BHP warns of ongoing iron ore slump

Good morning. Here's what happened overnight and what you need to know today.

1.

BHP’s bets: BHP, the world’s biggest miner, warned of ongoing challenges in the iron ore market, expecting supply for the steel-making material to exceed demand into next year due to China’s slowing economy and weak property market. CEO Mike Henry said China’s overall steel demand had plateaued and will likely remain depressed in 2024, even if some sectors like shipbuilding and automotive were seeing strong demand. But the miner is betting on copper as a growth driver, citing long-term needs tied to the energy transition. BHP’s underlying profit rose 2% to USD13.7 billion, though overall profit fell due to big write-downs and charges. The company cut its dividend amid plans to increase investment in copper and potash projects. (Capital Brief)(FT)(Bloomberg)

2.

Pressure point: Meta CEO Mark Zuckerberg said in a letter to the US House Judiciary Committee that the Biden administration "repeatedly pressured" Meta in 2021 to censor certain COVID-19 content, including satire and humour, a move he now deems "wrong." Zuckerberg expressed regret for not being more outspoken against the pressure and said Meta wouldn't comply with similar demands today. Zuckerberg’s letter was seen as an attempt to repair ties with Republicans before the 2024 election, as the ongoing Republican-led investigations scrutinise its content moderation. But it also comes as the global debate over free speech online intensifies following France's detention of Telegram’s billionaire CEO and co-founder Pavel Durov for not cooperating with law enforcement to curb criminal activity on the platform. The Biden administration has not responded to Zuckerberg’s allegations. (Axios)(The Washington Post)(The Verge)

3.

Cyber dragon: An alleged Chinese government-backed hacking group exploited a previously unknown vulnerability in Versa Director, a software platform used to manage services for internet service providers (ISPs), compromising several US and international companies, Lumen Technologies said in a blog post. The cyberattack, believed to have started as early as 12 June, is attributed to the alleged state-sponsored Volt Typhoon. It allowed the hackers to surveil ISP customers by penetrating their networks, with Lumen finding malware that could intercept passwords inside ISP routers serving certain groups or individual customers. Versa Networks acknowledged the vulnerability had been exploited and urged customers to update their software. Brandon Wales, a former Cybersecurity and Infrastructure Security Agency director, told The Washington Post that China's cyberespionage efforts have "dramatically stepped up," echoing comments from FBI officials in April about China's developing efforts to "physically wreak havoc" on US critical infrastructure. (Reuters)(The Washington Post)

4.

Micro short: Short seller activist Hindenburg Research disclosed a short position in Super Micro Computer, alleging "accounting manipulation,” undisclosed related party transactions and export control failures. The AI server maker, closely tied to Nvidia, saw its shares drop as much as 8.7% following the report. Hindenburg’s report based on interviews with former senior employees and litigation records, suggests that while Super Micro is benefiting from early adoption of AI technology, it also faces governance and compliance challenges. The report also raised concerns about the company’s profitability, especially in the face of rising production costs and competition. Super Micro has not responded to the allegations, while analysts predict heightened scrutiny of its accounting practices. (Bloomberg)(Reuters)

5.

Locally made: Chinese EV-maker Xpeng is seeking to expand local production in Europe to avoid steep tariffs on its electric vehicles, Bloomberg reported citing CEO He Xiaopeng. The 10-year old Tesla rival, which on Tuesday priced its budget-car Mona from 119,800 yuan ($24,750), faces potential extra tariffs of 21.3% on its China-made EVs. Xpeng is focusing on selling mid- to high-end models in Europe while limiting the Mona for the Chinese market. Setting up a manufacturing presence in Europe would place Xpeng alongside other Chinese EV manufacturers like BYD, Chery and Zhejiang Geely’s Zeekr, all aiming to reduce the impact of the EU's plan to raise duties to as high as 36.3%. Xpent also plans to set up a large-scale data centre in Europe, Bloomberg said. (Bloomberg)

6.

Upbeat pulse: US consumer confidence rose to a six-month high in August, as improved perceptions of the economy and falling inflation offset rising concerns over the labour market. The Conference Board’s confidence index increased to 103.3 from 101.9 in July, surpassing economists' expectations of 100.7. The report showed a one-year high in future expectations but also highlighted concerns about job availability, with the proportion of consumers saying jobs were "plentiful" dropping to 32.8%, the smallest share since March 2021. Consumer sentiment is still below pre-pandemic levels due to high living costs and job market uncertainty. (Bloomberg)(Reuters)

7.

Hostage rescue: Israeli special forces rescued 52-year-old Qaid Farhan Alkadi, an Israeli Bedouin hostage, from a tunnel in southern Gaza on Tuesday. Alkadi was abducted by Hamas-led militants on 7 October and held in various locations, including underground tunnels, for 326 days. The complex operation, which the Israeli military attributed to accurate intelligence, marked the first successful rescue of a hostage from an underground tunnel, and the eighth hostage to be freed alive by Israeli military operations. An estimated 108 hostages remain abducted by Hamas, although about a third are believed to have died, according to Reuters. The rescue comes amid escalating violence, with over 40,000 Palestinians killed since the conflict began and the vast majority of Gaza's population displaced.(Reuters)(Associated Press)

8.

Zelenskiy's push: Ukrainian President Volodymyr Zelenskiy is set to present a plan to US President Joe Biden and presidential candidates Kamala Harris and Donald Trump, outlining Kyiv’s strategy to end the war with Russia. On Tuesday, Zelenskiy told reporters Kyiv's three-week-old incursion into Russia's Kursk region is part of a broader “victory plan” that also involves economic and diplomatic efforts. Earlier this week, Politico reported Zelenskiy also plans to present a detailed list of long-range Russian targets to Washington in an effort to persuade it to lift restrictions on US weapons. "The main point of this plan is to force Russia to end the war. And I want that very much - (that it would be) fair for Ukraine," Zelenskiy said at a forum in Kyiv. (Capital Brief)(Reuters)(Politico)