2025-06-26 22:08
HOUSTON, June 26 (Reuters) - Ethane traders Satellite Chemical USA and Vinmar International have received U.S. government letters allowing them to load ethane on vessels destined for China but prohibiting unloading ethane in China without authorization, sources familiar with the matter said. The letters received Wednesday from the U.S. Department of Commerce follow a licensing requirement imposed several weeks ago on ethane exports to China, stalling shipments and leading vessels to drift or anchor around the U.S. Gulf Coast. Sign up here. The letter could be perceived as the administration preparing to lift the restriction, industry sources and analysts said. Even so, there would likely still be some reluctance to load ethane - which is extracted from U.S. shale gas and primarily used as a petrochemical feedstock - as China-bound vessels could be stuck in limbo depending on how long the full-path restriction plays out, said AJ O'Donnell, an analyst at Tudor Pickering Holt & Co. The U.S. also sent similar letters to Enterprise Products Partners (EPD.N) , opens new tab and Energy Transfer (ET.N) , opens new tab on Wednesday, Reuters reported exclusively. China's Satellite Chemical Co Ltd (002648.SZ) , opens new tab, the parent of Satellite Chemical USA, and Vinmar declined to comment. Around half of all U.S. ethane exports head to China, and the halt in flows has pushed ethane prices lower on worries of domestic oversupply. The restrictions are likely to cut into profits of top ethane producers. Supertanker Gas Bluebonnet loaded for China's Satellite Chemicals at Energy Transfer's Nederland facility in Texas on June 12 and was near the Panama Canal on Thursday, ship tracking data on LSEG and Kpler showed. At least nine other tankers were drifting or anchored along the U.S. Gulf, while two were moored at loading docks. In the near term, export terminal operators such as Energy Transfer and Enterprise could benefit as they can push their buyers to load at the docks, industry sources said. Still, Enterprises Morgan Point dock near Houston could see lower volumes as a result of the ethane restrictions, Tudor Pickering Holt & Co's O'Donnell said. Chinese petrochemical firms use ethane, extracted from natural gas, as a feedstock because it is a cheaper alternative than naphtha, while U.S. oil and gas producers need China to buy their natural gas liquids as domestic supply exceeds demand. https://www.reuters.com/business/energy/satellite-chemical-vinmar-get-us-govt-letters-preventing-ethane-unloading-china-2025-06-26/
2025-06-26 22:05
PARIS, June 26 (Reuters) - The Financial Action Task Force (FATF), a global financial crime watchdog, on Thursday called on countries to take stronger action to combat illicit finance in crypto assets, warning that gaps in regulation could have global repercussions. The Paris-based watchdog said that while progress has been made since 2024 in regulating virtual assets, many jurisdictions still have work to do to combat risks. Sign up here. As of April 2025, only 40 of 138 jurisdictions assessed were "largely compliant" with FATF's crypto standards, up from 32 a year earlier. "With virtual assets inherently borderless, regulatory failures in one jurisdiction can have global consequences," FATF said in a statement. Illicit crypto wallet addresses may have received up to $51 billion in 2024, according to blockchain analytics firm Chainalysis. FATF said that countries continue to face difficulties in identifying who is behind virtual asset transactions. The report is the latest sign of rising concern among financial authorities about crypto-related risks to the financial system. In April, the EU's securities watchdog warned that the expanding crypto sector could pose risks to broader financial stability, especially as links with traditional markets deepen. FATF also raised concerns about the use of stablecoins, a type of cryptocurrency pegged to fiat currencies, by "various illicit actors", including North Korea, terrorist financiers and drug traffickers. It said most illicit crypto activity now involves stablecoins. The FBI has said that North Korea was responsible for the theft of approximately $1.5 billion worth of virtual assets from crypto exchange ByBit in February - the largest ever crypto theft. North Korea’s mission to the United Nations in New York did not respond to a request for comment. https://www.reuters.com/sustainability/boards-policy-regulation/global-financial-crime-watchdog-calls-action-crypto-risks-2025-06-26/
2025-06-26 21:41
LONDON/NEW YORK, June 26 - Two Canadian pension funds have halted a long-running auction for renewable energy developer Cubico Sustainable Investments that they had hoped could be valued at more than $6 billion, including debt, three people familiar with the matter said. The Montreal-based Public Sector Pension Investment Board (PSP) and Ontario Teachers' Pension Plan (OTPP) decided to explore a sale of the company that operates wind and solar farms across Europe, North and South America and Australia, nearly two years ago, when low-carbon energy companies were enjoying a period of rising valuations. Sign up here. However, the offers made were not enough to persuade the shareholders to agree to a sale, two of the people said. The process was not expected to restart imminently, one of the people and a third one said. Some bidders valued Cubico at around 5 billion euros ($5.9 billion) including debt, two of the sources said. Spanish infrastructure fund Qualitas Energy and KKR-backed power producer ContourGlobal were among the parties interested, the people said. Cubico, PSP, Qualitas, ContourGlobal and OTPP declined to comment. A representative for KKR had no immediate comment. Some investor interest in the sector has waned, especially in the United States, due in part to a rush for more power sources, including polluting ones, to meet soaring power demand for artificial intelligence projects, and Donald Trump's continued support for fossil fuels on his return to office. The owners originally expected the sale to fetch a valuation, including debt, of around 10 times Cubico's 2023 earnings of $625 million before interest, tax, depreciation and amortisation, Reuters reported previously. The process had attracted interest from at least one corporate utility as well as financial firms betting that clean power companies would become more valuable as governments pushed to reduce planet-warming emissions. Bankers were hoping Trump's drive to loosen regulations would drive a deals boom, but market volatility and geopolitical concerns have hampered some activity so far. Counting all its concentrated solar power and transmission line technology, Cubico has a total 2.8 gigawatts of generation capacity. It was formed in 2015 when the two funds partnered with Banco Santander. They bought equal shares of the Spanish bank's stake in 2016. ($1 = 0.8538 euros) https://www.reuters.com/sustainability/climate-energy/canadian-funds-shelve-6-billion-sale-renewables-company-cubico-sources-say-2025-06-26/
2025-06-26 21:16
June 26 (Reuters) - Energy and industrial products supplier DNOW (DNOW.N) , opens new tab said on Thursday it would buy MRC Global (MRC.N) , opens new tab in an all-stock deal valued at $1.5 billion, including debt. The combined company will operate over 350 service and distribution locations in more than 20 countries, serving customers across the upstream, midstream, downstream, gas utility, and broader industrial sectors. Sign up here. The deal adds to the ongoing consolidation in the oilfield services and industrial supply sector, as companies combine to expand geographic reach, broaden product offerings and improve operational efficiency. MRC Global is a distributor of pipe, valves, fittings, and automation products, primarily serving the energy, gas utility and industrial markets. Under the terms of the deal, MRC Global shareholders will receive 0.9489 of DNOW shares for each MRC share, giving the deal per share value of $13.85 and representing a premium of 6.8%, according to Reuters calculation. MRC shares rose 14% in extended trade, while DNOW also gained 1.9%. The deal is expected to close in the fourth quarter of 2025, upon which, DNOW shareholders will own about 56.5% of the new company, while MRC shareholders will hold 43.5%. The companies expect the deal to generate $70 million in annual cost savings within three years, driven by supply chain efficiencies, systems integration and public company cost savings. The deal is also expected to be accretive to adjusted earnings per share in the first year after closing. DNOW CEO David Cherechinsky will lead the combined company, which will continue to operate under the DNOW name and remain headquartered in Houston, Texas. Two MRC Global board members will join DNOW's board, expanding it to 10 directors. https://www.reuters.com/legal/transactional/dnow-acquire-mrc-global-15-billion-all-stock-deal-2025-06-26/
2025-06-26 21:10
LONDON, June 26 (Reuters) - Shipping costs for the Gulf have fallen in the past two days after a ceasefire was reached between Israel and Iran, although rates could rebound if tensions increase, shipping and insurance industry sources said on Thursday. The conflict had raised concerns that Iran could close Hormuz, the strait between Iran and Oman through which around 20% of global oil and gas demand flows amid broader fears that oil could soar to $100 a barrel. Sign up here. Shipping rates for supertankers, which can carry 2 million barrels of oil, jumped over the past week before the ceasefire - more than doubling to over $60,000 a day. Rates were quoted around $50,000 a day on Thursday, freight data showed. "Tanker rates ... have been pulling back following the halt to hostilities between Israel and Iran," Jefferies analyst Omar Nokta said in a note. Israel and Iran agreed to a ceasefire on Tuesday after 12 days of war. Greece's shipping ministry on Thursday eased requirements for its merchant fleet, no longer advising them to report voyages through Hormuz, saying the situation "appears to have been improved". War risk insurance premiums for Gulf shipments softened to between 0.35-0.45%, from a peak of 0.5% on Monday, sources said. This compares with levels of around 0.3% in recent months. The cost of a seven-day voyage is based on the value of the ship and the drop will translate into tens of thousands of dollars less in additional costs each day. "Rates have definitely softened," said David Smith, head of marine with insurance broker McGill and Partners. "Whilst war premiums are still significant there is a large number of war risk insurers looking to underwrite risks and offer capacity, which in combination with the improved political situation is adding ever downward pressure on rates. That said, the situation remains very fluid." Iran would respond to any future U.S. attack by striking American military bases in the Middle East, Supreme Leader Ayatollah Ali Khamenei said on Thursday, in his first televised remarks since the ceasefire. https://www.reuters.com/business/energy/gulf-shipping-costs-drop-israel-iran-ceasefire-holds-2025-06-26/
2025-06-26 21:09
ORLANDO, Florida, June 26 (Reuters) - TRADING DAY Making sense of the forces driving global markets Sign up here. By Jamie McGeever, Markets Columnist The dollar slid and stocks surged on Thursday as investors ramped up bets that U.S. interest rates will soon be cut, after President Donald Trump, in his latest attack on Fed Chair Jerome Powell, reportedly said he may name his replacement early. In my column today I look at where the "pain trades" for investors may lie in the second half of the year. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Markets 'run it hot' Juice the economy. That seems to be the Trump administration's broad plan, which will be achieved in time by tax cuts, deregulation, and loose fiscal policy. And loose monetary policy. Most definitely loose monetary policy. Pressure from the White House on the Fed to cut interest rates is nothing new. The president has unleashed several verbal tirades towards Chair Jerome Powell for not doing so, branding him "very stupid", "very dumb" and of "low IQ". Powell's term as chair expires in May next year, and he insists he can't be fired. So Trump is now considering naming his replacement early, who could operate as a "shadow" Fed chair, undermining Powell's influence. It remains to be seen how effective or even viable this would be. But the fact it's being floated is pouring fuel on market moves that were already beginning to catch fire - the dollar is tumbling, Fed rate cut bets are being ramped up, stocks are flying, and "Big Tech" is getting its mojo back. The dollar on Thursday slumped to its lowest in more than three years against a basket of major currencies - performing especially poorly against European currencies - and is on track for its worst first half of any year in over half a century. The Trump administration will likely be quite happy with the way markets are reacting - a more export-competitive dollar, lower short-term yields, and higher stocks. And if you look further out, higher nominal growth and above-target inflation to inflate away the debt. The danger is these moves snowball and the dollar goes into a more rapid freefall, triggering widespread market dislocation. But we're not there yet, and investors are running with it. Hawkish Fed could inflict markets' biggest 'pain trades' As the first half of the year closes, financial markets are in limbo, waiting to see how the kaleidoscope of global trade deals will – or won't – come together after July 9, when Washington's pause on its "reciprocal tariffs" expires. But if investors are wrong-footed, which trades will be the most vulnerable? The state of suspended animation in today's markets is remarkably bullish. U.S. growth forecasts are rising, S&P 500 earnings growth estimates for next year are running at a punchy 14%, corporate deal-making is picking up, and world stocks are at record highs. The uncertainty immediately following President Donald Trump's April 2 "Liberation Day" tariffs seems a distant memory. The relief rally has ripped for nearly three months, only taking a brief pause during the 12-day war between Israel and Iran. It's a pretty rosy outlook, some might say too rosy. If we do see a pullback, what will be the biggest "pain trades"? The major pressure points are, unsurprisingly, in asset classes and markets where positioning and sentiment are most overloaded in one direction. As always with crowded trades, a sudden price reversal can push too many investors to the exit door at once, meaning not all will get out in time. To identify the most overloaded positions, it's useful to look at the Bank of America's monthly global fund manager survey. In the June survey, the top three most-crowded trades right now are long gold (according to 41% of those polled), long "Magnificent Seven" tech stocks (23%), and short U.S. dollar (20%). This popularity, of course, means these three trades have been highly profitable. The "Mag 7" basket of Nvidia, Microsoft, Meta, Apple, Amazon, Alphabet and Tesla shares accounted for well over half of the S&P 500's 58% two-year return in 2023 and 2024. The Roundhill equal-weighted "Mag 7" ETF is up 40% this year, and the Nasdaq 100 index, in which these seven stocks make up more than half of the market cap, this week hit a record high. Meanwhile, the gold price has virtually doubled in the last two-and-a-half years, smashing its way to a record high $3,500 an ounce in April. And the dollar is down 10% this year, on track for its worst first half of any year since the era of free-floating exchange rates was established more than 50 years ago. SLASH AND ... BURN? In some ways, these three trades are an offshoot of one fundamental bet: the deep-rooted view that the Federal Reserve will cut U.S. interest rates quite substantially in the next 18 months, a scenario that would make all these positions money-spinners. Even though the Fed's revised economic projections last week were notable for their hawkish tilt, rates futures markets have been upping their bets on lower rates, largely due to dovish comments from several Fed officials and a sharp fall in oil prices. Traders are now predicting 125 basis points of rate cuts by the end of next year. Economists at Morgan Stanley are even more dovish, forecasting no change this year but 175 basis points of cuts next year. That would take the Fed funds range down to 2.5%-2.75%. Lower borrowing costs would be especially positive for shares in companies that can expect high future growth rates, like Big Tech. Low rates are also, in theory, good for gold, a non-interest-bearing asset. But, on the flip side, it's difficult to construct a scenario in which the economy is chugging along, supporting equity performance, while the Fed is also slashing rates by 175 bps. Easing on that scale and at that speed would almost certainly signal that the Fed was trying to put out a raging economic fire, most likely a severe slowdown or recession. While risk assets may not necessarily collapse in that environment, over-extended positions would be exposed. Granted, this isn't the first time investors have banked on Fed cuts in the past three years, and we have yet to see a major blow-up as a result. Markets have handled "higher-for-longer" rates much better than many observers warned, soaring to new highs in the process. Still, if "pain trades" do emerge in the second half of the year, it will likely be because of one sore spot: a hawkish Fed. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/world/china/global-markets-trading-day-2025-06-26/
