorMittal South Africa CEO Kobus Verster told a news briefing. "We were clear to say we are not going to carry any further losses," Verster added. The company wants the government to reduce the discount on scrap metal offered to South African recycling mini-mills, saying this put its long steel operations at a disadvantage. ArcelorMittal South Africa's longs business' operational loss doubled to 1.1 billion rand ($59.11 million) in 2024, from 600 million rand the year before. The company received a 380 million rand loan from the Industrial Development Corporation of South Africa, its second-largest shareholder after parent company ArcelorMittal (MT.LU) , opens new tab, to facilitate the continued operations of its long-steel business. ArcelorMittal South Africa also reported a headline loss of 5.1 billion rand for the year ended December 31, compared with a 1.89 billion rand headline loss in 2023. It said the losses were driven by poor financial performance at its long steel business, reflecting weak demand, high energy and logistics costs, as well as low-cost steel imports, particularly from China. The closure of the long-steel operations, which produce fencing material, rail, rods and bars used in the construction, mining and manufacturing sectors, has been expected since November 2023. The shutdown could affect about 3,500 direct and indirect jobs in total. ($1 = 18.5867 rand) Sign up here. https://www.reuters.com/markets/commodities/arcelormittal-south-africa-delays-long-steel-plant-closure-amid-government-talks-2025-02-06/
2025-02-06 07:00
Nippon Steel's $15 bln bid for US Steel blocked by Biden in January Nippon Steel says proposed deal aligns with Trump's goals of stronger America Vice chairman Mori hopes Trump-Ishiba meeting helps the deal along TOKYO, Feb 6 (Reuters) - Nippon Steel (5401.T) , opens new tab, Japan's biggest steelmaker, said on Thursday its proposed acquisition of U.S. Steel (X.N) , opens new tab fits with President Donald Trump's goal of a stronger United States as the leaders of the two allies prepared to meet. Nippon Steel's bid for U.S. Steel, key to the Japanese company's global expansion plan, was blocked last month by then-U.S. President Joe Biden, citing national security. Together with U.S. Steel, it filed a number of lawsuits challenging Biden's decision. The merger became highly politicized ahead of the November U.S. presidential election, with both Democrat Biden and Republican Trump pledging to kill it off as they wooed voters in the swing state of Pennsylvania where U.S. Steel is headquartered. Nevertheless the bid "contributes to Trump's goals of promoting U.S. investment, creating U.S. jobs, and strengthening U.S. manufacturing through new investment and advanced technology transfer," Nippon Steel said in a statement, while adding there was no guarantee that the transaction would be closed. "We are convinced that our acquisition plan is the best proposal for U.S. Steel, and I hope that the (Japan Prime Minister Shigeru) Ishiba-Trump meeting will convey that to Trump and open the way for a deal," Takahiro Mori, Nippon Steel's vice chairman, told reporters on Thursday. "If Trump fully understands that, I believe he might reconsider his position," Mori said. Trump and Ishiba are expected to meet at the White House on Friday. Mori said he visited the U.S. last week but declined to say whether he met any members of Trump's administration. With the proposed deal, the world's No.4 steelmaker would be aiming to boost its global crude steel output capacity to more than 100 million metric tons in the longer term. Aside from the U.S. where it is already present, Nippon Steel wants to expand further in India and Southeast Asia, where it expects demand for steel to grow and where some nations have tariff protection measures in place to limit imports, including from China. Nippon Steel said on Thursday its April-December net profit dropped 18% to 362 billion yen ($2.4 billion) amid sluggish steel demand in Japan and overseas. "Increases in exports due to the expanded structural supply/demand gap in China continues to cause global spreads weakness," Nippon Steel said. "In Japan, while the pressure by imported materials is high, sluggish demand for steel is becoming more serious than expected." Nippon Steel also said it planned to sell all 10.7 million shares it holds in Kobe Steel (5406.T) , opens new tab, with the latter expected to do the same with the 6.7 million Nippon Steel shares it owns. ($1 = 152.4600 yen) Sign up here. https://www.reuters.com/markets/commodities/nippon-steels-9-month-net-profit-down-18-24-billion-2025-02-06/
2025-02-06 06:56
Sterling slips after Bank of England rate cut Yen pares gains after hitting 8-week high versus dollar Dollar slightly higher, but still near recent lows NEW YORK, Feb 6 (Reuters) - The yen touched an eight-week high versus the dollar on Thursday after a Bank of Japan policy board member advocated continued interest rate hikes, while sterling slid as the Bank of England cut rates. The pound fell sharply after the Bank of England cut interest rates as expected, but forecast higher inflation and weaker growth, with two officials calling for an even larger rate cut. Sterling later pared some of those losses, having touched a one-month high on Wednesday. It was last down 0.54% at $1.2438. Money markets now price in around 67 basis points of further BoE easing by the end of the year. "The pound's losses may prove somewhat limited: the services-driven British economy is largely sheltered against trade war risks," Karl Schamotta, chief market strategist with payments company Corpay in Toronto, said in a research note. The dollar index was up against a basket of peers at 107.69, but it still hovered near the lowest level since the start of last week, with investors beginning to entertain prospects that a global trade war could be averted. In the absence of tariff headlines, markets looked ahead to the release on Friday of key U.S. monthly payrolls figures, the next major test for the U.S. monetary policy outlook. The dollar index hit a two-year high of 110.17 on January 13, but has since retreated 2%. "Driving this correction have been several factors, the largest of which has probably been this week's tariff news, where it looks like the Trump administration has been using tariffs for transactional not ideological purposes," said Chris Turner, global head of markets at ING. U.S. President Donald Trump suspended planned tariff measures against Mexico and Canada this week, but imposed additional 10% levies on imports from China. YEN STRENGTH The yen strengthened as far as 151.81 per dollar - the strongest level since December 12 - in the Tokyo morning, after the BOJ's Naoki Tamura said the central bank must raise rates to at least 1% or so in the latter half of fiscal 2025 with upward risks to prices rising. Japan's currency was last changing hands at 151.335 per dollar, up 0.82% on the previous day, paring some of the early gains after Tamura clarified that he didn't mean that the neutral rate should be 1%. "There seems to be a good amount of yen buying pressure today (Thursday). Not really sure what's driving that, but it's been very correlated to rates, and that's breaking down just a little bit today," said Brad Bechtel, global head of FX at Jefferies in New York. The market is currently pricing in a quarter-percentage-point BOJ rate hike by September. "Tamura is known to be on the hawkish side," although his comments initially "fired up yen longs," said Shoki Omori, chief global desk strategist at Mizuho Securities. Conversely, a quarter-percentage-point rate cut by the Federal Reserve is fully priced in for July, with markets expecting a total of 46 basis points of reductions by the December meeting, according to LSEG data. U.S. Treasury Secretary Scott Bessent said on Wednesday that while Trump wants lower interest rates, he will not ask the Fed to cut rates. Canada's loonie was at C$1.431 versus its U.S. counterpart after rising to the highest level since December 17 at C$1.4270 overnight. The Mexican peso was down 0.45% at 20.474 per dollar. The euro edged down 0.19% to $1.0382. Sign up here. https://www.reuters.com/markets/currencies/dollar-slumps-8-week-low-vs-yen-trade-war-risk-recedes-2025-02-06/
2025-02-06 06:55
Feb 6 (Reuters) - (This Feb. 6 story has been refiled to add the company's name in paragraph 1) ArcelorMittal on Thursday forecast improving steel demand for 2025 and said its annual investment budget would be similar to last year's, after its fourth quarter earnings exceeded market expectations. Shares of the world's second largest steelmaker rose 6.6% by 1042 GMT to their highest price since April 2024. "Expectations for profit were weak in Europe. Demand is weak, but the company has been very profitable in Europe, indicative of the resilience of their business," J.P.Morgan analyst Dominic O'Kane said. ArcelorMittal reported a 13% rise in its quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA) to $1.65 billion, a nearly 8% beat to analysts' consensus provided by the company. "The long-term outlook for the steel industry is positive and our global presence means we have a unique opportunity to prioritize investment in markets where there is a strong outlook for growth and returns," CEO Aditya Mittal said in a statement. The Luxembourg-based company expects to invest between $4.5 billion and $5.0 billion this year, in line with its 2024 plans. Mittal said the primary investment focus would be in Brazil, India and the United States. In a separate statement, ArcelorMittal said it would build a new steel plant in Calvert, Alabama to meet growing demand from U.S. automakers. The group expects global steel demand to grow between 2.5% and 3.5% this year excluding China, the world's top consumer and producer of the metal. It raised its dividend by 10% compared to last year and will pay out $0.55 per share for 2024. ArcelorMittal shipped some 13.5 million metric tons of steel in the fourth quarter, slightly up from the same period in 2023 and from the third quarter. Its Swedish peer SSAB (SSABa.ST) , opens new tab also topped quarterly profit expectations last week, buoyed by resilient demand for its high-strength steel. Sign up here. https://www.reuters.com/markets/commodities/arcelormittal-expects-steel-demand-increase-2025-after-positive-q4-2025-02-06/
2025-02-06 06:53
Sees US stablecoins as 'worrisome' for EU banks FRANKFURT, Feb 6 (Reuters) - The European Central Bank hopes U.S. President Donald Trump's plan to support cryptocurrencies pegged to the U.S. dollar will speed up legislative backing for the digital euro, ECB board member Piero Cipollone told Reuters. The ECB has presented its digital currency - essentially an online wallet guaranteed by the central bank - in part as an electronic means of payment that does not rely on dominant U.S. providers such as Visa (V.N) , opens new tab and PayPal (PYPL.O) , opens new tab. Cipollone said Trump's support for globally available stablecoins tied to the dollar would help create yet another U.S.-made payment tool and added urgency to the digital euro project. The European Commission proposed digital euro legislation in June 2023 but not much has happened since amid scepticism from some lawmakers and bankers. "The political world is becoming more alert to this," Cipollone said in an interview on Wednesday. "And it’s possible that we will see an acceleration in the process." Cipollone hoped the EU's Parliament and Council would wrap up work on the digital euro legislation before the summer, paving the way for negotiations with the Commission. This would leave room for the new rules to be finalised by November, when ECB policymakers are set to vote on whether or not to launch the digital currency. "Political processes are complex and there are many things on the table," Cipollone said. "Obviously the sooner the better, but we fully understand their needs." Asked by Reuters about this timeline, EU lawmaker Markus Ferber said Parliament may at best have a report ready by the summer. Like money market funds, stablecoins offer exposure to short-term interest rates in an official currency but they can also be used to make payments. Cipollone said the spread of U.S. stablecoins as a means of payment was "worrisome" because it threatened to divert deposits away from European banks. "If people in Europe start to use stablecoins to pay, given that most of them are American and dollar-based, they will be transferring their deposits from Europe to the United States," he said. Bankers fear a digital euro would equally empty their coffers as customers transfer some of their cash to the safety of an ECB-guaranteed wallet. To address these concerns, the ECB said holdings would likely be capped at a few thousand euros and not remunerated. Nigeria, Jamaica and the Bahamas have already launched central bank digital currency (CBDC) and a further 44 countries, including Russia, China, Australia and Brazil are running pilots, according to the Atlantic Council think tank. Trump, by contrast, prohibited the U.S. Federal Reserve from issuing its own CBDC. Sign up here. https://www.reuters.com/technology/ecb-hopes-trumps-crypto-plan-will-speed-up-digital-euro-2025-02-06/
2025-02-06 06:33
Mitsubishi-led consortia won all three offshore wind sites in 2021 Those were offered at Japan's first state-run offshore wind auction Mitsubishi CEO can not say when construction may start or projects to be launched TOKYO, Feb 6 (Reuters) - Japan's Mitsubishi Corp (8058.T) , opens new tab took a 52.2 billion yen ($342.4 million) impairment charge on its domestic offshore wind projects in the nine-month period ended in December, it said on Thursday. Mitsubishi leads consortia which won Japan's first state-run wind auctions in 2021 to run three offshore wind farm projects. The farms have a projected capacity of 1.76 gigawatts and were expected to start operations in 2028-2030. The trading house said on Monday it is reviewing how to proceed with the offshore wind projects given a "significantly changed" business environment, showing that the country is not immune to rising costs across offshore wind projects globally. Russia's war on Ukraine and a related spike in prices, changes in supply chains, rising interest rates and other factors forced Mitsubishi to start re-evaluating the projects, chief executive Katsuya Nakanishi told a briefing on Thursday. "At this point in time, it is not possible to say anything about the delivery date, the start of construction," he said. Chubu Electric Power (9502.T) , opens new tab, a Mitsubishi partner in all three farms, also posted an 18 billion yen charge on the projects. "Even if there is an additional impairment loss in the revaluation... the impact on business performance is limited because we are taking the maximum amount of impairment this time," Nakanishi said. On Thursday, Mitsubishi reported a 19% increase in nine-month net profit to December to 827.4 billion yen owing to gains in its liquefied natural gas business and asset sales, it said. Mitsubishi kept its forecast for the full fiscal year ending in March unchanged at 950 billion yen. So far, Japan has held three offshore wind auctions, with winners including western companies RWE (RWEG.DE) , opens new tab, Iberdrola (IBE.MC) , opens new tab and BP (BP.L) , opens new tab. Last week, the government relaxed some of the auction rules to address soaring costs. Mitsui (8031.T) , opens new tab, which in partnership with others, won an offshore wind farm development right in 2023, also warned this week of challenges amid rising construction costs and exchange rate fluctuations but said it planned to continue the business. ($1 = 152.4600 yen) Sign up here. https://www.reuters.com/markets/asia/japans-mitsubishi-9-month-net-profit-up-19-yy-2025-02-06/
