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Draft shows that EU will exempt most companies of carbon border levies
A draft proposal by the European Commission showed that the Commission would propose to exempt "the vast majority of" companies from the EU's Carbon Border Levy because they only produce 1% of the emissions under the scheme. The commission will propose the move this week, as part of an overall package of measures designed to reduce red tape and streamline business processes. This would dramatically reduce the number of importers who are currently covered by a world-first border tax on carbon in the European Union. The draft proposal of the Commission, which was seen by, detailed plans to limit the application of the CBAM (also known as the carbon border levie) to only companies that import goods up to a threshold of 50 tonnes of mass per year. "A mass-based criterion reflecting the average emission intensity of the volume imported CBAM products would better translate climate objectives of the CBAM." The threshold of 50 tonnes would exempt the majority of importers of their obligations under this Regulation," said it. According to the draft, this change would cover more than 99% emissions that are covered by the border carbon tax. The carbon border tax would replace existing CBAM regulations, which require all companies and individuals importing CBAM covered goods worth more than 150 euros to pay it starting next year. In 2026, this policy will charge at the EU-border for the CO2 emissions that are embedded in steel, aluminum, cement, and other imported goods. Wopke H. Hoekstra, EU Climate Commissioner said this month that the analysis of the Commission had shown that nearly all the emissions covered under the carbon border tax - 97% of them - were produced by only 20% of companies in the scheme. The draft document stated that the majority of exempted consumers are small or medium businesses. It said that "for these importers, compliance with CBAM obligations results in a significant administrative burden which outweighs the environmental and regulatory benefits." Before the Commission publishes it on Wednesday, there is still time for changes to be made. All changes to EU policy must be approved by both the European Parliament as well as the EU member states.
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OPEC+ faces a loss of control if it delays its output further: Bousso
OPEC, along with its allies, is faced with a difficult decision: Should they begin lowering the oil production cap even though crude supply and demand are unlikely to improve anytime soon? The OPEC and its allies may choose to delay this crucial moment in order to maintain prices, but they risk losing market control. In April, the Organization of the Petroleum Exporting Countries (OPEC) and other major producers, including Russia, will begin to slowly unwind years of production restrictions. After a series cuts since 2022, the group has held back 5.85 million barrels of production per day, or 5.7% of global consumption. Due to the persistently low oil demand and growth of global crude production, the rollback of 2.2 millions bpd, announced in November for 2024's first quarter, has been delayed five different times. Unfortunately, the market is not likely to improve significantly by April. It may even get worse, as the increasingly fractious relations between the United States of America and other major economies will weigh on demand for oil. Donald Trump, the U.S. president, has urged Saudi Arabia, OPEC de-facto leader to lower oil prices. Trump's discussion with his Russian counterpart Vladimir Putin, and the bilateral U.S. - Russia talks that followed in Saudi Arabia, have raised speculations about a possible ceasefire in Ukraine as well as a possible easing of U.S. restrictions on Moscow's huge oil production. DISCIPLINE OPEC+'s members have been able to maintain relative stability on the oil market in recent years largely due to their discipline. Benchmark Brent crude has remained in the range of $70-$100 a barrel, except for a few volatile months that followed Moscow's invasion. OPEC has seen its market share and ability to control the market steadily decline as non-member producers increased their output. Drillers in the Permian deposits of Texas and New Mexico have seen their output soar in recent years that the United States is now the top producer in the world. This month, the U.S. Energy Information Administration raised its forecast for U.S. crude oil production to a record 13.6 million barrels per day in 2025. Although the rate of growth has slowed, it is expected that production will remain constant for many years. The EIA predicts that global oil production will grow by 1.6 millions bpd in 2025, with the United States, Canada and Brazil leading this growth. Meanwhile, tensions are rising within the alliance. Chevron's $48 billion expansion at Kazakhstan's Tengiz oil field is expected to achieve production of 260,000 barrels per day by the end February, four months earlier than planned. This will bring total production up to 1,000,000 barrels per day. To meet its production goal, the central Asian country would have to significantly reduce its output, resulting in a loss of revenue. Nigeria has increased production in the last few months. Kurdistan, Iraq's semiautonomous region, could soon resume its 300,000 barrels per day oil exports after a two-year dispute. After years of investment, the United Arab Emirates (a close ally of Saudi Arabia) is also increasing its capacity. Gulf State has reached a capacity of almost 5 million barrels per day, as opposed to the current official production levels of 3.2 millions bpd. This year, the quota will increase by 300,000. Tough Choices According to the International Energy Agency, the growth of the oil supply in 2025 will outpace the global demand for oil, which is forecast to increase by 1.1 millions bpd, after gaining 870,000 bpd last year. OPEC's global oil inventory trends are slightly more positive, but still not very much. If production does indeed exceed demand, then stocks should begin to rise this year. More OPEC+ supply would only accelerate the build-up. OPEC+ is thus faced with a difficult choice. The upside of further delays in the unwinding of cuts is limited, since significant spare production capacity already helps maintain stable oil prices by providing a market buffer. Holding back production increases economic pressures for producers who are growing their capacity within a group. Trump could be irritated by a delay. On the other hand however, an increase in production on a market that is well supplied could result in a drop of oil prices. OPEC+ could decide to delay again, but that decision will have consequences. The group's credibility and market share may suffer even further. ** The opinions here are the columnist's, who is an author for **
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Iraqi minister: Iraq is waiting on Turkey's approval before restarting oil flow from Kurdistan.
Iraq's oil minister announced on Monday that it is awaiting Turkey's approval before restarting the oil flow out of the Iraqi Kurdistan Region. Hayan Abdel Ghani, a reporter, said that he hoped to have the Kurdish oil exported in two days. When asked about the timing of Iraq's return to oil exports, he replied that "this issue would be resolved in a week." Kurdistan regional government announced on Sunday that the Iraqi Kurdistan officials have agreed to resume Kurdish crude oil exports, based on volumes available. In March 2023, the pipeline was shut down by Turkey after the International Chamber of Commerce ordered Ankara pay Baghdad damages of $1.5 billion for exports that were not authorised between 2014 and 2018. The administration of U.S. president Donald Trump is putting Americans at risk Pressure Sources have said that Iraq must allow the restart of Kurdish oil exports or else face sanctions along with Iran. Later, an Iraqi official denied the pressure or threat of sanctions. The rapid resumption in exports of oil from Iraq's semiautonomous Kurdistan would help offset the potential drop in Iranian oil exports. Washington has promised to reduce Iranian oil exports to zero, as part of Trump’s "maximum-pressure" campaign against Tehran. Reporting by Muayad Kenney and Ahmed Rasheed; Writing by Clauda Tanian, Editing By Louise Heavens
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After conservatives won the election, euro and German stocks rose.
Euro and German stocks rose on Monday, as investors welcomed the election results in Germany that placed centrist parties on course to form a government. However, optimism was dampened by potential tricky economic policy negotiations. After a steep U.S. stock market sell-off last Friday, European shares edged up while Wall Street Futures also edged upward. Friedrich Merz is set to be the next German chancellor, after his conservative opposition won Sunday's national elections. Merz is expected to be able form a grand coalition with centre-left Social Democrats even though they came in third behind the far right Alternative for Germany. Peter Schaffrik is a global macro strategist with RBC Capital Markets. He said, "In the end it was a result which was very close to the most recent exit polls. It should be an outcome that will benefit the market." The euro reached a monthly high of $1.0528, before falling to $1.0481 in the last trade. Susannah Streeter is the head of money markets at Hargreaves Lansdown. She said that Merz appears to be determined to lift the debt brake which limits annual borrowings to 0.35% GDP. However, this won't happen easily, as he needs a two thirds majority in parliament. In early trading, the DAX index in Germany rose 0.73%. The STOXX 600, a pan-European index, rose by 0.19% despite a decline in tech stocks. As the EU leaders prepare to meet at an extraordinary summit to discuss how to pay for European defense needs and additional support for Ukraine, they begin German coalition talks. This week marks the third anniversary of Russia's invasion of Ukraine. WALL STREET STEADIES S&P 500 and Nasdaq Futures both rose 0.6%. The Nasdaq dropped 2.5% in the past week, its worst three-month period. Losses were led by "Magnificent 7" tech companies. Wall Street suffered a blow on Friday after a survey of services revealed a shocking drop in activity due to concerns over tariffs and rising costs. The pullback in the market has raised the stakes of Nvidia's results for Wednesday. Investors are expecting fourth-quarter sales to be around $38.5 billion, and first-quarter guidance to be around $42.5 billion. On Friday, the Federal Reserve will release its preferred measure of core inflation. It is expected to show that it has slowed down to 2.6% compared to 2.8%. However, tariff concerns could overshadow this result. The survey, conducted on Friday by the American Consumers Association, showed that inflation expectations in the United States for the next five-year period have risen to 3.5%. This is the highest level since 1995. Francesco Pesole is a currency strategist with ING. The dollar index (which tracks the currency against six other currencies) was slightly lower, at 106.48. After a week of declines, the U.S. dollar rose by 0.17% to 149.54 yen after falling last week due to rising expectations of future rate hikes by the Bank of Japan. Gold remained strong on commodity markets at $2,946 per ounce after climbing for eight consecutive weeks. The oil market has shifted in the opposite direction, partly due to speculation that sanctions on Russia could be eased in an eventual peace agreement on Ukraine. This would boost its oil exports. Brent remained flat at $74.37 per barrel and continued to trade near its lowest level since December.
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Subsea 7 and Saipem from Norway will create a European leader in energy services
The two companies announced late Sunday that Italy's Saipem had agreed to merge its onshore and offshore energy service provider Subsea 7 with Subsea 7, in a 100% share deal. Subsea Seven shares rose up to 9% at the opening of trading and gained 5% by 830 GMT on the Oslo stock exchange. Saipem shares opened higher than 5% before reducing gains to 1.4%. They said that the combined group will be called Saipem7 and have an order backlog totaling 43 billion euros ($45billion), revenues of around 20 billion euro, and core earnings exceeding 2 billion euros. Citi analysts wrote in a client note that the combined business would create cost savings, and provide a stronger integrated offering in particular offshore. They added that this merger could increase payouts for Saipem's and Subsea7 shareholders in 2025 or 2026. The transaction will generate benefits of approximately 300 million euros per year, mainly in the form of cost savings. This is due to fleet optimization, unified procurement and sales and marketing operations. In a joint statement, Subsea7 said that shareholders would receive 6.688 Saipem share for every share they own.
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National Grid sells US Renewables Arm to Brookfield for $1.7 billion
National Grid, a British company, announced on Monday that it had reached an agreement to sell its U.S. Onshore Renewables business to Canadian Investment firm Brookfield Asset Management. The deal includes debt and is valued at $1.74 billion. National Grid is refocusing its investments on its energy networks business, and looking for buyers for its renewables division and Grain LNG terminal in Britain. This is part of the divestment plan announced by National Grid last May. Shell, BP, and Equinor are among the energy companies that have begun to reduce their investments in renewables and low carbon businesses due to declining profitability. National Grid anticipates that the deal between Brookfield and its institutional partners, including Brookfield Renewable Partners, will be completed by the end of the first quarter of the fiscal year ending March 31, 2026. National Grid Renewables is based in Minneapolis and develops and operates solar and onshore wind assets, as well as battery storage in the United States. 1.8 gigawatts are currently in operation, and 1.3 gigawatts are under construction. National Grid shares, which operate transmission and distribution networks and Britain's energy system in certain parts of the United States were up by 1% at early trading. The portfolio of Brookfield Renewable Partners in the United States includes hydropower, solar, and storage facilities. This portfolio spans 34 states. $1 = 0.7896 pounds (Reporting and editing by Mrigank, Eileen Soreng, and David Goodall)
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Sources say that Shenhua China has halted spot coal imports due to a rise in port inventories.
China Shenhua Energy, China's biggest coal miner and importer, has stopped buying imported coal on the spot market as port stocks grow. Three traders who are familiar with this matter said that it is a move which will dampen prices of imported coal. According to two analysts and a senior coal trader in Singapore, who spoke under condition of anonymity, the decision of CHN Energy Investment Group, Shenhua’s parent company will impact purchases starting April. According to a coal trader based in China, the decision was also applicable to deliveries made at the end of March. Shenhua didn't immediately respond to an faxed comment request. According to a second China based trader, the move by the state owned company will affect around 1 million tons per quarter of coal and is not applicable to term contracts. Two traders stated that no decision was made as to how long the halt in spot imports will last. The affected volume may be small in comparison to China's record imports of coal of 542.7 millions metric tons by 2024. However, it has sparked market anxiety over whether other companies will follow and whether this import pause might become government policy. The policy was designed to protect Shenhua’s coal sales on the domestic market. However, the coal trader based in Singapore could not remember the last time Shenhua stopped such imports. Analysts with more than 10 years of experience in the sector said that this was the very first time Shenhua has stopped such imports. Shenhua reported in a recent filing that its commercial coal sales fell by 21.6% on an annual basis to 30.2-million tons in January. The company cited warmer temperatures as a factor, and also the accumulation of stocks. Shenhua reduced production in January by 8.5% compared to the previous year, to 24.9 millions tons. The Singapore-based trader stated that "coal is oversupplied domestically as well as globally", adding that this was bad news for Chinese import coal prices. The unseasonably warm weather this winter has had a negative impact on the coal consumption. Normally, heating demand boosts the consumption of coal. The data of consultancy Mysteel revealed that thermal coal inventories in 55 major Chinese port cities were 72.92 millions tons on February 21. This is moving closer to the all-time record of 77.46million tons set in August 2019.
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Amplats suspends operations in South African mine following heavy rains
Anglo American Platinum announced that it had stopped operations at its Tumela Mine in South Africa after flooding was caused by excessive rains. The company, however, maintained its production forecasts for the year. In a recent statement, the world's largest producer of platinum group materials (PGMs) used to reduce vehicle emissions stated that heavy rains over the last week in the north of South Africa had caused widespread floods. Amplats said that the Tumela underground mine, a smaller operation within the Amandelbult Complex, had been the most affected. The rest of the complex including the main Dishaba Mine, the concentrator, and other infrastructure were not affected and operations resumed Monday following a brief pause. A detailed impact assessment and recovery plan to ensure safe production at Tumela mine, which produces about 10% of Amplats' monthly metal-in-concentrate, was under way. Amplats stated that preliminary indications indicate that the metal-in-concentrate production guidance for 2025 of 3 to 3.4 millions PGM ounces will not be affected. Amplats reported on February 17, a 40% drop in its profit for 2024, to 8.4 billion Rand ($458.56 millions), as lower PGM prices continue hurting the company's income. (1 dollar = 18.3184 rands) (Reporting and Editing by Aidan Lewis).
The rise in iron ore is halted after four days due to increased duties on Chinese steel
Dalian iron-ore futures prices ended a four day winning streak on Sunday as increased levies against Chinese steel dampened prospects for demand. However, decreasing portside stocks in China limited the decline.
The May contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 0.77% lower, at 832.5 Yuan ($114.95).
As of 0710 GMT, the benchmark March iron ore traded on Singapore Exchange was 0.18% less at $108.3 per ton.
According to a document from the trade ministry, Vietnam will levy a temporary antidumping levy up to 27,83% on certain steel products imported from China.
This move follows the announcement by U.S. president Donald Trump of 25% tariffs for all steel imports in early this month. South Korea followed suit, and imposed tariffs provisionally on Chinese steel sheets last week.
China's stocks fell on Monday due to concerns about President Donald Trump’s new memorandum, signed last week, which restricts Chinese investment in strategic areas. This is escalating the trade tensions.
Mysteel data revealed that the capacity utilisation rate in the blast furnace steelmills surveyed had decreased for a second consecutive week. The daily hot metal production was down 0.21% from last week to 2,28 million at the end of February 20.
Iron ore demand is usually gauged by the hot metal production.
Hexun Futures, a Chinese consultancy, said that despite the weather in Australia, iron ore exports worldwide have decreased slightly. Port inventories will also be falling, they added.
SteelHome's weekly data showed that portside iron ore stocks in China dropped 1.15%, to 145.8 millions metric tons on February 21.
Coking coal and coke both fell by 1.99% and 2.9% respectively.
The benchmark steel prices on the Shanghai Futures Exchange have fallen. Hot-rolled coils fell 1.24% and stainless steel and wirerod dropped 0.23%. $1 = 7.2422 Chinese Yuan (Reporting and editing by Mrigank Dahniwala, Janane Venkatraman).
(source: Reuters)