2024-10-22 11:43

Oct 22 (Reuters) - German steelmaker Salzgitter (SZGG.DE) , opens new tab cut its full-year guidance on Tuesday, reporting a drop in its earnings during the first nine months of 2024 against the backdrop of a sustained weak economic environment. Salzgitter said in a statement it now expects 2024 earnings before interest, taxes, depreciation and amortization (EBITDA) of between 275 million euros ($297.69 million) and 325 million euros, down from a previous range of between 400 million and 500 million. The company also said it anticipates one-off expenses of up to 120 million euros this year for "additional measures" on top of its previously announced cost-cutting programme "Performance 2026". The expenses are set to be used especially for restructuring measures in the Trading Business Unit, Salzgitter said. The trading business unit's core segment is the Salzgitter Mannesmann Handel Group. Salzgitter's preliminary nine-month EBITDA result amounted to 322 million euros versus 576.0 million euros a year earlier, burdened by an impairment of around 130 million euros. This was due to adjustments on assets of the companies of Mannesmann Precision Tubes Group in its Steel Processing Business Unit, the statement said. ($1 = 0.9238 euros) Sign up here. https://www.reuters.com/markets/commodities/german-steelmaker-salzgitter-cuts-full-year-guidance-2024-10-22/

2024-10-22 11:24

Buyers seek shorter-term contracts with resell flexibility Japan's LNG demand falls due to nuclear restarts, renewables Intermediaries needed to bridge gap between buyers and sellers SINGAPORE, Oct 22 (Reuters) - Japan and other top liquefied natural gas (LNG) buyers are calling for more supply flexibility in order to adapt to variable power demand, industry executives said on Tuesday. LNG suppliers such as Qatar prefer long-term contracts with buyers that can last decades to secure financing for what can be multi-billion dollar projects. However, in recent years with more producers entering the global market, buyers are seeking shorter-term contracts with flexibility to resell cargoes when their demand is low. "What we are looking for is flexibility in both our long- and short-term contracts in order to manage the uncertainties we face," Jonathan Westby, senior vice president of LNG at Japan's JERA Global Markets, which handles 40 million metric tons of LNG annually, told an industry conference. He said the company faces an increasingly variable and less predictable customer load, and buys and sells LNG depending on the weather and nuclear power availability. The outlook for Japan's LNG demand is falling due to nuclear reactor restarts and more renewable energy, but the pace of decline is uncertain. Nuclear power accounted for 9% of Japan's power generation mix last year. Japan shut all 54 of its reactors after a powerful 2011 earthquake and tsunami triggered a meltdown at the Fukushima nuclear plant. Japan now runs 11 nuclear reactors, with restarts contributing to an 8% fall in LNG imports last year to the lowest in 14 years. In top LNG importer China, power demand fluctuates between summer and winter and by region, said Zhang Yaoyu, global head of LNG and new energies at state-run PetroChina International. "Unfortunately in China, we live in an environment where there are huge supply and demand imbalances," he said. Both companies, along with other buyers at the Asia Gas Markets Conference, said supply diversification is key to managing fluctuating demand. LNG supplier Mexico Pacific's chief marketing officer Sungbok Park said that while long-term deals are still preferred, it is seeing contract terms evolve on the buyer's and seller's side to enable more flexibility in managing volumes. "This flexibility is becoming even more important as market conditions continue to shift, so existing producers and portfolio suppliers are warming up to flexible contract structures," he said. "However, for new projects, we still need 15-20 year commitments to meet project financing requirements." Intermediaries can step in to bridge the gap between buyers and sellers, said Steve Hill, executive vice president at trading house Mercuria. "What producers and buyers want are diverging over time. Producers are typically looking for 20-year contracts with buyers, to enable the financing to develop projects ... while buyers tend to have more uncertainty to manage," he said. "So the world has more of a need for intermediaries to manage the risk between what producers want and what buyers want." Sign up here. https://www.reuters.com/business/energy/lng-buyers-call-more-flexible-supply-adapt-variable-power-demand-2024-10-22/

2024-10-22 11:15

Oct 22 (Reuters) - Sterling hit a fresh 2-month low against the dollar on Tuesday while investors remained focused on the central banks' easing paths and the possible outcome of the U.S. elections. The U.S. dollar index was just off a 2-1/2-month high on expectations the Federal Reserve will take a measured approach to rate cuts, while the too-close-to-call U.S. election keeps investors on edge. British public borrowing in the first six months of the tax year came in higher than official forecasts, data showed on Tuesday, underscoring the challenge facing finance minister Rachel Reeves in her first budget next week. Analysts expected the UK budget to tighten spending, a move that could weaken the economy and lead the BoE to more rate cuts than markets are currently pricing. Sterling was last down 0.05% at $1.2883, after hitting its lowest since mid-August at $1.2967. The pound has so far benefited from the Bank of England's cautiously hawkish tone, signalling a more gradual cutting cycle relative to peers, while UK growth was outperforming relative to the euro area. "We think these forces (rate and growth divergence) will continue to weigh on the (euro/pound) cross also in the coming months," said Kirstine Kundby-Nielsen, analyst at Danske Bank. "Longer-term, some of these pound tailwinds look set to fade, and we expect not least a more dovish BoE to eventually weigh on sterling." The BoE's Megan Greene said she still believed the central bank should be cautious about cutting borrowing costs. Analysts noted that Thursday's release of the UK PMI data could affect market expectations for the BoE's monetary easing path. Last week, sterling tumbled to its lowest two months after softer-than-expected British inflation. The single currency rose 0.14% to 83.41 pence per euro. The repricing of the euro area policy rate outlook, with investors discounting some chances of a 50 basis points rate cut in December, was weighing on the single currency last week. Sign up here. https://www.reuters.com/markets/currencies/sterling-hits-fresh-two-month-low-against-dollar-2024-10-22/

2024-10-22 10:48

BERLIN, Oct 22 (Reuters) - German Chancellor Olaf Scholz promised on Tuesday to boost investment, attract skilled workers and cut red tape to revive growth in Europe's biggest economy, which is on track to contract for the second straight year. Blaming inflation, high interest rates and geopolitical conflicts, Scholz also criticised the European Union, saying red tape was holding up investment and he urged Brussels to take drastic action. "Together, we have to get out of this bad situation where bad figures lead to bad sentiment - and bad sentiment leads to even worse figures," Scholz told a conference of the BDA employers' association. "We need more growth. The pie has to get bigger again," he said, adding his planned growth initiative aimed to cut bureaucracy, offer incentives for investment and ensure energy was affordable and sustainable. He stressed the importance of bringing more skilled workers into the job market, including from abroad, and creating more flexibility with working hours and the pension age. Earlier this month, the economy ministry cut its economic forecast, saying it expected a 0.2% contraction this year, compared with a previous projection of 0.3% growth, underscoring Germany's place as a laggard among the Group of Seven major economies. The export-oriented economy is having to adjust after benefiting for decades from cheap energy from Russia for industry. Germany has weaned itself off that since Moscow's full-scale invasion of Ukraine and is turning to alternatives. Scholz also said the government, made up of his Social Democrats, the Greens and the pro-business Free Democrats, aimed to strengthen Germany as a financial centre and that it was crucial for the European Commission to complete the capital market union. On EU bureaucracy, he said Brussels was right to ensure that common rules apply in the internal market. "But some things have come out of this that make you wonder," he said, citing conditions on sustainability set out by the European Commission, adding Brussels had to "finally cut bureaucracy on a large scale". Sign up here. https://www.reuters.com/markets/europe/germanys-scholz-working-with-industry-boost-growth-2024-10-22/

2024-10-22 10:47

TSX ends down 6.63 points at 24,716.70 Shares of goeasy tumble 9.4% Utilities sector loses 0.6% Materials advances 1.6% as gold climbs Oct 22 (Reuters) - Canada's main index inched lower on Tuesday, weighed by declines for the financial and utilities sectors, but the move was modest as commodity prices rose and ahead of an expected outsized interest rate cut by the Bank of Canada. The Toronto Stock Exchange's S&P/TSX composite index (.GSPTSE) , opens new tab ended down 6.63 points, or 0.03%, at 24,716.70, its second straight lower closing level after notching a record high on Friday. U.S. benchmark the S&P 500 was also down marginally as investors awaited more earnings to assess the health of American companies. "The big news in Canada this week is tomorrow with the Bank of Canada. So today, we're most likely following the U.S. markets," said Colin Cieszynski, chief market strategist at SIA Wealth Management. The BoC is expected to slash its benchmark rate by 50 basis points, its first such reduction in 15 years outside of the pandemic era. The heavily weighted financials sector slipped 0.2%, pressured by a decline of 9.4% for the shares of goeasy Ltd (GSY.TO) , opens new tab after brokerage BMO downgraded the consumer lender to "market perform" from "outperform". The utilities sector was down 0.6% and consumer discretionary lost 0.7%. The materials sector, which includes metal miners, was among the sectors that gained ground. It added 1.6% as gold climbed to an all-time high. The price of oil also rose, settling 2.2% higher at $72.09 a barrel. Energy was up 0.1%. Shares of Dye & Durham Ltd (DND.TO) , opens new tab climbed 9.5% after the legal software firm confirmed a report that it has expanded scope of its strategic review process to include a sale or merger. Sign up here. https://www.reuters.com/markets/tsx-futures-fall-amid-focus-wall-street-earnings-boc-rate-decision-2024-10-22/

2024-10-22 10:29

TAIPEI, Oct 22 (Reuters) - Taiwan's government offered rare details on Tuesday of its wartime food plan, saying it is taking monthly inventories of crucial supplies like rice and making sure they are properly stored across the island in case of a Chinese blockade. China, which views democratically governed Taiwan as its own territory, has over the past fives years staged almost daily military activities around the island, including war games that have practised blockades and attacks on ports. Taiwan's government rejects Beijing's sovereignty claims. China's latest war games around the island, carried out last week, included blockading key ports and areas, and assaulting maritime and ground targets, Beijing said. In a report to parliament about preparations in case of a Chinese blockade, a copy of which was reviewed by Reuters, Taiwan's agriculture ministry said it has ensured that rice stock piles were above a three-month level as required by law and that food supplies were stored across the island in a bid to "lower attack risks". The ministry said Taiwan's current rice stocks were enough to support the island for at least seven months and plans on rice rationing through supply stations across the island were being made in case of a food crisis. During a blockade, more farmland will be used to grow rice, the ministry said, adding it will also prioritise growing sweet potatoes, soy beans and fresh vegetables as well as using more ponds for aquaculture. In a scenario in which sea fishing is not allowed, the ministry said the island's fish feed inventory will be enough to support fishing in ponds for more than three months. The ministry said it was planning to set up a task force to ensure food supply safety by taking a monthly inventory of the island's food resources. Taiwan, a farming powerhouse during Japanese colonial rule from 1895 to 1945, depends on imports for the majority of its food needs as farm land was taken over for factories during rapid industrialisation starting in the 1960s. Taiwan's food self-sufficiency rate in 2023 dropped to 30.3%, the lowest level in 18 years, according a previous report from the ministry. In a separate report to parliament on preparations for the same scenario, the National Security Bureau said China's cyber forces were honing their skills to infiltrate key online infrastructure like telecoms in a bid to destabilise Taiwan with misinformation during a conflict with China. Additionally, over the past two years, China has carried out "joint combat readiness patrols" near Taiwan three to four times per month, the bureau added. The number of tanker aircraft used for aerial refuelling, landing ships and other forces participating in the training has been gradually increased, it said. "This underscores that the communist military has continued to escalate its military threat against Taiwan in an effort to establish a blockade and control of our external sea lines of communication," the bureau said. Sign up here. https://www.reuters.com/world/asia-pacific/preparing-chinese-blockade-taiwan-maps-out-wartime-food-plans-2024-10-22/