Key transactions & industry news Weekly Update 04/04/2025

Metals & Mining

Autos Trump’s 25% auto tariffs are in effect. What investors need to know. President Donald Trump’s 25% tariffs on imported vehicles to the US have taken effect, but the impacts of the new levies could take years to unfold. Wall Street analysts and investors have been bearish on the tariffs, which some believe could decimate company earnings and drive the automotive industry into a recession. Automakers were lobbying for vehicles and parts that are compliant with Trump’s United States-Mexico-Canada trade agreement to be tariff-free, but so far there have been no exemptions for vehicles.

No arbitrage, no rally: US aluminum premium stabilises as global prices weaken. As of April 3, the LME 3M daily average price stood at $2,460 per tonne. In that case, the 25% tariff adds an estimated $615 per tonne to the import cost. After factoring in ocean freight and inland transportation, the full landed cost for aluminum imports into the US exceeds $800 per tonne. At present, the US Midwest premium has reached ~$850 per tonne, essentially aligning with this cost threshold. With minimal or no profit margin, the arbitrage window has effectively closed, and the premium has reached a stage of relative stability.

Alcoa and IGNIS Equity’s energy supply JV comes to fruition, bringing stability to San Ciprián’s operations. The long-awaited joint venture between Alcoa Corporation and IGNIS Equity Holdings has officially been established to ensure the continued operation of Alcoa’s San Ciprián complex. Alcoa, as a major shareholder of the JV with a 75% stake, has contributed $81M, and IGNIS Equity, with the remaining 25% share, has invested $27M in forming the joint venture. Going ahead, Alcoa will invest up to $108M if required for operations. The main goal of this joint venture is to resume operations at the San Ciprián complex in 2025, in line with a commitment made in the Viability Agreement signed between Alcoa and its employees in 2021 during the curtailment of operations.

Transportation & Logistics

Despite weak freight market, trucking jobs soared in March. Truck transportation jobs in March rose the most in a month since the beginning of 2022. The increase of 9,600 jobs that went along with a larger-than-normal increase in nonfarm payrolls for the country (up 228,000 jobs) was the largest since an increase of 10,400 jobs in January 2022. That month was nearing the end of what is generally considered the strongest freight market in recent history. This month’s increase came during a time when the most optimistic voices are hoping for an improvement by the end of the year.

New US tariffs hit railroad stocks in early trading. Railroad stocks tumbled Thursday in response to the Trump administration’s Wednesday announcement of widespread tariffs on U.S. trading partners. It was an indication that investors believe the tariffs will raise prices and have a negative impact on consumer spending, which in turn will reduce demand for the raw materials and finished products that railroads carry. CSX and Union Pacific stock prices slumped by 4%, while Norfolk Southern was down 5%. The Canadian railways fared better, perhaps because Canada and Mexico – which were early tariff targets – were exempt from the reciprocal tariffs announced at the White House on Wednesday. Canadian National stock was up slightly in morning trading, while Canadian Pacific Kansas City was down by 0.7%.

Energy

Oil dives 7%, settles at lowest in over 3 years on China’s retaliatory tariffs. Oil prices plunged 7% on Friday, settling at their lowest close in more than three years, as China ramped up tariffs on US goods, sharply escalating a global trade war that has investors worried about a recession. China announced it will impose additional tariffs of 34% on all U.S. goods from April 10. Nations around the world have readied retaliation after Trump raised tariff barriers to their highest in more than a century.

Others

Trump tariffs pile stress on ailing world economy. The latest round of US trade tariffs unveiled on Wednesday will sap yet more vigour from a world economy barely recovered from the post-pandemic inflation surge, weighed down by record debt and unnerved by geopolitical strife. Depending on how President Donald Trump and leaders of other nations proceed now, it may also go down as a turning point for a globalised system that until now had taken for granted the strength and reliability of America, its largest component.

Fed’s Powell says larger-than-expected tariffs likely to boost inflation, slow growth. President Donald Trump’s new tariffs are “larger than expected,” and the economic fallout including higher inflation and slower growth likely will be as well, Federal Reserve Chair Jerome Powell said on Friday, while cautioning it was still too soon to know what the right response from the central bank ought to be. “We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” undermining both of the Fed’s mandates of 2% inflation and maximum employment, Powell told a business journalists’ conference in Arlington, Virginia, remarks that pointed to difficult decisions ahead for the U.S. central bank and did nothing to staunch a global bloodletting in stock markets.