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Eastern China is sweltering under an early heatwave that threatens crops and industry
On Friday, sweltering heat engulfed China's east coast as a high pressure system settled over its most populous area, baking agricultural and manufacturing hubs on the Yangtze River, and raising fears of potential economic losses. Over the next week, large swathes in China's economic core are expected to reach temperatures between 37 and 39 degrees Celsius (99 and 102 Fahrenheit). Forecasters warn that temperatures in parts of Anhui, Zhejiang, Hubei, and Henan provinces could reach 40 C. This year, the subtropical heat wave has come early. The 'Sanfu Season,' an ancient agricultural mark in China that has been used for more than two millennia, usually begins mid-July. It lasts until late August. People seek shelter from the intense heat of summer. Meteorologists have linked extreme heat to climate change. This has become a major problem for Chinese policymakers. In addition to scorching crops and eroding incomes from farms, higher temperatures also impact manufacturing hubs, disrupt operations in important port cities and strain the already overburdened health care systems. Authorities in eastern and central China warned workers about the dangers and urged them to take precautions. Extreme heat and high humidity combined with commutes create a higher risk of heatstroke. China experienced its worst heatwaves in 2022. Many parts of the country were subjected to a 79 day hot spell between mid-June and late August. China doesn't keep a count of heat-related deaths and neither did the Chinese government. However, domestic media sometimes report on fatalities that are attributed to local authorities. A report in The Lancet from 2023 estimated that heat wave-related deaths in the second largest economy in the world would double to 50,900 in 2022. The national meteorological center forecasts more torrential rainfall in parts of north and south-west China this weekend. Videos on Chinese social media show residents canoeing their way through the flooded streets of Chengdu. (Reporting and editing by Lincoln Feast, Xiuhao Chan and Joe Cash.)
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Sources say that the hydrotreater at Marathon Galveston Bay Refinery will remain closed until September.
Sources familiar with the plant's operations on Thursday said that a fire-damaged hydrotreater will be closed at Marathon Petroleum Galveston Bay Refinery, Texas until September. All other units at the 631,000-barrel-per-day (bpd) refinery in Texas City, Texas, are operating at or near full capacity following the June 14 fire at the 400 train hydrotreater, which is part of the 64,000-bpd Residual Hydrotreating Unit (RHU), the sources said. Sources who refused to identify themselves because the information was not publicly available did not quantify exactly the production impact. In an email sent Thursday night, Jamal Kheiry, the spokesperson for Marathon, declined to comment on operations at its refinery. According to the U.S. Energy Information Administration, the Galveston Bay Refinery has the second largest capacity in the United States. The 400 train is the third of three hydrotreaters that are part of the RHU. It uses hydrogen to remove sulfur in feedstocks, and products derived from them. This helps to meet U.S. Environmental Rules. The RHU has also a heavy oil unit which uses hydrogen as a boost to the motor fuels feedstocks, which can be squeezed from residual crude. This thick residue is most commonly used to make petroleum coke and asphalt. Sources said that following the fire, production of the 144,000 bpd gasoline producing fluid catalytic Cracker 3 (FCC-3), was reduced for several days. Reporting by Erwin Seba, Editing by Sandra Maler & Jamie Freed
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Oil prices stable on strong job market and tariff uncertainty
The oil prices were not much changed on Friday, as the U.S. Federal Reserve kept interest rates at the same level due to a strong job market. Investors are also waiting for clarity regarding President Donald Trump's tariff plans against various countries. Brent crude futures rose by 1 cent or 0.01% to $68.81 per barrel at 0036 GMT. U.S. West Texas Intermediate crude gained 3 cents or 0.04% to $67.03. The U.S. Independence Day is a holiday. The U.S. Labour Market receded from the list of risks when data released on Thursday showed American firms had added more than 147,000 jobs, and that the unemployment rate dropped to 4,1%. This is a sign the economy has remained resilient in spite of the uncertainty and turbulence over the size and scope tariffs. The President said that Washington will begin sending letters to other countries on Friday, specifying the tariff rates they'll face on goods shipped to the United States. This is a significant shift from his earlier promises to reach scores of individual agreements. Trump said to reporters on Thursday, before leaving for Iowa, that he would send 10 letters at once to ten countries, each containing tariff rates ranging from 20% to 30%. Trump's 90 day pause in raising U.S. Tariffs ends on the 9th of July, and many large trading partners are yet to sign trade agreements. This includes the European Union and Japan. OPEC+ - the world's biggest group of oil producers - is expected to announce a production increase of 411,000 barrels a day for August in order to regain market shares, according to four delegates. Treasury Department: The U.S. imposed sanctions against Hezbollah controlled financial institutions and a network which smuggles Iranian crude oil under the guise of Iraqi oil. Barclays said on Thursday that it had raised its Brent Oil price forecast for 2025 by $6 per barrel to $72 and for 2026 by $10 to $70, citing an improved outlook on demand. (Reporting from Arathy S. Somasekhar, Houston; Editing and proofreading by Tom Hogue.)
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AGL Energy purchases South Australia's Virtual Power Plant (VPP) from Tesla
AGL Energy announced on Friday that it has acquired South Australia's Virtual Power Plant from Tesla. The Australian power retailer is looking to increase its battery storage to help drive the green energy transition. AGL is aiming to achieve zero net carbon emissions in 2035 by implementing grid-scale storage projects of 1.4 gigawatts. AGL will be able to access residential solar and battery system networks consisting of approximately 7,000 Powerwall batteries. More are expected to be installed in this year. SAVPP is an extensive network of Powerwall and solar home battery systems installed in South Australian community and social housing. AGL will now own the SAVPP. In a press release, the company said that customers would receive significant discounts on energy and it will explore ways to extend the program to other users. Jo Egan, AGL's Chief Customer Officer, said: "We understand that the upfront costs for installing solar panels and batteries are a barrier to many people. We are working on ways to make them more affordable." The company stated that the solar and battery assets will be coordinated so as to work together and used to stabilise electricity grids where necessary. The company has not disclosed the value of this deal. Tesla, the electric vehicle manufacturer, did not respond immediately to a question about the deal's value.
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Michael Madsen, actor of 'Reservoir Dogs and Kill Bill', dies aged 67
Michael Madsen died on Thursday at the age of 67. He was an actor in many films, including "Reservoir Dogs", "Thelma and Louise" and others. Ron Smith, Madsen's manager, confirmed that Madsen died from a cardiac arrest in his Malibu home. Madsen, who was born in Chicago in 1960, began acting in early 1980s with projects such as the TV series "St. He has accumulated more than 300 credits on screen, including "St. He appeared in "The Hateful Eight", "Kill Bill" and "Once Upon a Time... In Hollywood" as well as in "Reservoir Dogs", a 1992 film directed by Quentin Tarantino. Smith, Susan Ferris, and Liz Rodriguez, along with their manager Susan Ferris said that Michael Madsen had done some amazing work in the independent film industry over the past two years. They said he was also preparing to publish a book entitled "Tears For My Father : Outlaw Thoughts And Poems", which is currently in the editing process.
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Stocks hit record, US dollar strengthens after jobs data
The dollar rose after the U.S. payrolls data was stronger than expected, which indicated that the labor market might not be degrading as rapidly. The Labor Department Nonfarm payrolls increased 147,000 jobs in June, after a 144,000 increase in May that was revised upwards. This is well above the 110,000 estimates of economists polled. Markets dialed Back expectations According to LSEG, the Federal Reserve is expected to cut rates this year in response to the new data. The nearly 25% chance of a rate cut has all but disappeared, and expectations for a reduction in September are now down to 75%, from nearly 98% just before the report was released. "July Cut is off the table." "I was as surprised as everyone else to receive such a high number," said Sandy Villere. I'm not going say Goldilocks but it is pretty amazing, given all the intercurrents from DOGE to tariffs. It's pretty amazing that you can cut when the labor market is this strong. Wall Street closed again at record highs, with the S&P 500 index and Nasdaq composite index both reaching new records. Technology shares Nvidia rose by 1.3%, as its market capitalization approached $4 trillion. The Institute for Supply Management (ISM), another economic institute, showed that the U.S. service sector was booming. Pick up the pace In June, employment decreased for the third consecutive month as orders recovered. The Dow Jones Industrial Average climbed 344.11, or 0.7%, to 44.828.53, while the S&P 500 jumped 51.93, or 0.8%, to 6,279.35, and the Nasdaq Composite grew 207.97, or 1.02, points to 20,601.10. The S&P 500 rose by 1.72% for the week. The Nasdaq gained 1.62% and the Dow rose 2.3%. MSCI's global stock index rose by 5.99 points or 0.65% to 926.47, after reaching a record high of 926.79. It was also up 0.3% for the week. The pan-European STOXX 600 closed the week up 0.47% led by bank stocks. Dollars strengthened In the wake of payrolls, the dollar index, which measures greenbacks against a basket currencies, rose 0.38% to reach 97.12. The euro fell 0.37%, at $1.1754. The dollar is on course for its second consecutive gain, after nine sessions of declines. It was down by 0.1% this week. The dollar gained 0.95% against the Japanese yen to reach 145.03. Hajime Takata, a Bank of Japan board of member, said that the central banks should resume interest rates hikes after a temporary pause in order to evaluate the effect of U.S. Tariffs. He expressed optimism that the country is on track to achieve its central bank's goal of price stability. The sterling strengthened by 0.07%, to $1.3645. This follows a sharp drop in UK assets the previous session due to fiscal concerns and uncertainties about Rachel Reeves future as Britain's Finance Minister. U.S. Treasury yields jumped After the jobs report, we will ease a bit. The yield on the benchmark 10-year U.S. notes increased 5.3 basis point to 4.346%, while the yield on the 2-year note, which moves typically in line with expectations of interest rates for the Federal Reserve rose 9.7 basis points, to 3.886%. The 10-year yield increased by 6.3 basis point while the 2-year rate rose nearly 14.6 basis points. U.S. crude dropped 0.65% to $67.01 per barrel. Brent was down to $68.79 a barrel, a drop of 0.46% for the day.
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Q&A: Is Venezuela on the verge of losing its prized foreign asset, Citgo?
Gold Reserve's $7.38bn bid was selected by a U.S. court as the winning bid. Preliminary winner After intense competition, Citgo Petroleum (owned by Venezuela) held an auction for its parent company. Robert Pincus is the court officer who oversees this auction. He made his recommendation Wednesday, after evaluating five bids submitted during the "topping period" of the bidding rounds, which was completed at the end of June. The auction is a result of a case Crystallex, a Canadian miner, filed in Delaware eight years ago against Venezuela. Citgo Holding's parent company, PDV Holding was found liable by the federal court for Venezuela's past debts and expropriations. This allowed over a dozen creditors to seek compensation for nearly $19 billion. If Judge Leonard Stark, after a series of delays, approves the bid in the next month's court hearing, it is likely that this year's bidding round will be concluded soon. The final results hearing is scheduled for August 18. In March, a $3.7 billion bid from Red Tree Investments of Contrarian Funds kicked off the round. This included a $2 billion agreement for payment to holders of defaulted Venezuela bonds. In April, rival bidders began to make their offers. According to court documents and sources, rival bidders include the group led Gold Reserve's Dalinar Energy Corporation, a consortium led Black Lion Capital Advisors and a group headed by commodities house Vitol. The court did not reveal the names of some bidders, and certain offers that were received did not meet eligibility requirements. Pincus said that the recent resolutions of parallel legal actions in pursuit of the exact same assets encouraged new bids. Gold Reserve, despite its winning bid being lower than other offers, covered 11 of 15 creditors at the auction and included its own claim of $1.18 billion for expropriation assets in Venezuela. Compensation would be provided for pending claims from oil company ConocoPhillips and miners Rusoro, Crystallex, and conglomerates Koch OI Glass, Siemens Energy, and Siemens Energy. Gold Reserve's offer didn't include an agreement to compensate holders of Venezuelan defaulted bonds, which, according to analysts and bidders, could delay or interfere in the distribution of auction profits. What could be the possible loss for Venezuela? Venezuela would lose its largest overseas asset if it fails to retain equity in the refinery and its U.S. parent companies. With a foreign debt of $150 billion, the country has already lost assets in Europe, Asia, and South America to creditors. Judge Stark left the door open for Venezuelan parties to make an offer. Boards supervising refiners would have to get the backing of politicians from both Caracas as well as Washington. This is a difficult task given the U.S. sanctions against the OPEC nation, and the strained relationship between the two countries. Prior to the sanctions, Citgo's 807,000-barrel-per-day refining network was a primary processor of Venezuela's heavy sour crudes. Citgo, the Houston-based refiner, has been relying on other crude suppliers since it severed ties with PDVSA in Caracas, Venezuela's state-run oil firm, which is Citgo's ultimate parent. Venezuela's opposition has been working for years to keep Citgo. They have funded legal defenses, and lobbied in Washington. Treasury Department must approve the winner of the auction. Treasury Department has protected Citgo in recent years from creditors. Citgo, according to opponents of Venezuelan president Nicolas Maduro, could help the nation's economy recover if democracy was restored. Maduro officials rejected U.S. sanction and called the auction a robbery. Can creditors claim post-auction compensation? Yes. ConocoPhillips and Gold Reserve have taken legal action to seize Venezuelan assets such as tankers, bank accounts and PDVSA controlled storage facilities. If they are not satisfied with the results of the bidding round, which was won by Elliott Investment Management affiliate Amber Energy last year, the creditors can file objections. Other creditors can continue their parallel cases outside of the Delaware case, where they haven't made much progress in proving bond-related claims, or that PDVSA U.S. subsidiaries are liable for Venezuela's obligations, an essential step to pursue Citgo assets. Three of the original 18 creditors cleared by the court have withdrawn due to mounting legal fees and uncertain prospects for recovery. Other participants, such as the owner of artifacts belonging to Venezuelan independence hero Simon Bolivar and a collector of Bolivar-related items, failed to meet all requirements set by the court. All creditors will be compensated? Unlikely. Citgo's value was up to $13 Billion in the Delaware case. However, all bids have been below $11 Billion. Profits for the refiner dropped to $305 millions last year, down from $2 billion in 2020. This suggests that some of the registered creditors who collectively claim $18,9 billion may not be eligible to receive any distributions.
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China's Foreign Minister dismisses European concerns over rare Earths
China's Foreign Minister downplayed European concerns over rare earth exports on Thursday. He said it was standard practice to control dual use goods exports, but that Europe could meet its needs if they submitted applications. Wang Yi spoke in Berlin at a joint press conference with his German counterpart. He was on the second leg a European tour to prepare for the summit between EU leaders and Chinese leaders that will take place later this month. Wang stated that "rare earths are not a problem, have never been a problem, and will never be a issue between China, Europe, or Germany." If legal applications are filed, Europe and Germany can meet their normal needs. China, which controls 90% of the global processing capacity for rare Earths, used in everything from cars to home appliances and other products, imposed early April restrictions requiring exporters obtain licenses from Beijing. The German Foreign Minister Johann Wadephul stated that the restrictions caused "great concern" in Germany and damaged China's reputation as a reliable trading partner. He said: "We're on our way to finding joint sustainable solutions that will bring about the detente necessary," When Wang was asked whether an agreement on restrictions could be reached ahead of the EU and China summit, he replied: "This issue is not between China or Europe... Controlling dual-use products is standard practice." China and Germany have both the right to do this." He added that the Chinese Ministry of Commerce has already implemented a fast track procedure to ensure that all normal approvals can be processed as quickly and efficiently as possible. Wang arrived in Berlin after a visit to Brussels where he had a meeting with EU officials, including Kaja Kallas the EU's High Representative for Foreign Policy, who also encouraged Wang to lift export restrictions on rare earths. Wadephul stated that the two ministers discussed the Russian invasion of Ukraine, Taiwan, and the Middle East crisis. He said, "We think China can play an important role in the relationship with Iran." (Reporting and editing by Bill Berkrot; Sarah Marsh, Andreas Rinke)
Copper squeezed in the United States however China has plenty: Andy Home
The London Metal Exchange ( LME) copper rate hit a record nominal high of $11,104.50 per metric load on Monday.
The London market is playing catch-up with its U.S. peer CME Group, where a vicious short squeeze has been playing out on the COMEX contract.
Traders are now scrambling to deliver metal to CME storage facilities in the United States to cover short positions.
The panic has actually fanned to a rally that has driven the copper rate up by 27% given that January and enhanced a bull story of a market caught between constrained supply and green need boom.
However, not everyone lacks copper. China, the world's. biggest buyer, has a lot of the things.
This doesn't offer much relief for those short of the CME. contract, at least straight, but it's a helpful reminder the. world hasn't run out of copper right now.
STRONG SEASONAL RISE
Inventory signed up with the Shanghai Futures Exchange. ( ShFE) stood at 291,020 metric tons at the end of recently,. compared with London Metal Exchange (LME) stocks of 105,900 heaps. and CME stocks of just 18,244 heaps.
This year brought the typical seasonal stocks rise around the. lunar brand-new year vacations however it's been the strongest because 2020,. a year of COVID-19 disruption.
Headline ShFE stock peaked at 300,045 lots in the middle. of April and has remained around those raised heights, the typical. post-holiday drawdown up until now obvious by its lack.
There are another 45,000 tons of bonded copper registered. with ShFE's international branch, the International Energy. Exchange.
The build in Chinese exchange stocks lifted global exchange. inventory to 491,000 tons at the end of March, the greatest. regular monthly level since August 2021.
FALTERING DEMAND, HIGHER SUPPLY
Weak spot demand, robust imports and rising domestic output. have integrated to keep China's exchange stocks high.
Chinese purchasers, like those everywhere else, have responded to. copper's sharp rally by de-stocking, which is probably why the. seasonal post-holiday decline in ShFE stocks hasn't yet kicked. in.
Meanwhile, Chinese imports of refined metal have actually been. performing at a healthy clip because the middle of in 2015. Imports. accelerated from 1.65 million lots in the first half of 2023 to. 2.07 million in the 2nd half.
The rate dropped only somewhat in the very first 4 months of. this year with cumulative imports of 1.25 million tonnes up by. 17% on the exact same period of 2023.
Net imports of 1.18 million tonnes were up by a sharper 26%. on the year-earlier period showing lower exports, which fell. to 70,400 lots from 129,000.
Significantly, imports of raw material have actually also been rising. this year.
Incoming volumes of copper concentrate rose by 7%. year-on-year to 9.34 million heaps in January-April, Chinese. players obviously adjusting to the loss of the Cobre Panama mine. after its closure at the end of 2023.
Greater copper focuses schedule has translated into. greater domestic production of refined copper. After rising by 8%. in the first quarter of the year, output development sped up to. 9% in April.
A March arrangement by Chinese smelters to cut output due. to uneconomic treatment terms was one of the triggers for. copper's super-charged rally however any effect on the country's. production rate is so far tough to discern.
IMPORT PREMIUM COLLAPSE
The combination of elevated stocks and super-high costs has. caused a collapse in the Yangshan premium << SMM-CUYP-CN >, a. closely-tracked indication of China's copper import hunger.
The premium is presently evaluated by local information company. Shanghai Metal Markets at minus $5 per heap, the very first time it. has fallen into negative area because the information series was. released in 2013.
The spot import door has actually simply securely closed. Metal will. still flow into China under yearly supply offers, which tend to. be favoured by larger buyers, however arrivals will likely drop a. couple of equipments relative to the last few months.
This may allow CME shorts some flex in re-routing deliveries. of South American copper from China to U.S. ports.
CME's list of deliverable brand names does not consist of either. Russian or Chinese brand names, restricting the potential for a straight. stocks move from the LME, where they represented. two-thirds of necessitated inventory at the end of April.
China clearly won't miss the additional import units in the brief. term as the cost spike suppresses purchasing every stage of the. product production chain.
DISCONNECT
This copper rally has actually been driven by fund purchasers and. accentuated by trade short position holders being forced to. cover.
Financiers are still coming to the bull celebration. Cash. supervisors have actually lifted their straight-out long positions on the CME. contract to a near six-year high of 141,204 agreements.
Investment fund long positions on the LME have actually also bent. broader over the recently to 107,385 lots, the most bullish. positioning given that the LME launched its Dedications of Traders. Report in 2018.
It takes two to tango in a booming market and it's the CME. shorts that are likewise contributing to the upside momentum.
Nevertheless, presuming traders can move copper to CME warehouses. and reconstruct diminished stocks, the current detach in between CME. and LME pricing will be closed.
That will leave the far bigger detach in between rate and. supply chain reality.
Can copper keep rising if the world's biggest physical. consumer stops buying? And if China won't pay these rates, who. else will?
The opinions revealed here are those of the author, a. columnist .
(source: Reuters)