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Saudi chemical group SABIC reports worse-than-expected quarterly loss
Saudi Arabian chemical giant SABIC announced worse-than-expected fourth quarter results on Wednesday, against a backdrop of margin pressures in the sector. Chemicals industry is struggling with low demand and high input cost, which has led to lower prices and squeezed profit margins. SABIC reported a net loss for the three-month period ending December 31 of 1,89 billion riyals (US$504 million), compared to a loss in the same period last year of 1,73 billion riyals. LSEG data indicates that analysts had predicted a profit of a bit more than 1 billion riyals. Salah Al-Hareky is the executive vice president of corporate finance. He told reporters that "fixed costs are usually higher in winter" and also during the fourth quarter. SABIC, which is 70% owned by Saudi Aramco and has a market capitalization of $70 billion, saw a net profit of 1,54 billion riyals for 2024, up from a loss of $2.77 billion in 2023. Chief Executive Abdulrahman Al-Fageeh stated that monetary easing helped to support the petrochemicals sector, but "overcapacity remains a challenge for polymers in particular". "Ethylene capacity growth is slower than demand growth, resulting in sustained pressure on capacity utilization rates." SABIC's EBITDA margin remained stable despite these market conditions. This shows its resilience in difficult market conditions," said he in the earnings release. SABIC's capital investment is expected to be between $3.5 and $4 billion in this year. The guidance for the next five years was $4 to $5 billion. Reporting by Pehsa Magd in Riyadh, and Yousef Saba in Dubai. Editing by Jacqueline Wong & David Goodman
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Dalian iron ore continues to hurt Chinese steel export prospects
The price of iron ore futures fell for the third session in a row on Wednesday. This was due to a gloomy outlook for Chinese exports, and increased trade tensions between China and the U.S. The May contract for the most traded iron ore on China's Dalian Commodity Exchange closed at 812 Yuan ($111.86), a decrease of 0.98%. In the early part of the session, the contract reached 803 yuan, its lowest since February 18. As of 0708 GMT, the benchmark March iron ore traded on Singapore Exchange was down 0.22% at $105.8 per ton. Last week, U.S. president Donald Trump signed a memo aimed at tightening restrictions on Chinese investments in strategic areas. This caused Chinese stocks to plummet on Tuesday. In a report, Hexun Futures, a Chinese consultancy, stated that the additional levies by Vietnam and South Korea will affect China's direct exports of steel, which in turn, will put pressure on prices. Last week, Vietnam announced that it would impose a temporary antidumping levy against some steel products imported from China. Meanwhile, South Korea has imposed tariffs provisionally on Chinese steel plates imports. Hexun added that the steel mills are now in full production and demand for raw materials is increasing. According to Chinese consultancy Lange Steel citing statistics by the China Iron and Steel Industry Association, in China, daily crude production at key steel companies increased 0.8% on a month-to-month basis to 2,151 million tonnes, while average daily steel production rose 4.2% to 2.037 millions tons. The Shanghai Futures Exchange saw a rise in most steel benchmarks. Rebar rose by 1.24%; hot-rolled coils increased by 1.18%; wire rod rose by 0.57%. Stainless steel fell 0.3%. Citi analysts wrote in a recent note that "China's expectations of a second round of government-mandated capacity reductions have been increasing in the past few months." Coking coal and coke, which are both steelmaking ingredients, showed marginal losses. They were down by 0.55% each.
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Sources: S.Korea’s SK Energy closes crude unit for 2 week overhaul
South Korea's SK Energy plans to restart the 170,000-barrel-per-day (bpd) crude distillation unit (CDU) at its Ulsan refinery in next two weeks after maintenance work, three trade sources familiar with the matter said on Wednesday. Sources said it is not clear if this shutdown was planned. WoodMackenzie, a consultancy, said on LinkedIn that the unit had been closed since Monday morning. Two sources stated that this shutdown would not affect the company's export programme in March for certain refined fuels, such as diesel, and that other CDUs on the site will likely be running at a higher rate to make up the production loss. SK Energy operates five CDUs in the refinery, with a combined capacity of 840,000 bpd. The company plans to shut its two 40,000-bpd residue hydrodesulphurisation units at the site, one after another between mid-March and mid-May, a fourth source said. A fifth source confirmed that the company's CDU, which produces 110,000 bpd of product per day, will also be closed from May to June for maintenance. In response to a question, an official from SK Energy responded on Wednesday that "SK Energy operates its plants flexibly based on the market demand", without commenting about the units.
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Ravindra, a New Zealander who plays cricket against India in dead-rubber matches, is keen to play.
Rachin Ravindra is not interested in sitting out New Zealand’s final match against India, after scoring a century against Bangladesh during the Champions Trophy. Selectors can rest players in the final group game against India on Sunday, as New Zealand has already qualified for semi-finals. Ravindra, the Black Caps batsman who missed the Black Caps opener against Pakistan due to a head injury, does not wish to miss any more matches at the ICC Tournament. "Conversations around that haven't been really had." In a tournament such as this, you'd want to play the most games possible," said the 25-year old lefthander on Wednesday. "And because of the nature and severity of my previous injury, I have missed some games." "I'll do what the team wants, but I would be eager to get out there and do my thing." Ravindra was forced to undergo concussion protocol after a ball struck him on the head during a fielding mishap. Daryl Mitchell was out of the team due to illness and Mitchell returned to the team to bat at number 4. Mitchell scored 112 on his return. Ravindra stated that Mitchell, the all-rounder was "definitely" progressing on his path to full health. The team appreciated having a few rest days. On the day of the match against India, however, players will be eager to play for the dead-rubber. He said, "I'm guessing you won't take games for granted at all." "I believe we can treat it as if it were a match in an international competition, right?" There's still much to play for - the first place in the semi finals.
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RPT-Congo increases cobalt export limits to boost prices in the face of a glut.
Three sources with knowledge of the situation said that the Democratic Republic of Congo was considering cobalt export quotas in order to reduce oversupply of the metal and increase prices. The cobalt price is at a historically low level due to a slackening in demand by automakers. Mines are also ramping up their production of copper from which the cobalt can be extracted as a side-product. Sources who declined to name themselves and discuss sensitive issues said that the Congolese Government has discussed the plan of introducing limits, but that no final decision had been made. Congo banned all battery metal exports for four months Monday in order to control an oversupply. The Authority for the Regulation and Control of Strategic Mineral Substances' Markets (ARECOMS) announced the ban on Monday. It said the export limit would be reviewed within three months and, based on the results, could be either modified or ended. Sources and analysts say that the temporary ban will not be enough to stop the flow of metal onto the market. It is also unlikely to have any lasting effect on the prices. Prices are expected to fall further once companies begin to release their stockpiled metal. Sources said that the Congo government plans to introduce export quotas for the metal. These quotas will be negotiated in the period of export suspension. Email questions to ARECOMS or Mines Minister Kizito Pakaabomba were not answered immediately. Patrick Muyaya, the Minister of Communication was not available to answer questions immediately. Sources said that previous attempts by the government, to convince mining companies to reduce the flow on metal on the market internationally voluntarily have been ignored. Sources from two sources confirmed that Gecamines' attempts to convince China’s CMOC Group, via their joint venture, to control the flow of cobalt onto the market and to limit the impact of prices had failed. CMOC DOUBLES THE COBALT OUTPUT CMOC, world's largest cobalt producer, increased cobalt production last year by more than twice as much, to 114,000 metric tonnes, while increasing copper production at its Tenke Fungurume Kisanfu Mines in Congo. CMOC mines in Congo produced approximately 650,000 tons copper. CMOC stated that the temporary ban on shipments has not affected production at mines and spokeswoman Vincent Zhou said the company does not expect a significant impact on its business performance. Eurasian Resources Group, Glencore and other large cobalt producers from Congo declined to comment. London Metal Exchange cobalt prices have plummeted from an all-time high of $82,000 per ton in April 2020 to just $21,000, the lowest since the contract's launch in 2010. BMO Capital Market analysts wrote in a report that the ban may temporarily increase spot prices, but the effect could only be temporary, as mining companies would continue to stockpile cobalt. They said: "We fully anticipate that this will lead in the future to further supply control, the next step most likely being production or export quotas."
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New York Times Business News - February 26, 2019
These are the most popular stories from the New York Times' business pages. These stories have not been verified and we cannot vouch for the accuracy of these reports. Tesla announced on Tuesday that certain drivers in China can use Autopilot to assist with lane-changes and other advanced tasks on city streets. New York Public Radio announced on Tuesday it would be laying off about 7% its staff due to a continuing financial crisis. GenBioPro, America's largest abortion pill manufacturer, asked a Texas judge on Tuesday to add the company to a list of defendants of a lawsuit brought in October by the three Republican attorneys general of the states. GenBioPro is now involved in the first major abortion legal battle of President Trump's 2nd term. (Compiled by Bengaluru newsroom) - U.S. president Donald Trump signed an Executive Order Tuesday that directed his Commerce Secretary, Howard Lutnick to launch an investigation to determine whether the importation of copper into the United States and the production of this material abroad pose a threat to the economic and national security of America. (Compiled by Bengaluru Newsroom)
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As US stockpile reports counter rising supply concerns, oil prices edge up
After an industry group announced that U.S. crude stocks fell last week, oil prices increased marginally on Tuesday. Brent crude was up 20 cents or 0.3% to $73.22 per barrel at 0430 GMT. U.S. West Texas Intermediate Crude Oil Futures rose 18 cents or 0.3% to $69.11. Market sources reported on Tuesday that U.S. crude stockpiles fell by 640,000 barrels during the week ending February 21. They cited data from the American Petroleum Institute. The official U.S. data on stockpiles is expected later Wednesday. In a Wednesday note, ING commodities analysts said that if confirmed by the EIA today, this would be the first drop in U.S. oil inventories since the middle of January. The analysts polled estimated that U.S. crude stockpiles increased by 2.6 million barrels last week. On the supply-side, ING said that prospects for a deal between Russia and Ukraine were improving. The market was also looking at the possible implications of a deal on minerals between the U.S.A. and Ukraine. The ING strategists stated that "this would bring us closer to the lifting of Russian sanctions, removing a lot of the uncertainty in supply hanging over the markets." Sources familiar with the issue said on Tuesday that the U.S., Ukraine and other countries have agreed to the terms of a draft mineral deal which is central to Trump's plans to end the conflict in Ukraine as quickly as possible. After pulling oil prices down more than 2% on Tuesday, gloomy economic reports out of the U.S.A. and Germany have capped gains. Brent crude oil closed at its lowest level since December 23 while WTI registered its lowest settlement in December 10. Consumer confidence in the U.S. declined at its fastest pace in three-and-a half years in February, while 12-month inflation expectations surged. The German economy contracted in the final three months of 2024, compared to the previous quarter. The oil prices have been affected by fears that President Donald Trump’s decision to impose tariffs on China and other trading partners may add pressure to the economy. ANZ Bank analysts said in a client note that this has helped ease concerns about a tighter oil supply near term despite new U.S. Sanctions against Iran. Rory Johnston, an analyst at Commodity Context, said that even though U.S. policies could lead to a reduction of up to one million barrels per day in Iranian crude oil exports, OPEC+ countries hope to counter any loss in supply by bringing more supply to market in the months to come. Reporting by Shariq KHan in New York, Jeslyn Lerh from Singapore and Muralikumar Aantharaman. Editing by Kim Coghill and Muralikumar Aantharaman.
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Transocean Barents Gearing Up for Drilling Job in Romanian Black Sea
On a frigid morning on the Black Sea the sun is glaring into the quiet navigation room of the massive semi-submersible drilling rig Transocean Barents, anchored in Romania's Constanta port.In a matter of weeks, the rig - known as the Mighty Barents - will travel 160 kms out to sea and start drilling the 10 gas wells that make up Neptun Deep, one of the European Union's most significant gas deposits which will double Romania's production and potentially turn it into a net exporter at a time when the EU is winding down Russian gas purchases.Jointly owned by oil and gas group OMV Petrom, majority-controlled by Austria's OMV, and Romanian state-owned gas producer Romgaz, Neptun Deep holds an estimated 100 billion cubic meters (bcm) of recoverable gas."Once the ship goes out to sea it can start drilling in a few days," said OMV Petrom senior executive Cristian Hubati, adding it was a matter of weeks before that happened.On track to deliver first gas in 2027, Neptun Deep is Romania's biggest energy project since it completed its second nuclear reactor almost two decades ago.The project faces opposition from the country's rising far right, who regard gas exports as a betrayal of national interest, and protests and legal challenges from environmental activists, as well as fiscal uncertainty as the government seeks to lower the European Union's largest budget deficit.To get past the bridges of the Bosphorous Strait and into the Black Sea, Transocean's rig, which has previously drilled in Canada, Norway, Cyprus and Lebanon, has had to lower its ram guides for the first time since it became operational in 2009.Employees from 20 different companies were providing services on the rig, which has a cinema, a gym, a music room, a cafeteria and offices split over four levels.Once the drilling starts, with some wells at depths of more than 1,000 metres, the rig will host up to 140 staff, which will rotate every four weeks round the clock for up to 18 months, manager Pierre Gully said.(Reuters - Reporting by Luiza Ilie; Editing by David Evans)
Treasury yields rise slightly as dollar is weakened by US growth concerns
The U.S. Treasury yields recovered some ground after the House of Representatives on Wednesday.
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The dollar and oil prices are struggling due to growing concerns about the U.S. economic outlook.
After Trump ordered an investigation into possible new tariffs against copper imports on Tuesday, U.S. prices of copper rose by more than 4% overnight.
The Republican-controlled U.S. House of Representatives late on Tuesday narrowly passed Trump's $4.5 trillion tax-cut plan, sending the budget resolution to the Senate, where Republicans are expected to take it up.
Investors anticipate that more debt will be issued in the future, and the 10-year benchmark yield rose by roughly 3 basis points.
The yield on the two-year bond rose by 2.7 basis points to 4.129%.
Tony Sycamore is a market analyst for IG. He said, "(The plan's) progress was a bit faster than expected." You can see how yields are changing, and it caught people off guard.
In the previous session, yields fell to their lowest level in several months as traders increased bets on more Federal Reserve rate reductions this year due to growing concerns about the outlook for the largest economy in the world.
The latest survey data released on Tuesday shows that U.S. consumers' confidence dropped at the fastest pace in three-and-a half years in February. This is the latest of a series of surveys which indicate that both businesses and consumers are becoming more concerned about the policies of the Trump administration.
"We are not surprised by the low consumer confidence figures. We are surprised that they're coming out now, even before the tariffs have an impact on consumers," said Joseph Capurso of Commonwealth Bank of Australia.
Fed funds futures indicate that nearly 60 basis point of easing will be priced in before year's end, up from 40 bps just a week earlier.
This weighed down the dollar, especially against the yen. In the previous session, the greenback fell to a four-month low versus the Japanese currency.
The last time it traded, the yen was 0.25% higher than its previous price of 149.38. This is due to the recent rebound in U.S. Treasury rates.
The euro, in other currencies, fell 0.11%, to $1.0502. However, it was still near its one-month high. The pound was also within striking distance of a two-month high and bought $1.2651 last.
Capurso, of CBA, said that the dollar is weakening because of the soft economic data. But at some point you reach a threshold, where safe-haven flows are directed into the U.S. Dollar. "If things really get bad in America, say, the market begins pricing in a possible recession or even something that is close to one, the U.S. Dollar will always go up," said CBA's Capurso.
The outlook for oil demand is also clouded by fears of a slowing U.S. economy.
Brent futures rose by 0.08%, to $73.08 per barrel after falling more than 2% the previous session. U.S. West Texas Intermediate crude (WTI), however, increased by 0.09%, to $68.99 a barrel, reversing a portion of Tuesday's 2.5% decline.
Gold prices rose 0.2% on Wednesday, thanks to safe-haven flows. The ounce price increased to $2,920.83.
ASIA SHARES UPBEAT
On Wednesday, MSCI’s broadest Asia-Pacific share index outside Japan gained 0.67%, boosted by a rise in Chinese stocks.
Hong Kong's Hang Seng Index soared by more than 2%. The Hang Seng Tech Index also rose 3.6%.
The Shanghai Composite Index rose 0.5% while the CSI300 blue chip index increased by 0.15%.
Chinese stocks are on fire in the last few weeks. DeepSeek's AI breakthrough has reignited interest among investors in China's technological capabilities.
The rally was slowed down earlier this week by news that the Trump Administration plans to tighten the semiconductor curbs on China. Also, after the U.S. president signed a memo directing the Committee on Foreign Investment to restrict Chinese investment in strategic areas.
Vishnu Varathan is the head of Asia ex-Japan macro research at Mizuho.
Not in China's particular case. The U.S. is determined to cause significant industrial pain, which will compromise technological advantage and manufacturing capacity or clout.
Japan's Nikkei index fell by more than 1%.
After a mixed session, U.S. stocks futures have rebounded. Nasdaq Futures rose 0.5% and S&P500 Futures gained 0.35%.
The futures of the EUROSTOXX50 index also rose by 0.46%, while FTSE futures gained 0.43%.
Nvidia, the AI sector's poster child, will report its earnings for the quarter on Wednesday. This could provide clarity and justify high valuations.
Due to the slow returns and breakthroughs made by China's DeepSeek, investor scepticism about the billions of dollars that U.S. technology firms have invested in AI infrastructure has increased.
Jacob Falkencrone, global head of Saxo’s investment strategy, said that any signs of weakness within Nvidia’s report would have a significant impact on investor sentiment toward AI stocks in general.
This earnings report isn't about Nvidia...it's about if the AI revolution can continue its rapid pace.
(source: Reuters)