Latest News
-
Sources say that Hengli Petrochemical Singapore's former Singapore branch will cease operations.
Four industry sources said on Monday that Hengli Petrochemical International (the former Singapore trading arm of the?sanctions hit Hengli Petrochemical Refinery in Dalian) plans to cease its operations. Three sources stated that the?operation will likely wind down by late May. Hengli Petrochemical, based in China (Dalian), did not immediately respond to an email?requesting comment. Hengli Petrochemical International was a company that employed 100 people and traded mainly oil and petrochemicals before the parent company came under U.S. sanction, according to two of those interviewed. Sources claim that some staff were told they were going to be?made redundant? while others were to be transferred to other parts within the Hengli Group which were not subject to U.S. sanctions. Hengli Petrochemical Refinery was sanctioned by the U.S. Treasury in late 'October over alleged Iranian oil purchases, which hengli denies. Hengli Group changed the ownership of the Singapore unit shortly after the U.S. decision. The Hengli Petrochemical?Refinery reduced its holding to 5% and Dalian Changxing International Trade, a local Chinese government entity, assumed the 95%.
-
Gold falls as interest rates rise amid war uncertainty
Gold prices fell Monday as U.S. president Donald Trump's "swift" rejection of Iran's response to a peace proposal raised inflation fears and affected the outlook for interest rate rates. As of 8:45 am EDT (1245 GMT), spot gold was down by 0.5% to $4,692.49 an ounce. U.S. Gold Futures fell 0.6% to $4701.30. After the U.S. made an offer to reopen negotiations in the hope of reopening the talks, Iran released on Sunday a response focusing on ending the conflict on all fronts, particularly Lebanon. The document also demanded compensation for the war damages. In a few hours, Trump had dismissed Iran's offer with a social media post. Jim Wyckoff is a market analyst for American Gold Exchange. He said that inflation concerns are rising after the United States has rejected the 'Iran response. Constraints in the Strait of Hormuz add to these pressures, and work against gold. Gold is under pressure, despite its appeal as a safe haven asset. Higher rates will increase the cost of non-yielding investments. Global brokerages have lowered their expectations for two U.S. rate?cuts in 2019. Their forecasts are now split between a little easing or no cut at all by 2026. The U.S. data on inflation for April is due this week, after the Friday jobs report revealed that U.S. employment increased more than expected in April. The markets are also watching Trump’s two-day trip to China, where he will'meet Chinese president Xi Jinping and discuss Iran, Taiwan artificial?intelligence, and nuclear weapons. Shares of Indian jewellery retailers fell after Prime Minister Narendra modi asked people to refrain from buying gold for one year in order to protect their foreign exchange reserves. India is the world's second largest gold consumer. Silver spot was up by 3.1% to $82.84 an ounce. Platinum was up 0.8% at $2,071.70 and palladium rose 0.2% to $1,494.97. (Reporting and editing by Alexander Smith in Bengaluru, Ashitha Shivaprasad)
-
Vodacom increases its long-term target for customers as financial services grows
Vodacom Group, a South African mobile telecoms company, announced on Monday that it had upgraded its long-term customer growth target following the addition of millions of?customers in the last year. The group focused on Africa, owned by Britain's Vodafone in majority, has cited its rapidly growing financial services business as well as its mobile core business. Vodacom has announced that it will increase its total number of customers to 275 millions by 2030, up from the previous goal of more than 260 million. Its customer base had reached 237.3million in the financial year ending March 31. Vodacom is 'enforcing its position in the financial services sector, and recently increased its stake in Safaricom Kenya's largest mobile operator. It already owns 39.9%. In a media conference, Chief Executive Shameel J.oosub stated that the increased stake would give Vodacom a more effective control and help accelerate the expansion of the M-Pesa lending and payments app beyond its mature markets, including Kenya and Tanzania. Joosub said that financial services generate about 41 billion rand (2.50 billion dollars) in revenue and offer better margins and returns on capital compared to traditional mobile services, because they require a significantly lower capital expenditure. Vodacom has also increased its target for 2030 of 130 million financial services customers, up from 120 million. Bulk-buying Diesel Joosub, CFO Raisibe Morathi and other Vodacom executives said that to address energy supply risks and the rising cost of fuel, Vodacom buys diesel in bulk and increases on-site storage when possible. They also arrange for fuel suppliers who will hold stock on Vodacom's behalf. They said that it has hedged diesel prices in South Africa for the next six-months to limit the cost 'volatility. Vodacom spends 4% of revenue on energy. The operator uses diesel generators to power its towers in the event of prolonged 'power cuts. The towers can also be powered by solar and batteries. Vodacom’s earnings before interest tax depreciation amortization (EBITDA), grew by 12.8%, to 62.6?billion Rands, a little lower than a?consensus?forecast?of 63 billion Rand, according to data compiled LSEG. The Group Service Revenue grew 10.6% to 133.6 Billion Rands, mainly due to strong performances in Egypt and Tanzania.
-
Copper reaches 3-month high on supply concerns and technical break
On 'Monday', copper prices rose to their highest level in over three months as fears of supply shortages outweighed worries about lower demand because of the stalemate during the 'Iran War. In open-outcry official trading, benchmark three-month copper at the?London Metal Exchange rose 1.1% to $13,715 per metric ton. This is its highest since January 29. The stock was on course to post its sixth consecutive session of gains. This is the longest bullish streak since December. It has gained 10% this year but is still well below its peak of $14,527.50 in January. Ole Hansen is the head of commodity strategy for Saxo Bank, Copenhagen. He said that Friday's copper break above $13,500 attracted funds using technical levels. This price action appears 'pretty robust in comparison to the not so robust backdrop of the Middle East war. This suggests that supply is also being challenged at a time when demand is questioned. Freeport also received copper support when it delayed?the complete resumption? of its flagship Grasberg mine from its previous expectation of late 202027 to early 2028. After hitting a high of 104.840 yuan in the previous three months, the most traded copper contract at Shanghai Futures Exchange ended daytime trading 0.9% up. Data showed that factory inflation in China, the world's largest metal consumer, exceeded expectations. This raised hopes that government efforts to boost the country's economy were having an effect. LME aluminium rose 1.9% in official activity to $3,570 per ton on the back of persistent concerns about the impact of conflict on Middle East producers, who account for about 9% global supply. Morgan Stanley analyst Amy Gower wrote in a report that a rapidly tightening aluminum market had left investors wondering why the LME Aluminium price hadn't risen more. Tin has risen?1.6%, to $54,750 per ton. It had previously reached $55,200 as its highest level since March?2. Broker?Marex stated in a report that the metal, which is used primarily as solder for electronic devices, is expected to be benefited by global chip shortages due to?ongoing issues with supply at tin-producing operations. Other?metals include LME zinc, which rose 0.7% to $3.454 per ton. Lead also increased 0.1% to $1.976 and nickel gained 1.4% to $20,160.
-
Constellation Energy beats its profit forecasts on the back of strong power demand and Calpine's boost
Constellation Energy, a U.S.-based power company, beat Wall Street expectations for the?first quarter adjusted profit on a Monday. It was helped by?increased power demand and contributions from recently acquired Calpine assets. In premarket trading, shares of 'the company' rose by?nearly?5%. According to the Energy Information Administration, U.S. electricity consumption is expected to continue to increase in 2026 and in 2027. Constellation is the largest U.S. nuclear power operator. After completing the?Calpine purchase in January, Constellation has expanded beyond its nuclear heavy fleet, adding a large portfolio of gas-fired generators that give it?more versatility in high-demand market such as Texas or California. The company announced earlier this year that it plans to spend $3.9 billion on capital expenditures and has increased its share buyback authorization to $5 Billion, as it prepares to meet the growing demand for cleaner electricity. Constellation has also completed commercial operation of the Pin Oak Energy Center in Fairfield (Texas), a 460 megawatt natural gas-fired power plant. As part of its regulatory 'commitments' related to the acquisition of Calpine, in March the company announced that it would sell a portfolio PJM generation assets for $5 billion to LS Power. The total quarterly operating revenue was $11.12 billion compared to $6.79 from the previous year. According to LSEG, the Baltimore, Maryland based company reported an 'adjusted profits of $2.74 for the three-month period ended March 31. This was higher than the $2.57 average analyst estimate. The nuclear fleet produced 44,666 Gigawatt-hours,?down from the 45,582 that was produced a year earlier, due to more planned outage days than last year. (Reporting by Dharna Bafna in Bengaluru; Editing by Tasim Zahid)
-
Russell: The impact of the closure on Chinese EVs is not limited to oil, but also extends beyond it.
The Indian diet cola consumer and the buyer of an electric vehicle may appear to have little in common. But they both face the risk of being affected by the closure of the Strait of Hormuz. The world economy will be affected by the second and third round effects of the closure of the narrow waterway. Already, the price of refined fuels like diesel and gasoline has increased and inflation is a result. Electric vehicles (EVs), which allow users to reduce their dependence on fossil fuels, are considered by many to be a big winner in the current conflict between Iran and the United States. EVs, however, are still exposed to the Strait of Hormuz because the manufacturing of their batteries relies on sulphuric acids. This is a component that is used in the extraction of nickel and lithium. The high-pressure acid-leach method is essential for the extraction of battery-grade Nickel from ore in mines in Indonesia, which is the world's largest producer of metal. Copper and lithium are also produced in Australia. Before the U.S.-Israeli attack on Iran on February 28, about half of the world's seaborne sulphur passed through the Strait of Hormuz and largely went to Asia. Sulphur is produced as a byproduct when crude oil or gas is refined into fuels. Middle East countries like the United Arab Emirates, Saudi Arabia, and Kuwait are major suppliers of raw materials used to produce sulphuric acids. Bulk carriers usually transport sulphur, but volumes have fallen since the Iran conflict began. According to Kpler's commodity analysts, only 30,000 tons of metric sulphur made it through in April and 188,000 tons in March. Kpler reported that this was a decrease from the average of 1.27 millions tons per month during the three months before the beginning of the conflict. Delivered prices in Asia have risen by 50% since the beginning of the war, to $880 per ton. Sulphuric Acid costs will rise for nickel, lithium, and copper miners. But the greater concern is that there could be a shortage of sulphuric acids. The risk is that some miners may have to cut back production if they cannot obtain enough sulphuric acids. RISE IN CONCERN The sulphuric-acid supply is becoming increasingly difficult to secure on a long-term basis, according to several mining executives from Indonesian and Australian companies that attended the Asian Battery Raw Materials Conference held in Hanoi last month. China's EV makers and battery manufacturers are vulnerable to any disruption in the supply of lithium as well as nickel from Australia. Alternatives to sulphuric acids are available, but are not suitable for producing battery-grade Nickel. For copper and lithium, they require more energy to produce smaller volumes. The processing of metals may not be a crisis yet, but the closer we get to that point the longer the Strait of Hormuz is effectively closed. This raises the issue of what Beijing will do if the threat to its EV industry and battery industries is more than just a remote possibility. The logical next step would be to increase pressure on Iran, its ally, and Donald Trump in the United States to reach an accord that at least reopens all traffic through the Strait of Hormuz. Other impacts are already felt, besides crude oil and LNG. Before the Iran?war, about 8% of the global aluminium supply passed through the Strait of Hormuz. This has now largely ceased. Kpler data shows that 20,000 tonnes of lightweight metal left the Strait of Hormuz in April. This is down from a previous average of 1,26 million tons during the three months before the beginning of the war. Loss of these cargoes have tightened the supply of aluminium in India. This has led to a shortage of Diet Coke which is sold only in aluminum cans. This is a 'inconvenience' for Diet Coke consumers, but it also shows how shortages can occur in unexpected places, disrupting supply chains and leading to higher prices. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
-
INDIA BONDS - Oil-led inflation fears are sapping demand for Indian bonds
Indian government bonds fell a little on 'Monday as stalled U.S. - Iran peace talks sent 'oil prices higher fueling concerns about India’s inflation and fiscal prospects. Traders were preparing for a 'potentially firmer April inflation % data. The benchmark 6.48% bond yield for 2035 settled at 7.0317% - a 5.1 basis point increase after Friday's sharpest rise. The yield of the new 10-year bond at 6.94% for 2036 closed up 4.1 basis points to 6.9814%. Donald Trump squashed Iran’s response to a U.S. Peace proposal on Monday, raising fears that the 10-week-old conflict would continue. Brent crude jumped 2.6% to $100 a barrel during Asian trading. Separately on Sunday, Prime Minister Narendra Modi urged Indians not to waste fuel and to reduce their use of fertilisers. He also urged them to limit unnecessary overseas travel, cut down on cooking oil, and reduce the amount they used. Traders said that his remarks reinforced concerns about the impact of energy costs and shortages on inflation. Kruti Chheta is a Mumbai-based fund analyst and fixed income analyst for Mirae Asset Investment Managers (India). A poll of economists revealed that India's April inflation data, which is due on Tuesday will likely move closer to the central banks 4% target, from 3.40% in March. HSBC economists said that with energy and 'El Nino' shocks, they forecasted FY27 inflation to be 5.6% and gross domestic product to be 6%. They also predicted two rate increases in the first and fourth quarters of 2027. India's overnight swap rates soared along with bond yields. The swap rate for a year rose by 7.5 basis points to 5.97%. Meanwhile, the rate for a two-year swap increased by 9 basis points to 6.22%. The five-year OIS was at 6.62% - up 6.25bps.
-
India's SBI loses more than $11 billion over two sessions due to margin squeeze and disappointing earnings
State Bank of India lost more than $11 billion in market value during two sessions due to?narrowing profit margins and disappointing fourth-quarter results that brokers?warned might signal a 'tougher profitability cycle. On Monday, shares of India's largest lender by customer base fell 4.5% to 973.60 Rupees. This was an extension of Friday's nearly 7% fall following the results. The stock dropped more than 10% over two sessions and $11.3 billion was lost. NSE data on Monday showed that the 1,000 strike of SBI was the most heavily?called, indicating that investors are expecting any near-term recovery?in stock price to be capped around that level. The two sessions saw 95 million shares traded, which is almost five times the average 30-day volume of 18.7 millions. Analysts say the lender's fourth quarter?earnings missed reinforced concerns that Indian bank are entering a "tougher profitability cycle", with rising funding costs beginning to erode loan margins. SBI reported on Friday a smaller net interest margin for the quarter of 2.8%, compared to 2.98% during the previous three-month time period. They also missed the profit estimates by analysts. JP Morgan said on Monday that "NIM compression has become more apparent as funding costs reprice quicker", adding that earnings could slow down in the next quarters. "Core earnings are underwhelming and incremental margins are tightening," Bernstein stated, warning that upside catalysts could be limited if margins do not stabilize. Brokerages said that SBI's asset quality was a positive factor, as bad loans and credit costs remained benign. However, they warned it might not be enough to offset margin compression pressures on net interest income. Analysts maintained a positive long-term outlook, citing the strong balance sheet of the bank, its?scale, and market leadership. SBI's gains for the year to date were wiped out by the two-session selling, which left the stock down 0.8%, but it still performed better than the benchmark Nifty50's 8.8% decline.
Iran War raises stakes for US, China ahead of Trump-Xi discussions
The Iran War has further strained U.S. - Chinese ties and is expected to dominate the May 14-15 summit between U.S. president Donald Trump and Xi Jinping, his Chinese counterpart and host in Beijing. Here are some of the main issues that Washington?and Beijing will be dealing with as the U.S. - Israeli war against?Iran reshapes their broader relationship.
IRAN CEASEFIRE CONFERENCES U.S. Treasury?Secretary Scott Bessent said the two presidents would discuss the Iran War, and asked China to "join in this international effort" to open up the Strait of Hormuz for international shipping. Analysts say that while Beijing did work behind the scenes last month to convince Iran to have peace talks with the U.S., it was not acting solely on Washington's orders. China has called for an end to hostilities after the visit of Iran's foreign minister last week.
China said it appreciated Iran's commitment to not develop nuclear weapons while also recognizing Iran’s legitimate right to peaceful use of nuclear power.
The U.S. thinks Iran is trying to build a nuke bomb. They want Iran to give up its right to enrichment and to hand over their stockpile of highly-enriched uranium for a period of 20 years.
Energy security is a growing concern for China as the war continues. Beijing has been forced to cut back on its lucrative exports such as jet fuel or gasoline in order to protect its domestic market.
China imports roughly half of its crude oil from the Middle East. The U.S. Blockade and the Strait of Hormuz closure have left many ships trapped in the Gulf, vulnerable to attack. China's crude oil imports fell by 20% in April compared to a year earlier, according to Chinese data. China's Foreign Ministry has stated that the U.S. blocking of the strait is not in the interest of international cooperation. Last week, it confirmed that a Chinese-manned oil tanker was attacked by a U.S. vessel in the strait.
US SANCTIONS ON IRANIAN OIL AND WEAPON SALES China remains the largest buyer of Iranian oil, despite the pressure from the Trump administration.
Over 80% of Iran's oil shipped has been bound for China as Chinese refiners have taken advantage of the discounted oil sanctioned by the U.S. Kpler estimates China will buy?an estimated 1.38 million barrels of Iranian oil per day in 2025. The U.S. Treasury sanctioned Hengli Petrochemical in April for purchasing Iranian oil worth billions of dollars. This was in response to its threat of sanctions against buyers. The Treasury also wrote to two Chinese banks, warning them of secondary sanctions should they facilitate trade in Iranian oil.
Beijing has reacted. The Ministry of Commerce has ordered companies to not comply with the?U.S. Beijing imposed sanctions on five refiners for the first-time,?invoking legislation that allows Beijing retaliation against?entities who enforce sanctions it considers illegal. The U.S. Treasury sanctioned two Chinese companies and two Hong Kong-based firms just days before Trump's trip. They accused them of providing and facilitating Iran's efforts to buy weapons and materials for ballistic missiles from China. (Reporting and editing by Emelia Sithole Matarise, Mei Mei Chu, and Antoni Slodkowski)
(source: Reuters)