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Gold falls as dollar strength weighs on gold; attention turns to Fed meeting
The dollar strengthened on Tuesday and gold prices fell. Markets were looking for clues about the future of interest rates in the Federal Reserve's policy announcement. Gold spot fell by 0.7% at $4,044.81 an ounce as of 0250 GMT. It had risen as high as 1% Monday. U.S. Gold Futures for August Delivery fell 0.8% to $4.045.40. Dollars are nearing a month-high, which makes greenback bullion prices more expensive for those who hold other currencies. Ilya Spivak is the head of global macro for finance content network Tastylive. The U.S. Federal Reserve is expected to conclude its two-day policy meeting on Wednesday. According to CME FedWatch, 62% of market participants believe that the Fed will keep interest rates at their current level. However, 38% expect a rate increase at least 25 basis points. The markets are pricing in a 81% chance of a hike during the September meeting of the central bank. On Monday, President Donald Trump called on the Fed lowering interest rates. He said that the U.S. would have the lowest rate of interest in the world. Trump said that on Monday, the United States was having "good discussions" with Iran. He also stated that there is a possibility of a 'deal' to resolve their conflict. However, he warned that strikes will resume if the negotiations fail. Saudi Arabia, Jordan, and Iraq reported drone attacks on Sunday, indicating that Tehran had quickly tested the pause of the U.S. campaign. Spivak said that gold will likely rise above $4,200 an ounce if the Fed meeting does not produce language that is "setting the foundation for a rate hike in September". Silver spot fell by 1.9%, to $57.30 an ounce. Platinum lost 1%, to $1605.14, and palladium dropped 1.6%, to $1271.09. (Reporting and editing by Varun H. K. and Ronojoya Mazumdar in Bengaluru)
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Australia builds first oil refinery at home in 60 years, to improve fuel security
Prime Minister Anthony Albanese announced on Tuesday that Australia will be considering building its first?oil? refinery in over 60 years. The war in the Middle East has squeezed supplies from abroad and highlighted the urgency of improving energy security. Albanese stated that the project would help to build Australia's sovereignty and resilience in the fuel sector, which could shield the country against future supply shocks. Albanese stated that if the project is deemed?feasible', Perdaman, a chemical industrial producer in Western Australia will build a new large-scale refinery. Albanese, a reporter in Western Australia's Pilbara Region, told reporters that "the war?in?the Middle East... has an impact here just like it does all over the world." Building national resilience makes Australia less susceptible to events happening around the globe. Albanese announced that his government, along with the Western Australia State Government, will spend A$4,000,000 ($2.8 million) jointly on a feasibility study for the refinery. Albanese continued, "We want the project to be a success and that's why we are looking for the best location. Australia imports about 80% its fuel and is racing to secure supplies in the face of the Iran War. A report by the Australian Treasury warned that global oil markets have become more vulnerable, with "weaker buffers against supply-shocks". The treasury told Treasurer Jim Chalmers that global oil inventories?have decreased since the conflict in the Middle East has intensified. Meanwhile, refined fuel markets now face a?risk of further tightening?, it said. The majority of Australia's oil refineries were constructed in the 1950s and 1960s. However, high operating costs as well as the rise of large refineries across Asia have forced many of them to close over the last three decades. Ampol's Queensland Refinery and Viva Energy's facility in Victoria, both in the east of the country, are now the only two active refineries. In 2000 there were eight. Western Australia's lone refinery will be shut down by 2021, after BP converted its 146,000 barrels a day Kwinana facility into a fuel terminal. ($1 = 1.4306 Australian dollars)
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Asia markets sell off in a broad scale due to AI fears
Asian markets dropped on Tuesday, led by chipmakers, on concerns?about massive funding requirements of the AI boom. A slide in oil prices didn't do much to lift bonds, and traders were worried about U.S. interest rate hikes coming this week. South Korea's KOSPI plunged more than 8 percent to a low of three months, setting off a circuit breaker. Japan's Nikkei fell 4% after a drop of 2.2% for the Philadelphia Semiconductor Index. Nvidia's shares fell 5% overnight, after the Wall Street Journal reported that the company was in discussions to provide approximately $250 billion in financial guarantees for OpenAI in connection with a massive data center project. CXMT shares in Shanghai surged 466% on their debut day, highlighting the growing interest of investors and the competitive threat from Chinese competitors. Chris Weston is the head of Pepperstone's research. He said that there was a growing sense of optimism in mainland markets regarding China's ability build a global competitive AI ecosystem. The Information reported that China had?also started manufacturing locally developed immersion deep UV lithography machines. This chipmaking tool was long dominated exclusively by Dutch supplier ASML. ASML's shares fell 8.5% on Monday. South 'Korea SK Hynix shares fell by nearly 11%, while Samsung Electronics shares dropped more than 9%. In Tokyo, Kioxia was down 18% and?Tokyo Electron was down 9.8%. CXMT, the chip-making indexes and CXMT were also lower in early trading. OIL SLIDES US YIELDS DIPLEAD Brent crude futures continued their nearly 9% drop on Monday, dropping to $87.55 per barrel as hostilities between Iran and the U.S. cooled following Washington's sudden suspension of airstrikes on Saturday. Donald Trump stated on Monday that the United States and Iran were having "good discussions" and that there was a possibility of a deal. The break in fighting has pushed benchmark U.S. Treasury 10-year yields down by four basis points, to 4.64%. Shorter-term rates have not moved much. The Federal Reserve is expected to hike by 25 basis points this Wednesday, according to traders. "The U.S. - Iran War, which is driving up the price of crude, remains the main determinant for what will 'happen in the global economy over the next few months and, as a result, what informs the central bank policy forecasts at the margin," said Thierry?Wizman, currency & rates strategist?at Macquarie Group. We expect the Fed to tighten its bias this week. The expectation of a hike?sooner rather than later' kept the dollar at $1.1370, the euro at $1.14 and the Australian Dollar just below 70 cents. The yen was trading at 163.78 per dollar, barely above a four decade low. Markets are on edge about Japan interfering in the currency pairing, especially if the Bank of Japan holds rates this week, and causes another yen drop. Wizman said that if BoJ communication was not hawkish, and USD/JPY continues to rise, traders can expect an official response. This could include verbal interventions, rate checks or direct FX market interventions, possibly on Friday. (Reporting and Editing by Shri Navaratnam).
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Whitehaven Coal's output in 2026 is at the top of its guidance range, but costs are at the low end.
Whitehaven Coal, Australia's largest coal producer, said Tuesday that its annual sales and output were near the top end of their guidance range due to the recovery of its Queensland mines. However, the company expects its costs for the full year to be near the lower end of the forecast. As the Sydney-based coal mining company tries to absorb higher diesel costs linked to Middle?East conflict, it is important to consider cost forecast. Whitehaven has said that unit costs are expected to be around A$132 ($92.29), towards the low end of their forecast range. This is after they achieved savings in line with its annualised target between A$60 and A$80 million. The company made A$222 for every ton of thermal coal it sold in the 'fourth quarter,' up from A$189 per ton a year ago, thanks to a stronger Asian demand after the supply of liquefied gas was interrupted. The managed run-of mine production for the year ending June 30 was 40.3 Mt, up 3% on the previous year and close to the upper end of the 37-41 Mt range. The managed coal sales increased 8%, to 32.7 Mt. This was within the estimates of 29.5 to 33 Mt. The Visible Alpha consensus estimate was that fourth-quarter production would rise by 1.3%, to 10.7 mt. Queensland operations including the Blackwater and Daunia Mines, which were purchased from BHP Group for $4.1 billion in early 2024, have recovered from weather disruptions in previous quarters, with production increasing 41% sequentially. New South Wales' mines including Maules Creek Narrabri, and Gunnedah posted a 1.6% increase in quarterly production year-on-year, but output fell by 8% from the previous quarter due to tougher mining conditions. Whitehaven shares were down 1.1% at 0058 GMT, following the declines of the energy subindex and the wider market. $1 = 1.4302 Australian Dollars (reporting and editing by Shilpi Major and Subhranshu S Ahu in Bengaluru).
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Origin Energy in Australia flags the possible exposure of data for about 900,000.
Origin Energy, a company in Australia, said that on Tuesday, data relating to 900,000 customers, both current and former, may have been accessed. The company is contacting the affected individuals. Last week, the country's largest electricity and gas retailer announced that it was investigating an alleged security breach which involved unauthorised access to some customer information. Origin stated on July 23 that the affected data could include financial information, such as last few digits of a customer’s credit card number or bank account number. As of 0121 GMT, shares of the company were down 1.7% at A$10.47. The broader ASX200 index was 0.3% lower. On its website, the company announced that it had finished its initial review phase and was notifying customers affected. It also offered identity protection and cybersecurity support services. Sydney-based company reviewed a possible security threat in early July but stated that, 'based on the information available at the?time, it was not considered credible. The company said that new information it received on the 22nd of July indicated that a possible security incident could?have taken place, prompting them to inform customers and investors. Origin has engaged cybersecurity and forensic experts, taken steps to secure its systems and is continuing its investigation into the incident. Customers are urged to be vigilant and watch out for scams.
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South Korea's KOSPI falls 7% as the global chipmaker sale deepens
South Korean shares fell 'on Tuesday, as a global sale of chipmakers weighed down on technology heavyweights. Pressured 'by concerns about a 'intensifying competitive environment - from China - and a steep drop in SK Hynix shares listed in the U.S. The benchmark KOSPI fell 500.47 points or 7.41% to 6,253.81, prompting "sidecar" trading restrictions on both the KOSPI index and junior Kosdaq, temporarily suspending programme trading. Memory-chip manufacturer SK Hynix fell 10% after 'its American Depositary Receipts (ADRs), which were issued in the United States, dropped to a new record low and below their original U.S. offering prices. Samsung Electronics fell 9.15%, another major index component. The KOSPI weighting is dominated by the two largest chipmakers, who together make up more than half the market. This amplifies the effect of the sell-off across the entire sector. The market sentiment was further dampened due to developments in China. These included a blockbuster debut of ChangXin Memory Technologies, (CXMT), and reports that a Chinese state-backed company began manufacturing immersion DUV equipment. Kim Seokhwan, a Seoul based analyst at Mirae Asset Securities said that the market is more concerned about CXMT's potential to expand its capacity?to Korean rival companies and?technology following?its IPO. Reporting by Cynthia Kim, Editing by Sherry Phillips
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Australia is considering building its first oil refinery domestically in 60 years
Australia announced on Tuesday that it will 'consider building its first new oil refinery for more than 60 Years, as the war in the Middle East squeezes overseas supplies and highlights the urgency of improving energy security. A government statement said that the federal government and Western Australia's state government would jointly spend A$4m ($2.8m) on a feasibility study of the refinery. Australia imports 80% of the fuel it uses and is racing to get supplies in light of the Iran 'war. The majority of Australia's oil refineries were built in the 1950s and 1960s. However, high operating costs as well as the rise of large refineries in Asia have forced many of them to close over the last three decades. "This is a matter of fuel security - for the entire nation. But, of course, Western Australia will be left with no fuel refining capability after the closure of the BP facility in Kwinana by 2021. It's an important initiative," Federal Resources Minister Madeleine King said to ABC Radio. Ampol's Queensland refining facility and Viva Energy's facility in Victoria – both?on Australia's east coast – are the only two operative now, compared with eight in 2000.
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Officials say seven people were killed in Russian attacks on eastern Ukraine
Officials said that on Monday, a Russian strike on frontline localities in eastern Ukraine killed seven people and injured more than twenty. Three people were killed in two locations near Kostiantynivka, a contested city, according to prosecutors in Donetsk Region. The Russian military claimed this month that its forces had captured Kostiantynivka. However, Ukrainian officials denied the city's change of hands. Four people were killed in the area of Kramatorsk. This heavily fortified "fortress city" is considered crucial to Ukraine's defenses. The prosecutors said that 18 people had been injured in the Donetsk Region. Oleksandr Hansha, the Governor of Dnipropetrovsk Region said that more than 50 artillery and drone attacks were conducted on five districts. Two people were killed near the town of 'Nikopol', which is a Russian target that is often used on the north bank if the Dnipro River. One person was killed near the town of Syneklykove in the east. A Ukrainian drone hit a building in Russia's Belgorod Region and killed one person. Two others were injured. (Reporting and editing by Nick Zieminski, Cynthia Osterman, and Ron Popeski)
CORRECTED-RPT-Singapore deals carbon tax rebates for refiners near term, sources say
Singapore is using refiners and petrochemical companies refunds of approximately 76% for its organized carbon tax for 2024 and 2025 to assist them alleviate expense stress and remain competitive versus rivals somewhere else, four sources knowledgeable about the matter stated.
The tax concessions will provide a significant buffer for refiners' profit margins amidst growing competition with newer plants in China and the Middle East.
Carbon tax costs are estimated at between 80 cents and $1. per barrel of unrefined input basis for refineries based upon the S$ 25. ($ 18.48) per ton of emission rate, according to speaking with companies. FGE and Wood Mackenzie. That would be close to a quarter of. refiners' present margins in Singapore.
Under Singapore's brand-new tax rate for carbon emissions,. which worked on Jan. 1, services that release more than. 25,000 metric tons of carbon annually pay S$ 25 per heap up until. 2025, compared with S$ 5 per heap in 2019-2023.
The rate will consequently increase to S$ 45 per load for. 2026-2027 and S$ 50-80 per lot by 2030, the federal government revealed. in 2022.
Major business in the refining and downstream sectors have. been offered refunds on a transitional basis to soften the added. tax burden, decreasing the final costs to in between S$ 6 and S$ 10 per. ton of emissions, 3 of the sources stated.
These refineries and downstream services will still have. to pay a straight-out S$ 25 per ton of carbon emission tax and. consequently look for the rebates, according to the terms and. conditions set out by the government, a 5th source said.
Singapore has three refineries of an integrated capability of. 1.119 million barrels daily, currently operated by Shell. , Exxon Mobil Corp, and Singapore Refinery Co. ( SRC), a joint endeavor in between Chevron and Singapore. Petroleum Co, wholly owned by PetroChina.
While the interruption of Russian oil trade post-Ukraine war. and post-COVID need boosted refining margins between 2020 and. 2022, these profits have actually cut in half from peak levels reached in. February. << DUB-SIN-REF >
Shell decreased to comment, while an ExxonMobil spokesperson. stated: As a matter of practice, we do not go over confidential. matters.
The Singapore Refining Business remains committed to support. the Singapore federal government's policies through close collaboration. and continued discussion, an SRC representative stated.
The concessions will likely be in place at least for 2024. and 2025, among the sources stated, including that the affordable. rate will be back on the table for discussion in 2026 or after.
Singapore presented a shift framework in 2015 to. assistance business in Emissions-intensive trade-exposed (EITE). sectors such as chemicals, electronic devices and biomedical. producing in their energy shift.
The allowances will only be offered a proportion of. the companies' emissions, and are based upon worldwide. recognised effectiveness criteria where offered, or the. aspiration and toughness of business' decarbonisation strategies, a. representative at Ministry of Trade & & Industry informed in an. email.
Their staying emissions will continue to go through. the dominating heading carbon tax rates.
The period of this transition structure will depend on the. development of carbon prices internationally and the progress of. decarbonisation technologies, he stated, including that companies. will be given sufficient notification in advance of modifications to. facilitate business planning.
In basic, the carbon tax would have to be paid in the year. following the reporting year since of the time needed to. assemble the emissions information and separately validate the total. emissions of the reporting year, a spokesperson from the city. state's National Environmental Firm (NEA) stated earlier.
Companies presently have the option to also offset approximately 5%. of their taxable emissions utilizing international carbon credit -. either purchased or accumulated elsewhere on the planet, according. to the NEA.
This significant increase in carbon taxes has been a hot subject in. Singapore's refining sector, following the sale of Shell's. flagship Bukom and Jurong Island refinery and petrochemical. facilities amidst stiff competitors.
(source: Reuters)