2026-02-05 05:02

South Korea to establish hotline, joint committee with China to ensure stable supply Diversifying sourcing also crucial, ministry says South Korea joins U.S.-led critical minerals trade bloc SEOUL, Feb 5 (Reuters) - South Korea is seeking closer cooperation with China on critical mineral supply chains, its trade ministry said on Thursday, as Seoul unveiled plans to secure stable supplies of rare earths needed for cutting-edge technologies. The announcement comes after South Korea this week joined a U.S.-led trade bloc for critical minerals with allies and partners that aims to guard against heavy reliance on China for materials strategically critical to advanced manufacturing. Sign up here. The trade ministry said it would establish a hotline and joint committee with Chinese authorities to help South Korean companies import Chinese minerals more quickly and reliably. South Korea, which is home to leading semiconductor, electric-car battery and petrochemical companies, lacks a full supply chain for rare earths, the ministry said in a statement. Authorities will designate 17 critical minerals needed for national security and tighten monitoring and analysis on their supplies in order to prevent an unexpected shortage, it said. To diversify sourcing, Seoul will also cooperate with other countries including the United States, Vietnam and Laos, the ministry said. The government plans to allocate 250 billion won of ($172.35 million) of state funds to support local companies developing overseas mines. In October, Beijing expanded control over its rare earths, including extra scrutiny for semiconductor users. At the time, South Korea's trade ministry said China's monopoly on rare earths increased instability in global supply chains. On Wednesday, South Korea was picked to chair a preferential trade bloc for critical minerals, dubbed the Forum on Resource Geostrategic Engagement, or FORGE, unveiled by Washington in an effort to safeguard supply chains from being used by any one country as a tool of geopolitical leverage. While the U.S. has aggressively looked for ways to secure supplies of critical minerals after Beijing last year wielded its dominance by curbing exports, South Korea has taken a more diplomatic approach with China to address the stability of the supply of materials critical to its manufacturing sector. South Korean Foreign Minister Cho Hyun told a meeting in Washington that Seoul, which will chair the bloc through to June, would boost coordination with partners and help promote investment in projects to secure supply chains, the ministry said. ($1 = 1,450.5600 won) https://www.reuters.com/world/asia-pacific/south-korea-seeks-closer-china-cooperation-secure-critical-mineral-supply-chains-2026-02-05/

2026-02-05 04:52

Largest convertible bond issuance of its kind in Japan JBIC considering lending roughly 1 trillion yen - sources TOKYO, Feb 5 (Reuters) - Japan's Nippon Steel (5401.T) , opens new tab is considering selling as much as 500 billion yen ($3.2 billion) of convertible bonds, according to two sources with knowledge of the matter, in a transaction that would be the largest of its kind in Japan. The steelmaker is considering making a final decision as soon as this month, the sources said, declining to be named as the information is not public. Sign up here. Reuters is reporting the potential issuance for the first time. Nippon Steel said in a statement nothing has been decided yet. The company's shares closed down 2% following the report. At 500 billion yen, the convertible bonds issuance would be the largest of its kind in Japan, according to LSEG data. The issuance amount could be reduced or the plan could be reconsidered, one of the sources said. Nippon Steel favours issuing the convertible bonds to avoid a capital increase that entails immediate share dilution and, with domestic interest rates rising, it can issue them as zero-coupon bonds, the sources said. Convertible bonds can be converted into shares at a predetermined price. The steelmaker requires capital for the expansion of its overseas business including in the U.S. and India and for decarbonisation initiatives. The company also needs long-term funding to replace a bridge loan it took out for its acquisition of U.S. Steel last year, which totalled around 2 trillion yen, the sources said. The steelmaker's business performance has deteriorated amid U.S. President Donald Trump's tariffs on steel imports and competition from exports from China. The sources also said the Japan Bank for International Cooperation is considering lending funds to Nippon Steel totalling roughly 1 trillion yen ($6.37 billion). JBIC said in a statement it would not comment on specific cases. ($1 = 156.9100 yen) https://www.reuters.com/world/asia-pacific/nippon-steel-considering-32-billion-convertible-bond-sale-sources-say-2026-02-05/

2026-02-05 04:49

Rio Tinto faces deadline to announce offer intent, extend talks or walk away Merger could create top global miner worth over $200 billion Potential deal faces regulatory, cultural, and investor concerns MELBOURNE/LONDON, Feb 5 (Reuters) - Rio Tinto (RIO.L) , opens new tab and Glencore (GLEN.L) , opens new tab are expected to announce an extension to merger talks ahead of a UK regulatory deadline on Thursday, to allow Rio more time to study the merits of any deal, three people familiar with the talks said. However, Rio Tinto could walk away, amid pushback from some investors including some in Australia, who want to be assured a deal will create value and who strongly oppose Rio Tinto paying a premium, one of the people said. Sign up here. In January, the companies said they were in early talks for a merger in what could create the world's largest mining company with a combined market value of nearly $207 billion with access at scale to copper, in high demand for the energy transition. Under UK takeover rules, a potential bidder has 28 days from being identified to either announce a firm intention to make an offer, walk away or seek an extension. The current deadline is February 5. If Rio Tinto were to seek an extension, Glencore would happily oblige, according to one source with knowledge of the matter. Rio Tinto and Glencore spokespeople declined to comment ahead of Thursday's deadline. One of the key concerns for Rio Tinto investors is that Glencore is holding out for a big premium when some of its copper developments are still at a very early stage. They also questioned the value Glencore's marketing arm would bring. Market volatility that includes wild swings in commodity prices and a run-up in copper has added to headaches over valuation. "With copper at $14,000 Rio needs a lot of thinking," one of the sources said. The three people familiar with the talks declined to be named as the discussions are confidential. SCEPTICAL SHAREHOLDERS Several Australia-based investors have told Reuters they would not be happy with any deal that involved a premium for a company that has faced operational challenges, and they had yet to see how such a tie-up would demonstrate value. "We expect an extension later this week as a face-saving device," said Hugh Dive of Atlas Funds, which has shares in Rio and does not support any tie-up. He said apart from Glencore's South American copper assets, the rest were complicated and outside of Rio's interest, while there were incentives for Rio Tinto, paying with scrip, to overpay as it seeks to dilute the stake of its top UK shareholder, state-owned Aluminium Corp of China (Chinalco) (601600.SS) , opens new tab. Rio Tinto is exploring a potential asset-for-equity swap with Chinalco that would trim the Chinese investor's 11% stake, freeing up Rio to resume buybacks and pursue new strategic deals, sources told Reuters last year. Australia is home to more than 20% of dual-listed Rio Tinto's shares but more than half of its profits, which stem from its lucrative iron ore mines. "You want to feel any deal is a win-win for shareholders and you don't want to be paying away all of the upside," said Andy Forster, a portfolio manager at Adelaide-based Argo Investments. The Financial Times reported on Thursday that Rio Tinto is pushing for its chair and CEO to retain their roles, while Glencore is holding out for a hefty premium. In acquisitions of unequal size, the largest, generally the acquirer, typically keeps its management team. Rio Tinto's market capitalisation is roughly double that of Glencore. TRADING AND GEOPOLITICS While copper is an obvious motivation for a deal, some sources said Glencore's commodities trading arm, which has a reputation for capitalising on market volatility and a broad network of trading contacts, was another part of the appeal amid geopolitical uncertainty. Investors, however, questioned whether those traders could be incentivised to stay on in a Rio Tinto culture that had much lower risk appetite. Adding fuel to Rio's considerations, Glencore this week said it is in talks to sell a 40% stake in its copper and cobalt operations in the Democratic Republic of Congo to a U.S.-backed consortium in a deal valuing the assets at about $9 billion. Any proposed tie-up could also require asset sales to secure regulatory approval from top commodity buyer China, which has longstanding concerns about resource security and market concentration, Reuters has reported. https://www.reuters.com/business/rio-tinto-expected-push-more-time-weigh-glencore-deal-sources-say-2026-02-05/

2026-02-05 02:43

MUMBAI, Feb 5 (Reuters) - The Indian rupee ended modestly higher on Thursday, shored up by foreign banks' dollar sales and traders cutting intraday short bets while companies' demand to hedge their dollar exposures kept a lid on gains. The rupee closed at 90.3550 per dollar, up 0.1% from the previous session. The currency hit a peak of 90.0750 during the session but was unable to rise past the 90 handle as importers stepped in to pick up dollars. Sign up here. Traders said stop losses were hit on wagers on the rupee falling once the currency advanced over 90.20 to the dollar. Asian currencies fell slightly while regional stocks, including India's benchmark Nifty 50 (.NSEI) , opens new tab, declined as worries over the rising costs of AI investment jolted risk appetite. "A more difficult equity environment would typically see a flight from risk and a flight from procyclical currencies into the dollar. That is what is probably lending the dollar a little support this week," analysts at ING said in a note. The dollar index was up 0.1% at 97.8. Later in the day, the focus will turn to central bank decisions in Europe and England with no change in policy rates anticipated by either of the central banks. The Reserve Bank of India, too, is expected to keep rates unchanged at its monetary policy meeting on Friday, after India clinched a trade deal with the U.S. "We maintain our view that the RBI is at the end of the easing cycle and will keep policy repo rate unchanged in CY26 at 5.25% as downside risks to growth have incrementally receded," analysts at Goldman Sachs said in a note. https://www.reuters.com/world/india/rupee-likely-open-steady-corporate-dollar-demand-hurdles-rally-extension-2026-02-05/

2026-02-05 02:00

Shares track Wall Street lower, but European tech steadies Shock Google spending plans fed AI jitters Silver prices slump, Bitcoin hits lowest since Nov 2024 Amazon earnings due, BoE and ECB to decide on policy LONDON, Feb 5 (Reuters) - World stocks dropped on Thursday as concerns about the exploding costs of the AI boom drove tech worries, Europe geared up for a busy day of central bank meetings and silver suffered another 10% crash in the unruly metals markets. Europe's main bourses saw a relatively easy start all considered, with the region's tech stocks (.SX8P) , opens new tab bouncing 1.8% following a 7% fall over the last two sessions and both the euro and German Bund yields were broadly steady. /FRX Sign up here. Google parent Alphabet (GOOGL.O) , opens new tab had stunned markets on Wednesday with a capex spending plan of as much as $185 billion this year - 55% more than analysts had expected. The news sent its shares down over 6% at one point, and combined with a 17% plunge in chipmaker AMD's stock (AMD.O) , opens new tab, it extended a brutal tech selloff that has already wiped out almost $850 billion of market value this month. Craig Inches Head of Rates and Cash at Royal London Asset Management said markets are now at a delicate stage, with stock markets stretched, credit spreads tight and geopolitics and governments' debt level also nagging worries. If equity markets don't start to settle back into their years-long pattern of tech-led gains in the coming months, "will we see the wheels start to come off a bit?" Inches said. "And what is the reaction of the markets? Do they dive back into the safe havens like sovereign bonds, or has that correlation broken down." Amazon (AMZN.O) , opens new tab is due to announce its results later, but Europe's attention was now turning to the 1200 GMT Bank of England interest rate decision and then one from the European Central Bank at 1315 GMT. Both are set to hold their rates steady. It left the euro at just under $1.18 but the pound was coming under some sustained pressure at $1.358 and 10-year and 30-year gilt yields rose to their highest levels since late November. More than the looming BoE, it was the rising uncertainty around Prime Minister Keir Starmer's future. He has come under renewed fire this week for his appointment of Peter Mandelson as U.S. ambassador despite Mandelson's ties to Jeffrey Epstein. The potential for a leadership challenge wasn't good for Britain's view among international investors, RLAM's Inches said. SILVER SLUMPS AGAIN Precious metals also dived on Thursday to snap two days of gains after an epic implosion last week saw them plunging from lofty record highs. Silver tumbled as much as 14% and was still down 10% in London at $79.2 an ounce. Gold also fell 1.5% to $4,888 an ounce and platinum shed 5%. Back in the currency markets, the U.S. dollar index (.DXY) , opens new tab was up 0.2% at a two-week high, while the risk-sensitive Australian and Kiwi dollars , fell 0.5% and 0.3% respectively. The brittle Japanese yen was looking steadier at 156.82 per dollar. It has fallen for four straight days ahead of a general election on Sunday where polls are tipping a decisive victory for Prime Minister Sanae Takaichi, endorsing her spending ambitions that have raised concerns about the nation's strained finances. In the Treasuries market, the benchmark 10-year yield slipped 1 basis point at 4.2656%. The U.S. non-farm payrolls report for January has been pushed back from its scheduled release on Friday to February 11 due to a four-day partial government shutdown that has now ended. Oil prices fell 1.5% to $68.5 a barrel after the U.S. and Iran agreed to hold talks in Oman on Friday , while the plunge in bitcoin showed no sign of stopping as it neared the key $70,000 level - its lowest since late 2024. "We believe this broader decline is mainly driven by massive withdrawals from institutional ETFs. These funds have seen billions of dollars flow out each month since the October 2025 downturn," Deutsche Bank analysts said in a note to clients. https://www.reuters.com/business/retail-consumer/global-markets-global-markets-2026-02-05/

2026-02-05 01:08

ECB set to keep rates steady at 1315 GMT Bank of England also expected to hold rates, decision due 1200 GMT Dollar-yuan little changed after Trump-Xi phone call SINGAPORE/LONDON, Feb 5 (Reuters) - The dollar climbed to a two-week high on Thursday as fresh volatility gripped stocks and precious metals, while traders counted down to rate decisions from the European Central Bank and the Bank of England. The dollar index , which measures the U.S. currency's performance against a basket of six others, was last up 0.14% at 97.82, up for a second day. Sign up here. "There’s a bit of risk aversion coming through," said Sim Moh Siong, currency strategist at OCBC in Singapore. "When there's risk aversion, the dollar tends to strengthen." The dollar has regained some strength this week and stocks turned risk-off as financial markets assess U.S. corporate earnings season, now halfway complete. Gold and silver, which have become more volatile recently as a result of leveraged buying and speculative flows, were rocked by a fresh selloff on Thursday, which saw silver falling as much as 16.6% to a low of $73.41. The Nasdaq Composite has fallen 2.9% during the past two days, its biggest slide since October, with volatility triggered by market bellwethers including Google parent Alphabet (GOOGL.O) , opens new tab, which reported aggressive spending plans on Wednesday, and a rout in software stocks as they adapt to a new era of generative AI. ECB, DEAD AHEAD The euro was last down 0.2% at $1.1790 ahead of the ECB decision, where it is expected to keep rates on hold. Investors' attention will be focused on the post-policy press conference to gauge the outlook for rates over the coming months. Right now, markets show traders are attaching very little chance of a rate cut this year. Even with the volatility that has dominated markets since the start of the year, the euro is only some 0.4% above where it was when the ECB last met in December. However, the euro is some 13% higher against the dollar than it was a year ago, which has added to some concern among policymakers about the impact on regional price pressures, while inflation in the euro zone has fallen to around 1.7%, below the ECB's target of 2%. "We expect the ECB to leave their policy rate on hold through 2026, but judge that there is a higher risk of another cut than a hike given inflation is likely to undershoot their target," MUFG currency strategist Lee Hardman said. The pound , meanwhile, was down 0.5% at $1.358 ahead of the BoE's policy decision, at which it is also expected to remain on hold. Late on Wednesday, Federal Reserve Governor Lisa Cook said in a speech she is more concerned about stalled progress on inflation than a weakening labour market, a strong signal that she will not support another interest-rate cut until tariff-induced price pressures begin to recede. Fed funds futures are pricing an implied 88% probability that the U.S. central bank will hold rates at its next two-day meeting ending on March 18, though bets on a rate cut edged up to 12% from 9.4% a day earlier, according to the CME Group's FedWatch tool. Against the yen , the dollar rose 0.14% on the day to 157.11 yen. The threat of joint U.S.-Japanese official buying to counter yen weakness on January 23 pushed the dollar to a three-month low of 152.1. As nerves have built ahead of Sunday's election, it has risen by around 3%, having recovered roughly three quarters of that initial slide. Against the offshore yuan , the dollar was last flat at 6.9439 yuan following a phone call between U.S. President Donald Trump and Chinese counterpart Xi Jinping in which they discussed trade, security issues and U.S. arms sales to Taiwan. Cryptocurrencies extended losses, hitting their lowest since November 2024. Bitcoin fell as much as 3.54% to $70,052.48 at one point and was last down 1.7% at $71,720. Ether was steady around $2,135, having recovered from an overnight low of $2,068. https://www.reuters.com/world/asia-pacific/dollar-recovers-central-bank-decisions-loom-2026-02-05/