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Sources say that Fujairah's marine fuel prices are near their highest levels in a year, due to the suspension of Sudan supply.
Trade sources reported that spot premiums for marine oil at Fujairah - the third largest bunkering port in the world - held near to their highest levels during this year as the fuel oil supply was tightened following the United Arab Emirates' decision to stop importing Sudanese crude oil. According to Kpler ship tracking data, the UAE imported no Sudanese crude oil in August, despite receiving one or two cargoes per month of Nile Blend or Dar Blend crude this year. The reason for the imports being stopped was not immediately apparent. Sudanese crude oil is usually refined in Fujairah into very low-sulfur fuel oil (VLSFO). The UAE sources said this week that bunker premiums for VLSFO delivered at Fujairah to ships were offered for delivery five days before the date of the agreement at $15 per metric ton over Singapore benchmark fuel oil quotes. Offers for later deliveries ranged from $10 to $13 per ton. Sources said that premiums rose last week, reaching their highest levels for the year to date, after largely hovering around parity or low single digits in earlier months of this year. One of Dubai's marine fuel traders said that the supply of VLSFO cargo is now tighter, and loading has been delayed. A second trader stated that the price hike is temporary and fuel is still available two weeks in advance. Roslan Khasawneh is a senior research analyst at Kpler and a lead researcher for fuel oil. He said that it will take some time before refineries in Fujairah can get alternative crude supplies such as Doba oil from Chad or Escalante oil, which comes from Argentina.
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Chinese lithium miner calls for stricter regulation of the industry
Qinghai Salt Lake, a Chinese lithium producer, said that on Thursday compliance investigations were being conducted in Qinghai Province into the mining licenses of the metal for electric vehicle batteries. This is part of a trend towards stricter supervision of the sector. In response to investor inquiries, Qinghai Salt Lake responded in a filing made to the Shenzhen Stock Exchange that the investigations into mining permits are part of the tougher approach being taken by the regulators. Qinghai Salt Lake's own mining operation is "fully compliant and stable," according to the company. Local officials in July ordered Zangge Mining, a mining company in Qinghai Province to close a unit for "noncompliance". In August, Contemporary Amperex Technology said that it had closed a unit in Jiangxi Province due to an expired license. Although provincial officials have not provided many details, the crackdown coincides with a broader anti-overcapacity campaign in Chinese industry which was launched by President Xi Jinping in early July. In August, the prospect of a lower mining output led to a massive rally in lithium. The prices have fallen since then, but a new miner has been granted a license to operate in the Jiangxi Province lithium hub, Yichun. This eased fears of further production being suspended. Reporting by Amy Lv in Beijing and Lewis Jackson; Editing by Jacqueline Wong, Tom Hogue
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Asia markets rise as Fed comments and jobs data suggest rate cuts
Asian stocks rose on Thursday, mainly due to dovish remarks from Federal Reserve officials. A smooth auction of Japanese superlong debt also helped calm investor nerves. Australia, India, and Japan saw their shares rise, while Chinese shares dropped the most since April, on reports that regulatory intervention was being taken to curb runaway speculation. MSCI's broadest Asia-Pacific share index outside Japan gave up its early gains, and fell 0.2%. China was the main culprit, as it lost ground. Bloomberg News reported that financial regulators are preparing cooling measures to cool the market. The CSI 300 dropped as much as 2,6%. U.S. Stock Futures rose by 0.1%, as investors were encouraged by the comments of Fed officials and the smooth auction of 30-year Japanese Government Bonds. This attracted buyers to beaten-down stocks. The Nikkei rose 1.6%, and Australian shares gained 1% after their largest one-day drop since April. Tony Sycamore is a market analyst with IG Sydney. He said, "We had one or two weak days but dip-buyers stepped in." He added that many people see this September weakness as a good opportunity to buy, with the economy still growing. This is a positive backdrop for equity markets. India's benchmark Sensex rose 1.1% at the opening of markets, after the government slashed taxes on various goods to boost consumption and counteract U.S. Tariffs. Investors began September with a gloomy mood as a sale of longer-dated bonds dampened investor confidence in advance of Friday's crucial non-farm payrolls in the United States. The bond market sold-off overnight, but worries about the fiscal health in major economies, from Japan to the United States, and Britain, kept borrowing costs for long-term loans near their multi-year-highs. Investors received a boost in confidence after Federal Reserve officials including Governor Christopher Waller expressed their support for rate reductions in the coming months. Stephen Miran, the President Donald Trump nominee for an open Federal Reserve Board seat, has said that he will work to preserve independence of the central bank, before Thursday's confirmation hearing in front of the Senate Banking Committee. The latest "JOLTS", or Job Openings Report, released on Wednesday showed that job openings were lower than expected. This boosted market bets of a rate reduction at the Fed meeting scheduled for later in the month. Thilan Wickramasinghe is the head of research for Maybank in Singapore. The Fed is under pressure to lower rates this month, as the markets are eagerly awaiting an optimistic message. The Federal Reserve’s “Beige Book” painted a mixed image of the U.S. economy, which seemed to highlight monetary policymakers’ concerns. Analysts from ING described it as "bleak" and said that it contained "a lot of tariff warnings about prices". The CME Group's FedWatch showed that traders are now pricing a 99.7% chance of a rate cut at the Fed meeting in September. The yield on 10-year Treasury bills rose to 4,2226% from its U.S. closing of 4.211% Wednesday. The two-year rate, which increases with traders' expectation of higher Fed Funds rates, reached 3.6187%, compared to a U.S. closing of 3.612%. The dollar was up by 0.1% against the Japanese yen, at 148.25. It remained within the range of trading it has been in since August began. The euro currency fell 0.1% to $1.1650 while the dollar index, which measures the currency in relation to a basket other major trading partners' currencies, rose 0.1% to 98.239. Brent crude fell 0.6% on the commodities market to $67.17 per barrel. Gold spot prices fell 0.8% to $3529.94 an ounce, after reaching a record high on Wednesday.
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The Sakhalin Governor of Russia says that Exxon's return to Russia would be beneficial
The Governor of Russia's Sakhalin region in the far east told reporters on Thursday that a possible return of U.S. Energy Major Exxon Mobil could be a boon for local oil and gas businesses. Last month, Russian President Vladimir Putin issued a decree that would allow foreign investors to recover their shares in the Sakhalin-1 project. This includes Exxon Mobil, a major U.S. oil company. The decree was signed on the same day that Donald Trump and Russian President Vladimir Putin met in Alaska at a summit, where the agenda included opportunities for business collaboration and investment as well as talks about finding peace in Ukraine. The decree, published in November 2022 as a sequel to the one Putin had signed on October 20, which ordered the seizure the Sakhalin-1 Project. Exxon held a 30% operator stake in this lucrative project and is the sole non-Russian investor who has sold its stake. Valery Limarenko said that Russia has its own technologies for producing oil and gas including offshore but the return of Exxon would be helpful. He said, "We must develop further. In this sense, a joint development would be more effective." He added, "It's important they want to come back." Exxon has taken a $4.6 billion impairment charge to exit its Russian operations after Moscow sent troops into Ukraine, in February 2022. Putin extended the period of sale for the Exxon share in Sakhalin-1 that was not claimed until 2026. Exxon was joined by Rosneft of Russia, ONGC Videsh from India, and SODECO, a Japanese company, as well as other investors. Both ONGC Videsh (India) and SODECO (Russia) were allowed to retain their stakes by the Russian government.
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Bloomberg News reports that ArcelorMittal’s negotiations to sell its South African unit have stalled over valuation.
Bloomberg News reported Thursday that the talks between ArcelorMittal and state-owned Industrial Development Corporation to sell their South African unit have been stalled due to valuation differences. The report was based on people familiar with this matter. The report stated that while the parties could still come to an agreement about the fate of ArcelorMittal South Africa by the 30th of September, they want much more than was offered. Bloomberg reported that offers of up to 7 billion rand (398.6 millions dollars) have been discussed for the South African division. ArcelorMittal's South African unit, IDC and its South African division did not respond immediately to requests for comments. Could not verify the report immediately. ArcelorMittal South Africa, in a Tuesday statement to the Johannesburg stock exchange, said that the company was exploring different strategic options. The IDC had also been performing due diligence on the company. And the government pursued structural interventions. The Luxembourg-headquartered company said in July that talks with the South African government have so far yielded little progress to avert the closure of its loss-making long steel operations at its South African unit. ArcelorMittal South Africa delayed the closure in March after IDC invested 1.683 billion Rands. The number two steelmaker in the world said previously that the closure of the plant could not be delayed beyond September 30, unless a quick solution was found. IDC owns about 8.2% of ArcelorMittal South Africa. This makes it the second-largest stakeholder, after ArcelorMittal.
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Reactions to India's reduction of consumption tax on hundreds items
India announced on Wednesday that it would reduce taxes on hundreds of items, from soaps to cars, to boost domestic demand. It also simplified the complicated structure of its goods and services tax to just two rates, from four. There were some exceptions, however, for luxury goods and "sin goods". Early sessions saw the benchmark BSE Sensex (BSE index) and Nifty 50 rise by 0.8% each. Here's how the industry has responded so far: ANISH SHAH, GROUP COOPERATIVE & MD MAHINDRA GROUP "The next-generation GST Reforms... mark an important moment in India's quest to build a simpler and fairer tax system that is more inclusive. Mahindra views these reforms in a transformative way. These reforms simplify compliance, increase affordability, and energise the consumption while allowing industry to invest more confidently." SAURABH AGAWAL, PARTNER, AUTOMOTIVE TASKS LEADER AT EY INDIA The rationalization of GST on automobile vehicles and parts has been a welcome and significant change. This move, which makes vehicles more affordable in all segments will boost consumer spending and simplify the complex classification disputes that have plagued the industry for years. SAMIR SHAH, EXECUTIVE DIR. & CFO HDFC ERGO GENERAL INSURANCE COMPANY "The GST Council's decision to exempt health insurance for individuals from GST is an important development. This decision is in line with the regulator's broader goal of "Insurance for All By 2047", and represents a significant step forward. It is expected that the premiums will decrease due to the lower taxes. However, the exact amount of this reduction will depend on the availability of input tax credits, which we will learn more about in the next few days." NILESH SHAH, MANAGING DIRECTOR, KOTAK MAHINDRA ASSET MANAGEMENT CO The GST announcement reduces inflation, increases consumer sentiment, does not disturb fiscal consolidation, and improves the ease of doing business. It also partially offers negative effects of tariffs. SHAILESH CHANDRA PRESIDENT, SOCIETY FOR INDIAN AUTOMOBILE MANUFACTURERS This timely move will bring new energy to the Indian automotive sector and bring cheer to consumers. These announcements, which will make vehicles more affordable for first-time buyers, middle-income families and those in the entry-level segments, will benefit them greatly. C S VIGNESHWAR PRESIDENT, FEDERATION OF AUTOMOBILE DELIVERERS ASSOCIATIONS "The 56th GST Council Meeting marks a watershed for India's automotive retail industry. This is a bold step that will increase affordability, stimulate demand and strengthen India's mobility eco-system. "There may be a need for clarification on the levy of cess and how it is treated in dealer's books. This will ensure that there are no ambiguities during transition." SANJEEV ASTHANA, CEO, PATANJALI FOODS LIMITED. "At Patanjali Foods we are committed to passing these benefits on to our customers. This initiative not only will increase FMCG penetration in urban and rural India, but it will also act as catalyst for wider economic revival by boosting consumption and supporting related sectors. This reduction will benefit our categories like ghee soaps, biscuits and noodles, honey and chyawanprash." RADHIKA RAO IS A SENIOR ECONOMIST IN THE DBS BANK OF SINGAPORE The lower GST rate will have a positive impact on growth in the second and third quarters of this year, as well as FY27. It will also improve operational efficiency and expand the formal economy. GARIMA KAPOOR ECONOMIST INSTITUTIONAL EQUITIES ELARA SECURITIES MUMBAI We expect GST-related demand boost to add between 100 and 120 bps to GDP growth in the next 4-6 quarters. This will nullify the negative impact on exports to US. We remain positive on the increase in consumer demand as multiple policy levers are now favourable for the very first time in over a decade. SHRIPAL SHAH is the MD & CEO of KOTAK SECURITIES The GST rate reductions are timely, as they come just before the holiday season and in the context of US tariff disputes. Consumers will have more money to spend on essentials such as FMCG, autos and concrete. It should boost the demand and help businesses and traders see more volume. The earnings for next quarter may also be boosted. This could also help to reduce inflation. It will depend on how quickly the companies can pass these benefits onto their customers. DEVARSH VAKIL HEAD OF PRIME RESEARCH HDFC SECURITIES The GST reforms are a paradigm shift towards economic rationality. Rate reductions for essentials such as dairy, medicine, and food directly benefits consumers because of their inelastic nature. These reforms are a combination of RBI rate cuts, income tax rebates for FY26, and a moderated inflation. They create multiple stimuli to stimulate consumption and economic growth."
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Palm prices rise on the back of better exports
Malaysian palm futures were up on Thursday as traders anticipated robust export demand to key destinations. They also awaited demand and supply statistics from the Malaysian Palm Oil Board for additional cues. At the midday break, the benchmark palm oil contract on Bursa Derivatives Exchange for November delivery gained 38 ringgit or 0.86% to 4,480 Ringgit ($1,065.40), a metric tonne. The contract dropped 0.76% during the previous session. The Malaysian stock exchange will be closed Friday due to a public holiday. The price of crude palm oil futures rose as traders expect the demand for exports to remain strong in September. They are also waiting on data from Malaysian Palm Oil Board and export figures due next week. He said that "the production numbers will determine the direction of the market in the future". A survey on Wednesday showed that Malaysian palm oil inventories will rise for the sixth consecutive month, as production continues outpacing exports, despite an improvement in demand. Dalian's palm oil contract, which is the most active contract, gained 0.3% while soyoil prices rose by 0.14%. Chicago Board of Trade soyoil prices were up by 0.06%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils. Oil prices fell, extending a drop of more than 2% from the previous trading session. Investors and traders are looking ahead to a meeting at OPEC+ this weekend, where producers will likely consider a further increase in production targets. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures. The palm ringgit's trade currency, the dollar, has weakened by 0.14%, making it slightly cheaper for foreign buyers. Technical analyst Wang Tao stated that palm oil could test the support zone between 4,367 and 4,381 Ringgit per metric tonne. A break below this level would open up the road to 4,343 Ringgit.
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Heavy rains in Delhi flood Delhi's Yamuna River, crossing the danger mark.
After heavy rains in the north, parts of Delhi and Indian Kashmir flooded Thursday. However, weather officials predict some relief from the downpours. This year's fierce monsoon has caused immense destruction, with at least 130 deaths in August. The torrential rains in the Himlayan enclaves of Ladakh and Himachal Pradesh, as well as the federal territory Jammu and Kashmir and the Himlayan enclave Jammu and Kashmir have flooded many rivers to dangerous levels. After a breach in the Jhelum River embankment, authorities advised people to evacuate their homes. Omar Abdullah said on X that "the Jhelum is rising, but at a slower rate than expected." The administration will not lower its guard. "We continue to closely monitor the situation." Officials said that rescuers were searching for people who may have been trapped under debris at the Ratle Hydroelectric Power Project on the Chenab River in Drabshalla after heavy rain caused a landslide. Indian weather officials predict that showers will ease on Thursday with moderate rainfall expected in Jammu & Kashmir and Uttarkhand. The Yamuna River in Delhi, India's capital, reached the danger level on Tuesday. The Central Water Commission called it a "severe" situation. As a precaution, thousands of people had evacuated their homes to safer areas before the muddy water began pouring in. The historic Loha Pul or Iron Bridge that spans the Yamuna River in the old part of the town has been closed by the authorities. Many people waded in floodwaters around the historic Red Fort. They carried an idol of Lord Ganesha - the Hindu god that vanquishes all obstacles - for an annual ritual. Rains have destroyed crops on tens and thousands of hectares in Punjab, the breadbasket of the country. Since August began, 37 people have died. The floods in India and Pakistan were exacerbated by the authorities releasing water from dams. Reporting by Adnan Abidin and Tanvi Mehta from New Delhi; Fayaz Bukhari in Srinagar, Editing by Clarence Fernandez
AMBITION EUROPE-Stress relief as Japan's debt auction is successful
Gregor Stuart Hunter gives us a look at what the day will bring for the European and Global markets. Jittery bonds markets found calm after members of the Federal Reserve sounded a support note for rate reductions and Japan's most recent super-long bond auction passed without incident.
The markets stabilized after a Thursday auction of 30-year Japanese Government Bonds met with a bidding-to-coverage ratio of 3,31. This was after the yield of similar-dated debt reached a record. The bond market is not yet experiencing a new wave of fear, despite the fact that demand for 30-year Japanese government bonds was at its lowest level since June.
Investors in Asia took a positive view of the U.S. Stock Futures after Federal Reserve officials including Governor Christopher Waller reiterated their support for rate reductions in the months to come.
Stephen Miran, the nominee of President Donald Trump to fill a vacant seat on the Federal Reserve Board said that he would also work to preserve the independence of the central bank ahead a Senate confirmation meeting later today.
According to CME Group’s FedWatch tool, traders are pricing in a 96% probability that the Fed will cut interest rates during its September meeting.
The yield on 10-year Treasury bills rose to 4.2187% from its U.S. closing of 4.211% Wednesday. Meanwhile, the U.S. Dollar Index retreated 0.1% to 97.231.
Early European trading saw pan-regional futures flat, German DAX Futures slipping 0.1%, and FTSE Futures up 0.1%.
MSCI's broadest Asia-Pacific share index outside Japan, which had been up in the beginning, was down by 0.2% at its last update. China losses were to blame for this.
Bloomberg News reported that financial regulators were preparing cooling measures to cool the market. The blue-chip CSI 300 dropped 2.5%, and was on course for its largest one-day drop since April.
The SSE STAR 50 Index fell 5.4% as GPU chip maker Cambricon Technologies, a leader in the recent rally, dropped as much as 132%.
The BSE Sensex rose 1.1% at the opening of the markets after the Indian government slashed taxes on several items to boost consumption and counteract U.S. Tariffs.
Brent crude fell 0.7% on the commodities market to $67.16 per barrel.
Gold spot prices dropped by 0.8% to $3,531.63 an ounce, after reaching a record high on Wednesday.
The following are key developments that may influence the markets on Thursday.
Earnings: Broadcom, CVC Capital Partners, Lululemon Athletica
Eurozone economic data: retail sales for July
Debt auctions:
France: 10 year, 17-year, and 31-year government bond auctions
United Kingdom: 20-year government debt auction
(source: Reuters)