2024-04-30 13:25

LONDON, April 30 (Reuters) - Analysts have cut price forecasts for European Union carbon permits for 2024 to 2026 following record low figures last year for emissions covered by Europe's carbon market. EU Allowances (EUAs) are forecast on average at 63.96 euros a metric ton this year and 74.00 euros in 2025, a Reuters survey of eight analysts showed, down 13.7% and 11.2% respectively from forecasts made in January. The average forecast for the second quarter of this year was 62.30 euros a ton, down 18.8% from the January forecast of 76.76 euros a ton. The EU's Emissions Trading System (ETS) forces manufacturers, power companies and airlines to pay for each ton of carbon dioxide they emit by surrendering carbon allowances as part of Europe's efforts to meet its climate targets. Data published by the European Commission earlier this month showed 2023 emissions covered by the ETS fell a record 15.5% as renewable power output soared. "EUA fundamentals continue to look bearish for the remainder of the year, with power emissions likely to post another significant year-on-year drop in 2024," said Trevor Sikorski, head of natural gas and carbon at Energy Aspects. The benchmark EU carbon contract currently trades around 66 euros a ton and has fallen almost 20% since the start of the year. Paula VanLaningham, director of carbon research at LSEG, said signs of improved industrial activity in some sectors and demand for permits from the shipping sector could help lift prices from current levels by the end of the year and into 2025. "That said, we don’t expect these more bullish factors to have a significant impact on prices much ahead of 2025, barring a massive change in the geopolitical picture," she said. The shipping industry was included in the ETS from January this year with shipping firms needing to surrender permits to cover 40% of intra-EU voyages for 2024, rising to 70% in 2025 and 100% in 2026. The average price forecast for 2026 was 92.48 euros a ton, down 7.6% from the January forecast of 100.13 euros a ton. Sign up here. https://www.reuters.com/markets/carbon/analysts-cut-eu-carbon-price-forecasts-2023-emission-slump-2024-04-30/

2024-04-30 13:23

April 30 (Reuters) - Chinese smelters, the world's biggest buyers of mined copper, are concerned they will lose power to negotiate prices if BHP Group (BHP.AX) New Tab, opens new tab, known locally as "the big miner", succeeds in its bid for rival Anglo American (AAL.L) New Tab, opens new tab. BHP, the world's largest listed mining group, is fine-tuning an offer that could make it the biggest producer of copper, a metal in high demand as the world seeks to shift towards electric vehicles and a lower carbon economy. The proposed takeover would give BHP control of roughly 10% of global mined supplies, surpassing Chile's Codelco and Freeport-McMoRan (FCX.N) New Tab, opens new tab. "This is not good news for China given the heavy reliance on external supply, and Chinese companies hold limited resources," Zhang Weixin, a metal analyst at China Futures, said of the potential tie-up. The China Smelters Purchase Team (CSPT), a group of top smelters that negotiates with miners on yearly prices to treat and refine copper, has no current plans to urge Beijing to investigate the deal, three sources familiar with the matter said. CSPT's head could not be reached for comment and BHP declined to comment. China's State Administration for Market Regulation also did not immediately respond to a request for comment. There is a precedent of Chinese regulators getting involved in deals that impact copper supply. In 2011, Glencore (GLEN.L) New Tab, opens new tab agreed to China's demand that it sell its interest in Xstrata's Las Bambas copper project in Peru to clinch their multi-billion dollar deal. The world's leading consumer of the metal, China imported 27.54 million metric tons of copper ore and concentrate in 2023, worth $60.1 billion, customs data showed, more than half of global supplies. TIGHT MARKET In China, BHP is most active in the spot market, where it sells to domestic smelters using tenders, according to smelters and analysts, signing contracts for fixed volumes to be priced via an index provided by third parties. By comparison, rival miners Freeport and Antofagasta (ANTO.L) New Tab, opens new tab agree an annual fixed sale price with China's smelters that is widely used as an industry benchmark. Chinese copper smelters said the prospect of more supply being sold under index pricing could increase uncertainty for costs and planning. None of the smelter officials wished to be identified given the sensitivity of the matter. One of them said index pricing meant smelters would be unable to estimate production costs and to draw up a full-year production plan. Smelters are still recovering from supply shortages driven by the December closure of the First Quantum's (FM.TO) New Tab, opens new tab Cobre Panama mine, which drove down treatment charges (TCs) - their main source of income. Treatment charges are fees paid by miners for converting raw materials into metal. They fall when mine output decreases as smelters have to compete for concentrate. Adding to their difficulties, the concentrate market is expected to be in deficit for the next three years. Last week, spot treatment charges (TCs) in China turned negative for the first time since pricing agency Fastmarkets started the index in 2013. That compares with 2024 benchmark New Tab, opens new tab TCs settled between Chinese smelters and Freeport and Antofagasta at $80 per ton. Much as consolidation raises concerns, however, William Adams, head of base metals research at Fastmarkets in London, said it could calm the market longer term by tackling the high cost and risk of developing mines. "Look at the current tightness in spot treatment and refining charges, which is because there is insufficient mine supply to meeting smelter's demand, highlights the need to invest more upstream," he said. Sign up here. https://www.reuters.com/markets/commodities/copper-smelters-leading-buyer-china-wary-bhp-anglo-american-tie-up-2024-04-30/

2024-04-30 13:23

April 30 (Reuters) - Warsaw chief prosecutor Malgorzata Adamajtys said on Tuesday an investigation had been launched into Polish refiner Orlen's Swiss unit, including allegations of links between its former CEO and "terrorist organisations". Polish website Onet had reported on Monday that the former CEO of Orlen Trading Switzerland, referred to only as Samer A. due to Polish privacy laws, was suspected by Orlen's internal security unit of having contacts with Lebanon's powerful Iran-backed Hezbollah group. "All circumstances will be established, which are also known to prosecutors from the press, radio and television, including possible connections with terrorist organizations, will be the subject of verification in these proceedings," Adamajtys told reporters when asked about allegations of links between Samer A. and Hezbollah. Samer A. denied in an interview with Polish private radio RMF that he had any connections with Hezbollah. "I have been to Poland many times, I am a Polish citizen, I have a Polish passport. I am treated by the current authorities as a second-class citizen," he said, adding that while he was currently abroad, he was not hiding from Polish law enforcement. State prosecutor Dariusz Korneluk said that apart from OTS, investigators were also examining whether Orlen artificially lowered fuel prices ahead of a 2023 election and sold assets at below fair value as part of a merger with smaller rival Lotos. On Monday, Polish Prime Minister Donald Tusk said he had called the country's chief prosecutor and secret services coordinator to discuss potential links between the former CEO of Orlen, Daniel Obajtek, and Hezbollah. Obajtek responded on social media platform X that Tusk was "looking for scandals where there are none". Sign up here. https://www.reuters.com/world/europe/poland-probing-alleged-links-between-orlen-units-ex-ceo-terrorist-organisations-2024-04-30/

2024-04-30 13:18

April 30 (Reuters) - Public Service Enterprise Group (PEG.N) New Tab, opens new tab posted a fall in first-quarter profit on Tuesday, as higher interest expenses and unfavorable weather weighed on the electric and gas utility. Interest rates in the U.S. have hit multi-decadal highs since the Federal Reserve began hiking rates last year, leading to higher borrowing costs. The Newark, New Jersey-based company's operating and maintenance costs, which include restoration costs due to bad weather, rose 5.4%, while interest expenses climbed about 13.8% to $205 million in the first quarter. New Jersey and other states in the eastern half of the U.S. experienced a massive winter storm at the start of the year which knocked out power for many homes and businesses. "On the operations side, PSE&G met the challenge of quickly restoring service to tens of thousands of customers following a severe rain and windstorm early in the year..." said CEO Ralph LaRossa. The utility's electricity and natural gas distribution segment, PSE&G, posted a revenue of $2.33 billion in the first quarter compared with $2.29 billion last year. Peer FirstEnergy (FE.N) New Tab, opens new tab, which also provides electric services to customers in New Jersey and other states, missed Wall Street estimates for first-quarter profit last week, dragged by higher interest expenses and milder weather. The company said net income for the first quarter fell to $532 million, or $1.06 per share, from $1.29 billion, or $2.58 per share, a year ago. Operating revenues for the January-March quarter fell to $2.76 billion from $3.76 billion a year ago. The company provides electric and gas services to about 4.3 million customers across New Jersey and also operates nuclear-generating assets through its PSEG Power segment. Public Service Enterprise reaffirmed its full-year adjusted profit forecast of $3.60 to $3.70 per share, compared with analysts' expectations of $3.67 per share, according to LSEG data. Adjusted earnings came in line with analysts' estimates at $1.31 per share, but was below the $1.39 per share in the same period last year. Sign up here. https://www.reuters.com/business/energy/public-service-enterprises-first-quarter-profit-drags-interest-cost-weighs-2024-04-30/

2024-04-30 13:05

LAGOS, April 30 (Reuters) - Gasoline shortages persisted in Nigeria's major cities on Tuesday, causing a sharp increase in prices and exacerbating the country's cost-of-living crisis. Prices in some retail outlets in Lagos and Abuja rose above 850 naira, while those outside major cities, such as Kano, soared above 1000 naira, though the government-owned oil firm, NNPC Ltd, which imports the products sells at an average price of 617 naira. President Bola Tinubu's government last year removed subsidies and allowed private firms to import but foreign currency shortages and a cap on the price of petrol have meant NNPC remains the sole importer. An NNPC spokesperson said that some outlets were taking advantage of this situation to maximise profits. Gasoline is widely used in cars and to power generators for households and small businesses and the current shortage is weighing on the economy, which is already struggling with the highest inflation rate in 28 years. Many commuters were left stranded waiting for buses that were stuck in long queues at various retail stations. Analysts say the price of basic food items would see a sharp increase if shortages persist. This will add to frustrations after the government raised electricity tariffs for some consumers. "You have the money for transport but no bus, you have the money for to buy fuel but there is scarcity. No light (electricity), heat everywhere, and high costs of goods. What did we do to deserve our leaders," someone posted on the X platform. The NNPC has attributed the shortages to logistical challenges, assuring customers that it has more than 1.5 billion litres of petrol, which was enough to last at least 30 days. But it is in debt and is unable to produce enough crude for its refineries. Sign up here. https://www.reuters.com/world/africa/nigerian-gasoline-prices-soar-shortages-worsen-cost-living-crisis-2024-04-30/

2024-04-30 13:00

April 30 (Reuters) - Top U.S. refiner Marathon Petroleum (MPC.N) New Tab, opens new tab beat first-quarter profit estimates on Tuesday, as demand for refined products remained at high levels and global fuel supplies tightened due to refinery maintenance activities and disruptions in Russia. The refiner also announced a $5 billion increase to its share repurchase authorization. Heavy refinery maintenance work during the quarter and outages at Russian refineries following Ukrainian drone attacks reduced fuel supplies to global markets. Demand for fuel remained stable. U.S. product supplied, a proxy for demand, averaged at 20.10 million barrels per day (bpd) at the end of March, compared with 19.7 million bpd a year earlier, according to U.S. Energy Information Administration data. Marathon said it completed $648 million of planned turnaround activity in the reported quarter, the highest level in the company's history. Turnarounds lowered utilization to 82%, which contributed to refining operating costs per barrel of $6.14 during the first quarter. Its total throughput was 2.7 million bpd in the January-March quarter, compared with 2.8 million bpd a year earlier. For the second quarter, Marathon expects total refinery throughput of 2.97 million bpd. Refining and marketing margin fell over 27% to $18.99 per barrel for the first quarter, compared with a year earlier, the biggest U.S. refiner by volume said. The beat is not big enough to create a "wow" factor, said analysts at Scotiabank. "Turnaround expense came in higher than guidance suggesting the turnaround did not proceed as smoothly as hoped," Scotiabank added. Margins and profits of U.S. refiners have normalized after hitting sky-high levels in 2022, when Russia's invasion of Ukraine disrupted crude supplies. The refiner posted net income of $2.58 per share, for the three months ended March 31, topping average analysts' estimate of $2.42 per share. It reported a profit of $6.09 per share a year earlier. Sign up here. https://www.reuters.com/markets/commodities/marathon-petroleum-posts-lower-q1-profit-margins-decline-2024-04-30/