Commodities

Shell company digs deep for Glencore copper

18 Mar 2022

Cash and potential new equity cover only half the $1.1 bln Metals Acquisition is paying to buy an Aussie mine from the commodities giant. A raft of debt and some future revenue will plug the gap. Copper’s role in the energy transition makes the financial engineering worthwhile.

Hot war thaws formerly frozen trade routes

17 Mar 2022

Algeria shunned imports of French wheat in a diplomatic row. That has changed because of shortages after Russia invaded Ukraine. The U.S. has even talked to vilified Venezuela. Amid political hype about self-reliance, globalization still matters – even if it requires compromise.

Nickel gets nixed, French firms linger in Russia

17 Mar 2022

The war in Ukraine is affecting far corners of global finance. In the Viewsroom podcast, Breakingviews columnists explain how the conflict helped bring nickel trading to a halt in London. And why oil giant Total and carmaker Renault are resisting the exodus by Western companies.

LME’s nickel business is halfway out the door

16 Mar 2022

The London Metal Exchange again suspended trading in the energy transition material, a week after wiping trades. The latest mess means custom is already heading elsewhere. The LME’s best hope is that a lack of oven-ready alternative venues leads to a degree of inertia.

Russia punches economic hole above its weight

16 Mar 2022

The country that was a trade minnow during the Cold War became a big commodities exporter. That’s why the isolation of an economy smaller than Texas is pushing up global prices of energy, wheat and other goods. Though some countries can help fill the gap, consumers will suffer.

Nickel’s return may leave everyone underwhelmed

15 Mar 2022

The London Metal Exchange will restart trading in the commodity on Wednesday, a week after the bourse suspended the market amid epic price rises. The LME’s decision to void trades angered financial investors. New safeguards may irk traditional members it was trying to protect.

Nickel crisis puts ‘too big to fail’ back on table

15 Mar 2022

Chinese metal producer Tsingshan won Beijing's support after an $8 bln hit in a short squeeze. It’s a reminder systemic risk is not the domain of big banks alone. The more financial contagion stems from Russia's war, the likelier other governments will face a similar choice.

Gas guzzlers face reckoning from Ukraine shock

14 Mar 2022

Prices of raw materials and fuel have soared after the Russian invasion. That could push drivers to swap big cars like the Jeep Wrangler for more energy-efficient rides. With big vehicles currently bringing in roughly half of sales, that’s a problem for the $4 trln auto industry.

Rio’s Mongolian generosity reflects strategic bind

14 Mar 2022

The $120 bln miner has offered $2.7 bln to buy out minority investors in Turquoise Hill, which controls the giant Oyu Tolgoi copper mine. Rio Tinto could have paid less last year. But its lack of metals needed for alternative energy makes it vital to remove any future barriers.

U.S. shale won’t wean the West off Russian crude

11 Mar 2022

Fracking transformed the U.S. oil patch and made America a net exporter. But even with high prices, there are limits. Public companies are wary of over-investing, and even private firms are finding land is scarce. They may struggle to replace more than 10% of Russia's output.

Russia fertiliser crisis cultivates world of pain

11 Mar 2022

The country is a major exporter of potash and urea, nutrients underpinning food security. The fallout from Moscow’s Ukraine war exacerbates a price and supply crisis. Top importers India and Brazil will be hit hard; smaller, economically weaker buyers will be even worse off.

Gauging the global backlash against Russia

10 Mar 2022

The shockwaves from President Vladimir Putin’s invasion of Ukraine are reverberating around the world. In our Viewsroom podcast, Breakingviews columnists debate the country’s isolation, the impact on Asia, Europe’s plan to wean itself off Russian gas, and the fallout for banks.

Russian wheat squeeze sows seeds of global unrest

9 Mar 2022

Prices of the grain soared to record highs following Moscow’s invasion of Ukraine, a major producer. A previous spike in 2007 led to riots in Africa and Asia while pushing up subsidy costs. This time major importers like Egypt already have low reserves, spelling greater trouble.

Venezuela gives Washington lesson in realpolitik

9 Mar 2022

The Latin American country’s oil could conveniently replace U.S. imports from Russia. But the regime of Nicolás Maduro has been under U.S. sanctions since 2017. Easing them would amount to accepting the lesser of two evils, with nearly 30 million Venezuelans as pawns.

Nickel’s emergency stop creates longer-term issues

9 Mar 2022

The LME suspended trading in the metal and nixed trades after prices soared. The fix avoids wider losses, and London’s idiosyncratic market may make this seem a one-off. But commodity producers fretting over Russia may now also worry about how easily they can hedge in future.

Capital Calls: Danone

8 Mar 2022

Concise views on global finance: The French yoghurt maker’s new CEO presents underwhelming new financial targets.

Capital Calls: White-collar crime, Rusal rejig

7 Mar 2022

Concise views on global finance: The U.S. attorney general wants to go after more individuals as well as companies for corporate crimes. Even law firm Wachtell says top bosses should pay attention; a plan to separate Rusal’s non-Russian bits looks like a challenge.

Big Oil haunted by $100 crude trauma

2 Mar 2022

Prices are high, and Russia’s 8% of global supply might evaporate, but Chevron and Exxon promised this week their focus is lower costs and returning capital. That’s a far cry from last time’s destructive investment binge. They may end up ruing missed drilling opportunities.

Chevron’s green fuel deal is cheap and cheerful

28 Feb 2022

The $276 bln oil giant is buying sustainable diesel firm Renewable Energy for around $3 bln. A solid investment return makes it financially sensible. It's also a bet on the transition away from fossil fuels. For now, though, it's a tiny one compared to Chevron's European peers.

Biden’s fossil-fuel enmity backs him into a corner

25 Feb 2022

The U.S. president’s climate stance has made him few friends in the oil patch. But U.S. drillers can fill gaps caused by Russia’s invasion of Ukraine. Expediting applications and rolling back regulations is a climbdown, but it would curb two foes: rising prices and low popularity.