2024-05-23 00:53
CAPE TOWN/BRUSSELS May 22 (Reuters) - South Africa is considering lodging a formal complaint at the World Trade Organization against the European Union's "protectionist" carbon border levy, Trade Minister Ebrahim Patel said on Wednesday. The EU's proposed carbon border adjustment mechanism (CBAM), which will impose charges on imports of carbon-intensive goods like steel and cement into Europe, has faced criticism from some developing nations and sectors including China's steel industry. In October, the EU launched a trial phase of the world's first carbon border levy, which from 2026 will impose costs on imports of steel, cement, aluminium, fertilisers, electricity, and hydrogen. "We believe that first prize always is to reach agreement through engagement and negotiation and our door remains open to find a settlement with the European Union on this matter," Patel told Reuters. "Failing everything else, we would be obliged to take the next step which would be to lodge a formal complaint (at the WTO), but we are still continuing discussions with a view to finding an amicable solution," he added. A European Commission spokesperson said the border levy was designed to comply with WTO rules and would allow deductions for any carbon prices already paid abroad. "EU domestic industry pays a carbon price. We need to make sure importers pay an equivalent price, based on the carbon content of their goods, to prevent carbon leakage and help reduce greenhouse gas emissions," the spokesperson said. "Carbon leakage" refers to the risk that, rather than reducing emissions, European industries would simply move abroad to avoid paying the EU's domestic carbon price. However, countries including South Africa say CBAM would penalise developing nations struggling to raise the large investments needed to reduce their industries' CO2 emissions. "Instead of recognising differential levels of development, it imposes a one-size fits on all firms across the world," Patel said. He said South Africa, which could take a serious economic hit should CBAM be introduced, had raised the issue of trade-related measures on climate change at the WTO in February. The EU is South Africa's largest trading partner and the current version of CBAM could lead to a reduction of total exports to the EU of 4% in 2030 (or 0.02% reduction in GDP) relative to a baseline with no CBAM, an April report from the South African Reserve Bank said. Sign up here. https://www.reuters.com/world/africa/safrica-considers-complaining-wto-against-eu-carbon-border-tax-2024-05-22/
2024-05-23 00:52
Stubborn inflation keeps US rate hike on agenda US manufacturers report surge in input costs Hopes of improving US fuel demand support oil market OPEC+ to meet on June 1, analysts expect output curbs to stay NEW YORK, May 23 (Reuters) - Oil prices fell for a fourth consecutive session on Thursday and settled at multi-month lows as the prospect of higher-for-longer U.S. interest rates raised worries around demand growth in the world's biggest oil market. Brent crude futures settled lower by 54 cents, or 0.7%, at $81.36 a barrel, the lowest since January. U.S. West Texas Intermediate (WTI) crude futures fell 70 cents, or 0.9%, to $76.87 a barrel, a three-month low. S&P Global data showed accelerating U.S. business activity this month, but manufacturers also reported a surge in prices for a range of inputs, suggesting a pickup in goods inflation in the months ahead. On Wednesday, minutes from the U.S. Federal Reserve's latest policy meeting showed policymakers remain doubtful if current interest rates are high enough to tame stubborn inflation. High interest rates increase the cost of borrowing, which can slow down economic activity and dampen demand for oil. Also weighing on the market, U.S. crude stocks rose by 1.8 million barrels last week, according to the Energy Information Administration, compared with an estimated draw of 2.5 million barrels. However, the EIA reported U.S. gasoline demand at its highest since November, providing some support for energy markets ahead of the Memorial Day holiday weekend, which is considered the start of the U.S. summer driving season. U.S. gasoline consumption makes up around 9% of global oil demand. "It was a pretty good report for gasoline, everything pretty much hit the positive side of the ledger," Mizuho analyst Bob Yawger said. "However, one report does not make a trend, so everyone will be watching if it can continue to perform going forward." Investors are also looking ahead to the June 1 meeting of the Organization of Petroleum Exporting Countries and its allies, together called OPEC+, where the group will decide its output policy. Russia said it exceeded its OPEC+ production quota in April for "technical reasons" and will soon present to the OPEC Secretariat its plan to compensate for the error, the Russian Energy Ministry said late on Wednesday. Recent weakness in crude oil prices raises the likelihood that OPEC+ will maintain its existing production curbs at least through the end of September, said Andrew Lipow, president of Houston-based Lipow Oil Associates. Sign up here. https://www.reuters.com/business/energy/oil-prices-fall-worries-higher-us-interest-rates-2024-05-23/
2024-05-23 00:48
May 23 (Reuters) - Shares of Australia's BHP Group (BHP.AX) New Tab, opens new tab fell over 3% on Thursday, a day after smaller rival Anglo American (AAL.L) New Tab, opens new tab rejected its third takeover proposal and agreed to a one-week extension for the deadline to make a binding offer. Shares of BHP fell as much as 3.8% to A$44.47 by 0026 GMT. BHP, the world's biggest listed mining group, now has until May 29 to make a binding offer for Anglo American or it will be forced to walk away for at least six months, under the UK's takeover rules. BHP's latest 29.34 pounds per share approach, based on undisturbed share prices at market close on April 23, valued London-listed Anglo at 38.6 billion pounds (about $49.1 billion). The offer was still conditional on Anglo unbundling its platinum and iron ore assets in South Africa. The May 29 deadline coincides with general elections in South Africa, where Anglo was formed and is still of significant national importance. Last week, Anglo announced plans to either spin-off or sell its less profitable coal, nickel, diamond and platinum businesses to refocus on copper. Anglo's shares closed up 0.4% at 26.98 pounds on the London bourse on Wednesday. ($1 = 0.7864 pounds) Sign up here. https://www.reuters.com/markets/deals/bhp-shares-fall-after-anglo-american-rejects-third-proposal-extends-bid-deadline-2024-05-23/
2024-05-23 00:41
May 22 (Reuters) - Eight young Alaska residents sued the state on Wednesday seeking to block a major natural gas project, the latest in a string of climate-change related lawsuits by youths arguing that government policies promoting fossil fuels violate their rights. The Anchorage state court lawsuit, brought by a group of plaintiffs ranging in age from 11 to 22, alleges that an Alaska law mandating the project's development infringes on their due process rights and other constitutional protections by causing the release of greenhouse gases that harm their health and livelihood. Several of the other youth climate-change lawsuits have recently been dismissed, including two lawsuits against the federal government and two previous cases in Alaska. A similar case involving young Hawaiian plaintiffs is expected to head to trial next month, and the plaintiffs have amended one of the dismissed federal cases as well. The Alaska Supreme Court said in the most recent case before it, which was dismissed in 2022, that courts cannot mandate broad policy changes. The latest lawsuit is narrower than the earlier Alaska cases, which challenged broad state policies that support fossil fuels. By focusing on a specific project, the plaintiffs said the newest suit complies with the earlier court decisions. "Alaska's youth are on the front lines of the climate crisis, and their futures depend on a swift transition away from fossil fuels," Andrew Welle, an attorney at the non-profit law firm Our Children's Trust, which represents the plaintiffs, said in a statement. Alaska Attorney General Treg Taylor called the lawsuit "misguided" in an email, and said liquefied natural gas development in the state "is subject to the most stringent environmental standards in the world." Taylor said he is confident the courts will uphold the law. The corporation's Alaska LNG project includes an over 800-mile pipeline that will bisect the state, carrying up to 3.3 billion cubic feet of gas per day from the state's petroleum rich North Slope to Alaska communities and an export terminal south of Juneau. The development agency has said the roughly $39 billion project is expected to be operational by 2030. The young plaintiffs said in the lawsuit that climate change is already causing them breathing problems due to wildfire smoke and is diminishing their ability to hunt and fish for subsistence, among other alleged harms. They said the Alaska LNG project will make climate change worse. The lawsuit asks the court to block the Alaska LNG project from proceeding, and to declare that a law mandating its development is unconstitutional. They also asked the court for a declaration that the Alaska constitution includes a right to a life-sustaining climate system. Sign up here. https://www.reuters.com/sustainability/climate-energy/youth-climate-change-lawsuit-targets-alaska-lng-project-2024-05-22/
2024-05-22 23:22
SAN SALVADOR, May 22 (Reuters) - El Salvador's Congress on Wednesday signed off on a $1.5 billion debt issuance to finance its credit portfolio and the Central American nation's general budget. The issuance, signed off on by 57 lawmakers out of the 60 who voted, could be made on domestic or international markets. The funds raised will go toward paying off debts, issued under previous administrations, that are set to mature. Sign up here. https://www.reuters.com/world/americas/el-salvador-congress-approves-15-bln-debt-issuance-2024-05-22/
2024-05-22 23:02
TOKYO, May 23 (Reuters) - Nearly half of Japanese firms find the yen's slide beyond 155 to the dollar harmful to their business, roughly double the percentage of those who see the currency's weakness as a positive, a Reuters survey showed on Thursday. The yen, under pressure from a wide gap between interest rates in the United States and Japan, plunged to a 34-year low of 160.245 yen a dollar late last month. But it has since recovered some ground to around 156.36 after suspected rounds of intervention by Japanese authorities. More than a third of Japanese companies want the Bank of Japan to raise interest rates further in response to the yen's softer trend, the survey also showed, indicating they are willing to face higher borrowing costs to support the currency. The yen has lost roughly 10% against the dollar so far this year despite the BOJ's decision in March to end eight years of negative rates. The poll showed 16% of respondents regarded the yen's fall beyond 155 per dollar as greatly negative to their operations and 32% saw it as somewhat negative, while a combined 25% said it would be either greatly or somewhat positive. "I very much fear Japan's consumer market might contract (due to a weak yen), and that we might get used to it," one manager at a food company wrote. The weak yen has become a headache for policymakers by cooling consumption. While a boon for exporters and inbound tourism, it increases import costs, adds to inflationary pressures and squeezes households. The survey showed 37% of respondents wanted the central bank to raise interest rates again to counter the yen's weakness, while 34% wanted the government to intervene in the foreign exchange market to stem the currency's decline. Thirty percent of companies polled by Reuters said the range of 140-149 yen to the dollar is desirable for them and 28% said the 130-139 yen range is ideal, while no firms regarded the yen trading below 160 yen to the dollar as favourable. To guard themselves against the yen's depreciation, almost two-thirds of the respondents are looking into raising prices of their products, while 16% are considering switching to the domestic procurement of parts and raw materials, the poll showed. The survey of 493 companies was conducted for Reuters by Nikkei Research from May 8-17, with companies responding on condition of anonymity. A total of 229 companies responded. Asked if Japan has exited from deflation once and for all, 27% of respondents said it has and one-third said it has not, with the remaining 40% saying it's hard to tell. "First, we need to ascertain whether Japan's inflation is being driven by higher costs or growing demand," a manager at a wholesaler said. Prime Minister Fumio Kishida is counting on high wage growth in recent years to put a decisive end to more than two decades of deflation. Sign up here. https://www.reuters.com/markets/asia/yen-slide-beyond-155-is-pain-point-half-japan-firms-reuters-survey-shows-2024-05-22/
