Automotive angst as China's critical minerals export curbs take hold
Frank Fannon, a minerals industry consultant and former US assistant secretary of state for energy resources during Trump's first term, said the global disruptions are not shocking to those paying attention.
'I don't think anyone should be surprised how this is playing out. We have a production challenge (in the US) and we need to leverage our whole of government approach to secure resources and ramp up domestic capability as soon as possible. The time horizon to do this was yesterday,' Fannon said.
Diplomats, carmakers and other executives from India, Japan and Europe were urgently seeking meetings with Beijing officials to push for faster approval of rare earth magnet exports, sources told Reuters, as shortages threatened to halt global supply chains.
A business delegation from Japan will visit Beijing this month to meet the ministry of commerce over the curbs, and European diplomats from countries with big car industries have also sought "emergency" meetings with Chinese officials in recent weeks, Reuters reported.
India, where Bajaj Auto warned further delays in securing the supply of rare earth magnets from China could "seriously impact" electric vehicle production, is organising a trip for car executives in the next two to three weeks.
Last month the head of the trade group representing General Motors, Toyota, Volkswagen, Hyundai and other major carmakers raised similar concerns in a letter to the Trump administration.
"Without reliable access to the elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras," the Alliance for Automotive Innovation wrote in the letter.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Maverick
6 hours ago
- Daily Maverick
Stocks on guard for payrolls, Tesla tumbles as Trump-Musk bromance sours
SYDNEY, June 6 (Reuters) – A run of soft economic data this week has markets wary of a downside surprise in the monthly payrolls print due later in the day, which would add to fears of stagflation while piling pressure on the Federal Reserve to ease policy in a hurry. Tesla shares bounced 0.8% in after-hours trading after tumbling a whopping 14% overnight to wipe off $150 billion in market value. That came after Trump threatened to cut off government contracts to Elon Musk's companies as the once close relationship turned into a bitter public feud. Nasdaq futures were flat and S&P 500 futures inched up 0.1%. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1% on Friday but it is still set for a weekly rise of 2.2% to hover just below an eight-month peak. Japan's Nikkei rose 0.3% but is set for a weekly drop of 0.7%. South Korea's KOSPI is closed for a holiday but was up 4.2% this week to nearly 11-month tops as the newly elected President Lee Jae-myung planned an emergency package to boost the flagging economy. The won has also gained 2% this week to an eight-month peak. Chinese blue chips were flat and Hong Kong's Hang Seng dropped 0.3% as a call between Trump and Chinese President Xi Jinping offered little clarity to ease ongoing trade tensions. 'The US-China agreement to de-escalate tensions, and the recent phone call between Trump and Xi, shows both countries have an economic 'pain threshold',' said Luke Yeaman, chief economist at the Commonwealth Bank of Australia. 'This takes some severe downside scenarios off the table, but tensions will remain high and further bouts of escalation are likely…we see little prospect that a comprehensive US-China trade agreement will be settled by 14 August.' WAIT FOR PAYROLLS Weaker-than-expected labour market data, including a 47% year-on-year jump in Challenger layoffs and a significant downside surprise in ADP's private payrolls, have dampened expectations for the payrolls report. Forecasts are centred on a rise of 130,000 jobs in May, with the unemployment rate holding steady at 4.2%. Any unexpected weakness could bring the next US rate cut forward and trigger a huge rally in Treasuries. Futures imply scant chances of a rate cut until September, which is about 93% priced in, with another move likely to come in December. Yields on the benchmark ten-year Treasuries were flat at 4.3925%, having risen 3 basis points overnight to bounce away from a one-month low. 'We expect payrolls to lose additional momentum in May, printing a below-consensus 110,000,' said analysts at TD Securities in a note to clients. 'Markets have recently been singularly focused on tariffs and deficits, with macro taking a back seat in recent weeks. Our forecast may not be sufficient to catalyze this revamped focus on macro, but we expect downside surprises to generate a larger market reaction.' The dollar was flat against its major peers on Friday but was set for a weekly drop of 0.7% on soft economic data. The euro got some support and hit a six-week top of $1.1495 overnight after the European Central Bank cut rates but signaled that it was nearing the end of its year-long policy easing cycle. Investors have given up on a move in July, with the final move mostly to come in December. In commodities markets, oil prices were slightly lower but were headed for weekly gains on supply concerns. US crude futures slipped 0.1% to $65.29 a barrel but was up 2.1% for the week. In precious metals, gold prices climbed 0.3% to $3,362 an ounce. For the week, they are up 2.2%.
IOL News
2 days ago
- IOL News
China and South Africa deepen economic cooperation through trade initiatives
Strengthening ties: China and South Africa enhance cooperation through trade and investment Strengthening ties: China and South Africa enhance cooperation through trade and investment With China increasing its engagement in Africa, collaboration between China and South Africa is continuing to transforming trade, investment, and economic cooperation for both nations. This week, the Daily News was granted an exclusive insight from the Chinese Consul General in Durban Li Zhigong who shed light on vast opportunities waiting to be tapped into between both nation nations. In the interview with Zhigong, praised the the burgeoning partnership between China and South Africa. The Consulate General highlighted that he was taking firm steps to promote bilateral trade and investment, especially within KwaZulu-Natal, an area rapidly gaining recognition as a gateway for Chinese investment into the region. By facilitating business delegations, organising matchmaking events, and supporting trade expos, the consulate plays a pivotal role in creating fertile ground for both South African and Chinese businesses. Zhigong highlighted that major Chinese companies, including YOA Cabel, ZPMC, and NPC, have already made significant investments in the province. Their contributions not only boost the local economy but also forge deeper economic ties between China and South Africa. For South African businesses eager to tap into the vast Chinese market, the Consul General underscored the importance of leveraging existing bilateral trade agreements. He pointed out that events like the China International Import Expo (CIE) act as vital platforms for showcasing South African products, particularly wine, which has found a warm reception among Chinese consumers. Additionally, the recent opening of the Chinese market to South African avocados and soybeans marks a significant opportunity for producers in the region. Zhigong emphasised that provinces such as Guangdong, Fujian, and Guangxi—which are sister provinces to KwaZulu-Natal—regularly host trade fairs that encourage economic collaboration. He added that prospects in sectors like the digital economy, green energy, and advanced manufacturing continue to increment the appeal of the Chinese market for South African enterprises. These industries not only promise growth but also offer a diverse array of opportunities for collaboration. "Provinces like Guangdong, Fujian, and Guangxi—KwaZulu Natal's sister provinces—regularly host trade fairs and economic forums that provide platforms for cooperation. For example, the China- ASEAN Expo in Guangxi also highlights African participation. With opportunities in digital economy, green energy, and advanced manufacturing, China offers South African companies a growing and diversified market," he explained. In conclusion, the Belt and Road Initiative (BRI) has also emerged as a cornerstone in the framework of this evolving relationship. Zhigong detailed how the BRI enhances economic ties by promoting essential infrastructure development and facilitating trade, as well as encouraging people-to-people connectivity. In addition, various logistics and energy projects aligned with the BRI are already making a tangible difference in South Africa, integrating with the country's national development goals and promoting sustainable cooperation that benefits both nations, he explained.
The Herald
2 days ago
- The Herald
Local debt markets could shield Africa as funding sources shrink, Moody's says
Moody's research shows the median interest rate on local currency debt in Africa stands at about 12%, compared with 8% in Latin America and 5.5% in Asian emerging markets, highlighting cost savings African sovereigns could achieve with deeper, more developed local markets. Diron said in the previous decade, African governments had access to more diverse financing sources from the World Bank to comparatively affordable international bond market lending. Today sources are more limited, and conditional, with rich nations cutting aid and concessional finance shrinking. Flows from China, a key source for countries such as Angola and Zambia, are turning net negative as repayments come due and fresh lending slows, she said. 'We're looking at a few years where the net flows are likely to be negative because the repayments are likely to be more significant,' Diron said of China. Declining oil prices have also squeezed crude exporters' revenues, notably in Angola, and Diron said Moody's expects Brent futures to remain close to $65 (R1,161) per barrel, a drop of roughly $10 (R179) from their previous forecast. Multilateral development banks are stepping in to fill gaps, Diron said, but the amounts were in the 'tens of billions', not enough to close the annual financing gap the African Development Bank has estimated at $400bn (R7.1-trillion). Moody's was also monitoring further cuts in US funding of international institutions such as the International Monetary Fund, the World Bank or theAfrican Development Bank, Diron said. She said: 'It would be a risk if multilateral development banks concluded they cannot lend as much as they have, specially at a time when the borrowing needs are, if anything, rising.' Reuters
