2025-01-22 11:48

Jan 22 (Reuters) - The pound rose for a third day to hit a two-week high against the dollar on Wednesday, as a lack of clarity on U.S. President Donald Trump's tariff plans kept a lid on the greenback. Sterling was last up 0.1% at $1.2376, its highest since Jan. 8 . The pound initially fell more than 0.3% in early trading, as data showing that Britain borrowed more than expected in December weighed. But uncertainty around the Trump administration's tariff policies has put pressure on the dollar since Monday, and the U.S. currency continued to edge broadly lower on Wednesday (.DXY) , opens new tab. The pound has gained 1.6% so far this week. Trump did not immediately impose tariffs on U.S. imports on his first day back in the White House, but has said he is considering tariffs of around 25% on Canada and Mexico and around 10% on China from Feb. 1. He has also vowed duties on European Union imports, without providing further details. Asked by reporters at the White House on Monday whether he would impose a universal tariff on all imports into the United States, Trump said: "We may. But we're not ready for that yet." The euro rose 0.14% against the pound to 84.50 pence, having hit its highest since August on Monday at 84.73 pence. Investor concern around Britain's financial outlook has fuelled the pound's around 2% fall against the single currency since the start of the year. "Prospects of a weaker UK economy and more Bank of England easing still paint a negative picture for sterling this year, even though market concerns regarding UK public finances have sufficiently abated," said UniCredit analysts in a note. Markets currently price in about 65 basis points of BoE rate cuts this year. Britain ran a bigger-than-expected budget deficit in December, according to official data on Wednesday, underlining the fiscal pressure faced by finance minister Rachel Reeves. Public sector net borrowing was 17.8 billion pounds ($22 billion), more than 10 billion pounds higher than a year earlier, the Office for National Statistics said. ($1 = 0.8088 pounds) Sign up here. https://www.reuters.com/markets/currencies/sterling-hits-two-week-high-against-dollar-amid-tariff-uncertainty-2025-01-22/

2025-01-22 11:47

Brazilian soy shipments halted over potential plant health issues Suspension affects Terra Roxa, Olam, C.Vale, Cargill, ADM, sources say China takes more than 70% of its soybean imports from Brazil BEIJING/SAO PAULO, Jan 22 (Reuters) - China, the world's biggest soybean buyer, has stopped receiving Brazilian soybean shipments from five firms after cargoes did not meet plant health requirements, according to a statement from the Brazilian government confirming what Reuters had learned from two sources on Wednesday. The phytosanitary-related suspension comes as Brazil has been bolstering its share of the world's biggest soybean market at the expense of the No. 2 exporter, the United States. It's also an unexpected twist in the global agricultural supply chain, as U.S. President Donald J. Trump's threats of renewed tariffs against Chinese imports have increased geopolitical tensions between the world's top two economies. The Brazilian agriculture ministry said the "non-conformity" notice it received from China's General Administration of Customs (GACC) refers to five Brazilian companies, which the ministry did not name. One of the sources told Reuters that since Jan. 8 Brazil has suspended shipments to China from Terra Roxa Comercio de Cereais, Olam Brasil and C.Vale Cooperativa Agroindustrial. On Jan. 14, Chinese customs suspended shipments from Cargill Agricola SA and ADM do Brasil, that source added. Olam, Cargill and ADM together accounted for about 30% of the more than 73 million metric tons of soybeans shipped from Brazil to China in 2024, according to data from shipping company Cargonave Group. However, Brazil's agriculture ministry said only a small volume of soybeans were affected and the impact on the country's exports was minimal. "The companies' units were suspended, but other units of the same companies can continue exporting," said Luis Rua, the Ministry of Agriculture's secretary of commerce and international relations. Archer-Daniels-Midland Co (ADM.N) , opens new tab, the parent company of ADM do Brasil, declined to comment. Cargill Inc, the privately-held U.S. grain trading giant and parent of Cargill Agricola SA, also declined to comment. Juliana Basso de Araújo, owner of Terra Roxa Comercio de Cereais, declined to comment. The parent firms of the other two affected companies did not respond to Reuters' requests for comment. China's GACC did not respond to a request for comment. "When we try to process clearance on customs' website for soybeans shipped by these five companies, we are not able to proceed," said a second source, a trader at a China-based soybean crusher. Countries typically require imported or exported agricultural goods to be inspected to ensure they are free of pests and diseases, to protect local food supplies. HOLD-UP COMES AHEAD OF PEAK LOADINGS Brazilian soybean export shipments remain seasonally light early in the South American harvest. But loadings are due to surge over the coming weeks as more of the harvested crop is moved to market, at which point suspensions could be far more disruptive, market analysts said. Some analysts questioned the timing of the suspensions, so close to Trump's inauguration. China may want to slow shipments from Brazil to wait for crush margins to improve after making big purchases or to give Beijing room to make a trade deal with Washington that could include purchases of U.S. soy, said Jim Gerlach, president of U.S. brokerage A/C Trading. "It could be something to give Xi (Jinping) an opportunity to buy U.S. beans to put in reserve and get some goodwill," Gerlach said. The Brazilian agriculture ministry said the GACC detected the presence of pesticides and pests on a routine inspection of cargos. "The temporary suspension of the companies' units was communicated in advance by GACC to the Brazilian side, demonstrating confidence in the Brazilian inspection system and the robustness of the work carried out by the Brazilian government and exporters," the ministry said. The ministry said Brazil's overall soy exports to China "will not be affected", adding it will provide the needed information for China to lift the temporary suspensions. It was unclear how many cargoes and volumes were affected by the non-conformities, as the Brazilian government did not provide additional details. It also was not clear how long the suspension would last, although traders expected it to be short-term. China, which buys more than 60% of soybeans shipped across the world, now takes more than 70% of its imports of the oilseed from Brazil, eating into U.S. market share. "We are taking it seriously," an official at one of the affected companies told Reuters. He declined to be named due to sensitivities of the issue. China imported a record 105 million metric tons of soybeans in 2024. Sign up here. https://www.reuters.com/markets/commodities/brazilian-soy-shipments-china-5-firms-suspended-phytosanitary-grounds-sources-2025-01-22/

2025-01-22 11:42

DAVOS, Switzerland, Jan 22 (Reuters) - Ships not linked to Israel could begin returning to the Red Sea in as little as two weeks, DP World's deputy chief executive said, adding that could see freight prices "come crashing down". Sea freight prices could drop "at least 20%, 25%" and that could happen over two to three months, Yuvraj Narayan told Reuters on the sidelines of the World Economic Forum meeting taking place in Davos, Switzerland. It is hard to predict a specific timeline, however, the deputy CEO and CFO of the Dubai-owned ports and logistics firm added. Yemen's Houthis said on Sunday they will limit their attacks on commercial vessels to Israel-linked ships and will look into halting all attacks once the Gaza ceasefire is fully implemented. The Iran-backed Houthis have carried out more than 100 attacks on ships since November 2023. They have sunk two vessels, seized another and killed at least four seafarers. They have staged attacks across the southern Red Sea and the Gulf of Aden and still hold 25 crew members from the Galaxy Leader car carrier seized in November 2023. In response many of the world's biggest shipping companies have diverted vessels away from the Red Sea, travelling around the southern tip of Africa instead. Narayan said that has tied up at least 30% more capacity than usual. He said freight rates are expected to come down once the shorter route via the Red Sea and Suez Canal picks up again. Dubai's DP World, which manages ports in countries from Britain to Peru as well as operating warehousing and logistics parks. Asked about possible expansion, Narayan said DP World is looking at the east and west coasts of Africa. "I think there's massive potential there because there's nothing available ...and the cost of moving cargo in Africa is so high that it just makes sense." In Europe, the state-owned conglomerate is working on investment in London Gateway port despite a "challenging" economic environment in the UK due to lack of growth and legacy issues, he said. The $1.3 billion project was reportedly put on hold after two ministers criticised practices at DP World's subsidiary P&O Ferries, but British business minister Jonathan Reynolds in October said the investment was going ahead after talks with the firm. With a general increase in the size of vessels "we have the greatest possible location right now," Narayan said speaking of the project. "We're going to do a complete build-up of London Gateway ...that was always our strategy." Sign up here. https://www.reuters.com/business/autos-transportation/dp-world-says-sea-freight-prices-could-fall-20-if-red-sea-attacks-curbed-2025-01-22/

2025-01-22 11:28

SNB Chairman: does not like negative rates, but ready to use them SNB Chairman: Swiss franc is a safe haven SNB Chairman sees no need to change model of bank oversight DAVOS, Switzerland, Jan 22 (Reuters) - The Swiss National Bank still has room to cut interest rates again and even take rates below 0% if Swiss inflation falls too far, Chairman Martin Schlegel said on Wednesday, although he could not say how likely such a step would be. "At the moment (rates) are at 0.5%," Schlegel told Reuters at the World Economic Forum in Davos, Switzerland. "This means that we still have some room. "In Switzerland no one likes negative interest rates. Also the Swiss National Bank doesn't like negative interest rates. But if we have to do it, we would do it again." The SNB charged negative interest rates for nearly eight years from Dec. 2014 but exited the policy to tackle resurgent inflation after the COVID-19 pandemic. Price rises have since slowed, with inflation within the SNB's 0-2% target range since June 2023 and at 0.6% in January. The SNB cut interest rates from 1% to 0.5% in December, its biggest reduction in more than a decade, and markets expect more cuts this year. Schlegel said the central bank would see whether further adjustments were necessary at its next meeting in March. "At the moment monetary conditions are appropriate, we decide from quarter to quarter and then we will see," he said, adding he could not give a likelihood of rates going negative. Although tariff hikes threatened by the new Trump administration in the United States would have only a limited effect on Swiss inflation, the safe haven franc could be affected by rising global uncertainties, he said. "Whenever there is a crisis, investors tend to buy the Swiss franc," Schlegel said. "This has some effect of course then on monetary conditions in Switzerland. "The Swiss National Bank will look at monetary conditions, so interest rates on the one hand and exchange rates on the other hand, and we will analyse and see what the effects are." The SNB will also play a role in drawing up new banking regulations following the 2023 collapse of Credit Suisse and its subsequent takeover by UBS (UBSG.S) , opens new tab. Schlegel said the Swiss model of financial regulator FINMA overseeing individual banks and the SNB working on the stability of the sector as a whole was generally working well. "So I don't personally see any need for a change here," he said. Sign up here. https://www.reuters.com/markets/rates-bonds/swiss-national-bank-can-cut-rates-further-or-go-negative-chairman-says-2025-01-22/

2025-01-22 11:22

Jan 22 (Reuters) - Chinese state oil and gas company CNOOC (600938.SS) , opens new tab has set its 2025 production target at a record high, between 5.6% and 8.3% above 2024's output. The offshore oil and gas specialist pumped about 720 million barrels of oil equivalent (boe) in 2024, meeting the high end of its target, CNOOC said in a statement outlining its annual strategic outlook on Wednesday. That was up 6.7% from 2023's 675 million boe. CNOOC said it was targeting net production at between 760 million and 780 million boe for 2025, and 780 million to 800 million boe for 2026. That is slightly lower than the company's guidance a year ago for 780 million to 800 million boe for 2025 and 810 million to 830 million boe in 2026. Under the latest guidance, the goal for 2027 is 810-830 million boe. Chief Executive Officer Zhou Xinhuai told analysts and reporters in Hong Kong that the tweak partly reflected the company's divestment of Gulf of Mexico assets announced in December. CNOOC aims to maintain a "prudent and stable" production plan after years of strong growth, Zhou added. For this year's production, offshore China and overseas will account for about 69% and 31% respectively, CNOOC said. The company plans capital spending of between 125 billion yuan and 135 billion yuan ($17-19 billion) this year, versus last year's estimated 132 billion yuan, an all-time high. New domestic production this year will come from Bozhong 26-6 Oilfield Phase I and Kenli 10-2 Oilfield Phase I, both in Bohai Bay off north China, China's largest oil producing region. Globally, new production will flow from projects such as Yellowtail in Guyana and Buzios7 in Brazil. CNOOC said it would maintain an annual dividend payout ratio of no less than 45% of earnings from 2025 to 2027. Separately, Zhou said new U.S. President Donald Trump's government was set to bring a lot of uncertainty to global energy markets. There was unlikely to be an immediate big increase in U.S. shale oil production, despite Trump's campaign to accelerate drilling, Zhou added. ($1 = 7.2756 Chinese yuan renminbi) Sign up here. https://www.reuters.com/business/energy/chinas-cnooc-sets-2025-output-target-new-high-2025-01-22/

2025-01-22 11:08

DAVOS, Switzerland, Jan 22 (Reuters) - Ukraine's largest private energy company DTEK said on Wednesday it plans to invest 450 million Euros ($468.59 million) to expand a wind farm near the Black Sea coast, boosting its capacity. DTEK, most of whose thermal generation capacity has been damaged or destroyed by Russian bombardments, said it would expand its Tyligulska Wind Power Plant from 114 MW to 500 MW. The company, which is owned by Rinat Akhmetov who is Ukraine's richest man, said it had reached a financing deal with lenders for the purchase of 64 wind turbines from Danish manufacturer Vestas (VWS.CO) , opens new tab. DTEK said 370 million euros of the investment would come from bank loans backed by the state-owned Export and Investment Fund of Denmark (EIFO), while DTEK was financing the rest. "The commitment is the largest private sector investment in Ukraine since (R)ussia's full-scale invasion in 2022 and the biggest ever private investment in Ukraine's energy sector." "At full capacity, Tyligulska will produce 1.7 TWh of electricity a year – providing enough electricity to power 900,000 Ukrainian homes," it said, adding that the planned completion date was in late 2026. Most of DTEK's generating capacity had traditionally been in its network of thermal power plants, which have been bombed intensively by Russia during the three-year war in Ukraine. DTEK said last summer that 90% of its thermal generation capacity had been knocked out. The Tyligulska wind farm, which came online in May 2023, is situated 400 kilometres south of Kyiv in the Mykolaiv region. ($1 = 0.9603 euros) Sign up here. https://www.reuters.com/business/energy/ukraine-energy-firm-dtek-plans-470-million-wind-farm-expansion-2025-01-22/