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Thyssenkrupp increases lower end of profit forecast on steel and materials demand
Thyssenkrupp raised its 'lower end' profit outlook for 2026 on Thursday, thanks to its'steel, materials and marine trading units, as well as the cost reductions related to its ongoing efficiencies programme. The German company, which produces everything from 'car parts to fertilizer plants', is currently undergoing a radically new structure. It has spun off all of its divisions to improve performance and simplify the firm. Thyssenkrupp expects an adjusted operating profit between EUR600 and EUR900 millions, up from EUR500 to EUR900, as compared to EUR833 in the poll. Axel Hamann, finance chief, said: "The figures prove that our performance improvement measures are working." The third quarter sales were higher than expected at EUR8.79billion, driven also by the materials division that will be spun off in the autumn as well as its steel division which will host a capital market day in September. The adjusted operating?profit for this period rose 18% to EUR183 millions, missing the EUR207 million polled estimate.
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The US claims that more oil is leaving Middle East. But is this true? Russell
How much crude oil leaves the Strait of Hormuz each day? Energy Secretary Chris Wright of the United States claims that nine million barrels of crude oil are exported every day, but companies tracking vessel movements claim it's only half. It is important to know how much crude oil leaves the Middle East through the narrow chokepoint, because it is this oil that travels to Asia. Asia, which is the largest energy-consuming area, has been the hardest hit since the U.S. Israel and the United States attacked Iran on 28 February. Wright stated on X, a social media platform, on August 12, that "thanks for the coordinated efforts of?U.S. Wright said on?social media platform X that "thanks to the coordinated efforts of the?U.S. He added that by adding an "additional 5 to 7 million bpd from the region via newly-upgraded pipelines and export facility, total oil flow is currently averaging around 15 million bpd." If Wright's figures are correct, the oil market may not be as tight as many analysts think. Wright's figures don't match those of several tracking services. Wright did not specify a specific time period, but Kpler data shows that crude exports through the Strait of Hormuz were 2.77 million barrels per day for the week starting July 27. The week starting August 3 will see a drop to just 1.74 million bpd. Even the best week of the conflict, the week that began June 29, saw only 6.98 millions bpd. What is the total amount of exports to and from the Middle East region? The total exports from the Middle East include cargoes departing from the Red Sea port of Yanbu in Saudi Arabia, as well as those from Oman and the Fujairah facility located in the United Arab Emirates. Kpler data indicates crude shipments were 9.53 million barrels per day (bpd) in the week starting August 3 and an average of 12.26 millions bpd over a period of four weeks. Data from LSEG Oil Research filtered to only show cargoes being loaded, that have been loaded, that are in progress or?have already been discharged' shows Middle East crude imports at 9.33 million bpd during the first 12 days of august, down from 12.35 millions bpd on July. The tracking data indicates that exports to the Middle East are still far below the levels before the conflict, with Kpler showing shipments of 18.7 millions bpd for the three months up until the end February. It would be logical, if Wright's figures are correct, for import data from the Middle East to show an increase. Kpler showed a surge in Middle East crude imports in July. Of the 13.27 million barrels per day (bpd) that arrived, 10.86 million were discharged in Asian ports. The imports of crude oil from the Middle East were up from 9.26 million barrels per day in April. This was the lowest Kpler data since 2013. However, the number for July was still far below the average of 18.71 million barrels per day in the three months prior to the Iran War. This was partly due to the fact that a lot of tankers were able to leave the Strait of Hormuz after the ceasefire was declared between Iran and the United States in mid-June. MIND THE GAP The vessel tracking data shows a difference between what they see and what Wright claims is being shipped out of the Middle East. Three main explanations are possible for the gap. 1. Wright's department provided the correct numbers, but tracking services miss some clandestine shipments which are done out of sight. 2. Wright and his department genuinely believe in their numbers but they are 'discounting shipments. 3. Wright is aware that his numbers are incorrect, but he continues to disseminate the information because it fits the narrative of U.S. president Donald Trump who wants to portray the war as going well. Wright could resolve the first possibility by sharing his knowledge of what he knows, such as vessel names, cargo details, and the loading and discharge ports. The tracking service could then compare the data to determine where discrepancies lie. The second possibility, which is the most likely one, involves the U.S. Navy doubling-counting exports that are transferred from ship to ship. Wright's third option is the most disturbing. And doubts will continue to persist as long as he doesn't present evidence. You can also 'wait a few more weeks' to see what the import numbers are from various countries who buy crude oil from the Middle East. The arrival numbers will reflect this if 15 million barrels per day are truly leaving the region. This is because tankers take time to travel from one destination to another. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of a columnist who writes for.
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Metal prices fall due to stronger dollar
Copper and the industrial metals complex fell on Thursday, as the dollar strengthened. This was after U.S. data on inflation?didn't affect expectations for the U.S. Federal Reserve rate decision next month, which may influence economic activity. The benchmark three-month copper on the London Metal Exchange fell 0.32% to $14,086.5 per metric ton at 0300 GMT. The Shanghai Futures Exchange's most traded copper contract fell 0.55%, to 107 580 yuan (15,951.72) per ton. Investors judged that the mild U.S. consumer inflation data for July was not enough to change the Fed's hawkish stance. The U.S. Dollar Index ticked up by 0.05%, to 100. Demand for U.S. treasuries was solid, supporting the dollar and weighing on greenback-denominated ?commodities by making them more expensive for buyers using other currencies. Inventory outflows at the London Metal Exchange (LME) supported copper prices amid uncertainty about possible U.S. tariffs for refined copper imports. David Wilson, BNP Paribas' head of commodity strategy, stated that "a lot of metal is still being sucked into the U.S." The Yangshan copper premium is a major metals consumer in China. The red metal was further pressured by the fact that the barometer of the country's demand for imports, fell on Wednesday to its lowest level in four weeks. The benchmark LME and SHFE aluminium prices dropped almost 1%. This is the second consecutive drop for the light metal after a seven session rally. Supply concerns were eased by improving supply prospects from the Middle East - a major global supplier of aluminium - and the anticipated'return' of some war-damaged smelting capacities. The supply concerns were eased despite the impasse in the peace negotiations between Iran and the U.S., which threatens to restrict traffic through the Strait of Hormuz. Wilson stated that "there is more uncertainty regarding a peace agreement, even though smelters from the Gulf are shipping materials out via Saudi Arabia and Oman." Zinc fell 0.64% among?LME Metals. Lead slipped 0.24%. Nickel dropped 0.93%. Tin lost 0.69%. Zinc fell 0.29% among SHFE metals. Lead gained 0.57%. Nickel dropped 0.27%. Tin lost 0.96%.
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BofA will take 49.9% of Jio Credit in India for $1.9 billion
Bank of America is set to acquire up to a 49.9% share in Jio Financial Services' non-bank lending arm in a deal worth 182.68 billion rupees ($1.92 billion). The lender is expanding its presence in India's rapidly growing financial sector. The deal is a continuation of a recent trend of large foreign investment in Indian banks and nonbank lenders. These institutions are experiencing a high demand for credit, and low delinquency rate. Recent deals include MUFG's investment into Shriram Finance in Japan, Emirates NBD of Dubai's purchase of 60% stake in RBL Bank, and Sumitomo Mitsui Financial Groups' investment in Yes Bank. The two companies announced on Wednesday that Bank of America would become a partner in the non-banking finance firm Jio Credit by way of a preferential allocation of equity shares and warrants. Access to a rapidly growing market BofA initially holds a stake of 26.5% in the transaction. This could increase to 49.9% if the warrants are exercised. As part of the agreement, Jio Credit will provide BofA with shares and warrants valued up to 66.13?billion?rupees. BofA CEO Brian Moynihan stated that by combining Jio Financial Services’ scale, local expertise, and customer base with Bank of America’s global reach and digital experience, and its close to 250-year leadership in banking we can expand access to financial products and services, and support India’s continued economic development. In just two years, Jio Credit has grown to be one of India's fastest-growing NBFCs. Its assets under management topped $3 billion at the end of June. Bank of America stated that the investment will provide Jio Credit with capital to help it grow, while also gaining access to global financial expertise. Credit from non-bank sources in India is growing rapidly at over 14%, across all segments such as personal loans for gold and small business credit. JV STRATEGY of JIO FINANCIAL Jio Financial is a company that operates in digital lending, payments and insurance brokerage. The company has decided to form joint?ventures across its various business lines. Through its joint ventures, it offers asset and wealth management. It also has a joint venture with Germany's Allianz, which offers general and health insurance.
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Oil prices drop on lower demand forecasts, despite deadlock between US and Iran talks
Oil prices dropped more than $1 Thursday as forecasters reduced global oil demand projections by 2026 due to disruptions caused by the U.S./Israeli war against Iran. However, the supply constraints created by the conflict helped keep the market stable. Brent futures fell $1.29 or 1.5% to $87.69 per barrel at 0100 GMT. U.S. West Texas Intermediate crude (WTI), which is a blend of U.S. West Texas Intermediate and Brent, fell $1.30 or 1.6% to $81.97. In its monthly report on the oil market, published on Wednesday, the Organisation of Petroleum Exporting Countries (OPEC) lowered its forecast of world oil demand growth for 2026 from 588,000 barrels per day to 580,000. The International Energy Agency also said that it expected a 1.6-million-bpd reduction in consumption this year. This is down from a previous forecast of 1,000,000 bpd, due to the U.S./Israeli war against Iran, which has led to higher prices and restricted fuel supplies. The Energy Information Administration reported on Wednesday that oil prices were also being impacted by a sudden build-up in U.S. crude oil inventories. These had posted their largest weekly increase since January 2023, as exports plummeted. The EIA reported that crude inventories increased by 17.4 millions barrels, to 424.4million barrels during the week ending August 7. This is the highest level since June 5. Analysts had expected a draw of 1.4 million barrels based on a poll. Prices are still high due to the deadlocked talks between Iran and the U.S. about ending the Gulf war. On Wednesday, a senior Iranian source stated that there was no progress made in the talks to revive and implement the interim agreement reached in June. The attacks on Tuesday on the shipping in the Strait of Hormuz, and Bab el Mandeb, two vital export routes for Middle Eastern gas and oil, highlighted the risk that remains for the crude supply. Analysts at Haitong Futures wrote in a report that the safety situation in these waters had deteriorated further, forcing ships to turn off their signal, which "reduces visibility in shipping" and makes it harder for the market and its analysts to track and estimate actual supply levels. (Reporting and editing by Christian Schmollinger; Sam Li, Lewis Jackson)
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Brazil's top court upholds the laws related to the collapse of Amazon deforestation agreement
The Supreme Court of Brazil on Wednesday upheld state legislation that effectively ended an initiative that was credited for reducing deforestation in the Amazon rainforest to grow soybeans. The?justices rejected the farmers' claims that a?20 year-old voluntary?soy - moratorium was illegal, shielding grain processors and traders from potentially billions of reais worth of damages. The court supported state actions, like Mato Grosso’s last year’s decision, which revoked the tax benefits of companies that participated in the moratorium. The law that was passed in the state with the highest soy production prompted grain traders from around the world, including ADM, Cargill, and Cofco in China, to withdraw their pledges in January. Environmentalists say this effectively ended the initiative. Brazil is the largest soybean producer in the world. The moratorium, which was introduced after boycott threats, prohibits participants from purchasing soybeans that are grown on deforested land?after July 2008 The voluntary initiative has been found to be effective in reducing the deforestation rate of the Amazon rainforest, the largest in the world. Scientists warn that deforestation could accelerate global warming. Brazilian farmers challenged this moratorium in the Supreme Court, claiming it was unfair and imposed unfair restrictions on them. Brazilian law allows land owners to clear up to 20% of their property, while the moratorium prohibited any deforestation beyond 2008. Abiove, a group of soy processors in Brazil, welcomed the ruling on Wednesday. It said it removed legal uncertainty. Andre Nassar said that members of the group were unlikely to return to the moratorium. Cristiane Mazzetti, of the environmental group Greenpeace, said that the court's ruling was "a setback" which could in the medium-term reverse the positive trend towards reduced deforestation?in the Amazon. Farmers group Aprosoja MT announced in a press release that it will evaluate options for reconsidering the compensation claims. The decision of the court adds uncertainty to Brazilian president Luiz Inacio Lula's 2023 bid to stop Amazon deforestation before 2030. Scientists say the Amazon "helps regulate global climate" by storing huge amounts of carbon, and slowing greenhouse gas accumulation in the atmosphere. Researchers from the University of Wisconsin, Madison, World Wide Fund for Nature Brazil, and other organizations published a report in July that found "the moratorium" helped reduce deforestation for soybean production in the Amazon to "nearly 0", and reduced deforestation by 35% for areas susceptible to soy expansion in its first decade. The estimate was that the end of the moratorium would result in an extra 1.4 million hectares of deforestation over the next 10 years, and 745 million tons of greenhouse gas emissions. This is roughly equal to Canada's emissions each year. Reporting by Ricardo Brito and Roberto Samora, in Brasilia; Writing by Fernando Cardoso and Editing by Kylie Madry Brendan O'Boyle Cynthia Osterman
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Brazil's Ultrapar Q2 profits surge as local fuel industry normalizes
The Brazilian energy and logistic conglomerate,?Ultrapar, reported that on Wednesday its second-quarter?net income increased 46% year-over-year?to 1.68 billion reais (323.7 million dollars), boosting its first-half profits by 71% as the ongoing?legalization?of the fuel distribution sector?boosted market recovery. Ultrapar's performance was largely "driven" by its Ipiranga business. This business benefited from the police crackdown against organized crime, and Middle East tensions, which reinforced the advantage for large-scale operators with import capabilities. Alexandre Palhares, Chief Financial Officer at Ultrapar, said that the company's performance was a result of the efforts made by the public authorities to combat illegal activities in the fuel industry. "As a?result of this more normalized?environment, law-abiding actors, including ourselves, but also others, are regaining?market share, recovering volume, and improving?financial?results." A police crackdown on fraud schemes in fuel distribution a year or so ago boosted the shares of major distributors, after it demolished a network of illegal businesses which ran gas stations to compete with firms such as Ultrapar. Since then, more inspections have been conducted to target price gouging. Tax evasion businesses have also been closed, and major distributors are being investigated for their links with PCC. PCC is a criminal ring which used the fuel industry as a means of laundering multi-billion dollar amounts of money. Ipiranga increased imports to combat the global fuel volatility caused by Middle East tensions. This resulted in an 8% increase of its sales volume for the second quarter compared to last year. The unit's revenue net reached 37.5 billion reals, up 24% from the previous year. The CFO said that despite this, Brazil was "one of the least affected countries at the pump," pointing out government actions such as subsidies and tax reductions, along with Petrobras’s strategic pricing policy. Ultrapar's operational?gains?and working capital released at Ipiranga resulted in a record 4.8 bn reais of operating?cash for the quarter, driving leverage to its lowest level since 2008 Ultrapar's financial performance has also allowed for an early dividend distribution. According to the executive, the company has approved 1.085 billion reals in "dividends" for the first six months of the year. This is equivalent to 1.00 reals per share. The program also includes a share purchase of up to 18,000,000 shares. The executive stated that, while Ultrapar does not give any guidance, it expects the fuel distribution sector to operate in a compliant way. Palhares stated that "we are convinced this more fair and compliant competitive atmosphere is here to remain." "I am not in the position to comment on any other effects." ($1 = 5,1907 reais). (Reporting and editing by Chris Reese, Aurora Ellis, and Luciana Magnalhaes)
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Sources say Braskem is looking at restructuring out of court as soon as this month.
Two people familiar with the matter said that Braskem is in advanced discussions for a possible 'out-of court restructuring. This could be filed this month. The company has over $10 billion of debt in Brazil, Europe and America. Sources said that the restructuring proposal may come before the August 24 deadline, when Braskem’s 60-day protection ends. Sources said that Braskem (which private equity firm, IG4 Capital, recently purchased from engineering group Novonor) has been experiencing a prolonged down cycle in the petrochemical industry. It is estimated to take three to five year to resolve Braskem's issues. Braskem has been weakened in its cash position by the depressed petrochemical prices and a disaster at one of its salt mines located in northeastern Brazil. The company refused to comment. Sources said that Braskem had been discussing alternative options with its creditors, such as bondholders and the banks, in order to avoid a long restructuring process. However, they have yet to reach a deal. Sources said that creditors rejected Braskem’s offer of repaying principal after a 5-year grace period with a 2-1/2 year grace period for interest. Sources said that if the current restructuring discussions continue, Braskem will have a 90-day period of negotiation to come to a comprehensive agreement. This would allow time for both parties to reach an agreement, while protecting it from creditors' claims. One source said that Braskem is also exploring options to restructure its Mexican subsidiary’s $2 billion debt. This could include a possible U.S. Chapter 11 filing, which would be timed with the Brazilian proceedings.
The morning bid for EUROPE is a cool down of the Fed bets, while BOJ wagers are on fire.
Satoshi sugiyama gives us a look at what the European and global markets will be like today. After all the hype, the U.S. CPI data on Wednesday was in line with the expectations. It may even have been a bit anticlimactic. Coupled with ?softer-than-expected July nonfarm payrolls, ?it ?has dampened money-market bets on a September Federal Reserve rate hike. The Bank of Japan's September rate hike expectations were boosted by Thursday's Japanese wholesale price data.
The 7.2% rise year-over-year in July indicated that price pressures are still alive and resilient. This is due to the strong demand caused by the AI boom, as well as the higher costs of raw materials from the Middle East War. Asian stocks were mostly steady in the morning session. South Korean stocks reached their highest level in three weeks due to chip stocks. MSCI's broadest index of Asia-Pacific stocks outside Japan rose nearly 1%. Japan's Nikkei gained 1.61% during the midday break.
Early European trades saw the Euro Stoxx 50 futures rise by 0.35%. German DAX futures also rose by 0.26%, and FTSE Futures climbed 0.27%. Forecasters lowered their outlook for global demand this year, citing the wider fallout from the Middle East conflict. United States and Iran remain at odds over how to end the conflict. They have conflicting claims regarding?control of the Strait of Hormuz.
U.S. crude fell 1.3% to $82.19 per barrel and Brent was down 1.16 percent to $87.95. Reserve Bank of Australia Assistant governor Christopher Kent warned in Sydney?of the risks of further policy tightening during a? NEXT Newsmaker, saying that inflation risks remain high and that "a lot" of things would need to be right in order to avert another rate increase.
Key developments that could impact markets on Thursday include: - UK Q4-June GDP, Eurozone, UK industrial production, U.S. Weekly Jobless Claims
(source: Reuters)