Starbucks to lower prices of some drinks in China
BEIJING, June 9 (Reuters) - Starbucks (SBUX.O), opens new tab will lower prices of some iced drinks by an average of 5 yuan ($0.70) in China, the company said in a post published on its Weixin social media account on Monday.
The U.S. coffee chain said it would create a "whole-day" service scenario, focusing more on the afternoon with the products whose prices are more "accessible" from Tuesday.
($1 = 7.1870 Chinese yuan renminbi)
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Auto companies 'in full panic' over rare-earths bottleneck
BERLIN/LONDON/DETROIT, June 9 (Reuters) - Frank Eckard, CEO of a German magnet maker, has been fielding a flood of calls in recent weeks. Exasperated automakers and parts suppliers have been desperate to find alternative sources of magnets, which are in short supply due to Chinese export curbs. Some told Eckard their factories could be idled by mid-July without backup magnet supplies. "The whole car industry is in full panic," said Eckard, CEO of Magnosphere, based in Troisdorf, Germany. "They are willing to pay any price." Car executives have once again been driven into their war rooms, concerned that China's tight export controls on rare-earth magnets – crucially needed to make cars – could cripple production. U.S. President Donald Trump said Friday that Chinese President Xi Jinping agreed to let rare earths minerals and magnets flow to the United States. A U.S. trade team is scheduled to meet Chinese counterparts for talks in London on Monday. The industry worries that the rare-earths situation could cascade into the third massive supply chain shock in five years. A semiconductor shortage wiped away millions of cars from automakers' production plans, from roughly 2021 to 2023. Before that, the coronavirus pandemic in 2020 shut factories for weeks. Those crises prompted the industry to fortify supply chain strategies. Executives have prioritized backup supplies for key components and reexamined the use of just-in-time inventories, which save money but can leave them without stockpiles when a crisis unfurls. Judging from Eckard's inbound calls, though, "nobody has learned from the past," he said. This time, as the rare-earths bottleneck tightens, the industry has few good options, given the extent to which China dominates the market. The fate of automakers' assembly lines has been left to a small team of Chinese bureaucrats as it reviews hundreds of applications for export permits. Several European auto-supplier plants have already shut down, with more outages coming, said the region's auto supplier association, CLEPA. "Sooner or later, this will confront everyone," said CLEPA Secretary-General Benjamin Krieger. Cars today use rare-earths-based motors in dozens of components – side mirrors, stereo speakers, oil pumps, windshield wipers, and sensors for fuel leakage and braking sensors. China controls up to 70% of global rare-earths mining, 85% of refining capacity and about 90% of rare-earths metal alloy and magnet production, consultancy AlixPartners said. The average electric vehicle uses about .5 kg (just over 1 pound) of rare earths elements, and a fossil-fuel car uses just half that, according to the International Energy Agency. China has clamped down before, including in a 2010 dispute with Japan, during which it curbed rare-earths exports. Japan had to find alternative suppliers, and by 2018, China accounted for only 58% of its rare earth imports. "China has had a rare-earth card to play whenever they wanted to," said Mark Smith, CEO of mining company NioCorp (NB.O), opens new tab, which is developing a rare-earth project in Nebraska scheduled to start production within three years. Across the industry, automakers have been trying to wean off China for rare-earth magnets, or even develop magnets that do not need those elements. But most efforts are years away from the scale needed. "It's really about identifying ... and finding alternative solutions" outside China, Joseph Palmieri, head of supply chain management at supplier Aptiv , said at a conference in Detroit last week. Automakers including General Motors (GM.N), opens new tab and BMW ( opens new tab and major suppliers such as ZF [RIC:RIC: and BorgWarner (BWA.N), opens new tab are working on motors with low-to-zero rare-earth content, but few have managed to scale production enough to cut costs. The EU has launched initiatives including the Critical Raw Materials Act to boost European rare-earth sources. But it has not moved fast enough, said Noah Barkin, a senior advisor at Rhodium Group, a China-focused U.S. think tank. Even players that have developed marketable products struggle to compete with Chinese producers on price. David Bender, co-head of German metal specialist Heraeus' magnet recycling business, said it is only operating at 1% capacity and will have to close next year if sales do not increase. Minneapolis-based Niron has developed rare-earth free magnets and has raised more than $250 million from investors including GM, Stellantis and auto supplier Magna ( opens new tab. "We've seen a step change in interest from investors and customers" since China's export controls took effect, CEO Jonathan Rowntree said. It is planning a $1 billion plant scheduled to start production in 2029. England-based Warwick Acoustics has developed rare-earth-free speakers expected to appear in a luxury car later this year. CEO Mike Grant said the company has been in talks with another dozen automakers, although the speakers are not expected to be available in mainstream models for about five years. As auto companies scout longer-term solutions, they are left scrambling to avert imminent factory shutdowns. Automakers must figure out which of their suppliers – and smaller ones a few links up the supply chain – need export permits. Mercedes-Benz ( opens new tab, for example, is talking to suppliers about building rare-earth stockpiles. Analysts said the constraints could force automakers to make cars without certain parts and park them until they become available, as GM and others did during the semiconductor crisis. Automakers' reliance on China does not end with rare earth elements. A 2024 European Commission report said China controls more than 50% of global supply of 19 key raw materials, including manganese, graphite and aluminum. Andy Leyland, co-founder of supply chain specialist SC Insights, said any of those elements could be used as leverage by China. "This just is a warning shot," he said.
Reuters
an hour ago
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Rising rates could affect Japan's spending plans, PM Ishiba says
TOKYO, June 9 (Reuters) - Japan must be aware that rising interest rates would push up the government's debt-financing costs and affect its spending plans, Prime Minister Shigeru Ishiba said on Monday. "Japan is shifting to a phase where interest rates rise as a trend," Ishiba told parliament. "Japan's debt-to-gross domestic product ratio is high. When interest rates rise, the cost of funding government debt increases. That could weigh on spending," he said, calling on the need to ensure the government maintains public and market trust in its finances.
Reuters
an hour ago
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Morning Bid: Markets pin hopes on London trade talks
A look at the day ahead in European and global markets from Rocky Swift Optimism abounds in the markets that the United States and China will reach a rapprochement in London today, after a phone call last week between leaders of the world's two largest economies turned down the heat on their protracted rift over trade. Both sides have strong incentives to ratchet down the rhetoric and find agreement as their economies remain tightly linked, although U.S. President Donald Trump has shown interest in decoupling them. The market reacted favourably on Friday to U.S. jobs data that showed less of a slowdown than feared, temporarily easing concerns about the trade war's fallout. But that was counterbalanced today when China's dour producer price data added to evidence that the spat is taking its toll. Asian shares rebounded sharply on Monday, reacting to Friday's exuberance on Wall Street. Equity futures pointed to a slightly lower open in Europe , while U.S. stock futures, the S&P 500 e-minis , slid 0.2%. On the trade front, representatives from the U.S. and China, due to meet at a still undisclosed location in London, will attempt to revive a preliminary trade agreement reached in Geneva last month. Trump is threatening to impose triple-digit tariffs on Chinese goods, while Beijing's key leverage is its near stranglehold on rare earth minerals that are critical to many high-tech sectors. Perhaps persistence is the key. Japan's chief trade negotiator Ryosei Akazawa is planning a sixth round of talks in Washington this week, Kyodo News reported. The economic and earnings slate is practically empty today. The next major figures to watch out of the U.S. will be inflation data on Wednesday, followed later in the week by producer price figures, weekly jobless claims and the University of Michigan report on consumer sentiment. The Fed is in a blackout period ahead of its June 18 policy decision. The markets were also keeping an eye on events in Los Angeles, where National Guard troops are facing down protesters demonstrating over Trump's immigration policies. Videos showed part of a major freeway in the city blocked by activists. California on its own is the world's fourth-largest economy, opens new tab, exceeding Japan's gross domestic product, and Trump deployed guardsmen to its biggest city to counteract what the White House described as "chaos, violence and lawlessness". Governor Gavin Newsom called Trump's reaction "the acts of a dictator". Key developments that could influence markets on Monday: - U.S. wholesale inventory data for April. - Mexico reports inflation and producer price data for May. Trying to keep up with the latest tariff news? Our new daily news digest offers a rundown of the top market-moving headlines impacting global trade. Sign up for Tariff Watch here.
