WEBVTT - Bloomberg Surveillance TV: April 14th, 2026 0:00:00.040 --> 0:00:06.720 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.640 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.680 with Lisa Bromwitz and Amrie Hordernt. Join us each day 0:00:18.720 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.400 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.920 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.280 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.919 anywhere else you listen, and as always on the Bloomberg 0:00:34.000 --> 0:00:37.280 Terminal and the Bloomberg Business app. So here's the latest 0:00:37.280 --> 0:00:39.640 this morning. The US of Iran wearing a fresh round 0:00:39.680 --> 0:00:42.479 of talks before the ceasefire ends next week, joining us 0:00:42.479 --> 0:00:44.760 now as Rachel's ZEMBA of the Center for a New 0:00:45.000 --> 0:00:48.240 American Security. Rachel, Welcome to the program. Anne, Marie and 0:00:48.320 --> 0:00:50.760 Victoria coaches. We're talking about this in the previous hour. 0:00:51.000 --> 0:00:54.120 The American strategy has changed. They've gone from lifting some 0:00:54.280 --> 0:00:59.800 sanctions on some Iranian crude to ultimately blockading all Iranian crude. 0:01:00.000 --> 0:01:01.560 What do you expect to be the outcome of this 0:01:01.640 --> 0:01:02.600 shift in strategy? 0:01:04.160 --> 0:01:06.920 Yeah, well, the US government. Thanks for having me, John. 0:01:07.640 --> 0:01:12.000 The US government is really hoping that this blockade will 0:01:12.000 --> 0:01:14.600 bring Iran to the not only back to the table, 0:01:14.680 --> 0:01:18.440 but make more concessions. I would note that the Iranian 0:01:18.520 --> 0:01:23.000 response to the US twenty year moratorium has been to 0:01:23.040 --> 0:01:26.240 come back with another five year one, which I think 0:01:26.440 --> 0:01:29.119 is similar to what they were offering back in February 0:01:29.160 --> 0:01:33.120 before this war. So we'll see how much movement we've seen. 0:01:33.480 --> 0:01:38.360 But ultimately, what this means is that oil flows, is 0:01:38.680 --> 0:01:43.200 that the oil flows from Iran, if this blockade is effective, 0:01:44.040 --> 0:01:48.360 could could fall. That could be two million barrels a 0:01:48.440 --> 0:01:53.240 day further offline that was going to China, you know, 0:01:53.320 --> 0:01:57.240 putting you know, taking you know, outages from the Gulf 0:01:57.920 --> 0:02:01.920 from ten to eleven million barrels a day to maybe 0:02:02.280 --> 0:02:06.240 thirteen or so. So it would just increase the outage 0:02:06.280 --> 0:02:09.240 that we're seeing here. But the US government is hoping 0:02:09.320 --> 0:02:14.880 that we get to a resolution. But right now we're 0:02:14.960 --> 0:02:18.800 sort of we're seeing a few sanctioned vessels making their 0:02:18.800 --> 0:02:22.040 way through the strait. Will they be stopped by US 0:02:22.040 --> 0:02:24.920 military when they get further out into the Gulf of Oman, 0:02:25.400 --> 0:02:27.000 We'll see. I think that will be one of the 0:02:27.040 --> 0:02:29.200 stories for today in the next few days. 0:02:29.360 --> 0:02:32.720 Rachel speaking of that blockade. If the United States does 0:02:33.040 --> 0:02:35.840 take over a tanker, is it clear to where exactly 0:02:35.880 --> 0:02:36.560 they would bring it. 0:02:38.280 --> 0:02:44.000 No, it's not. You know, we were in in charted territory. 0:02:44.080 --> 0:02:47.400 There was a point earlier this year, before the war 0:02:48.160 --> 0:02:50.240 where the US was I mean I called it at 0:02:50.240 --> 0:02:53.480 the time, they were using you know, kinetic force to 0:02:53.520 --> 0:02:57.720 implement financial sanctions. They did it with Venezuela a little 0:02:57.720 --> 0:03:01.440 bit with the tankers going to Cuba, couple Iranian tankers, 0:03:01.680 --> 0:03:03.840 but a lot of them just sort of spent time 0:03:03.960 --> 0:03:07.640 out at sea. Some of the Venezuelan ones eventually came 0:03:07.680 --> 0:03:11.280 to the United States or went to Caribbean ports. It's 0:03:11.400 --> 0:03:16.480 possible some of these could go to Aman, could go 0:03:16.560 --> 0:03:20.440 somewhere else and get processed, could go to friendly countries 0:03:20.480 --> 0:03:24.560 in Asia. But it's not clear to me that Scentcom 0:03:24.639 --> 0:03:28.840 has been charged to stop these vessels. It's not clear 0:03:28.880 --> 0:03:31.160 that they have a guidance about what to do with 0:03:31.200 --> 0:03:34.280 them after the fact. This is really a point of 0:03:34.440 --> 0:03:38.040 leverage that the US government is trying to impose on 0:03:38.080 --> 0:03:41.880 both Iran and China. Right China has been the buyer 0:03:42.560 --> 0:03:45.400 of first and last resort for Iran. It's also been 0:03:45.440 --> 0:03:49.320 the primary buyer of the Russia sanctions. And I know 0:03:49.440 --> 0:03:52.360 it as well that the US government let you I'm 0:03:52.360 --> 0:03:55.640 sure I've talked about this, but have let the Russia 0:03:55.680 --> 0:04:02.040 sanctions lapse within the last couple of days, largely because 0:04:02.960 --> 0:04:05.680 China was the one who was still buying most of 0:04:05.680 --> 0:04:07.000 that oil. 0:04:06.880 --> 0:04:10.440 In order for the Iranians maybe capitulate for the United States. 0:04:10.520 --> 0:04:12.720 Does the blockade need to go on for longer? Because 0:04:12.760 --> 0:04:15.440 before the blockade, and we were just discussing the sanction 0:04:15.560 --> 0:04:18.479 lift on Iranian crewed at sea, the regime brought in 0:04:18.800 --> 0:04:21.760 hundreds of millions of dollars because they were allowed to 0:04:21.920 --> 0:04:26.240 now export without the sanctions, so out of much higher premium. 0:04:27.880 --> 0:04:31.640 You're spot on, Anne, Marie. Iran has been earning more 0:04:31.960 --> 0:04:35.040 in the last couple of months. They got more vessels 0:04:35.440 --> 0:04:39.200 out ahead of the war compared to what they were 0:04:39.240 --> 0:04:43.200 normally doing. It's pretty volatile oil flows out of Iran, 0:04:43.279 --> 0:04:46.960 I must admit, and they've been able to sell at 0:04:47.040 --> 0:04:51.960 much higher prices now. The sanctions relief that well hasn't 0:04:52.040 --> 0:04:55.840 yet expired, but has been converted into this military blockade, 0:04:56.400 --> 0:04:59.080 did not lift any of the sanctions on what Iran 0:04:59.120 --> 0:05:02.880 could buy, how they could spend there their resources. That's 0:05:03.080 --> 0:05:04.839 one of the reasons they want to be paid in 0:05:04.880 --> 0:05:08.440 crypto or Redmond b or assets that don't touch the 0:05:08.800 --> 0:05:14.360 US treasury. But undeniably, you know, Iran's military led government 0:05:15.040 --> 0:05:19.040 has been able to support itself, and you know it's 0:05:19.080 --> 0:05:22.320 sitting on more cash now even as more cash is 0:05:22.360 --> 0:05:24.719 locked up. Now, that's not going to be enough for 0:05:24.839 --> 0:05:28.400 rebuilding Iran, but it could be enough for the regime 0:05:28.480 --> 0:05:31.600 to remain in place. And so I think that's where 0:05:31.839 --> 0:05:34.400 the US government's view that this could be just a 0:05:34.440 --> 0:05:37.760 couple more weeks of pain. The timelines might not line 0:05:37.800 --> 0:05:38.760 up in my view. 0:05:38.960 --> 0:05:42.400 Stay with us. More Bloomberg surveillance coming up after this, 0:05:51.760 --> 0:05:54.160 we understand this morning. According to headlines, the fronts of 0:05:54.200 --> 0:05:56.320 the UK is co hosting a summit this weekend to 0:05:56.320 --> 0:05:59.599 discuss safeguarding international shipping. I'm very pleased to say we 0:05:59.600 --> 0:06:01.920 can have that conversation right now around this table because 0:06:01.960 --> 0:06:04.360 joining us is roll on the skill. The French Minister 0:06:04.440 --> 0:06:06.840 for the Economy and Finance Minister, good morning, it's good 0:06:06.839 --> 0:06:08.919 to see you. Good morning, Thank you for having welcome 0:06:08.960 --> 0:06:11.400 to New York City. Let's talk about the objectives for 0:06:11.480 --> 0:06:14.360 this meeting. What can we hope for over the next week. 0:06:15.360 --> 0:06:17.719 Well, we can hope for the escalation. I mean, you 0:06:17.920 --> 0:06:20.440 know that France wasn't part of the conflict, as we're 0:06:20.440 --> 0:06:22.400 not a belligerent, we're not even warned that it was 0:06:22.440 --> 0:06:24.680 going to happen. But now we are where we are 0:06:25.120 --> 0:06:27.960 and we feel with others, the UK and others, we 0:06:28.000 --> 0:06:31.600 can be part of the solution. We need the escalation first, 0:06:31.640 --> 0:06:34.279 we need those talks that are happening and which hopefully 0:06:34.279 --> 0:06:36.240 we'll keep on happening between a Run and the US 0:06:36.320 --> 0:06:40.160 to move towards some kind of solution. But if we 0:06:40.160 --> 0:06:43.200 do have the escalation, we feel that a coalition of 0:06:43.240 --> 0:06:45.920 the winning countries from all over the place that have 0:06:46.320 --> 0:06:49.360 a part in the problem, because as you know, this 0:06:50.080 --> 0:06:52.919 straight over most story is affecting a soul economically in 0:06:52.960 --> 0:06:56.040 Asia dramatically and in Europe as well, that we can 0:06:56.240 --> 0:07:01.760 help pacify the strait. That straight is the notot of 0:07:01.800 --> 0:07:04.640 the economic impact of that conflict. If we can undo 0:07:04.720 --> 0:07:06.680 that not we know that we don't be in a 0:07:06.720 --> 0:07:10.920 better place. So whatever we can do once that's the 0:07:11.000 --> 0:07:14.960 escalation that's important to help make the straight up our 0:07:15.000 --> 0:07:17.480 moves more freed. We will do and that's what's happening 0:07:17.520 --> 0:07:17.880 on Friday. 0:07:18.000 --> 0:07:21.040 Does that actually mean in reality whatever we can do, 0:07:21.040 --> 0:07:23.280 does that mean you'd have a military presence in the 0:07:23.280 --> 0:07:23.640 straight up? 0:07:23.640 --> 0:07:23.920 Foremost? 0:07:23.960 --> 0:07:24.680 What does that actually mean? 0:07:25.280 --> 0:07:27.360 What's happening in the Red Sea? And it has happened 0:07:27.360 --> 0:07:29.320 for a while. You know, there was hooties there that 0:07:29.400 --> 0:07:33.920 were making passage dangerous for ships, and we have, we 0:07:34.000 --> 0:07:37.600 had and we still have coalition of partners that are 0:07:37.680 --> 0:07:42.960 just making it safe, just preventing deterring attacks from the hooties. 0:07:43.040 --> 0:07:45.640 And you know we are in there. There's Spanish in there, 0:07:45.680 --> 0:07:48.640 and there's a few countries in there. Obviously the straight 0:07:48.720 --> 0:07:51.880 up our moose would be probably a bigger deal to do, 0:07:52.120 --> 0:07:55.080 but we can do it provided again that we have 0:07:55.120 --> 0:07:58.680 the escalation, we have some path to lasting seas fire 0:07:59.240 --> 0:08:03.320 that will require I mador headway on nuclear on ballistic 0:08:03.360 --> 0:08:06.640 capabilities of Iran that have to be gone. But once 0:08:06.680 --> 0:08:10.720 we have that, there's a case for non beligerent country 0:08:10.760 --> 0:08:12.960 to be part of the solution to pacify the stretch, 0:08:12.960 --> 0:08:15.120 which again is the not of the economic impact. 0:08:15.160 --> 0:08:17.320 We have to talk about consequences as well. I'm not 0:08:17.320 --> 0:08:21.040 sure how well understood the energy mixed story is in France. 0:08:21.080 --> 0:08:23.000 At the European level, it's been a bit of a 0:08:23.040 --> 0:08:25.840 mess in places like Germany, particularly the UK that's been 0:08:25.880 --> 0:08:28.880 highlighted so many times. Could you briefly describe the energy 0:08:28.920 --> 0:08:31.920 mix in France, how different it is and how insulated 0:08:32.080 --> 0:08:32.480 you might be. 0:08:32.880 --> 0:08:35.440 You know, I remember Ram Manuel when Barack Obama came 0:08:35.480 --> 0:08:37.520 into office, that said you should never let a good 0:08:37.559 --> 0:08:40.680 economic crisis go to waste. Well, this is what Frans 0:08:40.720 --> 0:08:43.280 did in the seventies when we had an old shot. 0:08:43.320 --> 0:08:46.880 Then France decided to embark on a major nuclear program 0:08:47.200 --> 0:08:50.280 that allowed us to go down from ninety percent hydro 0:08:50.360 --> 0:08:55.000 camber you know, energy mix to sixty, so forty percent 0:08:55.000 --> 0:08:57.880 of our energy now it's coming from nuclear, it's carbon free, 0:08:57.920 --> 0:09:01.600 it's cheap, and it's completely sovereign. It doesn't depend on 0:09:01.600 --> 0:09:05.240 anyone else. And because we don't want these economic crisis 0:09:05.280 --> 0:09:07.720 good to ways, we've just announced that we're doubling down. 0:09:07.800 --> 0:09:10.680 So we're going to bring that energy mix from ninety 0:09:10.720 --> 0:09:14.440 to sixty to thirty five by investing again in nuclear 0:09:14.760 --> 0:09:18.000 as well as hydro as well as renewables. At the 0:09:18.120 --> 0:09:20.440 end of the day, we have a convengen star of 0:09:20.600 --> 0:09:25.559 three major driving forces that we haven't interested in investing 0:09:25.880 --> 0:09:28.720 geopolitical issues. We have to be sovereign, We have to 0:09:28.720 --> 0:09:33.920 be more independent of what's happening againstwhere the environment. You know, 0:09:34.040 --> 0:09:37.040 I think climate is coming back because it's been on 0:09:37.080 --> 0:09:39.520 a bit of a back burner for a while, but 0:09:39.640 --> 0:09:42.240 because we see we're depending way too much of one 0:09:42.280 --> 0:09:44.760 region of the Gulf and of hydro camebra, it's coming back. 0:09:45.080 --> 0:09:48.000 But also jobs. By doing this, we're going to create 0:09:48.240 --> 0:09:51.520 hundreds of thousands of jobs because building a little barre station, 0:09:52.240 --> 0:09:55.360 you know, building wind farms and solo farms are helpful 0:09:55.520 --> 0:09:56.559 for the jobs on the ground. 0:09:56.840 --> 0:10:00.160 This is all expensive and it takes money to time 0:10:00.360 --> 0:10:03.199 where the amount of debt globally has reached record highs 0:10:03.240 --> 0:10:06.400 has surged dramatically since the pandemic. How much fiscal headroom 0:10:06.440 --> 0:10:07.880 do you have, Well. 0:10:07.679 --> 0:10:10.160 It's all going to be about priorities. You know, we 0:10:10.200 --> 0:10:13.120 can't have it all. And today we have one priority, 0:10:13.160 --> 0:10:17.440 which is seigny, which has two pinness, defense sovereignty. We 0:10:17.520 --> 0:10:21.360 will have doubled defense spending in France between twenty seventeen 0:10:21.559 --> 0:10:24.079 and twenty twenty seven. By the time we get there 0:10:24.160 --> 0:10:27.240 next year, an energy seventy so that means we have 0:10:27.280 --> 0:10:29.120 to save and swhere. You know, we have to save 0:10:29.160 --> 0:10:31.680 on our spending. We have to seven and retirement spending, 0:10:32.080 --> 0:10:34.640 and you know, it's a big debate in France. We've 0:10:34.679 --> 0:10:37.600 done so, We've managed to get a budget through and 0:10:37.600 --> 0:10:42.120 I can tell you it wasn't easy with Congress that looks, 0:10:42.160 --> 0:10:44.880 you know, as I said to my Italian colleague, a 0:10:44.920 --> 0:10:48.400 bit like an Italian Congress, you know, lots of different 0:10:48.400 --> 0:10:51.040 groups having to discuss and model through. But we did 0:10:51.559 --> 0:10:53.520 and we're going to have to do it again. But 0:10:53.840 --> 0:10:56.920 most importantly, I think that's a presidential election taking place 0:10:57.000 --> 0:10:59.640 next year and the condidates are going to have to 0:10:59.679 --> 0:11:04.120 make that choice. Two they one priority on soverignty, defense 0:11:04.120 --> 0:11:07.160 and electricity and energy to make France and at the 0:11:07.280 --> 0:11:09.680 end of the day, Europe a stronger place. Do we 0:11:09.720 --> 0:11:13.280 still want to be stuck in the past of things 0:11:13.280 --> 0:11:14.480 we have to change and reform. 0:11:14.600 --> 0:11:16.520 Do you expect growth to have to go down because 0:11:16.520 --> 0:11:19.360 you're saving in these other areas to preserve the sovereignty 0:11:19.800 --> 0:11:22.480 in respect with respect to energy, with respect to defense. 0:11:22.600 --> 0:11:26.000 Well, we entered that crisis on quite strong footing. I 0:11:26.000 --> 0:11:28.720 heard Jimmy Diamond saying that the US academy is resilient. 0:11:28.800 --> 0:11:31.760 So it's the French economy. It was pretty strong getting 0:11:31.760 --> 0:11:33.760 into that crisis. So we we have a slow down 0:11:33.800 --> 0:11:37.200 in the short run, but again what we're doing is investment. 0:11:37.679 --> 0:11:40.680 At the moment, when someone wants to put a data 0:11:40.720 --> 0:11:44.800 center somewhere not in the US, they look at France 0:11:45.080 --> 0:11:50.320 because we have carbon free ample and cheap electricity and 0:11:50.360 --> 0:11:52.439 they need that. So at the end of the day, 0:11:52.480 --> 0:11:55.400 this is investment in the French economy, in the europe 0:11:55.400 --> 0:11:58.400 and economy, but it is attracting investments, including from the 0:11:58.440 --> 0:12:01.920 part of US investors. We want to diversify. We're having 0:12:02.320 --> 0:12:04.920 you know, the Magnificent Seven looking at Frants to invest. 0:12:05.160 --> 0:12:08.439 We're having US banks looking to invest, and we have 0:12:08.559 --> 0:12:10.880 French and European companies also looking to invest. 0:12:10.880 --> 0:12:11.000 THO. 0:12:11.559 --> 0:12:14.760 Again, short term resilience, but a bit of a risk. 0:12:15.160 --> 0:12:17.040 Long term, we need to invest in the future and 0:12:17.080 --> 0:12:19.319 that's the only ad. Growth is the way ad. 0:12:19.480 --> 0:12:21.560 When you look at the long term, when will France 0:12:21.679 --> 0:12:24.920 finally stop buying Russian fossil fuels, Well, you. 0:12:24.880 --> 0:12:27.680 Know we're committed to that. We already committed to stopping 0:12:27.880 --> 0:12:31.200 gas import. There's no new contracts. This has been decided 0:12:31.200 --> 0:12:34.240 that the open avount this year and any gas impot 0:12:34.280 --> 0:12:36.520 is going to be stopped by January. So we are 0:12:36.559 --> 0:12:38.480 on the past. The only thing we wanted to do 0:12:39.240 --> 0:12:44.720 is to make sure that this was done respecting international laws. 0:12:44.920 --> 0:12:47.600 We are a low binding country and EU is a 0:12:47.600 --> 0:12:50.680 low binding country, so we did it respecting some contracts 0:12:50.679 --> 0:12:53.800 that we're still in the go, respecting European decisions, the 0:12:53.880 --> 0:12:56.600 sanctions decision as well, and this is all taking place 0:12:56.840 --> 0:12:59.600 the way it should be, respecting international law. 0:13:00.160 --> 0:13:03.439 Russia doesn't a final question an important one. You've used 0:13:03.440 --> 0:13:06.800 the word perlligerans to describe others. The US might be 0:13:06.840 --> 0:13:09.000 in that group in your mind. You can confirm that 0:13:09.120 --> 0:13:11.480 if you want to. The other question, and the other 0:13:11.520 --> 0:13:14.800 answer you've offered is the word solvereign. This is important 0:13:14.840 --> 0:13:17.120 with regards to the future of a relationship with the US. 0:13:17.160 --> 0:13:20.160 Just what is the transatlantic relationship given the way the 0:13:20.200 --> 0:13:22.520 discourse has evolved over the last month. 0:13:23.600 --> 0:13:27.320 We've been friends for two hundred and fifty years, you know, 0:13:27.480 --> 0:13:31.080 and this is going to go beyond the ups and downs, 0:13:31.160 --> 0:13:35.319 and there are some of the somewhat interpersonal relationship or 0:13:35.360 --> 0:13:38.520 some somewhat disagreement on the short term way of dealing 0:13:38.520 --> 0:13:42.560 with such and such problem. What gets us together. It's 0:13:42.640 --> 0:13:45.000 much stronger than what divides us. And I can see 0:13:45.000 --> 0:13:48.000 it every day when I talk to us and French 0:13:48.040 --> 0:13:50.880 and Europen companies. We need those companies to keep on 0:13:50.960 --> 0:13:53.640 working together to give us the right example of what 0:13:53.679 --> 0:13:56.000 we need to do when we disagree. I'm going to 0:13:56.080 --> 0:13:58.240 chair a G seven meeting this week. Sometimes we don't 0:13:58.280 --> 0:14:01.240 agree on everything with our finance colleagues. We address it. 0:14:01.480 --> 0:14:04.880 We address it in close rooms. We are allies and friends, 0:14:05.040 --> 0:14:08.040 and this needs to go beyond what's going on in 0:14:08.040 --> 0:14:11.840 the ground. We have the solutions to the problem together 0:14:12.360 --> 0:14:15.720 and we need to make sure that everyone understands this. 0:14:16.520 --> 0:14:21.400 We are stronger together than divided. Despite sometimes the somewhat 0:14:21.640 --> 0:14:23.840 short term disagreement. We need to look beyond that and 0:14:23.880 --> 0:14:24.440 make sure. 0:14:24.240 --> 0:14:27.800 We do stay with us. More Bloomberg surveillance coming up 0:14:28.120 --> 0:14:40.040 after this. Let's talk about the shaken and the commodity market, 0:14:40.120 --> 0:14:42.800 and not include go snapping a two day losing stream 0:14:42.840 --> 0:14:45.680 with inflation concerns easing on, renewed optimism for a peace 0:14:45.760 --> 0:14:48.520 deal with the ram Amy G. Morgan Stanley right, The 0:14:48.560 --> 0:14:50.720 longer term effects of current events in the Middle East, 0:14:50.720 --> 0:14:53.640 the more bullish than bearish for metals if they bring 0:14:53.760 --> 0:14:56.120 more stock pilot. Amy joins us now for more Amy, 0:14:56.120 --> 0:14:58.400 good Mornich, and welcome to New York as well. Let's 0:14:58.400 --> 0:15:00.760 talk about the degree of disruption you've seen in your 0:15:00.760 --> 0:15:03.560 space over the last six weeks. How things changed. 0:15:04.000 --> 0:15:06.720 Yeah, so, look, the big change we've seen is really 0:15:06.760 --> 0:15:09.880 the aluminium market. This has been the most physically disrupted 0:15:09.920 --> 0:15:12.320 from the conflict so far. First of all, it was 0:15:12.360 --> 0:15:14.760 a question of we couldn't ship anything out. The region 0:15:14.880 --> 0:15:17.600 is about nine percent of global aluminium production. Then we 0:15:17.640 --> 0:15:20.680 started worrying about getting those raw materials into the aluminum 0:15:20.760 --> 0:15:22.960 box site, and then we actually had some strikes on 0:15:23.080 --> 0:15:26.280 facilities and on energy infrastructure, and so we've lost about 0:15:26.400 --> 0:15:29.200 four percent of global aluminium production. And bear in mind 0:15:29.240 --> 0:15:32.240 and commodities, we care about those very small imbalances. It's 0:15:32.240 --> 0:15:34.880 the price is set at the margin. So aluminium has 0:15:34.920 --> 0:15:37.280 been one of the standout performers so far. And what 0:15:37.360 --> 0:15:40.080 you typically see is when these disruptions happen, you're looking 0:15:40.120 --> 0:15:42.360 at twelve months to fix them. So that's been the 0:15:42.360 --> 0:15:44.920 big disrupted one. And then of course we've had some 0:15:45.040 --> 0:15:47.280 changes in these macro factors that have been a big 0:15:47.360 --> 0:15:49.720 driver for metals, so things like the dollar. The dollar 0:15:49.760 --> 0:15:53.440 weakness had been a big tailwind that reversed briefly. Obviously, 0:15:53.440 --> 0:15:57.080 coming back towards weakness again changes an interest rate expectation, 0:15:57.280 --> 0:15:59.160 so that has taken a bit of the wind out 0:15:59.160 --> 0:16:00.000 of the sales. 0:15:59.720 --> 0:16:01.560 For some of the others. Let's just stick on that line. 0:16:01.600 --> 0:16:04.800 Twelve months to fix, twelve months to fix the production, 0:16:05.000 --> 0:16:07.040 to get back to where we were pre war. What 0:16:07.080 --> 0:16:09.640 does it mean for the demand story over the next year. 0:16:09.680 --> 0:16:11.760 How do you we anticipate that's going to change. 0:16:12.080 --> 0:16:14.200 Yeah, look at we anticipate there'll be about a two 0:16:14.200 --> 0:16:16.800 million ton seplus in the aliminium market, which is a 0:16:16.840 --> 0:16:20.200 lot of demand to try and destroy. I think what 0:16:20.240 --> 0:16:22.680 we're seeing at the moment, similar to oil, we've got 0:16:22.680 --> 0:16:26.040 a very steep backuidation, so downward slope in the aluminium curve. 0:16:26.280 --> 0:16:29.800 What that's trying to do is disincentivize holding excess infantry 0:16:30.120 --> 0:16:32.040 end users at the moment, So we're sort of trying 0:16:32.080 --> 0:16:35.200 to incentivize everyone holds as little as possible for now 0:16:35.360 --> 0:16:36.920 while we try and figure out where we can get 0:16:36.960 --> 0:16:39.240 a bit more supply, and we might also start to 0:16:39.280 --> 0:16:41.320 see a bit of switching, So could you see perhaps 0:16:41.320 --> 0:16:44.400 some substitution towards things like steel in the auto sector. 0:16:45.080 --> 0:16:46.800 But I think it's going to stay a very very 0:16:46.800 --> 0:16:47.360 tight market. 0:16:47.560 --> 0:16:50.360 How much have you seen different regions pull up the 0:16:50.400 --> 0:16:52.680 slack given the fact that the Middle Easter there has 0:16:52.720 --> 0:16:56.040 been a destruction to facilities and a destruction to suppliers, 0:16:56.040 --> 0:16:59.040 So you're seeing, for example, South America start to ramp 0:16:59.120 --> 0:17:02.200 up production, Australia. How much do you see sort of 0:17:02.400 --> 0:17:04.959 a shifting to different parts of the world. 0:17:05.440 --> 0:17:07.760 Yeah, Look, the challenge with aluminium is it's really all 0:17:07.800 --> 0:17:10.800 about electricity supply. And if we think about everything that's 0:17:10.800 --> 0:17:12.840 going on in the world with data centers and AI, 0:17:13.119 --> 0:17:16.200 the one thing that we're struggling with is electricity supply. 0:17:16.520 --> 0:17:18.840 The two regions where really you would think you could 0:17:18.880 --> 0:17:21.760 have a bit of response is China and Indonesia. Now 0:17:21.840 --> 0:17:25.200 China is actually capped on its capacity and potentially there's 0:17:25.200 --> 0:17:27.720 a room to increase slightly your amperage and get a 0:17:27.760 --> 0:17:29.480 little bit more out of it, but that there's not 0:17:29.600 --> 0:17:32.119 that much that China can do. And then Indonesia has 0:17:32.160 --> 0:17:33.840 a good pipeline. But we kind of knew that that 0:17:33.960 --> 0:17:36.560 was coming already. They can't really do much quickly, and 0:17:36.600 --> 0:17:39.560 again takes twelve months to fix a smelter, also takes 0:17:39.600 --> 0:17:42.440 time to ramp one up, and power costs just becoming 0:17:42.600 --> 0:17:44.760 very very difficult. I mean, even in the US we've 0:17:44.800 --> 0:17:48.399 had smelters being sold to data centers, even where in 0:17:48.440 --> 0:17:51.000 the US you've not just got aluminium prices, but you've 0:17:51.000 --> 0:17:54.160 got this record Midwest premium. So the all in price 0:17:54.200 --> 0:17:57.080 here is about six thousand dollars and that's still not 0:17:57.080 --> 0:17:57.600 been enough. 0:17:57.760 --> 0:18:00.520 So this sounds really problematic. This sounds like it should 0:18:00.520 --> 0:18:03.080 be moving markets more. It seems like a shortage, seems 0:18:03.080 --> 0:18:05.439 like something that's going to cause inflation. Are you as 0:18:05.480 --> 0:18:07.320 seguin as the rest of markets that seem to be 0:18:07.440 --> 0:18:09.720 just sort of declaring that all clear mission accomplished. 0:18:10.280 --> 0:18:12.840 I think, look, there's a clearly an element of positioning 0:18:12.840 --> 0:18:15.280 and flows here. Aluminium was already a very very long 0:18:15.320 --> 0:18:17.119 market coming into this, so I would say it's not 0:18:17.160 --> 0:18:19.520 like the market was caught short and had to suddenly cover, 0:18:19.600 --> 0:18:22.240 And I think that explains partly it. Some of this 0:18:22.280 --> 0:18:25.119 is playing out also in the physical premiums in different regions. 0:18:25.119 --> 0:18:27.760 So for example, in Europe, used to pay about three 0:18:27.840 --> 0:18:30.679 hundred dollars on top of the aliminium price to get metal. 0:18:30.800 --> 0:18:33.639 We're now paying six hundred, so that's doubled in the 0:18:33.680 --> 0:18:36.440 Midwest as well, keeps rising japan premiums. So I think 0:18:36.480 --> 0:18:39.600 we are seeing it, but I would say the physical 0:18:39.600 --> 0:18:41.480 realities of this are going to be hung clear as 0:18:41.520 --> 0:18:42.120 time goes on. 0:18:42.320 --> 0:18:44.000 I mean, this is just the latest shark when it 0:18:44.000 --> 0:18:45.919 comes to sky in the Middle East. A lot of 0:18:46.080 --> 0:18:48.680 importers were also dealing with the on and off potential 0:18:48.720 --> 0:18:51.400 of what was going on with Donald Trump's tariff policies. 0:18:51.560 --> 0:18:54.680 Are you seeing more countries stockpile base metals? 0:18:54.920 --> 0:18:57.920 So I think we're seeing more countries, definitely talk about it. 0:18:58.440 --> 0:19:00.920 At the moment, we haven't seen too much in terms 0:19:00.960 --> 0:19:03.880 of what we could say extra buying. But what we 0:19:03.920 --> 0:19:05.800 see is, first of all, this started off with the 0:19:05.920 --> 0:19:08.159 US Project Vaults talking about, you know, we need to 0:19:08.160 --> 0:19:10.120 have stockpiles, we need to make sure we've got security 0:19:10.119 --> 0:19:13.440 of supply chains. We're now seeing the EU, the UK, Australia, 0:19:13.520 --> 0:19:16.880 South Korea, everyone's starting to bring up that word stockpiling, 0:19:17.040 --> 0:19:19.639 and so I think as we've had enough supply shocks 0:19:19.640 --> 0:19:22.520 now we had this in COVID that definitely drove increased 0:19:22.560 --> 0:19:25.239 inventries at the company level. But this time governments are 0:19:25.240 --> 0:19:27.359 paying attention to so I think this is going to 0:19:27.400 --> 0:19:29.440 be a theme for the next few years. That's actually 0:19:29.440 --> 0:19:30.919 going to be pretty bullish for the complex. 0:19:31.080 --> 0:19:32.880 How much of a premium is that aiding to prices? 0:19:33.359 --> 0:19:35.880 So I think this will probably keep your prices well 0:19:35.880 --> 0:19:38.119 above sort of Typically we would say a prices should 0:19:38.119 --> 0:19:40.680 be anchored around cost support or incentive price what you 0:19:40.720 --> 0:19:42.640 need to bring on for a new mine. But if 0:19:42.640 --> 0:19:45.320 you think about inventory building, it's essentially demand. So that 0:19:45.359 --> 0:19:47.479 allows us to trade at a premium. So for example, 0:19:47.560 --> 0:19:49.840 in copper, we would say that kind of incentive price 0:19:49.920 --> 0:19:52.160 is more like ten thousand dollars a ton to bring 0:19:52.200 --> 0:19:54.679 on a new mine, but we forecast price is staying 0:19:54.880 --> 0:19:58.040 well above that sort of twelve thousand dollars through the 0:19:58.080 --> 0:20:00.879 medium term. Just to take into a count that stockpiling. 0:20:01.080 --> 0:20:04.400 Can we finish on gold save the five K what's 0:20:04.440 --> 0:20:06.200 going to happen to demand for gold now? And how 0:20:06.200 --> 0:20:08.439 has that shifted? How has that changed? We've talked so 0:20:08.520 --> 0:20:11.040 much about this massive tail wind of central bank buying. 0:20:11.480 --> 0:20:13.680 Is that still going to be the story was that ended. 0:20:14.280 --> 0:20:15.879 So I think the central bank buying has been the 0:20:15.880 --> 0:20:18.440 sort of stable level of gold demand under the surface, 0:20:18.480 --> 0:20:21.480 although what we did see in March was Turkey's selling 0:20:21.520 --> 0:20:24.440 gold to underpin the lira. In contrast, though we had 0:20:24.520 --> 0:20:27.280