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Data shows that Asia's diesel refining margins are at a record high of over $87 per barrel.
LSEG data showed that the Asian sulphur diesel refinery margins have reached a record high of slightly over $87 per barrel. The gains were primarily due to concerns about regional supply. According to data, this compares to pre-war levels around $22 per barrel. The last time the margins reached a record was at $85.6 per barrel towards the end of March. Front-month time-spreads hovered at just over $11 per barrel, nearing a five-month-high. In recent months, Asian refiners increased crude shipments and diesel production to take advantage of robust margins. They also shipped more diesel to distant markets like Africa to make up for shortages in the West. Sources and analysts have said that there are growing concerns about the near-term Asian oil supply risk. The market is now watching for another round of production cuts or run reductions as the escalating tensions of the Middle East increase the possibility of crude delivery delays. The Asian diesel situation is becoming more complex. In the past, Asia was better supplied by higher exports of?China and Korea, said Abhisek Kumar, senior oil market analyst with Sparta Commodities in a recent note. "But Asia is no longer immune from the risk premium." Fears about crude availability and Saudi disruption of supply have begun to lift Asian diesel. Since late last week, a few refiners began selling 'October spot cargos. The market is unsure whether the volumes will be comparable to September or August.
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Merz confidante backs tax cuts as German fuel prices hit record
Thorsten Frei is a senior conservative German lawmaker and a close confidante to Chancellor Friedrich Merz. He said that lowering the gasoline sales tax would be a logical step. Merz's?government is trying to reduce the record high prices?at the pump in advance of the state elections at the weekend, whose results could put pressure on the chancellor. The price of E10, the most common gasoline sold in Germany, is at an all-time-high for the past four days. This is due to the increase in international oil prices, which have reached $100 per barrel as a result of the U.S. and Israeli war against Iran. The national average daily price for one litre of E10 jumped to EUR2.30 ($10.05 per?gallon), up from EUR2.286. TAX REDUCTION FOR ENERGY RELIEF Frei told RTL/ntv lowering the energy tax, 'which was done by the government in May and July, could be an option. 'As well as reducing sales tax to 7% rather than 19%. He added that the discussions should be quick and focussed on how to implement measures by October 1st. Merz, the leader of a cabinet meeting on Wednesday, didn't present any specific measures Tuesday, but promised to make proposals "very soon". He rejected a tax on windfall profits, claiming it had no legal basis. Before the state elections on Sunday in Berlin and Mecklenburg/Western Pomerania, the chancellor wants to show that he is able to act on concerns of voters. Last week, the far-right Alternative for 'Germany (AFA) defeated Merz's Christian Democrats in Saxony-Anhalt. A poll conducted by INSA on Wednesday showed that his CDU was at 7% of the vote in Mecklenburg/Western Pomerania. This is almost half the result the party achieved in the 2021 elections. Merz, the head of Merz’s conservative parliamentary party, Frei, confirmed his support for Merz on Wednesday. Frei said, "We must resolve the many problems that we face in Germany."
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Bonds stabilize ahead of Fed decision, stocks rise as oil prices fall
The global stock market rose on Wednesday, as the recent rise in oil and government bond yields paused before a crucial U.S. Federal Reserve rate decision later that day. MSCI's global equity index rose 0.1% after falling in the two previous sessions. A four-day losing streak was broken by an index of Asia-Pacific stocks outside Japan, which rose 0.6%. The STOXX Europe 600 index, which is the pan-European benchmark, opened 0.3% higher. Futures that track the U.S. S&P 500 index also rose, after the benchmark index had closed lower for the second consecutive session on Tuesday. The yield on the benchmark 10-year Treasury bonds hit its highest level in 2007. The yield on a 10-year Treasury bill in the United States was 5%, after it had been lowered earlier in the day. It rose above this threshold on Tuesday, for the first time since 2007, briefly reaching its highest level in 2007. Later on Wednesday, the Federal Reserve will announce their policy decision. This will be followed by a conference with Kevin Warsh. It's a matter of credibility that he hikes now. Michael Nizard is the head of multi-assets and overlay at Edmond de Rothschild Asset Management, Paris. "It is also a matter of guidance and a response function from the Fed." It's difficult to define a Fed reaction function today. U.S. president Donald Trump has stated repeatedly that he prefers lower interest rates. He said last month that the U.S. will stop trading with nations with whom it runs a deficit in trade if the Fed does not reduce rates. The traders have mostly ignored those comments, and now see a rate increase as almost certain. According to CME Group’s FedWatch tool the markets are pricing in a 92.5 percent probability of a rate hike when the Fed makes its announcement. This is up from 61.2 percent a week earlier. The dollar index (which measures the U.S. Dollar against six other currencies) eased by 0.1% to reach 99.6. It had been nearing its two-week peak. The Japanese yen was stable at 155 to the dollar, after a two-session decline. This is ahead of Friday's Bank of Japan policy announcement. Markets expect the rate to reach its highest level in over 31 years. British stocks were up and the pound was flat as a reading on domestic inflation did not change expectations in advance of the Bank of England policy decision?on Thursday. Markets expected?rates?to remain unchanged. Rates are still expected to increase by the end of the year. Sterling could strengthen if the BoE announces that it will be raising interest rates in response to rising inflation and energy costs. The Japanese yen could also weaken if BoJ's messages do not meet market expectations. As fuel supply disruptions due to the Middle East conflict raise concerns about inflation driven by energy, central banks around the world are considering tightening monetary policy. Brent crude futures fell 0.6% to $108 per barrel on Wednesday after gaining 2.9% the previous day. This was due to reports that Saudi Arabia offered additional crude cargoes through Oman, which eased concerns about supply disruptions. Digital assets have continued to fall after a steep selloff during the previous session when the U.S. Senate voted not to advance comprehensive cryptocurrency legislation backed up by Trump. Bitcoin fell 0.6% to $75423 following a 4% loss on Tuesday. Ether dropped 0.8% to 2,388 after a 6.3% decline in the previous session.
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South Korea places critical minerals and energy at the forefront of the inaugural Central Asia Summit
The first South Korean summit between the leaders of Central Asian countries and President Lee Jae Myung took place on Wednesday. Seoul is focusing its efforts to strengthen ties with this resource-rich area by promoting cooperation in the areas of minerals, energy, and supply chains. The summit was attended by the leaders of Kazakhstan, Uzbekistan Turkmenistan Kyrgyzstan Tajikistan. It concluded three days of bilateral discussions that resulted in more than 70 agreements, memorandums and understandings spanning energy, mines, infrastructure, technology, and investment. Lee, speaking at a forum for business after the summit, said that South Korea wanted to extend cooperation beyond resource imports in order to deepen industrial partnership. Lee stated that "we must strengthen our cooperation along the entire minerals value chain - from exploration to refining, high-value materials processing, and final product manufacturing." He said that Seoul would support these efforts by establishing rare metals centers in Central Asia led by South Korea, with the aim of promoting joint research as well as workforce training. The summit marks the beginning of a new phase for Seoul in its engagement with Central Asia. As a resource-poor nation, it seeks to diversify its crude oil, uranium, and other strategic mineral supplies, while increasing opportunities for its companies. The summit established a framework to hold regular bi-annual leaders' meetings, with Kazakhstan hosting the next meeting in Astana 2028. South Korea and Kazakhstan signed agreements this week covering nuclear energy and crude oil, as well as critical minerals. They also upgraded their ties into a comprehensive strategic partnership. The meetings with Uzbekistan (Uzbekistan), Turkmenistan (Turkmenistan), Kyrgyzstan (Kyrgyzstan) and Tajikistan produced agreements on strategic minerals, energy infrastructure, trade and investment, and digital technologies. Chey Tae -won, Chairman of SK Group, highlighted the opportunities for expanding cooperation at the Business?forum. Chey stated that "we will expand critical minerals collaboration beyond simple development, to include the entire supply chain from refining and materials production." Chey also called for stronger cooperation on?renewable energies and nuclear power. South Korea's New Northern Policy, launched in 2017, aims to create new opportunities for South Korean businesses by establishing deeper economic ties.
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After a summer of extreme weather, the EU launches a climate insurance scheme
Ursula von der Leyen, President of the European Commission, said that the European Union will create a "climate-insurance alliance" in order to provide more coverage for extreme weather conditions. This comes as Europe emerges from an intense summer marked by droughts, wildfires, and heatwaves. Climate change has caused Europe to heat up twice as fast as the average global continent. The wildfire season of this year was one of the worst in Europe. Heatwaves caused power outages, reduced productivity, and forced schools to close. According to EU statistics, only one-quarter of climate-related economic losses are insured in the EU. "Far too frequently, national budgets?become?the insurers of?last resort. In a speech before the European Parliament, von der Leyen stated that we must take action to reduce this gap. The EU has a policy framework that is ambitious to reduce greenhouse gas emissions, which cause climate change. However, the EU has not been prepared for the impact of global warming. In February, the EU's independent Climate Advisors stated that Europe underinvested in climate adaptation. They urged actions such as?better planning in order to avoid building homes in flood-prone areas and designing cities to help people stay cool during heatwaves. Von der Leyen stated that "we need to dramatically increase our preparedness." She also promised to make?other suggestions. In October, a "climate resilience strategy" on how to manage climate risks in 100 European territories vulnerable to climate change will be released. Heatwave plans will improve early warning systems, while EU water plans will increase drought risk management. Brussels also asked senior firefighters for proposals on how to better manage wildfires. This included the EU forming its own firefighting squadron.
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EU's von der Leyen supports partnership with Canada in an 'openly hostile' world
The head of the European Commission has called on 'Wednesday' for EU countries to form a new partnership with Canada to combat climate change, China and other major challenges. Ursula von der Leyen, in her annual address to the European Parliament at Strasbourg, outlined the priorities of the 27-nation EU in the coming year. She said that the only solution to this problem was for all member states to work together. "Our path is obvious." "Building an independent Europe with the power to act." With Russia's invasion in Ukraine, the 27-nation group faces war at its borders. The 27-nation bloc faces stiff competition from Donald Trump's United States and an assertive China on trade issues. In addition to the EU's domestic challenges, there are also major obstacles in Europe. These include the growing popularity of an eurosceptic right-wing, as seen in recent regional elections in Germany that have undermined Chancellor Friedrich Merz. According to opinion polls, Marine Le Pen is the front-runner in France's presidential election next year. "Our Union is stronger than ever." Von?der Leyen stated that the state of our Union could also be as fragile as ever. Work with Canada Von der Leyen, who is now serving her second five-year stint at the top of the EU executive, would also stress the importance of maintaining European independence in different sectors, such as energy, raw materials, and clean technologies. Mark Carney, the Canadian Prime Minister, was welcomed warmly by EU legislators as he arrived in Strasbourg to hear von der Leyen speak. Von der Leyen stated, "We would like to bring the relationship with Canada up to the highest possible level." "I would like to open the door to Canada becoming the first associate member in the EU. Carney received a standing ovation after Von?der Lieen approached him and hugged him. CHINA TRADE DEFICIT Von der Leyen then turned to the issue of trade and said that the EU would use all means possible to reduce its "unsustainable trade deficit" with China. She stated that the imbalance had reached a critical point, with a goods trade deficit last year of EUR1 billion ($1.15billion) per day. Let me be clear: We will use every tool at our disposal to restore balance in our relationship. Words can be good. "But deeds were better," she said. FIGHT CLIMATE CCHANGE Von der Leyen said that the bloc would need to continue its ambitious course on mitigating the climate change, but also increase efforts to adapt to it. He drew on the experiences of the past three months in which the continent had been hit by unprecedented wildfires and heat waves.
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Bahrain's Alba produces 1.3 million tonnes of aluminum per year, CEO claims
The CEO of Alba Aluminium Bahrain said that the company produces aluminium at a rate of 1.3 millions metric tons per year, as opposed to 1.6 million tons before the Iran war. Alba, the world's largest aluminium smelter, closed production lines 1, 2 and 3 after the outbreak of war, as the Strait of Hormuz was closed, limiting exports. In late March, an Iranian attack hit the plant. Ali 'Al Baqali, on the sidelines the Fastmarkets Aluminum Conference in Budapest, said that Alba now operates lines?4,?5, and?6 at its smelter. This is equivalent to 1.3 millions?tons of aluminium per year. He called the Iranian attack a "small and minor attack". "We have already fixed the damages." Al Baqali added that Alba was covered by insurance. Al Baqali stated that its overall capacity will return to 1.6 mt when it completes the acquisition of French Aluminium Dunkerque within the next few months. Alba brings in 300-350 trucks of raw material alumina daily to maintain production, according to the CEO. Al Baqali said that the logistic operation was "expensive" but the London Metal Exchange aluminium prices and the premiums for metals were offset. Al Baqali, a spokesperson for Alba, said that Alba exports metal via the Saudi port of Jeddah, located on the Red Sea, and Sohar, Oman. This is in spite of the ongoing hostilities across the Middle East.
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Martin Vladimirov: ROI-Europe cannot win the AI race without an integrated energy market.
Mario Draghi, the former president of the European Central Bank, warned Europe in 2012 that it would face a "slow pain" if it did not revive investment and productivity. Now, the continent faces the risk of proving his right one data centre and at a time. Europe is falling behind in the AI race. Look at the scale difference. In July, the European Commission announced plans to build seven massive AI computing hubs. Eighteen out of 27 European Union governments have bid for at least one of these hubs, with a commitment of around EUR3 billion ($3.5billion) in future computing purchases. According to S&P Global Ratings, the capital expenditure of six hyperscalers based mainly in the United States is expected to reach $1.3 trillion dollars by 2027. These spending commitments may not be directly comparable but they do highlight a huge - and insurmountable- investment gap. In order to begin closing this gap, EU must address its fragmented market for energy. The EU's energy system is currently unable to transport electricity from the point where it is produced to where a new industrial demand emerges. Weak interconnections and large differences in transmission fees, as well as complicated permit procedures, divide what was supposed to be one market. It has huge economic implications. According to the International Energy Agency, the average price for electricity in 2025 will be around $107 per megawatt hour. This was almost 57% higher than China and more than double the U.S. These high costs have had a devastating impact on the traditional industries. According to a senior analyst at the Center for the Study of Democracy, Marius Koppen, an analysis of Eurostat's data showed that the overall production in Europe was just 1% higher in 2025 than it was in 2021. The decline in chemicals production was 19%, and the output of basic steel and iron, cement, and aluminium fell by 16%, 14 %, and 11 %, respectively. The decline in manufacturing is not solely due to energy. The decline in manufacturing is not only due to energy costs. While most of Europe has recovered from the COVID-19 Pandemic and energy crisis that followed Russia's invasion of Ukraine in full force, Europe's industrial base is still suffering. Energy prices have risen again following the U.S. - Iran war. Access to affordable, reliable energy is more important than ever as Europe looks to join the AI Industrial Revolution. GEOGRAPHY OF ENERGY Europe's struggle to capitalize on the AI boom highlights the unfinished business of the bloc's integration of energy. Around 40% of EU distribution grids are older than 40 years. According to the European Commission, EUR584 billion in investment will be needed by 2030 for modernizing and extending electricity networks throughout the EU. A data centre can be built in two years but connecting it to Europe’s outdated transmission system can take seven. The AI infrastructure that is currently being developed has a high concentration. According to CSD's analysis of announcements by companies and records from national investment agencies, 68 EU major data-centres have been announced since 2024. Four countries, France, Spain Finland and Sweden, account for 43. The availability of low-carbon, affordable electricity and reliable grid connections is one of the major reasons behind the concentration. CSD estimates based on comparable national electricity prices show that a 100-megawatt centre generates an annual electricity bill in Germany of EUR254 millions and EUR153 in Spain. However, only EUR91 in Finland where the electricity mix is dominated primarily by nuclear energy and renewables. LIMITING FACTOR In order to create an integrated electric market in Europe, the European Union will have to change its economics. First, it would be important to make energy more easily available across borders. Investing in battery storage and expanding nuclear power could also help to reduce the reliance on imported gas. Grid operators could also benefit from a map of future demand that is credible across the bloc. This would allow Brussels and national governments to plan grids, oversee renewable generation, and consider industrial demand in concert. Multilateral financial institutions, such as the European Investment Bank and national governments, can also fund grid development in a proactive manner, rather than waiting for customers. Finaly, Europe could create a framework that would accelerate grid connections and construction permits. It makes little sense to build an AI gigafactory across all member states, but the Commission can select sites based on credible demand. The interconnected computing nodes could allow all EU nations to gain access. Many obstacles would be in the way of a deeper integration of the EU, such as bureaucracy and competing national interests. Fixing the power system will not eliminate Europe's other AI flaws. The EU is a small producer of semiconductors, and it lacks advanced fabrication capabilities. The EU is a leader when it comes to advanced chipmaking lithography. This is led by the Dutch equipment maker ASML. However, other than that, Europe relies heavily on U.S. design, Asian manufacturing, and non-European clouds platforms. Without it, Europe has very little chance of making it past the starting line. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
India's NSE will launch an IPO amid investor caution about derivative-fueled growth
Investors are cautious about capital market firms due to declining derivative trading volumes. This has already affected the price of the offering.
The IPO of 'India's largest bourse, which is set to be third-largest in the country's history, will 'begin' with anchor investor bids from institutional funds. It's an offer for sale from existing private investors and no new capital is being raised. Open subscriptions begin Thursday and end on September 21.
Investors will be asked to value one of the world's biggest derivatives exchanges at a moment when its main growth engine has slowed down. This raises questions about the extraordinary growth driven by derivatives that the exchange can maintain.
Public filings on September 11 showed that the NSE shares would be sold in a range of 1 700 to 1 785 Indian rupees (17.72 to 18.00), which values the company at 46 billion dollars.
According to two anonymous sources who have direct knowledge of this matter, the value is between 15% and 20% less than that sought at pre-deal roadshows. It is also 40% less than what the private markets?sales of NSE share in 2024 suggested.
Investors are unwilling to pay more because regulatory changes have slowed the growth of options trading. Also, a reorganization of trading rules has been implemented to align Indian markets to global standards. The NSE earns 80% of their revenue through trading, of which 60% comes from options trading. Volumes have fallen 27% since 2024.
"NSE’s high exposure in derivatives is a two-edged blade." The company's large liquidity pool and scale are clearly competitive advantages, but also make its earnings more susceptible to regulatory changes or shifts in trading activities," said Gary Tan.
Even at this valuation, NSE will still be one of the top 10 listed exchanges in the world.
Two sources familiar with the matter confirmed that several institutional investors around the world, including sovereign wealth fund and asset managers who only hold long positions, had made commitments at the lower offer price.
They said that this includes Abu Dhabi Investment Authority (ADIA), Singapore's GIC and Fidelity Investment Management, Norges Bank Investment Management, Carmignac and Life Insurance Corporation of India.
GIC, Norges ADIA, Carmignac and Fidelity refused to comment on our request, and LIC did not respond to any of our questions.
Sriram Krishnan (chief business development officer, NSE) pointed out in a Saturday press conference that there was a disconnect between current expectations of shareholders and the price offered.
Some shareholders believe that NSE is worth more than the price at which we propose to do an IPO. For them, NSE is worth more. "There is money on the table.
Tests are slowed down by a variety of options.
Reduced derivative trading volume has had a negative impact on the NSE's bottom line. Revenue from operations dropped 3.1% and profit fell 15.5% in the fiscal year that ended March 2026.
Bernstein predicts that Indian equity derivatives are entering a normalisation phase and that growth will slow down to 5% by the fiscal year ending 2027, due to new regulatory measures for options trading.
The NSE's IPO price implies a forward earnings multiplier of 35 to 40 times FY2028 earnings. This is higher than the current trading multiples for global exchange operators - Nasdaq Group, CME Group Deutsche Borse HKEX, LSEG and CME Group.
The current closing price mechanism is based on the fact that options trading has slowed down due to tighter regulations and there are initial "teething" issues. Anubhav Dayal is the founder of Hong Kong based fund manager Soach Global Corporation. He said that if the IPO had been launched at a different time, it could have resulted in a better valuation.
In the offering, his flagship fund sells 20% of its NSE holding.
The NSE launched electronic gold receipts and natural gas futures in the last 15 months. It also incorporated a coal exchange.
NSE's Krishnan said on Saturday that these efforts are positives and outweigh any concerns about short-term derivative volume.
He said that in the long term there would be a lot of diversification and people would forget about index options.
(source: Reuters)