2023-11-09 20:41
Nov 9 (Reuters) - California climate technology company Heirloom on Thursday unveiled what it says is the first U.S. commercial direct air capture (DAC) plant to suck planet-warming carbon dioxide from the air, a milestone in the effort to scale up nascent carbon removal technologies and hit global climate goals. Scientists expect the world will need to remove billions of tons of carbon-dioxide from the air annually. Direct air capture such as that used by Heirloom can secure the CO2, but it is not yet clear whether it can do so at a price that makes the technology practical. The new facility, which uses crushed limestone to capture 1,000 metric tons a year, is part of a ramp up that Heirloom says will cut costs. Current industry prices for carbon removal by direct air capture are around $600-$1,000 a ton, one person familiar with the situation said. Some of Heirloom's first sales for capture and storage, in 2021, were more than $2,000 per ton. The U.S. government is aiming in about a decade for $100 a ton. "We've got to scale. Scale is the only way we're going to be able to move that quickly," U.S. Secretary of Energy Jennifer Granholm said in an interview on Thursday after visiting the site. The new plant, about an hour and a half from San Francisco Bay in Tracy, California, has tall stacks of trays holding limestone open to the air. The rock naturally absorbs CO2 and Heirloom has treated it to do so in a few days. Rock that has captured CO2 is heated with renewable energy to release the gas, and then reused. Heirloom works with startup CarbonCure to store the gas from the new plant in concrete. The Department of Energy is spending billions in grants to build direct air capture demonstration hubs. Heirloom is one of the winners of the largest tier grant. Occidental Petroleum (OXY.N), another hub grant winner, aims to marry acquired DAC technology with its own expertise managing resources underground, where most of the carbon dioxide is expected to be stored. BlackRock Inc, the world's biggest money manager, on Tuesday said it will invest $550 million in Occidental's West Texas plant. https://www.reuters.com/sustainability/climate-energy/climate-tech-company-heirloom-opens-us-commercial-carbon-capture-plant-2023-11-09/
2023-11-09 20:34
Nov 9 (Reuters) - Federal Reserve Chair Jerome Powell on Thursday said that while the Fed is "not going to ignore" a significant tightening in financial conditions from higher bond yields, there is no "direct line" from there to a monetary policy response. The Fed does not want to overtighten policy, Powell said at an International Monetary Fund event, but "the biggest mistake we could make is really, to fail to get inflation under control." The Fed is still trying to judge if it needs to do more and then will consider how long to keep rates high, he said. https://www.reuters.com/markets/us/feds-powell-biggest-mistake-would-be-fail-control-inflation-2023-11-09/
2023-11-09 20:01
SAN FRANCISCO, Nov 9 (Reuters) - U.S. Treasury Secretary Janet Yellen began two days of meetings with Chinese Vice Premier He Lifeng on Thursday in a bid to limit the economic fallout from tensions between Washington and Beijing and keep the lines of communication open. U.S. Treasury officials have sought to downplay expectations for any breakthroughs from the meetings in San Francisco, where U.S. President Joe Biden next week will host a summit of Asia-Pacific Economic Cooperation (APEC) country leaders, including Chinese President Xi Jinping. Biden and Xi are expected to steal the spotlight with a planned meeting on the summit sidelines. Yellen first met with He during a visit to Beijing in July that was among a series of cabinet-level engagements that paved the way for Biden and Xi to meet. In opening remarks, Yellen said she wanted "an open and substantive discussion" on the U.S.-China economic relationship, Beijing's subsidy practices and global challenges such as climate change and debt relief, among other issues. "The United States has no desire to decouple from China: A full separation of our economies would be economically disastrous for both our countries, and for the world," she told He. Flanked by more than a dozen staff on each side facing each other across a swath of marigold flowers, Yellen sought to reassure China that the U.S. wants a healthy economic relationship based on a level playing field. She added she would discuss and explain the reasons behind continued U.S. national security restrictions. CHINA'S CONCERNS He, China's new economic czar, who faces flagging growth at home, said through an interpreter that his engagements with Yellen so far have been "constructive." But he added that the two sides needed to bring their relationship "back to a healthy and stable development." He said he would communicate China’s "key concerns on the economy," including improving the investment and business environment and "to also take effective measures to bring our economic and trade relations back on track" - references to longstanding Chinese objections to U.S. tariffs on its exports and restrictions on U.S. investment in China. The San Francisco meetings mark the first in-person gatherings of new U.S.-China economic and financial forums involving staff-level officials from both sides after their launch in October. But in announcing the consultations on Monday, Yellen said this would not be a recreation of the Obama administration's U.S.-China Strategic and Economic Dialogue, a broad forum that was widely criticized for its lack of substance. A U.S. Treasury official said that a key goal for the meetings was deepening communications with China, gaining a better understanding of the relationship, and avoiding any misunderstandings about U.S. policy decisions. 'FRACTURED' RELATIONSHIP Kelly Ann Shaw, a former White House trade adviser to former President Donald Trump, said it was important for Yellen to re-engage with China, but that the meeting would do little to change the overall trajectory of U.S.-China relations. "This relationship is fundamentally fractured. And I think it's going to stay that way for the foreseeable future," said Shaw, a partner at law firm Hogan Lovells. "So it's about figuring out, what do we want this relationship to look like knowing that? And just because you don't like each other doesn't mean you can't get along where your interests align." Yellen also said that she would discuss cooperation with China on global challenges, including climate change and debt relief for low-income countries, where the U.S. and China "have an obligation to lead." Deputy U.S. Treasury Secretary Wally Adeyemo told Reuters NEXT on Thursday that Yellen also will make it clear that China should "not provide material support for Russia in their war against Ukraine," as firms that do so will incur U.S. sanctions. "We think that having those direct conversations means that they understand us and we understand them," Adeyemo said, adding that new sanctions were coming soon against parties aiding funding of the Hamas militant group in Gaza. https://www.reuters.com/world/us-treasurys-yellen-chinese-vice-premier-he-set-meet-amid-pre-apec-friction-2023-11-09/
2023-11-09 20:01
Nov 9 (Reuters) - U.S. natural gas futures slid about 2% to a two-week low on Thursday on record output and forecasts for mild weather through late November that should limit heating demand and allow utilities to keep injecting gas into storage for a couple more weeks. Front-month gas futures for December delivery on the New York Mercantile Exchange fell 6.5 cents, or 2.15%, to settle at $3.041 per million British thermal units (mmBtu), the lowest close since Oct. 25 for a third day in a row. The U.S. Energy Information Administration (EIA) said it would not release its weekly gas storage report on Thursday due to a planned systems upgrade. EIA will resume its regular schedule next week. Analysts forecast utilities pulled about 7 billion cubic feet of gas from storage during the week ended Nov. 3, the first withdrawal of the 2023/2024 winter season. One bearish factor that has weighed on the futures market for much of this year has been lower spot or next-day prices at the Henry Hub benchmark in Louisiana. The spot market has traded below front-month futures for 179 out of 215 trading days so far this year, according to data from financial firm LSEG. Next-day prices for Thursday at the Henry Hub were up about 9% to $2.18 per mmBtu. Analysts have said that long as the futures market stays in contango - with prices in the second-month higher than the front-month - and spot prices remain far enough below the front-month to cover margin and storage costs, traders should be able to lock in arbitrage profits by buying spot gas, storing it and selling a futures contract. SUPPLY AND DEMAND LSEG said average gas output in the Lower 48 U.S. states has risen to 107.0 billion cubic feet per day (bcfd) so far in November, up from a record 104.2 bcfd in October. Meteorologists projected the weather would remain mostly warmer than normal through Nov. 24. Even so, temperatures are still declining with the coming of winter. LSEG forecast that cooler weather would cause U.S. gas demand in the Lower 48 states, including exports, to jump from 101.6 bcfd this week to 107.8 bcfd next week. The forecast for this week was higher than LSEG's outlook on Wednesday, while its forecast for next week was lower. Pipeline exports to Mexico have fallen to an average of 5.3 bcfd so far in November, down from 6.5 bcfd in October and a record 7.0 bcfd in August. On a daily basis, exports to Mexico were on track to drop to an eight-month low of just 4.4 bcfd on Thursday. Analysts, however, expect U.S. exports to Mexico to rise by the end of the year once the first 0.18-bcfd liquefaction train at U.S.-based New Fortress Energy's (NFE.O) plant in Altamira in Mexico starts pulling in U.S. gas to turn into LNG for export. Gas flows to the seven big U.S. LNG export plants have risen to an average of 14.1 bcfd so far in November, up from 13.7 bcfd in October and what was a record 14.0 bcfd in April. The U.S. is on track to become the world's biggest LNG supplier in 2023, ahead of recent leaders Australia and Qatar. Much higher global prices have fed demand for U.S. exports due in part to supply disruptions and sanctions linked to the war in Ukraine. Gas was trading around $15 per mmBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $17 at the Japan Korea Marker (JKM) in Asia . https://www.reuters.com/business/energy/us-natural-gas-prices-slide-2-2-week-low-record-output-mild-weather-2023-11-09/
2023-11-09 20:00
Nov 9 (Reuters) - War risk insurance premiums have risen sharply after a missile damaged a merchant ship in the Ukranian port of Pivdennyi, three industry sources said on Thursday. After withdrawing from a U.N.-backed deal in July that guaranteed safe shipments of Ukrainian grain via the Black Sea, Ukraine says Russia has repeatedly attacked Ukrainian port infrastructure. It said on Wednesday a Russian missile hit the Liberian-flagged KMAX Ruler when it was loading iron ore. Four crew were injured and the Ukrainian pilot was killed, making it the first fatal strike involving a commercial ship in many months. Ukraine is listed as a high-risk area by marine insurers and an additional war risk insurance premium has to be renewed typically every seven days. Vessels also have to have an annual war policy. Three insurance sources said the premiums had crept up with two saying they had risen to 3% of the value of the vessel from around 1% before the attack, which would add tens of thousands of dollars in extra costs. Ukraine's temporary "humanitarian corridor" for cargo vessels, which was set up after Moscow exited, was still working despite the attack, Deputy Prime Minister Oleksandr Kubrakov said on Thursday. "The pilot died when running down the stairs after the incident so the exact cause is not clear yet," a source with knowledge of the incident said, asking not to be named. The source said it was possible the cargo could still be shipped once the damage was assessed. A fourth insurance industry source estimated the vessel had been insured for $15 million with damage seen at $4 million without liabilities for the crew. Philippines-based Venus Mare, listed on shipping databases as the vessel's owner, could not be located for comment. "It is a stark reminder of the fragility of maritime safety and security and this act of aggression, capable of inflicting loss of innocent lives, must be vehemently condemned," dry bulk shipping industry association INTERCARGO said on Thursday. "Bulk carriers, manned by innocent seafarers, represent the epitome of non-combatant vessels." https://www.reuters.com/markets/commodities/ukraine-war-risk-ship-premiums-rise-after-attack-sources-say-2023-11-09/
2023-11-09 19:58
Nov 9 (Reuters) - More U.S. high-yield bond issuers saw downgrades to their credit ratings than upgrades last month, JPMorgan (JPM.N) said in a research report. October saw downgrades to 18 junk bond issuers' ratings accounting for $22.2bn in debt, while just 16 issuers were given upgrades by ratings agencies, the JPMorgan report said. This is the first time downgrades have surpassed upgrades on U.S. junk-rated borrowers in four months, it added. Changes to credit ratings are significant for a company, since lower ratings most often result in higher borrowing costs. Ratings agency Moody's Investors Service has forecast defaults among low-rated U.S. companies will peak at 5.6% in January 2024, before falling to 4.6% by August 2024. October's ratings actions reflect a broader trend as there have been 293 downgrades totaling $393 billion over the last 12 months, compared to 264 upgrades equaling $479 billion, the JPMorgan report said. The largest number of junk issuer downgrades this year have been in the healthcare and financial sectors. While high-grade companies' credit ratings have proven resilient during the Federal Reserve's interest-rate hikes, businesses with significant leverage and floating-rate debt have struggled to keep pace with rising debt-servicing costs. Persistent inflation and dampened demand have also eroded profit margins. https://www.reuters.com/markets/rates-bonds/more-junk-rated-companies-downgraded-than-upgraded-october-jpm-2023-11-09/
