2025-08-14 07:16
Petrochemical exports have fallen amid global oversupply South Korea is a major naphtha importer, crucial for global oil markets Concerns over financial health of large petrochemical company YNCC South Korean president supports tax incentives, regulatory changes SEOUL, Aug 14 (Reuters) - South Korea's government will announce a plan this month to restructure the country's petrochemical sector, which is in a "grave" situation, Industry Minister Kim Jung-kwan said on Thursday. South Korean petrochemical companies must take lessons from the restructuring of the country's shipbuilding industry in the late 2010s, when shipmakers had to liquidate assets and streamline business areas amid a sharp drop in orders, Kim said. Sign up here. Margins have plunged for petrochemical companies in South Korea and across the globe due to an oversupply of products caused by relentless capacity additions in the last decade, particularly in China, the biggest petrochemical market. Demand has also been sluggish over the last three to four years. "A restructuring in the petrochem industry has been highly expected, given the industry is running merely 80% of total capacity in Korea now - meaning we have about a 20% glut here," said Hwang Kyu-won, an analyst at Yuanta Securities Korea. Kim, who was speaking at a shipyard, said the petrochemical industry needed to take voluntary measures, including the "adjustment" of facilities, his ministry quoted him as saying. There have been concerns as well over the financial health of South Korea's loss-making Yeochun NCC Co (YNCC), a Yeosu-based petrochemical maker that local media says faces 180 billion won ($130 million) in loans coming due at the end of August. South Korea's DL Holdings said in a regulatory filing on Thursday its subsidiary DL Chemical Co will issue a 150 billion won ($108.38 million) loan to YNCC, in which it holds a major stake. YNCC did not respond to phone calls seeking comment. South Korea's government can use YNCC's travails as an opportunity for a large-scale restructuring in the industry, said the analyst Hwang. Analysts do not expect global petrochemical margins to recover before 2027. The last major restructuring for South Korea's petrochemical industry was in 1999 during the Asian Financial Crisis, when YNCC was formed. President Lee Jae Myung, who took office after a snap election in June, pledged during his campaign to pursue tax support for mergers and acquisitions in the petrochemical industry, and to exempt companies from antitrust regulations to allow more coordination of production and operations. South Korea’s exports of petrochemical products stood at $21.7 billion in the first half of this year, down 11.1% from a year earlier, amid price declines and global oversupply. Total exports of petrochemical products were $48 billion in 2024, accounting for 7% of South Korea's total exports and a top-five export item after semiconductors, automobiles, machinery and petroleum products. South Korea is one of the world's largest importers of naphtha, a derivative of crude oil that is refined into chemical products used in plastics for automobiles, electronics, clothing and construction. If the country is forced to cut capacity, it could impact global oil markets. Other South Korean petrochemical companies besides YNCC are also seeing asset reshuffling. HD Hyundai (267250.KS) , opens new tab is looking to acquire Lotte Chemical’s (011170.KS) , opens new tab naphtha cracker, or the companies may merge their cracker operations, trade sources have said. HD Hyundai said nothing has been decided yet. ($1 = 1,381.3000 won) https://www.reuters.com/business/energy/south-korea-announce-plan-restructure-petrochemical-sector-facing-grave-2025-08-14/
2025-08-14 07:01
Brent and WTI up 0.7%, after hitting two-month low in previous session Trump threat, Fed interest rate cut bets support prices Trump meets Putin on Friday to discuss war in Ukraine Rising supply adds to bearish outlook TOKYO/SINGAPORE, Aug 14 (Reuters) - Oil prices climbed on Thursday as investors weighed what impact the U.S.-Russia summit on Ukraine on Friday might have on Russian crude flows, with secondary sanctions looming over Moscow's customers, while a rising supply outlook capped gains. Brent crude futures rose 45 cents, or 0.7%, to $66.08 a barrel at 0631 GMT, while U.S. West Texas Intermediate crude futures gained 44 cents, also up 0.7%, to $63.09. Sign up here. Both contracts hit their lowest in two months on Wednesday after bearish supply guidance from the U.S. government and the International Energy Agency (IEA). Trump on Wednesday threatened "severe consequences" if Putin does not agree to peace in Ukraine. Trump did not specify what the consequences could be, but he has warned of economic sanctions if the meeting in Alaska on Friday proves fruitless. "The uncertainty of U.S.-Russia peace talks continues to add a bullish risk premium given Russian oil buyers could face more economic pressure," Rystad Energy said in a client note. "How Ukraine-Russia crisis resolves and Russia flows change could bring some unexpected surprises." Trump has threatened to enact secondary tariffs on buyers of Russian crude, primarily China and India, if Russia continues with its war in Ukraine. "Clearly there's upside risk for the market if little progress is made" on a ceasefire," said Warren Patterson, head of commodities strategy at ING, in a note. The expected oil surplus through the latter part of this year and 2026, combined with spare capacity from the Organization of the Petroleum Exporting Countries, means that the market should be able to manage the impact of secondary tariffs on India, Patterson said. But things become more difficult if we see secondary tariffs on other key buyers of Russian crude oil, including China and Turkey, he said. Expectations the U.S. Federal Reserve will cut rates in September are also supportive for oil. Traders are almost 100% agreed a cut will happen after U.S. inflation increased at a moderate pace in July. Treasury Secretary Scott Bessent said he thought an aggressive half-point cut was possible given recent weak employment numbers. The market is putting the odds of a quarter-percentage point cut at the Fed's September 16-17 meeting at 99.9%, according to the CME FedWatch tool. Lower borrowing rates would drive demand for oil. Oil prices were kept in check as crude inventories in the United States unexpectedly rose by 3 million barrels in the week ended on August 8, according to the U.S. Energy Information Administration on Wednesday. Also holding oil prices back was an International Energy Agency forecast that 2025 and 2026 global supply would rise more rapidly than expected, as OPEC and its allies increase output and production from outside the group grows. https://www.reuters.com/business/energy/oil-climbs-russia-supply-risks-ahead-summit-2025-08-14/
2025-08-14 06:59
Earnings forecast cut on geopolitical, trade policy uncertainty Revenue rises 10%, transport volumes grow 10.6% Gemini cooperation with Maersk boosts performance FRANKFURT, Aug 14 (Reuters) - Container shipping company Hapag-Lloyd (HLAG.DE) , opens new tab reported a 3.1% decline in first-half net income on Thursday and lowered the top end of its full-year earnings forecast, largely due to uncertainty over geopolitical issues and U.S. trade policy. The world's fifth-largest shipping firm projected full-year earnings before interest and taxes ranging between 200 million euros and 1.1 billion euros, compared with a previously expected range of breakeven to 1.5 billion euros. Sign up here. Frequent changes in U.S. tariff policies have caused volatility in trade patterns, and the tense security situation in the Red Sea has also been a burden, resulting in 24% lower EBIT at 619 million euros in the six months, the German company said. Houthi militant attacks on Middle Eastern shipping have clouded the outlook for global shipping, with vessel owners being forced to sail a costly alternative route around Africa. Net income in the first half fell 3.1% to 709 million euros ($829 million). However, revenues were up 10% at 9.7 billion euros and transport volumes grew 10.6% to 6.7 million 20-foot-equivalent (TEU) containers, spurring CEO Rolf Habben Jansen to talk of a "solid note overall." The company's operational collaboration with bigger rival Maersk (MAERSKb.CO) , opens new tab - known as Gemini - got off to a good start, but costs needed to be optimised, he said. Germini brings together a network of 340 ships on seven trade corridors. ($1 = 0.8549 euros) https://www.reuters.com/business/autos-transportation/hapag-lloyd-lowers-2025-earnings-forecast-after-half-year-profit-slips-2025-08-14/
2025-08-14 06:45
Aug 14 (Reuters) - Shares in Hellofresh fell on Thursday after the German firm cut its outlook for the full year on Wednesday, blaming a strengthening euro and a decline in sales at its ready-to-eat business. The stock was down 6% in early trade at 0606 GMT, having lost 25% of its value since January and almost 90% since its August 2021 peak. Sign up here. The German meal-kit maker now expects its full year adjusted core profit (AEBITDA) to come between 415 million euros and 465 million euros ($486 million - $544 million), down from a previous range of 450-500 million euros. In a statement, the firm said this reflects the euro rising more than expected against currencies such as the U.S. dollar and the Canadian dollar compared to when the guidance was first provided earlier this year. The company makes more than 60% of its sales in North America, which means its revenue loses some of its value when converted into the European currency. A company compiled poll expects AEBITDA to come at 466 million euros this year. HelloFresh had seen a change in demand from customers cooking meals from scratch during the COVID-19 pandemic to preferring ready meals they only need to reheat after a day in the office. It responded by producing more ready to eat (RTE) goods. But, in the RTE business, second quarter revenue fell by almost 6% from a year ago. The Berlin based company also said it's extending its share buy-back program by up to 100 million euros to a total of up to 175 million euros and to extend its duration until no later than December, 31 2026. ($1 = 0.8546 euros) https://www.reuters.com/markets/currencies/hellofresh-shares-fall-after-outlook-cut-2025-08-14/
2025-08-14 06:40
LAGOS, Aug 14 (Reuters) - Nigeria has approved a phased plan to refinance 4 trillion naira ($2.61 billion) in electricity sector debt to help stabilise the nation's ailing power industry and improve supply, its finance minister said. The debt, primarily owed to 27 power generation companies for outstanding invoices between 2015 and 2023, has stifled investment in the industry and exacerbated chronic power outages in Africa's most populous nation. Sign up here. President Bola Tinubu pledged to settle the claims following a recent verification. He approved the plan on Wednesday. Speaking after a cabinet meeting in the capital Abuja, finance minister Olawale Edun said the refinancing would be executed within three to four weeks under the oversight of the debt management office. "It is now fully approved, and we move to implementation," Edun said. The plan will likely involve bond issuances and other instruments to spread out the repayment liability over time. This aligns with broader sector reforms, including a 35% cut in electricity subsidies and tariff hikes for urban consumers, measures expected to save the government around 1.1 trillion naira, or around $718.58 million, annually. ($1 = 1,530.8000 naira) https://www.reuters.com/sustainability/boards-policy-regulation/nigeria-approves-26-billion-electricity-sector-debt-refinancing-plan-2025-08-14/
2025-08-14 06:39
Sales expected to fall by 5% to 7% Third quarter saw "enormous" uncertainty, CEO says Shares indicated 2.3% lower FRANKFURT/DUSSELDORF, Aug 14 (Reuters) - German conglomerate Thyssenkrupp cut its full-year outlook for investments and sales on Thursday, blaming weak demand for its products as U.S. President Donald Trump's import tariffsdisrupt global trade of autos, machines and building materials. The company, with a broad portfolio that includes steelmaking and submarine production, now expects sales to fall by 5% to 7% during its fiscal year to September 30. It previously expected sales to drop by up to 3%. Sign up here. Thyssenkrupp said that the introduction of tariffs had curbed international trade and hit global supply chains, and that things could get worse should the conflict in the Middle East escalate further. "The past quarter was characterised by enormous macroeconomic uncertainty," Thyssenkrupp CEO Miguel Lopez said. "We are very much feeling the weak market environment in key customer industries such as the automotive, engineering and construction industries." Shares in the company were indicated 2.3% lower in pre-market trade. Adjusted earnings before interest and tax (EBIT) are now forecast to be at the lower end of the 0.6 billion to 1 billion euros ($0.7 billion to $1.2 billion) guidance range, the company said. In its fiscal third quarter from April to June, adjusted EBIT rose 4% to 155 million euros, missing the 174 million average estimate in an analyst poll provided by the group. ($1 = 0.8544 euros) https://www.reuters.com/markets/europe/thyssenkrupp-cuts-sales-outlook-investments-trumps-tariffs-stir-uncertainty-2025-08-14/
