By Kylie Madry

MEXICO CITY -Mattel Inc top-selling toys like Mega Bloks will now be made in Mexico, as the U.S. toymaker becomes the latest company to move its supply chain closer to home.

Mattel announced in mid-March it had spent around a billion pesos, or $50 million, to expand a plant in the northern Mexican state of Nuevo Leon, which is now the company’s largest plant, overtaking other hubs in China, Vietnam and Malaysia.

The plant in Monterrey, close to the U.S. border, sprawls across 200,000 square meters (2.25 million square feet), employing close to 3,500 workers.

“Being able to have product close to your consumer and not having to transport it from Asia, that’s going to be more profitable and more competitive when you take costs into account,” Mattel’s Latin America managing director, Gabriel Galvan, told Reuters.

The expansion was first pitched in 2020, Galvan said. Mattel closed two factories in Asia in 2019 and more recently shuttered a plant in Canada and another in Mexico ahead of expansion of the mega-factory.

“This consolidation and plant expansion was in line with the company’s transformation/turnaround strategy and a manufacturing footprint consolidation we called ‘Capital Light,'” spokeswoman Catherine Frymark told Reuters in an email, saying that the strategy was four years in the making.

Galvan said Mattel’s move was just the latest instance of how worries about over-extended supply global chains are generating fresh interest in “nearshoring” from industries like textiles and even automaking – already a mainstay of Mexican manufacturing.

Mexico’s finance minister told local media recently that the demand for industry parks in northern Mexico was booming.

Mattel plans to double its investment in the plant over the next five years, Nuevo Leon state said in a press release.

“It’s a big opportunity (for Mattel),” Galvan said, due to the plant’s proximity to the company’s Dallas-Fort Worth distribution center, its second-largest in the United States. “We can be there in 24 hours, so for us it’s really convenient.”

(Reporting by Kylie Madry; Editing by Christian Plumb, Kenneth Maxwell and Leslie Adler)

By Seher Dareen

(Reuters) – Gold retreated on Friday and was set to post a weekly decline after robust U.S. jobs data drove the dollar higher and bolstered bets that the Federal Reserve would aggressively raise rates.

Spot gold XAU= fell 0.8% to $1,921.48 per ounce by 01:01 p.m. ET (1701 GMT). U.S. gold futures GCv1 dropped 1.3% to

$1,928.10.

Bullion was en route to post a drop of 1.9% for the week.

U.S. job data showed the unemployment rate falling to a new two-year low of 3.6% and wages re-accelerating, positioning the Fed to raise interest rates by a hefty 50 basis points in May. (Full Story) FEDWATCH

The data powered gains in benchmark U.S. 10-year Treasury yields US10YT=RR and the dollar .DXY, making gold less appealing for overseas buyers. US/

Expectations for a rate hike are driving gold lower, said Bart Melek, head of commodity strategies at TD Securities, as that would translate into higher opportunity cost of holding non-yielding gold.

However, he added that “(Fed) policy has a long way to go to be even neutral… and gold is going to continue to be fairly firm.”

Meanwhile, negotiations aimed at ending the five-week war between Russia and Ukraine were set to resume even as Ukraine braced for further attacks. (Full Story)

“While geopolitical crises do not last forever, we expect the secondary impacts of the Russia-Ukraine crisis to provide a strong level of support for gold prices this year,” ANZ said in a note.

Platinum XPT= fell 0.2% to $981.53, while palladium XPD= gained 0.4% to $2,271.46. However, both metals were on course for a fourth consecutive weekly loss.

“In the near term we could see a tighter environment in precious group metals, particularly palladium,” Melek said, highlighting a possible “erosion of availability from Russian sources.”

Elsewhere, silver XAG= fell 0.5% to $24.65 per ounce, down 3.4% for the week.

(Reporting by Seher Dareen and Eileen Soreng in Bengaluru; Editing by Amy Caren Daniel)

By David Shepardson

WASHINGTON -President Joe Biden’s administration on Friday sharply boosted fuel economy standards for vehicles, reversing former President Donald Trump’s rollback of U.S. regulations aimed at improving gas mileage and cutting tailpipe pollution.

The National Highway Traffic Safety Administration (NHTSA) announced it will boost fuel efficiency requirements by 8% for both the 2024 and 2025 model years and 10% in 2026. That was a slightly bigger increase than the proposal outlined in August.

The NHTSA rules are about the same as rules previously announced by the Environmental Protection Agency for a fleetwide real-world average of about 40 miles per gallon in 2026 compared with 32 mpg under the Trump rules. Some environmentalists along with electric vehicle makers Tesla and Rivian argued NHTSA should have adopted more aggressive requirements of 10% yearly requirements over the three-year period.

The new rules are expected to reduce consumer fuel costs by $192 billion for new vehicles sold by 2030. The administration is eager to make the case that regulations will prod automakers to build more efficient vehicles and save consumers money at a time of near record pump prices.

Automakers say they will need to spend tens of billions to comply with the rules. NHTSA estimates consumers could save $1,387 in fuel costs over the life of a vehicles but the rule will increase the average cost of a vehicle by almost that much.

The rule’s total costs for automakers are pegged by NHTSA https://www.nhtsa.gov/sites/nhtsa.gov/files/2022-04/Final-Rule-Preamble_CAFE-MY-2024-2026.pdf at more than $200 billion through 2029, will increase the average cost of a vehicle industry wide by $1,087, NHTSA said. The total cost for Detroit’s Big Three automakers is estimated at more than $100 billion for General Motors Co, Ford Motor Co, and Chrysler-parent Stellantis.

The Trump administration in March 2020 rolled back fuel economy standards to require only 1.5% annual increases in efficiency through 2026. That was much less than the 5% annual increases required by his predecessor Barack Obama.

The EPA in December finalized its vehicle emissions requirements that are parallel to the NHTSA rules. The EPA said its rules will result in 3.1 billion tons of avoided CO2 emissions through 2050. Major automakers on Wednesday backed EPA’s revisions over challenges brought by some states and some ethanol groups.

EPA and NHTSA plan to write and adopt another round of vehicle standards that will cover 2027 and beyond that analysts believe will be so aggressive that automakers must build electric vehicles to meet them.

John Bozzella, president of the trade group Alliance for Automotive Innovation, said “increased regulatory requirements for automakers will require supportive policies, as well as regulatory alignment with the EPA to ensure that standards can be attained.”

Legislation has stalled in Congress that would boost EV rebates to up to $12,500 per vehicle and provide generous tax incentives for automaker EV production and business purchases of EVs.

Dan Becker, director of the Safe Climate Transport Campaign, said NHTSA’s “rules only require automakers to reduce gas guzzling slightly more than they agreed to cut nine years ago.”

NHTSA on Sunday said it reinstated a sharp increase in penalties for automakers whose vehicles do not meet fuel efficiency requirements for model years 2019 and beyond. The decision was a victory for Tesla that could cost other automakers like Stellantis hundreds of millions of dollars or more.

(Reporting by David Shepardson; Editing by David Gregorio)

By Nick Carey

LONDON -UPS said on Friday it was trying out a four-wheeled “eQuad” electric cargo bike for deliveries in densely packed urban areas, where bikes have better and easier access, to complement its push into electric vehicles.

The package-delivery giant is trialing around 100 of the electric bikes, designed and built by British firm Fernhay, in seven European markets and will also launch trials in the United States and some Asian markets, Luke Wake, UPS vice president of fleet maintenance and engineering, told Reuters.

UPS said it would also use four-wheeled electric bikes from other manufacturers for the trials, but did not disclose names.

As well as making public commitments to cut their carbon footprints, package-delivery companies are seeking new ways to cut the cost of last-mile deliveries given soaring e-commerce orders.

UPS’ eQuad has an electric-assisted top speed of around 25 kilometers (15.5 miles) – if you pedal hard you can go faster – and can haul up to 200 kilograms (441 lb) of packages. Its electric battery has a range of around 40 miles (64 km), which Wake said would be more than adequate for urban routes.

The vehicle is only 36 inches (91 cm) wide, so can legally use bike lanes and enter pedestrian zones that UPS’ vans and trucks cannot access. Under normal circumstances, drivers would have to get out of their vehicles, load packages on carts and haul them to customers.

UPS’ Wake said the Atlanta-based company sees an opportunity to scale up the use of the bikes in megacities and complement its range of vans and trucks.

“There are more and more opportunities for zero-emission solutions like this that can alleviate inner-city congestion,” Wake said while demonstrating the eQuad at a UPS package facility in London. “It can also help our operations be more efficient at the same time.”

Rivals FedEx and Deutsche Post unit DHL are also experimenting with electric cargo bikes as part of their own zero-emission vehicle plans.

UPS is working with electric van makers like UK startups Arrival and Tevva, plus U.S. truck maker Xos.

(Reporting By Nick Carey;Editing by Bernadette Baum and Barbara Lewis)

LONDON – Nickel volumes on the London Metal Exchange (LME) slid 28% month-on-month in March during a period of chaotic trading that included a shutdown, data showed on Friday.

The exchange, the world’s oldest and largest market for industrial metals, suspended nickel trading on March 8 after prices spiked by more than 50% in a matter of hours to hit $100,000 a tonne.

A spate of technical glitches after trading resumed on March 16 left traders fuming and volumes thinner than usual.

The average daily volume of combined LME nickel futures and options slumped to 64,952 lots in March compared to 90,685 a month earlier and 88,342 in January, data showed.

The surge in prices that triggered the halt was blamed on short-covering by one of the world’s top producers, China’s Tsingshan Holding Group.

The LME, owned by Hong Kong Exchanges and Clearing Ltd., will hold an independent review into the nickel crisis, a top executive said on Tuesday.

(Reporting by Eric Onstad and Pratima Desai; editing by David Evans)

By Ann Saphir

(Reuters) – It’s not as if U.S. central bankers needed more reasons to step up the pace of interest rate hikes.

But that’s what they got on Friday, when the Bureau of Labor Statistics’ latest jobs report showed employers added 431,000 to payrolls last month and the unemployment rate fell to a two-year low of 3.6%.

All are signs of a strong labor market with little need for the kind of super-easy monetary policy that the Fed is currently delivering and has begun to unwind.

“A very tight labor market got even tighter,” wrote Oxford Economics’ Kathy Bostjancic and Lydia Boussour.

Futures contracts tied to the Fed’s policy rate fell after the jobs report, as expectations intensified that the Fed will go bigger at the Fed’s next three meetings, hiking by a half-a-percentage point each time to deal a more decisive blow to price pressures.

Rate futures contracts reflect odds-on bets for the policy rate to end the year in the range of 2.5% to 2.75%, with about a one-in-three chance of going even higher. Either way that is high enough to put the brakes on growth.

It was just two weeks ago that the Fed raised interest rates by a quarter-of-a-percentage point in its first policy tightening in three years, and signaled ongoing rate hikes ahead to rein in inflation at a 40-year high and climbing.

With average hourly pay that’s 5.6% higher than a year earlier, March’s labor market report reflected strong demand for workers despite rising borrowing costs that may, to central bankers, also contain a warning signal for a building “wage price spiral” that could make inflation even worse.

At their mid-March meeting, policymakers had projected an end-of-year policy rate of about 1.9%. Since then a number, including Fed Chair Jerome Powell, have signaled their readiness to move faster.

Chicago Fed President Charles Evans, who personally prefers the more measured path, told reporters Friday that he doesn’t see a big risk in using “some” half-point rate hikes to bring borrowing costs to neutral sooner, as long as the goal was not to raise rates much faster and push them much higher.

The worry there would be that the Fed ends up tightening too much, tipping the economy into recession. Historically it’s been rare that the Fed has avoided such an outcome once the unemployment rate falls as low as it is now.

With inflation looking set to accelerate even more after Russia’s invasion of Ukraine sent oil prices higher and a COVID-19 outbreak in China threatens to further damage already strained supply chains, tamping down inflation is “essential” to sustaining a strong labor market, Fed’s Powell has said.

The Fed targets 2% inflation by a measure known as the personal consumption expenditures price index. In February that measure jumped to 6.4%.

Policymakers don’t want to risk that expectations for ever-higher prices get baked into American household and business psychology. Rate hikes are designed to curb demand and blunt that risk.

Besides, policymakers have argued, the labor market has met the standard of full employment, and is strong enough to withstand the kind of fairly rapid withdrawal of support they are contemplating.

Friday’s report offered more grist for that argument. The unemployment rate was “little different” than the pre-pandemic rate of 3.5%, the report’s authors said.

And it helps ratify the Fed’s hope that workers sidelined by the pandemic would find their way back to the labor force as COVID-19 cases fall.

Participation in the labor force by workers in their “prime” years of 25 to 54 rose to 82.5%, the highest level in two years. Most industries are now above or close to their pre-pandemic level of employment

U.S. employment overall is still 1.6 million below the pre-pandemic level, the report showed.

But Fed policymakers increasingly see that deficit as likely to get filled only slowly and not prone to be hurried along by keeping rates low.

(Reporting by Ann Saphir; Editing by Andrea Ricci)