Tariffs and their impact larger than expected: Powell

Spanish Market: Agriculture, Chemicals, Crude oil, Metals, Natural gas, Oil products
04/04/25

Federal Reserve chairman Jerome Powell said today tariff increases unveiled by US president Donald Trump will be "significantly larger" than expected, as will the expected economic fallout.

"The same is likely to be true of the economic effects, which will include higher inflation and slower growth," Powell said today at the Society for Advancing Business Editing and Writing's annual conference in Arlington, Virginia.

The central bank will continue to carefully monitor incoming data to assess the outlook and the balance of risks, he said.

"We're well positioned to wait for greater clarity before considering any adjustments to our policy stance," Powell added. "It is too soon to say what will be the appropriate path for monetary policy."

As of 1pm ET today, Fed funds futures markets are pricing in 29pc odds of a quarter point cut by the Federal Reserve at its next meeting in May and 99pc odds of at least a quarter point rate cut in June. Earlier in the day the June odds were at 100pc.

The Fed chairman spoke after trillions of dollars in value were wiped off stock markets around the world and crude prices plummeted following Trump's rollout of across-the-board tariffs earlier in the week.

Just before his appearance, Trump pressed Powell in a post on his social media platform to "STOP PLAYING POLITICS!" and cut interest rates without delay.

A closely-watched government report showed the US added a greater-than-expected 228,000 jobs in March, showing hiring was picking up last month.

By Stephen Cunningham

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07/04/25

UK rows back ZEV mandate for hybrids

London, 7 April (Argus) — The UK government has pushed back its zero emission vehicle (ZEV) mandate for hybrid electric vehicles (HEVs) to 2035 from 2030, and has committed to support carmakers following the imposition of trade barriers by the US last week. The original ZEV cut-off point of 2030, one of Europe's most ambitious, will still apply to sales of cars powered by gasoline and diesel, but will be extended to 2035 for HEVs. The government will now also let carmakers continue using low-emission non-ZEVs to earn credits toward their ZEV sales targets until 2029, instead of ending this arrangement in 2026. This means they can offset some of their current ZEV requirements with cleaner non-ZEV sales, effectively pushing part of their ZEV sales obligations past the original mandate deadlines. Transport secretary Heidi Alexander said the changes were made "in the face of global economic challenges". The Society of Motor Manufacturers and Traders (SMMT) welcomed the changes, saying the government had "rightly listened to industry" and responded quickly to the change in global dynamics. Over the weekend, Jaguar Land-Rover paused exports to the US while it digested the impact of President Donald Trump's tariffs. "Given the potentially severe headwinds facing manufacturers following the introduction of US tariffs, greater action will almost certainly be needed to safeguard our industry's competitiveness. UK-US negotiations must continue at pace," SMMT chief executive Mike Hawes said. Competition concerns Other industry groups said delaying the mandate could lead to a loss of competitiveness in the long term transition to EVs. "Its dilution is in stark contrast to the accelerating ambition of the Chinese and others. UK-based automakers need to fully embrace battery electric or be significantly diminished in time, running the risk of continued job losses," said Dan Caesar, chief executive of Electric Vehicles UK, an industry association based in London. Some were more resigned, recognising the need to allow room for carmakers to transition and consumers to gain access to low priced vehicles — especially at a time of elevated trade tensions. "We understand the pressure British car makers face and welcome the government's declaration of support," said Quentin Wilson, founder of EV advocacy group FairCharge. "While we don't agree that hybrids mainly powered by a combustion engine should be included in the ZEV mandate until 2035, we do understand the reasons why, along with increased flexibilities until 2029." By Thomas Kavanagh UK car registrations by fuel Fuel type Feb-25 Feb-24 % Change % Market share 2025 % Market share 2024 BEV 21,244 14,991 41.7 25 17.7 Plug-in hybrid vehicles 7,273 6,098 19.3 9 7.2 Hybrid EVs 11,431 10,591 7.9 14 12.5 Petrol 39,865 48,211 -17.3 47 56.8 Diesel 4,241 4,995 -15.1 5 5.9 Total 84,054 84,886 -1.0 — SMMT UK BEV monthly market shares, govt targets % Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Sigma Lithium hits 1Q production, sales goals

07/04/25

Sigma Lithium hits 1Q production, sales goals

Sao Paulo, 7 April (Argus) — Sigma Lithium hit its first quarter lithium concentrate production and sales targets in Brazil after a sizeable deal with a UAE-owned company. Sigma produced 68,300 metric tonnes (t) of lithium oxide concentrate in the first quarter, after agreeing to sell 76,000t to International Resources Holding (IRH), a metals and critical minerals trading company owned by the Royal Group of Abu Dhabi, the firm said in a press release. Sigma shipped 47,000t — its first of two batches to the company — in early March, with a following 29,000t scheduled to be shipped this week. Following the sale, the company achieved a 2.8pc increase in volumes over the previous quarter. Although undisclosed, Sigma's chief executive Ana Cabral said that the company beat its sales targets for the period. The company operates the fifth-largest lithium oxide mining complex in the world, which is expected to produce 300,000t of the mineral compound this year . Sigma anticipates to achieve all of its quarterly production targets for 2025. By Pedro Consoli Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US producers look overseas as shale stalls

07/04/25

US producers look overseas as shale stalls

New York, 7 April (Argus) — US shale producers are seeking to deploy their expertise around hydraulic fracturing in international markets, in a marked departure from their recent strategy and one that is set to accelerate as domestic output slows. Continental Resources — whose billionaire founder and executive chairman Harold Hamm was one of the driving forces behind the shale revolution after figuring out how to unlock the vast resources of North Dakota's Bakken basin with horizontal drilling — recently announced plans to explore for unconventional resources in Turkey. And EOG Resources aims to kick-start a drilling campaign in Bahrain. Early successes could prompt a scramble by peers to follow suit, which would be a reversal of the trend seen in the early days of the shale boom when the industry largely retrenched from overseas investments to concentrate on exploiting domestic plays. And while decisions to venture abroad have been mainly based on individual company strategies up until now — and investors have been lukewarm at best — forecasts for shale to start plateauing in the coming years could lend them greater impetus. "Maybe, as they have success, that will draw others in," energy investment firm Bison Interests chief investment officer and founder Josh Young says. "It could be the start of something big." The caveat is that a potential international push at scale is unlikely to happen overnight, and companies such as Murphy Oil and APA — which already have exploration campaigns under way from Vietnam to Ivory Coast and Suriname — have underperformed compared with their rivals. "You are not seeing that market acceptance or market credit for international projects," Young says. That perception may shift if international exploration yields above-average returns for shareholders, boosting the case for producers to seek to build out their inventory further afield as growth in the shale patch slowly grinds to a halt. International exploration may have its own risks, given shale's success story has largely been confined to the US and Argentina to date. But the "cost of entry is relatively low compared to a North American landscape with little room for exploration and high premiums for solid assets in the Permian", consultancy Rystad Energy vice-president for North America oil and gas Matthew Bernstein says. Hamm, who took Continental private more than two years ago after tiring of public markets, recently warned that US shale is beginning to plateau . "What we really need to concentrate on is where we go as we crest right here in America, what the downside looks like," he told the CERAWeek by S&P Global conference in Houston. He also signalled a greater openness to drill outside North America. Talking Turkey Continental recently announced a joint venture with Turkey's national oil company and US-based TransAtlantic Petroleum to develop oil and gas resources in southeast and northwest Turkey. State-owned Turkish Petroleum has pegged initial estimates from the Diyarbakir basin in the southeast that could reach 6bn bl of oil and 12 trillion-20 trillion ft³ (340bn-570bn m³) of gas. The Thrace basin in northwest Turkey may hold up to 20 trillion-45 trillion ft³. "We see immense potential in Turkey's untapped resources," Continental's chief executive, Doug Lawler, says. And in February, EOG Resources announced a tie-in with state-owned Bapco Energies to evaluate a gas prospect in Bahrain. EOG will take on the role of operator, and the venture is awaiting further government approvals. "The formation has previously been tested using horizontal technology, delivering positive results," EOG chief executive Ezra Yacob says. By deploying its existing skillset around horizontal drilling and completions, EOG is confident of achieving results that are competitive with projects in its domestic portfolio. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Asian governments hold fire on tariff retaliation

07/04/25

Asian governments hold fire on tariff retaliation

Singapore, 7 April (Argus) — Governments in Asia-Pacific have so far not followed China's lead by retaliating against US president Donald Trump's import tariffs, even as they warn of the potential for long-term economic disruption. The leaders of Vietnam, Malaysia, Indonesia, Taiwan and Singapore said over the weekend that they are not planning to respond in kind to the US tariffs. The restrained reactions came despite China's decision to match Trump's targeted tariffs with duties of 34pc on all imports from the US. China's tariffs, announced late last week, take effect on 10 April, a day after what Trump is calling his "reciprocal" duties on a range of countries. Countries in Asia-Pacific have been hit with some of the highest of Trump's targeted duties. Vietnam, which is facing one of the highest targeted tariff rates of any country at 46pc, is considering removing all its own tariffs on US imports, Trump said following a call with To Lam, general secretary of Vietnam's communist party, on 4 April. The offer has not been officially confirmed by Hanoi. Vietnam benefitted from the tariffs that Trump imposed on China during his first term in office, as some manufacturing and exports were shifted to the country. That helped send its trade surplus with the US to a record $123bn last year, the third-highest of any single country behind China and Mexico, according to US customs data. Malaysia, which faces a 24pc tariff, will not levy retaliatory duties, prime minister Anwar Ibrahim said on 6 April. The US duties are a major threat to the world economy and could force Kuala Lumpur to reduce its forecast for gross domestic product (GDP) growth this year, he warned. The direct impact of the US tariffs on commodity exporters like Malaysia and its neighbour Indonesia has been reduced by the extensive exemptions announced for energy, metals and other commodities. Still, the prospect of a global economic slowdown and disruption to trade flows threatens to have a major impact. Despite their measured approach, governments of emerging Asian economies may struggle to quickly negotiate lower tariffs given Trump's focus on reducing bilateral trade deficits, analysts at UK bank Barclays said on 7 April. The bank has reduced its 2025 forecast for GDP growth in emerging Asia by 0.2 percentage points to 3.3pc and warned of the risk of deeper cuts. Australia eyes price hit The government of Australia, another large commodity exporter, warned on 7 April that the uncertainty caused by Trump's tariffs could reduce consumer confidence and potentially damage the budget by causing a decline in commodity prices. Trump's so-called "liberation day" tariffs are more significant than expected when it released its budget in March, the Australian Treasury said in its economic and fiscal outlook released ahead of federal elections next month. The direct impact of the tariffs on Australia would be limited, but indirect effects would be larger because of the hit imposed on the country's major trading partners, including China, it said. "The potential magnitude and persistence of the economic effects of these announcements has resulted in greater-than-usual uncertainty around the outlook," the Treasury said. Trump has targeted Australia with the minimum 10pc tariff, but this could still disrupt its exports of beef and tallow, among other products. Australian prime minister Anthony Albanese has also pledged not to retaliate with tariffs on US imports. Japan and South Korea, long-standing allies which nevertheless have been singled out for higher US tariff rates of 24pc and 25pc respectively, have also indicated they will not respond in kind. The US accounted for almost 19pc of South Korea's total exports in 2024, including passenger cars, auto parts and lithium-ion batteries. Seoul is considering measures to support its automobile industry in the wake of the tariffs, the trade and industry ministry said. India, which faces a 26pc rate, is considering lowering import tariffs on US goods, including a 2.75pc duty on LNG, to ease tensions. By Kevin Foster, Tom Major and Joseph Ho Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Oil, stock markets slump as tariffs take effect: Update

07/04/25

Oil, stock markets slump as tariffs take effect: Update

Updates with latest oil prices, stock market declines Singapore, 7 April (Argus) — Oil futures and stock markets fell sharply again on Monday after the first tranche of US import tariffs came into force. Crude oil futures fell by almost 5pc, with US benchmark crude WTI futures dropping below $60/bl to a new four-year low. Stock markets in Asia and Europe also dropped sharply. Markets in China — which were closed for a holiday at the end of last week — dropped by around 10pc, while Japanese and South Korean exchanges fell by up to 8pc. The sell-off in crude futures accelerated when markets in Europe opened, in line with big drops in the continent's stock markets. Germany's Dax stock exchange fell by as much as 10pc, while the UK FTSE 100 dropped by up to 6pc. Shares in oil majors BP and Shell were up to 9pc lower. US president Donald Trump's 10pc tariff on imports from all countries took effect on 5 April, with exemptions for some commodities . What Trump has described as "reciprocal" tariffs targeting some of the US' biggest trade partners are due to enter into force at 12:01 ET (04:01 GMT) on 9 April. Trump has given no indication that he will cancel or postpone the tariffs, despite the market turmoil in recent days, although he has held out prospects of negotiated reductions with some countries. The president denied on 6 April that he is crashing the markets deliberately. "But sometimes you have to take medicine to fix something," he told reporters. China announced its own 34pc tariffs on all US imports late on 4 April, adding to the pressure on financial markets. Beijing will continue to take "resolute measures" to protect its interests, state-owned media reported over the weekend. China is the only major US trading partner that has so far retaliated against the US tariffs. Several other countries in Asia have said they do not plan to retaliate or have asked Trump to delay the tariffs. Benchmark crude futures have now fallen by up to 18pc since Trump announced his tariffs. Crude oil came under additional pressure on 7 April after Saudi Arabia's state-controlled producer Saudi Aramco reduced its official formula prices for May-loading cargoes, including particularly sharp cuts for buyers in Asia. The front-month June Brent contract on Ice fell by 4.7pc to a low of $62.51/bl. The Nymex front-month May crude contract fell to $58.95/bl, the lowest since April 2021. By Kevin Foster Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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