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Petronas estimates that the proposed ENI joint venture will take between one and two years to set up.
Petronas anticipates that it will take between one and two years to establish a joint venture proposal with Italian energy group Eni for some upstream assets located in Indonesia and Malaysia. This was revealed by a senior executive at the state-run company on Tuesday. In February, the companies signed an agreement on a joint venture to combine approximately 3 billion barrels equivalent of oil (boe) with an additional 10 million boe in exploration potential. The idea behind the combination was to create an independent entity that could be self-financed, Mohd. Jukris Abdul wahab, executive vice president of Petronas and chief executive officer of upstream, told the Energy Asia Conference in Malaysia's capital. Eni's Chief Operating Officer, Guido Brusco said: "This is a major game changer in the region." We are combining assets in Malaysia and Indonesia, especially the Kutai Basin." Eni's Kutai Basin investments include the Northern Hub and Gendalo Gandang Hubs, which contain massive gas reserves. Petronas said that it would like to include oil projects in Indonesia’s Kutai Basin as part of the joint venture. It proposed to swap its assets and blocks in Malaysia and Indonesia for Eni’s blocks in Indonesia. Petronas has said that it will exclude Indonesian assets awarded to the company recently, including the Binaiya block and the Serpang block. (Reporting and writing by Florence Tan and Ashley Tang, Emily Chow and Clarence Fernandez; editing by Tom Hogue and Clarence Fernandez).
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Dalian iron ore falls as traders evaluate mixed Chinese macro-data
Iron ore prices fell on Tuesday, as traders assessed mixed macroeconomic reports from China's top consumer. However, resilient steel mill profit lent some support. As of 0255 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.43% lower. It was priced at 696.5 Yuan ($97.00) per metric ton. The benchmark July Iron Ore price on the Singapore Exchange dropped 1.03%, to $93.1 per ton. The National Bureau of Statistics reported on Monday that China's crude-steel output fell 6.9% in May from a similar period a year ago to 86.55 millions tons. Official data released on Monday showed that new home prices dropped in May, continuing a two-year stagnation. This highlights the challenges facing the housing sector, despite multiple rounds of support policies. Retail sales, which are a measure of consumption, have picked up, providing temporary relief in the midst of a fragile truce between China and the United States. Galaxy Futures, a broker, stated that while blast furnace production is at its peak, profits are high and steel mills do not feel the need to reduce production. According to Mysteel, as of June 12th, 60% of China's blast furnace steel mills reported positive margins. Mysteel data revealed that the volume of iron ore arriving at ports fell by 8.62% on a weekly basis to 23,85 million tonnes as of 13 June. Coking coal and coke both increased by 0.77% and 0.74 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have lost ground. The price of rebar fell by 0.03%. Hot-rolled coils dropped 0.13%. Wire rods lost 0.67%. Stainless steel was down 0.6%. $1 = 7.1805 Chinese Yuan (Reporting and editing by RashmiAich; Michele Pek)
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GRAINS - Chicago soybeans fall on favorable weather and weaker soyoil
Chicago soybean futures declined on Tuesday after a two-day rally, due to favorable weather conditions for U.S. crops and lower soyoil price. As of 0222 GMT the most active soybean contract fell 0.23%, to $10.67 a bushel. This halted gains fueled by surging crude prices and stricter U.S. biofuel blend mandates. On Monday, soybeans reached a new high of one month and soyoil an all-time high of 20 months. Analysts say that tensions between Iran and Israel could cause energy prices to rise, causing a spike in grain prices. Andrew Whitelaw is an agricultural consultant with Episode 3. The region has a major impact on the grain markets. The Soyoil Contract dropped by 0.85% to 54.64 cents a pound as traders made profits and removed some support for soybeans. Oilseeds continue to be affected by a weakening demand, uncertainty over tariffs and global competition. The price of corn fell 0.06%, to $4.35 per bushel. This was due to the weekend rains that were beneficial for key growing areas, such as the Plains, the Northwest and Southeast Midwest, and parts of the Plains. However, strong export data helped curb losses. The latest U.S. corn harvest inspections reached 1.67 million tons, which is higher than expected. According to U.S. Government data, the weekly condition ratings of the corn crop in the United States also improved. They were the highest they had been for several years at this time. Soybean ratings declined. The price of a bushel rose by 0.84%, to $5.41. However, harvest pressures limited gains. After a slow start, the U.S. harvest of winter wheat is now expanding. The USDA reported that the winter wheat harvest was 10%, up from just 4% one week earlier but still behind the average for the past five years of 16%. Analysts had on average estimated harvest progress as 11%. Traders said that commodity funds bought soyoil contracts at the Chicago Board of Trade on Monday, but sold corn, soybeans, soymeal and wheat futures.
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Singapore exports fall unexpectedly by 3.5% in May
Singapore's domestic non-oil exports dropped 3.5% from the same period a year ago, according to government data released on Tuesday. This was in contrast with analyst expectations, as shipments into the United States plummeted a month after Washington announced new tariffs. The drop was compared to a poll prediction of an 8.0% growth year-on-year, and came after a 12.4% increase in April. Electronics shipments rose slightly, but petrochemicals and non-monetary gold as well as specialised machinery dropped. Brian Lee, an economist at Maybank, said that a boost in exports caused by frontloading is cooling. This can be seen in the 20,6% drop in exports from the United States compared to a year ago after five months of growth. He suggested that the drop could have been made worse by a large base from a year ago. In May, exports to Taiwan and Indonesia increased on an annual basis, while those to Thailand, Malaysia, and the U.S. decreased. The outlook remains uncertain for the financial center as the United States' tariffs are expected to slow global trade. Singapore's GDP forecast was downgraded in April from 1%-3% to 0%-2%, citing the risk of a recession and job loss. Gan Kim Yong, Singapore's Trade Minister, said in May that the U.S. would not budge from its 10% tariff on Singapore but that the nation was working to negotiate concessions for pharmaceutical tariffs President Trump had threatened to implement. Singapore, one of the most open economies in the world, is often viewed as a bellwether economy for global growth. Its international trade dwarfs that of its domestic market. (Reporting and editing by John Mair; Reporting by Jun Yuan Yong)
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Oil prices jump as Trump calls for Tehran to be evacuated.
U.S. Stock Futures fell and Oil Prices rose on Tuesday as Investors were shaken by U.S. president Donald Trump's request for everyone to leave Tehran, with the fifth day of Israel-Iran combat sowing fears of an broader regional war. The markets were tense after another report claimed that Trump asked the national security adviser to prepare the situation room when he cut his trip short to the Group of Seven Summit in Canada. Trump had earlier called on everyone to evacuate Tehran immediately and reiterated the fact that Iran should've signed a deal with the United States. Recent developments have triggered a wave in the early Asian trading. S&P futures dropped 0.46% and European futures declined 0.69%. Crude prices briefly rose more than 2%. The market is now exhibiting some risk aversion as it adds another element of uncertainty to the market. This was said by Tony Sycamore a market analyst with IG. Wall Street closed Monday higher after sources said that Iran wanted an immediate ceasefire between Israel and Trump, which also dampened a rally of crude prices. Israel's attack on Iran's state-run broadcaster and its uranium-enrichment facilities escalated the Iran-Israel air conflict, the largest battle between two long-time enemies. Investors moved towards safe-haven assets like gold, which gained 0.5%. Meanwhile, a rise in U.S. Treasuries drove yields down across the curve. The yield of the benchmark 10-year bond was about 2 basis points lower at 4.43%. The dollar strengthened against the euro and yen, while maintaining a tighter range. The broadest MSCI index of Asia-Pacific stocks outside Japan rose a little, and futures tracking Hong Kong’s Hang Seng Index also increased a bit. Investors will focus on interest rate decisions from a number of central banks this week, with the Bank of Japan's decision expected later that day. The BOJ's two-day meeting is expected to end with the BOJ maintaining short-term rates at 0.5%. However, markets will be interested in the institution’s view on quantitative tightening. The Nikkei 225 index in Japan rose 0.5%. Meanwhile, the yen fell to 144.96 dollars per yen. Investors expect the BOJ will consider slowing down its reductions in bond purchases next, as it focuses on avoiding major market disruptions, and tries to wean off the decade-long massive stimulus. This would be the country's first major decision after recent auctions showed a declining appetite for longer-dated bonds and drove yields on the country's debt to record levels. On Tuesday, the yields of 30-year and forty-year bonds were largely stable. Investors will pay attention to the comments of officials during a week that is filled with meetings by central banks around the world as they try to navigate Trump's unpredictable tariff policies and the impact they have on the global economic situation. On Wednesday, the Federal Reserve will likely hold its rates at the same level. However, the attention once again will be focused on the future path that Fed Chair Jerome Powell outlines for rate reductions. Traders have priced in two rate cuts by the end the year. Sycamore, IG's central banker, said: "To be a Central Banker is a challenging job right now. On top of the current tariff situation and trade policy as well as the signing of deals by deadlines there is this Middle East uncertainty." The macro backdrops we are seeing now are not more difficult than they were before. The risk of prolonged unrest and disruptions in oil supply have sent commodities prices higher. Brent crude futures contract rose 0.34% to $73.47 per barrel. West Texas Intermediate crude rose 0.43% to $72.09. Gold was trading at $3,393.05 an ounce, up by 0.3% for the day.
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London metals fall as dollar strengthens, Middle East tensions increase
The price of metals fell in London on Tuesday due to a stronger dollar, and the escalating tensions with Iran and Israel. As of 0124 GMT, the London Metal Exchange reported that three-month copper was down by 0.3%, at $9,673.50 a metric ton. LME aluminium fell by 0.1% to 2,511.50 dollars a ton. Zinc fell 0.4% at $2,649; lead fell 0.4% at $1,998.50; and nickel dropped 0.4% at $15,005. Tin fell 0.4% to $32,505. The SHFE's most-traded contract for copper gained 0.3%, to 78.500 yuan per metric tonne ($10,934.67). Israel and Iran attacked one another for the fifth day in a row on Tuesday. U.S. president Donald Trump called on Iranians to leave Tehran citing his country's rejection to a deal that would curb nuclear weapons development. As geopolitical tensions escalated in the Middle East, U.S. futures fell and oil prices rose. The dollar index increased by 0.3% against its competitors. The dollar's strength makes commodities priced in greenbacks more expensive for buyers of other currencies. Better-than-expected retail data from China released on Monday offered some relief and raised hopes for a rise in metals demand. As part of the deal between the United States and the United Kingdom announced during the G7 Summit, on Monday, the U.S. will impose a tariff-free quota for steel and aluminum imported from the United Kingdom. SHFE aluminium was unchanged at 20,400 Yuan per ton. Lead was also flat at 16,915 Yuan. Nickel fell by 1.1%, to 118.400 Yuan. Zinc gained 0.3%, at 21,870 Yuan. Tin fell 0.4%, to 263,620 Yan. Click or to see the latest news in metals, and other related stories.
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Australian shares lack direction due to financial counter miners
Investors were cautious after reports of an Israel-Iran possible ceasefire. This led to a decline in Australian shares on Tuesday. As of 0035 GMT, the S&P/ASX 200 was unchanged at 8,547.50. The benchmark closed Monday with little change. Reports late on Monday indicated that Iran had asked its regional allies, including the United States President Donald Trump, to exert pressure on Israel to bring about an immediate ceasefire. This raised hopes for a possible Middle East ceasefire. Market participants are trying to gauge how much of an impact the conflict between Israel and Iran could have on asset prices, said Kyle Rodda. Senior financial market analyst for capital.com. The Australian stock exchange saw heavyweight miners gain 0.6%, as the iron ore prices rose, supported by a resilient steelmaking demand. BHP Group, a mining giant, rose by 0.2%. Rio Tinto, a miner of iron ore, rose by 0.8%. Information technology companies rose by 0.3%. Australian gold stocks rose nearly 1%, as investors sought safe havens due to the conflict between Israel and Iran. Financials were among the losers, with a 0.2% drop after traders locked up profits to prepare for increased market volatility. The "Big Four Banks" lost between 0.1% to 0.6%. Oil prices fell after hopes of a ceasefire eased concerns about a disruption in crude supply from the region. Woodside Energy, the oil and gas company that dominates Australia's energy sector, lost 0.4% of its value while Santos, a smaller rival gained 0.4%. This was a day after Woodside Energy received an offer for $18,7 billion from a consortium led by Abu Dhabi National Oil Company. New Zealand's benchmark S&P/NZX 50 Index was mostly flat at 12,703,25 points.
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Ecuador reopens the mining concession registry seven years after it was closed
The mining ministry of Ecuador announced Monday that it had launched a new register of concessions, the first in seven years. This was done to encourage more mining projects in the South American nation and to curb illegal activities. Since 2018, the previous registry has been closed due to concerns about irregularities in concession system. No new concessions were granted since then. Mining Minister Ines Manuelo said at a recent press conference that "regulation is needed to protect investments and promote responsible development with respect for the environment and communities." The Ministry will open the register in phases, starting with small-scale nonmetallic mining such as limestone or clay, which are used to make cement and ceramics. The second phase, which will be for small-scale metal mining, is scheduled to open in September. In 2026, the registry will be opened to other forms of mining. Manzano stated that the National Mining Cadastre will consolidate all information about mining concessions in a transparent and efficient manner. Reopening coincides new regulations for how to apply for permits in small-scale non-metallic mines. Manzano stated that "we have improved the regulations, and we will issue guidelines to enable the proper development" of the mining value-chain. In October, President Daniel Noboa who pledged to combat drug gangs, boost the economy and fight the drug trade, ordered the relaunch of the mining registry as part of an mining decree which includes measures to stop the spreading of illegal gold mines. Ecuador exports more than $3 billion worth of copper, gold, and silver. Due to the opposition of indigenous communities and negative court rulings, Ecuador has lagged behind countries in the Andean region such as Peru or Chile when it comes to large-scale mining. Noboa’s administration also proposed new fees for mining, causing a backlash among the mining chamber of the country. Carolina Jaramillo, a government spokesperson, told reporters on Monday that fees will be based on the size and type mining projects and that an open dialogue is being held with representatives of the sector. Reporting by Yury Garca in Quito, Daina Beth Solon in Santiago and Jamie Freed.
Polish utility PGE Q1 profits jump on lower CO2 emissions costs
PGE, Poland's largest energy utility, reported on Tuesday a core profit of 4,33 billion zlotys (about $1.16 billion), up 71% from the previous year. This was primarily due lower CO2 emissions costs and regulatory revenue increases.
The results are in line with preliminary estimates that were reported by the company in mid-May.
Why it's important
PGE, along with other Polish utilities is experiencing structural changes in the energy landscape of Poland as renewables slowly replace coal, which has long dominated.
According to data from the Forum Energii think tank, coal's share of Poland's electricity generation fell to 57.1% by 2024. Renewable energy sources, however, reached a new record at 29,6%.
CONTEXT
The rise in the company's core profits was driven primarily by lower CO2 emissions costs and higher government-regulated payment for grid stabilization and capacity mechanisms.
The result was also positively impacted by the improved results of electricity sales to customers, and increased revenue from heat sales.
By the Numbers
The net profit of PGE for the first three months rose by over 170%, to 2,42 billion zlotys. Sales revenue increased by around 2%, to 17.17 billion Zlotys. This compares with 16.84 billion Zlotys one year earlier.
Cost of goods sold for the company was 13.34 billion Zlotys during the quarter. This is down 11% compared to 15.05 billion Zlotys at the beginning of 2024.
(source: Reuters)