2024-05-30 00:29

BHP investors wary of overpaying for Anglo Analysts expect BHP to stay on hunt for copper deals BHP can focus on own growth opportunities, investor says BHP shares down 1.75%, roughly in line with peers SYDNEY, May 30 (Reuters) - BHP Group (BHP.AX) New Tab, opens new tab investors welcomed the top global miner's decision to walk away from a $49 billion plan to take over Anglo American (AAL.L) New Tab, opens new tab, which rejected three proposed offers from its bigger rival over the past six weeks. BHP's decision to withhold a binding bid came after Anglo said it would not grant the Australia-headquartered mining group a further extension to iron out details of a deal that called for Anglo to first spin off its South African assets. The developments ended a tense standoff between the two global mining giants and negotiations in which shareholders warned BHP not to pay too much to secure control over Anglo. "It was one of the best opportunities out there for them and it was always going to be hard to complete. I applaud them for showing discipline," said Andy Forster, senior investment officer at Argo Investments, which holds BHP shares. BHP's timing was good but the complexity of the deal requiring demergers and a copper price rally made it difficult to execute, Forster said. While BHP's Australian-listed shares fell 1.75% on Thursday, they were in line with its peers. Winning the Anglo deal would have been a career defining victory for BHP CEO Mike Henry, who has reshaped the company since moving into the top job in January 2020, including buying copper producer Oz Minerals for $6.4 billion last year. "I don’t think it reflects badly on Mike Henry and BHP. It was an opportunistic bid and one that made a lot of sense," said Matthew Haupt, lead portfolio manager at Wilson Asset Management, a BHP investor. WHAT NEXT FOR BHP BHP aimed to win control of Anglo's prized copper assets in Latin America and increase access to a metal central to the global shift towards clean energy and electric vehicles, as well as its metallurgical coal assets in Australia. "As investors, it wasn’t obvious that the proposed deal was very accretive. Yes it would bring more copper to the portfolio, but depending on what they paid for it, it's not necessarily accretive to the share price," Pendal Group portfolio manager Brenton Saunders said. BHP's tilt at Anglo reflected a growing preference among miners for buying over building assets to grow, given rising costs for developing new mines and a blowout in timelines for regulatory approvals, mining industry sources in Perth said. Building a new mine now averages more than 16 years, according to figures from S&P Global. "Clearly they remain acquisitive and will be sifting through their other targets for building out the copper portfolio," said John Milroy, a private client adviser at Ord Minnett. BHP could target London-listed Antofagasta (ANTO.L) New Tab, opens new tab or Canada's Lundin Mining (LUN.TO) New Tab, opens new tab, which both have copper assets in northern Chile where BHP has its Pampa Norte operations, said RBC analyst Kaan Peker. "Anto is the one that screams the most synergies...but they are very expensive. Most of these you’re going to pay a large premium, so you have to have a lot of synergies to justify it," he added. BHP declined to comment. Instead of chasing Anglo, Pendal's Saunders said BHP will have to revert attention to its own growth opportunities in Pilbara iron ore and copper in South Australia and Chile, and hopefully lift dividends. If it wants to go for Anglo, BHP now has to wait six months before it can approach the company again under British corporate laws. It can return sooner if a new party bids for its takeover target. After BHP scrapped its proposal, Anglo said it was fully focused on delivering plans it has set out to increase value to shareholders, including divesting its less profitable assets to focus on expanding copper output. Anglo's shares closed 3% lower at 24.80 pounds in London trading on Wednesday. "BHP will bide its time for six months and see how investors agitate on the Anglo side," Peker said. Sign up here. https://www.reuters.com/markets/commodities/bhp-shares-open-slightly-lower-after-walking-away-49-bln-anglo-takeover-deal-2024-05-30/

2024-05-30 00:05

May 30 (Reuters) - The Swiss National Bank sees a "small upward risk" to the central bank's inflation forecast, its Chairman Thomas Jordan said on Thursday. Speaking at the Bank of Korea International Conference in Seoul, the central banker said there are currently reasons to believe that the natural rate of interest - a key indicator for monetary policy decisions - has increased somewhat, or might rise over the coming years. "We view this as a small upward risk to the inflation forecast," Jordan said. "If this risk were to materialise, our monetary policy stance would be more accommodative than intended." He said that since inflation can fluctuate within the range of price stability, the current monetary policy would likely remain compatible, even if the natural rate of interest was slightly higher. Jordan said if upward risks to inflation were to materialise, this would most likely be associated with a weaker Swiss franc, which could be counteracted by selling foreign exchange. Sign up here. https://www.reuters.com/markets/europe/snbs-jordan-sees-upward-risk-central-banks-inflation-forecast-2024-05-30/

2024-05-30 00:00

LONDON, May 30 (Reuters) - The London Metal Exchange (LME) has approved the listing of the first ever Indonesian brand of refined nickel. "DX-zwdx" isn't the most memorable of historical markers but the new brand's inclusion on the LME good delivery list represents a watershed moment for the global industry. Five years ago Indonesia produced just 600,000 metric tons of nickel and shipped most of it as unprocessed ore to China, where it was alloyed into stainless steel. Last year the country mined 2.03 million tons of contained metal, accounting for over half the world's production. It now exports a spectrum of nickel products, including refined metal of a purity acceptable for LME delivery. For Indonesia it's a vindication of its policy of forcing miners to move downstream by banning ore exports from 2020. For the LME it's a welcome liquidity booster as it looks to rebuild its nickel contract after the crisis of 2022. For everyone else, though, the conversion of Indonesian production power to market power may be more problematic. NEW NICKEL POWERHOUSE Indonesia's ban on the export of unprocessed ore didn't go down well with other countries. The European Union won a case against the country at the World Trade Organization in 2022. President Joko Widodo shrugged off the ruling with an "it's okay". An appeal was swiftly lodged. The export ban remains in place. Although controversial, the policy has been undeniably successful, not only in terms of outright nickel production but also in terms of product mix. Nickel producers, many of them Chinese, have worked out how to convert Indonesia's relatively low-grade nickel resource into forms of the metal that can be used in electric vehicle batteries. The new "DX-zwdx" brand, grading a minimum 99.8% pure nickel, is the culmination of that technical evolution. PT CNGR Ding Xing New Energy, a joint venture between Chinese battery materials group CNGR Advanced Material Co. (300919.SZ) New Tab, opens new tab and a local company, can produce 50,000 tons of full-plate metal to that specification every year. Other operators will likely follow as Indonesia's relentless drive to capture an ever greater part of the battery materials value chain rolls on. CHANGING EXPORT FLOWS Indonesia's shifting role in the global nickel supply chain is captured by the country's trade with China, its main nickel customer. Back in 2018 the flow of nickel between the two countries was exclusively in the form of ore or nickel pig iron (NPI), the first stage of process upgrade required by the Indonesian government. China's imports of Indonesian ore dried up after the 2020 ban but imports of Indonesian ferronickel, a customs code that includes NPI, have mushroomed from 600,000 tons to 7.9 million in 2023. As Chinese players have opened up new processing routes to battery-grade nickel sulphate, ever more products are showing up in the two countries' trade. China imported zero nickel matte from Indonesia before 2022 because no-one in Indonesia produced it. Imports last year amounted to 301,000 tons. Imports of intermediate products such as mixed hydroxide precipitate have grown from nothing to 830,000 tons over the same time-frame. Now Indonesia is exporting both nickel sulphate and refined nickel to China. Flows of sulphate only began early last year and amounted to 60,000 tons. Volumes were already above 40,000 tons in the first three months of this year. The first shipments of Indonesian refined metal to China kicked in last December and grew to 4,250 tons in the first quarter of 2024. Indonesia has been China's second largest supplier of refined nickel after Russia so far this year. STRUCTURAL SHIFT Not that China needs much refined nickel these days. It is importing increasing amounts of Indonesian intermediate products and producing ever more of its own. China's net imports of refined nickel fell from 256,000 tons in 2021 to 133,000 tons in 2022 and to just 55,000 tons in 2023. The country's exports outstripped imports in March for the first time since 2014. CNGR Advanced Material Co. also produces refined nickel on home soil. Its "CNGR" brand, produced at an annual rate of 12,500 tons, was listed by the LME in February. Huayou Cobalt (603799.SS) New Tab, opens new tab, which has invested heavily in Indonesia's nickel sector, has also received LME approval for two of its Chinese brands. The LME, keen to attract physical liquidity to its contract after having to suspend trading in 2022, has approved five new Chinese brands with deliverable annual production capacity of 79,100 tons. Or 129,100 tons if CNGR's Indonesian plant is included. EASTWARDS DRIFT The emergence of a Sino-Indonesian production hub of high-purity Class I nickel has come at a useful time for the LME. The latest sanctions package prohibits the LME from accepting deliveries of metal produced after April 12 by Russia's Norilsk Nickel. With annual production of over 200,000 tons, Norilsk has historically been a big liquidity provider to the Class I segment of the nickel market. Russian metal accounted for a third of LME nickel stocks at the end of April. But the amount of Chinese nickel in the system has grown from zero in August last year to 12,096 tons. Partly thanks to deliveries of the new Chinese brands LME inventory has risen steadily this year, hitting a two-year high of 84,090 tons last week. The composition of LME stocks, though, is starting to drift eastwards. It will continue to do so because the LME-delivery capacity of the Class I market is also drifting eastwards. This puts a lot of potential trading power in the hands of the Chinese companies building out refined metal capacity in both China and Indonesia. And it's only going to grow. Indonesia's nickel production boom shows no signs of ending any time soon. The country's mined output grew by another 19% year-on-year in the first three months of 2024, according to the International Nickel Study Group. Incoming president Prabowo Subianto has said he will follow his predecessor's ambition of leveraging the country's nickel resource into a global electric vehicle hub. The outgoing administration has just added 16 programmes to its list of strategic projects that will receive state support, including five industrial parks for nickel processing. There's a lot more Indonesian nickel still to come. And some of it may well be coming to the LME. The opinions expressed here are those of the author, a columnist for Reuters. 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2024-05-29 23:35

SAO PAULO/RIO DE JANEIRO, May 29 (Reuters) - Creditors of Brazilian electric utility Light (LIGT3.SA) New Tab, opens new tab on Wednesday approved the firm's restructuring plan, which includes a capital injection of up to 1.5 billion reais ($288.33 million), the company said. Reuters reported the approval of the restructuring plan earlier on Wednesday, citing sources. Light, which operates Rio de Janeiro's power service, filed for bankruptcy last year, with its debt totaling 11 billion reais. As part of the proposed restructuring, Light would receive up to 1.5 billion reais in capital, including 1 billion reais from its reference shareholders, the trio of businessmen Nelson Tanure, Ronaldo Cezar Coelho and Carlos Alberto Sicupira. The plan, which needs to be approved by a judge, also includes up to 2.2 billion reais in a debt for equity swap. Light CEO Alexandre Nogueira told Reuters the plan would give the firm a "very sustainable" debt level in terms of size, rates and maturities. Shares in Light ended up 5.3% on Wednesday, having hit a session high after the approval. Brazil's benchmark equity index Bovespa (.BVSP) New Tab, opens new tab fell 0.9%. ($1 = 5.2023 reais) Sign up here. https://www.reuters.com/business/energy/creditors-brazil-utility-light-approve-restructuring-plan-2024-05-29/

2024-05-29 23:09

May 30 (Reuters) - Britain's car production fell by 7% year-on-year in April, falling for a second consecutive month, as manufacturers wound down existing models and more plants transitioned to electric vehicle (EV) production, industry data showed on Thursday. A total of 61,820 cars rolled off production lines in April, compared with 66,527 units in the same period last year, the Society of Motor Manufacturers and Traders (SMMT) said. March production volumes were down by 27.1%. "With a general election in a matter of weeks, the next government must ensure the conditions are right not just for the competitiveness of UK manufacturing, but for the investment required to transition the sector to a net zero future," SMMT CEO Mike Hawes said. Electrified vehicles, whether fully electric models, plug-in hybrids or full hybrids, represented 40.5%, up from 37.7%, of all cars produced. Manufacturers produced a combined 25,031 units of EVs, a modest 0.1% rise on the previous year, the industry body said. Production of EVs has successively grown as giants like Nissan (4021.T) New Tab, opens new tab and Jaguar Land Rover-owner, Tata Motors have poured in billions in the country to ramp up EV plans as it attempts reach net zero by 2050. Meanwhile, UK car production is down 0.8% on 2023 volumes in the year to date, SMMT added. Sign up here. https://www.reuters.com/world/uk/uks-car-output-down-second-straight-month-april-says-industry-body-2024-05-29/

2024-05-29 22:47

SYDNEY, May 30 (Reuters) - China has lifted its import bans on five major Australian beef producers, Agriculture Minister Murray Watt said on Thursday, in the latest sign of improving relations between the countries. The trade bans have been removed by Beijing with immediate effect, Watt told the Australian Broadcasting Corp. "The work that we've done to stabilise our relationship with China is paying real dividends for our farmers and our processors," Watt said. Australia and China, its largest trading partner, are rebuilding ties after a period of strained relations which hit a low in 2020 after Canberra called for an independent investigation into the origin of COVID-19. Australia is one of China's top suppliers of beef but volumes have plunged after diplomatic relations soured, even as Beijing bought larger quantities of beef overall. China suspended some Australian beef factories from its market in 2020, citing labelling irregularities and other technical issues. "We had already seen a couple of other processing operations have their trade bans lifted, but now (it is) another five," Watt said. Beijing had also imposed tariffs on billions of dollars' worth of Australian commodity imports, most of which have been lifted since a change of government in Canberra two years ago. Sign up here. https://www.reuters.com/world/asia-pacific/china-lifts-ban-five-australian-beef-exporters-2024-05-29/