Delta Air Lines Adjusts Outlook Amid US Tariff Uncertainty

Delta Air

Delta Air Lines has pulled its full-year 2025 financial forecast, citing concerns over uncertainty caused by ongoing US tariff disputes. The airline emphasized that with the lack of economic clarity, it is premature to provide an updated outlook for the year. This decision comes in the wake of the growing US tariff conflict with global trade partners.

US Tariff War Causes Concern

Delta's chief executive, Ed Bastion, noted that the airline had informed its aircraft supplier, Airbus, that it would not purchase planes if they included a tariff fee. "If you start to put a 20% incremental cost on top of an aircraft, it gets very difficult to make that math work," he said during an earnings call. The airline is focused on managing what it can control, including reducing planned capacity growth for the second half of 2025.

Impact of Trade Disputes on Bookings

Delta's corporate travel segment began the year with momentum but faced a slowdown in February and March. This reduction in corporate confidence led to lower growth rates for the airline, particularly in its corporate sales, which increased by low-single digits. Delta noted that corporate strength was driven mainly by the banking and technology sectors. The airline has also seen a significant drop in bookings from Canada due to trade tensions with the country, while its operations in Mexico have shown mixed results.

Despite these challenges, Delta has managed to remain resilient in certain areas. Premium, loyalty, and international bookings have helped offset softness in domestic travel. In terms of fuel costs, Delta experienced a decrease in expenses, with fuel prices dropping by 7% in the first quarter of 2025 compared to the previous year.

Financial Performance and Outlook

Delta’s financial results for the first quarter of 2025 showed significant improvement. The airline posted a profit of $240 million, a notable increase from the $37 million reported in the first quarter of 2024. However, despite this positive performance, the ongoing uncertainty regarding tariffs and trade relationships remains a significant concern.

The company’s revenue forecast for the second quarter of 2025 remains cautious, projecting a potential increase or decrease of 2% compared to the previous year. As Delta continues to navigate these challenges, the airline is focusing on maintaining margin protection and controlling costs and capital expenditures.

Delta Pulls Full-Year Forecast Amid US Tariffs

Delta air

Tariff Uncertainty Forces Strategic Shift

Delta Air Lines has withdrawn its full-year 2025 forecast, citing escalating US tariff uncertainty. The airline announced the move during its Q1 earnings call, stating that current trade dynamics prevent accurate forecasting.

Delta emphasized its unwillingness to purchase aircraft that incur tariff-related cost increases. "If you start to put a 20pc incremental cost on top of an aircraft, it gets very difficult to make that math work," CEO Ed Bastian explained. The airline is focusing on preserving margins and cash flow by curbing capacity growth and reducing capital expenditures.

Tariffs Reshape Operational and Regional Outlook

US tariffs introduced in April — including a 10pc baseline and higher reciprocal duties — have added pressure to international trade and aviation. While President Trump delayed the harshest measures for 90 days, tariffs on Chinese goods were increased further.

Meanwhile, Delta saw a Q1 profit of $240mn, up sharply from $37mn last year, despite weaker corporate confidence. Premium travel and loyalty bookings remained strong, though softness appeared in domestic and standard fare segments. Delta also reported declining bookings in Canada and a potential future capacity cut in both Canada and Mexico.

The Metalnomist Commentary

Delta’s response highlights how macro-level trade policy decisions ripple through capital-intensive sectors like aviation. With aerospace supply chains already strained by materials inflation and logistics costs, these tariffs risk slowing fleet modernization and increasing downstream pressure on alloy, composite, and engine component suppliers.

China Sinopec CATL Investment Accelerates EV Battery Exchange Network Expansion

Sinopec CATL

China Sinopec CATL investment emerged as the state-controlled oil refiner became the largest cornerstone investor in the battery producer's record-breaking Hong Kong IPO. The strategic China Sinopec CATL investment supports the companies' ambitious plan to build 10,000 electric vehicle battery exchange stations nationwide, marking a significant shift for the traditional energy company toward new energy infrastructure as China's EV market continues rapid expansion.

Record IPO Success Validates Strategic Partnership Value

China Sinopec CATL investment positioned the oil refiner as the largest cornerstone investor in CATL's $4.6 billion Hong Kong IPO that became the world's largest listing in 2025. CATL shares surged over 16% in their Hong Kong trading debut on May 20th, closing at HK$306.2 compared to the IPO price of HK$263 per share. The successful market reception demonstrates strong investor confidence in the partnership strategy and China's EV infrastructure development plans.

Meanwhile, the two companies reached an initial agreement in April to build more than 500 EV battery exchange stations nationwide in 2025, with a long-term target of 10,000 stations. This ambitious infrastructure rollout leverages Sinopec's existing network of 30,000 integrated energy charging stations serving 300 million users, including approximately 10,000 EV charging and battery exchange stations already operational across China.

Strategic Project Targets Heavy Vehicle Transportation

However, Sinopec and CATL finalized a specific agreement on May 21st for the Qiji Exchange Station project focused on heavy trucks in Fujian province. The project will serve critical road freight transportation along the coastal route between the Yangtze River Delta and Pearl River Delta using CATL's latest battery exchange system technology. This heavy vehicle focus addresses a key market segment where battery exchange offers significant advantages over traditional charging methods.

Therefore, the heavy truck application demonstrates practical implementation of battery exchange technology for commercial vehicles requiring rapid turnaround times. The coastal corridor route represents one of China's most important freight transportation arteries, making successful deployment here a potential template for nationwide expansion. The project showcases how traditional energy companies can integrate new energy technologies into existing transportation infrastructure.

Traditional Energy Companies Embrace New Energy Transition

Furthermore, Sinopec's investment reflects broader trends among conventional energy companies accelerating investments in new energy markets. State-run energy firm PetroChina launched a "supercharger station" in Shanghai's Yili road area in March, demonstrating industry-wide recognition of EV infrastructure opportunities. These companies leverage existing real estate assets and customer relationships to enter growing new energy segments.

As a result, joint ventures between traditional energy companies and EV technology providers create synergistic opportunities for rapid infrastructure deployment. PetroChina, SAIC, Sinopec, and CATL established the Shanghai JieNeng Zhidui New Energy Technology joint venture in September 2022 to lease EV battery packs and develop battery exchange technology. CATL's construction of a 40 GWh annual capacity factory in Dongying, China's largest oil refining city, further strengthens these traditional energy sector connections.

The Metalnomist Commentary

Sinopec's cornerstone investment in CATL's record-breaking IPO exemplifies how China's traditional energy giants are strategically positioning themselves within the electric vehicle ecosystem, leveraging their existing infrastructure assets to capture new revenue streams in battery exchange services. The partnership's focus on heavy vehicle applications addresses a critical market need where battery exchange technology offers compelling advantages over conventional charging, potentially accelerating commercial EV adoption across China's logistics sectors.

LGES Exits Indonesia EV Battery Project Amid Strategic Shift

LGES

LGES exits Indonesia EV project

LGES exits Indonesia EV project, marking a significant shift in its global battery strategy.

South Korea’s LG Energy Solution (LGES) has officially withdrawn from Indonesia’s $8.4 billion Grand Package EV battery initiative.

The project originally included LGES, LG Chem, Posco Future M, Huayou, Antam, and Indonesia Battery Corporation. Plans had outlined a complete value chain: from mining and smelting to precursor, cathode, and battery cell production.

Strategic Refocus on Core Ventures and Energy Storage

LGES exits Indonesia EV project while reaffirming its commitment to the HLI Green Power joint venture with Hyundai Motor. This Indonesian JV plant has a 10 GWh annual battery cell capacity and began mass production in April 2024.

Meanwhile, LGES continues to diversify beyond the EV battery sector. It has secured energy storage system (ESS) battery contracts with Delta Electronics in Taiwan and PGE in Poland.

Indonesia Presence Maintained Through LFP and JV Assets

Despite the LGES exit from the Indonesia EV project, the company retains stakes in key Indonesian operations. Earlier this year, LGES invested in a lithium iron phosphate (LFP) cathode plant with China’s Lopal Tech.

LGES emphasized its intent to continue collaboration with the Indonesian government, particularly via its joint venture HLI Green Power. This signals a strategic recalibration rather than a full-scale withdrawal from the Indonesian battery ecosystem.

The Metalnomist Commentary

LGES’s departure reflects a broader recalibration of battery majors toward diversified revenue streams and scalable ESS markets. The company’s sustained Indonesian footprint suggests long-term positioning, albeit through leaner, more focused partnerships.

Rolls-Royce Sees Increase in Trent Engine Deliveries and Aftermarket Services in First Half of 2024

UK aircraft engine manufacturer Rolls-Royce reported a significant increase in the delivery of large engines and aftermarket services in the first half of 2024. This surge is primarily driven by the Trent XWB-84 and Trent 7000 models, along with a growing demand for long-term service agreement (LTSA) shop visits, which is expected to boost the company's operating profits.

Rolls-Royce delivered 120 large engines from January to June 2024, up from 115 during the same period last year. This included 44 Trent XWB-84s, 37 Trent 7000s, 24 Trent 1000s, and 15 Trent XWB-97s. The XWB-84 and XWB-97 power Airbus' A350, the 7000 powers the A330neo, and the 1000 is used in Boeing's 787. Additionally, deliveries of smaller civil engines for business and regional aviation increased to 116 units, up from 73 a year earlier.

LTSA shop visits rose to 624, with 413 for large engines and 211 for smaller engines. Of these, 394 were classified as major.

Rolls-Royce received 273 large engine orders in the first half of the year, with notable orders for the A350 from Delta and IndiGo, followed by 787/777 and A330neo bookings from Korean Air and VietJet at the Farnborough Airshow. The company's order book at the end of June stood at 1,773 engines, up from 1,405 a year earlier.

Flight testing for high-pressure turbine (HPT) blade improvements on the Trent 1000, which will double the time on wing, is about to begin. This part is already in service on about half of the Trent 7000 fleet.

Revenue from Rolls-Royce's civil aerospace division increased to £4.1 billion ($5.2 billion) in the first half of 2024, driven by a rise in shop visits and engine deliveries. Service revenue accounted for £2.8 billion, and original equipment (OE) revenue was £1.3 billion, both up by 27%.

Defence revenues reached £2.2 billion, up by 18%, while power systems revenue grew by 6%, totaling £1.8 billion.

Reflecting the strong performance in the first half of the year, Rolls-Royce has raised its full-year operating profit guidance to £2.1 billion-2.3 billion from the previous £1.7 billion-2 billion forecast in February. Other civil aerospace metrics remain unchanged, with large engine flying hour guidance set at 100-110% of 2019 levels, OE deliveries at 500-550, and shop visits at 1,300-1,400.

Mangrove Lithium Secures $35mn for BC Refining Plant

Mangrove Lithium

Mangrove Lithium secured $35mn to construct a lithium refining plant in Delta, British Columbia. The facility aims to enhance North American battery material supply.

Refining Plant to Boost EV Battery Production

The plant, slated for late 2025 operation, will produce battery-grade materials for roughly 25,000 EVs annually. The funding included investments from Mitsubishi, Asahi Kasei, Breakthrough Energy Ventures, and BMW i Ventures. Mangrove converts lithium chloride and sulfate into battery-grade lithium hydroxide. Its modular platform enables refining facilities near feedstock and battery manufacturing sites.