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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.
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Portugal wants EU to press France reluctantly on power connections
Portugal, following a major blackout on the Iberian Peninsula last month, said that the EU must enforce the common market rules in order to integrate the Iberian power grid with wider Europe. This will overcome France's unwillingness to add interconnections. Experts and officials say that the blackout in Spain, which began on April 28 and left Portugal's mainland without electricity, could have been avoided if both countries had interconnections for power supply, rather than relying solely on their own power stations. Last Wednesday, energy ministers from Spain and Portugal wrote to EU energy commissioner Dan Jorgensen to ask him to step up. The Portuguese Energy Minister Maria da Graca Carvalho said to reporters at an event near Lisbon, that France has a large amount of nuclear power and is not interested in importing renewable energy cheaper from Iberia. She added that the European Commission could "pressurize" France to conform with the rules on the EU electricity markets. "If Portugal does something that is deemed a barrier to internal market, then the Commission will not waste time sending us a notice with an alert. We expect France to be treated the same way," Carvalho stated. Iberia, with a share of only 3%, is behind the EU target that all countries should have 15% or their energy systems interconnected to broader European networks by 2030. The strengthening of an existing interconnector that connects France and Spain is expected to be finished this year. A new underwater powerline that spans the Bay of Biscay will be completed in 2028. Carvalho says that although RTE, the French grid operator, has looked into the feasibility of two more interconnections to Spain across the Pyrenees in the future, they will not be included in France's plan until 2035. This "worries her". (Reporting and editing by Gareth Jones.
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Think tank: EU sanctions have cost Kosovo 600 million euros in unpaid funds
According to a GAP Institute report, Kosovo has been denied more than 600 millions of euros in external funding for environmental protection projects and energy projects, among others, ever since the European Union implemented sanctions in 2023. Kosovo's Government disputes the amount, but a report by a local organization gives one of first independent assessments on the impact of sanctions on one of Europe’s poorest country for its role in inflaming ethnic tensions in the north of its Serb majority. The GAP Institute reported that "the measures... have had significant financial and development consequences, costing Kosovo approximately 613.4 millions euros in projects suspended or indefinitely deferred." The funds affected are related to various financial instruments which have contributed to Kosovo's growth since its independence from Serbia. According to the report, environment and energy are the most affected sectors, with more than 460 millions of euros stalled. This is a major blow to a country which desperately needs to reduce the reliance it has on coal-fired energy generation. In the first half of this year, at least 150 millions euros were identified as funds that had been stalled. The EU hasn't publicly stated how much money is being delayed. The Kosovo government disputes these figures. A spokesperson said that aside from the 7.1 million euro it claims to have lost due expiration of contracts, these funds are "neither lost nor at risk", because they will be resumed when sanctions are lifted. Kaja Kallas, the EU's chief of foreign policy, said that the bloc will begin lifting sanctions "gradually", on condition that tensions between Kosovo and the north are de-escalated. Senior diplomats told reporters that EU funded projects would receive technical assistance in the coming weeks, but there is no plan at this time to distribute funds. Some EU members do not recognise Kosovo as a country, making lifting sanctions difficult. The diplomat stated that "the gradual lifting is not very substantial" and that it was unlikely the EU could move forward in funding. Kosovo is aspiring to be a member of the EU. Albin Kurti, the Prime Minister, has played a role in stifling the process by raising tensions and closing Serb institutions in the north, as well as by banning the Serbian dinar inside its borders and by stifling trade. Reporting by Edward McAllister, Fatos Bytyci and Sophie Walker
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South African rand falls as gold prices weigh
The rand of South Africa fell against the dollar Tuesday as risk sentiment increased following Donald Trump's decision not to impose tariffs on Europe. At 1510 GMT the commodity-backed currency of the country traded at 17,8900 per dollar, down about 0.2% from its previous closing. The Top-40 index on the stock exchange was flat, with mining companies facing pressure due to the drop in gold prices of more than 1%. Gold Fields, AngloGold Ashanti, and Sibanye Stillwater are all South African mining companies that traded lower for most of the trading session on Tuesday. Shares of Harmony Gold fell even more after the company announced that it had agreed to purchase Mac Copper Ltd, an Australian miner, in a $1.03 billion deal. Investors in the United States will be focused on this week's central bank interest rate announcement. Economists surveyed by predict that the South African Reserve Bank will cut its main rate of interest by 25 basis points on Thursday, to 7.25%. Inflation in South Africa remained below the SARB target range of 3%-6% in April, while the local currency recovered from recent losses and now trades below 18 dollars per unit. Data released by the central bank earlier that day showed that South Africa's composite leading Business Cycle indicator increased 1.1% from month to month in March. The yield on South Africa's benchmark government bond for 2030 was down by 5 basis points to 8.84%. Reporting by Bhargavacharya and Sfundo parakozov, Editing by Bernadettebaum and Andrea Ricci
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US Judge extends the topping period for Citgo Parent's auction to June 2
According to a Tuesday filing, a U.S. Federal Judge has extended until at least June 2, the deadline for rival bidders to enter bids during a court-organized sale of shares of Citgo Petroleum's parent company. Citgo Petroleum is owned by Venezuela. Last month, Delaware Judge Leonard Stark accepted a $3.7billion offer from Contrarian Funds affiliate Red Tree Investments, as the opening bid for the auction of shares. The auction was intended to compensate 15 creditors who were affected by debt defaults and expropriations. Red Tree and other rival consortia were given until the 28th of May to submit their submissions Competing Last week, lawyers for Venezuela requested that parties take more time to review parallel lawsuits before other U.S. courts which could have an impact on the price or conditions of certain bids. According to a proposed new calendar by some creditors the final hearing of the auction would still take place in July, after a "special master" appointed by the court overseeing the process of sale recommends a winning bidder next month. Several Venezuelan creditors who were involved in the case of Delaware, which lasted eight years, have filed lawsuits to recover the same assets. Last week, a New York court dismissed arguments from one of the creditors groups. The Venezuelan lawyers requested the extension. They wrote: "This is an important development in the sales process." The Venezuela parties respectfully request an extension to the topping period in order to allow bidders or potential bidders to account for what the special master called a "cloud of uncertainty" that hung over bidding. In court motions, some creditors supported the extension. (Reporting and editing by Nick Zieminski, David Gregorio and Marianna Pararaga)
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Oklo, South Korea's KHNP enter into agreement to develop Aurora nuclear facility
Nuclear technology company Oklo announced on Tuesday that it had signed a Memorandum of Understanding (MOU) for the development of Oklo’s planned Aurora powerhouse with South Korea’s nuclear plant operator Korea Hydro & Nuclear Power. In morning trading, shares of Oklo rose 1.9% to $49.71. Oklo said that the MOU also outlines plans for collaboration on the development of advanced nuclear technology worldwide. The nuclear industry is in high demand because it's considered a cleaner fuel source and more reliable than solar or wind energy. The U.S. president Donald Trump signed Friday executive orders to jumpstart nuclear industry. These orders direct the independent nuclear regulatory agency of the United States to reduce regulations and expedite new licenses for power plants and reactors. Oklo announced that it will deploy its 75 Megawatt Electric (MWe), Aurora powerhouse. This is a neutron-fission reactor designed to provide clean, affordable energy for industries such as data centers. The facility is at the Idaho National Laboratory. The company expects to finish the licensing process later this year. Aurora's nuclear technology allows it to only need to be refueled every 10 years. This is in contrast to traditional reactors, where one-third is replaced every 1 to 2 year. It is also expected to cost less. According to the agreement, the Oklo, backed by Sam Altman, will work with the South Korean nuclear construction and operation company on the development and verification for the Aurora powerhouse. (Reporting and editing by Shasheesh Kuber in Bengaluru)
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Indian miner NMDC's profit quarterly falls due to lower prices
The Indian state-owned mining company NMDC reported a decline in its fourth-quarter profits on Tuesday, due to lower product prices. Iron ore mining company's quarterly profits before tax and exceptional items came to 23.51 billion rupees (275.56 millions dollars), a 3.5% drop from the previous year. The company's profit, including taxes, increased by 2% in the quarter January-March due to lower expenses for tax. NMDC's average iron ore price was 4,206 rupees. This is lower than the 4,299 rupees average a year ago, according to JM Financial Institutional Securities. According to commodities consultancy BigMint, the company announced a reduction in price back in January. JSW Steel, who primarily purchases iron ore through NMDC said earlier this month that a continued drop in iron-ore prices was expected in the first three months of the current fiscal year. NMDC’s fourth-quarter operating revenue rose 7%, to 69.53 Billion Rupees. This was mainly because of higher sales at its pellets division, which saw a near 13-fold rise in revenue. The company's iron ore revenue fell by nearly 2% in the third quarter. ($1 = 85,3180 Indian rupees). (Reporting and editing by Shreya Biwas in Bengaluru)
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The US Core Capital Goods Orders are Plummeting, a Sign of Weak Business Spending
The number of new orders for capital goods manufactured in the United States plummeted in April, amid the uncertainty surrounding the economy due to tariffs. This suggests that business spending on equipment has weakened since the beginning of the second quarter. Commerce Department's report on Tuesday showed that shipments of this product fell last month. Economists say that President Donald Trump's reversals on import duties are making it hard for businesses to plan. This is evident from the decline in business sentiment. Stephen Stanley, Santander U.S. Capital Markets' chief U.S. economics, said: "I predicted months ago that business investments would be the primary driver of a softer performance in this year as executives delay their capital projects until there is more clarity about policy." These data confirm that hypothesis for the first time. Census Bureau of the Commerce Department reported that non-defense capital goods, excluding aircraft orders, fell 1.3% in April after a 0.3% increase, which was upwardly revised, in March. The economists polled had predicted that these core capital goods orders would dip 0.1%, after an earlier reported 0.2% decline in March. Core capital goods shipments fell 0.1%, after rising 0.5% in March. Orders for nondefense capital goods fell 19.1%. These goods were shipped at a 3.5% increase after a 1.1% decline in March. The first quarter saw a surge in business equipment spending, mainly information processing equipment. This was the fastest growth in four-and-a half years. This helped limit the drag of an import flood on the gross domestic product. Trump has deferred the increase in import duties for most countries until July. This month, the White House announced an agreement with Beijing that would reduce tariffs on Chinese products to 30% for 90 days from 145%. TARIFFS WHIPLASH Trump escalated his trade war last week, proposing to impose a 50% duty on European Union products starting on June 1, and threatening Apple with a 25 percent duty on iPhones made outside of the United States. Trump backed down from his threat to the EU at the weekend, and restored a deadline of July 9. He views tariffs as an instrument to, amongst other things, revive the long-declining U.S. industry base. Economists say that this feat would be difficult. Bookings for communication equipment fell 2.6% last month while orders for computers and electronics products increased 1.0%. Orders for electrical equipment, appliances, and components fell by 0.2%. Orders for metal products and machinery rose 0.8%, while orders for machines fell 0.2%. Last month, orders for durable goods (items such as toasters and aircraft that are meant to last at least three years) dropped by 6.3% after an upwardly revised 7.6% increase in March. Prior to this, it was reported that orders for durable goods had risen 7.5% in march. Last month, they were weighed down by the decline in commercial aircraft orders as well as the diminishing boost from tariff-related forward-running. Boeing announced on its website it received eight orders for aircraft in April. This is down from 192 in the month of March. Orders for motor vehicle and parts declined 2.9%. After a surge of 23.5% in march, the total number of transportation orders fell 17.1%. Christopher Rupkey is the chief economist of FWDBONDS. He said that many of the inputs used in the manufacturing of durable goods are manufactured in other countries and will have to be imported, at what appears to be a higher price, when tariffs are taken into account. "It will be very difficult to revive American manufacturing if factories are unable to get the parts that they need at a reasonable price and in a timely fashion."
Oil prices drop while bond yields increase and global stock indexes are near flat
MSCI's global equity index fell slightly on Monday, after a run of gains. Oil prices dropped on the prospect that production would increase and U.S. bonds yields increased after economic data. This was the beginning of a busy central bank week.
The yields on U.S. Treasuries rose following data showing that the U.S. Services sector growth in April had been boosted by higher orders.
The prices businesses paid for goods and services have reached their highest levels in over two years. This indicates that tariffs are contributing to the inflationary pressures.
The gold price rose, due to a weaker dollar and demand for safe havens ahead of the U.S. Federal Reserve’s rate policy announcement later this week.
After nine consecutive days of gains, MSCI's global stock index fell 0.67 points or 0.08% to 848.58.
Public holidays in Britain, China, and Japan affected the overall trading. The pan-European STOXX 600 rose and closed earlier up 0.16%.
Wall Street saw all three major indices gain some ground but the S&P 500, after nine days of gains, was headed for its first drop.
Sahak Manuelian is the managing director and head of equity trading for Wedbush Securities. He said that trading volumes were low.
Manuelian observed that while the trading volume was low, equity prices gained some ground as the session progressed.
The stock market opened lower due to renewed uncertainty over U.S. president Trump's policies on trade. He announced a tariff of 100% on films produced outside the U.S., but provided little clarity about how the levies will be implemented.
Adam Sarhan of 50 Park Investments, Orlando, Florida, said: "Markets love certainty, and investors woke this morning to more uncertainty about what could happen with tariffs."
Shares of video streaming services such as Netflix, Paramount Global and Netflix fell after the news about movie tariffs.
Sarhan stated that investors are worried more industries may be targeted "if they wake up and see another 100% or a 200% tax on some other important industry to our economy."
Trump said that on Sunday, the United States met with many countries including China about trade, and that his priority was to get a fair deal with China.
In recent days, optimism about a possible de-escalation in trade tensions between China and the U.S. has helped boost markets. European shares are trading at levels just below those seen before Trump’s major tariff announcement on April 2, which roiled the markets.
By 3:11 p.m. By 3:11 p.m. ET (1911 GMT), Dow Jones Industrial Average rose by 31.67 points or 0.08% to 41,349.10. The S&P 500 dropped 16.27 points or 0.29% to 5,670.40, and the Nasdaq Composite declined 64.77 points or 0.36% to 17,912.96.
Oil prices have fallen more than $1 a barrel on the energy market after OPEC+ announced over the weekend that they would increase oil production. This has caused investor concern about more oil supply at a time when demand outlooks are uncertain.
Brent crude ended the day at $60.23 a barrel, down by $1.06 (1.73%) or $1.06 per barrel.
The Taiwan dollar has seen a second session of strong gains against the U.S. Dollar, which reached a low of 28,815 and last traded at 28.990.
The rise of Taiwan's currency has sparked speculation about a revaluation by Asian currencies in order to gain U.S. concessions on trade.
The dollar index fell by 0.1%, to 99.77, measuring the greenback in relation to a basket of major currency including the yen, the euro and other major currencies.
The dollar fell 0.79% against the Japanese yen to 143.79.
The yield on the benchmark 10-year U.S. Treasury notes increased 1.7 basis points from Friday's 4.32% to 4.339%. The 30-year bond rate rose by 2.8 basis points from 4.795% to 4.8244%.
The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve (Federal Reserve), fell by 0.1 basis points, to 3.839% from 3.84% at Friday's close.
Spot gold increased by 2.63%, to $3,325.49 per ounce. U.S. Gold Futures increased 2.42% to an ounce of $3,310.10.
(source: Reuters)