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After the Ukrainian attack, Russia will ask its reservists for help in defending refineries
The top brass of the Russian army said that it will use reserve soldiers to protect civilian infrastructure, such as oil refineries, after an increase in drone attacks from Ukraine deep into Russia during recent months. In the midst of a conflict with the West regarding Russia's involvement in Ukraine, Vladimir Putin ordered that the regular army be increased to 1.5 active personnel, making it the world's second largest army after China's. Putin said at least 700,000. Russian legislators say that there are another 2,000,000 men in the active reserves - those men who signed a contract as reservists but don't usually serve. According to Vice Admiral Vladimir Tsimlyansky of the Russian General Staff, the deputy head of its main organisational and mobilization directorate, Ukraine's use long-range drones has increased the danger for critical national infrastructure as well as residential areas. He said that to increase the security of critical infrastructure and other important facilities for the wellbeing of citizens it was decided to include the most trained patriotic citizens to implement measures to protect civil facilities deep in Russia. The Russian military could free up regular troops to fight in the deadly war of attrition if it sent more reservists behind to protect infrastructure. Tsimlyansky stated that the proposed changes do not constitute any sort of mobilization. The Russian defence ministry made it clear that the reserve forces would not be deployed outside of Russia, nor in the "special military operations" the Kremlin refers to in Ukraine. According to the ministry of defence, reservists will serve in their region. (Reporting and editing by Andrew Osborn, Guy Faulconbridge)
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Draft shows that EU leaders are open to lowering the new climate targets in the future.
Draft conclusions from a summit held on Thursday revealed that European Union leaders wanted a revision clause to be included in the new climate change goal of the bloc, which could allow them to slacken it in the future. Diplomats expect a heated discussion on the EU’s new climate goal for 2040. This has raised concerns in certain capitals about how to finance the low-carbon transformation alongside other priorities such as defence and revitalising the local industries. The draft conclusions of the meeting were seen by. They stated that leaders would agree to allow EU countries and legislators to move forward with setting the 2040 Climate Goal. They also laid out the conditions to achieve this. The draft said that "revision clauses are needed in light of the latest scientific evidence and technological advancements, as well as the evolving challenges to global competitiveness for the EU." It could change before the leaders approve it Thursday. Poland, among others, has argued that a clause of revision is necessary in the event green technologies do not develop as planned or economic conditions prevent countries from making the necessary investments to meet the climate targets. This move reflects the concern of countries like France and Latvia, that agricultural land and forests will not be able to absorb enough CO2 to meet the target - partly because wildfires are becoming worse due to climate change. The EU Commission said that the target for 2040 should be to reduce net emissions by 90 percent compared to 1990 levels. This would be among the most ambitious goals of any major economy. The Commission said that it is important to stick to ambitious climate goals to ensure European industry can compete with China in green technology and to protect countries against costly extreme weather. It has also proposed weakening certain EU green laws including the EU corporate sustainability law, and a upcoming carbon pricing scheme for heating and transport fuels. This is an effort to curb the pushback of some governments that want to rollback climate measures. The draft conclusions of the leaders also called on the European Commission (EC) to create more "enabling conditions", which could be policy changes or financial support, to help industries and citizens meet climate goals. Reporting by Kate Abnett, Andrew Gray and Andrea Ricci
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Russia assumes the new owner of UGC, a gold producer, will buy out small investors
An official of the Russian government said that Moscow assumed on Wednesday that the new owner, UGC, the gold producer would be required to buy out minority shareholders. This was after the Central Bank ruled that state had violated the rights of small investors. In January of this year, the state took a majority share in Russia's fourth largest gold producer from Konstantin Strukov. State prosecutors claimed that Strukov had acquired property "through corrupt means". The central bank has taken a rare stance against the government's 50 billion dollar asset grab spree that began shortly after the outbreak of the conflict in Ukraine. In a ruling earlier this month, the court ruled that the state violated the rights and interests of UGC's minor shareholders by failing to make an offer in accordance with the law. The central bank has asked the agency for state property, which is under the Finance Ministry's jurisdiction, to make a buyout proposal. The agency previously stated that it was working on a solution with the shareholders. Alexei Moiseev, Deputy Finance Ministry, told reporters Wednesday that the new owner of UGC would have to resolve this issue. This will be a topic of discussion with new investors. "We assume that the investor must make an offer," Moiseev told a crowd of investors in Moscow. Moiseev claimed that the situation is more complex than the central bank has presented, since the property agency cannot be considered as a voluntary purchaser and was required to comply with the court order to transfer assets to the government. "I believe that the situation is not as simple as it appears here. The spirit of law does not match this situation." Moiseev said that it was clear there were problems. According to sources, the secretive copper producer UMMC is the likely buyer of UGC's seized stake. Moiseev stated that the ministry aims to sell its stake in UGC before the end the year. (Reporting and writing by Elena Fabrichnaya, Editing by Andrew Osborn).
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US chemical companies set to have another poor quarter due to China's supply glut and tariffs
The U.S. Chemical industry is likely to report another quarter of low earnings, as tariffs and Chinese overcapacity continue to squeeze margins. LyondellBasell, Dow, Sherwin-Williams, Celanese, and Eastman Chemical will likely post lower profits following a difficult second quarter, marked by weak automotive and manufacturing demand. Analysts said that the commodity chemical producers face a cyclical downturn which has now lasted for 38 months. We'll see continued pressure on their earnings in Q3. Seth Goldstein, Morningstar analyst, said: "I don't believe there will be any relief or difference based on the guidance given during Q2." China's rapid ramp-up of ethylene production – a key component for plastics and packaging, as well as construction – has exacerbated a global glut, pushing down prices and margins in the U.S., Europe and other markets. High energy costs, an aging infrastructure, and strict environmental regulations have put pressure on the petrochemicals industry in Europe. This sector relies on imported feedstocks. As a result, several plants were closed after years of losses. RBC Capital Markets' Arun Viswanathan says that the demand for commodity chemicals has been "somewhat tepid". Dow and Eastman are projecting earnings lower than previous guidance midpoints. The near-term volume pressure is due to a combination of sluggish building and construction activities, coupled with the ongoing uncertainty surrounding tariffs. However, some improvements could be seen in the near future, he said. The U.S. tariffs on European goods of at least 15 percent have dampened the demand for key consumers, including automakers and machinery manufacturers as well as consumer goods producers. The recent Carlyle deal to purchase BASF's Coatings Business highlights the continued portfolio reshuffling in spite of industry headwinds. As trade and geopolitical tensions continue, investors will be watching earnings calls to get signals on cost-control, recovery prospects, and demand trends. Dow will report on October 23, LyondellBasell October 31, and Eastman Chemical November 3.
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McGeever: Investors are hearing Powell clearly because Treasury yields have plunged.
The decline in Treasury yields against the backdrop of record stock prices, tight spreads on credit and persistent inflation suggest that investors have accepted Federal Reserve Chairman Jerome Powell's view that policy is driven by employment rather than inflation. There's even a danger that a feedback loop could take hold where labor market worries depress yields and exacerbating concerns that the economy is slowing. This, in turn, could maintain downward pressure on the yields. CPI inflation, a rare indicator of economic growth, will be released on Friday to investors who have been deprived of official data for three weeks due to the government shutdown. It's just not what they wanted. The report due on Friday is expected to reveal that the core annual inflation rate remained at 3.1% for September. This is more than a point higher than the Fed's target of 2%. Since nearly five years, the annual core CPI is at 3% or more almost every month. Bond market will likely shrug this off. Last week, the yield on two-year Treasury bonds fell to its lowest level since August 2022. This reflects investors' beliefs that the Fed would cut rates again next weekend, in December and even into next year. The 10-year yield has fallen below 4.00% and reached its lowest closing daily level in over a year. Even if the inflation rate is on the higher side, it's unlikely that this will cause a spike in yields. ASSESSING THE FRAGILIOUS LABOR MARK Investors have filled in the blanks with their own doomsday scenarios, as there were no official economic statistics during the three-week shutdown of the government. The slump in employment growth is what they have been wallowing over. The dramatic decline in job creation, which has been mostly offset by the shrinking labor pool until now, is alarming. Goldman Sachs economists outlined on Monday five reasons for the rapid decline in job creation: a slowdown of immigration, a reduction in government hiring and funds, adoption of artificial-intelligence technology; tariffs and trade uncertainty as well as costs related to tariffs; and macroeconomic risk. The underlying trend in payroll growth is now 25,000 per month, 125,000 less than the projections made in January. This is also below the "breakeven pace" of job growth required to stabilize unemployment, which was estimated at 75,000. This is on the higher side of estimates for breakeven. Anton Cheremukhin of the Dallas Fed estimates it at 30,000. This is down from 250,000 just two years ago. A low level of break-even job growth can help keep the unemployment rate down, but masks an even greater fragility on the labor market. Net job growth can quickly turn into job losses if the economy deteriorates. MESSAGE IN BARREL The Fed is well aware of this danger. Chair Powell indicated last month that fear of a rapid deterioration of the labor market was the main reason for the decision to continue cutting interest rates, even when inflation exceeded the 2% target. Investors and the Fed may both have other reasons for looking past the inflation rate that is still high. One is the signals from the oil markets. The link between the crude oil price and inflation may be weaker now, but that doesn't mean it should be ignored. Brent crude is near $60 per barrel, and oil prices are at a five-month low. This is down about 15% compared to the same time last year. The majority of energy analysts, such as those at the International Energy Agency (IEA), predict a persistent imbalance in supply and demand for the upcoming year. This is due to both increased production and weakened demand. If Eurasia Group analysts have it right, the glut could drive prices down to $55 per barrel by the end this year. This would be a 5-year low. Oil prices that are moderate have been exerting downward pressure on the inflation rate almost all year. Although cheaper crude oil won't help inflation reach the Fed's target of 2%, it can explain why investors and the Fed have turned their attention away from inflation towards the deteriorating labor market.
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Sources say that Thyssenkrupp and Jindal Steel will deepen TKSE due diligence in the next week.
Two people familiar with this matter have confirmed that Germany's Thyssenkrupp is going to start giving India Jindal Steel International greater access to the financial details of Thyssenkrupp Steel Europa (TKSE) from next week. Last month, Jindal Steel submitted an indicative offer for TKSE. TKSE is the second largest steelmaker in Europe. People said that the deepening due diligence coincides the visit by a Jindal Steel delegation to TKSE headquarters in Duisburg in advance of the crunch negotiations planned for later this year. Thyssenkrupp declined to provide any further comment, but said that official due diligence procedures had begun in recent weeks. This included site visits by Jindal Steel. Jindal Steel (part of the Naveen Jindal Group) declined to comment. The Key to Understanding Pension Liabilities After the news, Thyssenkrupp shares, which had been up 1.5% in the morning, soared as high as 3.2%. They were trading at 2% above their previous levels by 1149 GMT. The people stated that Jindal Steel was willing to take on 2.7 billion euro ($3.2 billion) of pension liabilities, which has been a major obstacle to previous attempts to sell TKSE. However, this would require Thyssenkrupp making substantial financial commitments. This could lead to a negative equity value for TKSE. TKSE employs 26,000 people, or 28% of Thyssenkrupp. Brokerage Jefferies estimates TKSE's value at 2 billion euros. The people reported that more formal discussions took place after Jindal Steel chairman Naveen Jindal, during his trip to Germany on October 8, met with Thyssenkrupp executives, worker representatives and the premier of North Rhine-Westphalia. Jindal Steel, as part of its plans, has committed to completing a direct reduction facility in Duisburg that will produce carbon-neutral stainless steel. It also pledged more than 2 billion euro for an additional capacity electric arc furnace. Jindal Steel will also supply Duisburg high-quality iron from its mines located in Cameroon. Labour leaders welcomed Jindal Steel’s consensus-driven strategy after criticizing Czech billionaire Daniel Kretinsky for not engaging. Kretinsky was slated to purchase half of TKSE prior to Jindal Steel’s interest being revealed. Juergen Kerner is Thyssenkrupp’s deputy chairman of the supervisory board and a senior leader in Germany’s most powerful union IG Metall. Jindal Steel is looking to expand its European operations. Last year, it bought Vitkovice Steel in the Czech Republic and until recently, was in the running for Italy's Ilva Steel plant. Reporting by Christoph Steitz, Editing by Alexander Smith and Tomaszjanowski.
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UN Secretary-General: Global warming pushes the planet to its brink
On Wednesday, UN Secretary General Antonio Guterres said that global warming was pushing the world to the edge and called on countries to implement disaster alert systems to protect the people from extreme weather. "Each of the past ten years was the hottest ever recorded." Ocean heat is destroying ecosystems while breaking records. No country is immune to fires, flooding, storms, and heatwaves", he said at the UN World Meteorological Organization’s extraordinary conference, held in Geneva, to celebrate its 75th anniversary. Guterres called on countries to mobilize funds to create a global surveillance system, also known as Early Warning Systems (EWS), to protect the public from extreme weather. They give farmers the ability to protect their livestock and crops. Families should be able to safely evacuate. "Protect entire communities from destruction," Guterres said. He added that if you are notified 24 hours in advance of a potentially hazardous event, it can reduce the damage by as much as 30%. Since Guterres' initiative to implement multi-hazard early warning systems in all countries by 2027, 60% of countries have implemented them. More than 2,000,000 people have died in the last 50 years due to weather, water, and climate-related hazards. WMO reported on Monday that a majority of these deaths occurred in developing countries. (Reporting and editing by Thomas Escritt, Olivia Le Poidevin)
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Saudi Arabian crude exports reach a six-month high during August
Data from the Joint Organizations Data Initiative showed that Saudi Arabian crude oil exports rose in August to their highest levels in six months. Crude exports rose to 6,407 million barrels per days (bpd) in July from 5,994 million bpd, their highest level since Febuary 2025. Saudi Arabia, which is the largest oil exporter in the world, increased its crude production to 9.722 millions bpd from 9.201 in July. JODI data showed that the refinery crude throughput fell to 2.902 mbpd in august, a 2.6% drop from July's 2,978 mbpd. Direct crude burning also decreased by 1,000 bpd at 607,000 bpd. The demand is still somewhat contained, according to UBS analyst Giovanni Staunovo. "They have unwound production cuts so there's more oil and they produce more, but the official selling price was still very high," he said. "September should be a higher month, just because the temperatures in the Middle East are declining and there is more crude oil available for export." JODI publishes the monthly export figures of Saudi Arabia and its other OPEC member countries. OPEC+ had announced earlier in October that it would increase oil production targets by 137,000 bpd beginning November. This was the same incremental rise as October, amid concerns about a possible supply glut. The OPEC+ Alliance, which includes Russia, and other smaller producers has increased oil production targets this year by over 2.7 millions bpd, equivalent to approximately 2.5% of the global demand. The International Energy Agency predicted earlier this week that the global oil markets could experience a surplus of up 4 million bpd in 2019, as OPEC+ producers and their rivals increase production while demand remains low. Sources familiar with the situation said that Saudi crude exports are likely to fall in November, to around 40 million barrels. Chinese refiners will then switch to cheaper spot supplies coming from other Middle East producers. Reporting by Anmol Chaubey, Bengaluru. Editing by Shailesh Kumar.
Utility PPL increases capex plan on electricity demand by almost 40%
PPL Corp. increased its infrastructure investment goal for 2025-2028 to $20 billion on Thursday, nearly 40% more than its previous plan. The company is looking to protect its grid against storms, and it expects to increase electrification.
The company intends to invest $4.3 Billion in infrastructure this year.
Energy Information Administration (EIA) predicts that power consumption in the U.S. will reach record levels in this year and next due to the increased use of data centers and rising energy requirements for heating and transport in homes and businesses.
PPL expects to spend $14.3 Billion between 2024 and 2027. PPL expects to increase the rate base by 9.8% on average annually through 2028. This is an improvement from the 6.3% growth that was expected during the previous plan period.
It expects to need equity of $2.5 billion during the plan period in order to support this increase.
The Allentown-based company increased its dividend by 6%, to $0.2725 a share.
LSEG data shows that profit per share on a adjusted basis was 34 cents in the fourth quarter. This is lower than the 37 cents analysts had predicted.
PPL shares fell 1% during premarket trading as operating expenses for the company also increased by nearly 12% compared to last year.
More than 3.5 millions customers in Kentucky, Pennsylvania, and Rhode Island receive electricity and gas services from the company.
PPL expects earnings in 2025 to range from $1.75 per share up to $1.87, a higher range than the $1.67 to $1.73 range last year.
The company also extended its target for dividend growth and earnings per share of 6% to 8 percent annually until at least 2028. (Reporting from Seher Dareen, Bengaluru. Editing by Maju Sam)
(source: Reuters)