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Sources say ADNOC is set to receive unconditional EU antitrust approval for Covestro.
Two people with direct knowledge said that the Abu Dhabi state oil company ADNOC will receive unconditional EU antitrust approval in its $16.6 billion acquisition of German chemicals firm Covestro for 14.7 billion euros. The largest deal ever signed by ADNOC demonstrates the Middle East's plans to diversify investments and reduce their dependence on oil as global energy transitions move towards cleaner sources of energy. According to the source, the European Commission is not concerned about competition because the companies are not overlapping. The EU Competition watchdog declined to comment. ADNOC could not be reached immediately for comment. The company expects the deal to close in the second half this year. Covestro, who earlier Tuesday reduced its core profit expectation for 2025, has said that it does not speculate on regulatory proceedings. "XRG and Covestro work constructively with the relevant authorities to file FSR, FDI, and merger control filings. The company stated in an email that it was confident all approvals would be received by the long-stop deadline (02.12.2025). XRG, the international investment arm within ADNOC, will be the majority shareholder of Covestro. Covestro manufactures plastics and chemicals used in the automotive, engineering, construction and construction sectors. The South African and Indian Competition Watchdogs have cleared the deal already without demanding any remedies. The EU Foreign Subsidies Regulation, FSR, also applies to this acquisition. It focuses on unfair foreign aid. The rules are designed to curb unfair competition by non-EU companies that receive government subsidies. ADNOC is still awaiting FSR approval for this deal. Last year, it received unconditional EU approval under the FSR to acquire Fertiglobe.
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Argentex's collapse on untested currency swings: from rebound to rescue
Argentex’s chief executive Jim Ormonde, and its chief financial officer Guy Rudolph bought shares of the London-listed forex broker in early April as the stock recovered from a March plunge. Ormonde was appointed 18 months ago amid a sagging stock performance. In a statement on April 2, Ormonde said that Argentex "reset" its 2024 goals and is now "well-positioned to return to profitable expansion." The company's shares have risen more than 50% in the past year. The company's liquidity position plummeted in a flash, and the financial markets reacted with a dramatic shift. Argentex became one of the most visible corporate victims in a matter of weeks as a result of the market volatility caused by the global war on trade. IFX Payments bought Argentex for a fraction of its value, and both the CEO and CFO are gone. Argentex declined comment. IFX, a UK-based company, did not respond to requests for comments. The 2nd of April was also known as "Liberation Day" when U.S. president Donald Trump announced sweeping tariffs in return against a number of countries. This triggered increased volatility among trading firms, with currency markets moving widely. The Swiss franc, the safe haven currency, surged by 7% against U.S. dollars in April. Meanwhile, Deutsche Bank's currencies volatilty index, which measures currency fluctuations, rose up to 28% and reached its highest level for two years. Argentex has navigated past big market crashes such as the decline of the pound against the dollar, Brexit and COVID-19. According to two people who are familiar with the firm, despite having done stress tests and scenario modelling, the company had not planned for the rapid devaluation of the dollar against many major currencies. The information they shared was confidential, so the company asked that their names not be used. One person said that Argentex is most vulnerable to sudden increases in the value of the Swiss franc, the euro, and the pound against the dollar. ZERO-ZERO LINES Argentex stated in its annual report for 2024 that it "performs regular stress tests to ensure the group is able to meet its current and future obligations if there were a significant change to the market." According to this person, Argentex, when the market moved in its favor, was exposed to cash calls by its liquidity providers. It also found itself unable to ask for margins from many of its customers due to its zero-zero line. Barclays and Citigroup declined to comment. They are two of Argentex's liquidity suppliers. According to an ex-forex broker, this business model is used by smaller FX brokers in London. It does not require the customer to pay initial margin or additional funds to cover intra-day volatility. Smaller brokers instead include margin costs into the price they charge for trading. The person stated that Argentex has paid out more than 20 million pounds (26.65 millions) in the 12 days following April 3. Argentex's full-year financial statements show that at the end December of last year, it had 18.4 millions pounds in cash. In its financial statements, the company stated that its cash flow position fluctuates significantly from month to month as a result of margin calls and working-capital movements. One Argentex employee, speaking under condition of anonymity as they were not authorized for public comment, said that "zero-zero contract aren't necessarily the devil." They said that the issue was "ensuring the business is healthy enough to accept those contracts". One of the two individuals said that the reasons for Argentex’s liquidity crisis were complex. It lacked a hefty financial balance sheet like its larger rivals, and was unable adequately to hedge its positions. The company was attempting to simplify its relationships with liquidity providers and implement a Treasury function to manage their positions when the markets were thrown into chaos by Trump's Tariffs. They also said that they were trying to boost its cash position through new products. In April, the company announced that it would launch its digital account and payment businesses this summer. Argentex, which was founded in 2012, received its authorization as an electronic-money institution (EMI) by the UK Financial Conduct Authority in 2018. According to Argentex's website, a quarter are from the financial industry. According to company filings from 2024, the family office of John Beckwith - one of Britain's richest financiers - backed the company in 2013. Beckwith's Pacific Investments Management held a 17% stake in the company before the deal was announced with IFX, according to LSEG. Pacific Investments refused to comment. EMIs have flooded London in the past decade. They offer payment services and enjoy a lower regulatory burden than banks. FCA regulations require EMIs keep counterparty and liquid risks in check, including the risk that a party may not fulfill its obligations. In a February letter to all CEOs and directors of payment firms, including EMIs (Electronic Money Institutions), the FCA stated that it was still concerned about risks for consumers and integrity of the financial system. The FCA gave EMIs a deadline of March 2025 for them to test their operational resilience in the event of a shock. When contacted for this article, the FCA declined comment. Argentex's other regulators in Australia, Dubai, and the Netherlands declined to comment on this matter or didn't respond to any requests for comments. FIELDING OF BIDS The company requested that trading be suspended on April 22. It revealed that its near-term liquidity was being affected by margin calls related to its foreign currency forward and options book after the rapid devaluation of the U.S. Dollar in response to U.S. Tariffs and Government Spending Cuts. The company announced that it would need "an immediate injection of cash to ensure the Company’s continued solvency." The board had rejected two of the three takeover offers, including one from IFX Payments. The board sought a bridging deal with IFX Payments to meet its liquidity needs. Argentex had announced on April 25 that it had reached a deal to buy IFX for approximately 3 million pounds. CEO Ormonde was leaving immediately. Argentex shares began trading again this week and fell 91%. The company announced that it had received a loan of 20 million pounds from IFX, and that Rudolph, the finance chief along with other board members had resigned. ($1 = 0.7505 pounds)
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Attenborough's new film shows both destruction and hope for the oceans of our planet
In a new documentary premiering on Tuesday, British naturalist David Attenborough said there was hope for the future health of our oceans. The film shows the extent of human-caused damage and the oceans’ capacity to recover. Attenborough's latest work, "Ocean", charts the challenges that the seas have faced over the course of his career, from industrial fishing practices and coral bleaching to destructive industrial fishing. In a trailer for the film, he says, "I now understand that the most important place on Earth, is not on land but at sea." The release of the film in its entirety coincides with Attenborough’s 99th Birthday. The premiere will take place in London on Tuesday, with a red carpet and celebrities walking the blue one. Attenborough stated that despite depicting the current bleak state of ocean health, discoveries made during the filming provide hope. He said, "The ocean is capable of recovering faster than we ever thought possible. It can bounce back to its life." "If we can save the ocean, we will save our planet." "After a lifetime spent filming our planet, I'm certain that nothing is more vital." The release of the film comes before the United Nations Ocean Conference in Nice, France in June, where it is hoped that more countries will ratify an agreement for 2023 to protect ocean biodiversity. Only 21 countries have signed the agreement, far short of the required 60. (Reporting by Susanna Twidale, Editing by Hugh Lawson).
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Copper boosted by weaker dollar and focus on tariff tensions
The dollar eased on Tuesday, but the impact of a slowdown in global demand and growth due to U.S. tariffs on imports and the trade war between China & the United States weighed on sentiment. At 1053 GMT, the benchmark copper price on London Metal Exchange was up by 0.7% to $9,436 per metric tonne. Tom Price, Panmure Liberum's analyst, said: "We are neutral for now and bearish in the second half of the calendar year due to seasonality and policy changes." Tariffs will hurt this year's trade once they have a full impact. The focus is now on whether the trade tensions will reduce after China announced last week that it was evaluating a proposal to hold discussions over U.S. president Donald Trump's tariffs of 145%. China's Commerce Ministry stated that Beijing was open to discussions, signaling a possible de-escalation of the trade war. China is the largest consumer of industrial metals, such as copper. Copper is used in power and construction industries. Copper stocks monitored by the Shanghai Futures Exchange, or ShFE, in warehouses was a positive for traders. Around 89,000 tonnes have fallen nearly 70% from late February, and are now at their lowest level since mid-January. Traders said that the expectations of a copper market surplus are worrying. According to a survey released last week, the copper market will have a surplus of over 60,000 tons in this year. This will be followed by a deficit in 2026. Edward Meir of Marex, the consultant, said that he believes these estimates will come down in time, particularly if supply issues continue. He was referring to the shortages in concentrates used to produce copper metal. Technically, copper has strong support around $9,310 to $9,315 at the convergence of the 100-day and 200-day moving averges. Around $9,475, or the 50-day average, is where resistance on the upside lies. The lower dollar price of metals, which is cheaper for holders other currencies, would increase demand. Aluminium dropped 0.5%, to $2.419 per ton. Zinc increased by 0.7%, to $2.626, while lead rose 0.3%, to $1.939; tin rose 3.5%, to $31,775; and nickel increased 0.8%, to $15.610 per ton. Reporting by Pratima Deai. Mark Potter edited the article.
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Marathon Petroleum, a top US refiner, suffers a quarterly loss due to lower margins
Marathon Petroleum reported a loss for the first quarter. The company is the latest U.S. refining firm to be hit by reduced margins in a period of increased maintenance and turnaround activities across the industry. The company reported that the results represented the second largest planned maintenance quarter of its history. The Findlay-based company reported a refining margin of $13.38 per bar in the first quarter. This compares to $19.35 in 2024. Turnaround activity, also known as planned maintenance, is usually performed by refineries in the first quarter of the year to prepare them for the increased demand during summer driving season. The scheduled downtime limits the refineries' utilization, which in turn affects their ability to maximize margins. It also impacts quarterly performance. U.S. refinery margins as measured by the 3-2-1 Crack Spread The market has recovered in the first quarter of 2025, after hitting multi-year lows. However, it continues to be under pressure due to lingering challenges. Rivals Phillips 66, Valero Energy and HF Sinclair reported losses as well. Marathon CEO Maryann Manen stated in a press release that "we are well positioned to meet the summer demand, as seasonal trends will improve margins. We remain optimistic about its long-term prospects." Marathon, the largest U.S. refiner in terms of volume, reported that its crude capacity was utilized at 89% during the third quarter, which resulted in a total throughput 2.8 million barrels a day (bpd), up from 2.7 million bpd one year ago. The company anticipates a total refinery output of 2.9 millions bpd in the second quarter. The company's net loss for the quarter ended March was $74m, or 24c per share. This compares to a profit in the previous year of $937m, or $2.58/share. According to data compiled by LSEG, analysts had on average expected a loss per share of 53 cents. (Reporting by Arunima Kumar in Bengaluru; Editing by Sriraj Kalluvila)
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Duke Energy's electricity rates beat quarterly estimates
Duke Energy beat Wall Street's expectations on Tuesday for revenue and profit in the first quarter, thanks to higher electricity prices, increased retail sales, and a colder Winter. U.S. utilities are arguing for higher electricity bills, as the power consumption surges due to the growth of AI data centers and increased manufacturing in the United States. According to the U.S. Energy Information Administration, the U.S. power demand is expected to reach record levels in 2025 and 26. After years of stagnation, the U.S. nuclear sector has also become popular as businesses look for cleaner energy to power data centers. The U.S. Nuclear Regulatory Commission renewed Duke Energy's Oconee Nuclear Station operating licenses by 20 years in late March. Duke Energy's nuclear plants will provide more than half of their electricity to customers in the Carolinas by 2024. These plants represented over 96% the company's clean power production. A colder-than-expected-winter also helped the utility as customers needed more electricity and natural gas to heat their homes. The adjusted earnings for its electric utilities segment in the first quarter were $1.28 billion compared to $1.02 billion at the same time last year. Gas utilities posted a profit adjusted of $349 millions in the first quarter compared to $284 million one year ago. LSEG data shows that the quarter's revenue came in at $8.25billion, exceeding analysts' estimates of $8.06billion. Charlotte, North Carolina based company reported an adjusted profit per share of $1.76 for the three-month period ended March 31 compared to analysts' average estimates of $1.60. (Reporting and editing by Sahal Muhammad in Bengaluru, with Pooja Menon reporting from Charlotte, North Carolina)
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Ball Corp. raises its profit forecast due to a resilient aluminum packaging market and cost control
Ball Corp, a manufacturer of aluminum cans, raised its profit forecast for the year after exceeding analysts' expectations in the first quarter. The company attributed this to a resilient market and tight control on costs. The company's forecast for full-year profit growth is between 11%-14%. This compares to the previous estimate of a rise of over 10%. Ball said that the 25% tariff on Aluminum imposed by Donald Trump, the U.S. president, was manageable and the company was working to reduce the volatility of the metal's prices. The company has also placed a strong emphasis on local manufacturing and sourcing to minimize exposure to fluctuations in international trade. Weak forecasts by Constellation Brands, the company's client, and other packaged food companies such as Kraft Heinz and PepsiCo have stoked concern over a sluggish packaging demand. Ball Corp.'s aluminum bottles and cups are popular with environmentally-conscious consumers. This is due to their recyclable nature and reliance on recycling, as opposed to plastics and processing-intensive steel tin coated. LSEG data shows that the company's revenue for its first quarter rose 7.8%, to $3.10 Billion, compared to estimates of $2.89 Billion. The global aluminum packaging shipment increased by 2.6% while the selling, general, and administrative costs decreased by 37%. The company exceeded expectations by 76 cents a share.
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EU legislators set to accelerate softer CO2 emissions targets for cars
The European Parliament has cleared the way for a rapid approval of EU CO2 emission targets for cars and vans, which will give automakers more time and reduce potential fines. European automakers warned that failing to meet existing targets this year could lead to fines up to 15 billion euro ($17.0 billion), as the goals depend on selling more electric cars, a segment in which they are behind their Chinese and U.S. competitors. After heavy lobbying by automakers, the European Commission has proposed that they meet their targets using the average emissions for the period of 2025-2027 rather than this year. Instead of debating for months, EU legislators voted to approve a motion that would have allowed the change to be approved quickly. On Thursday, they will vote on the proposal from the Commission itself. The EU still has to approve the proposal. Ursula von der Leyen, President of the European Commission, said that this change will give European automakers a "breathing room". Volkswagen stated last week that the longer compliance period will still be a burden by 2025. E-Mobility Europe, a group representing the electric transport industry in Europe, has warned that changing the CO2 target period to 2025 will further put Europe behind China on EVs as well as deter investment in charging infrastructure. Reporting by Philip Blenkinsop, Benoit van Overstraeten and Kirby Donovan.
Spot prices increase on forecast of cooler weather and less wind
The cool weather on Tuesday pushed up the price of European prompt electricity, with little temperature increase expected for the remainder of the week. Wind power supply is also falling.
LSEG research showed that Germany would be a net electricity importer on the day ahead when wind capacity was down in the region in the morning, shifting the balance in favor of bullishness.
Overall, the capacity of conventional generation is expected to remain constant.
At 1000 GMT, the price of French baseload electricity for Wednesday was up 80.6% at 32.5 Euros ($36.76).
The German contract equivalent rose 12.2%, reaching 96.5 euros. This is a significant premium to France.
LSEG data indicated that the German wind power production was expected to drop to 7.9 GW on Wednesday, from 13.7 GW and in France, to 5.9 GW.
The French nuclear capacity has increased by two percentage points, to 65%.
The power consumption in Germany is expected to rise slightly, from 54.2 to 54.4 GW. In France it will fall by 1.5 GW to 43.3 GW.
The German baseload for the year ahead increased by 2.4% to 85.5 euros/MWh. This was mainly due to oil and carbon prices that were higher.
The French equivalent rose 2.1% to 63.05 Euros.
The benchmark contract on the European carbon markets was up by 2.6% to 69.22 Euros per metric ton.
EPEX SPOT said that it traded a volume of 73.0 tWh on its European intraday and day-ahead markets in April 2025. This is 8% higher than the previous year.
In its earnings report, Uniper updated the market about the ongoing legal dispute between the two groups.
Uniper's trading and storage division was the main cause of its 83% drop in net profit for the quarter. ($1 = 0.8842 Euros) (Reporting and Editing by Louise Heavens, Vera Eckert)
(source: Reuters)