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EUROPE GAS - Prices edge lower due to strong supply and rising gas stocks
The wholesale gas prices in the Netherlands and Britain fell slightly on Thursday morning, as a result of a strong supply and increasing gas stocks. LSEG data shows that the benchmark Dutch front-month contract was 31.94 euros per Megawatt Hour (MWh) at the TTF Hub, or $10.91/mmBtu at 0803 GMT. The Dutch day-ahead contracts was down by 0.23 euros at 31 Euro/MWh. The British gas day-ahead price fell 0.70 pence to 77.10 pence a therm. The market is calm as Europe managed to fill its storages during the summer. Despite maintenance work in Norway, supply concerns remain low. Gas Infrastructure Europe released the latest figures showing that Europe's gas storage tanks are 78.3% filled. LSEG data shows that the total Norwegian export nominatons increased by 7 million cubic meters/day to 254 mcm/d. LSEG data also showed that liquefied natural gas supplies increased, with the sendout to Northwest Europe increasing by 135 gigawatt-hours a day. This amounts to 2,388 GWh/d. In a daily note, LSEG analyst Yuriy Onieshkiv stated that the market was expected to remain rangebound. There were no new factors to support or pressurize prices. The benchmark contract on the European carbon markets was up by 0.22 euros at 75.17 euro per metric ton. (Reporting and editing by Joe Bavier; Susanna Twidale)
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Tea exports from India and the global supply are threatened by a dry climate
Kamini Kurmi, a picker at a tea estate in Assam (India's northeastern State), wears an umbrella over her head so that her hands are free to pluck the delicate leaves off the bushes. Kurmi is one of many women who are employed to harvest conventional crops using their dextrous hands, rather than machines. The extreme weather conditions are shrinking harvests in India's tea plantations. This is threatening the future of a beverage industry that has been renowned for refreshing beverages like Assam and Darjeeling. It also threatens a global market valued at over $10 billion per year. Scientist Rupanjali Baruah of the Tea Research Association said that shifts in rainfall and temperature patterns are not longer anomalies. They are now the new norm. The changing patterns will reduce yields, and the rising Indian domestic demand is expected to decrease exports. India is the second largest producer of tea in the world. Indian exports could increase prices, even though other major producers like Kenya and Sri Lanka are stagnating. Last year, Indian exports accounted for 12% of the global trade. The tea prices in Indian auctions have only grown 4.8% per year over the past three decades. This is far below the 10% growth achieved by staples like wheat and rice. The 7.8% drop in output last year, to almost 1.3 billion kg (2.85 billion lb), mainly due to a steep fall in Assam boosted prices nearly by a fifth. Manju Kurmi has been working in tea gardens for over 40 years. She used to pick around 110 kg (243lb) of leaf per day. "But I'm only able to manage 60 kg (132 lb) now that the weather is hotter." Falling yields put pressure on an already struggling industry that is also facing heavy debt and shrinking margins. This makes it harder for companies to reinvest in plantations, replace ageing bushes and develop climate-resistant varieties. Second flush tea is prized by Assam for its aroma and flavour. It is usually more expensive than the first flush but is also particularly susceptible to heatwaves. Long dry spells, and intense, sudden rains, are disrupting the mild, humid conditions that are critical for the tea-growing areas of the state. Heat Strains the Cup This weather is not only conducive to pest breeding, but also forces estate owners to use the rarely used practice of irrigation plantations. Mritunjay, the owner of a 82-year old tea estate in Assam’s Tinsukia District, explained. The Tea Research Association reports that rainfall has decreased by more than 250 millimeters (10 inches) from 1921 to 2024. Minimum temperatures, however, have increased by 1.2 degrees Celsius (34.22 degrees Fahrenheit). This season, Assam experienced rains that were 38% lower than average, mainly due to the monsoon. This has helped to reduce the harvesting period, and thus the peak production season, by a few weeks, according to senior tea planter Prabhat Bezboruah. Bezboruah stated that "the tea prices have become volatile." While they may be correcting themselves this year, a lower production in the next year's expected to push them higher. Tea leaves become discoloured and blotched with brown spots, or even laced with tiny holes, when there are frequent, patchy rains. The punishing heat is forcing workers to cool down under industrial fans mounted on the wall. We must take breaks at least every 30 minutes, said Putli Lohar has been working in tea factories for over a decade. Once the leaves are dried, workers will crush and sift them in large barrel machines, before putting them in sacks, or hooking them onto pulleys for transport to a further processing facility. Women wearing disposable masks, aprons, and caps inspect the tea before it is packaged and final quality checked. Tea growers increased pesticide use and pruned trees earlier after last year's drought reduced production. Hemant Bhangur, the chairman of India's leading tea industry association, Indian Tea Association, explained that these measures add to costs which are already increasing at an 8%-9% rate per year due to higher wages and fertiliser prices. Planters claim that government incentives do not encourage replanting. This is crucial in Assam where older colonial tea bushes are less productive and more susceptible to weather changes as they age. India's tea sector has thrived for almost 200 years. However, its share in global trade may fall below 12% by 2024, as a growing population increases demand. The Indian Tea Association reports that domestic consumption has risen 23% in the last decade, to 1.2 billion kilograms (2.7 billion pounds), outpacing the production growth of 6.3%. India's imports of tea nearly doubled in 2024, reaching a record high of 45.3 million kg (90.8 million lb) in the same year. Executives of India's top merchants said that this adds costs for overseas buyers at a moment when competitors around the world, like Kenya, are facing similar issues. Unnamed official from a major exporter in Kolkata, an eastern city, said that global supplies might tighten as India is also experiencing a shortage. This could finally boost world prices.
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Marex, a European commodities broker, expands its petrochemical trading team
Marex, a European financial and commodities group, is expanding its global trading team for petrochemicals. It is betting on a rebound in an industry that has been hit by low margins. This was announced on Thursday by its new head of petrochemicals trading. Vasudev Balagopal joined Marex as a new employee in August. The company's goal is to increase its petrochemical trade portfolio up to 3,000,000 metric tons. Balagopal was previously the head of aromatics trading at Japan's Mitsubishi Corp. He said that a trader would join Marex's team of petrochemical traders in Tokyo in the month of December. The company will also add staff to Dubai, Japan, and Singapore before the end. Marex has offices in New York, Rotterdam and other cities. The company has expanded its petrochemicals portfolio to include products like aromatics, polyvinylchloride, chloralkali, and shipping liquids such as methanol. Overcapacity in China, the Middle East and other countries has caused a global downturn that is longer than expected. Tariffs, trade protectionism and other factors have exacerbated industry problems. "I expect the turbulence of trade caused by tariffs to lessen slightly, maybe within a year. Also, European demand must be revived for this industry to recover," Balagopal stated. After years of losses, Europe's petrochemical sector is in ruins.
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Iron ore reaches multi-week high in hopes of improved China demand
Iron ore futures prices rose for the third consecutive session on Thursday, reaching multi-week highs. This was aided by expectations of improved China demand. However, the rising steel stocks fueled concerns about the pace of steel resumption and capped gains. The January contract for iron ore on China's Dalian Commodity Exchange closed the daytime trading 1.67% higher, at 791.5 Yuan ($110.65), reaching its highest level since August 14, By 0800 GMT, the benchmark October iron ore traded on Singapore Exchange had risen 1.66% to $104.95 per ton. It reached its highest level since the 24th of July at $105.35. Yingguang Wang said that some steelmakers were planning to resume production and increase raw material procurement on Thursday, according to a note written by an analyst from Lange Steel the day before. Steel mills at the top Chinese steelmaking center Tangshan had to reduce production temporarily to improve air quality in preparation for a military display in Beijing to mark the end of World War Two on September 3. This weakened ore demand. A Singaporean trader who requested anonymity because he was not authorized to speak with the media said, "A lot money flowed from stock markets today in order to buy iron ore." He said, "I am not very optimistic so I plan to build some short positions." Chinese stocks fell as investors took profits on surging tech stocks after reports that regulatory restrictions on speculation could be in place. Steel stocks are likely to rise and the demand for steel may be low. This could prevent mills from quickly restarting production. Analysts at Yongan Futures stated that portside stocks would be expected to keep price increases in check. Coking coal, coke and other steelmaking materials fell by 1.97% and 1.37 percent, respectively. The benchmarks for steel on the Shanghai Futures Exchange are mixed. The rebar benchmark was unchanged, but hot-rolled coils rose 0.24%. Wire rod rose 0.34%. Stainless steel fell 0.58%. ($1 = 7.1529 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson)
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After jihadist attacks, Congolese women resort to mining as a means of survival
Maman Soki, a Congolese woman who is part of a small group that does heavy mining for survival in the wake of a terrorist attack by Islamic State rebels on her village which killed her daughter as well as her sister. The 49-year old widow fled her home with her son, her grandson, and her sister's kids in April to escape the jihadists, one of the many armed groups that occupied the mineral-rich area. Soki, along with two other women, now hauls 30 kg bags of debris up a steep muddy slope to earn a few dollars per day for the four children she cares for. In an interview, Soki stated that "sometimes we want to dig in the pits but are told we can't." "That's the reason we always transport the already-dug, sand to be processed." Soki's life is only remembered by a photograph of her sibling. Soki is now caring for two of her sister's small children as well as an orphaned grandchild. Muhindo, Soki's 12-year old son, looks after three of his adopted siblings when Soki is working. The mining industry in Congo is traditionally dominated primarily by men. However, women often undertake this backbreaking work for survival. According to the RENAFEM national association, a Western funded group dedicated to protecting the rights of women workers, many female miners face harassment and discrimination by their male counterparts, and are assigned lower-paying jobs. Soki wants to save up enough money to open a food store, and then leave the mining industry behind. However, after paying for his children's school fees, food and other expenses, there is not much left. Obed, her son, said: "We are worried about her safety if she travels to Pangoyi." UN and local officials reported that in July, Islamic State-backed fighters murdered at least 43 worshippers at a church located in Komanda. In August, they killed at the least 52 civilians living in eastern Congo's Beni and Lubero regions.
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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.
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.
(source: Reuters)