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Indonesian aluminium exports in March hit a 28-month high, as metals flow to US
Data from Indonesian Statistics Agency and Trade Data Monitor, an export-import data aggregator, show that Indonesian aluminium exports increased by more than a?double from the previous months?to the highest level since November 2023. Southeast Asia shipped 88,554 tons of unwrought aluminum in March, up from the 33,490 tonnage of February. The country is expected to increase production significantly this year, at a time when the market is suffering from the shortages brought on by the Middle East war. * The first 'aluminium exports were made in March from Weda Bay, on the Indonesian Island of Halmahera. A smelter owned jointly by the Chinese Tsingshan Holding Group & Xinfa Group began production recently. According to Statistics Indonesia, released on Monday, Weda Bay shipped three cargoes. 18,500 tons went to the U.S. which is a country that relies heavily on importing goods from the Gulf, 10,000 tons went to China, and 8,000 tons went to South Korea. According to the latest figures for the EU, which excludes imports from Greece, Indonesia also exported 6,000 tonne of aluminum to Italy in the month of March. The EU imported 1,860 tonnes from Indonesia during the same period. (Reporting and editing by Rashmi aich; Reporting by Tom Daly)
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Iraq offers May-loading Crude at Deep Discounts for Loading inside Hormuz
Iraq offers Basrah May-loading 'crude' at steep discounts to term buyers who?load inside the Strait of Hormuz. This has been largely blocked ever since the iran conflict began. According to a?notice dated May 3, the state oil marketer SOMO offered its Basrah Medium Crude at a discount of $33.40 or $26 per barrel compared to its official May selling price. The offer was for loading between May 1 and May 10 or 'May 11 to 31 respectively. The document also showed that it offered Basrah Heavy crude?May-loading at a $30 discount per barrel for the May?OSP. Cargoes can be sold "free-on-board" at the Basrah Oil Terminal, or Single Point Moorings located both inside the Strait of Hormuz. It said that the OSP will determine the final destination for the cargoes. SOMO didn't immediately respond to an?request of comment. Discounts are a sign of increasing pressure on Iraqi crude oil exports, as there is a persistent risk in the waterway - regarded as 'critical artery' for global oil flows. Kpler data shows that most of Iraq's crude oil exports to Asia are shipped to Asia. Kpler reports that in April, only two vessels were loaded at Iraq's Basrah Port. One of the vessels has already travelled through the Strait of Hormuz, while the other hasn't.
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Oil prices drop as investors are encouraged by positive earnings
The global stock market rose on Tuesday as investors took heart from a series of robust earnings. Meanwhile, simmering hostilities in the Strait of Hormuz between the U.S.A. and Iran kept oil prices well above $100 per barrel. The yen was also on traders' minds after it briefly jumped during the previous session. This fueled speculation about another round of Tokyo intervention. The STOXX 600 index rose 0.5% in Europe. This was boosted by Anheuser-Busch shares, which surpassed expectations with their first-quarter results. Also, Unicredit, an Italian lender, reported record quarterly profits. On Monday, the U.S. launched new attacks on the Gulf as it fought for control of the Strait of Hormuz through dueling maritime blockades. This came shortly after U.S. president Donald Trump launched an effort to move stranded oil tankers and other vessels through this vital energy-trade chokepoint. Maersk announced that the Alliance Fairfax - a U.S. flagged vehicle carrier operated by Farrell Lines - left the Gulf on Monday via the Strait of Hormuz, accompanied by U.S. Military assets. Oil prices, which have been slipping below the $115 per barrel high of Monday, have given some relief to stocks and other risky assets. The renewed hostilities still shook the markets and reminded us that the Middle East war is far from over. On the oil market, Brent crude futures dropped 1.3% to $112.93 per barrel and U.S. crude fell 2.3%, both having risen in the previous session due to increased concerns about supply disruption. The markets may be relieved today after?President Trump said overnight that the conflict could last another two or three weeks. Markets are likely to be sceptical, however, due to the recent escalation of hostilities and the repeated extension of projected timelines since the conflict started," ING's head of commodities strategy Warren Patterson stated. S&P Global Market Intelligence data shows that 83% of S&P500 companies have surpassed EPS estimates, and 78.2% have beaten revenue expectations. LSEG data indicates that earnings growth in the S&P 500 will now top 18% for?the first three months, up from an estimate of 12.8% a month earlier. Nasdaq and S&P futures both rose by 0.6%, suggesting that the market is recovering from Monday's negative closing. Jeff Buchbinder is the chief equity strategist at LPL Financial. He said: "Without signs of slowing, AI-driven expenditure will continue to do the heavy lifting in terms of S&P 500 earning growth, led by technology." YEN INTERVENTION WORT After Monday's brief surge, the?yen has been stable at 157.26 dollars after reaching an intraday peak of 155.69. Satsuki Katayama, Japanese Finance Minister, spoke Monday against speculative foreign exchange trading. Market participants are on high alert for any further intervention. Sources say Tokyo intervened on Thursday to support?its ailing currencies. Abbas Keshvani is Asia Macro Strategist for RBC Capital Markets. He said that authorities may intervene again, if the dollar/yen keeps testing 160, which they have historically protected. In 2022, Tokyo fired "three volleys" of intervention within a few week. "We believe that the?intervention is merely a way to keep a lid on USD/JPY and not a catalyst for protracted yen strengthening," he stated. The Australian dollar traded at $0.7161 last, after Reserve Bank of Australia raised rates on Tuesday for the third time in this year, a move that was widely anticipated. Spot gold, meanwhile, rose 0.7%, to $4,553, above the low of $4,500 on Monday, which was the lowest level since March 31. (Reporting and editing by Rae Wee, Muralikumar Aantharaman, William Maclean; Reporting by Christopher Cushing)
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Germany allocates five billion Euros to encourage heavy industry to reduce CO2
The German economy ministry announced on Tuesday that it would provide up to $5.85 billion this year to help major factories reduce their carbon emissions through the use of cleaner technology. Carbon contracts for Difference (CCfDs) covering 15 years will be used to cover extra costs for low-emission production in industries such as steel, cement and chemicals. The goal is to keep these factories in Germany, and help them meet climate goals instead of moving production to countries that have weaker environmental regulations. The government has loosened up some conditions after a first bidding round that took place in 2024. The government has loosened some conditions after a 'first bidding round in 2024. The program's final target is to reduce emissions by 85%. This is slightly lower than the previous goal of 90%. The new rules?allow for funding of technologies that capture CO2, particularly in industries such as cement and certain chemical production. The projects that are purely aimed at generating cleaner industrial heat can also be eligible. The government has clarified rules regarding cancellations and delays to reduce risk for businesses. The ministry stated that only factories covered by the EU emissions trading system are eligible to apply. Bids must be submitted before September 7, 2026.
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Sources say that Arcelor and Adani are among the firms that will be setting up treasury functions in India's GIFT City.
Three sources claim that Gautam Adani’s firm, Bharti Airtel (the telecom operator), Genpact, a U.S. based company, and ZF Friedrichshafen, the auto parts giant, are all setting up treasury in India’s tax-neutral finance zones. Public filings indicate that they are set to join ArcelorMittal - the second largest steelmaker in the world - which has obtained regulatory licenses for two treasury centers. Modi's government is promoting the Gujarat International Finance Tec-City (GIFT City) as a rival to Singapore and Dubai as a centre of finance. The government increased the tax holidays for companies operating in the city to 20 years, and relaxed regulations. Two of the three sources who declined to be identified as they were not authorised by the media to speak, said that seventeen corporate treasuries will likely begin operating in GIFT City within the next three month. Singapore and the Netherlands have been traditional locations for corporate treasury operations. Global treasury centers are hubs for multinational companies to manage their cash, liquidity, funding, foreign exchange, and financial risks. The three?sources' said that firms are setting up treasury centers in GIFT City because of the lower tax rates on dividends?and the ability to send excess cash overseas. They also like the fact that they can hold assets in dollars, as the rupee is weakening. India hopes that by moving this activity to GIFT City it will be able to maintain control over global financial flows related to its companies. "Treasury centres at GIFT City are ?allowing firms to pool cash and borrow at a group level with greater flexibility and improving access to funds generated by their Indian businesses," said Suresh Swamy, a senior partner at PricewaterhouseCoopers. In response to a question, a ZF Friedrichshafen spokesperson responded in an email that the company is looking into a GIFT City setup and has not yet applied for a license. No response to email queries sent to other companies mentioned in the article. Names of companies planning to establish operations in GIFT City? have not been reported previously. Dipesh Shah is an executive director of the International Financial Services Centre Authority (GIFT City), a regulator. He said that "the growth of treasury centers at GIFT represents a structural change in how India-linked corporations manage global 'capital. He refused to comment on the specific companies that set up treasury functions at the tax hub. REGULATORY PUSH Sources said that activity has increased'sharply' since January. Seven companies have'secured regulatory licences, and another 17 are at various stages of approval. According to two sources, a large part of the recent increase is due to the regulatory changes that will be implemented in April 2025. The?interest of foreign multinational companies was beyond our expectations," stated a senior regulatory officer at GIFT City, who?requested anonymousness as they were not authorised by the media to speak. Sources said that a key change was made to allow banks to pay interest for current account balances. This practice is not permitted by the Reserve Bank of India (RBI) for onshore lenders. Two of the sources claimed that only one foreign bank had started this practice so far. Sources say that ArcelorMittal, an early entrant, plans to pool cash for its India entities through GIFT City. This is similar to the activities it performs via its treasury center in Paris via an entity named ArcelorMittal Treasury. Reporting by Jaspreet K. Kalra and Jayshree Upadhyay in Mumbai, Editing by Ira Dugal and Thomas Derpinghaus
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Gold recovers from a five-week low, but inflation worries cap gains
Gold prices rose on Tuesday after a five-week low was reached in the previous session. However, gains were modest as high crude oil prices kept inflation concerns alive and clouded U.S. rate outlook. After a drop of more than 2% on Monday, spot gold was up 0.5% at $4,543.87 an ounce as of 0757 GMT. U.S. Gold Futures for?June Delivery were up 0.5% to $4,554.10. Ilya Spivak is the head of global macro at Tastylive. He said that prices seem to have digested a little after the return of a 'war' trade across the markets on Monday. The dollar and Treasury "yields" rose as the crude oil rebound fueled inflation fears. Spivak noted that this weighed against gold, which is non-interest bearing and anti-fiat. Brent crude hovered at $113 per barrel, as the U.S. continued to negotiate a truce with Iran while exchanging blows in the Strait of Hormuz. The U.S. Military said Monday that it destroyed six Iranian small vessels and intercepted Iranian drones and cruise missiles, as Tehran tried to thwart the new U.S. Naval effort to open up shipping through the Strait of Hormuz. Dollar-priced materials become more expensive to holders of currencies other than the U.S. dollar. Higher crude oil prices can also stoke the inflation and increase the probability of higher interest rates. Gold is considered an inflation hedge, but high interest rates can make other assets more appealing, which reduces its appeal. Markets now see a 37% chance of an increase by March 2027 compared to 27% for a reduction one week ago. Investors are now awaiting a number of important U.S. statistics this week, such as the ADP employment report and the April payrolls data. Silver spot was up 0.8% to $73.29 an ounce. Platinum gained 1.7% at $1,978.77 and palladium increased 1.1% to 1,496.25. (Reporting and editing by Rashmi aich, Subhranshu Sahu, and Louise Heavens in Bengaluru)
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As the Iran War disrupts supply chain, German companies abroad become more pessimistic
A survey on Tuesday showed that German companies operating abroad are more 'pessimistic' about their prospects. Nearly one-third of respondents expect economic conditions to worsen as the Iran War exposes vulnerabilities in global supply chains. In a survey conducted by the German Chambers of Industry and Commerce (DIHK) of 4,500 companies, 32% of respondents expected that the situation in their foreign locations would worsen?in 12 months. This is an 8-point increase from the last AHK World Business Outlook Survey conducted before U.S. and Israeli?airstrikes against Iran at the end February sparked a Middle Eastern war. According to the survey, the?disruption' of energy markets, supply chains and fuel prices, as well as volatile demand, are all affecting international business. "This is not just an economic slowdown." Volker Treier is the head of DIHK's foreign trade. Despite the darker outlook, assessments of conditions are not worsening overall. Nearly 40% of respondents rate their situation as good and nearly 50% as satisfactory. The authors of the survey said that the geographical impact on German companies with international locations of their dependence on imports of oil and gas from the 'Gulf region' varies. The majority of companies in Asia-Pacific, including China, and the closest to the conflict zones, are sceptical regarding the future. The outlook for firms operating in China, America and South America's Mercosur region is relatively optimistic. (Reporting and editing by Barbara Lewis, Miranda Murray, Christian Kraemer)
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Gold recovers from a five-week low, but inflation worries cap gains
Gold prices rose from the 'five-week low' they hit the previous day, but gains were modest as high crude oil prices kept inflation concerns alive and clouded U.S. rate outlooks. After a drop of more than 2% on Monday, spot gold was up 0.5% at $4,543.33 an ounce as of 0615 GMT. U.S. Gold?futures delivered in June rose 0.4% to $4,553.10. Ilya Spirak, the head of global macro at Tastylive, said that prices seem to have digested a little after the return of "war trade" across markets on Monday. Gains were however capped by the fact that Treasury "yields" and the dollar rose as the rebound in crude oil stoked inflation concerns. Spivak stated that this weighed against gold, which is non-interest bearing and anti-fiat. Brent crude was hovering?above $113 per barrel, as the U.S. continued to negotiate a truce with Iran while exchanging blows in the Strait of Hormuz. U.S. Military said Monday that it destroyed six Iranian small vessels and intercepted Iranian drones and cruise missiles, as Tehran tried to thwart the new U.S. Naval effort?to open up shipping through Strait of Hormuz. Dollar-priced materials become more expensive to holders of currencies other than the U.S. dollar. While higher crude oil prices can increase inflation, they also increase the probability of higher interest rates. Gold is considered a hedge against inflation, but high interest rates can make other assets that yield more attractive. This reduces its appeal. Markets now see a 37% probability of an increase by March 2027 compared to 27% a week ago. Investors are now awaiting a number of important?U.S. This week's data includes job openings, the ADP employment report and the April payrolls. Silver spot was up 0.4%, at $73 an ounce. Platinum gained 1.4%, to $1971.86, while palladium was up 1.1%, to $1495.43. (Reporting and editing by Rashmi aich and Subhranshu Sahu in Bengaluru.
Kenya increases retail fuel prices in response to the Middle East conflict driving up crude costs
Kenya's energy regulator announced late Tuesday that retail fuel prices had risen by up to 24.2% due to a spike in crude oil prices and a squeeze on?petroleum supply caused primarily by the Middle East conflict.
The Energy and Petroleum Regulatory Authority, which sets maximum retail prices monthly for different products, released a statement that showed a litre of petrol had been increased by 16.1%. It now costs 206.97 Kenyan shillings (about $1.60).
Diesel was raised by 24.2%, to 206.84 Kenyan Shillings. Kerosene remained at 152.78 Kenyan Shillings. The regulator justified the increase in retail prices by citing the rising cost of imported goods, which they claimed had increased up to 68.7%.
In March, EPRA kept prices the same, saying that the impact of war hadn't yet been reflected in retail price.
Kenya imports nearly all of its fuel products from the Middle East ?via government-to-government deals with Persian Gulf suppliers, including Saudi Aramco Trading Fujairah, Abu Dhabi's ADNOC Global Trading ?Ltd, and Emirates National Oil Company Singapore Ltd.
The new prices were set to take effect on late Tuesday night, but motorists in Nairobi's capital rushed to fill their tanks up, creating long queues.
EPRA said that it has reduced the value-added (VAT) tax on petrol, diesel and kerosene, from 16% down to 13%, "to cushion consumers from the high...cost?of petroleum products due to the escalating prices on the international market."
(source: Reuters)