2024-07-08 11:14

BEIJING, July 8 (Reuters) - China's Shandong province plans to develop a 100 billion yuan ($13.8 billion) lithium battery industry by next year, a local government notice showed on Monday. Shandong, in China's east, aims to build an industrial chain covering electrode materials, electrolytes, battery cells and assembly, the notice showed. The plan includes expanding the category of consumer batteries, improving quality and performance, and strengthening research and development. The provincial government will support the cities of Jinan and Qingdao to develop companies engaged in raw material production and battery assembly based on the needs of regional new energy vehicle makers. It will also support cities such as Zaozhuang and Jining in lithium battery manufacturing and energy storage projects. ($1 = 7.2680 yuan) Sign up here. https://www.reuters.com/markets/commodities/chinas-shandong-province-plans-14-bln-lithium-battery-industry-by-2025-2024-07-08/

2024-07-08 11:11

LONDON, July 8 (Reuters) - New finance minister Rachel Reeves announced plans to drive investment into Britain by speeding up the country's planning system, with the aim of building more houses, unblocking infrastructure projects and developing onshore wind farms. "We are going to get Britain building again," she said on Monday in her first speech in the job. Below are some details of her plans: ONSHORE WIND Reeves said she would scrap the "absurd ban" on new onshore wind projects in England with immediate effect. The Labour government elected last week issued a policy statement simultaneously on Monday removing the two tests which have since 2015 led to an effective ban on new onshore wind by refusing permission where any opposition exists. Reeves also said she would consult on designating onshore wind projects as "significant infrastructure projects", meaning planning decisions on those projects would be taken nationally, not locally, in future. PLANNING Reeves said the government would reform the National Planning Policy Framework, launching a consultation on a growth-focused approach to the planning system before the end of the month. Deputy prime minister Angela Rayner, who is also responsible for housing policy, will intervene in planning where she believes the regional or national economy will benefit from a development, Reeves said. She added that planning appeals had already been recovered for two data centres in southern England. Local mayors and investment officers will also be told to bring any investment opportunities with important planning considerations to the attention of Reeves and Rayner. Local planning authorities will be told brownfield land and "greybelt" land - sites which already have buildings on or are poor quality parts of the greenbelt area of protected land - will need to be considered for development to meet housing targets. INFRASTRUCTURE The transport minister and the energy security and net zero minister will be told to prioritise decisions on infrastructure projects which have been left unresolved. The new government will also set out "new policy intentions for critical infrastructure", which will be used as a basis to speed up future decisions. HOUSING The government will bring back mandatory housing targets. These had been ditched by the previous Conservative government in late 2022. Reeves said a new task force would be set up to accelerate stalled housing sites, which could speed up developments at several sites across the country where more than 14,000 homes could be built. Sign up here. https://www.reuters.com/world/uk/what-is-rachel-reeves-plan-get-britain-building-again-2024-07-08/

2024-07-08 11:09

LONDON, July 8 (Reuters) - A hung parliament in France is likely to complicate policymaking there, credit rating agency S&P Global said on Monday, warning that more debt or a sustained slump in economic growth could trigger another rating cut. S&P downgraded France at the end of May but the country now faces a hung parliament and difficult negotiations to form a government, after a left-wing surge in elections on Sunday blocked Marine Le Pen's quest to bring the far right to power. "Our 'AA-/A-1+' sovereign credit ratings on France would come under pressure if economic growth is materially below our projections for a protracted period," S&P said in a note on the election outcome. "Or if France cannot reduce its large budget deficit and if general government interest payments, as a share of government revenue, increase beyond our current expectations." S&P isn't due to review its French rating again until Nov. 29 although it can do it earlier if it feels the circumstances warrant it. Given the split parliament, in which no party came close to having the 289 seats required to secure an absolute majority in Sunday's election, S&P said the issue was now decision making. "We anticipate that the resulting government will struggle to implement meaningful policy measures and will face a persistent risk of a vote of no confidence," it said. France's spending already means its general government deficit is not likely to drop below 4% of GDP until 2027, by which point its debt-to-GDP ratio will have ballooned a few more percentage points to 112%. "In this context, the next government's approach to public finances, and to economic and budgetary reforms, could be key to determining France's creditworthiness," S&P said. Sign up here. https://www.reuters.com/markets/europe/frances-hung-parliament-complicates-policymaking-rating-firm-sp-warns-2024-07-08/

2024-07-08 10:55

LONDON, July 8 (Reuters) - Global hydroelectric generation slumped to a five-year low last year as a result of lower-than-average rainfall across China, North America and India, contributing to record fossil fuel combustion and emissions in 2023. Global hydro generation amounted to 4,240 billion kilowatt-hours (kWh) in 2023 down from a record 4,359 billion kWh in 2020, according to the Statistical Review of World Energy published by the UK Energy Institute. The slump over the last three years has been the largest on record, forcing the world's biggest producers to revert to coal and gas-fired power plants to replace lost generation, amplifying the upward trend in fossil fuel burning. But hydro is set to rebound this year thanks to higher rainfall and snow melt in key areas, which will combine with rapid deployment of wind and solar power to curb growth in fossil fuel use in 2024. Chartbook: Global hydroelectric generation New Tab, opens new tab Global hydro generation is highly concentrated, with two-thirds occurring in just seven countries - China (30%), Brazil (9%), Canada (9%), the United States (6%), Russia (5%), India (4%) and Norway (3%). China's generation fell by a massive 96 billion kWh in 2023 compared with three years earlier, accounting for 80% of the generation lost worldwide, according to the Statistical Review. Prolonged drought across south and central China cut water volumes down the Yangtze and other river systems, slashing power output even though the country brought new hydro dams and turbines into service. But there were also sharp downturns compared with three years earlier in the United States (-46 billion kWh), Canada (-22 billion kWh), India (-15 billion kWh) and Russia (-15 billion kWh). In the United States, hydro output fell to the lowest for 22 years, mostly as a result of an extended drought across the western part of the country, according to data from the U.S. Energy Information Administration. HYDRO REBOUND The outlook for hydro generators is looking more promising this year, with heavier rain and snowfall in most key producing areas, likely to drive a record one-year increase in output. China's generation had already climbed by 57 billion kWh (16%) in the first five months of 2024 compared with 2023, according to data from the National Bureau of Statistics. Since then, southern and central regions have been inundated with heavier than normal monsoon rains, triggering multiple flood alerts on the Yangtze and other river systems. With most of the main flood season still ahead in July and August, China's generation is on course to set new records as heavy river flows enable the country to make full use of newly installed turbines. By May 2024, China had installed 423 million kilowatts (kW) of generating capacity, up from 370 million kW when generation last peaked in 2020, so there is potential to increase output significant if river volumes are high enough. In Brazil, hydro has already set a new record of 206 billion kWh in the first five months of the year, surpassing the previous high of 199 billion kWh. Reservoirs connected to the main Southeast and Midwest electricity transmission system, which account for most of the country's hydro potential, were storing enough water to generate 101 billion kWh at the end of June. Storage was down from 129 billion kWh at this point last year but was otherwise the highest since 2012, according to data from the country's transmission operator. U.S. hydro generation has also started to recover from last year's low, with the government forecasting it will be 6% higher in 2024. In China the main substitute for hydro is coal, while in Brazil and the United States it is gas, so the rebound in hydro is likely to trim fossil fuel combustion and emissions. If the hydro rebound is sufficiently large, and accompanied by continued rapid deployment of wind and solar farms, both of which seem likely, it could be enough to create a peak in coal burning and fossil fuel emissions, at least temporarily. Related columns: - China’s hydropower generation surges and coal ebbs (June 18, 2024) - China’s rising hydro and solar set to cap coal use in 2024 (April 24, 2024) - Brazil’s hydro power adds to global gas surplus (February 9, 2024) - China’s renewables rollout signals future peak in coal (January 19, 2024) John Kemp is a Reuters market analyst. The views expressed are his own. Follow his commentary on X https://twitter.com/JKempEnergy New Tab, opens new tab Sign up here. https://www.reuters.com/business/energy/global-hydro-rebound-will-curb-fossil-fuel-growth-2024-kemp-2024-07-08/

2024-07-08 10:31

A look at the day ahead in U.S. and global markets from Mike Dolan Wall St stocks start the week surfing new records into another earnings season and Federal Reserve testimony, while surprise French election results saw the country's left-wing thwart Marine Le Pen's far right and leave a hung parliament there. U.S. Treasuries were relaxed early on and the dollar on the back foot after Friday's June employment report showed a cooling labor market and underlined hopes for two Fed rate cuts this year. Although it's hard to see what more he will say beyond last week's appearance in Portugal, Fed chair Jerome Powell faces a grilling in Congress on Tuesday and Wednesday following his semi-annual testimonies to the House and Senate. But stock market attention will likely drift to second-quarter corporate earnings updates - which kick off with the big U.S. banks on Friday. But much like the buzz about Britain's election result on Friday, the attention in Europe was all on politics first thing and the unexpected outcome to Sunday's second-round of the French assembly elections. Not only did the far right not gain a majority, but tactical voting pushed them into third place behind the left-wing alliance and President Emmanuel Macron's centrist grouping. Markets breathed a sigh of relief that the lack of a dominant force in parliament likely leaves policy gridlock for now - with fiscal worries surrounding both right and left tax and spend agendas easing somewhat. While the parliamentary hotch potch raises questions about getting next year's budget agreed amid European Union pressure to rein in the deficit closer to EU budget rules, the constellation in the assembly was not much different to what it was before the snap election was called last month. French stocks (.FCHI) New Tab, opens new tab gained almost 1%, French government debt yields eased more than 5 basis points and the risk premium over German equivalents edged 2bp lower to 66bp too . The euro retained Friday's gains to three week highs against a softer dollar. Sterling also basked in the glow of a new government, with the pound hitting its best level since June 12 as the Labour Party set out its stall following a landslide poll win on Thursday that gives it more than a 170 seat majority in parliament. Britain's finance minister Rachel Reeves set out plans on Monday to unblock infrastructure projects and private investment under a new "national mission" to drive economic growth. Speaking to business leaders, she said mandatory house-building targets would be restored. New foreign minister David Lammy also talked about a wanting to "reset" of Britain's relationship with the EU. In U.S. politics, the picture is more confusing. Even though pressure on President Joe Biden to step aside in the White House still circulates within the Democratic party, most Democrats still back him and opinion polls show he's still doing ok in key marginal states. U.S. stock futures were steady ahead of the open near Friday's new record highs, with 10-year Treasury yields hovering around 4.3%. Crude oil prices fell sharply to start the week. Elsewhere, world stocks were generally buoyant and MSCI's all-country index (.MIWD0000PUS) New Tab, opens new tab also eked out a new all-time high. China's ailing stocks remained the exception, with mainland stock indexes (.CSI300) New Tab, opens new tab falling for the fifth straight session. They lost almost 1% on Monday and are now back in the red for the year to date. China's central bank said on Monday it would start conducting temporary bond repurchase agreements or reverse repos to make open market operations more efficient and keep banking system liquidity ample. Key developments that should provide more direction to U.S. markets later on Monday: * US June employment trends, May consumer credit * Bank of England Monetary Policy Committee member Jonathan Haskel speaks * US Treasury auctions 3-, 6-month bills Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-07-08/

2024-07-08 10:21

LONDON, July 8 (Reuters) - Investment bank JPMorgan cut on Monday its forecast of the number of emerging market companies expected to default on their debt, following the biggest improvement in distressed-level market pricing since 2016. With some defaults out the way and others not having materialised, 2024 is also expected to be the first year since the start of the COVID-19 pandemic in 2020 that EM corporate default levels fall below the historical average. The bank lowered its high yield or 'junk'-rated EM corporate default forecast to 3.6% from 4.0% globally and to 2.1% from 2.9% for firms in the closely-followed CEMBI Broad Diversified index, which is run by a separate JPMorgan unit. "We see lower risks for the rest of the year as some of the default candidates rolled off and others already materialized, while new additions were limited," the bank's analysts said in a research note. Problems are expected to stay concentrated in China's property sector and among "repeat defaulters" in the likes of Latin America, although the bank also pointed out that there had not been a Ukrainian default yet this year, despite its war. Regionally, Asia's default forecast was left at 4.5% overall and 2.5% for the CEMBI group. Latin America's was cut by 1% to 4.6% and to 2.8% for the CEMBI. EM Europe was lowered to 2.0% from 3.0% and to 2.3% for CEMBI BD HY, while Middle East & Africa was nudged up to 0.6% from 0.5%, with the CEMBI at 0.5%. The note highlighted how much more optimistic international investors now seemed to be. The share of EM firms viewed as being in a "distressed" state and at serious risk of default had plunged 7% this year - distress being defined as having a 1,000 basis point risk premium or 'spread' on their bonds. That is the largest improvement in any calendar year since 2016, JPMorgan's analysts added. "Assuming 50% of bonds trading at distressed levels may default 12 months forward suggests a 4.6% default rate, but we believe this outcome is unlikely," they said. This was because more than half the distressed volume is from China, where bond prices are depressed in excess of the actual default risk, they added. Sign up here. https://www.reuters.com/business/finance/jpmorgan-cuts-forecast-emerging-market-corporate-defaults-2024-07-08/