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Dalian Iron Ore drops amid possible Chinese steel production cuts
Iron ore futures fell on Monday as a result of the possibility that China would cut crude steel production. However, the losses were limited by the continued increase in demand for this steelmaking ingredient. The September contract for iron ore on China's Dalian Commodity Exchange ended the daytime trading 0.49% lower, at 710.5 Yuan ($97.32). As of 0705 GMT, the benchmark May iron ore traded on Singapore Exchange was $98.6 per ton. Baoshan Iron & Steel, China's largest listed steelmaker, has said that a national output cut is likely to occur this year. Requests for comment were not immediately responded to by the China Iron and Steel Association, a state-backed organization and state planner. Wu Wenzhang is the chairman of the consultancy Steelhome. According to the state-owned China Metallurgy News, the steel market will be in balance if crude steel production this year falls by 50 million tons compared to last year. Wu said that steel consumption is expected to drop by 30 million tons from 2024 this year. Steel exports are also expected to fall between 15 and 25 millions tons. Steelmakers' increased production has helped to support prices. Everbright Futures, a broker, reported that hot metal production reached its highest level since October 2023 last week. Iron ore demand is usually gauged by the hot metal production. Coking coal and coke, which are used to make steel, also fell, by 1.6% and 1.66%, respectively. The Shanghai Futures Exchange saw a rise in most steel benchmarks. The rebar price rose by nearly 0.61%. Hot-rolled coil was up by 0.84%. Stainless steel gained 0.31%. Wire rod fell 0.57%. ($1 = 7.3006 Chinese Yuan) (Reporting and editing by Sumana Cheema and Sonia Cheema; Amy Lv and Michele Pek)
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Angola is more likely to borrow from IMF after the oil price drops, says Finance Minister
Vera Daves de Sousa, the Finance Minister, said that the drop in crude oil prices increases the likelihood of Angola needing an IMF loan. The government is also conducting stress tests to assess the impact on finances. After U.S. President Donald Trump's announcement of sweeping tariffs, on April 2, the second-largest crude oil exporter in Sub-Saharan Africa based its budget for 2025 on an oil price per barrel of $70, Brent oil futures briefly fell below $60. This was their lowest level in over four years. The contract closed at $66.91 per barrel on Friday. Daves de Sousa, in an interview at the International Monetary Fund Spring Meetings and World Bank Spring Meetings in Washington on Friday, said: "We are rolling stress test scenarios." De Sousa explained that a small drop in oil prices might trigger a temporary freeze on some expenditures, but a drop of say, $45 would require an additional budget. She said that the government is working to improve tax administration, increase enforcement of property taxes and mitigate the effect of lower oil prices. BOND PRICE DECLINES Many smaller and riskier emerging countries, including Angola have felt the impact of recent volatility in fixed income markets, particularly U.S. Treasuries. Angola's dollar-bonds were also hammered by investors who sold risky assets after U.S. Trump imposed sweeping tariffs on trade. The yield on the 2049 maturity has increased to 13% from 12% prior to the U.S. Tariffs. Bond yields are inversely related to bond prices. The bond was quoted on Monday at 70.87 U.S. dollars per cent. A level lower than 70 is usually a sign that a nation may have difficulty borrowing. Last week, the bonds rose on hopes that the tariffs standoff would be resolved. Angola was required to pay $200 million to JPMorgan earlier this month as a margin for its $1 billion total-return swap, a loan that the lender issued in December and which was backed by dollar bonds of the country. JPMorgan didn't respond to a comment request immediately. De Sousa stated that she is in discussions with JPMorgan about measures to be taken to avoid a margin call. She said that neither investors nor rating agencies have expressed concern about the payment. She said that there were no negative connotations. Instead, they were surprised at how quickly we had been able to raise such a large amount of money. The government is currently examining the possibility of requesting an IMF financing program. De Sousa, when asked about Chinese loans backed with oil, said that the government would have to pay another $8 billion. It expected to be able do so by 2028, rather than 2030-2031 as it had previously predicted. Angola is also borrowing more money, mainly from China's EXIM Bank, but this money was not secured by collateral, it was concessional, and earmarked to specific projects, such as improving internet capability in rural areas, or improving education. De Sousa stated that Angola would love to tap into international capital markets once again, but does not plan to do so for the time being. We want to go on the market but with the way things are going, this isn't the right time. We will keep an eye on it to make sure we are prepared for the next time. De Sousa said that officials from the Trump administration had confirmed in Washington, in meetings with the public, their commitment to fund the Lobito Rail Corridor without specifying an amount. The project is designed to transport minerals from central Africa's copperbelt into the West. (Reporting and editing by Paul Simao, Sharon Singleton and Paul Simao; Additional reporting in Nairobi by Duncan Miriri)
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National Grid announces a three-year rate plan in Upstate New York
National Grid, a British company, announced on Monday that it had submitted a proposal for a three-year plan of rates to the New York Public Service Commission in order to run its electric and gas distribution operations upstate New York. Niagara Mohawk Power Corporation, which provides electricity and gas to 1.7 million customers, accounts for around 15% of National Grid’s regulated assets. If the plan is approved, the average residential electricity customer using 625 kilowatt hours (kWh) each month will see their monthly bill increase by $14.32 the first year, then $6.44 the second and finally $4.34 the third. The company stated that residential natural gas users using an average of 78 thermos per month will see their monthly bills increase by $7.66 the first year, then $8.08 the second and $9.18 the third. National Grid announced that the plan will run from 2025-2028 and include a 9.5% return on equity, as well as a capital investment for NIMO of 1,43 billion dollars in electricity, and 351 million dollars in gas in the first year of rate. The plan also includes over $290 million of bill discounts and the retirement of approximately 112 miles of natural gas pipeline with a high leakage rate in the next 3 years. The commission will likely make a final decision in the coming months. Reporting by Shashwat awasthi, Bengaluru. Editing by Janane venkatraman and Kirby Donovan.
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S-Oil reports refining and petchem losses, expects US tariffs will affect margins in Q2
S-Oil, a South Korean company majority-owned by Saudi Aramco and with refining and chemical units, suffered losses in the first-quarter. It expects that margins will be affected by U.S. trade negotiations and volatility on the market during the second-quarter. S-Oil announced a loss of 14.5 billion won (14.93 millions) for the first quarter of 2025 compared to a profit of 454.1 million won a year ago, in a Monday statement. The first-quarter revenue of the company fell by 3.4% on an annual basis to 8.99 trillion won. S-Oil reported that its refining division had an operating loss in the quarter under review of 56.8 trillion won, compared to 250.4 billion won profit a year earlier, due to low demand in an uncertain economic environment and delays in maintenance. The company said that losses in its petrochemicals division have more than doubled from the previous quarter to 74.5 billion won. S-Oil's 669,000 barrels-per-day oil refinery, located in the city of Ulsan, southeast of Seoul was operating at 94% capacity compared to 93% for full-year 2024. S-Oil anticipates that the second-quarter refinery margins will be affected by the outcome of U.S. Tariff Negotiations, as well as increased global market volatility. S-Oil stated in a presentation that "ongoing U.S. Tariff tensions could weigh on oil demand predictions." The progress of trade negotiations is expected to reduce global uncertainty. S-Oil is also scheduled to perform maintenance on its residue fluid catalytic cracked (RFCC), unit in the fourth quarter. Separately the company targets mechanical completion of the Shaheen Project during the first half 2026. The $7 billion project will produce up to 3.2 millions metric tons of petrochemicals from crude oil each year. (1 dollar = 1,439.7000 won). (Reporting and editing by Heekyong Yak and Michele Pek, Florence Tan, and Rashmi Anich.
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Angola's Finance Minister says that country stress testing for lower oil prices and IMF program is more likely
Angola has been running stress tests in order to assess the impact of a drop in oil prices on the government's finances. Finance Minister Vera Daves de Sousa announced on Friday that this situation would make a request for IMF loans more likely. The second-largest crude oil exporter in Sub-Saharan Africa has built its budget for 2025 on an oil price per barrel of $70, but Brent oil futures briefly fell below $60 after U.S. president Donald Trump announced tariffs on April 2nd. The contract closed at $66.91 per barrel on Friday. Daves de Sousa said in an interview at the International Monetary Fund's and World Bank's spring meetings in Washington that "we are rolling out stress tests scenarios." De Sousa explained that a small decline in oil could lead to a temporary freeze on some expenditures, but a drop of $45 would require an additional budget. She said that the government was working on measures to reduce the impact of lower prices of oil on revenue, improve tax administration, and increase enforcement of property taxes. Many smaller and riskier economies, including Angola have been affected by the recent volatility in fixed income markets, particularly U.S. Treasuries. Angola was forced to pay $200m earlier this month when JPMorgan issued an margin call on its 1 billion total return swap, a loan that the lender issued in December and which was backed by dollar bonds of the country. De Sousa stated that she was in discussions with JPMorgan about measures that could be taken to avoid another margin payment and that neither investors nor rating agencies had given her any negative feedback on the payment. She said that there were no negative connotations. Instead, they were surprised at how quickly we had been able to raise such a large amount of money. The government is currently examining the possibility of requesting an IMF financing program. De Sousa, when asked about Chinese loans backed with oil, said that the government would have to pay another $8 billion. It expected to be able do so by 2028, rather than 2030-2031 as it had previously predicted. Angola is also borrowing more money, mainly from China's EXIM Bank, but this money was not secured by collateral, it was concessional, and it had been allocated to specific projects, such as improving internet capability in rural areas, or improving education. De Sousa stated that Angola would love to tap into international capital markets once again, but does not plan to do so for the time being. We want to go on the market but with the way things are going, this isn't the right time. We will keep an eye on it to make sure we are prepared for the next time. De Sousa said that officials from the Trump administration had confirmed in Washington, in meetings with the public, their commitment to fund the Lobito Rail Corridor without specifying the exact amount. The project is designed to transport vital minerals from central Africa's copperbelt into the West. (Reporting and editing by Paul Simao; Karin Strohecker)
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Reliance Results and foreign inflows boost sentiment
Indian shares rose Monday after heavyweight Reliance Industries reported earnings that were better than expected. Continued foreign inflows also helped to lift sentiment. As of 10:33 a.m. IST, the BSE Sensex was up 0.98% at 79,989.97 and the Nifty 50 rose 0.9% to 24,255.55. Reliance Industries accounted for a third (or about 330 points) of the Nifty's gain. The oil-to-telecom company jumped by 3% to a six-month-high after exceeding analysts' expectations on quarterly earnings. Morgan Stanley wrote in a report that "RIL's analysts meeting had a positive tone regarding the outlook of consumer retail growth returning to double digits, and domestic fuel sales increasing. They also provided details on the ramp-up for the new energy sector." It said that this is a catalyst for a stock re-rating as it represents the end of a cycle of earnings downgrades. Except for IT, all major sectors rose on Monday. The mid-cap and small-cap indices both rose by 0.8% and 0.6% respectively. Data showed that foreigners bought Indian stocks in the amount of 324.65 billion rupies ($3.80 billion) during the past eight days, despite the escalating tensions with Pakistan. VK Vijayakumar is chief investment strategist of Geojit Investments. He said that the major factor in the resilience of the markets was the foreign buying, due to the relative performance of U.S. bonds, stocks and the dollar. Heavyweight financials with significant exposure to foreign investors rose by 0.8%. ICICI Bank and Kotak Mahindra Bank saw gains of 1.6% and 1% respectively. Mahindra & Mahindra, among other stocks rose 1.8%. It was also one of the top three gainers on Nifty after it announced its plans to purchase a majority stake in SML Isuzu at a price of 5.55 billion rupees. SML Isuzu, however, fell 10% because the deal valued shares at a discount of 63.3% to Friday's close.
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Reliance's growth is boosted by telecom and retail success in India
Reliance Industries, India's largest company, jumped by 3% Monday after analysts praised the strength of its retail and telecom businesses following a quarter profit beat. They also upgraded the stock based on positive growth prospects. The Indian Nifty 50 index's top gainers were shares of Mukesh Ambani's conglomerate, led by the billionaire Mukesh. They rose up to 3.4% and reached their highest level since late October. Antique Broking stated in a report that "stock valuation has become attractive." "The telecom outlook looks good with strong subscriber gains and a second round of tariff increases over the next 12-15 month." Reliance reported a profit for the fourth quarter that was above expectations, thanks to a strong performance in its retail and telecom businesses. LSEG data shows that out of 32 analysts who cover the stock, thirteen have increased their price targets as a result of the results, while eleven have upgraded their ratings. Reliance, the third-heaviest share on the Nifty index, rose 0.7% in the last day. The Nifty has risen by over 2% in 2025, but its shares have increased by about 11%. Jefferies cited tariff increases and the possible listing of the Telecom arm as triggers for shares in the current financial year.
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MORNING BID EUROPE - Markets want more signals, less noise in trade
Wayne Cole gives us a look at what the future holds for European and global markets. The week has started off in a quiet manner, as President Trump is more focused on his disappointment over Russia than his trade war. The White House has communicated on trade with a lot of noise, rather than a clear message. Rollins, the Agriculture Secretary, told TV that they speak with China daily, which was likely news in Beijing. Scott Bessent, Treasury Secretary, says he did not discuss tariffs with Chinese officials. He also does not know if Trump spoke to Xi as he had claimed. The White House is reportedly planning to hold trade talks every week with six different countries until Trump's tariff deadline of July 9. It's a bit optimistic given that it usually takes 18 months to negotiate a deal and even longer to pass one. Markets are currently assuming that they have reached the peak of tariffs and Trump is forced to lower them on China. This is especially true after major U.S. retail chains warned Trump last week that their shelves will soon be empty if he doesn't. Barclays analysts believe that a 60% tariff on China is likely, a 10% tariff on everyone else, and a 25% sectoral tax, with some exceptions. They note that even this would be worse than the worst-case scenario for 2025. It could be that analysts are optimistic about earnings, but the Wall St futures have fallen around 0.5%. This week, 180 S&P companies, including Apple, Microsoft and Amazon, will account for more than 40% the market value of the index. Apple's iPhone sales outlook and the impact tariffs will have on its vast supply chain are likely to be of great interest. Data-wise, the euro zone and U.S. reports on inflation this week will be dovish in terms of policy. The same is true for the Q1 U.S. Gross Domestic Product report, where an increase in imports - notably gold – will have a negative impact on the headline number. The Atlanta Fed GDPNow estimate predicts a 0.4% drop in GDP annualised, even excluding gold. The Friday payroll numbers are more timely, and they should help refine bets on a Fed rate cut in June. The Fed's current estimate is around 63%. Market developments on Monday that may have a significant impact ECB Vice President Luis de Guindos, and Bank of Finland Governor Olli Reinn will be making appearances - Dallas Fed manufacturing survey
Chevron earnings slide, Hess merger arbitration drags out
Chevron Corp on Friday posted greatly weaker second-quarter earnings and the oil major's CEO marked down the possibility to close a $53 billion acquisition of Hess Corp. before mid-2025, sending shares down 3%.
Shares were off 9% since Wednesday following company. declarations stating a Hess deal closing could well be pressed back. by another year, if not blocked entirely.
Chevron is depending on the Hess acquisition to establish. a grip in Guyana, home to the biggest oil discovery in. almost twenty years. It also hopes the offer will alleviate dangers. connected with the company's performance-challenged oil. jobs in Australia and Kazakhstan, where functional issues. once again struck production, pressing upkeep work into the 3rd. quarter.
The business had actually cautioned oil output this quarter would slip. along with refining margins, but investors were shocked at the. magnitude of the declines.
Quarterly profits fell 19% to $2.55 per share, well below a. year ago and 38 cents below Wall Street's agreement price quote.
This quarter was a little light due to some functional and. other discrete products that impacted results, CEO Michael Wirth. informed experts.
The company's plan to enter Guyana's profitable overseas oil. fields was shaken by an obstacle from Exxon Mobil. A sluggish. arbitration process looks to drag the offer closing well into. 2025.
Asked by experts about the possibility of a compromise with. Exxon, CEO Wirth stated the concept would be practical and that. Chevron had pursued it, without success. It doesn't appear that. is how this is going to wind up, he stated.
Exxon declares its joint operating arrangement with Hess and. China's CNOOC Ltd offers it the right of first refusal to Hess'. Guyana properties.
Chevron reported revenues fell greatly to $4.4 billion, or. $ 2.43 per share, in the quarter, from $6 billion a year before.
It reported adjusted revenues of $4.7 billion, or $2.55 per. share, below $5.8 billion, or $3.08 per share, a year back. On the other hand, Exxon beat Wall Street estimates on strong oil. production in U.S. shale and Guyana's oil field.
Chevron's incomes from pumping oil and gas fell 9.4% on. weakness outside the U.S. Earnings from fuels and chemical. operations tumbled about 60%. Refining struggled with weak. margins that also struck rivals Exxon and Shell.
Oil refiners overall made less money offering gasoline in the. 2nd quarter, as need softened after production had actually skyrocketed. previously this year. Business had two years of excellent revenues. after increase production in the travel boom after COVID-19. shut-ins dissipated.
Despite recent operational downtime and softer margins, we. stay poised to provide substantial long-term incomes and money. circulation growth, CEO Wirth stated.
HESS DEAL HOLD-UP
On Wednesday, Chevron stated an arbitration panel that will. examine Exxon's difficulty to its Hess acquisition must have a. decision between June and August 2025. Exxon's Chief Financial. Officer Kathryn Mikells told Reuters she anticipates a hearing in. late May and a choice on the conflict by September 2025.
Up until previously this week, Chevron anticipated to seal the deal. by the end of the year.
CALIFORNIA
Chevron stated it would move its head office to Texas. from California, continuing an exodus of oil companies from the. state due to higher taxes, stricter climate policies and. depleting oil fields.
Chevron anticipates all business functions to move to. Houston over the next 5 years. Positions in support of its. California operations, that includes oil fields and two. refineries, will stay in San Ramon.
Chevron CEO Wirth and Vice Chairman Mark Nelson will transfer to. Houston before completion of 2024, the business said.
Chevron presently has roughly 7,000 workers in the Houston. location and about 2,000 staff members in San Ramon.
(source: Reuters)