Latest News
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German spot prices rise on demand and lower temperatures
The Tuesday spot power contracts are higher due to the low temperatures in Europe, and the seasonal wind power shortage in Germany. LSEG data shows that the German baseload contract for Tuesday is 140 euros per megawatt-hour as of 845 GMT. The equivalent French contract is 68.25 Euros/MWh. The Monday contract wasn't traded on Friday. LSEG data indicated that the German wind power production was expected to increase by 2.1 gigawatts on Tuesday to 6.5 GW. The French output, however, was expected to fall 390 megawatts, to 2.5 GW. LSEG analyst Naser Hahemi said that German wind generation was up compared with Friday but still almost 10 GW lower than normal. The data indicated that the solar power output in Germany is expected to drop by 2.1 GW and reach 8.1 GW. LSEG data shows that wind power will remain at Tuesday's levels for the rest of the week, before spiking to 19 GW or less on Friday. The French nuclear capacity has decreased by one percentage point, to 81%. On Friday, the French nuclear operator EDF issued a strike notice for October 2nd. LSEG data shows that power consumption in Germany will rise by 2.2 GW Tuesday, as temperatures fall in Germany by 1.3C. Demand in France is expected to increase by 1.7 GW. LSEG data show that the German baseload power for the year ahead fell 1%, to 85.80 Euros/MWh. The French equivalent was not traded with a range of bid-ask between 56.65 and 57 Euros. Mind Energy analysts say that the German forward curve looks to be reversing its gains from Friday as forecasts indicate warmer and more windy weather by the end of this week, coupled with lower carbon and gas contracts on Monday. The benchmark contract on the European carbon markets fell 0.9%, to 75.29 Euros per metric ton. (Reporting and editing by Janane Vekatraman; Forrest Crellin)
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EU confirms it re-imposed sanctions on Iran
The European Union announced on Monday it had reinstituted sanctions against Iran following a similar action taken by the United Nations. The EU reinstated sanctions today against Iran as a result of its continued non-compliance to the nuclear deal. In a press release, the EU presidency said that diplomatic negotiations remain possible. The EU stated that the sanctions include freezing assets of the Iranian Central Bank, other Iranian banks and travel bans for certain Iranian officials. The EU also banned Iran from purchasing and transporting crude oil, as well as the sale or supply gold and certain naval gear. The United Nations reimposed an arms embargo on Iran and other sanctions over its nuclear program, following a process initiated by European powers. Tehran had warned that the move would be met with harsh action. The U.N. Security Council has reimposed sanctions against Iran after accusations that it violated a deal signed in 2015 to prevent it from developing a nuclear weapon. Iran denies seeking nuclear weapons. (Reporting and editing by Andrew Gray, Sudip Kar Gupta and Ros Russel)
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Police say that 12 forest guards were killed by bandits in the north-central Nigeria.
Police said that at least 12 forest guards were killed in the attack on Oke-Ode, a town located in Kwara State, North-Central Nigeria. The attack highlights the worsening security situation in central and northwest Nigeria where armed groups known as bandits are responsible for mass killings, abductions and raids in rural communities. Adetoun Ejire Adeyemi, the Kwara Police spokesperson, said that gunmen stormed an office of a local government at around 0600 GMT Sunday and fired at random. Police reported that four people were injured in the attack. They are being treated in hospitals. The traditional chief of the area was among those killed. AbdulRahman AbdulRazaq, the governor of Kwara State, condemned the attack and demanded an increase in military presence. The governor's office announced that the Nigerian Army Headquarters had sent troops to Kwara in response to the Governor's request to supervise operations. The police said that forest security and troops were searching for the attackers in a joint effort. Ejire Adeyemi stated that "those responsible will be brought before the justice system".
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Italy rules Sinochem, the Chinese investor of Pirelli, did not violate 'golden powers' rules
The tyre maker said that the Italian government determined Sinochem, which is the largest shareholder of Pirelli, had not violated "golden powers" measures in 2023. The historic Italian company is now a Chinese-owned business. Recent months have seen a sensitive issue. Camfin, the second largest shareholder of Pirelli, claimed that this would threaten its plans to expand into the United States. Washington tightens restrictions on Chinese automotive technology, banning software and hardware produced by Chinese-controlled firms in vehicles connected to U.S. roads. A statement from the Italian government said that it had concluded that actions taken by directors who were not independent and appointed by Sinochem (which holds a 37% share in Pirelli) did not compromise management autonomy. Italian authorities began an investigation in November last year to determine whether Sinochem's presence on the board of directors violated the rules intended to protect Pirelli's independence from its Chinese investor. Marco Tronchetti Provera, the boss of Camfin, has recently called for further restrictions.
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Iron ore prices fall on the back of weak steel demand and rising China port stocks
Iron ore prices fell on Monday due to a sluggish demand for steel and a buildup of inventories in Chinese ports. The January contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 1.57% lower, at 784 Yuan ($1010.11) per metric ton. As of 0705 GMT, the benchmark September iron ore traded on Singapore Exchange was down by 0.02% to $105.3 per ton. Analysts from ANZ noted that iron ore futures dropped sharply during the week of October 1-8 due to a slowdown in steel mill restocking. Hexun Futures, a Chinese broker, said that a combination of high steel supplies and weak demand was impacting the market. SteelHome data show that total iron ore stocks at Chinese ports increased by 0.29% in a week to 132.5 million tonnes. Everbright Futures said that the current high levels of molten-iron production combined with strong arrivals at ports suggest that port inventories will likely rise further. Brokers said that if steel demand declines, the narrowing margins of steel companies may lead to voluntary production cuts. This could result in a buildup of iron ore stocks. According to Mysteel, blast furnace operation at integrated steel mills has remained robust in recent years. Mysteel's data shows that the average furnace capacity utilization rate increased for the third consecutive week in the week of September 19-25, a rise of 0.51 percent points from the week before. Coking coal and coke, which are used to make steel, also fell, by 4.98% and 4.16 percent, respectively. All steel benchmarks at the Shanghai Futures Exchange have lost ground. Rebar dropped 1.34%, while hot-rolled coil fell 1.23%. Wire rod also declined 1.21%, and stainless steel was down 0.7%. ($1 = 7.1201 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
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Malaysian palm oil stock will drop as production slows, and exports increase
The industry regulator expects Malaysia's palm oils to decrease in the next few months. They will end the year with around 1.7m metric tons. This is due to a seasonal slowdown of production, which coincides in part with an increase in exports in order to meet the festive season demand. Expected drops in palm oil inventories could help support benchmark futures. These have been under pressure lately due to cheaper soyoil supplies. Ahmad Parveez Ghulam Kadir said that the Malaysian Palm Oil Board's (MPOB) director general, Ahmad Parveez Ghulam Kadir stated on Monday, "We expect exports to increase in the next months due to festive season demand." Malaysian palm oil production usually drops off at the end of the year after a good September quarter. The MPOB reported that palm oil stocks in Malaysia increased by 4.18% month-on-month to 2.2 millions tons in August, which is the highest level since December 2023. In recent weeks, palm oil prices were under pressure due to a steep drop in the price of soy oil. India, the world's largest palm oil consumer, increased its soy oil purchase for the next few months. Kadir stated that despite this, the palm oil price is likely to remain stable in the months to come due to uncertainty over Indonesian supply. He said that the proposed implementation of a B50 biodiesel program and government seizure of oil palm plantations could affect exports from Indonesia. Indonesia currently mandates that biodiesel contain a minimum of 40% palm oil and plans to increase this to 50% as early as next year. Agrinas Palma Nusantara, a state-owned firm, received 674,178 acres (1.7 million acres), or palm oil plantations, from Indonesia earlier this month. This brings the total land area given to Agrinas Palma Nusantara to 1.5 million hectares. He said that oil palm replanting is slow in Malaysia. To speed it up, the MPOB has asked the government to increase the allocation from 100 million to 280 millions ringgit by 2026. (Reporting and editing by Subhranshu sahu; Rajendra Jadhav)
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MORNING BID EUROPE - Who needs a government?
Wayne Cole gives us a look at what the future holds for European and global markets. Treasury yields, the dollar and most Asian stocks are all slightly higher as investors await to see if the last-minute talks will stop the U.S. Government from shutting down on Wednesday. Both sides are aiming for political gain by allowing the government to close. Analysts from BofA estimate that a shutdown would cost 0.1% per week of the GDP, but this would be recovered when it reopened. Investors may have assumed that public pressure would eventually force a deal. A prolonged shutdown would leave the Federal Reserve in the dark when they meet on October 29, and it could also delay the release of the September payroll report, which is due this Friday. The markets have priced in an 89% probability of a Fed cut, assuming that the shutdown would not prevent them from doing so. Trump is also expected to implement his new tariffs, which will affect big trucks, patented medicines, and other products. However, there are still many questions about the exact scope of these tariffs, or if existing country agreements will take precedence. Reports indicate that the Trump administration may consider imposing tariffs on electronic devices imported from abroad based on their number of chips, but how this would actually work is still a mystery. Trade partners are probably wondering why they should do deals with Trump, when he is able to impose new taxes on anything at any time. Trump is having a busy time. He will reportedly attend the top U.S. military brass meeting on Tuesday, which was called last week by Defense Secretary Hegseth. In an interview with CNN, Trump said, "I want them to know that we love and respect them. They're leaders who are cherished. Be strong, be tough, be smart, and be compassionate." The meeting was not made clearer. The social media is ablaze with theories. They range from Hegseth urging the generals to adopt a "warrior culture" to his asking military leaders to swear a personal oath before Trump. Even rumors have circulated that the White House is pulling the U.S. Military from Europe and Asia in order to focus on the Americas. Investors are hoping that nothing dramatic happens this week, as it could cloud the fourth-quarter outlook for stocks. Nasdaq has, on average, returned gains greater than 6% during the December quarter. The world stock market is up 17% this year and worth $15 trillion. Gold and Chinese technology are the two biggest winners. Both have gained almost 40%. Market developments on Monday that may have a significant impact - EU consumer surveys and business surveys. Various EU countries report CPI data for September ECB speakers include Madis Müller, Martins Kazaks, Piero Cilpollone, Isabel Schnabel, and Philip Lane. Speakers include Christopher Waller (Fed), Beth Hammack (Fed), John Williams, Alberto Musalem, and Raphael Bostic
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Iron ore prices fall on the back of weak steel demand and rising China port stocks
Iron ore prices fell on Monday due to a sluggish demand for steel and a buildup of inventories in Chinese ports. As of 0241 GMT, the most-traded contract for January iron ore on China's Dalian Commodity Exchange was 1.5% lower at 784.5 Yuan ($110.18). The benchmark iron ore for September on the Singapore Exchange fell 0.07% to $105.25 per ton. Analysts from ANZ noted that iron ore futures dropped sharply during the week of October 1-8 due to a slowdown in steel mills restocking. Hexun Futures, a Chinese broker, said that a combination of high steel supplies and weak demand was impacting the market. SteelHome data show that the total iron ore stocks at Chinese ports increased by 0.29% in a week to 132.5 million tonnes. Everbright Futures said that the current high levels of molten-iron production combined with the strong port arrivals suggest that port stocks are likely to increase further. Brokers said that if steel demand declines, the narrowing margins of steel companies may lead to voluntary production cuts. This could result in a buildup of iron ore stocks. According to Mysteel, blast furnace operation at integrated steel mills has remained robust in recent years. Mysteel's data shows that the average furnace capacity utilization rate increased for the third consecutive week in the week of September 19-25, a rise of 0.51 percent points from the previous weeks. The DCE also saw a drop in other steelmaking ingredients, including coking coal, which fell by 4.03%, and coke, which dropped by 3.75%. All steel benchmarks at the Shanghai Futures Exchange have lost ground. Rebar dropped 0.92%, while hot-rolled coil fell 0.81%. Wire rod also declined 0.53%, and stainless steel was down 0.39%. ($1 = 7.1201 Chinese yuan) (Reporting by Lucas Liew; Editing by Subhranshu Sahu)
Malaysian steel industry roadmap targets "fully green" sectors by 2050?
Tengku Aziz, Malaysia's trade minister, said that the country is reorganizing its steel industry to reduce overcapacity and decarbonisation, with a view to achieving a "fully-green" sector by 2050. The 10-year plan includes clear licensing guidelines for steel manufacturers, the implementation of a carbon pricing framework and increased transparency, as well as expanding access to financing for the transition towards greener and higher-valued production.
Tengku Zafrul stated that steel is one of Malaysia's carbon-intensive industries. This exposes it to regulatory barriers on the market and makes decarbonisation necessary.
In addition, the industry faced a severe imbalance in domestic supply and demand. Projections showed that upstream capacity would reach 40.8 millions tonnes by 2030 while demand was only estimated at 14.7 million tons.
He said: "This gap highlights excess capacity - assets that are not being used, low returns on investments and market conditions that weaken competitiveness and resilience."
Tengku Zafrul proposed also that the regional ASEAN block establish a database of capacity and usage that could assist in addressing steel overcapacity and dumping.
He said that Southeast Asian countries must also explore the possibility of setting up hubs to produce green steel and a common pathway for decarbonisation.
? (Reporting and editing by David Stanway, John Mair, and Rozanna Latiff)
(source: Reuters)