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Nickel prices rise on fears over sulphur supplies via Hormuz
Nickel reached a three-week peak on Thursday as concerns over traffic disruptions?throughout the Strait of Hormuz sparked fears of sulphur shortages and threatened a key raw material for production. The benchmark three-month nickel on the London Metal Exchange rose 2.57%, to $17.235 per metric ton at 0700 GMT. The price had risen by up to 3.14% in the previous session. This was the largest increase since May, and the highest since June 23. The Shanghai Futures Exchange's most traded nickel contract was up 3.01% to 132,940 Yuan ($19641.85) per ton. "Sulphur?tightness?expectations are fermenting once again." This is mainly due to an increase in the?cost expectation for high-pressure acid leaching, which is a process that is used to extract nickel ore. Indonesia, which is the world's largest nickel producer, depends on the Middle East to provide about 75% the sulphur needed in sulphuric acids for leaching metals from ore. The U.S.-Iran blockade of the Strait of Hormuz, as well as military operations, have caused a disruption of shipments along this vital shipping route. The copper price was stable, helped by a weaker U.S. Inflation data and the?hopes for a more dovish Federal Reserve. Supply concerns and recent withdrawals from LME warehouses also helped. The metal rose by 0.27% at the LME, and fell by 0.23%?at the SHFE. Data released on Wednesday revealed that U.S. producer prices had their largest decline in 14-months in June. This is the latest in a series of U.S. reports which have dampened expectations for Fed rate hikes. Reduced borrowing costs tend to boost economic activity, which in turn can help metal demand. Aluminium grew by 0.68% on the LME, while zinc climbed 0.85%, and lead rose 1.19%. Tin also gained 1.35%. Aluminium was unchanged on SHFE. Zinc lost 0.68%. Lead added 0.38%. Tin fell 1%.
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Russian regions report death and injuries after another Ukrainian drone attack
As Kyiv continues its campaign against the 'Russian energy infrastructure, authorities in three Russian regions have reported deaths and injuries caused by Ukrainian drones and rocket strikes. Mikhail Yevrayev, the governor of 'Yaroslavl Region,' 250 km (155 miles) east from Moscow, where an oil refinery has been repeatedly attacked, said one man was killed and four others injured. He claimed that 19 drones had been?downed in the area, but did not specify which targets they were aimed at. Russian media reported that there were casualties in the Volga River region of Saratov after a drone attack on the city of Engels. Engels is home to an airbase which has been repeatedly attacked by Ukraine over the past few years. The governor of Bryansk Region, in Russia's west, near the Ukraine border, confirmed that a 15 year old girl and her grandma were killed by a rocket attack on the village Suzemka. A third person was injured. In recent weeks, Russia has experienced acute fuel shortages in all 11 time zones as long-range Ukrainian drone attacks hit its oil refineries. Ukraine claims it wants to limit the oil revenues that Russia uses to fund its four-year war on its neighbor, despite the fact that thousands of Ukrainians have been killed in Russian strikes across the southeast Ukraine. Both sides deny that they are targeting civilians. Officials in Ukraine said that Russian 'ballistic missiles' struck two districts of the Ukrainian capital Kyiv at dawn on Thursday. The fires started and two people were killed. Reporting by Felix Light, writing by Philippa Fletcher; editing by Philippa Light
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The tourist season has hit the Greek islands and they are experiencing a drought.
Seven Greek Islands in the Aegean have declared drought emergency this year. This is to conserve?water, as climate change causes summers to be hotter and rain more irregular. Authorities are now wondering if there will be enough rain to support the thousands of tourists that strain water supplies just as locals are in dire need. Astypalaia is an island in the shape of a butterfly, located east of mainland Greece. It relies on bottled drinking water and was not affected by the rains that fell in the north and west of Greece, giving the country the wettest winter it has experienced since 2022. According to local authorities' data, Astypalaia, in the southeast Aegean region, experienced the second-driest year since 2020. This created a dilemma for local officials. The island's only water reservoir, built in the 1990s, is surrounded by dry hills with sparse low shrubs. FARMERS RETURN TO WELLS In April, authorities cut off Evdokia Paltianou's access to a manmade lake in order to conserve?water. Her orchard's vegetables withered because she had to rely solely on the brackish water she pumped out of her well. Palatianou said, "Unless it rains I won't be planting anything" as he stood next to an old tree that was once full of mandarins in the village of Livadi on the coast, which is the main fertile area of the island. The lake that supplies water to Livadi, and the main tourist city of Chora (the island's capital), for household use, irrigation, and other purposes, contains now around 150,000 cubic meters, or a sixth its storage capacity. It would last about five and half months if you consume 900 cubic meters per day in summer. Komineas reported that the authorities declared a water crisis in May in order to expedite a temporary desalination facility with a daily production of 600 cubic meters for Chora. They also blocked irrigation to farmers in Livadi in order to protect the lake's reserve until autumn. He said that they would reconnect farmers if the Livadi Reservoir is refilled with rain. CONSUMPTION SOARS IN THE HIGHEST SUMMER MONTHS The Copernicus European Drought Observatory's map of Astypalaia, which was published in June, shows the area in orange as an early indicator of drought. In the village of Analipsi, on the east coast of the island, farmers fill tanks with water or use borehole water that is low quality. Desalination plants that supply tap water in the area were unable to meet the needs of a population that grew from 1,400 people in midsummer to 7,000 by the end of summer. A second temporary facility, located in?Chora, was built in anticipation of a permanent desalination system that will be constructed at the end of this year. On Greek islands, dozens of desalination units are being installed. ?omineas admitted that the temporary plant was expensive, but said it was necessary in case of drought. He said, "I was worried about what would happen if it didn't rain again this year." HOTELS CONSIDER RESOURCE-SAVING MEASURES Some hoteliers in Astypalaia are already taking action to save water. Maria Alkalai (42), who runs a hotel in Chora with views of the castle, the Aegean sea and the hillside, offers guests who choose to skip the daily cleaning a five-euro voucher. She said that "clients have embraced" the idea. She imagined a second island hotel that would have a cistern to collect rainwater in place of a pool or jacuzzi. Stavros papastavrou, the Environment Minister, has approved 15 million-euros ($17million) for desalination and grid upgrades, as well as water tanks, on nine of Greece's 200+ inhabited islands. This includes 1.5 million euros for Astypalaia. He briefed Luxembourg's environment ministers on water resilience in June. He said that water was not a theoretical issue for Greece. It is about the security of the country, its economic growth, and protecting local communities. According to the National Centre for Scientific Research “Demokritos” in Athens, droughts could worsen by 2049 due to global warming and increased water scarcity.
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British Steel is nationalised by Britain to protect domestic steelmaking
In an attempt to protect the future of steel production, the UK government announced in a statement on Thursday that it had 'nationalised' British Steel, which was previously owned by Chinese investors. British Steel's public ownership is necessary for the UK to safeguard its national interests, according to the government. "British Steel" is a part of the fabric and strength of Britain. The decision today secures the future for steelmaking in Britain, protects "skilled" jobs and safeguards an important national capability," said Keir starmer, the outgoing prime minister. In April 2025, the 'government' took over the operational control of British Steel, from its Chinese owners Jingye. This was done to prevent the closure of Scunthorpe, a steelworks located in northern England, and protect the 2,700 jobs in the plant, as well as thousands of others in the supply chain. The plant is the last primary steelmaking facility in the country. It supplies rail, construction and automobile industries. However, it has struggled in recent years with high energy prices in Britain and an oversupply of steel on the global market. Starmer stated that his government would introduce legislation in May of this year to allow the company to be taken over by the state after it failed to find a buyer. The company was privatised under Margaret Thatcher's regime in 1988. It said that the government appointed a leadership team to 'focus on stabilising operations and managing health and safety. They will also maintain production and work with management, unions, and staff in order to make British Steel an economically sustainable and low-carbon enterprise. Peter Kyle, Secretary of State for Business and Trade, said: "British Steel now belongs to the British people and our focus is the future." (Reporting and editing by Muralikumar Anantharaman, Sonali Paul, and Akanksha Kushi from Bengaluru)
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Bonds cheer lower inflation as Asian shares drop on chipmaker drag
?Asian stocks fell on Thursday, as a selloff in chipmakers obscured stellar earnings by industry leader TSMC. Meanwhile,?bonds benefited again from a benign reading of?U.S. Inflation that reduced the likelihood of a rate hike. As the U.S. finished its latest attacks on Iran, oil prices dropped. In recent days, the Middle East has been rife with hostilities. Washington launched attacks against Iran while Tehran targeted U.S. bases located in Kuwait and Jordan. Brent crude futures last fell 0.5% to $84.5 per barrel, but rose 11% in the past week. Taiwan Semiconductor Manufacturing Co. (TSMC), world's biggest contract manufacturer of advanced AI chip, reported a 77% increase in the second?quarter profit to a record which was far beyond market expectations. TSMC's stock rose 1.2% ahead of the results but it was not enough to reverse the decline in Asian chipmakers. MSCI's broadest Asia-Pacific index outside Japan fell 1%, while South Korea's KOSPI dropped 6.2% due to weakness at Samsung, which was down 6.6% and SK Hynix (down 9%). Japan's Nikkei dropped 3%. China's Hang Seng Index broke the trend by gaining 1.8%. Brian Heavey is an equity trader at JPMorgan. He wrote in a report that he was "seeing aggressive pullbacks in Memory/Hardware". Don't believe there is a 'negative headline' that's driving the semis/hardware sale. "It just shows how high the bar is for semis earning." Overnight, ASML shares, the world’s largest supplier of equipment used to manufacture high-tech computer chip, ended 0.4% lower despite its raising their 2026 sales predictions and pledging a capacity increase. Wall Street gained overnight when investors shifted from semiconductors to Magnificent Seven stocks, banks and other major lenders after strong earnings. Asia, however is more susceptible to the chip selling-off due to its greater exposure to semiconductor stocks. Stock futures for the entire region are up by 0.2%. In Asia, Wall Street futures were mostly flat. BONDS CHEER COOL INCLAIMATION Surprisingly weak U.S. consumer inflation data a day before added to the benign figures for the PPI in June. The markets have now priced out an imminent rate hike by the U.S. Federal Reserve to only 10% from 43% at the beginning of the month. Oil prices are rising on renewed Middle East hostilities, and the 'pullback' in inflation could only be temporary. Bond investors focused, however, on the cooler inflation data. The yield on two-year Treasury bonds increased by 2 basis points, to 4.1514%. They had fallen 14 bps in the previous two days. Ten-year Treasury yields increased by 1 basis point to 4.5594% after falling 7 basis points over the last two days. The dollar fell, except against the beleaguered Japanese yen. The dollar index remained steady at 100.52 after dropping 0.4% overnight to its lowest level since June 18. The yen was hovering at 162.15, just below the 40-year low of 162.84, as speculators remain cautious of Japanese intervention. The pound reached a two-month high on the expectation that Andy Burnham will choose a conservative finance minister when he is named Labour Party leader, which is expected to happen on Friday. The pound was unchanged at $1.3532 after a 1% increase overnight. Gold fell 0.8% to $4,027 per ounce. (Editing by Christian Schmollinger & Lincoln Feast)
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Kashagan Oil Operator says arbitration prevents Kazakhstan from enforcing fine
The operator of Kazakhstan's Kashagan Oilfield announced?on Thursday? that an international arbitral tribunal has issued a restraining order prohibiting Kazakhstan from enforcing an environmental fine. The Kazakh Justice Ministry announced on Tuesday that Kashagan's operator must pay a fine of $4.90 billion ($2.3 trillion tenge) by July 20, 2012. The country is involved in arbitration with oil companies that work on its oilfields. It accuses them of environmental violations and corrupt practices. The North Caspian Operating Company, Kashagan’s operator, stated in a statement: "The Arbitral Tribunal has issued a Restraining Order which prohibits the Republic to take any measures to enforce fines?while arbitration is still pending." "NCOC, the Contracting Companies and their representatives reject the fine and the allegations that underlie it and will contest them by any means available." North Caspian Operating Company, a joint venture between Shell, TotalEnergies and ExxonMobil, as well as China's CNPC is a multi-national?venture. Kazakhstan won an arbitration in January concerning the Karachaganak?field. It was seeking to recover around $4 billion. (Reporting and writing by Mariya Goreyeva, Felix Light and Vladimir Soldatkin; editing by Jacqueline Wong & Tomaszjanowski)
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Gold drops as Mideast conflict dampens inflation hopes
Gold prices fell?on Friday as a Middle?East conflict escalated, fueling fears that the U.S. Federal Reserve might raise interest rates in this year. This tempered recent optimism about easing inflation. By 0518 GMT, spot gold had fallen 0.8% to $4,029.29 an ounce. U.S. gold for August delivery fell 0.4% to $4034.40. The latest escalation of the?U.S.Iran conflict has not been reflected in June's inflation numbers, according to Jigar Trivedi. He is a senior research analyst with IndusInd Securities. After reimposing its naval blockade, the U.S. launched a series of two-wave attacks against Iran's missile and coastal defence sites. Iran responded by attacking U.S. military bases in neighboring countries as part of what it termed an "existential conflict" with America. The oil price has risen by 11% this week alone, raising concerns about inflation. Gold is often seen as a hedge against inflation, but it's no longer attractive in an environment of high interest rates. U.S. consumer inflation and producer inflation both slowed down in June amid a drop in energy prices, confirming that inflation had been?subsiding' before the recent escalation of the Middle East conflict. However, the financial markets did not believe that a Fed rate increase this year was possible due to the moderated inflation. CME FedWatch Tool data shows that traders still price in a 73% chance for a Fed hike in December. Fed Governor Lisa Cook stated on Wednesday that she was "prepared to take action" if the inflation rate does not begin to fall soon. Fed Chairman Kevin Warsh also declared his determination for inflation to be brought down, without revealing how. Investors will be watching for comments from 'Dallas Fed president Lorie Logan, and 'Fed vice chair Philip Jefferson later today. Silver fell by 1.2% elsewhere to $57.07 an ounce. Palladium fell 0.4% to $1,308.49 and platinum dropped 0.6% to 1,664.75 (Reporting and editing by Subhranshu Sahu, Rashmi Anich and Swati verma from Bengaluru)
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The IEA warns that China's restrictions on rare earths threaten $6.5 trillion in Western industry
International Energy Agency warns that the full implementation of China’s rare earth export restriction could put $6.5 trillion in downstream production outside of the country at risk. China, the world's largest producer?of?rare Earths, increased export controls in?October of last year, to include additional materials, and introduced new licensing requirements. However, they agreed to postpone implementation for one year. Rare earths is a grouping of 17 metals that are used in small amounts but essential for products such as cars, aircrafts, electronics and weapons systems. The IEA's Global Critical Minerals outlook report stated that if the controls are fully implemented, an estimated $6.5 trillion?of manufacturing across the automotive and high-tech sectors, as well as the defence, energy, and defence sectors, could be affected by supply disruptions. According to the report, nearly half of all economic impacts would be attributed to the U.S. Fatih Birol, Executive Director of the IEA, said: "Our analysis shows that vast amounts of economic value are dependent on relatively small quantities?of critical minerals. Their supply chains remain highly concentrated and therefore vulnerable." The agency warned about the risks posed by China's planned controls on exports of graphite, an important material used in batteries for electric vehicles, which had been announced at the time but later delayed. The report stated that a full implementation of graphite controls would put around $300 billion?of downstream production in countries outside China at risk. China accounts for more than 90% of the global graphite production. Western governments are trying to create alternative supply chains for critical minerals. According to the IEA, public financing commitments of new?projects have more than quadrupled from 2023-2025. They now total $65 billion. New rare earth refinery projects in the U.S. The agency reported that Malaysia and China reduced China's share of the global market from 90% to 85% in the last year. If the planned projects are completed on time, this share could drop to 70% by 2035. Reporting by Eric Onstad. Mark Potter (Editing by Mark Potter).
AI data centers force 'peaker power' plants to be brought back into service
The demand for electricity from AI data centers is reviving peaker power plants
Peakers emit more pollutants than power plants.
The majority of power plants are located in minority and low-income communities
By Laila Kearney
Dec 23, CHICAGO -
A 60s oil-fired plant rises from an industrial site behind Dvorak Park in Chicago's working class Pilsen district. In warmer weather, the park is crowded with children playing on its colorful playground or zooming down slides.
Next year, the eight-unit Fisk Power Plant owned by Houston's NRG Energy is scheduled to be retired. The next step was artificial intelligence.
As electricity demand from data centers outstripped existing supply, prices shot up on the country's largest power market – PJM Interconnection – alarming about power shortages and making Fisk & other plants like them suddenly profitable.
Matt Pistner said that NRG's senior vice president for generation, Matt Pistner, retracted the retirement notice from eight Fisk power-generating units.
Fisk is one of a growing number "peaker" units that are being used to power the U.S.'s electrical grid, with the demand for artificial intelligence from Big Tech data centers.
Peakers are designed to operate in short bursts when electricity demand spikes. They help prevent blackouts because they can provide power at a moment’s notice. These fossil-fuelled facilities, which are often decades old, emit more pollution and produce more electricity when they're running.
The analysis of the filings at the largest power grid in the country shows that 60% of them are for renewable energy sources.
PJM has postponed, or even cancelled, plans to retire oil and gas power plants. The majority of plants that avoided shutdowns were peaker units.
The Fisk Peakers were built at the site of an old coal-fired power station which operated for more than a century. The coal plant closed in more than a ten-year period after years of opposition from local residents. However, eight peaking units powered by petroleum oil still operate at the site.
"We were very disappointed when we learned that the coal station was closing, but still producing power at the site," said Jerry Mead Lucero, a lifelong advocate of the closure of Fisk coal, who lived most of his adult years in Pilsen.
Pollution dropped after the coal plant closed, but didn't disappear. According to the Environmental Protection Agency (EPA), sulfur dioxide levels at the site ranged between 2 and 25 tons of sulfur dioxide per year, when the peaker plant, which had eight units, occasionally fired up to feed the grid.
"That is not a small amount, considering the chimneys and houses nearby," said Brian Urbaszewski. He's Director of Environmental Health Programs for Respiratory Health Association in Illinois, a nonprofit organization that helps people with respiratory diseases.
DIRTY POWER
According to research by the federal and academic authorities, peakers are often not equipped with pollution controls such as mercury scrubbers that remove toxic chemicals from power plant emissions and filters for particulates.
Environmentalists say that some chimneys or smokestacks are lower, which means pollution is more localized.
The U.S. administration of Donald Trump may be more aggressive in extending the life of peakers. It has said that it is exploring all options, including peaker plants, emergency systems and other ways to meet massively increased electricity demand.
In an interview with Chris Wright in September, the U.S. Energy secretary said that there are many peaker plants which could be operated more often. He added that air quality regulations had prevented more from being run more frequently. The biggest targets today are the spare capacity in the grid.
According to a U.S. Government Accountability Office report, peaker plants produce about 3% of?country's electricity, but they are capable of producing 19%.
If we tap into this spare capacity, it could lead to more harmful emissions being released into neighborhoods which are already overburdened by environmental hazards.
According to research by the federal government and academics, the majority of the country's peaker plants are located in communities of color with low income. This means that prolonging the life of the plants could cause more pollution to be emitted into the air.
In a 2022 study, residents of "redlined" U.S. areas, who were denied financial services like mortgages because they were primarily Black or immigrants, were 53% more inclined to have a peaker built near them since 2000, compared with those in non-redlined communities.
The study was led by UCLA Professor of Environmental Health Sciences?Lara Cushing.
The Grid is being strained by the power demands
The majority of peaker plants in the United States were built in two periods of rapid growth in energy demand: at the beginning of the 20th century, when electrical appliances became commonplace in homes; and then again in the early 2000s as computers and the economy began to grow. After the energy-sucking devices and infrastructure improved, U.S. demand for power decreased and many fossil-fired plants closed.
Solar and wind farms began to provide more energy. These only work when the sun shines and the wind blows.
The U.S. Congress directed the Government Accountability Office to investigate the use of peaker plant and their impact on American communities. Environmental justice groups urged the U.S. Congress to do so.
According to the study, peaker natural gas plants emit 1.6 more sulfur dioxide per unit of electricity generated on a median base compared with non-peaker plants.
Fisk is a part of PJM Interconnection - the largest electrical grid in the United States. It spans 13 states, and has the highest concentration of data centres anywhere on the planet. The demand from AI data centres is threatening the grid's reserves and is already driving prices up.
The prices paid by PJM power suppliers to run plants during times of high demand jumped more than 800% compared to a summer ago. This made peaker power plants more profitable.
Jeff Shields, PJM spokesman, said: "It's clear that the electricity demand in this country is greater than supply –?the market reflects it, and generators respond." "We can't afford to lose our existing generation, while continuing to add new generation in order to meet the needs of the data centers and other heavy loads that power the nation's economy."
According to an analysis of the letters sent by power companies to PJM Interconnection, 23 oil, coal and gas power plants were set to retire in PJM territory in 2025.
The letters show that since January, U.S. energy companies, grid operators, and the federal governments have postponed or cancelled retirements for 13 of these power plants. The letters showed that 11 of the plants which avoided closure were peakers.
The Department of Energy ordered that the 55-year-old "Eddystone", owned by Constellation Energy and located outside of Philadelphia be kept running. PJM requested that the Wagner peaker near Baltimore be kept running while the grid operator coordinated the transmission required for the generator to be removed.
Some of the power plants that were retained were originally built to provide power around-the clock, but were later downgraded so they only run in emergencies.
Last Line of Defense
Fisk's owner NRG Energy believes peakers are vital safeguards for grids that are increasingly needed not only for data centers, but also for electrifying manufacturing and transportation and to avoid blackouts due to winter storms or summer heatwaves.
Fisk Peakers are located in Chicago, so the city does not need to import power in an emergency if outside sources of electricity go down.
Matt Pistner, NRG Energy, said: "They are the shock absorbers and last line of defense for the system." When they are needed, there's nowhere else to turn.
Pistner said that while NRG has power-generating sources ranging from wind and solar to nuclear, oil-fired peaks add an additional layer of security by ensuring fuel can be stored locally.
A NRG spokesperson said separately that "during its run time, the power station consistently operates within federal or state environmental regulations - and we are proud to its record".
Experts in energy say that there are other options to peakers. Transmission lines that are more reliable could be used to transport electricity from areas of the country where there is an excess of power, to those who have a shortage.
Rusco, from the GAO, said that "if we did that, the system could run more efficiently. You would also probably reduce the amount of dependence on peakers."
Clean energy advocates believe that batteries, which are being improved to store power longer, can also replace peaker units.
As AI power demand increases, communities such as Pilsen that have been successful in closing some sources of pollution over the past few years may find it more difficult to combat peaker plants.
John Quigley of the University of Pennsylvania Kleinman Center for Energy Policy said: "It will result in significant cost increases for consumers of electricity and local pollution, and prevent the connection of new clean energy production to the grid."
PJM has said that it will continue to connect renewable energy, nuclear power and gas-fired electricity to the grid, regardless of how long peakers remain on.
Shields stated that "we need to get every megawatt we can right now." He added that deactivating existing plants "ignores the reality."
Northern Illinois has a growing data center market. At least one data centre is already operational in Pilsen, and there are multiple energy-intensive projects being planned for the surrounding areas. T5 Data Centers announced a 20 building campus this year.
Mead Lucero is concerned that the Fisk Peaker Units will continue to exacerbate the environmental problems in his hometown. This includes industrial truck traffic emissions, metal scrappers, and a major road cutting through the area. "You combine all these factors and you have a real problem."
(source: Reuters)