Latest News
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Southern Co's retail sales beat first-quarter estimates
Southern Co, a power company in South Carolina, beat Wall Street expectations for its first-quarter profits on Thursday. This was due to an increase in retail electricity sales and a higher demand for energy. Utilities in the U.S. have seen a rise in demand due to the increasing use of artificial intelligence, which is driving the need for larger data centers that consume more energy. Electricity demand for heating, transportation and business purposes is also increasing. In February, the U.S. Energy Information Administration predicted that power demand would reach record levels in 2025 and in 2026. Residential, commercial, and industrial customers accounted for a 4.2% rise in sales of kilowatt hours in the company's first quarter. The company reported a 11% increase in data center usage for the first three months of this year. It also said that it has a large load-pipeline of over 50 gigawatts, of which 10 GW are committed and 6 GW are contracted. Total operating revenues for the quarter rose by 17%, to $7.78 Billion from a year ago. Interest expenses, however, rose 7.3%, to $714 millions, in the first quarter. Operating expenses, meanwhile, increased from $4.9 billion to $5.8 Billion, a jump of $1 billion. Southern Company is the U.S.'s second largest utility company, measured by its customer base. It provides power to six states: Alabama, Georgia Illinois, Mississippi Tennessee and Virginia. LSEG data shows that the Atlanta-based company reported an adjusted profit per share of $1.23 for the three-month period ended March 31. This compares to analysts' expectations of $1.20, which were compiled by LSEG. (Reporting from Katha Kalia, Bengaluru. Editing by Leroy Leo.)
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PBF Energy reports quarterly loss amid maintenance and turnaround activities
PBF Energy, a U.S. refiner, posted a loss for the quarter on Thursday as compared to a profit from last year. The fire at the Martinez refinery in California along with other turnaround activities affected refining margins. In preparation for summer driving, U.S. refineries undergo seasonal maintenance and turn-around activities. This reduces the refinery's ability to generate revenue and temporarily lowers its utilization. "Policy volatility and macroeconomic uncertainty combined with the Martinez incident, planned maintenance in PBF's refinery system, as well as policy volatility and macroeconomic uncertainties, created a challenging first quarter environment," said CEO Matt Lucey. A fire had broken out on February 1 at its 156,400-barrel-per-day Martinez refinery, impacting operations. In April, limited operations were resumed and the remaining units will likely restart in the fourth quarter. The Parsippany refiner in New Jersey reported a first-quarter loss of $401.8 million or $3.53 per common share. This compares to a profit of $106.6 millions or $0.86 per ordinary share compared to a year ago. PBF Energy reported that its gross refining margin for the first quarter was $6.39 a barrel, compared to $2.68 a barrel a year ago. The company reported that its crude oil and fuels throughput fell from 897.400 barrels per day a year ago to 730.400 barrels a day in the quarter under review. LSEG data shows that the company's adjusted loss per share was $3.09, compared to the estimated loss of $3.12, according to the data.
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Wall Street to benefit from tech boom, but yen falls on BOJ gloom
Wall Street was higher on Thursday. The dollar, which had been dragged down by gloomy Bank of Japan forecasts, also rose, as signs emerged that the so-called U.S. "exceptionalism" trades might not be dead at all. May Day was a public holiday in many parts of Europe and around the world. Trading volumes were low, but there were some active moves. John Hardy, a Saxo Bank analyst, said this was a direct response to recent questions regarding whether Donald Trump's radical change in the post-WW2 global order will end "U.S. exceptionalalism" on the markets. This is where U.S. assets have been brought up as bets that they will perform well. Hardy stated that "the recent narrative is to sell the dollar" and that it was a consensus. Wall Street made a sprint on Wednesday despite news of the first U.S. quarterly contraction in three years. The Nasdaq is expected to open almost 2% higher following strong Microsoft and Meta earnings that eased recent "Magnificent 7" anxiety. The Nikkei, a tech-heavy Japanese stock, had followed up with a jump of more than 1% in Asia. However, with London's FTSE almost stationary in Europe and MSCI's 47 country world stock index still in the negative for now. The situation was not expected to last for very long. The Nasdaq opened 1.8% higher and the S&P500 1.2% higher according to U.S. Futures. Microsoft surged almost 9% after its bumper forecast for growth, while Meta, the owner of Facebook and Instagram, was up more than 6% following strong advertising revenue. Gold, which had risen as investors sought cover in this year's financial crisis, has also fallen to its lowest levels in two weeks, as traders took advantage of some signs of hope in the global trade conflict to lock in profits. The Bank of Japan's decision to cut its forecasts on Thursday and the subsequent 1% drop in the yen against the dollar added to this. Hardy added, "Gold has also dropped today." Hardy said, "So these things are all linked". DATA WATCHING The majority of Europe's bonds markets were closed on the holidays. The UK 10-year Gilt Yields, a proxy of borrowing costs, ticked down and the U.S. Treasuries yields were back at 4.15%. Analysts now price in four U.S. rate cuts for the rest of the year. The U.S. ISM Manufacturing data is due to be released later. The trade war was expected to have a negative impact on the data. JPMorgan analysts noted that the S&P 500 had the largest loss in the first 100 of Trump's second presidential term since Richard Nixon's presidency of 1973. The dollar is experiencing its worst year ever in the past 35 years, following the Plaza Accord, when the U.S.A., West Germany Japan France and Britain agreed to jointly devalue the currency. What about the next hundred days? Analysts at JPMorgan said that attention will be focused on landmark fiscal legislation in the United States and the budget reconciliation processes, which will put the spotlight on America's unsustainable fiscal trajectory. Oil prices on the commodities market have stabilized at $61 per barrel, after plummeting on Wednesday due to the U.S. drop in GDP and indications that Saudi Arabia, which is the world's largest crude exporter, plans to increase production this year. Hardy, from Saxo Bank, said: "It'll be interesting to watch what happens if the drumbeat of negative data continues." Ukraine's bonds also rose, with a commodity-related slant. This was after the government of Ukraine signed a long awaited agreement to grant the U.S. priority access to its rare minerals. Analysts see this as a sign of progress after the ugly Oval Office spat that took place between Trump and Ukrainian president Volodymyr Zelenskiy in February. In an interview with Fox Business Network, U.S. Treasury Sec. Scott Bessent stated that the deal would show "Russian leaders there is no daylight" between the Ukrainian and American people.
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Fortive, a manufacturer of industrial products, forecasts a 2025 profit due to tariff issues
Fortive forecasted 2025 profits below Wall Street expectations, citing possible impacts from tariffs. The industrial products maker's share price fell more than 5% before the market opened on Thursday. The tariffs imposed by President Donald Trump on steel and aluminum, as well as on other countries, including China, could disrupt an already stressed supply chain, and increase costs for businesses. According to LSEG, the Everett-based Washington company expects to earn between $3.80 and $4.00 per share for the full year, compared with the analysts' estimated $4.02 per shares. Fortive has also stated that it will complete the spin-off of Precision Technologies by the end the second quarter of this year. The company previously anticipated that the spinoff would be completed by the third quarter. Analysts had predicted a profit of 98 cents a share. The company is expecting 86 to 90 cents a share. The company reported a profit adjusted for the quarter ending March 28th of 85 cents a share. This was in line with expectations. Fortive's sales for the first quarter of 2015 fell by 3.3%, to $1.47billion. Analysts expected sales of around $1.49 billion. (Reporting and editing by Vijay Kishore in Bengaluru, Anshuman tripathy from Bengaluru)
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Dominion exceeds its quarterly power demand estimates for Virginia and South Carolina
Dominion Energy, a U.S. utility company, reported a first-quarter profit and revenue that exceeded Wall Street's expectations on Thursday. This was due to lower interest rates and strong demand in Virginia and South Carolina. According to the U.S. Energy Information Administration, the U.S. energy demand is expected to reach record levels in 2025 and in 2026. This will be driven by the demand for artificial intelligence, cryptocurrency, and heat from businesses and homes. The first-quarter adjusted operating earnings of Dominion's Virginia division rose by 32.3%, to $561 millions. Those from South Carolina rose by 90%, to $152million. Dominion’s Virginia utility service the world’s largest cluster data centers. This cluster has more capacity than the four next largest global clusters of data centers combined, according the company. Dominion Energy's interest costs also fell 16.4%, to $480 Million in the first quarter. Reduced interest rates can reduce the borrowing costs of power companies. These companies need more capital to upgrade and maintain grid infrastructure. Dominion's gas and electric service areas experienced a quarter-on-quarter increase of 25.6% in heating degree days, a measure for energy consumption in space heating. LSEG data shows that the quarterly revenue for Q3 was $4.08 Billion, up from $3.63 Billion a year earlier, and beat analysts' estimates of $3.97 Billion. Analysts have predicted $3.39 per common share. The company has reaffirmed that its adjusted annual operating profit forecast is between $3.28 and $3.52. LSEG data shows that the utility's adjusted earnings per share were 93 cents for the three-month period ended March 31. This compares to analysts' estimates of 75 cents. (Reporting and editing by Sahal Muhammad in Bengaluru, with Pooja Menon reporting from Bengaluru)
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Ukraine reduces power imports 31% from March to April, according to a consultancy
ExPro, an Ukrainian consultancy, said that the warm weather in March had led to an increase of 11% in electricity imports in Ukraine. This was a reduction by 31% for April. According to the consultancy, Ukraine imported 187 GWh of electricity in April compared with 272 GWh for March. ExPro reported that 44% of the electricity was imported from Hungary. Ukraine imported electricity also from Slovakia and Poland. Officials in Ukraine have stated that the Russian attacks left Ukraine with only half its generation capacity. Some of this has been restored by Kyiv. German Galushchenko, Ukrainian Energy Minister, said that the European Union has increased the maximum amount of electricity Ukraine can export into the EU from 550 Megawatts to 650 Megawatts. "Ukraine trades electricity today with all of its European neighbouring countries - Slovakia. Romania. Hungary. Poland. Moldova." "Every spring, exports rise, while imports fall," Galushchenko wrote on Facebook. Ukraine began large-scale power exports before the Russian invasion of 2022, but stopped them after Russia damaged Ukrainian electricity generating facilities. (Reporting and editing by Jan Harvey, David Evans, and Pavel Polityuk)
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Exelon exceeds its first-quarter profit expectations on higher electricity prices
Exelon, a U.S. utility company, surpassed Wall Street expectations for its first-quarter profits on Thursday. This was largely due to higher electricity rates. Exelon and other U.S. utilities have sought to increase customer bills in order to improve the infrastructure. This is because the electrical grids are facing extreme weather conditions and a growing demand as a result of industrial electrification, artificial intelligence technology expansion, and data centers. Exelon announced in February that several of its rate cases were implemented at the beginning of the year. This helped boost earnings for the quarter. Rate case proceedings are used by utilities to determine the amount customers pay for services. According to data compiled and analyzed by LSEG, the company's total revenue grew 11% for the quarter ending March 31 to $6.71 Billion. This was higher than analysts' expectations which were $6.59 Billion. The Chicago-based firm posted an operating loss of 92 cents for the first three months of the year, which was lower than the average analyst estimate of 88cents. Exelon provides service to more than 10 million customers across Illinois, Pennsylvania and Maryland through its six fully-regulated transmission and distribution utilities. (Reporting and editing by Sahal Muhammad; Khusbu Jena)
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Canada's Northern Graphite Plans to Put Quebec Mine on Care and Maintenance
Northern Graphite, a Canadian mining company, will place its Quebec facility under care and maintainance, effectively ending production at North America’s only graphite-producing facility, by 2025 if it fails to find funding for expansion, according to its CEO. The graphite price, which is not traded at commodity exchanges but has fallen by half in the past year along with that of other battery metals due to the slow increase in sales of electric vehicles and aggressive pricing from China's dominant producer. Industry officials claim that China, which controls at least 70 percent of the graphite markets, has a pricing monopoly. Hugues Jacquemin, CEO of the company, said: "We are putting pressure on all our stakeholders, including government, to assist us in financing." He added, "We don't think it's right to shut down the only graphite producing mine in North America, because that's like killing a golden goose." Jacquemin stated that if the mine received funding, it would be able to continue operating for an additional eight years. Northern Graphite has requested C$10 Million to expand the Lac de Iles Mine in Quebec, Canada. The 35-year old facility sells mainly to industrial customers in the United States. In 2024, it is expected to produce 12 thousand metric tonnes. Even though Northern Graphite doesn't supply materials to battery manufacturers, it still feels the pinch from low commodity prices. China tightened its grip on commodities such as graphite despite the price crash. Beijing's Commerce Ministry announced export controls on graphite to the U.S. at the end of last year. Jacquemin stated that the uncertainty and risks associated with China's supply had caused potential investors shy away. Any disruption in supply may impact U.S. industry customers. He said that the company needed help from investors, governments, and banks. Once the Quebec plant was put under maintenance, it might not restart it. Instead, it would focus on its other mine in Africa. (Reporting and editing by David Evans in Toronto, and Divyarajagopal from Toronto)
LME suspends brand-new Russian metal deliveries after sanctions: Andy Home
The London Metal Exchange ( LME) has suspended the warranting of Russian metal produced on or after April 13 to abide by the current sanctions bundles announced on Friday by the U.S. and British federal governments.
Aluminium, copper and nickel increased higher in early Monday trading, showing the value of Russian supply to all 3 markets.
However, the sanctions have been thoroughly developed to reduce market turbulence.
The April 13 cut-off point implies that Russian metal already in the LME system can continue to be traded, which is especially significant for aluminium because Russian brand names represented over 90% of required stocks at the end of March.
Rather, the ban on brand-new metal shipments to the LME and its U.S. equivalent the CME is most likely to divide the market for Russian metal with the exchange basis cost moving to a premium over what is now non-exchange deliverable metal.
RUSSIAN STOCKS
Russian brands of aluminium have represented over 90% of LME required stocks because the end of December.
Although many Western metal users have actually decided to self-sanction by declining to utilize Russian metal, it is clear there is still an active worldwide market for aluminium produced by Russian manufacturer Rusal.
Russian metal comprised 58% of all the aluminium delivered out of LME warehouses in January, the ratio increasing to 94% in February and 88% in March, according to the LME.
The amount of Russia copper and nickel in the LME system at the end of March was lower at 62% and 37% respectively.
Copper market dynamics are much tighter than those of aluminium. Exchange inventory is lower and China, the world's. largest purchaser, appears rather happy to take in Russian metal. Imports of Russian copper rose by 14% to 371,000 metric heaps in. 2023.
Nickel is globally over-supplied however the market for the. Class I metal produced by Russia's Norilsk Nickel and traded on. the LME has been much tighter than that for Class II forms of. the metal such as ferronickel and nickel pig iron. Just like. copper, exchange inventory is lower and characterised by active. two-way movement.
While the U.S. and UK federal governments have actually prohibited all imports of. Russian aluminium, copper and nickel, the current sanctions still. allow for physical market trading in other areas and, in the. case of metal produced before April 13, exchange trading and. physical shipment, albeit with constraints on citizens of both. countries.
SPLIT MARKET
That raises the possibility of large shipments of Russian. metal onto LME warrant as holders of off-market product. produced prior to April 13 play it safe and decide to deliver that. metal to exchange.
It is possible that a reasonably large supply of Relevant. Metal may be called for (...) as a securing relocation, the LME. stated in a notification to members.
Off-market stocks of aluminium, defined by the LME as metal. that is being kept under a warehousing contract with an. specific choice of warranting, stood at 734,000 loads at the end. of February.
The quantity of Russian metal because shadow stock is unknown. But given that Russian metal is still being delivered routinely. out of LME storage facilities for physical delivery to the supply chain,. the LME anticipates that a sufficiently broad set of market. participants will be able to use such metal, the LME stated.
Undoubtedly, the design of the new sanctions package might really. benefit the LME, which has resisted calls unilaterally to ban. Russian metal from its system.
Advocates of such a move have argued that enabling Russian. metal to trade easily on the exchange threats debasing the LME. rate, which will wind up showing metal that is the least. desired by the physical supply chain.
The LME's issue has actually been that simply eliminating all Russian. metal as deliverable metal could develop a liquidity crisis for. the LME aluminium contract.
Such fears have been mitigated by allowing metal produced. prior to April 13 to stay part of the LME's physical liquidity. base.
Furthermore, by creating a new pool of non-deliverable Russian. metal, the logical outcome is for newly-produced metal to trade. at a discount to the LME price, successfully strengthening the. credibility of the exchange basis rate.
Thus, the sanctions can act to depress Russian metal. manufacturers' earnings from brand-new production whilst avoiding a. shipment default by LME brief position holders not able to deliver. older Russian metal against their positions.
UNCERTAINTY
All 3 affected metals jumped higher in early Monday. trading. LME three-month aluminium surged to a near two-year. high of $2,728 per heap. Copper, which was already in full bull. rally mode, extended its gains to $9,640.50, the greatest price. given that June 2022. Nickel made it as far as $19,355, a level last. sold October 2023.
In all three cases the preliminary knee-jerk response has. promptly gone into reverse as the market considers the capacity. for a period of quick stocks rises as older Russian metal moves. out of the storage shadows into LME storage facilities.
There may be more surprises ahead as trade streams adapt to. the brand-new regular however for the LME the new sanctions bring some. welcome clearness to a problem that had polarised the exchange's. user base.
The opinions revealed here are those of the author, a. columnist
(source: Reuters)