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The price of 2026 diesel is higher at major Asian refineries
According to several trade sources, major Asian refineries have signed term agreements for diesel exports by 2026, at a higher premium than the benchmark Singapore prices this year. This is supported by the firmer prices of November. The spot premiums for refiners’?sales? of 10ppm diesel in December were at their highest level in two years as the?prompt?supplies tightened because refinery outages exceeded expectations and year-end demand by regional importers increased, traders reported. The higher premiums on 2026 supply indicates that traders are still bullish about the prospects for motor and industrial fuel in the coming year. Three sources familiar with this matter claim that the Taiwanese refiner Formosa Petrochemical Corp. (FPCC), sold two cargoes of 750,000 barrels per month at 10ppm sulphur to a Western trading house for a premium of 60-70c a barrel. They added that two more?buyers can load a 750,000-barrel shipment every quarter for a premium of up to 80 cents a barrel. The contract prices for this year were higher by 20-40 cents a barrel. The 'premiums' for diesel and jet-fuel are largely up on an annual basis due to'stronger forecasts of supply-demand next year', said FPCC spokesperson KY Lin. However, he declined comment on the deal. He added, "We expect global supply-demand fundamentals to be better than this year for most oil products such as diesel and jet fuel due to some refinery closures and shutdowns since the second half of this year." Some refineries in Asia have experienced longer than expected outages. Others on the West Coast of the U.S. West Coast refineries have permanently closed due to high cost. SK Energy (a unit of SK Innovation) and GS Caltex, two South Korean oil companies, have been selling?several cargoes of 10ppm sulphur-free diesel per month? to a few Western trading houses as well as regional end users at a premium of 30 cents a barrel?, compared to around 20 cents a barrel this year? SK Energy and GS Caltex didn't immediately respond to our requests for comment. Two sources confirmed that Japan-origin barriques were also being discussed, with premiums of 30-50 cents per barrique. However, further details couldn't be confirmed. Traders said that FPCC?and GS Caltex jet fuel and kerosene were both sold at a premium of 80 cents up to $1 per barrel compared to FOB Singapore prices. Several buyers took advantage of this opportunity to lock in supplies, expecting a stronger heating demand through the first quarter next year. Reporting by Trixie YAP. Joyce Lee contributed additional reporting. Mark Potter (Editor)
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Copper prices rise on the prospect of support for Chinese real estate sector
On Wednesday, copper prices rose, returning to record levels on the back of hopes for more stimulus, particularly in China's battered real estate sector. Benchmark three-month Copper on the London Metal Exchange rose?1.2%?to $11,624 per metric ton at 1005 GMT, after falling by 1.3% Tuesday. It had reached a record high of $11,771 one day earlier. The shares of China's real estate sector soared on Wednesday, amid unsubstantiated market rumours about a government mortgage subsidy package worth 400 billion yuan (56.63 billion dollars). Property is one of the largest consumers of industrial metals, including copper. Dan Smith, managing Director?at Commodity Market Analytics, said: "A lot of?data from China recently was pretty abysmal in construction. It wouldn't?surprise me at all if there will be more stimulus for that part of economy to continue to grow." Analysts said that a stimulus for the Chinese economy as a whole was needed. Data on Wednesday revealed?that domestic demand is still weak and deflationary pressures persist. LME copper prices have risen 32% in this year, on fears of mine disruptions leading to deficits. Also, the flow of metals into the U.S. has tightened the supply of the rest of world. "I think that the risk for now is still on the upside. Smith stated that he had a "hunch" we would reach $12,000 by the end of the calendar year. The Shanghai Futures Exchange's most traded copper contract closed the daytime trade down 0.2%, at 91.850 yuan per ton. The U.S. Federal Reserve, expected to cut rates on Wednesday afternoon, may also dampen expectations for further rate cuts. Analysts at Chinese broker Jinrui stated that investors have'scaled back their positions due to the uncertainty of future rate cuts. The expected supply pressure outside of the U.S. keeps prices high and volatile. Other metals saw a 0.3% rise in LME aluminium to $2,863.50 per ton. Lead rose by 0.2% at $1,983, Nickel increased 0.2% at $14,760. Tin gained 1.4% at $40,400, while zinc fell 0.1% to 3,086.50.
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A Chinese rare earth manufacturer receives a streamlined license for magnet exports
Ningbo Jintian Copper, a Chinese rare earth producer, announced on Wednesday that it had obtained streamlined export?licences. After a meeting in late October between Donald Trump, the U.S. counterpart of President Xi Jinping, and Xi's Chinese counterpart Xi Jinping, the?new general licences? are intended to allow individual customers more exports with year-long permits. On an investor interactive platform, Ningbo Jintian Copper said that its rare earth magnets are used in electric cars, wind turbines and robots as well as consumer electronics, medical equipment, and consumer electronic products. Last week, it was reported that three Chinese rare-earth magnet manufacturers including JL Mag Rare Earth Ningbo Yunsheng High-Tech and Beijing Zhongke San Huan High-Tech secured the licenses which would allow them to speed up exports to certain customers. Beijing added several rare earth elements and magnets in early April to its export control list, requiring dual-use licenses for export. China's exports of rare-earth magnets plummeted in April and may, forcing automakers to shut down parts of their production. The dual-use license regime will continue to exist. Reporting by Beijing Newsroom. (Editing by Jan Harvey, Mark Potter and Jan Harvey)
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Intel wins reduced fine after losing its challenge to EU antitrust ruling
Intel, the U.S. chipmaker, lost its appeal against a 376 million euro ($438 millions) EU antitrust penalty imposed two years earlier for 'thwarting competitors.' But it gained some comfort as Europe’s second highest court reduced the fine by a third. The European Commission (which is the EU's competition enforcer) handed out the fine in 2023, after the court threw out an earlier penalty of 1.06 billion euro imposed by the tribunal in 2009 for blocking Advanced Micro Devices. The 376 million Euro fine was a result of payments Intel made to HP, Acer and Lenovo between November 2002 and December 2006 to stop or delay competing?products. These payments are often referred to as "naked restrictions" and are frowned upon by regulators. The Luxembourg-based tribunal stated that "the General Court upholds Commission 2023's decision against Intel, but reduces fine by about?140million euros." The judges said that a fine of 237 million euros is more appropriate in light of the severity and duration of the violation at issue. The company cited the limited number of computers that were affected by Intel?s restrictions and the 12-month interval between?some of these anti-competitive activities. On legal issues, the Commission and Intel may appeal to the European Court of Justice (the highest court in Europe), which is Europe's highest. T-1129/23 Intel Corporation V Commission.
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Silver extends rally beyond $60; gold steady ahead of Fed rate-cut decision
Investors awaited comments from Jerome Powell, the chair of the Federal Reserve, on future policy decisions, as gold prices remained unchanged. Silver extended its historic rally over $60 an ounce. As of 0844 GMT, spot gold dropped 0.2% to $4199.92 an ounce. U.S. Gold Futures for February Delivery fell 0.2% to $4.228.10 an ounce. Spot silver rose 1.2% to $61.37/oz after hitting an all-time record of $61.61 earlier. Silver broke above the $60 an ounce mark, luring in more short-term traders and trend followers. Carsten Menke, Julius Baer's analyst, said that this also reflects a narrative of "physical tightness" in the silver markets. White metal prices have risen 113% in the past year. This is due to a combination of factors, including a decline in inventories and the United States' designation of it as a "critical" mineral. Today, the two-day Federal Open Market Committee (FOMC) policy meeting ends. A rate-cutting decision is expected at 1900 GMT. Powell will then make his remarks at 1930 GMT. The markets assign an 88% chance of a 25 basis-point cut. In the last few weeks, investors' demand for gold measured by holdings in physically-backed products was not as high as silver. Menke said that this is the primary factor holding gold back. Holdings of the largest gold-backed ?exchange-traded-fund (ETF), New York's SPDR Gold Trust, fell 0.1% on Tuesday, while New York's iShares ?Silver Trust, gained 0.53%. Kevin Hassett is the White House's economic advisor and a frontrunner for replacing Powell as Fed Chair. He said on Tuesday that "there was plenty of room" to lower interest rates further. However, rising inflation may change this calculation. Gold is a non-yielding asset that tends to be favoured by lower interest rates. RBC Capital Markets has raised its long-term forecasts for gold prices to an average $4,600 per 1 ounce by 2026, and $5,100 in 2027. They cited geopolitical risk, a softer monetary policies, and persistent deficits. Palladium dropped 0.3%, to 1,501.71, and platinum fell 1.2%, to $1670.70. (Reporting and editing by Alexandra Hudson in Bengaluru, with reporting by Pablo Sinha from Bengaluru)
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Ambassadors of EU countries approve phase-out of Russian gas imports
The ambassadors of EU countries approved the bloc's plan on Wednesday to 'phase out' Russian gas imports in 2027. A spokesperson for Denmark's EU Presidency said that this was the last legal hurdle before the ban can become law. Last week, the EU reached a 'deal' on a new law that will cut ties with Russia, Europe's former largest gas supplier. They had vowed to do so following Moscow's full-scale invasion of Ukraine in 2022. According to the agreement, the EU must stop Russian imports of liquefied gas by 2026. Pipeline gas will be stopped by 2027. Before it becomes law, the 'Russian gas ban' still needs to be approved by the European Parliament and a meeting of EU ministers. The EU Ministers will formally ratify the ban in early 2019. EU officials expect that both will approve the deal, despite Hungary and Slovakia's opposition. (Reporting and editing by Louise Breusch Rasmussen, with Kate Abnett)
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Kazakhmys Copper announces new controlling shareholder
Kazakhmys, a Kazakh copper producer, announced on Wednesday that it had signed an?framework contract? which would transfer the control of?company? to a new investor. The?signing?of?the document marks the beginning of the transfer of the control. The company stated that all the necessary obligations and measures under the agreement would be completed in the near future 'according to established procedures. This will then be followed by the signing a'share purchase agreement. Vladimir Kim and Eduard?Ogay, the board chairman of Kazakhmys, signed the agreement. Kazakhmys has not said who will take control. Local media reported that Nurlan Artykbayev founded Qazaq Stroy and is its majority owner. Local media reported that the preliminary transaction value was $3.85billion. Kazakhmys refused to identify the new owner when asked by journalists and referred them to its published statement. Qazaq Stroy didn't immediately respond to a request for comment. Kazakhmys is ranked 20th in the world in terms of copper concentrator production. It produces 271,000 tonnes per year. Kazakhmys stated that the change in shareholder will not affect production or contractual obligations.
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Iron ore prices rise as China's weak data boosts demand
Iron ore futures rose on Wednesday, ending multiple sessions of losses. This was after soft factory data in China, the top consumer, raised hopes for a new stimulus to boost economic growth by 2026. After falling by 0.7% on the previous day, the?most-traded contract for iron ore on China's Dalian Commodity Exchange closed its daytime trading 1.85% higher. As of 0748 GMT, the benchmark January iron ore traded on Singapore Exchange was up 0.84% at $102.65 per ton. China's factory gate deflation has accelerated in the third year of its existence, and last month it reached a new high. This indicates a weakening domestic demand, which is not expected to improve soon. Official data revealed that the producer price index (PPI), which measures prices for goods and services, fell by?2.2% in November compared to a fall of 2.1% in October. This was worse than expected, as the official data predicted a drop of?2%. Analysts expect Beijing to take some measures to support growth in the first three months of 2026. Iron ore prices rose despite the fact that analysts from China Mineral Resources Group (CMRG), a state-owned company, argued that current trends were not in line with fundamentals. In a Tuesday statement posted on the WeChat page of the state-backed Steel Association, CMRG analysts said that "speculative activity among traders has amplified price fluctuation." Prices are not likely to trend up in the fourth-quarter due to a backdrop of increasing supply and weakening consumer demand." CMRG was 'established in 2022 for the centralisation of iron ore - purchases and to win better terms with miners. Coking coal, another steelmaking ingredient, fell by 1.29%, while adding 0.36%. The benchmarks for steel on the Shanghai Futures Exchange have gained ground. Rebar grew by 0.97%. Hot-rolled coils climbed by 0.58%. Wire rod jumped 0.27%. Stainless steel gained 0.24%. ($1 = 7.0617 Chinese Yuan) (Reporting and editing by Amy Lv, Lewis Jackson and Harikrishnan Nair).
The palm oil industry in Indonesia is gripped by fear as the military seizes plantations
In late June, Indonesian soldiers wearing fatigues entered a palm oil plantation in Borneo and displayed a sign declaring that the estate was under government control.
The Melati Hanjalipan Plantation is a perfect example of a military-backed takeover which has shocked the 16 million-strong workforce and the world's largest palm oil producer. Agrinas Palma Nusantara is the new state-owned palm oil firm that has a land area of 9.1 million acres. Nearly half was transferred to it, making it the largest palm oil company in terms of size. This crackdown, ordered by the President Prabowo Subianto, is the largest structural change to Indonesia's palm oil industry. It has put a total 5 million hectares of land under military surveillance. This is approximately 30% of Indonesia's palm oil land and is larger than the Netherlands.
Agrinas could be given the territory, but industry experts claim that they are not equipped to manage it.
Agrinas and the president's office did not respond when asked for comments.
Prabowo, who has been in power since October 2024, told his cabinet that he was determined to eliminate corruption cases that could not be investigated.
COMPANIES UNDER SIGE
Former special forces commander Prabowo has expanded the role of the military in civil affairs, reigniting fears that Indonesia will return to its authoritarian Suharto era. He appointed retired generals to Agrinas board, and created a taskforce of soldiers, police, and prosecutors, which will target plantations that operate in areas designated as forests, according to a presidential decree from January and the company website.
Questions about the seizures were not answered by the task force, the Indonesian defence ministry or the military.
In interviews with 12 company executives, growers in Indonesia, and five industry observers, including the most respected analysts of the sector, there was widespread concern about the future of their operations and the impact the crackdown would have on the global supply. Sources at three of Indonesia’s largest palm oil producers have confirmed that they have reduced their fertiliser usage and regular upkeep of areas at risk of takingover. This could affect future yields.
Agrinas was formed by Agrinas, a company that has been seized of assets. The executives have requested anonymity out of fear of government reprisals.
What can a business do if the government uses military or police? Who do we protest to? "Do you think we'll dare?" One executive replied: One executive said.
Eddy Martono, chairman of the industry group GAPKI, said that the "uncertainty" could cause a drop in production as early as this year.
'KING OF THE THIEVES
Melati Hanjalipan is two hours away from Sampit, through remote terrain with poor mobile reception and dust clouds following passing trucks. Sabarani, the cooperative's head, said that under state control there is a bleak future for this 106-hectare plantation, as monthly fruit bunches production has already dropped to 23 metric tonnes from an average of 80-100 tons.
He said that their caretaker partner did not want to maintain the plot because of its legal dispute.
Why is the state turning into the kings of thieves? He asked.
Sabarani admitted to managing the plot, which was cleared by a Dutch timber company for 20 years without any proper documents. The cooperative had an expired local government permit, but when the central government reclassified it as forest they did not secure a Forest Area Utilisation Permit.
This is similar to the experience of smallholders, who began planting on ancestral land before they were told that they were invading forests.
An association that represents them reported that seizures have also affected tens and thousands of small plantations operated by transmigrant farm workers resettled in the country under former strongman leader Suharto.
Sabarani stated, "We do not want to join Agrinas if we aren't legal." "We do not want to be used to work for Agrinas but be illegal," Sabarani said.
MILITARY RUN PLANTATIONS Prabowo believes that the military-run plantations are essential for achieving food and energy independence within five years.
Agrinas has been tasked to achieve his ambition of producing a diesel made entirely of palm oil, and controlling at minimum 30% of the domestic market for cooking oils.
Agrinas, a newly formed company, was given the palm brief by Prabowo in March. It had no prior experience. The lawyer for the company showed pictures and videos of armed troops arriving at Duta Palma Group plantations, which were the subject of a money laundering case. Agrinas was given the lands. Sutomo stated that it plans to manage three million hectares by 2029. In September, he said, "My job used be to run around and go undercover. But now I'm told to take care palm oil."
"This is an honor, a mandate even though I know nothing."
INDUSTRY’S BIGGEST NAME The task force has focused its attention on some of the biggest names in the industry. The forestry ministry listed subsidiaries of Singapore-based Wilmar as well as SD Guthrie and Sinar Mas Group.
Wilmar reported that despite challenges, the company had seen a 5% rise in production of fresh fruit bunches during the first half. However, full-year results are dependent on "resolutions to various issues" between Indonesian authorities.
The company said it had engaged with Agrinas in a few plantations, and supported the regulation of illegal plants.
Cargill stated that it was aware of the ongoing reviews and is in a constructive dialogue with authorities. SD Guthrie declined to comment on requests, but said in August that 3% of their planted area had been affected. First Resources and Musim Mas declined comment. Golden Agri, parent company of Sinar Mas did not respond.
COMPLEX LEGAL MAZ
Seizures bring to light decades of murky legality in land. Deforestation, unclear rights to land, changing rules, and inconsistent enforcement have plagued Indonesia's palm-oil sector since the 1990s boom.
Three senior executives say many growers have documents relating to Jakarta disputes, and are faced with opaque processes for regularising permits.
Investors are increasingly concerned about companies that have been certified as sustainable.
This could have a long-term impact on production, especially since growth has already slowed down due to the ageing of trees and the moratorium on new permits for primary forests.
Globally, a significant production shortfall could have repercussions on the global edible oil market. The markets are already constrained as Jakarta converts more palm into biodiesel.
Sjafrie Sjamsoeddin is the leader of the task force and has stated that Agrinas must be prepared to ensure production does not decrease, but should actually increase.
Top analysts at an industry event in Mumbai warned that seizures will continue to decline if they continue.
Thomas Mielke, a forecaster at Oil World, said: "We assume Indonesia's production to rise by 0.7 millions tons next year. However, I wouldn't be surprised if it turns out that the increase is much smaller because investments are being cut."
Dorab Mistry, an industry analyst, echoed these concerns: "The threat to nationalisation leads immediately to lower yields."
(source: Reuters)