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Sources say Indonesia will sign a $8 billion refineries deal with a US company amid tariffs agreement.
According to two sources with knowledge of the matter, and a presentation from the economic ministry, Danantara, Indonesia's sovereign wealth fund, plans to sign a $8 billion contract with U.S. engineering company KBR Inc. to build 17 modular refining plants. The contract was part of the trade agreement between Indonesia and the United States last week, which led to the reduction in threatened tariff rates from 32% to 19%. Airlangga Hartarto of Indonesia, who is the chief negotiator for the deal, revealed the modular refinery design during a briefing held behind closed doors on Monday night with Indonesian business leaders. Two sources confirmed that the deal was discussed in a presentation. Danantara, formerly Kellogg Brown & Root Inc., and KBR Inc. did not immediately reply to requests for comments. The proposed refinery contract has never been reported before, even though some details have been released, including the increased energy cooperation. Reporting by Stefanno Sulaiman, Dewi Kurniawati and Gibran Peshimam. Editing by Stephen Coates.
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Oil prices fall as concerns about trade wars increase fuel demand
Investor sentiment was impacted by the decline in oil prices on Tuesday, as fears that a brewing trade conflict between the U.S.A. and European Union would reduce fuel demand growth through a reduction of economic activity dampened investor confidence. Brent crude futures dropped 52 cents or 0.75% to $68.69 per barrel at 0325 GMT. U.S. West Texas Intermediate Crude was $66.69 per barrel, down by 51 cents or 0.76%. Both benchmarks ended the day slightly lower. The WTI August contract expires Tuesday, and the September contract, which is more active, was down 54 cents or 0.82% to $65.41 per barrel. "Broad Demand Concerns continue to simmer amid escalating trade tensions in the global market, particularly as markets watch the latest threats of tariffs between major economies, and Trump's possible announcements before August 1 deadline," said Priyanka Sackdeva, Senior Market Analyst at Phillip Nova. She added that investors are also looking at the ripple effect of new U.S. sanctions against Russian crude. Concerns about supply have been largely alleviated since major producers increased output and a ceasefire between Israel and Iran on June 24, ended the conflict. Investors are becoming increasingly concerned about the global economy due to changes in U.S. Trade Policy. The weaker dollar has helped to support crude oil prices as buyers of other currencies pay less. In a recent note, IG analyst Tony Sycamore noted that prices have fallen "as trade-war concerns offset the support provided by a softer dollar". Sycamore has also suggested that the tariff dispute between the U.S.A. and EU could escalate. According to EU diplomats, the EU is looking at a wider range of counter-measures that could be taken against Washington as prospects for a trade agreement are fading. US has threatened to impose 30% tariffs on EU imports if no deal is reached by August 1. As the Organization of the Petroleum Exporting Countries (OPEC) and its allies reduce their output, there are signs of a rising oil supply on the market. Saudi Arabian crude oil exports rose in May to their highest level in three months according to data released by the Joint Organizations Data Initiative on Monday. (Reporting from Anjana Anil, Bengaluru; Sudarshan Varadhan, Singapore; editing by Christian Schmollinger & Jamie Freed).
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Dutch Contractor Completes Malaysia’s Largest 'Rig-to-Reef' Decom Project
Dutch offshore contractor Marine Masters has completed its offshore scope for the decommissioning of the South Angsi Alpha (SAA) platform, operated by Hibiscus Oil & Gas Malaysia, marking a major milestone in the repurposing of retired offshore infrastructure.The platform’s substructure is now resting on the seabed as part of Malaysia’s largest rig-to-reef project.The SAA platform, located 130 km off the Terengganu coast, was a 4,000 mt weighing four-legged Mobile Offshore Application Barge (MOAB) that served as a full production facility for over 15 years.Following cessation of production, the topside and substructure were prepared for safe removal and partial reefing in line with Malaysian regulatory approvals. This marks the largest platform ever to be decommissioned and repurposed within Malaysian waters.Marine Masters was overall responsible for the removal of the MOAB by making use of the reversed installation method and the removal of various associated components for safe onshore disposal.The jacket was cut at -55 meters LAT and vertically separated, allowing the sections to be laid on the seabed as artificial reef structures. Additional tasks included the recovery of all 13 conductors, the retrieval of four MOAB support legs, and the cutting and transport of the Wellhead Access Platform.The MOAB topside has been skidded to shore at Labuan Shipyard, and all loose items have been offloaded. The ENA WB400 accommodation work barge was demobilized at the same time, while the two transport barges are currently en route to their respective demobilization ports.This marks the conclusion of Marine Masters’ active offshore operations on the project.Although the offshore scope is complete, the project continues with the final handling and disposal of the topside components.“This has been a highly successful campaign, with minimal delays and strong teamwork throughout. We are grateful to our client Hibiscus for their trust in us and having given us the opportunity to show that the combination of our oil and gas experience and salvage mindset is key for the safe and cost-efficient execution of a fast-track project like this. A special thanks to the Hibiscus project team for the pleasant and transparent collaboration,” said Danny Spaans, Founder & Director of Marine Masters.The South Angsi Alpha campaign stands as the largest decommissioning and reefing operation of its kind in Malaysian waters, and serves as a blueprint for responsible offshore retirement. The SAA decommissioning is part of Hibiscus Petroleum’s broader sustainability vision. The rig-to-reef initiative aligns with efforts to preserve biodiversity, enhance marine ecosystems, and promote sustainable fisheries and ecotourism in the region.
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MMA Offshore Officially Becomes Cyan Renewables
MMA Offshore has rebranded to Cyan Renewables following the acquisition, and opened a Melbourne office to support Australia’s offshore wind sector.The rebrand marks a pivotal step in aligning the business with Australia’s emerging offshore wind industry and the broader global transition to clean energy, the company said.Cyan Renewables to Buy MMA OffshoreWith the opening of Melbourne office, Cyan has established a regional presence adjacent to key upcoming offshore wind farm developments in Victoria and New South Wales.Cyan’s Melbourne office will be headed up by Wesley Griffiths, Head of Offshore Wind, Australia. Wes is an accomplished project logistics professional with significant experience in managing complex logistics project for the offshore wind and traditional energy sectors.With a track record across marine operations, subsea services, and complex offshore projects, the newly branded Cyan Renewables is well positioned to support the energy transition including the developing offshore wind industry in Australia, from early-stage surveying and construction support to long-term vessel operations and maintenance.“Australia is entering a transformative era for offshore wind, and Cyan Renewables is here to help make that transition possible.“By combining MMA’s deep local expertise with Cyan’s global focus and experience in renewables, we’re building a best-in-class partner for Australia’s clean energy future,” said Keng Lin Lee, CEO of Cyan Renewables.
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Iron ore continues to gain on China's stimulus hopes
The price of iron ore futures rose on Tuesday as investors hoped for more stimulus following Beijing's announcement of a $170 billion hydropower plant to boost the economy. As of 0313 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 1.74% higher. It was 817 yuan (113.93 dollars) per metric ton. The benchmark iron ore for August on the Singapore Exchange rose by 0.89% to $104.4 per ton. "Iron Ore Futures extended recent gains amid the prospect of additional stimulus measures. Beijing's announcement about the $170 billion project to build hydropower promises to deliver a positive boost for steel," ANZ analyst said in a report. The move also sparked hope that the government might be reverting back to traditional fiscal stimuli strategies to boost economic growth. ANZ said the positive sentiment was further supported by the ongoing efforts to reduce excessive competitiveness and overcapacity within the steel industry. Analysts say that hot metal production, a good indicator of demand for iron ore, is still high. Everbright Futures reported that on the supply side, there was a mixed picture. Australia's volume continued to drop, while Brazil's volume rebounded. In the meantime, Chinese steelmakers bypass tariffs by exporting semifinished steel billets. These are not subject to trade restrictions in many countries as finished steel products. This strategy is a major factor in the rapid increase of exports by the world's biggest steel producer. Researchers noted that despite robust exports, China's steel production from blast furnaces powered by coal must be reduced in order for it to meet its carbonisation target. Coking coal and coke, which are used to make steel, have both seen a rise of 5.97% and 2.96 percent, respectively. All steel benchmarks at the Shanghai Futures Exchange increased. The price of rebar increased by 0.75%. Hot-rolled coils rose by 0.98%. Wire rod grew 1.23%. Stainless steel gained 0.08%. ($1 = 7.1712 Chinese yuan). (Reporting and editing by Janane Venkatraman; Reporting by Lucas Liew)
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Gold prices rise to a new high after a month-long slump in the dollar and bond yields
The gold price rose on Tuesday, reaching its highest level in over a month. This was largely due to a lower U.S. Dollar and lower Treasury yields. Investors were looking for progress in the trade negotiations ahead of a deadline set for August 1. As of 0258 GMT, spot gold remained unchanged at $3.390.69 an ounce. Bullion had reached its highest level in this session since June 17. U.S. Gold Futures hold their ground at $3.405.20. Kelvin Wong, senior market analyst at OANDA, said that "Gold's upward movement has been largely supported by positive technicals as well as reinforced a wide base of dollar weakness." The U.S. Dollar Index hovered near a low of more than a week against its rivals. This made gold priced in greenbacks less expensive for holders of other currencies. On Monday, the benchmark 10-year U.S. Treasury rates hit a record low of more than a week. According to EU diplomats, the European Union is looking at a wider range of countermeasures against the United States because prospects for a trade agreement acceptable with Washington are fading. If no agreement is reached by the deadline of August 1, Donald Trump, U.S. president, has threatened to impose 30% duty on imported goods from Europe. Wong stated that there was a chance that the U.S. or the trading partners would not agree on the terms. This could lead to some uncertainty, and market participants could engage in hedging. The European Central Bank will also be on the radar. It is expected that the interest rate will remain at 2.0% following a series of reductions at the end its policy meeting of July 24. Next week, the U.S. Federal Reserve will announce its monetary policy. According to the CME FedWatch tool, traders are pricing in a 59% probability of a Fed rate cut in September. In a low interest rate environment, gold tends to do well. Silver spot fell 0.2%, to $38.84 an ounce. Platinum rose 0.8%, to $1.449.11, and palladium dropped 0.2%, to $1.262.89. (Reporting and editing by Sherry Jacque-Phillips in Bengaluru)
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Council says that demand from India will support the price of crude palm oil at 4100-4300 ringgit.
The Malaysian Palm Oil Council stated in a Tuesday statement that the price of crude palm oil is expected to range between 4,100 and 4,300 Ringgit ($970-$1,017) for the next month. This will be driven by the strong soybean oil markets and the festive demand from India. MPOC said that any rise in the price of vegetable oil could be limited by an abundance of oilseeds worldwide, especially soybeans. There are no shortages currently on the market. MPOC reported that global vegetable oil prices recovered from losses in the early part of the year, with soybean oil leading this recovery. It has increased 19% since January and outpaced gains in palm oil and rapeseed, while sunflower oil was stable. The report said that palm oil's price has become more competitive due to the strong prices of soybean oil. MPOC also noted that Malaysian Palm Oil exports to India had recovered significantly since April, with India's monthly palm oil imports remaining consistently over 250,000 metric tonnes in May and June. This positive momentum will continue into the third quarter. It is supported by favorable prices and a restocking of products before the Diwali Festival in October. India will import around 2.9 millions tons of palm oils in the third quarter to meet demand during the festive season. The firm interest in palm oil will continue to drive up prices, it stated.
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Shanghai metals prices rise as China's demand improves
On Tuesday, the most traded metals contracts at the Shanghai Futures Exchange increased. This was supported by better signs of demand from China. The Chinese authorities are vowing to stabilize industrial growth as well as a major hydropower plant in Tibet. SHFE nickel rose 1.41% at 0100 GMT to 123400 yuan (17,205.3) a ton. It hit 124180 yuan earlier in the session, its highest level since May 22. Zinc grew by 0.26%, to 22,845 Yuan. Lead climbed by 0.15%, to 16,960 Yuan. SHFE aluminium rose 0.48% to 20 845 yuan, after reaching a new high since March 14, at 20,880 earlier in the day. The Chinese government's plans to stabilize industrial growth, and the opening of the massive Tibet hydropower station are all positive signs for the metals markets. In addition, the prospects of metals demand in the country will boost the sentiment. Analysts added that it is unclear just how much demand there will be. An analyst in Shanghai echoed this view and said, "Despite all the uncertainty, such news seems definite and positive. This may support the commodities market for a little while." On July 19, China began construction of the largest hydropower project in the world on the eastern edge of the Tibetan Plateau. The estimated cost is at least $170 billion. The three-month contract for copper on the London Metals Exchange increased by 0.07%, to $9,866.5 per ton. Nickel fell 0.28% at $15,480, while tin dropped 0.08% at $33,785. Zinc and aliuminium were flat at $2.644.5 and 2.836.5 respectively. Investors outside China remained cautious and focused primarily on new developments in the trade talks between the U.S. After a short fall in the previous session, the U.S. Dollar traded in a narrow range. Click or to see the latest news in metals, and other related stories.
Report: China must reduce its steel production by 2025 to achieve the decarbonisation goal
Researchers said that in order to meet the green steel goal for this year, China must reduce its steel production from coal-powered blast furnaces by over 90 million metric tonnes from 2024.
Why it's important
Around 8% of carbon dioxide emissions are attributed to the global steel industry, and China produces more than half of all global steel.
Analysts at the Centre for Research on Energy and Clean Air in Helsinki said that if China met its goal of producing 15% of its steel using electric arc furnaces this year, CO2 emissions could be reduced by 160 million tons. This is almost equivalent to the carbon footprint of the European Union's steel sector.
By the Numbers
China is far behind other countries in the world when it comes to electric arc furnace steel. According to the centre, the average global share is 30%, with 71.8% of that in the United States and 58.8% India, and 26.2% Japan.
The report said that from 2021 to 2025's first half, China's capacity utilization of blast furnaces increased from 85.6% up to 88.6%. However, the utilisation of electric-arc furnaces fell from 58.9% down to 48.6%.
KEY QUOTE
Belinda Schaepe is an analyst with the Helsinki-based Centre. She said that a credible strategy would address the structural problems of the sector and ease global tensions.
CONTEXT
China will produce 1.005 billion tonnes of crude steel by 2024. Around 90% of this will be produced in blast furnaces.
Overcapacity in China's steel industry has led to a decline in prices, and has prompted a growing backlash against the country from its global trading partners.
High power costs, an unstable scrap supply, and increasing losses have been a major obstacle for cleaner electric arc plants. Reporting by Amy Lv, Lewis Jackson and Cynthia Ostert. Editing by Cynthia Ostert.
(source: Reuters)