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    China plans to restrict exports of a critical metal. But the market isn’t that worried

    China will start limiting exports of critical metal tungsten this weekend, just as alternatives to Chinese suppliers of the metal are reopening.
    Tungsten is an extremely hard metal used in weapons and semiconductors.
    The U.S. has not commercially mined tungsten since 2015, according to official records. But this year, one of the world’s largest mines for the metal is moving close to resuming production in South Korea.

    Workers transporting soil containing rare earth elements for export at a port in Lianyungang, Jiangsu province, China, Oct. 31, 2010.
    Stringer | Reuters

    BEIJING — China will start limiting exports of critical metal tungsten this weekend, just as alternatives to Chinese suppliers of the metal are reopening.
    It’s a reversal of past decades, during which, according to analysts, Chinese businesses poured cheap tungsten into the global market to put competitors out of business — eventually controlling 80% of the supply chain, according to Argus. Tungsten is an extremely hard metal used in weapons and semiconductors.

    As part of new rules limiting exports of “dual use” goods — which can be used for military or civilian purposes — China’s Ministry of Commerce earlier this month released a list indicating that businesses wanting to export a range of tungsten and critical mineral products would need to apply for licenses. The latest measures will take effect Dec. 1.
    The move comes as escalating U.S.-China tensions boost demand for non-China tungsten. The U.S. Defense Department has banned its contractors from buying China-mined tungsten starting Jan. 1, 2027.
    “It’s a bit late for the Chinese on tungsten,” said Christopher Ecclestone, principal and mining strategist at Hallgarten & Company.
    “Everybody needs more tungsten. That’s the message out there right now,” he said. “The thing that’ll prompt more tungsten is not a Chinese ban. It’s a Chinese ban causing [it to become more] profitable to mine tungsten.”

    Ecclestone pointed out that tungsten prices have not reacted much to China’s announcement. For mining the metal to be significantly profitable, he estimates prices would need to trade $50 higher than their current price of around $335 — measured by the industry in per metric ton units of ammonium para tungstate, in which one metric ton unit is 10 kilograms.

    Higher prices in the U.S. alone could encourage more tungsten production.
    While China restricts tungsten exports, the U.S. increased tariffs on Chinese tungsten by 25% in September. The majority of public comments on the U.S. tungsten tariffs supported the duties, noting benefits for domestic manufacturing. Some even requested the duties rise to 50%.
    It may take years to open a mine, but more tariffs, expected under a Trump administration, could make it “more commercially viable” for some U.S. mining projects to reopen, said Cullen S. Hendrix, senior fellow at the Peterson Institute for International Economics.

    ‘Friendshoring’ tungsten

    The U.S. has not commercially mined tungsten since 2015, according to official records. But this year, one of the world’s largest mines for the metal is moving close to resuming production in South Korea.
    Canada-based Almonty Industries said last week it came one step closer to fully reopening the Sangdong mine and processing plant with the installation of grinding equipment. The mine, more than 10 hours east of Seoul by bus, closed in 1994.
    Almonty aims to restore Sangdong to around 50% of its potential output by summer 2025, CEO Lewis Black told CNBC last month, after a ceremony that highlighted cooperation with the local government.
    He noted that 90% of South Korea’s tungsten comes from China, and that Chinese companies might invest in other businesses to maintain their market share indirectly.
    Jeong Kwang-yeol, the vice governor for economic affairs in Gangwon where Sangdong is located, said the region is willing to offer foreign investors incentives as he hopes the mine can become an anchor for other industrial companies to expand in the region. He cited estimates that the first phase of the mine would create 250 jobs and 1,500 indirect positions.
    Almonty currently operates a tungsten mine in Portugal. In 2015, the company completed an acquisition that gave it the mining rights to Sangdong, and in 2021 it obtained $75.1 million for project financing from German state bank KfW IPEX-Bank. Almonty said overall investment in Sangdong so far has exceeded $130 million.
    “In the medium-term, the U.S. will need to rely on friendshoring” for tungsten, said Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies. She noted that Almonty has committed 45% of the South Korea Sangdong mine to the U.S. through a long-term supply contract.
    Several members of the U.S. Geological Survey, a government agency which analyzes the availability of natural resources, visited Sangdong earlier this year to assess its capacity. China was the largest source of U.S. tungsten imports in June at 45%, according to the agency.
    Demand for tungsten in and outside China is expected to rise, keeping tungsten prices elevated in the near term, said Emre Uzun, ferro-alloys and steel analyst at Fastmarkets. But starting late next year, he expects increased non-China supply to help stabilize raw tungsten prices.
    “Outside China, demand will also rise, but supply is expected to grow when operations expand and projects progress,” he said, pointing to the Sangdong mine and tungsten projects in Kazakhstan, Australia and Spain.

    U.S. tungsten deposits

    Despite the lack of tungsten production in the United States, the U.S. Geological Survey has identified around 100 sites in 12 U.S. states with significant amounts of the metal: Alaska, Arizona, California, Colorado, Idaho, Montana, North Carolina, New Mexico, Nevada, Texas, Utah and Washington.
    In Idaho, roughly 4 hours away from Boise, a small Canadian company called Demesne Resources plans in coming days to close an eight-year deal worth $5.8 million to acquire the IMA tungsten mine, CEO Murray Nye said on Tuesday. He expects the mine could begin production by spring.
    Nye said decades of historical records indicate the mine has significant quantities of tungsten, silver and molybdenum, a metal often used to strengthen others. That, he said, has the makings of what he expects to be a “nice, profitable mine.” More

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    The great-man theory of Wall Street

    At this time of year, as they await their Christmas bonuses, people on Wall Street ponder their worth. Two questions can sharpen the mind of even the most senior employee. Imagine first accepting a position in Donald Trump’s new administration. How great a financial loss would your employer suffer? Before Mr Trump picked Scott Bessent as his treasury secretary, two of America’s biggest financial institutions weighed that question. Analysts quizzed Jamie Dimon, the boss of JPMorgan Chase, about whether he would leave the bank for public office. Shareholders of Apollo worried about a future without Marc Rowan, who has transformed the investment firm in recent years. More

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    Hong Kong’s property slump may be terminal

    Luxury homes high on the Peak, a verdant mountain towering over Hong Kong, have long been above the cares and concerns of the rest of the city: residents look down from sprawling mansions onto the dense knot of tower blocks in which most people live. But recent property woes have brought even the loftiest areas down to Earth. The family of one indebted property investor sold eight swanky Peak properties between July and October for around half the price they might have fetched a couple of years ago. More

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    Why everyone wants to lend to weak companies

    Credit investors often talk in euphemisms. The safest bonds, with the highest credit ratings and hence the lowest yields, are almost always referred to as “high-grade” rather than “low-yield”. Conversely, the riskier stuff, where defaults are more likely, is politely dubbed “high-yield” rather than “low-grade”. Recently, though, the yield on supposedly high-yield bonds has not been all that high. More

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    American veterans now receive absurdly generous benefits

    Donald Trump delights in projecting strength, meaning he loves America’s armed forces. During his first term, the president-elect signed legislation to spend more on defence, before proclaiming that he had “accomplished the military”. On the campaign trail, he doubled down, vowing further increases in defence spending and promising to tackle a recruitment shortfall. Yet he also wants to cut government waste, and has hired Elon Musk to lead a Department of Government Efficiency (DOGE). More

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    Why Black Friday sales grow more annoying every year

    When is black Friday? The obvious answer is a literal one. It is the day after Thanksgiving, an American holiday when families gather to gorge on turkey and pumpkin pie, which this year falls on November 29th. Yet Black Friday is not simply a date, it is also an idea. The day traditionally marked the beginning of the festive shopping season, when people would start to stock up on Christmas presents. Today, it is the time of year during which everything goes on sale. And pinpointing when this begins is a much more difficult endeavour. In a bid to find an answer your columnist searched her inbox for the earliest Black Friday discount offered by a retailer. The missive came in early October. More

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    Why exchange-traded funds are a ‘growth engine’ of active management

    ETF Strategist

    ETF Street
    ETF Strategist

    Investors have added money to actively managed exchange-traded funds in recent years, while pulling money from active mutual funds.
    That’s largely because of ETF cost advantages, including lower investment fees and greater tax efficiencies, experts said.

    Images By Tang Ming Tung | Digitalvision | Getty Images

    Actively managed exchange-traded funds are a growing trend in the investment space.
    To that point, investors have pulled money from active mutual funds and sought out actively managed ETFs in recent years. Investors yanked about $2.2 trillion from active mutual funds from 2019 through October 2024, according to Morningstar data. At the same time, they added about $603 billion to active ETFs.

    Active ETFs had positive annual inflows from 2019 through 2023 and are on pace for positive inflows in 2024, according to Morningstar. Meanwhile, active mutual funds lost money in all but one year (2021); they shed $344 billion in the first 10 months of 2024.

    “We see [active ETFs] as the growth engine of active management,” said Bryan Armour, director of passive strategies research for North America at Morningstar. While acknowledg
    “It’s still in the early innings,” he said. “But it’s been a bright spot in an otherwise cloudy market.”
    At a high level, mutual funds and ETFs are similar.
    They are legal structures that hold investor assets. But investors have gravitated toward ETFs in recent years due to cost benefits they generally enjoy relative to mutual funds, experts said.

    Why fees matter

    Fund managers who use active management are actively selecting stocks, bonds or other securities that they expect to outperform a market benchmark.
    This active management generally costs more than passive investing.
    Passive investing, used in index funds, doesn’t require as much hands-on work from money managers, who basically replicate the returns of a market benchmark like the S&P 500 U.S. stock index. Their fees are generally lower as a result.
    Active mutual funds and ETFs had an average asset-weighted expense ratio of 0.59% in 2023, versus 0.11% for index funds, according to Morningstar data.

    More from ETF Strategist:

    Here’s a look at other stories offering insight on ETFs for investors.

    Data shows that active managers tend to perform worse over the long term than their peer index funds, after accounting for fees.
    About 85% of large-cap active mutual funds underperformed the S&P 500 over the past 10 years, for example, according to data from S&P Global.
    As a result, passive funds have attracted more annual investor money than active funds for the past nine years, according to Morningstar.
    “It’s been a rough couple decades for actively managed mutual funds,” said Jared Woodard, an investment and ETF strategist at Bank of America Securities.

    But, for investors who prefer active management — especially in more niche corners of the investment market — active ETFs often have a cost advantage versus active mutual funds, experts said.
    That’s mostly by virtue of lower fees and tax efficiency, experts said.
    ETFs generally carry lower fund fees than mutual fund counterparts, and generate annual tax bills for investors with much less frequency, Armour said.
    In 2023, 4% of ETFs distributed capital gains to investors versus 65% of mutual funds, he said.

    Such cost advantages have helped lift ETFs overall. ETF market share relative to mutual fund assets has more than doubled over the past decade.
    That said, active ETFs represent just 8% of overall ETF assets and 35% of annual ETF inflows, Armour said.
    “They are a tiny portion of active net assets but growing rapidly at a time when active mutual funds have seen pretty significant outflows,” he said. “So, it is a big story.”

    Converting mutual funds to ETFs

    In fact, many money managers have converted their active mutual funds into ETFs, following a 2019 rule from the Securities and Exchange Commission that allowed for such activity, experts said.
    So far, 121 active mutual funds have become active ETFs, according to a Nov. 18 Bank of America Securities research note.
    Such conversions “can stem the tide of outflows and attract new capital,” according to the Bank of America note. “Two years before converting, the average fund saw $150 [million] in outflows. After converting, the average fund gained $500 [million] of inflows.”
    That said, there are caveats for investors.
    For one, investors who want an active ETF are unlikely to have access to one within their workplace retirement plan, Armour said.
    ETFs, unlike mutual funds, are unable to close to new investors, Armour said.
    This may put investors at a disadvantage in ETFs with certain “super niche, concentrated” investment strategies, because money managers may not be able to execute the strategy as well as the ETF gets more investors, he said. More

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    Donald Trump selects Kevin Hassett to lead National Economic Council

    President-elect Donald Trump picked Kevin Hassett to lead the National Economic Council.
    The move brings Trump closer to rounding out his economic team, with U.S. trade representative being the last of the key positions left.
    Trump made the announcement in a post on Truth Social.

    White House Council of Economic Advisers Chairman Kevin Hassett addresses reporters during the daily briefing at the White House in Washington, U.S. February 22, 2018.
    Jonathan Ernst | Reuters

    President-elect Donald Trump picked Kevin Hassett to lead the National Economic Council, a role that puts him at the center of the administration’s policy-making discussions from trade to taxes and deregulation.
    The move brings Trump closer to rounding out his economic team, with U.S. trade representative being the last of the key positions left.Trump made the announcement in a post on Truth Social.Trump also tapped attorney Jamieson Greer on Tuesday to serve as the U.S. Trade Representative.

    During Trump’s first administration, Hassett served as the chairman of the Council of Economic Advisers for two years, supporting the Republican’s corporate tax cuts and defending Trump’s punitive tariffs.
    The 62-year-old Hassett also worked with Trump’s son-in-law Jared Kushner on immigration and backed a move to end waivers of sanctions for countries that buy Iranian oil.
    The appointment came as Trump renewed his vow to raise tariffs by an additional 10% on all Chinese goods coming into the U.S. and impose tariffs of 25% on all products from Mexico and Canada. Such a move would end a regional free trade agreement.
    Trump is set to be inaugurated as the next U.S. president on Jan. 20. He cited illegal immigration and illicit drug trade as reasons for the tariffs.
    Hassett previously served as a scholar of fiscal policy at the conservative American Enterprise Institute think tank before Trump nominated him to the White House role in 2017.
    Late last week, Trump signaled his intention to nominate Scott Bessent, founder of hedge fund Key Square Group and a seasoned market pro, as his Treasury secretary. More