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Indonesia cracks down on illegal mining in the forests
An official revealed on Thursday that Indonesia's task force for forestry is planning to crackdown on illegal mines in forest areas covering 4,27 million hectares (10.55 millions acres) starting on September 1. In March, the task force had already begun what they called a "disciplinary action" against illegal palm production. They sent military personnel to seize 3.3 million hectares. Agrinas Palma Nusantara, a new state-owned company, has taken over some of the plantations. Febrie Adriansyah is a senior prosecutor in the Attorney General's Office and an official of the task force. She said that owners of illegal mines and plantations would be required to return a portion of their profits to state. Febrie stated that "for the information of the general public, the enforcement of law on forest areas turned into plantations by miners is not... the start of criminal prosecution." He added that if the state takes back control of forests, the criminals will be forced to pay all profits illegally gained to the state or to return them. Febrie stated that, as in the palm oil industry, the mines confiscated by the taskforce will be given to the State-Owned Enterprises Ministry, for temporary management. Febrie, however, said that the task force, consisting of prosecutors, police officers, military personnel and civil servants, could conduct criminal investigations in some specific cases. The Task Force has not specified what types of minerals are produced in the mines that it has identified as illegal. In his first address to the nation in the parliament, delivered earlier this month, President Prabowo vowed a wider crackdown on illegal exploitation. Indonesia is one of the world's major producers of nickel, copper, tin, and thermal coal. The country is the largest producer and exporter in the world of palm oil. (Reporting and writing by Bernadette Cristina; editing by David Stanway).
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Aster Chemicals declares Force Majeure at Singapore naphtha Cracker, sources claim
Aster Chemicals & Energy, a Singaporean company, has declared force majeure for petrochemicals from its naphtha cracked on Bukom Island. This was revealed in a letter that sources who were directly involved with the matter saw on Thursday. The letter attributed force majeure to "unexpected events" at the ethylene cracker plant, which had been scheduled for maintenance since August 1. In the letter sent to customers, it was not stated which products were affected. The company didn't immediately respond to our request for a comment. It remains unclear how long the 1.1-million-ton-per-year (tpy) unit will be shut, though sources with direct knowledge of the matter said the original restart date was the first half of September. Steam crackers typically convert naphtha to petrochemicals such as ethylene or propylene. These are both building blocks of plastic materials. Two sources who have direct knowledge of this matter confirmed that the crude distillation units at Bukom will continue to run at a slightly reduced rate due to this problem. All sources requested anonymity because they were not authorized to speak to the media.
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Impala CEO warns of flooding the market with platinum as prices rise
Impala Platinum, a South African company, is cautious in bringing on new production and releasing surplus stockpiles on the market despite recent increases in platinum prices. Chief Executive Officer Nico Muller stated this on Thursday. The second largest producer of platinum group metals (PGMs) in the world reported earnings of 732 millions rand ($41.68million) for the year ending June 30. This is down from the 2.4 billion rand earned the previous year due to lower sales volumes. Platinum prices have fallen. Since June, the rally has been on. This is due to the decline in supply and imports from South Africa, a major producer. The NYMEX stocks were heavily flooded earlier on fear of U.S. tariffs against imports. Muller told analysts Impala expects a supportive price environment in the coming 12-18 months. However, producers need to be "responsible" about how they destock their excess inventory and how they bring new production on line. Muller stated that "we exercise a more conservative approach in how we handle the current 30% rise of PGM prices over the last three month period." He said that despite a lower than expected adoption of electric cars, producers of PGMs - which are used primarily in catalytic convertors to curb toxic emissions - still face a major challenge. "We don't support an influx of new ounces in order to increase supply. "We don't believe there is any sense in oversupplying a market that's already oversupplied," he said. Muller stated that if the price momentum continued, Impala might consider reinstating certain life-of-mine extension projects while maintaining production levels around 3.4 millions ounces. Impala may also reconsider the planned closure. Canadian palladium mine The investment required for the multiple-year extension will require that the metal prices remain around $1400. The price of palladium, which peaked in March at $3,440 per ounce after the invasion of Ukraine by Russia, is currently around $1,097 per ounce.
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Officials say that two Pakistani towns are at risk of flooding if the river barrage collapses.
Officials warned that the eastern Pakistani towns of Chiniot & Hafizabad could face catastrophic flooding if a barrage on a major upstream river collapses after heavy rains have swollen it to capacity. India and Pakistan, both nuclear-armed neighbors, are fighting torrential rains caused by monsoons. These have led to flash floods and flooded rivers, resulting in 60 deaths so far this month, while the death toll for Pakistan is 805 since June. The Indian government is not likely to be able to ignore any flooding that occurs in India. Relations between India and Pakistan are already tense after a short conflict in May, which was the worst in decades. The Chenab River in Pakistan's vast province of Punjab was on the verge of bursting through a concrete barrage that controls flows at Qadirabad, siphoning water into an irrigation canal network. A technical expert with the National Disaster Management Authority said that "it is a situation of crisis", adding that the collapse could wipe out the towns which are home to over 2.8 million people. The official who requested anonymity because he wasn't authorised to talk to the media said, "Under constant supervision by experts and administration the water level is receding but it is not yet beyond danger levels." India released excess water from its dams this week, which flooded river flows in Punjab province, the breadbasket of its neighboring 240 million people. The Pakistani authorities said that more than 210,000 villages were evacuated near the rivers Ravi Sutlej Chenab, which flow into India from the north of Jammu. Heavy rains in the region killed 60 people. India releases excess water from its dams if they become too full. The excess flows into Pakistan and is accompanied by warnings issued from New Delhi. It calls this a humanitarian action. Pakistani officials confirmed on Thursday that India issued its third flood alert since Sunday. This time, it was for the Sutlej river, while the previous warnings were about the Ravi. The Indian water resources ministry didn't immediately respond to an inquiry about the issue. The provincial disaster management authority reported that more than 900,000.00 cusecs of water were passed through Qadirabad's distribution system on the Chenab River, which is 100,000 cusecs in excess of the structure's capacity. A cusec is the flow of volume equal to 1 cubic foot or 28 cubic litres every second. Authorities blew part of the riverbank on Wednesday to release water before it reaches the barrage. Marriyum aurangzeb, senior minister of the Punjab government, confirmed that 12 people were killed in Punjab this week. Aurangzeb said, "We will meet this challenge as one nation," standing by the Ravi's swollen banks. There is no reason to panic. Indus River - the waters of Pakistan’s eastern rivers combine with those of the northern rivers of Punjab to form the Indus, which flows through Sindh and then into the sea. Forecasters expect the downpours will subside by Thursday. Clarence Fernandez, Clarence Shahzad and Asif Shazad (Editing)
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Investors look at US inflation data as they continue to watch gold.
The dollar weakened on Thursday and investors were waiting for the U.S. Inflation data on Friday to get a clue about the Federal Reserve policy. As of 0851 GMT spot gold rose 0.1% to $3,399.60 an ounce after reaching $3,401.73 earlier in the session, its highest level since Aug. 11. U.S. Gold Futures for December Delivery edged up 0.2% to $3,456.20. The dollar index fell by 0.1% against its competitors. Investors await the release on Friday of the Personal Consumption Expenditures Price Index (PCE), the Fed's preferred measure of inflation. The economists polled expect the PCE index to increase by 2.6% in July. This is the same as the rise from June. Market consensus indicates that the PCE inflation reading for July will be higher than last month's, which is already factored into prices. "A surprise on the upside will likely strengthen the dollar, increase Treasury yields and weigh down gold prices," said Ricardo Evangelista senior analyst at ActivTrades. The opposite outcome could fuel the expectation of a Fed that is more dovish, softening and supporting precious metals. According to CME FedWatch Tool, the markets expect that there is a greater than 87% probability of a rate cut of 25 basis points at next month's Fed policy meeting. Gold that does not yield is usually a good investment in an environment with low interest rates. John Williams, the New York Fed Bank president, said that rates may fall at some stage in the future. However policymakers must gauge data to come. Traders also keep an eye on the moves of U.S. president Donald Trump to assert control over Fed. Trump announced earlier this week that he would be firing Fed Governor Lisa Cook. "Many view the dispute as a danger to the Fed's credibility and independence, which supports the precious metal," stated Evangelista. Silver spot was down 0.5% to $38.82 an ounce. Platinum fell 0.1% to 1,345.75 while palladium rose 0.4% to $1,000.29. (Reporting by Ishaan Arora in Bengaluru; Editing by Harikrishnan Nair)
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Spot prices are affected by the forecast of higher renewables and a weaker demand
On Thursday, prompt electricity prices in Europe's wholesale market fell amid forecasts of increased renewable energy generation and a softer demand. "The signal for Germany is bearish, driven by a decrease in consumption and a noticeable rise in wind- and solar-supply," said LSEG Analyst Xiulan She. By 0800 GMT, the German baseload day-ahead power had fallen 20% to 96.0 Euros ($112.39) per megawatt hour. The French equivalent baseload contract for Friday delivery was down 38.4%, at 38.5 Euros/MWh. LSEG data indicated that the German wind power production was expected to increase from 5.8 gigawatts to 9.3 GW on Friday, while in France it was expected to go up to 11.4 GW. In both countries, solar power production increased by 3.6 GW during the same time period. The French nuclear capacity remained at 75%. The power demand in Germany is expected to drop to 52.2 GW by the weekend, a loss of 500 MW per day, while in France it will reach 43.2 GW with a 300-MW decline. The German baseload for the year ahead fell 1.7%, to 83.4 Euros/MWh. Baseload for 2026 in France was down by 1.0% to 59.7 Euros/MWh. Benchmark European carbon permits fell 0.7%, to 71.71 Euros per metric ton. Analysis of EPEX SPOT data by renewables company 1Komma5 revealed that the number of trading sessions this year where European spot power prices are negative (meaning in scenarios of overproduction, the seller pays to place the delivery volume with the buyer) totaled 457 as of August 26. The value of the products sold by 1Komma5, a company that sells photovoltaics and home-storage battery systems, as well as heat pumps, electric car chargers and electric car chargers in addition to smart meters, is exactly what the full-year 2020 will be worth. According to a monthly GfK survey, the German consumer's sentiment is likely to decline for the third consecutive month in September.
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Iron ore reaches two-week high in China as it pushes for a reduction in steel production
Iron ore futures prices hit a 2-week high on Friday, thanks to China's efforts to reduce steel production as it combats overcapacity. The contract for January iron ore on China's Dalian Commodity Exchange grew 1.74% to 790.5 Yuan ($110.51) per metric tonne, its highest level since August 14. The contract is up 1.5% in August. As of 0712 GMT the benchmark October iron ore traded on Singapore Exchange was also up 1.5%, at $104 per ton. This is its highest since August 14. The price has increased by 4% this month. According to a document that was reviewed by a source familiar with the issue, China is planning to reduce its steel production from 2025 to 2026. Analysts believe this will improve the profits of steel mills and increase their ability to absorb rising raw material prices. The prices of key steelmaking materials were also supported by the expectation of improved demand following production restrictions in Tangshan in Hebei Province, a major Chinese production hub. Steelmakers in Tangshan have been asked to reduce production to help curb air pollution before a military parade in Beijing on September 3, which will commemorate the end World War II. "Hot Metal output will likely increase after this round ends." Ore prices were also supported by the expectation that the U.S. Federal Reserve would cut interest rates in September, said Qingwei Xie of consultancy Shanghai Metals Market. The other steelmaking materials were mixed. Coking coal increased by 0.9%, while coke decreased by 0.51. The Shanghai Futures Exchange saw a rise in most steel benchmarks. Rebar was up 0.55%, hot-rolled steel coils were up 0.83%, and wire rod was up 1.08%. Stainless steel fell 0.19%. Baoshan Iron & Steel Co, China's largest listed company, has warned of increasing pressure on exports due to trade protectionism.
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South Korea Minister says it has reached agreement with the US on nuclear fuel reprocessing
Cho Hyun, South Korean Foreign Ministry said that following the summit between U.S. president Donald Trump and South Korean president Lee Jae Myung earlier this week, both countries agreed to discuss nuclear reprocessing. Cho, in an interview broadcast live on television, said: "We run 26 nuclear power stations and buy and bring in fuel every time. We feel the need to be able to reprocess and make our own fuel using concentrates." "Cooperation with the U.S. will be essential in order to achieve this." We must change the nuclear agreement or use another method within the agreement between the countries. It is therefore very significant that we have decided to start discussions in this direction. A bilateral agreement prohibits South Korea from reprocessing spent nuclear fuel, which could be used to create nuclear weapons. Foreign Minister Cho said that South Korea is not interested in nuclear weapons, but rather industrial and environmental purposes. Cho said on Thursday, "Any talk of wanting to have our own nuclear weapons or having nuclear capabilities via revision (of the accord) would be something the U.S. couldn't accept in terms overall nuclear nonproliferation." Reporting by Joyce Lee, Hyunjoo Ji and Ed Davies.
Prices fall in Europe as LNG and wind supply offset the lower Norway flows
Dutch and British gas wholesale prices fell early on Thursday, as wind energy generation reduced gas-for power demand. Increased liquefied gas arrivals also offset the reduction in Norwegian supplies.
LSEG data show that the benchmark Dutch front-month contracts at TTF hub were down 1.32 Euros at 31,23 Euros per megawatt hour or $10.63/mmBtu by 0742 GMT. This was the lowest price for a whole week.
The British gas front-month contract fell by 2.55 pence, to 78.21 pence/therm. Meanwhile, the intra-day contract was down by 2.65 pence.
Daniel Hynes is a senior commodity strategist with ANZ. He said that ship tracking data showed an increase in imports of liquefied gas in certain parts of Europe this week.
He added that "this will help offset Norwegian flow, which is dipping because of seasonal maintenance."
Hynes stated that wind generation is expected to also increase in Northwest Europe, which will ease the demand for gas. LSEG data shows that the non-local distribution zone's gas demand, which is mainly power stations and big industries in Northwest Europe will drop from 2,206 gigawatts/day on Thursday, to 1,692/GWh by Friday. LSEG analyst Saku Jussla stated that the European market is comfortable with current conditions, with their looser storage goals and abundant LNG supply despite Norwegian maintenance ramping-up.
Data from infrastructure operator Gassco shows that the number of Norwegian gas exports to Europe has dropped from 281 mcm/day to 273 mcm/day since Wednesday.
Gas Infrastructure Europe's data shows that EU gas storage facilities were 76.4% filled last year, compared to 92% around the same time last.
The benchmark contract on the European carbon markets was down 0.35 euros at 71.89 euro per metric ton. Nora Buli, reporting from Oslo; Barbara Lewis, editing)
(source: Reuters)