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Bolivia imports energy in crypto amid dollar and fuel shortages
Bolivia's state-owned energy company YPFB plans to use cryptocurrency as a payment method for its energy imports, despite a severe shortage of fuel and dollars in the South American country. After years of declining natural gas exports, the country has been battling a dangerous decline in its foreign currency reserves. This has led to a fuel shortage in the country that is manifested by long lines of people at gas stations. After the government approved the use of digital assets as a way to meet demand, a spokesperson for YPFB, a state-run energy company, said that a system was in place to allow cryptocurrency to be used to buy fuel imports. The spokesperson added that "from now on, (cryptocurrency transactions) will be carried out", adding that the new buying system was designed to support national fuel subsidy in Bolivia due to a lack of hard currency. A spokesperson for the government said that YPFB has not yet used digital currency to buy energy imports but it is planned to do so. Bolivia, which was a net exporter of energy for many decades due to its vast reserves of natural gas, is now reliant upon imports, as the domestic production of gas has decreased amid a lack major new discoveries.
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South Africa will incentivise the local production of EVs
The National Treasury announced on Wednesday that South Africa would spend 1 billion rand (54.27 millions dollars) to support local production of new-energy vehicles and batteries as well as other manufacturing projects. It is home to brands like Toyota, Ford, Isuzu, Volkswagen, and Mercedes, amongst others. According to the industry, government incentives and policy intervention will encourage original equipment manufactures to invest in the production of electrical vehicles in the nation. South Africa published its Electric Vehicles White Paper (PDF) in 2023. It outlined the country's plan to transition from producing mainly internal combustion engine cars to a mixture that includes electric vehicle by 2035. The treasury stated in its annual budget review that the department of trade, industry, and mineral resources planned to implement a regional strategic minerals plan, but did not give a timeframe. Minerals such as cobalt, lithium, copper and other critical minerals are essential for products such as solar panels and electric vehicle batteries. They are also key to the global energy transition. The Treasury said that 1 billion rand would be set aside for the Industrial Development Support Programme, a scheme designed to encourage firms in certain manufacturing sectors like automotive to invest in infrastructure. The Treasury added that the purpose of the incentive was to increase local production and assembly for new-energy cars, batteries and other projects focusing on operational efficiency and competition in new manufacturing projects. It added that the incentive was expected to attract investment of 30 billion Rands from the private sector.
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RPT-Ukraine Bets on US LNG as Gas Import Needs Rise
The state gas company of Ukraine said that it may import large quantities of U.S. natural gas via terminals located in Germany, Greece and Poland this year, as Kyiv continues to struggle with the effects of Russian attacks against its infrastructure. The White House is leading the talks to end more than three long years of war following Russia's invasion in Ukraine. Kyiv announced on Tuesday that it would accept a ceasefire offer, but Moscow is yet to accept one. The importation of U.S. natural gas to Ukraine could strengthen the economic relationship between Washington and Ukraine, while the presence of U.S.-produced gas in Ukraine’s storage facilities may deter Russian aggression. Dmytro Lyppa told an interview that Ukraine could import as much as 4 billion cubic meters of gas from April to October. Calculations based on average gas prices find that the total import bill would be at minimum $1 billion. Lyppa stated that up to 50% of the LNG imported through Europe would come from LNG terminals in Europe rather than pipeline gas. In an interview published on Wednesday, Lyppa stated that "if we look at the political aspect of it, it's better for us to get as much (U.S. Liquefied Natural Gas) to Poland as possible and bring it gradually to us." Lyppa stated that the geopolitical environment meant U.S. LNG would be preferable to rival Qatari LNG if only the price difference wasn't significant. RUSSIAN TRANSIT IS NOW OVER The Ukraine was the main transit route for Russian Gas until the start of this year when the transit agreement between the two countries expired. This deprived Russia of revenue from transit fees. Ukraine has also large underground storage facilities for gas. President Volodymyr Zelenskiy stated that Kyiv, the White House and other countries have discussed the possibility of using these sites to store U.S. Liquefied Natural Gas (LNG) which could be used in place of some western European gas upon which Ukraine is dependent. In recent weeks, Russian forces intensified their attacks on Ukrainian infrastructure (production and underground storage facilities), reducing Ukraine’s gas production. They also limited its ability to remove fuel stored in storage. Ukraine produced 52-53 millions cubic metres of natural gas per day prior to the recent attacks. However, a senior source in the industry said that the attacks had reduced production by as much as 40%, forcing Kyiv into increasing imports. Officials have refused to provide updated numbers, but some output has been restored. As temperatures begin to rise and gas consumption starts to decrease, Ukraine will typically start pumping gas in storage for winter 2025-26 when the current peak heating season ends. This is usually around April. According to energy officials, Ukraine must have 13 bcm in reserves by mid-October to ensure a smooth winter. Lyppa stated that LNG can be delivered to Ukraine via terminals located in Germany, Greece and Lithuania. Although the Polish and Lithuanian routes are the cheapest, Lyppa says Ukraine will also need to use other pipes as the Polish interconnector only allows imports of up to 7 millions cubic metres per day compared to a demand of 20-25. The exchange rate is $1 = 0.9158 euro. (Reporting and editing by Barbara Lewis.
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Satellite data shows that copper smelting has declined for the first four-month period.
Satellite data showed that global copper smelting dropped for the first four-month period in February, due to lower activity in plants outside of China's leading copper refiner. Earth-i, a specialist in observational data collection, tracks smelters that represent up to 95 percent of global production. It sells this data to fund managers and traders, as well as to miners and traders. The company stated in a press release that an average 8.8% of the global copper smelter monitoring capacity was inactive last month. This is up from 8.6% of January. This change was primarily driven by Europe, Asia (excluding China), and Oceania. Earth-i stated that "smelting activity is still strong, despite the current market conditions in terms of treatment and refining costs (TC/RCs)." Smelter inactivity, which accounts for over 40% of the capacity in China covered by the services, has fallen for the fourth month in a row to 5,5%, its lowest level since March 2023. The TC/RCs are at record lows, both for the benchmark annual terms and the spot market terms. Both of these terms are now marked in negative territory. Due to increased smelting capacity, the Chinese copper smelters are experiencing a shortage of copper concentrate. (Reporting and editing by Tomasz Jánowski; Reporting by Polina Deitt)
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Ecuador: upfront payment required for Sacha Oil Deal
The deadline for the Chinese-Canadian group to pay an upfront payment of $1.5 billion to Ecuador to develop the most productive oil block in the country has passed, said the energy minister on Wednesday. This appears to have scuttled the deal. The consortium, which is made up of subsidiaries from the Chinese state energy giant Sinopec, and Canada's New Stratus Energy had until Tuesday evening to pay the money and the deal wouldn't go through without it. The Energy Ministry has awarded the Contract for 20 years The northeastern Sacha Field, which produced 77,000 barrels of oil per day last year, was awarded without any public bidding. The awarding of this contract has been criticized by unions, indigenous organizations, and opposition politicians. They have questioned whether Amodaimi Oil Company S.L. (the Sinopec subsidiary) and Petrolia Ecuador (the New Stratus affiliate) have the technical and operating capacity to operate the Block. Ines Manzano, the energy minister, told Ecuavisa local television on Wednesday that there was nothing more to say than that the deadline had expired. If this contract does not proceed, the president has stated that he will consider other options. The government said that it did not have the money or technology to increase production in Sacha. Petrolia is the only member of this consortium to have publicly commented on the deal. However, it did not respond immediately to a comment request. The contract included a $1.7 billion investment plan and a plan for increasing production from the field by 100,000 barrels per d ay within the first three year. Authorities had stated that, despite clauses which determined production distribution on the basis of the price of crude oil and the levels of extraction, the government's take, including upfront payment, taxes, and charges for transportation, would be about 82%. Reporting by Alexandra Valencia, Writing by Julia Symmes Cobb
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Nyrstar will reduce production by 25% at Hobart Zinc operations in Australia
Nyrstar, owned by commodity traders Trafigura, announced on Wednesday that it will reduce production at its Hobart Zinc operations by 25% from April. This news sent prices up. A statement stated that "This decision is the result of a thorough, extensive review. It is a response to the deteriorating conditions on the market and financial losses suffered by Nyrstar Australia." In an email, Nyrstar said that the zinc smelter at Hobart is one of the largest in the world. It has a production capacity of 260,000 metric tonnes per year. However, it did not provide the most recent figures. Nyrstar has said that its Australian assets face significant financial challenges as a result of the worsening raw material market conditions, increased costs, and negative treatment charges. Hobart's General Manager Todd Milne stated that "we remain optimistic about our future and are flexible to increase production levels if operating conditions improve". According to a January poll, analysts expect the global market to be in surplus this year by 147,000 tons of the metal used primarily for galvanizing the steel. This is partly due to new mines being opened. The benchmark zinc price on the London Metal Exchange fell last month, to $2,706.50 per ton. This was their lowest level in almost four months, before recovering. LME prices rose on Wednesday after Nyrstar's announcement. They gained 1.9%, reaching $2,967 per ton at 1200 GMT. This was their highest level in almost three months. (Reporting and Editing by Louise Heavens, Eric Onstad)
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After a decade, oil production returns to Libya's Mabruk Field
Libya's Mabruk Oil Operations resumed production on the Mabruk Oilfield following a decade long shutdown, said the Government of National Unity in Tripoli. According to the statement, production officially resumed on Sunday, initially at a rate of 5,000 barrels a day. The statement plans to increase this to 7,000 bpd before the end of the month and to 25,000 bpd in July. As part of efforts to improve efficiency in the country's oil operations and infrastructure, crude began to be transported to the nearby Al-Bahi fields on Tuesday. Libya's National Oil Corporation had announced that it would reopen Mabruk Oilfield in the first three months of 2023, with a production capacity up to 25,000 barrels a day. In 2015, the field was closed after a terrorist attack which NOC described. The company lost $575 million on field equipment. Libya, Africa's largest oil reserve, has struggled since 2011 to maintain consistent production levels due to internal conflict and infrastructure damage. The statement on Wednesday said: "This is a significant leap forward for Libya's oil industry, reflecting improved stabilization and confidence in our ability to rebuild and boost national economy." (Reporting and editing by Kirsten Doovan; Tala Ramadan)
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Blackstone supports Trump's tariffs, saying it will boost US Manufacturing
Stephen Schwarzman, Blackstone's chief executive officer, backed U.S. president Donald Trump's tariffs on Wednesday. He said they would boost manufacturing in the United States as well as spur growth in the largest economy in the world. Since Trump took office in January, his focus on tariffs has rattled investors and consumers around the world. Economists have also warned of the possibility of a U.S. economic recession and the drag it would cause on the global economy. Schwarzman told reporters at Blackstone’s 20th Anniversary in India in Mumbai that he expected India-U.S. Tariff Negotiations to go relatively smoothly in comparison with other countries, following a recent meet between Prime Minister Narendra Modi, and Trump. He said that U.S. Tariffs "will result in a significant rise in manufacturing activity within the United States." Schwarzman stated that "given the size and scope of the U.S. this tends to be good for the rest of the world." Trump imposed a 25 percent tariff on steel and aluminum imports into the U.S., and plans to take similar measures with other goods. Amit Dixit (head of Asia Private Equity at Blackstone) said that the private equity giant plans to double the assets it manages in India from the current level of $50 billion in the next few year. This US investment company counts India as one of its top markets. It is also the largest owner of office buildings and shopping malls, and of logistics parks. The company has invested in electric vehicle components and IT services, and built one of India's top three hospital chains. Dixit stated that the U.S.-based company, which has around $60 billion in infrastructure assets worldwide, will also deploy funds to India's infrastructure, such as data centers, towers for telecoms, renewable energy, airports and ports. Schwarzman stated that "India is in need of infrastructure, and we would like to work towards this goal." Reporting by Dhwani Paandya, Mumbai; editing by Aditya K. Kalra and Chizu Nomiyama
Euro buoyed after Ukraine ceasefire proposal; tariffs squeeze stock
The euro rose to near 5-month highs Wednesday, as Ukraine was ready to accept a ceasefire lasting a full month. Meanwhile, stocks were thrown into turmoil by the back and forth of U.S. tariffs plans after levies against steel and aluminum imports began.
European equity futures jumped by 1.1%, and FTSE Futures rose by 0.5% after news that the U.S. will restore military assistance and intelligence sharing with Ukraine following Kyiv's acceptance of a U.S. proposed ceasefire.
In an interview published Wednesday, Sergei Lavrov, Russian Foreign Minister, said that Moscow would avoid compromises which could jeopardize the lives of people, Russian agencies reported.
In Asia, the euro was unchanged at $1.0913 and hit its highest level since October at $1.0947 on Tuesday. The Russian rouble reached a seven-month peak on Tuesday.
The U.S. tariffs on steel and aluminum of 25% went into effect on Wednesday. They had a relatively muted impact on share prices in Asian steel mills, and they drew countertariffs from Europe.
MSCI's broadest Asia-Pacific share index outside Japan was flat, but fragile. Australia's benchmark closed down 9.6% from February's record high.
Hong Kong, China and Taiwan markets were largely steady. South Korea and Taiwan rebounded. Japan's Nikkei remained stable after falling to a six-month low the day before.
Wall Street's S&P 500 flirted with a 10% drop from the record-breaking closing high of February, but ended a volatile session around 0.8% lower.
After Ontario halted plans to impose a surcharge for exported electricity, President Donald Trump threatened and then backtracked from a 50% increase in steel and aluminum tariffs against Canada.
Dollar has fallen, Treasuries are up and stocks have been selling at their highest level in months. Traders worry that tariffs and policy uncertainties will harm U.S. economic growth.
Bruce Kasman, J.P. Morgan's chief global economist, told reporters in Singapore that the U.S. economic outlook was heightened. Although we haven't yet changed our model forecast, the risk of a recession is now about 40%.
"If the U.S. enters a recession, we will have a more complex story because you'll need to understand that the financial spillovers from the U.S. to the rest the world are often very large."
Investors worried about the economy punished retailers with disappointing financial results. Dick's Sporting Goods shares plunged 5.7% after a gloomy outlook, and Kohl's Corp's shares fell 24% following a decline in sales.
Travel stocks were also hit after Delta Air Lines slashed its profit forecast by half, and rivals United Airlines and American Airlines warned about deteriorating results and falling government bookings.
The U.S. Inflation data for February will be released later in the day, but it's likely too early to see any impact of tariffs.
The central bank meeting of Canada will be closely monitored to find out what the monetary policymakers at the forefront of Trump's Trade War are thinking. The market has priced in a seventh consecutive rate reduction, which was only a slight possibility two weeks ago.
Overnight, the Canadian dollar fell to a low of C$1.445 before recovering. U.S. stock futures moved up 0.2%.
The yen slipped from its five-month high, trading at around 148 dollars. The Australian dollar, which is sensitive to risk, was held at just under 63 U.S. Cents. Brent crude futures traded just below $70 per barrel. (Editing by Shri Navaratnam).
(source: Reuters)