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Vietnam to offer online gold trading as it permits private imports
Vietnam is planning to open a gold online exchange, allowing companies to import gold, for the first decade, starting next month. This will be part of efforts to stabilize domestic prices which are increasing at an alarming rate. Local economists say the move is intended to balance gold supply and demand. It could also be used to mobilize private resources in order to boost economic growth. State media quoted a central banking official on Thursday as saying that the State Bank of Vietnam is studying international experiences to set up the exchange. According to a report in the Dan Tri, the deputy governor of the SBV, Pham Quang Dug, said that the central bank would also consider trading gold at the Mercantile Exchange of Vietnam, or in a future international financial centre. Academics warn that rapid credit growth could cause asset price bubbles in the Southeast Asian nation, which is one of fastest-growing economies in the region. The central bank also tries to stabilize the price of domestic gold, which is a popular choice for investment and is considered an important tool for wealth preservation in Vietnam. In spite of efforts made last year to increase supplies through auctions and commercial bankers, domestic prices are up 60% this year and, as of Thursday, remain around 23% above the international market. From October 10, a government order will permit qualified companies to import the precious metal. A central bank licence will be issued to companies for gold imports and a quota set annually. Vo Tri Thanh, an economist based in Hanoi, said that more imports would help to cool the domestic gold price and reduce the gap between the local market and the global one. However, it could also pressure the exchange rate. Thanh explained that "you will need to pay U.S. dollar to import gold and the more you import the greater the outflows of greenback." The central bank announced earlier this week that the decree issued on August 26 will also end its monopoly over gold bullion in an effort to diversify the gold supply and increase competition and transparency in the marketplace. The central bank also said that it would tighten its controls on gold trading firms in order to prevent money laundering and other illegal activities such as smuggling, illegal trading, and speculation. The police in Vietnam have charged a former Saigon Jewellery chief executive with embezzlement, and abuse of authority. ($1 = 26 397 dong)
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Saudi Aramco wants buyers to buy more oil for October after a price drop, sources claim
Three sources with knowledge of the matter have confirmed that Saudi Aramco, the world's largest oil exporter, has asked Asian buyers for more crude oil in October. The kingdom had made price cuts deeper than expected on all grades due to a growing supply. Two sources claim that Saudi Aramco, in its bid to regain market share, spoke with Asian buyers at the APPEC Conference in Singapore this week, encouraging them to buy more crude oil in October. One of them stated that this has partially led to the delay of the October supply being allocated to their customers, possibly until next week. Aramco has not responded to a comment request. All sources spoke under condition of anonymity. The state-owned producer announced the price of its Arab Light crude for Asia in October at $2.20 per barrel, which is $2.20 above the average Oman/Dubai. This represents a $1 drop from the five-month high reached in September. The price reduction followed a decision made by the Organization of Petroleum Exporting Countries (OPEC+) and its allies, led by Russia, at the weekend to increase production by 137,000 barrels a day in October. Since April, the group led by Saudi Aramco, which pumps half of all world oil, has already increased production by 2.5 million barrels per day, or 2.4%. Analysts say the move shows that OPEC+ prioritizes market share, even if this means softer prices. The increase in production has not yet been felt on global markets, due to the strong Middle East oil market in summer. However, it is expected that this will cause global oil markets to become surpluses and global benchmark Brent oil to drop below $60 per barrel. Saudi crude exports from Saudi Arabia to China, the top importer, fell by about 43 million barrels between August and September. Brent crude futures fell slightly to $67.38 per barrel on Thursday, on concerns about a softer U.S. market and broader oversupply risks. However, losses were contained by worries over the Middle East attacks and Russia's conflict in Ukraine. (Reporting and editing by Clarence Fernandez in Singapore, Florence Tan, Siyi Liu)
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The EU's highest court has ruled against Hungary's nuclear aid
The EU's highest court ruled on Thursday that the European Commission shouldn't have approved Hungarian aid to expand its Paks nuclear plant by a Russian firm, as the Commission hadn’t checked whether the contract complied with EU rules. As part of a bilateral agreement between Russia and Hungary regarding the peaceful use nuclear energy, Hungary awarded the contract directly to Nizhny Novgorod Engineering of Russia. The Russian government then provided Hungary with an official loan to help finance the majority of the construction of the new reactors. In 2017, the European Commission also approved the project. In 2018, Austria, a neighboring country, filed a complaint with the EU General Court about the state assistance involved in the deal. However the case was lost. The Austrian government then appealed to the EU Court of Justice. On Thursday, the Court of Justice ruled that Austria was right in its argument that the Commission had to examine whether awarding the contract directly to the Russian firm was compliant with EU procurement laws. Bart Meijer, Sharon Singleton, and Helen Popper edited the article.
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IEA: World oil market will see increased supply and surplus after OPEC+ increase
The International Energy Agency stated on Thursday that the world oil supply would rise faster than expected in 2018, as OPEC+ member countries increase their output and the supply from outside of the group increases. It also suggested that a surplus may grow by 2026. The IEA, a consultancy for industrialised nations, has said that the supply will increase by 2.7 millions barrels per day in 2025. This is up from 2.5million bpd, as previously predicted. And by a further 2.1million bpd in next year. OPEC+ has added more crude oil to the market since the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies have decided to unwind their second layer of production cuts faster than originally planned. This extra supply has led to concerns of an excess and pressure on oil prices in this year. The IEA believes that supply is increasing faster than demand, despite its upward revision of the forecast for world demand growth this year, which was increased by 60,000 bpd compared to the previous forecast. It cited resilient deliveries in advanced countries as the reason. The IEA reported that "Oil markets were being pulled in various directions by a variety of forces. New sanctions against Russia and Iran could lead to supply losses, while OPEC+'s supply was higher and there was the possibility of an inflated oil balance." IEA's demand forecasts are lower than other forecasters, because the agency anticipates a quicker transition to renewable sources of energy. OPEC will update its forecasts on Thursday, with a demand increase greater than that of the IEA. The IEA said the world market looked oversupplied. Thursday's report suggested that the supply could exceed demand by 3.3 million bpd in the next year. This is due to growth outside of the OPEC+ and a small expansion in demand. The report from last month suggested a surplus for 2026 of nearly 3 million bpd. (Reporting and editing by Louise Heavens, Susan Fenton, and Alex Lawler)
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Iron ore prices fall as China's steel stocks rise
Iron ore futures prices fell on Thursday as the sentiment was weighed down by China, a major steel consumer. The day-traded iron ore contract for January on China's Dalian Commodity Exchange closed 0.81% lower, at 795.5 Yuan ($111.69), per metric ton. As of 0835 GMT, the benchmark October iron ore traded on Singapore Exchange fell 1.24% to $100.55 per ton. Analysts in Shanghai said that "Steel inventories continue to accumulate while demand is still not showing clear signs of improvement." The stock of five major steel products rose for the seventh week in a row, reaching a four-month record of 15,15 million tons during the week ending September 10. This was according to data provided by consultancy Mysteel. Prices were volatile earlier in the session as traders awaited important China data due on Monday. These include property, economic growth, and industrial metals output. First Futures analysts said that a tight balance between the supply and demand for ore, a key ingredient in steelmaking, is expected to support prices. The focus remains on whether Beijing will cut steel production across the country for the rest of the year in order to rebalance the market, which has been struggling with overcapacity as well as a faltering domestic demand. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell 0.51%, while hot-rolled coils dropped 0.03%. Stainless steel lost 0.35%, and wire rod gained 0.37%. Analysts said that prices of coking coal, which is also used to make steel, increased by 2.33% and 1.8%, respectively. The latest mine accident, in Heilongjiang Province, northeastern China, raised concerns about more stringent safety measures, which could limit supply. State media reported that all six trapped miners were successfully rescued. Reporting by Amy Lv, Lewis Jackson and Eileen Soreng; Editing by Ronojoy Mazumdar & Eileen Soreng.
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Investors weigh Israel's attack against Qatar and US rate cuts as they mix up the Gulf markets
Gulf stocks were mixed early on Thursday. They reflected a cautious mood, but there was no sign of a risk-off position after Israel's attack in Qatar. Traders appeared to be pricing the event as an isolated incident. Israel expanded its Middle East military campaign by targeting Hamas leaders in Doha. Regional investors, who have been navigating months' worth of geopolitical tension, seemed to see the event from a temporary, tactical perspective. Qatar's benchmark stock index fell 0.3% on track to extend its losses for the fourth consecutive session. Investors weighed political developments and possible diplomatic uncertainty as they sold financials. Qatar National Bank is the largest lender in the region. It has decended by more than 1%. Saudi Arabia's main stock index dropped 0.2% during choppy trading as investors sold selectively. Financials and energy sectors were among the losers amid concerns about a weaker U.S. oil demand and an oversupply. Al Rajhi Bank, the index heavyweight, lost 0.6% while Saudi Aramco dropped 0.2%. Aramco has raised $3 billion through a sale of dual-tranche Islamic bonds (sukuk), as it moves to tap the debt markets in order to strengthen its balance sheet due to lower oil prices. Dubai's main stock index rose by 0.1% after bouncing from its lowest level in almost two months. Emaar Properties, the blue-chip property firm, gained 0.7%. ADNOC Gas and Fertiglobe both rose 0.6% and 1.3%, respectively, ending a four-day loss streak. Investors are keeping a close eye on the U.S. Federal Reserve, as a positive reading of U.S. producer price levels has led markets to price a higher chance that three interest rate reductions will be made this year. (Reporting from Amna Marieyam in Bengaluru, Editing by Andrew Cawthorne.)
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Cnergyico, Pakistan's largest refiner, will increase fuel oil exports in response to a sharp drop in sales
Vice chairman of Cnergyico, Pakistan's largest oil refiner, said that the company expects fuel oil exports to increase by 35 to 40 percent during fiscal year 2026. This is because high taxes are reducing domestic sales. In June, Pakistan imposed an additional tax of around 40% on domestic fuel oil sales, in addition to a consumption-based tax of 18%. This effectively closed the market for its refiners. Usama Qreshi said on the sidelines APPEC that the company had exported 80,000 tonnes, or 95%, of its production from July until now, compared to 55% for the previous fiscal year which ended in June. Fuel oil sales, which are primarily used by ships, usually make up 10 to 15 percent of a refiner's revenue. Cnergyico exports 247,000 metric tonnes (1.57 millions barrels) per year. An increase of 35-40% would bring the annual exports up to 333,000 to 346,000 tons. Kpler's data showed that Pakistan's fuel exports reached a record high of 242,000 tonnes in August. Qureshi, who spoke in an interview, said that Cnergyico was upgrading its refinery to reduce fuel oil output and increase fuel sales on the domestic market in accordance with Pakistani policy guidelines for upgrading refineries to produce cleaner gasoline. Qureshi said, "We plan to import more sweet crude oil and upgrade the refinery so that it produces cleaner diesel and gasoline. We also plan to establish fuel oil cracking plants to boost gasoline production." Cnergyico imports sour crude from the Middle East with a high sulphur level. Last month, it was Pakistan's very first purchase of U.S. oil. The crude oil produced in the United States is typically low sulphur and produces less fuel oil after refinement. Qureshi stated that domestic sales of fuel oil is typically more profitable than exports. Export revenue is dependent on fuel cracks. The company sold fuel to traders, who then exported it to South Europe, Singapore and United Arab Emirates. Pakistan has significant fuel oil-based electricity generation capacity. However, utilisation of this capacity has plummeted in the last decade due to lower demand for power, increased solar adoption, and increased production from other clean sources, such as nuclear. (Reporting and editing by Clarence Fernandez; Sudarshan Varadhan)
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Elliott says Kansai electric can be more attractive by selling off non-core assets
Elliott Management, an activist investor and Kansai electric power shareholder, has said that the Japanese utility can become a better long-term investment if it sells non-core assets, boosts profitability, and increases shareholder returns. Elliott is now one of the three largest shareholders in Kansai, Japan's largest nuclear power company by number of reactors online. The stake, which ranges between 4%-5%, was disclosed on Wednesday by a source familiar with the situation. In a Wednesday statement released from London, Elliott stated that it looked forward to working closely with Kansai's management team and other key stakeholders in order to enhance the core business of the company. The company's statement stated that "by increasing shareholder returns, unlocking the capital from its non core assets, and improving profitability, We believe the Company can enhance its financing flexibility for future growth, and bolster its attraction as a long term investment proposition." Elliott claimed to have a "significant stake" in Kansai, making it the largest shareholder of Kansai. However, it did not reveal its size. Kansai refused to comment in a letter to on its relationship with individual shareholders. The company stated that it will continue to communicate with its shareholders in a variety of ways. Kansai shares rose 3.1% during afternoon trading in Tokyo. This outperformed the Nikkei Index, which was up 0.65%. Elliott wants Kansai to increase its dividend from 60 yen to 100 yen and to increase share buybacks through the sale of non-core assets. This source, who is not authorized to speak in public, was familiar with the situation. The source claimed that Elliott had identified non-core assets worth over 2 trillion yen (13.58 billion dollars) at the company, including real estate valued at more than 1 trillion yen and a stake in construction firms. Elliott has taken stakes in companies such as Tokyo Gas, Sumitomo Corp, and Dai Nippon Printing, in an effort to increase shareholder value and return on investment. Kansai Electric, besides its energy business, has assets in IT, real estate and other areas. However, it targets nuclear power to be the main source of earnings growth for the near-to mid-term. The company plans to maintain its 60-yen dividend per share for the fiscal year, despite an expected 30% decline in profits. $1 = 147.2800 Japanese yen (Reporting and editing by Jamie Freed).
Ukraine's DTEK invests heavily in battery storage to boost energy security
DTEK, a Ukrainian private energy company, announced on Thursday that it has built the largest battery storage facility in the country to ensure stable electricity supplies as a result of Russian attacks against Ukraine's energy industry.
Russia is attacking Ukraine's energy system and denying millions of Ukrainians power. It launched a full scale war against Ukraine 2022.
DTEK reported that its total investment for the project was 125 million euro ($146.13million). It said that six battery storage systems were connected to the electricity grid in Kyiv, the capital of Ukraine, and the Dnipropetrovsk region in eastern Ukraine.
The combined facilities were built in partnership with Fluence, an American leader in intelligent energy storage. They can store 400 megawatts of electricity, enough to power 600 000 Ukrainian households for 2 hours.
DTEK stated that the new systems will increase the safety of the electricity supply, and reduce the risks of accidents and outages. This is especially true in the event of an accident or breakdown of some power generation.
Svitlana Grinduk, Ukraine's Energy Minister, said that the energy storage system is as important as the energy production itself in the context of the large-scale attacks against Ukraine's energy systems.
(source: Reuters)