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Sources say that India is looking to end import taxes on US LPG and ethane in trade negotiations.
Three sources with knowledge of the situation said that India intends to eliminate taxes on U.S. imports of ethane, liquefied petrol gas (LPG), and other petroleum products. The move is part of broader talks with Washington to reduce India's trade surplus and lower its tariff burden. India is considering scrapping the import tax on U.S. LNG and increasing purchases of fuel from the United States. As President Donald Trump’s sweeping tariffs rattle markets and economies, several Asian nations with trade surpluses in Washington are looking to increase their imports of U.S. Energy. They hope that this will help them avoid higher tariffs. India levies an import tax of 2.5% on propane, butane and ethane. These are used to produce LPG, which is primarily used as a cooking fuel. According to Indian government statistics, India imported 18.5 millions metric tons LPG valued at $10.4 billion in the fiscal year 2023-24, mainly from the Middle East. According to the U.S. Energy Information Administration (EIA), it was the second largest buyer of U.S. Ethane, after China. It imported 65,000 barrels a day in the past year, while China imported 227,000. The U.S.-China Trade War has led to a surge in tariffs and will likely reduce China's imports. India's biggest buyer of ethane is Reliance Industries. It operates the largest petrochemicals facility in the world. New Delhi and Washington agreed to begin work in February on the first phase for a trade agreement to be completed late this year. The goal is to increase bilateral trade from $457 billion to $500 billion before 2030, and reduce India's trade surplus of $45.7 billion. Sources in the Indian government said that officials from the commerce and finance ministries will make a final decision regarding duty reductions. The three men spoke under condition of anonymity because the discussions were sensitive. The Indian Finance and Commerce Ministry did not reply to email seeking comment. Analysts believe that India has limited options to increase its imports of U.S. liquid ethane in the near future due to the lack of storage tanks, ships and crackers to process it. It will be difficult for the US increase ethane imports to India as India has already maximized its use as a fuel due to current margins. This is according to Cheryl Liu an analyst at Energy Aspects. She said that India's steam-cracker capacity is approximately 9.5 million metric tonnes of ethylene production. This can accommodate up 2 million tons (92,000 Bpd) of feedstock such as ethane. Prashant Vashisth said that it is easier logistically to import more LPG. India imports around 60% of its LPG requirements.
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Weekly oil price rises as US sanctions against Iran and OPEC cutbacks
The oil prices rose on Thursday as a result of the tighter supply that is expected after Washington imposed new sanctions on Iran's oil trade. Some OPEC producers also pledged to further reduce their output to compensate for pumping more than agreed quotas. Brent crude futures were up 34 cents or 0.5% to $66.19 per barrel at 0029 GMT. U.S. West Texas Intermediate crude rose 44 cents or 0.7% to $62.91 per barrel. The benchmarks for both currencies settled at their highest level since April 3, a 2% increase. They are now on course to see their first weekly gain in three weeks. Thursday is the final settlement day for the week before Good Friday and the Easter holiday. The Trump administration issued new sanctions on Iran's oil trade on Wednesday. These included a "teapot oil refinery" in China. This is a way to increase pressure on Tehran as talks about the country's nuclear program escalate. The Organization of Petroleum Exporting Countries, (OPEC), said Wednesday that it had received updated plans from Iraq, Kazakhstan, and other countries for further production cuts to compensate pumping over quotas. Michael McCarthy, CEO Moomoo, said that "these factors" could have affected sentiment – would argue that Iranian output (is) not important and that OPEC quotas are more often violated than observed. But both factors contributed to the more bullish mood. He said that the markets were also buoyed by large draws on U.S. distillates and gasoline stocks, and a smaller-than-expected gain in crude oil inventories. McCarthy stated that the drop in refinery suggests that there may be bottlenecks in supply. OPEC, International Energy Agency, and Goldman Sachs, as well as several banks including JP Morgan and Goldman Sachs, have all cut their forecasts for oil prices and growth in demand this week, as U.S. Tariffs and retaliation by other countries have thrown global trade into chaos. The World Trade Organization has said that it expects the trade of goods to decline by 0.2% in this year. This is down from its October expectation of a 3.0% increase. (Reporting and editing by Tom Hogue; Florence Tan, Reporting)
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Valero books $1.1 bln impairment, may idle California refinery
Valero said it took a $1.1bn pre-tax impairment on its California refineries. It also told state regulators that it would permanently close or restructure the refinery located in Benicia (California) near San Francisco by April 30, 2026. Refiners are facing increasing regulatory and cost pressures, especially in California, which is the biggest gasoline market in the United States. The state's proposed transparency rules and emissions targets have had a significant impact on long-term investments. According to the U.S. Energy Information Administration, Benicia converts 145,000 barrels of crude oil per day into motor fuels. Lane Riggs said that Valero's chief executive, Lane Riggs, understood the impact this could have on its employees, partners and community and would continue to work closely with them during this time. Valero said Wednesday that it is also weighing its strategic options for the refinery in Los Angeles, which produces 91 300 bpd. Riggs stated in October that Riggs was open to all options for the two California refineries. California's refineries are closing down. Companies cite increased regulations, such as the state's plan to ban gasoline-powered cars by 2035. Six plants have closed since 2008. Two of these plants have been converted to produce renewable diesel. Phillips 66 - a rival refiner in the United States - announced, also in October, that it would close its Los Angeles refinery of 139,000 bpd within a 12-month period. This announcement was made just days after Governor Gavin Newsom signed a law requiring refineries keep fuel stockpiled to prevent price spikes. California has some of the highest gasoline prices in the United States because it relies on West Coast refineries and imports from Asia and the Middle East. Contrary to other U.S. areas, California does not have pipelines that connect it with refineries in the Midwest or along the Gulf Coast. The Benicia Refinery, located in northeast San Francisco Bay, has a daily throughput of 145,000 barrels. (Reporting from Mrinalika and Arunima Kumar in Bengaluru, Additional reporting by Erwin Seba at Houston; Editing and proofreading by Shounak and Christopher Cushing.)
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BHP's iron ore production drops due to cyclones; copper output gains thanks to Escondida boost
BHP Group announced a slightly lower iron ore production for the third quarter on Thursday, due to cyclones. A ramp-up of Escondida Mine led it to forecast Chilean copper output in 2025 at the upper half its guidance range. After Cyclone Zelia hit Western Australia's Pilbara Region in February, and after Cyclone Sean disrupted operations in January, the world's biggest listed miner had to temporarily stop its operations in Port Hedland. BHP has achieved record output in its Pilbara operations despite the bad weather. The South Flank site and Mining Area C benefitted from the ramp-up last year of South Flank, and the 13% increase in mining activity. As of 0027 GMT the shares of the company had risen 0.6% to A$36.2, largely in line with the 1% increase in the mining sub-index. Copper production increased 10% to 513.200 metric tonnes in the third quarter. This was boosted by a 20% increase in volume at the Escondida Mine in Chile, due to an improved operational performance. The company expects to reach its fiscal 2025 target for unit costs across all its operations, except in its BMA joint venture where costs will rise due to adverse conditions and geological problems at the Broadmeadow coal mine. BHP is leveraging its iron ore revenue, which generates more than half of its earnings, in order to expand its copper and potash project portfolio as it prepares for the growth that will come from the energy transformation. The global miner's Western Australia iron ore operations saw a slight decline in production, from 68.1 to 67.8 millions tons during the first quarter of the year. This is in line with Visible Alpha's consensus estimate of 68.03million tons.
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Alcoa anticipates a $90 million hit from tariffs in the second quarter and sees costs on China increasing annually
Alcoa announced on Wednesday that it expects U.S. Tariffs on Aluminum Imports from Canada will cost the company approximately $90 million during the current quarter. Donald Trump, the U.S. president who took office in January 2017, has announced and then reversed tariffs on many products and countries. Aluminum imports are currently subject to 25% duties. "Approximately 70%" of the aluminum we produce in Canada is for U.S. clients and now is subject to 25% tariffs. The net result for the business is currently approximately $100 million in negative territory, CEO William Oplinger stated during a conference call following earnings. Aluminum producer says tariffs on Canadian imports cost company around $20 million during the first quarter ended March 31. Alcoa gets a part of its materials from Chinese suppliers and is expecting the high U.S. Tariffs to increase its annual costs between $10 million and $15 million, "as it has no other suitable suppliers". Oplinger, speaking about the current production capacity in the United States, said that even if idle smelting capacities were to be restarted, there would still be a shortage of 3.6 millions metric tons. Oplinger said that until additional smelting capacities are built in the U.S. the most efficient supply chain for aluminum is Canadian aluminum entering the country.
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Sources say that over 100 employees have left the US EIA, which puts vital energy data in danger.
Three sources said that the U.S. Department of Energy's statistics division is likely to lose more than 100 employees following the latest round of resignations offered by the Trump Administration. This puts at risk the world's most closely followed energy reports, they added. Energy Information Administration (EIA) publishes data weekly, monthly, and annually on crude and fuel stocks, oil and gas production, and price forecasts. These are used as indicators by energy companies and traders to determine supply and demand. These reports can have a significant impact on global oil prices. Two sources stated that the EIA had about 350 employees. They said 40% had either left or accepted buyouts. According to one source, the number of departures could be as high as one third, but other sources, such as three EIA employees, claim that the number is in the dozens. Two sources stated that the agency was assessing which reports it could continue to release and those it may have to stop. The EIA has not responded to a comment request. One source claimed that the agency had discussed changing its release schedule. Source: Staffing issues were cited as the reason for the recent shift in publishing the weekly gasoline and diesel fuel updates on Tuesday mornings instead of Monday afternoons. A source stated that many research initiatives including white papers and working papers have been placed on hold indefinitely due to a lack of staff. Regular reports could be modified or shortened. It's difficult to predict whether the weekly energy data will continue. One source said, "I can't imagine how they'll continue over time." Three sources, without specifying the projects, said that the EIA has put new project development on hold or been delayed. Analysts are concerned about the loss of independent data. The EIA data was a great help in determining prices and leveling the playing field. John Kilduff is a partner at Again Capital. He said that it would be detrimental to not have this data. He has used the EIA data as input in every model for more than 20 year. More than 2,600 Department of Energy employees have accepted resignation offers. The hardest hit offices were those dealing with power grid stability, and loans for high tech energy projects. A DOE spokesperson responded to an article's request for comments by saying that the DOE was conducting a review of its entire organizational structure. The spokesperson stated that "no final decisions have yet been made, and multiple plans still remain under consideration." EIA may be the only government agency that publishes such detailed statistics so frequently. Market participants therefore closely monitor its publications in order to make informed trading decisions. The EIA also publishes smaller articles for the public to help explain the jargon and describe the trends in the energy industry. EIA data is used by industry analysts to create their own models or to confirm their models. According to the website of the agency, its data, analyses and forecasts do not require approval from any officer or employee of U.S. Government, thereby ensuring that it is free of bias. Kilduff stated that "This information will be held closely by companies and I do not think that it would be shared with the industry." Reporting by Arathy S. Somasekhar, Stephanie Kelly, in New York and Valerie Volcovici, in Washington D.C.
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Kennedy to study environmental factors in autism
Robert F. Kennedy Jr., the U.S. Secretary of Health, said on Wednesday he intends to commission a number of studies in order to identify environmental factors that contribute to autism. He claims these are related to its increasing prevalence across the nation. Kennedy, speaking at his first Press Conference since becoming Secretary of Health and Human Services said that the studies will examine mold, air and water, food, medicine and ultrasounds as well as parental risk factors such age, obesity and diabetes. Kennedy spoke a day after U.S. Centers for Disease Control and Prevention published a data-analysis showing that the prevalence of autism in the U.S. for 8-year olds by 2022 was 1 in 31. The data were published in CDC's Weekly Report. Autism is not known to have a cause, but experts believe it may be a result of combining genetic and environmental factors. The increase in autism rates is attributed by many experts to the widespread screening of children and the inclusion of a wider variety behaviors when defining the condition. Kennedy, a former lawyer for the environment, has promoted a link between vaccines, and autism, which is now debunked. He set a deadline of September for the U.S. National Institutes of Health (NIH) to determine the causes behind the increase in U.S. Autism rates. However, he said that by then, "some of these answers" will be available. Previous reports have indicated that the government plans to study the vaccines for measles, rubella, and mumps, as well as autism. Earlier scientific studies found no connection between vaccines, autism and previous scientific studies. Kennedy said he will also move the monitoring of autism rates from the CDC to the newly formed Administration for a Healthy America that he supervises directly. The CDC has previously enjoyed a degree of independence from HHS. Kennedy referred to the rise in autism as a pandemic, but patient advocates and scientist disagreed. The Autism Society is a patient advocacy organization that says the increasing rates are not an outbreak but rather a reflection of diagnostic progress and the need for screenings to be available at a younger age. The Autism Science Foundation released a press release that said researchers are currently investigating how environmental factors could work both independently and together with genes to cause Autism. Last week, a study confirmed that diabetes during pregnancy increases the risk of neurological and brain problems, including autism, in children. Reporting by Ahmed Aboulenein, Manas Mihsra, Julie Steenhuysen, and Sarah Morland, Washington. Additional reporting by Sarah Morland, Washington. Editing by Caroline Humer and Nancy Lapid.
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EU simplifies reporting requirements for deforestation laws by companies
The European Commission has made changes to the anti-deforestation legislation of the European Union that will take effect in December. The law will prohibit imports of products such as soy, beef and cocoa that are linked to the destruction of forests. Brussels delayed the launch of the policy by an entire year due to complaints from Brazil, Indonesia, and the former Biden administration. The Commission, in response to the industry's demands, published a set of rules late Tuesday that require companies to submit due diligence statements annually rather than each time a shipment or batch is placed on the EU marketplace. By the end June, the EU categorises countries as either high, standard, or low risk. Imports from low-risk countries will be subject to a lighter compliance requirement. In a press release, EU Environment Commissioner Jessika Rosawall stated that "our aim is to reduce the administrative burden for businesses while maintaining the goals of regulation." Brussels also rebuffs calls for more policy change and for easier reporting obligations from firms and some sectors, such as the U.S. Paper industry. Some campaigners criticized the changes, saying they weakened the law's efficacy. "Reducing reporting requirements to once a year from every batch is a pendulum that swings extremely from one end to the other. This raises concerns about the effectiveness of monitoring and enforcement," said Antonie Fontaine, director of VOICE Network. The nonprofit campaigned for reform in the cocoa sector. (Reporting and editing by Richard Chang, Maytaal angel and Kate Abnett)
Gold prices rise on trade tensions and a weak dollar
The gold price rose on Tuesday due to global trade tensions, the weaker dollar and tensions between U.S. companies and their main trading partners.
After hitting its lowest price since March 13, gold spot rose by 0.8% at 0847 GMT to $3,005.21 per ounce. U.S. Gold Futures rose 1.6% to $3.020.70.
Spot gold is still nearly 15% higher than last year, driven by geopolitical, economic, and central bank uncertainty, as well as increased flows to gold-backed ETFs.
Zain Vawda is an analyst with MarketPulse, by OANDA. He said that the gold price has been regaining momentum due to a lower dollar and the persistent uncertainty around trade war developments.
The U.S. Dollar Index has dipped, making greenback priced bullion cheaper for overseas buyers.
China has refused to submit to the "blackmail" of the U.S., as a trade war sparked by President Donald Trump’s tariffs shows no signs of abating. The European Commission announced that it offered a "zero for zero" tariff deal. However, the European Commission responded with 25% tariffs against some U.S. imported goods.
"If tariffs create further uncertainty for market players alongside the anticipation of rate cuts, then this combination could pave a way for a new rally in gold price," Vawda said.
The market will closely monitor the minutes of the U.S. Federal Reserve’s latest policy meeting, due on Wednesday.
40% of traders expect the Fed to cut rates by 97 basis points by the end the year. In a low-interest rate environment, zero-yield gold tends to flourish.
Ricardo Evangelista is a senior analyst with brokerage firm ActivTrades. He said, "The $3,000 level is a psychologically important level, so it's incredibly important right now... and if it passes through the resistance of $3,050, then I see it reaching $3,100."
Silver spot rose by 0.4%, to $30.24 per ounce. Platinum gained 1.1% at $923.10 while palladium was up 0.1% at $919.78. (Reporting and editing by Shailesh Kuber in Bengaluru)
(source: Reuters)