Iron Ore Falls as China PMI Slips to Lowest Level Since 2022
Iron ore and base metals dropped on concerns about China's economic outlook, with the country's manufacturing activity falling to its lowest level in more than two years.
Futures for the steelmaking raw material declined after Caixin's private manufacturing purchasing managers' index for May dropped to a reading of 48.3 from 50.4 in April — the lowest since September 2022 and well below the 50 mark separating expansion from contraction.
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Yahoo
31 minutes ago
- Yahoo
The new mobile mega-network trying to solve Britain's terrible coverage
As lobbying ramped ahead of their £15bn mega-merger, Vodafone and Three embarked on a campaign of self-denigration. Margherita Della Valle, Vodafone's chief executive, repeatedly criticised Europe's lacklustre 5G rollout. Three boss Robert Finnigan went further, saying his company's investment in its mobile network was 'unsustainable' without the tie-up. Talking down Britain's 5G coverage was a bold strategy for two of the country's four mobile operators. The deal has been bogged down by protracted regulatory scrutiny and as Vodafone tussled with CK Hutchison, Three's owner, for control of their new joint venture. Two years after it was first announced, however, the tie-up has finally completed and the strategy appears to have paid off. Now, bosses are promising a revolution for UK mobile customers. When Vodafone and Three first unveiled plans to merge to create the UK's largest network operator, they insisted the deal was 'great for customers, great for the country and great for competition'. Yet the announcement, which itself followed more than a year of private discussions, marked only the beginning of a drawn-out regulatory process that would last 18 months. At the heart of investigations were fears that the merger, which reduces the number of UK operators from four to three, would push up prices for consumers. Regulators have historically been sceptical about telecoms consolidation and a previous attempt to merge Three with O2 was blocked by the European Commission in 2016. Unions and China-sceptic MPs also sounded the alarm about granting Hong Kong-based CK Hutchison access to sensitive government contracts, as well as accusations of union-busting at the conglomerate's other companies including Felixstowe port. Ultimately, in December, the Competition and Markets Authority (CMA) gave the green light to the deal provided the two companies agreed to a number of legally binding commitments, including a pledge to invest billions into their combined 5G network, as well as guarantees around some tariffs and wholesale rates for so-called MVNOs that piggyback off major networks. Matthew Howett, the founder and chief executive of Assembly Research, says the lengthy wait for approval was too long. 'Two years is a long time when you've got operators who are saying that they can't meet their cost of capital and that they're in trouble and need to do something otherwise they're going to exit the market and consumers suffer,' he says. However, he adds that the companies 'probably benefited from the delay because of the fact we got a new government that was focused on investment and growth and a realisation from the CMA that coverage isn't where it should be'. Karen Egan, at Enders Analysis, argues that the regulatory process 'was always going to be thus'. 'It's a big move and I think the whole country needs to feel like it's been properly thought through,' she says. 'They came to the right decision and it's good that they took their time.' Yet even after CMA approval was secured, the deal was beset by further delays. The two companies had been aiming to complete by May 1 and a glitzy launch event was organised on a rooftop near Liverpool Street, but this deadline was pushed back. The source of the delay, according to multiple industry sources, was CK Hutchison. One describes it as a 'Hutch roadblock', while another claims the company, which was founded by Li Ka-shing, Hong Kong's richest man, was making aggressive demands at the negotiating table. Analysts say there is likely to have been a tussle for power and control between the two partners as the merger talks drew to a close. Vodafone will initially hold a 51pc stake in the joint venture and has the option of taking full control of the combined business after three years. However, the Hong Kong company is likely to have been keen to hold its ground. 'I suppose it's inevitable in these joint ventures that everyone's going to be looking after their own self-interest, particularly as the final touches are put to the agreement,' says Egan. 'I imagine that [CK Hutchison] are especially nervous about being easily shunted into the background unless they're on the front foot and protecting their interests at every opportunity.' Another potential source of conflict, according to analysts, could be costs. The newly merged company is expected to pay around £250m to Vodafone Group for central functions such as customer service – a figure that CK Hutchison will probably be keen to cut. The delay caused frustration within Vodafone, particularly as the company gears up for its two major summer sponsorships – Glastonbury and Wimbledon. Despite its painful genesis, however, most in the industry are optimistic about the transformative effects of the merger and its ability to unlock network investment for 27m customers. Most crucial is the prospect of an improvement to the UK's shoddy mobile coverage, which has been a key priority of the Labour Government under telecoms minister Chris Bryant, as well as regulator Ofcom. 'Clearly the UK's coverage position is not where it should be relative to other countries,' says Howett. Della Valle has insisted that the commitment to invest £11bn over the next decade will ensure not-spots are eliminated, though bosses have cautioned that customers are unlikely to see an instant improvement. However, the investment pledge is a first for the industry, and questions remain about how effectively Ofcom will be able to monitor and enforce it. What's more, could the commitment soon become a millstone around the new company's neck? At BT, the deal will mark a step change as the new company leapfrogs EE to become Britain's largest network. The former monopoly is viewed by analysts as a 'relative loser' from the deal, so is likely to step up its own network investment. Executives are also considering the launch of a new value mobile brand to beef up the company's offering at the lower end of the market. Publicly, however, BT is sanguine. Speaking to reporters last week, BT boss Allison Kirkby said: 'We're well ahead of the rest, so we don't feel the need to change our current plans.' Kester Mann, an analyst at CCS Insight, says the merger 'cements one of the most important structural changes in the history of UK mobile'. But he adds: 'The merging parties have little time to celebrate. Now, the hard work really begins as they set about implementing the many connectivity improvements they've long promised. 'For many UK mobile users that have struggled for too long with poor signal, the upgrades can't come soon enough.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
40 minutes ago
- Yahoo
Tesla's China Meltdown: 8 Straight Months of Pain as BYD Dominates the Road
Tesla (NASDAQ:TSLA) just clocked its eighth straight month of declining China-made EV sales, delivering 61,662 vehicles in May down 15% from a year ago. While that's a modest 5.5% bounce from April, it's hardly a turnaround. The Model 3 and Model Y are starting to feel their age, and even fresh incentives like software transfer perks and rural EV promotion programs haven't done much to reignite demand. Meanwhile, Europe isn't helping either. Sales there have also cooled, with some analysts citing CEO Elon Musk's political antics as a potential turn-off for more moderate buyers. Warning! GuruFocus has detected 4 Warning Signs with ASAN. All this is happening as the price war Tesla kicked off in 2023 keeps getting bloodier. More than 40 brands have joined the discount race, and China's government is now urging automakers to stop the bleeding. But BYD (BYDDF) isn't backing offit rolled out new promotions on over 20 models in late May. Geely and Chery followed suit. Tesla, on the other hand, finds itself stuck in the middle: newer rivals are undercutting it on price while also launching fresher, tech-savvier vehicles. Without a major product refresh soon, it's hard to see how Tesla claws back its edge. BYD, for its part, continues to pull ahead. The company sold 376,930 passenger vehicles in Maya 14.1% year-over-year gain, albeit slower than April's 19.4% surge. Still, that's more than six times Tesla's China-made output last month. And while Tesla is still a global EV heavyweight, it's losing steam in the market that matters most. The bottom line? BYD is expanding. Tesla is reacting. That's not a position investors typically cheer. This article first appeared on GuruFocus.
Skift
43 minutes ago
- Skift
Airlines Commit to 2050 Net Zero Goal, But Warn Fliers Face Higher Fares
Airlines may be sticking to their net zero goal, but they are now signalling that passengers may have to help foot the bill. The airline industry is sticking to its target of reaching net zero emissions by 2050, despite growing concerns over the slow ramp-up of green aviation fuels. The International Air Transport Association (IATA), which represents more than 350 airlines globally, reaffirmed its climate goal at the close of its two-day annual summit in New Delhi on Tuesday. 'There had been no talk of any delay to the target,' IATA director Willie Walsh said in a press conference, according to Reuters. He added that the goal remains both realistic and necessary. The target had come under scrutiny amid fears it might be delayed due to the lack of available low-emissions fuel. 'There is great concern that we're not making sufficient progress, not as airlines, but as the value chain that needs to support the airlines transitioning to net zero,' Walsh said. 'We still have time to get there, but we do need to see more action from all of the partners in the value chain.' Fuel Producers Not Playing Their Part Walsh called out oil majors and fuel producers for scaling back their investment in sustainable aviation fuel (SAF), the sector's preferred alternative to fossil-based jet fuel. The sector says SAF can reduce emissions by around 60%, but it currently accounts for less than 1% of global jet fuel use. 'We have made clear from the very beginning that the airline industry will not be able to achieve net zero in 2050 unless everybody in the wider value chain supports the industry in doing that,' Walsh said. 'I think it is a wakeup call.' While industry profits have rebounded since the pandemic, IATA warned that the cost of meeting net zero could reach as much as $4.7 trillion. Climate Costs Could Mean Higher Air Fares Reuters reported that IATA said some of that cost will likely be passed on to travelers through higher fares. Walsh and IATA have previously spoken about the risk of higher fares. "Going forward as we see increases in carbon costs, there has to be an impact on ticket prices as the industry transitions to net zero. The airlines cannot absorb increased costs," Walsh previously said. In a new report, IATA estimated that the average cost of SAF in 2024 was 3.1 times that of conventional jet fuel. It said that in 2025, it is projected to be 4.2 times that of jet fuel. Lufthansa has already introduced an environmental surcharge on all tickets from most European countries. The amount of the surcharge varies between $1 and $78, depending on the flight route. "This is due to steadily rising additional costs due to regulatory environmental requirements," the airline said in a statement. "These include the statutory blending quota of initially 2% for SAF for departures from European Union." IATA is expected to release further guidance on SAF deployment and financing later this year. Fuels Europe, which represents companies like BP and Shell, have rejected the aviation industry's claims. 'We reject claims from the aviation sector suggesting a lack of sustainable aviation fuel supply,' the group previously told Skift. 'Our members are on track to meet their current mandate and exceed 2030 targets. Despite policy and investment challenges, European fuel producers have rapidly scaled SAF output and lowered costs.'
