2024-07-01 06:55

CANBERRA, July 1 (Reuters) - Australia's labour tribunal has ordered unionised workers at Wilmar Sugar and Renewables, the country's largest sugar maker, to suspend their industrial action for six weeks, the company said. The decision by the Fair Work Commission will enable Wilmar's eight sugar mills - which together produce more than 2 million metric tons of sugar worth around $1 billion a year - to avoid further disruption to their operations. A pay dispute led to strikes beginning in May that delayed and disrupted the start of seasonal cane crushing operations and threatened to reduce Australia's sugar production. "The suspension of industrial action relieves the immediate risk to the annual crushing season, and provides clear air for negotiations with unions," a Wilmar spokesperson said in a statement. Unions will appeal the decision, said Australian Workers' Union official Jim Wilson. But he added that the Fair Work Commission was likely to extend its suspension order to prevent any further strikes and, if negotiations make no progress over the coming months, impose a pay deal on both sides. Wilmar Sugar and Renewables accounts for more than half of Australia's sugar production, the bulk of which is exported. It is owned by Singapore's Wilmar International (WLIL.SI) New Tab, opens new tab. The company said heavy rainfall in hot and humid sugar growing regions on the northeast coast over the last week had forced it to halt work at its mills but that it hoped to have them all up and running again in the coming days. Sign up here. https://www.reuters.com/markets/commodities/labour-tribunal-suspends-strikes-australias-biggest-sugar-maker-2024-07-01/

2024-07-01 06:55

MELBOURNE, July 1 (Reuters) - A fire at Anglo American's (AAL.L) New Tab, opens new tab Grosvenor metallurgical coal mine in Australia is likely to negatively affect its Australian met coal business, broker Jefferies said in a note on Monday. Anglo American said on Sunday it was battling an underground fire at the coal mine in Australia's Queensland state after a blaze ignited there on Saturday. There were no injuries, but it said it expects the mine to remain shut for several months. KEY QUOTE "On our estimates, Grosvenor accounts for ~30% of the $4.5bn value we attribute to Anglo's met coal business. This fire could significantly damage the timing and valuation of a potential sale of Moranbah North and Grosvenor." WHY IT'S IMPORTANT Anglo American rebuffed a $49 billion offer from BHP Group (BHP.AX) New Tab, opens new tab in May in favour of a strategy laid out by CEO Duncan Wanblad that included a process to sell its coal, nickel and diamond assets. At the time, investors said Wanblad would have to meet his targets promptly, or the company would be vulnerable to another bid by "all the usual suspects". The fire is the second at the mine since 2020, when a similar outbreak injured five workers, and Anglo said then it would work to ensure such an incident never happened again, Jefferies noted. BY THE NUMBERS Anglo American's steelmaking coal business expects to produce around 8 million tonnes in the first half of 2024, of which Grosvenor will contribute around 2.3 million tonnes. Anglo had guided to 15 to 17 million tonnes for the year, of which Grosvenor was expected to contribute around 3.5 million tonnes due to mine planning. Jefferies assumes the mine will be offline until mid-2025 and sees the closure tightening the 90 million tonne per year seaborn met coal market. MARKET REACTION Anglo American shares closed at 2502 pence on Friday. THE RESPONSE Anglo said in a statement to Reuters that it still intends to divest its steelmaking coal business and that it had received strong interest from a wide range of potential buyers. ⁠ "The incident underground at Grosvenor is serious and it will take some time to assess the impact on the mine and implement remedial action," it said, adding it was focused on ensuring the safety and wellbeing of its workforce and local communities. "We will assess the timing of the divestment process in the coming weeks but we are continuing the preparation work in the meantime." Sign up here. https://www.reuters.com/markets/commodities/jefferies-says-anglo-american-coal-fire-likely-affect-met-coal-sale-2024-07-01/

2024-07-01 06:37

July 1 (Reuters) - Oil prices rose on Monday, helped by expected peak summer consumption and OPEC+ production cuts, though gains were capped by rising output from other producers and the potential for economic volatility resulting from a changing political landscape. Brent crude futures rose 54 cents, or 0.64%, to $85.55 a barrel by 1105 GMT. U.S. West Texas Intermediate crude futures were up 49 cents, or 0.6%, at $82.03. Both contracts gained about 6% in June, with Brent settling above $85 a barrel in the past two weeks after the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, extended most of its deep oil output cuts well into 2025. That led analysts to forecast supply deficits in the third quarter as transportation and demand for air-conditioning during the summer eat into fuel stockpiles. On Friday the Energy Information Administration (EIA) reported that oil production and demand for major products rose to a four-month high in April, supporting prices. "Demand indicators look solid, especially in the all-important U.S. market, and peak refinery demand for crude is now firmly in place and should last through August," JPMorgan analysts wrote in a client note. Hopes of an interest rate cut by the U.S. Federal Reserve and rising geopolitical concerns in Europe and between Israel and Lebanon's Hezbollah have also kept a floor under prices, IG analyst Tony Sycamore said in a note. Traders are also watching for the impact hurricanes have on oil and gas production and consumption in the Americas. The Atlantic hurricane season started with Hurricane Beryl on Sunday. "Increased volatility is anticipated in wider markets this week as elections dominate the agenda in Europe and UK, while in the U.S. concerns over President Biden's fitness for office, let alone re-election, is dominating the news," said Panmure Gordon analyst Ashley Kelty. Sign up here. https://www.reuters.com/business/energy/oil-inches-higher-summer-demand-outlook-2024-07-01/

2024-07-01 06:24

SINGAPORE, July 1 (Reuters) - China is setting up a new entity that groups national oil producers and other state firms to search for ultra-deep oil and gas reserves and tackle harder-to-extract non-conventional resources, state energy group CNPC said on Monday. This is in answer to President Xi Jinping's call for the sector to have "new productive forces" that will contribute to the country's energy security, CNPC said on its website. In addition to CNPC and Sinopec, the country's two dominant producers of oil and gas, the new body gathers seven other state groups including China Aerospace Science and Industry Corp, steel group Baowu, equipment builder Sinomach, Dongfang Electric Group and Minmetals. "This...is to gather wisdom and strength to jointly build an industry chain from ultra-deep oil and gas exploration to development to engineering," CNPC said. The group will drill conventional resources at ultra-deep wells that extend as much as 10,000 meters (6.21 miles) below the surface in places like northwest Xinjiang's Tarim basin region where CNPC and Sinopec are major players. It will also seek to tap deep shale oil and coal-seam gas resources. China is the world's largest crude oil importer and relies on imports for nearly three-quarters of its needs. It has been investing billions of dollars to maintain its domestic crude oil production at above 4 million barrels a day, a level seen as necessary to power manufacturing activities and military services. Years of effort by state oil majors to drill deeper onshore and accelerate development at offshore oilfields have yielded output growth of 2% per year since 2018. That said, state firms have to contend with declining output at large mature fields. They are also grappling with the geological and cost challenges of extracting shale oil and gas resources. Sign up here. https://www.reuters.com/business/energy/china-sets-up-new-state-body-drill-deep-oil-gas-reserves-2024-07-01/

2024-07-01 05:56

MELBOURNE, July 1 (Reuters) - Indonesia's Delta Dunia Group (DOID.JK) New Tab, opens new tab plans to grow through acquisitions, backed by strong support from its lenders, after it completed the $122.4 million purchase of Atlantic Carbon Group on Monday, director Iwan Salim said. The Jakarta-listed company has been diversifying beyond its home base of Indonesia where it runs its BUMA coal mining services business. It bought Australia's Downer coal mining contractor business for A$139 million ($92.63 million) in 2021 and has now expanded into U.S. markets and mining anthracite coal, used to make steel. Its latest deal has secured ownership of four producing anthracite mines in Pennsylvania, which will help Delta Dunia to lower its revenue from thermal coal to below 50% of its total revenue by 2028. "We are going to use this very positive momentum going forward," Salim told Reuters. "We have a lot of support from our bankers if the growth opportunity is correct." The activity comes as major financial institutions have shied away from lending to fossil fuel companies given climate change concerns. Salim did not specify acquisition targets, timelines or the spending plans on them. For Delta, the latest transaction and its growth plans are supported by a cash position of $322 million as of end June and a $750 million syndicated loan facility with PT Bank BNI (Persero) Tbk and PT Bank Mandiri (Persero) Tbk (BMRI.JK) New Tab, opens new tab. It has also received support from several Shariah compliant banks, Indonesian and U.S. bond holders in the past year given Delta Dunia's strong track record for repayments, he said. The diversified mining services provider is looking at Australia, where Anglo American (AAL.L) New Tab, opens new tab is set to sell its coking coal mines, for growth, as well as at other jurisdictions, Salim said. "We will look at opportunities as they arise," he said. "Australia, because we're already there with Buma Australia, the contracting business, is something we actively look at." "But with the American acquisition, you can see that our outward radar is not just on Australia." The door is not closed on buys into mines producing other metals such as lithium or copper, but for now it plans to focus on what it knows best, which is coal, and mining services, he said. ($1 = 1.5006 Australian dollars) Sign up here. https://www.reuters.com/markets/commodities/indonesias-delta-dunia-eyes-more-deals-it-completes-us-coal-buy-2024-07-01/

2024-07-01 05:44

Wall Street indexes finish higher Europe's STOXX adds 0.32% Oil prices rise 2% to two-month high U.S. dollar, safe-haven gold advance Investors await Fed June meeting minutes, non-farm payrolls data NEW YORK, July 1 (Reuters) - Global stocks edged higher in choppy trading on Monday, while U.S. Treasury yields rose following France's historic elections and ahead of a string of economic data this week that could provide clues on the likelihood of Federal Reserve interest rate cut. The French far right took a smaller-than-expected lead in the first round of voting, suggesting a hung parliament could result and hamper the party's agenda. European stocks (.STOXX) New Tab, opens new tab finished up 0.31%, while the euro rose 0.13% following the vote. Investors will be eyeing remarks from Fed Chair Jerome Powell on Tuesday, followed by minutes from the Fed's latest policy meeting on Wednesday and U.S. non-farm payrolls data due on Friday. The Fed in June projected just one rate cut in 2024. "The French elections result wasn't as bad (as expected) and sometimes positioning matters," said Wasif Latif, president and chief investment officer at Sarmaya Partners. "There's going to be a big week for payrolls even though they're shortened trading so liquidity might be a little bit low as we head into the weekend," Latif added. The MSCI world equity index (.MIWD00000PUS) New Tab, opens new tab, which tracks shares in nearly 50 countries, was up 0.26% after early paring losses. In Asia, the MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) New Tab, opens new tab ended flat. Benchmark 10-year Treasury yields rose to their highest since mid-June at the start of a holiday-shortened week that will likely be marked by low trading volumes. The yield on the note rose to 4.4692%. CHOPPY SESSION On Wall Street, all three major indexes finished higher in a choppy session led by gains in technology, consumer discretionary, and financial stocks. Materials, industrials, and real estate equities were the biggest losers. The Dow Jones Industrial Average (.DJI) New Tab, opens new tab rose 0.13% to 39,169.52, the S&P 500 (.SPX) New Tab, opens new tab gained 0.27% to 5,475.09 and the Nasdaq Composite (.IXIC) New Tab, opens new tab gained 0.83% to 17,879.30. Oil prices rose 2% to a two-month high on hopes of rising demand during the Northern Hemisphere's summer driving season and worries that conflict in the Middle East could spread and reduce global oil supplies. Brent futures rose 1.9% to settle at $86.60 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 2.3% to settle at $83.38. That was the highest close for Brent since April 30 for a third day in a row and the highest for WTI since April 26. In currencies, the dollar surged to a fresh 38-year peak against the yen, the greenback soared to 161.72 yen , its strongest level since 1986. The dollar index was up 0.1% at 105.82. It was initially lower after data from the Institute for Supply Management on Monday showed U.S. manufacturing contracted for a third straight month in June. Gold prices edged higher. Spot gold added 0.28% to $2,332.29 an ounce, while U.S. gold futures gained 0.09% to $2,329.70 an ounce. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-07-01/