Latest News
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PG&E increases its core earnings forecast for 2025 on the basis of higher electricity rates
PG&E Corp. raised its core earnings forecast on Thursday, benefiting from lower operating costs and higher electricity prices. California Public Utilities Commission has approved an additional request for the company to increase electricity prices. This follows a similar approval last year. The utility reported a 10.5% rate base increase in 2024. U.S. Electric utilities are pushing to increase rates, due to the increasing demand for grids from industries like transportation, data centers, and manufacturers. The company reported that it would add nearly 14,000 additional customers to its electric grid in 2024. Patti Poppe, CEO of PG&E Corporation, said that "in 2024 we will connect more new customers to the grid than in previous decades." In February, the company's data center pipeline had increased by two gigawatts (GW) since July of last year. PG&E, the parent company of Pacific Gas and Electric Company (PG&E), is an energy company serving 16 million Californians in a 70,000 square mile service area. Oakland, California based company increased its forecast for full-year adjusted core earnings per share to between $1.48 to $1.52, up from previously $1.47 to $1.51. According to data compiled from LSEG, analysts expect earnings per share of $1.49. In 2024 the company's operating costs will be down 8.3%, to $19.96 Billion, compared to last. PG&E's adjusted core profit for the fourth quarter was 31 cents per common share. This is in line with analyst estimates. The company's shares rose by 1% during premarket trading. (Reporting by Pooja Menon in Bengaluru; Editing by Shinjini Ganguli)
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Duke Energy increases five-year capital expenditure plan to meet increased industrial and data center demand
Duke Energy raised its five-year plan for capital expenditures to $83 billion on Thursday, an increase of 13.7%. The utility is looking to improve its grid in order to capitalize on the increasing demand from data centres and increased electrification. According to the U.S. Energy Information Administration, U.S. electricity demand will reach record levels in 2025 and 2026, due to demand from data centres dedicated to artificial intelligence, cryptocurrency and homes and businesses to heat and transport. Duke plans to raise $6.5 billion in equity during its 2025-2029 capital plan, including $1billion this year. It plans to finance approximately 40% of its increase in capital plan through equity. By 2029, the company expects to have nearly 5 GW of natural gas-powered power installed. The capex plan for the company from 2024 to 2028 was $73 billion. Duke's electric segments and its gas segments reported a 5% increase in income for the fourth quarter ending December 31. This is compared to the same period last year. According to LSEG, despite interest costs, a high tax rate, and storm-related costs, the electricity provider reported a profit per share of $1.66 on an adjusted basis, which was in line with analyst estimates. Duke, North and South Carolina's largest utility, was hit by Hurricanes Debby and Milton, which destroyed miles of transmission and power lines, leaving thousands of Duke customers without electricity. Interest rates that are higher for longer can be a burden on utilities. This is because it increases the cost of investing in critical infrastructure, such as electrical grids. The utility based in Charlotte, North Carolina, reported revenues of $7.36 billion. This was higher than the analysts' average estimate, which was $7.33 billion. This is largely because of higher residential sales, and higher rates. Duke's 2025 forecast has earnings in the range of $6.17 to $6.42 a share. The midpoint is slightly lower than the estimate of $6.33 a share. Reporting by Seher dareen from Bengaluru, editing by Shash Kuber
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China's fuel consumption may have reached its peak, the IEA reports
The International Energy Agency (IEA), which released data on Thursday showing that China's road and air transportation fuels have likely reached their peak, said the agency. Data showed that China's consumption for gasoline, jet fuel and gasoil had decreased marginally by 2024. In a report published monthly, the IEA stated that the combined consumption of three fuels was 8.1 million barrels a day in China in 2018. This was 200,000 bpd less than 2021 levels and was only marginally higher than 2019 levels. It said that "this strongly suggests fuel consumption in the country has reached a plateau, and may have even passed its peak." China's oil demand contribution has slowed down after decades of being the leader in global growth. It is now facing economic challenges and is also shifting to electric vehicles. According to the Paris-based IEA, the decline in China's oil demand will accelerate in the medium term. This would be sufficient to create a plateau for China's total oil demand in this decade. The IEA stated that "this remarkable slowdown in the consumption growth was achieved through a combination structural changes in China’s economy and rapid deployment of alternative transport technologies." It said that a slump in China's building sector and weaker spending by consumers reduced fuel consumption in the country. The uptake of EVs was also a factor. It said that new EVs account for around half of all car sales. They will reduce oil demand by around 250,000 to 300,000 bpd in 2024. The use of compressed natural gas and liquified gas in road freight is expected to displace around 150,000 bpd. Enes Tunagur is reporting, Alex Lawler is editing and Tomaszjanowski is directing.
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Canada's Robex signs a new agreement with Mali to develop the Nampala gold mine
The Mali government announced that Canadian miner Robex had signed a new contract with the country to operate the Nampala mine located about 300 km south of Bamako. The mine has been operated by the company since 2017, but the new mining codes of Africa's 2nd largest gold producer require international companies to pay more taxes and give up larger stakes in assets. Robex, a company that has expressed its discontent with the new legislation by stating in September that it wanted to sell Nampala but had not yet received a reasonable offer. In a statement released by the Mali Council of Ministers late Wednesday, it was stated that the company planned to produce 1.4 tonnes of gold annually for an 8-year period. The company said that it had carried out a geological study which identified a deposit that contained mineral reserves of 17,351,000 tons, with 0.70 grams of gold per ton. In the statement, it was stated that the government and company had signed an agreement in September that would allow Mali to increase their shareholding in the Project. This would give the state priority dividends. (Reporting and writing by Tiemoko Diallo; Editing and editing by Christina Fincher).
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PBF Energy reports third consecutive quarter loss due to falling margins
PBF Energy reported a third consecutive quarter loss on Thursday as the U.S. refining company was hit by a decline of margins. The Parsippany refiner in New Jersey reported a fourth-quarter loss of $289.3 millions, or $2.54 a share. This was higher than the loss of 48.4 million dollars, or $0.40 if you look at it compared to a year ago. The margins on global refining have fallen in the past year due to the weaker economy and the opening of several refineries in Asia and Africa. U.S. refinery profit margins measured by the 3-2-1 Crack Spread In the quarter of October-December, this average fell by nearly 25% from a year ago. Phillips 66 and Marathon Petroleum, three of the biggest rivals in the industry, all suffered a setback to their results due to low margins. They still performed better than analyst's expectations. PBF Energy reported that its gross refining margin for the fourth quarter was $3.89 a barrel, down from $1.04 a barrel a year ago. Matt Lucey, CEO of PBF Energy, said that global refining markets are structurally tight. He added that capacity rationalization will outweigh new refinery construction. The company reported that its crude oil and raw materials throughput fell to 862,200 barrels per day (bpd) in the quarter under review from 878 200 bpd one year ago. PBF Energy said that the timing and scope of the planned turnaround at Martinez refinery, California could be affected by a fire on February 1. The company stated that "at this time it is not possible to estimate the cost of repair and the duration of the shutdown due to the incident." According to data compiled and analyzed by LSEG, on an adjusted basis the company lost $2.82 a share in the fourth-quarter, compared to estimates of a $2.81 loss. (Reporting by Arunima Kumar in Bengaluru; Editing by Krishna Chandra Eluri)
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Aluminium and copper prices are tightened by US tariff uncertainty
The prices of aluminium and copper were largely unchanged on Thursday, as the markets assessed the impact President Donald Trump’s decision to impose tariffs of 25% on imports of steel and aluminum starting March 12. The London Metal Exchange's (LME) three-month aluminium was down by 0.2%, at $2,616 per metric ton, as of 1049 GMT. Copper, however, rose 0.2%, to $9,475.50. The vast majority of the aluminium used by the U.S. comes from Canada. The majority of Canadian aluminium comes from Quebec. On Wednesday, Quebec's Premier Francois Legault said that Canada could consider export tariffs for products such as aluminum "where it really needs us". The price of copper has not changed in the U.S. yet, but after Trump announced tariffs for the metal late last month, the premium between the U.S. Comex contract and the LME contract soared to a new record earlier this week. The tariffs on steel and aluminum of 25% were announced this week as an extension to Trump's Section 232 tariffs from 2018, which were aimed at protecting domestic producers of steel and aluminum on national security grounds. Marcus Garvey is the head of commodities strategy for Macquarie. He said that the same mechanism would not allow tariffs to be applied to other commodities quickly, because it would require an investigation by the Department of Commerce. He added that "this suggests recent volatility in CME-LME Copper Spread... was likely to have exceeded normal levels, although prices remain susceptible to either blanket or country specific tariffs which would impact a significant portion of U.S. Imports." Last week, Trump deferred a 25% tariff for goods coming from Mexico and Canada to March in order to negotiate steps to secure the U.S. border and stop the flow of fentanyl. LME zinc dropped 0.2% to 2,857.50 per ton. Lead rose 0.7% at $1,987, and tin increased 0.5% to $31,640. The price of nickel fell 0.6% to $15,325 after stocks in LME registered warehouses (0#MNISTX-LOC>) rose to 180,900 tonnes following the delivery of 5,094 tons. (Reporting from London by Polina Devlatt; Additional reporting by Violet Li, Editing by Kirsty Donovan).
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Palm oil prices fall on Dalian crudes and Dalian oils.
Malaysian palm futures fell on Thursday, ending a five session rally. Weakened Dalian oils, and a decline in crude oil prices caused by the talks to end the Ukraine/Russia war, weighed heavily on the market. At the close, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange for April delivery fell 65 ringgit (1.41%) to 4,556 Ringgit ($1,023.13) per metric ton. Anilkumar bagani, head of commodity research at Mumbai's Sunvin Group, said that crude palm oil futures fell following a selloff on energy markets, after U.S. president Donald Trump launched diplomatic efforts to end Ukraine's war. He said that the easing of the Ukraine and Russia war could mean the logistics costs are reduced, and the uncertainty around the Black Sea Sunflower Oil trade is resolved. This would allow the flow of oil to reach key destinations markets. He added that the Black Sea Corridor is expected to see a decrease in freight rates, which will likely lead to a drop in sunflower oil and, consequently, put pressure on palm oils prices. The oil prices dropped slightly due to a possible peace agreement between Russia and Ukraine, as well as the rising crude inventories of the United States. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures. Trump began discussions on Wednesday with the Russian President Vladimir Putin as well as the Ukrainian President Volodymyr Zelenskiy in order to start talks about ending the conflict in Ukraine. China also called for peacekeeping measures to end the conflict. Bagani noted that the downward pressure on the Chinese palm olein market and the decline in soyoil was also evident. Dalian's palm oil contract, which is the most active contract, fell 2.2% while soyoil prices dropped 2.22%. Chicago Board of Trade soyoil was down by 1.1%. As palm oil competes to gain a share in the global vegetable oils industry, it tracks the price changes of competing edible oils. The palm ringgit's trade currency strengthened by 0.38% compared to the dollar. This made the commodity more costly for buyers who hold foreign currencies. ($1 = 4.4530 ringgit)
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Elliott, a hedge fund that is known for its relentless activism, has captured the attention of C-suites.
Bankers and lawyers that have dealt with Elliott Investment Management say that executives should expect to receive a thorough analysis of their weaknesses, backed up by rigorous research and financial power. Elliott is now focusing on the legendary oil giant BP. The $70 billion investment firm has not revealed the size of their stake in BP, or what they want to see changed. The mere hint that Elliott was playing the corporate agitator in this week's BP share price spiked to its highest level since August on the expectation the fund would force improvements and unlock shareholder value. The day after Elliott's announcement, BP announced that it would reset its strategy following weaker than expected results. The chief executive of BP declined to comment about the hedge fund investment. It was unclear whether Elliott had played a part in the company's decision. The hedge fund's bankers and lawyers, who worked for it or defended the company against it, said that Elliott is an investor no board should ignore. In bankers' notes, the fund has a reputation for being a persistent activist. It is sometimes referred to as an aggressive player but can also be a powerful one. Elliott, on the other hand, argues that its tenacity will eventually earn investors in its target company and portfolio greater returns. "Elliott’s team is truly frightening smart." "Sometimes the emphasis is on smart and at other times, it's on scary," said Kai Liekefett. He is co-chairman of Sidley Austin’s shareholder activism practice and corporate defense. The firm's expertise is in analyzing a company's peers, sector and competitors, as well as potential buyers, if the sale of a company is being considered. Lawyers and bankers have said that sometimes executives are taken by surprise by Elliott's investment. They noted that a news article or a phone call announcing the position would spark a feverish defense. "Elliott revived the ambush attack" in recent years. Elliott, and other activist investors, used to approach a target first privately. Today Elliott goes public immediately - often without much advance notice," Sidley’s Liekefett stated. Elliott is not just a one man show, as some prominent activist firms are. Its roots can be traced back to founder and co CEO Paul Singer's middle initial. The firm, which has about 600 employees, is instead reliant on a large group of analysts and portfolio managers who monitor sectors from retail to energy in all parts of the world. The team is more comfortable staying out of the spotlight to let their work speak for themselves, whether they are trying to dismantle a deal between two corporations in Asia or an American conglomerate. If Elliott is not convinced by the company's counterarguments and they resist, then discussions can quickly escalate to public threats such as proxy battles or special meetings. Attorneys, bankers, and other investors who have worked with or against the firm say Elliott sends a clear message to companies: Either agree with us, and you can take credit for any positive changes that occur, or refuse and suffer the consequences. Many sources asked to remain anonymous for fear of upsetting their firm. Elliott has declined to make any comments. Elliott is a multi-strategy fund, which invests in real estate and convertible bonds, as well as sometimes buying out companies. However, it's equity activism strategy that has garnered the most attention. Elliott approached 15 companies, including Southwest Airlines, Starbucks and other large corporations, last year. The firm also secured 12 board positions. A person familiar with Elliott's performance stated that since its founding in 1977, with $1.3 Million in assets, Elliott returned approximately 13% per year net of fees. In the last seven year, assets have doubled. Industry data shows that Elliott has been targeting ever larger companies over the past five years. Elliott investors are pleased with the steady returns of the company. It may not be as impressive as other firms that have made huge gains on occasion, but it has only had two years of losses over its 50-year-history. Elliott's outreach and negotiations are often conducted privately. Sometimes, they don't become public until the matter is resolved. This happened last year at Etsy when an Elliott portfolio manger joined the board. The firm is confident that it can continue to push its thesis of corporate overhaul, even if the company rejects it. Southwest Airlines eventually agreed to changes at the board level, while CEO Bob Jordan was left in place. Elliott's appetite for rapid changes was evident again this week when media reported that the fund increased its stake in U.S. refining company Phillips 66 from $1 billion to $2.5 billion. Phillips 66 already had a plan in place to improve performance and increase shareholder returns. Elliott now wants to push operational changes as well as the sale of midstream. In an interview with David Rubenstein, a private equity executive, Elliott founder Singer (now 80) said that he approved of every position taken by the firm. Singer says it's good for companies that become Elliott's activist targets to have their executives listening "with an understanding that we are real and can carry out our projects." Reporting by Svea Autumn-Bayliss, with additional reporting from Anousha Sakoui, in London; editing by Paritosh and Nia Bansal.
Steel tariffs and tax concerns overshadow supply problems as iron ore prices decline
Iron ore futures in Dalian ended a two-day rally on Thursday as fears over U.S. Steel Tariffs and possible India taxes trumped supply problems from Western Australia.
The May contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 1.52% lower at 808 yuan (US$110.87) per metric ton.
After reaching its highest level in almost four months, the benchmark March iron ore traded on the Singapore Exchange dropped 1.59% to $106.1 per ton.
Investors are concerned about a potential domino effect caused by Trump's new tariffs, said Zhuo Guqiu. Analyst at Jinrui Futures.
H.D. Steel Minister H.D. Kumaraswamy said that India could implement a temporary tariff of 15-25% on Chinese steel in six months due to the "serious threat" posed by cheap imports following Trump's new tariffs. Kumaraswamy stated.
This was after U.S. president Donald Trump's steep duties on steel and aluminum imports. Industry insiders warned that this could cause imports to surge as exporters ship to India.
Trump said that he would also impose reciprocal duties as early as Wednesday night, increasing fears of an expanding global trade war.
Hexun Futures, a Chinese consultancy, said that trade frictions could disrupt the iron ore markets as increased tariffs might aggravate export concerns.
Storms affected Australian shipments, tightening supply, Hexun added.
Port Hedland closed on Wednesday and the ports of Dampier, Varanus Island, and Varanus Island on Thursday.
Coking coal and coke, which are both steelmaking ingredients, have also lost ground. They fell by 1.96% apiece and 1.63% respectively.
The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell nearly 0.5%. Hot-rolled coil dropped 0.32%. Wire rod lost 0.4%. Stainless steel rose 0.61%. $1 = 7.2876 Chinese Yuan (Reporting and editing by Amy Lv, Michele Pek and Subhranshu sahu; Sumana nandy and Subhranshu sahu)
(source: Reuters)