Aurelia Butler

(Reuters) -General Motors Co and South Korea’s POSCO (NYSE:PKX) Chemical will build a $400 million facility to produce battery materials in Canada as the carmaker ramps up plans to produce mainly electric vehicles (EVs) in the future, the companies said on Monday.The plant will produce cathode active material (CAM) for vehicle batteries in Becancour, Quebec. Cathodes are the most complex and costly chemical component of an electric vehicle battery. The cathode “represents about 40% of the cost of every EV battery cell,” said Scott Bell, GM Canada’s President and Managing Director, in a news conference. “We plan to have capacity by 2025 to build a million EVs in North America.” The plant’s construction will begin immediately and the goal is to have it running by 2025. Once completed, it will create an estimated 200 jobs, according to a statement. GM aims to produce light vehicles that run exclusively on electricity by 2035.The CAM produced at the plant will be used to make GM’s Ultium batteries that will power the company’s EVs, such as the Chevrolet Silverado EV, GMC HUMMER EV and Cadillac LYRIQ. GM’s Ingersoll, Ontario, factory will launch EV production later this year, Bell said. Both Canada’s federal government and Quebec’s provincial government are working with GM and POSCO Chemical, the companies said, though details were not released.Rich in key materials for EV battery production – including lithium, graphite, cobalt and nickel – Canada has been wooing battery makers to safeguard the future of its car manufacturing industry as the world seeks to cut emissions.It is the second CAM plant announcement for Becancour in less than a week. On Friday, BASF SE (OTC:BASFY) said it was planning one there, too. Canada’s Industry Minister Francois-Philippe Champagne said that Becancour will become a hub for the country’s EV battery “ecosystem”. More “good news” is on the way, Champagne said, adding that there were “very live discussions” under way about building a battery factory in Canada.”Starting from this announcement, we will be integrated in the global supply chain for cars in North America,” Champagne said. More

(Reuters) -Oil-and-gas leaders advocated at an industry conference on Monday for a combination of more fossil fuel production and renewable energy sources to reduce reliance on places like Russia as oil prices soared following that nation’s invasion of Ukraine.The CERAWeek energy conference opened in Houston on a day when global crude prices reached levels not seen since the 2008 financial crisis. Buyers are shunning Russian exports of crude and fuel, creating what could be the biggest disruption in global energy supply in decades. Russia exports 4 to 5 million barrels of crude and 2 to 3 million barrels of products daily. [O/R] “This is about how we survive this crisis. There is no capacity in the world in the moment that can replace 7 million barrels of exports,” said OPEC Secretary General Mohammad Barkindo.The CERAWeek conference was originally expected to focus on energy transition technologies and a greater role for renewables. Instead, many participants have focused on energy security and reliability, as many countries, particularly Europe, rely heavily on Russia for fuel.The Portuguese government was discussing “how we can accelerate renewables in Portugal,” said Andy Brown, CEO of Portuguese energy company Galp. “Even before the Russia situation emerged, the market was distressed. Take Russia (energy) out of the equation, then it becomes a crisis.” At a news conference, Barkindo reiterated the need for further investment in oil-and-gas. He and others said lack of investment in previous years had in part led to the market’s tightness. Global benchmark Brent crude briefly surpassed $139 on Monday – not far from its all-time high of $147.50. It closed Monday above $123.”What is happening today in Europe is a big wake-up call to a lot of policymakers if they are serious about security of supply, affordability and of course climate change compatibility,” TotalEnergies CEO Patrick Pouyanne told the CERAWeek conference in Houston.TotalEnergies is one of the few oil majors that has not divested from Russia, though Pouyanne said the company is not investing additional capital in the country. Several speakers addressed Russia’s invasion, beginning with U.S. climate envoy John Kerry, who called Russia’s actions “abhorrent.””This is a defining moment for this century,” Kerry said. He said people must now live with higher energy costs for a time, and that the Biden Administration supports an all-of-the-above energy policy that includes natural gas and nuclear power.Advocates of renewables say the invasion makes the transition to cleaner fuels more desirable, and that additional fossil-fuel investment now will only increase the world’s dependence on oil and gas at a time when the climate continues to warm.Analysts believe high prices could persist for months, as the United States and the European Union are considering an outright ban on buying energy from Russia. Sources said Washington was considering going ahead alone, a step the White House had previously resisted. European countries account for roughly half of Russia’s crude exports, according to the U.S. Energy Information Administration.”We have to talk about diversification, we need more renewable energy in the basket…to have less energy dependence in Europe,” said Josu Jon Imaz, chief executive of Spain’s Repsol (OTC:REPYY).Saudi Arabia, leader of the Organization of the Petroleum Exporting Countries, and Russia are part of a group known as OPEC+ that has been boosting supply by 400,000 bpd every month to restore pandemic-related output cuts dating back to 2020. The United States and others have called for still greater increases from OPEC+, but producers are consistently falling short of targeted increases. On Monday, OPEC+ sources said the oil market’s fundamentals remained sound, downplaying the prospect of any further extra supply.After cutting spending and production during the depths of the COVID-19 pandemic, the industry has been in no shape to match the growth in consumption: The United States is still producing more than a million barrels below its 2019 peak of 13 million bpd. More

By Gertrude Chavez-DreyfussNEW YORK (Reuters) -Real yields in the U.S. Treasury market have gone even more negative as inflation surged, which is typically viewed as a positive factor for stocks, but Russia’s invasion of Ukraine has placed more emphasis on shedding risk than on the possibility of getting higher returns on Wall Street.The decline in benchmark U.S. real yields, which have been mainly below zero since 2019, suggested that investors are piling into TIPS because of concerns about high inflation. Indeed, the war has propelled global benchmark Brent crude futures to a roughly 14-year high of just under $140 per barrel.U.S. stocks, even with a strong earnings outlook and backed by a robust economy, may not be the best asset to hold during this geopolitical crisis, analysts said, though there was some divide in views.”If all else equal and you sat there and saw that one of the largest countries in the world is attacking a country one-third its size and it has aspirations to reconstitute the old Russian empire, is that really a good backdrop for stocks?” said David Petrosinelli, managing director and senior trader at broker-dealer InspereX in New York. Russian President Vladimir Putin, brushing aside worldwide condemnation of the invasion, which Russia calls a “special operation” vowed to press ahead with his offensive, which he said was going to plan, unless Kyiv surrendered.Since Russia launched the invasion on Feb. 24, the yield on U.S. 10-year Treasury Inflation Protected Securities (TIPS), also called the real yield because it strips out inflation, has fallen about 45 basis points.The 10-year TIPS yield has collapsed by roughly 64 basis points, since the release on Feb. 10 of U.S. consumer price data showing the annual U.S. inflation for January hitting a 40-year high. On Monday, the 10-year real yield dropped to a two-month low of -1.027%. Real yields are an important input to broader financial conditions, and when they are low, that typically underpins U.S. equities.”Equities like many financial assets are evaluated on the present value of their expected future cash flows,” said Tim Wessel, macro strategist, at Deutsche Bank (DE:DBKGn) in New York.”When real yields are falling, that means the expected value of a stock’s future cash flow is going to be higher. If you look at the sector breakdown of equities, if you look at the S&P 500 and compare its returns to big tech stocks or FANG stocks, they outperform the S&P on days when real yields fall,” he added, referring to the growth-stock grouping of Facebook (NASDAQ:FB), now known as Meta, Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Google-parent Alphabet (NASDAQ:GOOGL).After a sharp fall to start the year accelerated with Russia-Ukraine tensions, the benchmark S&P 500 has bounced back about 4% from its Feb 24 intraday low. But Wall Street’s fear index, the VIX, has climbed and the market sold off late last week and opened down on Monday.The S&P 500 technology index did slip slightly last week, mainly due to selling on Thursday and Friday. Since its intra-day trough on Feb. 24, that index has actually gained 4.2%.Analysts said aside from the tumble in real yields, U.S. stocks have benefited from the view that the latest geopolitical turmoil means the Federal Reserve would take a gradual approach to tightening monetary policy, starting next week.Fed Chair Jerome Powell said last week he would back an initial quarter percentage-point increase in the Fed’s benchmark rate at the March 15-16 meeting, but held out the prospect of hiking more aggressively this year if inflation does not ease.”This uncertainty is going to cause the Fed to move more slowly, to tighten more slowly and as a result fall behind the curve on inflation, which is positive for risk assets and a support for them,” said Ryan Swift, bond strategist, at BCA Research in Montreal.InspereX’s Petrosinelli thinks though that the risk in equities is in the medium to long term.”The expectations component is really the wild card here,” Petrosinelli said. “We could be sitting at oil of $150 per barrel very, very easily here in the coming days and I’m not saying it’s going to happen. But that can’t be good for stocks.” More

WASHINGTON (Reuters) -With inflation at a four-decade high, a U.S. government report shows corporate America has used its clout in the labor market to keep wages 20% lower than they should be, the White House said on Monday.The report, prepared by the Treasury Department with help from the Justice Department, Labor Department and Federal Trade Commission (FTC), found companies had the upper hand in setting wages because they generally knew more about the labor market than workers do.Further, workers may not be able to move or to afford an extended job search in order to find better-paid work.”These conditions can enable firms to exert market power, and consequently offer lower wages and worse working conditions, even in labor markets that are not highly concentrated,” the report said.U.S. Treasury Secretary Janet Yellen told a White House forum highlighting the report that workers are often at a disadvantage due to required non-compete or non-disclosure agreements; collusion between employers to keep wages low; or a lack of transparency that keeps workers unaware of prevailing wage rates.”Ultimately these conditions cumulatively yield an uneven market where employers have more leverage than workers,” she said. “This is what economists mean when we refer to monopsonistic power” among buyers of labor.The White House event featured several workers who complained about unfair employment practices at prior jobs.One of the speakers was a temporary worker at Alphabet (NASDAQ:GOOGL)’s Google, Shannon Wait, who said she was let go from her $15 per hour job for complaining on social media about a broken company-issued water bottle.Google officials did not immediately respond to requests for comment. Wait eventually won a settlement with Google which allows workers to discuss working conditions, according to the Communications Workers of America.The report discusses ways that firms can hold down wages, including conspiring with other companies to avoid hiring each other’s workers and requiring employees to sign non-compete agreements that prevent them from leaving for higher wages.The report cited a paper that found one-in-five workers is currently covered by a non-compete agreement, meaning they cannot leave to work for a competitor. “A careful review of credible academic studies places the decrease in wages at roughly 20% relative to the level in a fully competitive market. In some industries and occupations, like manufacturing, estimates of wage losses are even higher,” the report said.The U.S. unemployment rate fell to a two-year low of 3.8% in February but hourly earnings were flat, partly because the return of workers to lower-paying industries offset wage increases in some sectors as companies competed for scarce workers.Antitrust enforcement efforts usually focus on prices companies charge for goods and services. Antitrust enforcers have brought labor antitrust cases in the past, and the Trump Administration’s Justice Department brought one against a no-poach agreement between rail equipment suppliers in 2018, but they remain rare. More