2025-09-09 06:22

India races to cut reliance on Chinese rare earth magnets China resumes some rare earth exports to US, Europe, not India Part maker Sterling fast-tracks magnet-free motor production India's Sona Comstar has plans to make magnets domestically FARIDABAD, India, Sept 9 (Reuters) - In a 3,500 square foot laboratory in Faridabad, northern India, engineers are fast-tracking tests on an EV motor that could help alleviate one of New Delhi's most pressing trade and diplomatic challenges: its reliance on China for rare earths. Unlike regular EV motors, the one being tested by Sterling Gtake E-Mobility does not use rare-earth magnets - a technology that, while not new, is uncommon and could be transformative for the world's No. 3 car market that has been hit harder than most by China's export curbs on the critical minerals. Sign up here. "We want to be in commercial production as soon as possible," Sterling Managing Director Jaideep Wadhwa said. Seven Indian automakers are reviewing the motors, and if cleared, production could begin within a year, well ahead of an initial 2029 target, he added. Sterling sped up the timeline after China announced the curbs in April in response to U.S. tariffs. While China has since resumed some rare earth shipments to the U.S. and Europe, India remains effectively cut off due to political tensions with Beijing. Indian companies have yet to see a single import application approved. Prime Minister Narendra Modi and Chinese President Xi Jinping have discussed ways to improve trade, and Beijing has agreed to lift curbs on magnet exports but has not given a timeline. Against this backdrop, Sterling and several other firms are expediting work on alternate technologies that eliminate magnets or use ferrite or "light" rare earths, materials for which there is no dependence on China. China controls more than 90% of the world's rare-earths processing capacity, giving it diplomatic clout and dominance over the supply chain, as the global pivot to EVs intensifies demand for the group of 17 elements vital to consumer electronics, EV batteries, and motor magnets. India has the world's fifth-largest rare earth reserves, but lacks the ability to process them into magnets. To address this, the government plans to offer incentives for mining and processing, while also seeking to collaborate with Japanese and South Korean companies to produce magnets. CUT RARE EARTH DEPENDENCE Car makers like BMW (BMWG.DE) , opens new tab and Nissan (7201.T) , opens new tab are already building EV motors that do not rely on rare earths. However, the technology is yet to see widespread adoption as matching the compact size, light weight and performance of magnet-based motors remains a challenge. Rigorous testing requirements have further deterred many automakers. But that appears to be changing amid concerns about China using rare earths as a political tool. In 2010, Beijing briefly stopped shipments to Japan after a diplomatic dispute. "This could happen again in five years" cautioned Vivek Vikram Singh, CEO of Indian parts supplier Sona Comstar (SONB.NS) , opens new tab, referring to China's export curbs. While plans to mine and process rare earths would take years to develop, Singh said India "should not stop working on it". Sona, the largest importer of rare earth magnets in India's auto sector, has plans to make magnets domestically and is also developing motors without heavy rare earths from China. In Faridabad, Sterling has hooked up one motor to the back wheel of a stationary motorcycle in its lab and mounted another on a dynamometer to measure torque and power output, while various screens capture performance data. These high-density reluctance motors use tightly wound metal coils, instead of rare-earth magnets, to generate magnetic force and power. The technology belongs to Britain's Advanced Electric Machines, which in June signed a licensing deal with Sterling, enabling the Indian company to build the motors domestically. James Widmer, CEO of Advanced Electric Machines, said customers were pushing for quick solutions. "What can you do now? That is what customers are asking." 'SCRAMBLING FOR LOCAL SOLUTIONS' In Japan, scientist Masato Sagawa, who invented a magnet using rare earth element neodymium in the 1980s, is advocating for rare-earth free alternatives, saying they would be cheaper. In India, start-up Chara Technologies has spent five years refining its magnet-free motor technology to match and exceed the performance of existing motors, CEO Bhaktha Keshavachar said. While its motors are about 10%-15% heavier, the company is seeing demand from customers in India and Europe, he said. Chara, which has built motors for two and three-wheelers, will soon start production for small cars under a metric tonne. U.S.-based Conifer is returning to long-used ferrite magnets in motors which Indian founder Ankit Somani says can deliver 10%-30% better range than incumbent designs with some innovation, and are much cheaper. The company's Pune factory in western India is producing hundreds of motors and will hit its annual capacity of 70,000 units within two quarters, Somani said. "Everybody's scrambling for local solutions," he added. https://www.reuters.com/world/china/india-revs-up-alternate-ev-motor-tests-china-curbs-rare-earths-exports-2025-09-09/

2025-09-09 06:18

MUMBAI, Sept 9 (Reuters) - The Indian rupee encountered resistance after climbing past the 88 per U.S. dollar level on Tuesday, while forward premiums surged on expectations that the Federal Reserve may cut rates more than previously anticipated after a soft U.S. jobs print. The rupee was trading at 88.1250 at 11:36 am IST, compared with Friday's level of 88.2650. India's FX markets were shut on Monday. Sign up here. In early trades, the currency briefly breached the 88 mark, hitting an intraday high of 87.9550. The 87.95 level remains a key threshold, marking the prior all-time low before the recent breakout. The rupee has been lagging most Asian peers, pressured by the hefty U.S. tariffs on Indian goods that have dented sentiment, and, according to bankers, fuelled sustained dollar demand. "Every time we try to break below 88 (on dollar/rupee), dollar demand jumps in. Attempts to push lower are getting met with resistance," a currency trader at a bank said. The rupee's rise past 88 in opening trades came in the wake of the dollar's retreat, with markets pricing in a more dovish Fed stance. Weak U.S. jobs growth in August heightened expectations that the Fed will cut rates by at least 25 basis points next week, with total cuts of around 75 basis points expected for the remaining of the year. U.S. Treasury yields dropped in response to the rising rate cut bets, pushing dollar/rupee forward premiums higher. The implied yield on the 1-year forward premium rose 6 basis points to 2.29%. https://www.reuters.com/world/india/rupee-struggles-hold-above-88usd-premiums-jump-fed-outlook-2025-09-09/

2025-09-09 06:10

Seoul says currency issue needs to be addressed in trade deal South Korea in different position to Japan, officials say $350 bln investment package expected to add to pressure on won SEOUL, Sept 9 (Reuters) - South Korea's negotiations to finalise a U.S. trade deal are being held up due to foreign exchange issues and Seoul has asked Washington to help find a way to cap any market impact from a $350 billion investment package, a senior presidential official said on Tuesday. The delay in striking a final deal comes after U.S. President Donald Trump last week signed an executive order to implement Japan's trade deal, which includes a $550 billion investment package. Sign up here. South Korea is yet to reach a written agreement on its deal, which was struck in July and includes a $350 billion package to be invested in the United States. Presidential Policy Secretary Kim Yong-beom said that Japan and South Korea were in a different situation, echoing earlier comments by the industry minister and the foreign minister on Monday that Seoul could not agree to similar terms outlined in Japan's agreement on the investment package. "While there is not much difference in trade surpluses, the size of the economy, more importantly foreign exchange market conditions are very different," Kim told a live discussion forum. Kim said the most important matter that needed to be addressed in order for South Korea to sign any agreement on the investment package was the impact it would have on the domestic dollar-won exchange market. South Korea was in a different position to Japan because the yen is an international currency, while Japan also has a currency swap programme and foreign exchange reserves that are three times larger than South Korea's that would help cap the impact of its $550 billion investment in the U.S., he said. Since the deal was announced in late July, there have been growing expectations among market participants that the $350 billion investment will add to downward pressure on the won in the long term. The $350 billion compares with the maximum amount of $20-30 billion state-run policy banks can procure in a year, Kim said. It also compares with the national pension fund's overseas investments of $2-3 billion a month – a factor already cited by market participants as a big force weighing on the won. The won , which is currently trading at around 1,390 per dollar, has strengthened 6% so far this year, after weakening for four consecutive years to hit 15-year lows in 2024 below the psychological threshold of 1,400 mark. South Korea agreed with the U.S. at their opening round of trade talks in late April to put currency policy on the agenda and has since been in working-level consultations. The matter will be included when the two countries announce a final agreement after trade negotiations conclude, Finance Minister Koo Yun-cheol said on Monday. https://www.reuters.com/world/asia-pacific/south-korea-trade-talks-with-us-deadlocked-over-forex-seoul-says-2025-09-09/

2025-09-09 06:07

LONDON, Sept 9 (Reuters) - Aluminium, steel and copper have all been hit with steep U.S. import tariffs this year, upending physical supply chains and fracturing global pricing. Which metal is next for the tariff treatment? Sign up here. There is no shortage of potential targets. The United States Geological Survey's (USGS) latest iteration of its critical minerals list now includes 54 elements , opens new tab deemed essential for U.S. economic and national security. All come under the scope of President Donald Trump's Section 232 investigation into U.S. critical minerals import dependency. The investigation was launched in April and the final report and any potential tariffs are due in October. The USGS list is sprinkled with obscure components of the periodic table, such as rare earth elements dysprosium and praseodymium. But it also includes globally traded industrial inputs such as zinc and platinum. SIX IN, TWO OUT And now also lead and silver. The USGS recommends both for inclusion, along with potash, silicon, rhenium and copper. The United States is a net exporter of copper ore and concentrates, but the USGS highlights the country's import dependency for refined metal as a reason for inclusion. The Trump administration backed off from immediate tariffs on refined copper, but confirmation of the metal's new national security designation would increase the likelihood of a threatened phase-in from 2027. Silver, currently on a speculative price surge, is proposed for inclusion because of a scenario in which Mexico stops exporting to the United States, though that eventuality is described as a high-impact low probability event. Rhenium and lead are both borderline, but the USGS warns that its risk assessments fluctuate as production and trade flows change. To prove the point it has dropped tellurium and arsenic from the list. Rio Tinto (RIO.L) , opens new tab started recovering tellurium from its Utah copper smelter in 2022, leading to a decrease in U.S. imports. Arsenic's removal reflects Peru's move past China as the world's largest producer. MOST CRITICAL The USGS has evolved its methodology , opens new tab to include the economic impact of potential supply disruptions to flows of critical minerals to the United States. It has assessed the effects of more than 1,200 disruption scenarios for 84 minerals on 402 individual industries. Minerals-based industries contribute more than $4 trillion to the U.S. economy and, to quote the USGS, "the loss of even one can ripple through entire industries, from semiconductors to defense systems, undermining production capacity, technology leadership and American jobs". Which makes samarium the most critical of all critical minerals owing to its importance in manufacturing guided missiles, space vehicles and search and navigation instruments. Other rare earth elements, such as lutetium and terbium, make it into the top 10 along with semiconductor chip materials gallium and germanium as well as tungsten. All of them are subject to some form of Chinese export restriction as Beijing leverages its grip on global supplies in response to U.S. restrictions on advanced computer chip sales to China. TRADING TARIFFS The sheer number of potential metallic targets has inhibited individual markets from pricing in the probability of U.S. tariffs. The mere threat of refined copper tariffs, subsequently deferred, was enough to trigger a mass relocation of metal to the United States. The same has not yet happened for other industrial metals on the USGS critical minerals list, such as nickel, tin, zinc and, if confirmed, lead. Nor do hybrid industrial investment metals such as platinum, palladium and silver seem prepared for tariff turbulence. Palladium and silver are under-pricing tariff risk, Citi analysts say. Based on exchange-for-physical transactions, the U.S. premium for both metals is only 2-3% relative to non-U.S. pricing, which is very low considering the 50% tariffs applied to steel, aluminium and copper products. The U.S. Commerce Department has also launched an investigation , opens new tab into potential Russian dumping of unwrought palladium, putting it high on the potential trade hit list. PUSH AND PULL The action against Russian palladium underlines the double nature of the critical minerals threat to the United States and other Western countries. Dominant producer countries can both restrict supply or flood Western markets with too much supply to crush competitors. The Trump administration must walk a fine line between using tariffs as a tool for increasing domestic production and potentially limiting already constrained availability. Each individual metal on the lengthening USGS list of critical minerals has its own unique dynamics in terms of import dependency, alternative suppliers and domestic production potential. Copper has come in for a more nuanced approach than aluminium or steel, where blanket 50% tariffs capture all countries and, after last month's inclusion of 407 category codes , opens new tab, the whole length of the product chain down to household furniture. The broad spectrum of minerals now classified as critical argues for an equally tailor-made approach to determining solutions. Trump, of course, may disagree. Either way, global metal markets are in for more tariff turbulence, whether they're pricing it or not. The opinions expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/commodities/us-critical-minerals-list-expands-ahead-possible-tariffs-2025-09-09/

2025-09-09 06:07

Sept 9 (Reuters) - Finnish steelmaker Outokumpu (OUT1V.HE) , opens new tab said on Tuesday that it had signed a memorandum of understanding with U.S.-based Boston Metal to enhance the production of critical carbon-free metals. Carbon-free metals are seen as a key component of clean energy transition and a contributor to environmental sustainability. Sign up here. The two groups intend to establish a joint development project related to the use of Outokumpu's chromium material from its Kemi mine in Finland in components of Boston Metal's molten oxide electrolysis technology. Boston Metal aims to commercialize the molten oxide electrolysis process with equipment capable of taking the heavy greenhouse gas emissions out of steel production. "The joint development showcases our ability and commitment to drive our newly announced EVOLVE strategy for 2026–2030 forward," Outokumpu's chief technology Stefan Erdmann said in a statement. https://www.reuters.com/sustainability/climate-energy/outokumpu-signs-mou-with-boston-metal-enhance-production-carbon-free-metals-2025-09-09/

2025-09-09 06:00

Stocks get lift from Fed easing expectations Investors weigh 50bp cut, look to U.S. CPI, PPI releases for clues Political turmoil in many countries complicates outlook for FX, bond markets SINGAPORE, Sept 9 (Reuters) - Asia stocks rose on Tuesday, buoyed by expectations of a U.S. rate cut as early as next week, even as political upheavals around the world kept currency and bond investors on edge. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) , opens new tab climbed 0.7%, taking its cue from Wall Street's positive lead overnight that saw the Nasdaq index (.IXIC) , opens new tab notch a record-high close. Sign up here. Nasdaq futures were last up 0.06%, while S&P 500 futures similarly ticked up 0.05%. European futures, meanwhile, eased after regional benchmark indexes clocked gains in the cash session on Monday. EUROSTOXX 50 futures fell 0.2%, while FTSE futures and DAX futures dipped 0.13% and 0.26%, respectively. Breathing new life into the equities rally were expectations that the Federal Reserve would ease rates when it meets next week, following Friday's weak U.S. jobs report. While consumer and producer price inflation data are due in the week ahead, investors are betting that a 25-basis-point cut this month is a done deal, with focus now on whether the Fed could deliver a larger 50bp move. The U.S. Labor Department will also report a preliminary revision estimate to the employment level for the 12 months through March later in the day. "Both publications are poised to influence the central bank's pace down the monetary policy stairs," said Jose Torres, senior economist at Interactive Brokers, referring to the PPI and CPI figures. "A heavy subtraction from the worker roster alongside a downside miss on the CPI is likely to raise the odds of a half-percent to a coin flip." Markets are now pricing in an over 11% chance the Fed could lower rates by 50bp this month, compared to zero a week ago, according to the CME FedWatch tool. Elsewhere, Japan's Nikkei (.N225) , opens new tab climbed past the key 44,000 mark for the first time, aided by a weaker yen and following the resignation of the country's Prime Minister Shigeru Ishiba, a fiscal hawk. U.S. tariffs on Japanese goods including cars and auto parts are set to be lowered by September 16, Japan's tariff negotiator Ryosei Akazawa said in an X post on Tuesday. Hong Kong's Hang Seng Index (.HSI) , opens new tab rose 0.5%, while China's CSI300 blue-chip index (.CSI300) , opens new tab shed 0.7%. POLITICAL TURMOIL Renewed uncertainty over the political landscape across various economies has rattled currency and bond markets in the past few sessions. From Ishiba's resignation in Japan, French lawmakers voting to oust Prime Minister Francois Bayrou, a heavy election defeat for Argentina President Javier Milei's ruling party in local elections, to the abrupt replacement of Indonesia's finance minister, investors had lots to consider. Still, losses across currencies were capped by a broadly weaker dollar, while most bond markets have since largely held steady. The yen was last 0.3% stronger at 147.05 per dollar, clawing back its losses from the previous session, while the euro steadied at $1.1772. Yields on Japanese government bonds fell on Tuesday, after rising in the previous session. Bond yields move inversely to prices. "While global political risks bear monitoring, the market is currently positioned for a potential Fed rate cut, with equities rallying and bond yields responding mainly to U.S. data surprises," said Shier Lee Lim, lead FX and macro strategist for APAC at Convera. The two-year U.S. Treasury yield , which typically reflects near-term rate expectations, languished near a five-month low at 3.5005%. The benchmark 10-year yield was similarly pinned near a five-month trough and last stood at 4.0512%. In commodities, oil prices gained on Tuesday after OPEC+ decided to increase production by less than what market participants had anticipated. Brent crude futures were up 0.73% at $66.50 per barrel, while U.S. crude rose 0.72% to $62.71 a barrel. Spot gold touched a fresh record high of $3,656.92 an ounce, buoyed by expectations of imminent Fed cuts. https://www.reuters.com/world/china/global-markets-wrapup-1-2025-09-09/