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EU discusses support for Europe’s steel industry in the face of U.S. tariffs
Ursula von der Leyen, the European Commission's chief, hosted executives from the steel industry on Tuesday to discuss how to maintain its future health in light of high energy costs and decarbonisation as well as impending U.S. Tariffs. The debate will examine how the EU can respond to unfair trade practices, including in China, and global overcapacity. It was launched eight days prior to President Donald Trump's planned 25% tariffs. Participants included executives from ArcelorMittal, the second-largest steelmaker in the world, and ThyssenKrupp, as well as leaders from global union federation IndustriALL and key steel users from car manufacturing and construction. The key question is how to protect EU producers against a possible flood of imports of steel diverted from the U.S. market into the more liberal European market. Since 2018, when Trump introduced metal import tariffs during his first term, the EU has provided safeguards for steel in the form of quotas that are tariff-free per quarter and country. According to World Trade Organization regulations, these safeguards are only valid for eight years. They will expire during Trump's second presidential term, which is mid-2026. The European Commission (which oversees EU Trade Policy) has stated that it is looking at extending safeguards or setting up an alternative mechanism. The current system could be tightened. The EU steel demand will likely have declined in 2024, for the second year running. According to Eurostat, the EU's statistics office, iron and steel exports to the U.S. totaled 5.4 billion euro, while iron and steel imports to the EU amounted to 39.5 billion euros. The Commission will also seek to understand the views of industry on energy prices. This includes raw material supply, how to best promote low-carbon steel demand, and how to secure investment. $1 = 0.9512 Euros (Reporting and editing by Jan Harvey; Tiffany Vermeylen, Philip Blenkinsop)
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Seplat, Nigeria's Seplat, plans to spend up to $320 Million on new assets as it drives production
Seplat Energy will invest $320 million this year in infrastructure and new wells, with the goal of doubling its oil production to 140,000 barrels a day after acquiring Exxon Mobil Nigeria assets. Last October, the company obtained government approval to purchase 40% of four oil mine leases, associated infrastructure including the Qua-Iboe export facility, and 51% the Bonny River Natural Gas Liquids Recovery Plant, which was previously owned by Mobil Producing Nigeria Unlimited (Exxon's local subsidiary). The acquisition will be a major part of the production increase that is projected. This could bring the company's oil production from 48,618 barrels per day (bpd) last year up to as much as 140,000 bpd. Former Exxon assets are expected to contribute 60%. Seplat CEO Roger Brown stated that this year, the company will be focusing on reopening closed-in wells at SEPNU (the exxon assets) and launching a full drilling campaign on our onshore assets. The company reported a profit before taxes of 379.4 millions, up from 191.1 million last year. Revenue was $1.116 billion up 5%, with cash in the bank at year's end of $469.9million and net debt of $898million at 2024. After years of sabotage, and disagreements with local communities about leaks, international oil companies have shut down much of their shallow-water and onshore oil production in Nigeria. The company plans to complete the ANOH Gas Plant and drill 13 new onshore wells this year. (Reporting and editing by Jan Harvey; Isaac Anyaogu)
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Copper prices fall as tensions over tariffs escalate
Prices of copper fell Tuesday after U.S. president Donald Trump slapped new tariffs on China and Canada. This sparked fears about a possible trade war that could affect the global economy. However, prices remained within a narrow range while traders awaited further clarity. The price of three-month copper at the London Metal Exchange dropped 0.7%, to $9,351 per metric ton, by 1049 GMT. This was below the 21-day average of $9.411. Trump's new tariffs of 25% on imports from Mexico, Canada and the United States took effect on February 2, along with a doubled duty on Chinese goods. China responded with a hike in import duties for American agricultural and foodstuffs, bringing the two largest economies closer to a full-blown trade war. Dan Smith, the head of research for Amalgamated Metal Trading, said: "We are looking at two major developments." The prospect of a war in Ukraine is bullish, as it would boost confidence and reduce the risk that the conflict could spiral out of control. People are having a hard time trading those two possibilities. Smith said that traders usually use the "buy the rumour sell the truth" strategy. However, now they ignore the rumour to trade the facts. According to a White House spokesperson, Trump has halted military assistance to Ukraine after his confrontation with Ukrainian President Volodymyr Zelenskiy last Thursday. The Kremlin's spokesman expressed caution on reports that the U.S. had halted its aid to Ukraine and said more details were needed. The start of the National People's Congress in China (NPC) coincided with the new tariff exchange on Wednesday and further limited the reaction of the base metals. The NPC is expected to announce new stimulus measures that will help support the economy of China, the top metals consumer in the world. LME aluminium dropped 0.2% to $2606 per ton. Zinc fell by 0.8% to 2,818.50; lead remained at $1,991.50; nickel slipped 0.1% to $15.870 while tin rose by 0.7% to $30,735. (Reporting from London by Polina Deitt; Additional reporting in Bengaluru by Anushree Mukerjee; Editing by Janane Vekatraman.)
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China wants to know your opinion about the rules for imports, including battery waste and recycled steel
The Environment Ministry announced on Tuesday that China is seeking public opinion regarding rules for the importation of leftovers from the recycling spent lithium-ion batterys, as well recycled steel materials. The deadline for comments was set at March 20, in accordance with China's desire to speed up recycling efforts. This is reflected in the establishment of the China Resources Recycling Group, a group that focuses on recycling in the city of Tianjin, located in the north of the country. According to the proposal of the Ministry of Ecology and Environment, black mass, which is a mixture of nickel and cobalt containing a combined content greater than 25%, does not qualify as solid waste. It can therefore be freely imported into China. The black mass is the residue left after lithium-ion battery waste has been recycled. It usually contains metals like lithium, nickel, cobalt and cobalt. China allows imports of black mass produced by lithium-iron-phosphate batteries. Imports of recycled steel with a content greater than 92% iron are also allowed. Reporting by Violet Li, Mei Mei Chu and Clarence Fernandez; editing by Christian Schmollinger & Clarence Fernandez
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Indonesia plans to use the sovereign wealth fund to boost coal-gasification projects
Energy Minister Danantara Indonesia said that Indonesia is looking to increase coal gasification through its newly established sovereign wealth fund Danantara Indonesia. Indonesia, which is the world's largest thermal coal producer has been trying to process low-ranking coal into dimethyl ether in order to reduce LPG imports. However, previous projects have failed due to investors pulling out. Energy Minister Bahlil stated late Tuesday that the government will provide the capital investment, and the local investors will cover the rest. "Danantara will be one of them." Bahlil stated that four coal gasification project will be implemented in South Sumatra, East Kalimantan and both in parallel. He didn't provide any details about the project size. The government is accelerating 21 natural resources processing projects, worth $40 billion. Bahlil also said that Indonesia plans to build a refinery capable of processing 500,000 barrels of oil per day and increase its fuel storage to ensure energy security. The energy ministry estimated that the investment for the new refinery will be $12.5 billion. Danantara was launched in Feburary and is expected to manage assets worth more than $900 Billion, including stakes by the government in state-owned firms. Prabowo Sulaiman, the president of Danantara, has announced a $20 billion investment for Danantara, which will be used to fund projects in energy, food security, and natural resource processing. (Reporting and editing by Christian Schmollinger, Mrigank Dahiwala, and Mrigank Christina; Reporting by Bernadette Cristina, Stefanno Sulaiman, Stanley Widianto)
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Sources say that China's CNOOC will expand its refinery after a $2.7 billion upgrade.
Industry sources say that China National Offshore Oil Company is planning to launch a joint venture refinery complex in June. This will mark the company's expansion into refining, petrochemicals and other areas. CNOOC plans to begin operating the Daxie Island complex in Ningbo, which includes over a dozen newly-installed facilities as part of a 20 billion Yuan ($2.74billion) expansion program. This could increase the demand for imported crude oil by the company. A recent CNOOC tender document stated that the key additions included a 120,000 barrels per day (bpd), a 3.2-million-metric-ton-per-year (tpy), a 2-million tpy hydrocracker and a continuous reformer of 2.4-million tpy. According to three sources familiar with the subject, the upgrade will increase the capacity of the Daxie plant to process crude by 50%, to 240,000 bpd, as the smaller crude unit is being mothballed. It will also expand its capacity to produce raw materials for synthetic fibres and plastics. One source said that the expansion of Daxie will increase CNOOC's total crude oil processing capacity in China to approximately one million bpd, including plants which the state firm controls or invests. CNOOC’s largest subsidiary, based in Huizhou, is located in south China’s Guangdong Province. A CNOOC-controlled refinery with a 440,000-bpd capacity is integrated into a Shell-invested petrochemical facility. Sources declined to name themselves as they were not authorized to speak with the media. CNOOC, the parent company of offshore oil and natural gas specialist CNOOC Ltd, is responsible for managing the group's refining, petrochemical and petrochemical businesses. CNOOC's Refining and Chemical Division said on its official WeChat Platform on Tuesday that Daxie was heating its crude oil unit as part of preparation works before the launch of the plant. CNOOC's representative has not yet commented. CNOOC won an unusual batch of crude import quotas of 3 million tons (60,000 bpd) earlier this year. According to traders, the quotas were allotted to Union King Holdings' expanded Daxie Refinery. CNOOC, on the other hand, is building a commercial underground oil storage base in Daxie that has a total capacity of 31.5 million barrels and 5 million cubic meters. This was revealed by a document published last September regarding the company's procurement. According to the document, construction of the site will be done in two phases and should be finished by 2027. CNOOC has a similar-sized base of oil reserves in the Shandong Province refining hub. $1 = 7.2924 Chinese Yuan Renminbi (Reporting and editing by David Evans; Additional reporting by Trixie YAP; Editing by David Evans).
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Stellantis applauds EU decision to relax car emission standards
Stellantis, an automaker, said that it was pleased with the announcement by the European Commission on Tuesday. The Commission announced it would soften the carbon emission standards for cars in the EU. The Commission of the European Union, which is the executive body of the Union, has yielded to European automakers' pressure by announcing that it will give them three years instead only one to reach new CO2 emissions targets for their cars. After meeting with auto industry executives, unions, and campaign groups, European Commission President Ursula von der Leyen announced that she would instead propose compliance based upon the average emissions of each automaker over the period from 2025 to 2027 rather than just in 2025. In a press release, Europe's second-largest automaker stated that "Stellantis is pleased with the announcements made by Commission President von der Leyen yesterday." Stellantis chairman John Elkann was present at the talks held in Brussels on January 19, the company reported. Stellantis stated that the extended compliance period for carbon emission targets is a "meaningful move in the right directions" to preserve the competitiveness of the auto industry, while remaining committed towards targets and electrification. This initiative, along with additional support for targeted purchases and fiscal incentives as well as cheaper green energy, and investment in charging infrastructure can be a true accelerator in the march towards electrification, it stated. (Reporting and editing by Alvise Armellini and Susan Fenton.)
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Aramco's weight on Saudi Arabia and the Gulf countries is a major factor in the red coloration of most Gulf markets due to global trade war concerns.
The Gulf's stock markets fell on Tuesday morning as U.S. trade tariffs threatened an increase in global trade tensions. Saudi Aramco also disappointed investors with its disappointing earnings. The new tariffs of 25% on imports to the United States from Mexico and Canada, as well as a 20% increase on Chinese goods, went into effect on Tuesday. This sparked new trade disputes with three of the U.S.'s top trading partners. Saudi Arabia's benchmark stock index fell 1.1%. Saudi Aramco fell 2.2% after a decline in profit. The oil giant reported Tuesday a net loss of $106.2 billion for 2024. This is down from $121.3 in 2023. Aramco expects to pay out $85.4 billion total dividends in 2025. This is a drop of nearly 30% from 2024, when it paid out almost the same amount. The reason for this was lower sales and increased costs. The company also announced $200 million in performance linked dividends that will be paid out in the first quarter 2025. This is a sharp decline from the $10.8 billion in each quarter 2024. Dubai's main stock index dropped 0.2%. This was due to a 2.2% drop in Tecom Group, and a decrease of 0.4% in Emaar Properties. Qatar National Bank, the Gulf's largest lender, and Industries Qatar, the petrochemical manufacturer, both dropped 0.8%. The index in Abu Dhabi rose 0.3% thanks to a 3.1% increase at the petrochemical company Borouge. The companies announced that Abu Dhabi National Oil Company (ADNOC) and Austrian OMV would merge their polyolefin business to create a $60-billion chemicals powerhouse. Borouge Group International will be a merged entity consisting of two joint ventures, Borealis (75% owned by OMV, 25% by ADNOC) and Borouge (54% owned by ADNOC, 36% owned by Borealis). (Reporting and editing by Andrew Heavens in Bengaluru, Ateeq Sharif in Bengaluru)
Aramco anticipates a sharp fall in dividends for 2025 as profit drops from 2024
Aramco, the Saudi oil giant, said it expected to declare dividends totaling $85.4 billion by 2025. This is a drop of nearly 30% from 2024 payouts due to lower sales and increased costs.
Aramco will pay out about $124.25 Billion in dividends by 2024, and $97.78 Billion in 2023.
Aramco’s dividends in 2024 included approximately $43,1 billion in performance-linked bonuses, a mechanism that was introduced in 2023 and is paid on top of the base dividends which are paid regardless.
The company announced $200 million in performance linked dividends that will be paid out in the first quarter 2025. This is a sharp decline from the $10.8 billion in each quarter 2024.
Aramco reported that its net profit in 2024 was $106.2 billion, down from 121.3 billion dollars in 2023.
The decrease was due to a combination of lower sales revenue, higher costs and lower income from finance and other sources. Aramco reported in a stock market filing that this was partly offset by lower income tax and zakat. ($1 = 3.7503 Riyals) (Reporting and editing by Christopher Cushing, Muralikumar Aantharaman).
(source: Reuters)