DeepSeek AI integration to boost long-term metal demand

: Battery materials, Metals
25/02/13

Increasing integration of DeepSeek's artificial intelligence (AI) models in China is likely to boost long-term demand for metals used in AI infrastructures and products, according to market participants.

China's three largest telecommunications companies — China Mobile, China Unicom and China Telecom — have integrated DeepSeek's open source models, and provided exclusive computing power solutions and supporting environments for the DeepSeek-R1 model to help release the performance of the model, the country's industry and information technology ministry said on 9 February.

Other major Chinese technology firms including Alibaba, Baidu and Tencent have also announced integration of DeepSeek's models into their cloud platforms. This is likely to accelerate these companies' development of intelligent applications.

The country's largest electric vehicle (EV) maker BYD, which sold around 4.2mn EVs last year in China, on 11 February announced plans to integrate software from DeepSeek into 21 of its EV models, enabling the automaker to offer advanced autonomous driving features on all of its 18 models priced above 100,000 yuan ($13,686).

DeepSeek's models offer performance for a low price, with its training cost reportedly significantly lower than other large language models. It provides responses comparable to other contemporary large language models, such as OpenAI's GPT-4o.

The roll-out of DeepSeek's models is expected to provide low-cost, high-efficiency intelligent services for small and medium-sized companies and individual users, reduce the threshold for the use of AI technology, and accelerate the inclusion of AI technology.

Metals demand

This development is also likely to boost long-term demand for metals, particularly copper, aluminum, tungsten, molybdenum, gallium, germanium, battery metals and rare earths.

AI operations rely on a large number of servers and data centres, with copper widely used in power distribution, grounding and interconnection of the data centres. Global copper demand from data centres is projected to exceed 1mn t by 2026, according to industry estimates. Rapid development of the AI industry is also boosting copper demand in grid systems. Aluminum is used in some cooling and structural components of data centres.

Demand for indium phosphide (inP) photonic integrated circuit (PiC) technology from the data centre industry is also growing rapidly, driven by the heavy computing workloads required to support AI. AI growth and data centre demand is also expected to increase the use of compound semiconductor materials including gallium nitride and gallium arsenide. Molybdenum and tungsten can be used to manufacture high-temperature components and electrode materials used in some high-end AI hardware equipment.

Rare earth metals also have key applications in AI-related magnetic and optical materials. A faster development of AI products has the potential to increase demand for neodymium iron and boron (NdFeB) material used in special micro-motors and servo motors, rare earth polishing powder used in wafer devices and rare earth magnets used in audio products.

Some main domestic smartphone manufacturers such as Huawei, Honor and Oppo have also integrated DeepSeek's services into their products. This is likely to accelerate the development and consumer adoption of AI smartphones. Earlier industry estimates showed that shipments of AI smartphones would rise to 550mn units globally in 2027, making up more than 40pc of total phone shipments. About 30pc of cobalt and 7pc of global lithium production is consumed in the consumer electronics industry.

Challenges

DeepSeek's development is facing challenges outside China. The DeepSeek application was removed from Italy's app store in January owing to alleged data security concerns. Australia has banned the use of DeepSeek's technology on all government devices. Japanese companies such as Toyota, Mitsubishi and SoftBank have banned the use of DeepSeek for "information security issues". Texas in February became the first US state to ban the use of DeepSeek on government equipment.

But the western countries' anxiety about DeepSeek may spur the development of their own AI industries. US president Donald Trump said that DeepSeek was a "wake-up call" for the US technology industry. South Korea's acting president Choi Sang-moo views DeepSeek as a "new impact", planning to pour 34 trillion won ($23.5bn) into the development of the AI and semiconductor industries.

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25/04/01

Next US tariffs to take effect 'immediately'

Washington, 1 April (Argus) — President Donald Trump plans to announce a sweeping batch of tariffs on Wednesday afternoon that will take effect "immediately", the White House said today. Trump will unveil his much anticipated tariff decision Wednesday at 4pm ET during a ceremony at the White House Rose Garden. While the administration has announced the effective date, there is little clarity on what goods will face tariffs at what rates and against which countries, leaving the government agencies that will be tasked with enforcing new tariffs largely in the dark. "The president has a brilliant team of advisers who have been studying these issues for decades, and we are focused on restoring the golden age of America and making America a manufacturing superpower," the White House said today, brushing off criticism from economists, industry groups and investors. Economic activity in the US manufacturing sector contracted in March as businesses braced for Trump's tariff threats. Trump has previewed or announced multiple tariff actions since taking office. The barriers in place now include a 20pc tariff on all imports from China, in effect since 4 March, and a 25pc tax on all imported steel and aluminum, in effect since 12 March. A 25pc tariff on all imported cars, trucks and auto parts, is scheduled to go into effect on 3 April, the White House confirmed today. Trump and his advisers have previewed two possible courses of action for 2 April. Trump has suggested that all major US trading partners are likely to see a broad increase in tariffs in an effort to reduce the US trade deficit and to raise more revenue for the US federal budget. But Trump separately has talked about the need for "reciprocal tariffs", contending that most foreign countries typically charge higher rates of tariffs on US exports than the US applies to imports from those countries. In that scenario, high tariffs become a negotiating tool to bring down alleged foreign barriers to US exports. Treasury secretary Scott Bessent told Fox News on Monday night that the second course is the one Trump is more likely to take. Trump will announce "reciprocal tariffs" and "everyone will have the opportunity to lower their tariffs, lower their non-tariff barriers, stop the currency manipulation" and "make the global trading system fair for American workers again", Bessent said. But the White House insisted today that the new tariffs will not be a negotiating tool. Trump is "always up for a good negotiation, but he is very much focused on fixing the wrongs of the past and showing that American workers have a fair shake", the White House said. Trump's words and actions already have drawn retaliatory tariffs from Canada and China, and the EU is preparing to implement its first batch of counter-tariffs in April. Trump, for now, has deferred his tariff plans for imported Canadian and Mexican oil and other energy commodities. But the US oil and gas sector, which depends on pipelines and foreign-flagged vessels to transport its crude, natural gas, refined products and LNG, will feel the effects of tariffs on imported steel and proposed fees on Chinese-made and owned vessels calling at US ports. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico GDP outlook falls again in March survey

25/04/01

Mexico GDP outlook falls again in March survey

Mexico City, 1 April (Argus) — Private-sector analysts lowered Mexico's 2025 GDP growth forecast to 0.5pc in the central bank's March survey, down by more than a third from the prior forecast, driven by increased concerns over US trade policy and weakening domestic investment. The latest outlook is down from 0.8pc estimated in February and marks the largest of four consecutive reductions in the median forecast for 2025 GDP growth in the central bank's monthly surveys since December. Mexico's economy decelerated in the fourth quarter of 2024 to an annualized rate of 0.5pc from 1.7pc the previous quarter, the slowest expansion since the first quarter of 2021, according to statistics agency data. Uncertainty over US trade policy has weighed on investment and contributed to the slowdown. Concerns have intensified in recent weeks with US president Donald Trump set to announce sweeping new tariffs on 2 April. Mexico is preparing its response, possibly including reciprocal tariffs, on 3 April. A key concern in Mexico is an expiring carveout to the tariffs for treaties aligned with US-Mexico-Canada (USMCA) free trade agreement rules of origin. Mexico's economy minister said last week ongoing negotiations aim to secure a "preferential tariff," including a continuance of that exclusion and lower tariffs for goods progressing toward USMCA compliance. The median 2026 GDP growth estimate fell to 1.6pc from 1.7pc in February. Analysts again cited security, governance and trade policy as top constraints to growth. Year-end 2025 inflation expectations edged lower to 3.70pc in March from 3.71pc in February. The central bank's board of governors cut Mexico's target interest rate by 50 basis points to 9pc from 9.5pc on 27 March, citing expectations that inflation will continue to slow toward the central bank's 3pc long-term goal and reach 3.3pc by year-end. The board said it would consider additional cuts of that size at future meetings. Mexico's consumer price index accelerated to an annual 3.77pc in February, as slower growth in agricultural prices was offset by faster inflation in services. The target interest rate is projected to fall to 8pc by year-end, compared with 8.25pc in February's survey. The median exchange rate forecast for end-2025 reflected expectations of the peso ending the year slightly stronger at Ps20.80 to the US dollar from Ps20.85/$1 estimated in the prior forecast. The end-2026 estimate firmed slightly to Ps21.30/$1 from Ps21.36/$1. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexican peso weakness may partially offset US tariffs

25/04/01

Mexican peso weakness may partially offset US tariffs

Mexico City, 1 April (Argus) — Volatility in the peso/dollar exchange rate may help to partially offset any tariffs that US President Donald Trump decides to impose on imports from Mexico as the ensuing peso depreciation would make its exports more competitive, said analysts from US bank Barclays. President Trump will announce Wednesday his next decision related to the threat to impose a 25pc tariff against imports from its commercial partners Mexico and Canada. Trump has delayed the decision twice, and it is likely that he will do so again, given the serious repercussions the tariffs could cause to the US economy, said Latam chief economist at Barclays, Gabriel Casillas, during a webinar held Monday. The base scenario for Barclays is that Trump's administration will finally step back from imposing tariffs on Mexico and Canada and rather go for an early renegotiation of the (US Mexico Canada Free Trade Agreement (USMCA) this year, said Casillas. In this scenario, the Mexican peso would strengthen to between Ps19.5 to Ps19.00 to the greenback, he added. However, if Trump's administration decides to impose the 25pc tariffs on all Mexican imports as he has threatened to do, then the peso would weaken to Ps24/$1, said Erik Martinez, foreign exchange research Analyst at Barclays during the same webinar. "If tariffs were imposed, 25 percent on all imports, we think a good portion of this would be absorbed by the exchange rate," said Casillas. A weaker peso makes Mexican exports more competitive abroad. The Mexican peso on Tuesday was trading at around Ps20.30 to the dollar, and has weakened by 18.5pc in the past year from about Ps16.6 to the dollar a year ago. If President Claudia Sheinbaum's administration avoids the tariffs, the peso may strengthen to around Ps 19.00/$1 in upcoming days, said Martinez. If the tariffs are applied during a brief period or only for the automobile sector, the exchange rate could range between Ps21.00-22.00 per dollar, said Martinez. However, even without any tariff being applied, Mexico's economy is expected to grow only by around 0.7pc this year, less than the estimates made late in 2024 of around 1.4pc, due to the deceleration of the US economy, Mexico's main trading partner, said Casillas. The US economy is showing signs of slowing down, specially in the industrial sector, which will impact Mexico's growth for the year. Also, this uncertainty is directly affecting any upside expected from so-called nearshoring as companies would now lose interest in moving their manufacturing lines to Mexico if there is no clear benefit in using the USMCA to avoid tariffs, said Casillas. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US manufacturing contracts in March: ISM

25/04/01

US manufacturing contracts in March: ISM

Houston, 1 April (Argus) — Economic activity in the US manufacturing sector fell back into contraction in March after a brief expansion as businesses braced for US president Donald Trump's threatened tariffs on imports. The manufacturing purchasing managers' index fell to 49 in March, down from the 50.3 in February, the Institute for Supply Management reported Tuesday. That followed three months of expansion — above the breakeven threshold of 50 — following 26 months of contraction. The new orders index contracted for a second month in a row, falling to 45.2, down by 3.4 points from the prior month. Production fell to 48.3 from 50.7. New export orders fell to 49.6 in March from 51.4 the prior month. "Demand and production retreated and destaffing continued, as panelists' companies responded to demand confusion," ISM said. "Prices growth accelerated due to tariffs, causing new order placement backlogs, supplier delivery slowdowns and manufacturing inventory growth." The prices index surged to 69.4, up from 62.4 in February and the highest since mid-2022. Employment fell by 2.9 points to 47.6. The supplier delivery index fell by 1 point to 53.5, indicating ongoing slowing in deliveries and slowing demand. Trump plans to unveil sweeping "reciprocal" tariffs on major foreign trade partners on 2 April after previewing or announcing multiple tariff actions since taking office, including a 20pc tariff on all imports from China and a 25pc tax on all imported steel and aluminum that both took effect last month. Trump last month also announced a 25pc tariff on all imported cars, trucks and auto parts, scheduled to go into effect on 3 April. The measures, together with mass federal government layoffs and spending cuts, spooked US equity markets, which last month posted heavy losses. Comments focus on tariff confusion Comments from survey participants highlighted uncertainty over how Trump's tariff plans would effect operations and the economy. "Acute shortages continue to impact supply chain continuity," a transportation equipment executive said. "Chinese restrictions on critical minerals such as germanium have caused major shortages, resulting in all supply needed in 2025 already assumed — and, not surprisingly, significant price increases as a result." "Customers are pulling in orders due to anxiety about continued tariffs and pricing pressures," according to a computer and electronic products executive. "Business condition is deteriorating at a fast pace," a machinery executive commented. "Tariffs and economic uncertainty are making the current business environment challenging." "New order levels have increased and are better than expected," a fabricated metals executive said. "We suspect that our customers are trying to build inventory at current prices to get ahead of expected tariff and related cost increases." By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU publishes CO2 car standard tweak proposal

25/04/01

EU publishes CO2 car standard tweak proposal

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