2024-05-13 10:48

NEW DELHI/LONDON, May 13 (Reuters) - India's ship certification agency has withdrawn safety cover issued to Russian oil tankers that have been placed under U.S. sanctions, according to its website, with the vessels instead turning to a domestic provider. Major insurers and ship engine makers have already withdrawn cover for Russia's tanker fleet, which Moscow is relying on to maintain the country's oil trade after Washington and its allies including the European Union imposed a raft of sanctions for its invasion of Ukraine in February 2022. Classification societies provide services including the seaworthiness checks that are necessary for securing entry to port and services such as insurance. The Indian Register of Ships (IRClass) - among the world's top ship certifiers that form The International Association of Classification Societies (IACS) - had emerged as a provider of safety certification for Russian vessels over the last two years. But in February, while designating Russian shipping giant Sovcomflot, the U.S. Treasury's Office of Foreign Assets Control, also placed 14 vessels that had been certified by IRClass under sanctions. IRClass still provides safety cover for two of the 14 vessels, the NS Consul and NS Creation, according to its website, while cover has been withdrawn from the other 12. Those 12 vessels have been transferred to the Russian Maritime Register of Shipping (RSClass) since April, according to separate data on RSClass's website. IRClass and RSClass did not respond to requests for comment. IACS withdrew RSClass's membership in March 2022. Not having IACS cover could complicate entry into some ports, including in India, even with other certification in place. The majority of the tankers, some of which have changed their name since losing the IRClass certification, are currently anchored in or sailing to Russian ports, including Nakhodka and Vladivostok in Asia and Ust-Luga and Novorossisk in the Black Sea, ship tracking data on LSEG showed. Below is the table of some of the sanctioned vessels with their new names. Sign up here. https://www.reuters.com/markets/commodities/russia-certifier-steps-after-india-drops-safety-cover-sanctioned-ships-2024-05-13/

2024-05-13 10:33

Microsoft announces 4 bln euros investment in France France wins 1.2 bln euros investment from Amazon Pfizer and AstraZeneca also make new investments French Finance Minister to meet top Wall St CEOs PARIS, May 13 (Reuters) - France won a record 15 billion euros ($16.17 billion) in foreign investment pledges on Monday, allowing President Emmanuel Macron to bask in the limelight with global CEOs and forget about strained public finances and weak polls for a while. The bumper crop of pledges, in sectors ranging from artificial intelligence to pharmaceuticals and energy, stood Macron in good stead as he hosted business leaders for the annual "Choose France" summit at Versailles Palace. This year's figure is up from 13 billion euros announced in 2023. The French presidency said the investments included 56 different business projects and could lead to the creation of 10,000 jobs. Microsoft (MSFT.O) New Tab, opens new tab said it would invest 4 billion euros in France in its cloud and AI infrastructure, expanding its centres in Paris and Marseilles and adding a new data centre in the eastern city of Mulhouse. Over the weekend, France said Amazon (AMZN.O) New Tab, opens new tab would announce a 1.2-billion-euro investment at the event, to boost its logistics as well as Amazon Web Services' (AWS) cloud infrastructure. France is positioning itself as a European AI hub and the investments will help build the data infrastructure critical to support fast-growing, home-grown start-ups like Mistral AI. Microsoft President Brad Smith said that the investment reflected France's commitment to a low-carbon energy programme and Macron's business reforms. "Sometimes when we turn on the television we get the impression that nothing's going well in France. I don't think it's true," Macron said alongside Smith at an event unveiling the Microsoft investment. "There's a lot that's working and we don't pay enough attention to our considerable advantages." Macron's administration has taken flack from opposition parties over public finances after missing its deficit target and warning this year's fiscal shortfall would be bigger than expected. Though traditionally strong on economic issues, that has left his party on a weak footing heading into EU parliamentary elections in June with the far-right far ahead in the polls. Government officials did not give details on what public financial and other support were offered, but the state offers tax credits for certain types of green investments and research and development. Projects aligning with public priorities like hydrogen or computer chips often qualify for grants while local governments frequently make land available to foreign investors. Finance Minister Bruno Le Maire said the foreign investments were the fruit of government efforts over the last seven years to cut corporate taxes, which far-left parties say have been far too generous. Among other groups planning to boost their presence in France, drug companies Pfizer (PFE.N) New Tab, opens new tab, AstraZeneca (AZN.L) New Tab, opens new tab, Novartis and GSK (GSK.L) New Tab, opens new tab announced investments together worth over $1 billion. Estonian high-power energy storage firm Skeleton Technologies pledged to invest 600 million euros over five years and create 300 jobs. Spain-based fertiliser group FertigHy planned to invest 1.3 billion euros in a low-emission hydrogen-based plant in northern France, creating 250 jobs. China's Hunan Changyuan Lico (688779.SS) New Tab, opens new tab, South Korean group Enchem (348370.KQ) New Tab, opens new tab and Swiss firm KL1 are due to make investments worth together nearly 1 billion euros in producing materials or components for batteries. Macron was also scheduled to meet officials from Chinese battery company SVOLT as France pushes to create a battery manufacturing hub in the north. Le Maire was to host meetings on Monday with the CEOs of JPMorgan (JPM.N) New Tab, opens new tab, Goldman Sachs (GS.N) New Tab, opens new tab, Morgan Stanley (MS.N) New Tab, opens new tab and Bank of America (BAC.N) New Tab, opens new tab, among others. Sign up here. https://www.reuters.com/world/europe/france-gets-16-billion-foreign-investments-part-choose-france-event-2024-05-13/

2024-05-13 10:28

KUALA LUMPUR, May 13 (Reuters) - Malaysia's voluntary carbon market exchange will host an auction of its first Malaysian carbon credits on July 25, stock exchange operator Bursa Malaysia said on Monday. The auction by the Bursa Carbon Exchange (BCX) would involve carbon credits from the Kuamut Rainforest Conservation Project, which protects and restores 83,381 hectares of tropical forest in the Tongod and Kinabatangan districts in the eastern Malaysian state of Sabah, the bourse said. The auction involves BCX's first Malaysia nature-based carbon credits generated via a domestic forestry project, and marks the expansion of its product offering to include local carbon credits in addition to global carbon credits, the bourse said. "Given the importance of the voluntary carbon market in the nation's climate agenda, the offering of the Kuamut Project carbon credits is a significant milestone, indicating the country's environmental leadership," Bursa Malaysia chief executive Muhamad Umar Swift said in a statement. "It signals to the world that Malaysia is serious about climate action and its climate ambition." The BCX, the world's first Shariah-compliant carbon exchange, was launched in December 2022, with the aim of increasing transparency and enabling companies to buy carbon credits to offset greenhouse gas emissions. It completed its first carbon credit auction in March last year. Sign up here. https://www.reuters.com/sustainability/climate-energy/malaysian-carbon-exchange-host-first-local-carbon-credit-auction-july-2024-05-13/

2024-05-13 10:20

NEW YORK, May 13 (Reuters) - A rush by U.S. fuel makers to recalibrate their plants to produce renewable diesel has created a supply glut for low-emissions biofuels, hammering profit margins for refiners and threatening to impede a young industry. Turmoil in the biomass-based diesel sector, an umbrella term for renewable diesel and biodiesel, could become a roadblock to future investments in biofuels, the U.S. Energy Information Administration (EIA) said this year. That could potentially stall the transition away from traditional fossil fuels. Some producers of these biofuels have already shuttered plants this year, and industry participants say more are set to go out of business before the year's end. U.S. renewable diesel production capacity nearly quadrupled following the coronavirus pandemic from just 791 million gallons a year in 2021 to 3 billion gallons by 2023, as refiners sought ways to survive the transition away from their petroleum-based products. Combined with biodiesel, total U.S. output capacity for biomass-based diesel surpassed 5 billion gallons by 2023. Renewable diesel is a complete substitute for diesel, whereas biodiesel can only be used as a blend, making the former more attractive for producers. Both compete for the same feedstock - biomass, such as used cooking oil and vegetable oils - and are more expensive to produce than petroleum-based diesel, so their demand relies almost entirely on governmental blending mandates and tax credits. But blending targets for biomass-based diesel, set under the U.S. Environmental Protection Agency's Renewable Fuel Standards (RFS) program, generate combined demand of just up to 4.5 billion gallons a year through 2025, according to Scott Irwin, a professor at the University of Illinois. That is already below existing domestic production, before factoring in imports. By 2025, Irwin estimates U.S. renewable diesel and biodiesel output capacity will top 7 billion gallons. "The crux of the matter is that market participants convinced themselves that 'if we build it, the EPA will mandate it'. That didn't happen," Irwin said. The oversupply has cut prices of Renewable Identification Numbers (RINs) - the credits refiners earn under RFS for producing or importing biofuels - to the lowest in five years. D4 RINs tied to biodiesel and renewable diesel fell below 40 cents a gallon in February for the first time since 2019. They were trading around 44.50 cents a gallon last week, down from an average of $1.50 from 2021 to 2023. INDUSTRY RESPONSE Refiners are feeling the pinch across multiple segments of their renewable fuels businesses. Independent refiner Valero's (VLO.N) New Tab, opens new tab renewable diesel margins in the first quarter fell 21.5% year-on-year to $1.02 a gallon. Rival HF Sinclair (DINO.N) New Tab, opens new tab said lower credit prices swung its renewables segment to an adjusted loss of $18.6 million before interest, tax, depreciation and amortization in the first quarter, from a $3 million profit in the prior year. Vertex Energy (VTNR.O) New Tab, opens new tab plans to convert its 8,000-barrel-per-day (bpd) renewable diesel facility in Alabama back to fossil fuels production, citing macroeconomic headwinds for the biofuel which are likely to persist through next year. It had begun selling renewable diesel from this plant less than a year ago. Other new plants are running around 50% capacity, said Zander Capozzola, vice president of renewable fuels at consultancy AEGIS Hedging. U.S. oil major Chevron in March said it had (CVX.N) New Tab, opens new tab mothballed two biodiesel plants, citing unfavorable market conditions. Biodiesel not only competes with renewable diesel for feedstock, its production generates fewer RINs, putting it at an even bigger disadvantage to the boom in renewable diesel. Meanwhile, large renewable diesel producers are standing firm despite the oversupply, betting that they can withstand lower margins until smaller companies are pushed out of the industry, Capozzola said. ROAD AHEAD U.S. refiners are widely expected to turn to other markets in Canada and Europe for their excess renewable diesel, market participants said. However, they will face stiff competition from local producers. Canada's Imperial Oil (IMO.TO) New Tab, opens new tab is proceeding with plans to build a 20,000-bpd renewable diesel plant near Edmonton which will be able to produce the fuel cheaper than it would have cost them to import from the U.S., the company told Reuters. Braya Renewable Fuels, which began making renewable diesel in February at the Come-by-Chance refinery in Newfoundland and Labrador, believes operational issues will likely slow down new supply additions. Braya is producing up to 18,000 bpd of renewable diesel from its plant and sells it through a marketing partner. However, the biggest boost for the U.S. renewable diesel market will likely come once the Biomass-based Diesel Blender's Tax Credit (BTC) is replaced by the Clean Fuel Production Tax Credit (PTC) next year. BTC allows importers to claim the same tax credits that domestic producers get, worsening the domestic oversupply, Irwin said. Once PTC comes into effect next year, it will disincetivize imports and at the least, slightly improve the supply side of the equation. The U.S. imported roughly 900 million gallons of biodiesel and renewable diesel last year, according to EIA data. Imports in the first two months this year were around 200 million gallons, and Irwin said they are likely to rise through the rest of the year as importers squeeze out the last few tax credits they can get. "Things don't look as desperate next year, but before it gets better, it will certainly get much worse," Irwin said. Sign up here. https://www.reuters.com/markets/commodities/renewable-diesel-glut-hits-us-refiner-profits-threatens-nascent-industry-2024-05-13/

2024-05-13 10:01

A look at the day ahead in U.S. and global markets from Mike Dolan Wall Street and world stock markets have cleared the first-quarter corporate earnings season comfortably enough to be back stalking record highs, but macro markets don't want to budge much further until they see this week's U.S. inflation update. Wednesday's U.S. consumer price report sucks much of the oxygen out of the early part of the markets week - critical as it is in revealing whether disinflation has resumed after a sticky Q1, and at least enough to keep Federal Reserve easing expectations this year in the frame. For what it's worth, consensus forecasts for the April print see monthly core CPI gains slowing to a 0.3% pace from 0.4% in March - dragging the annual rate down to 3.6% from 3.8%. The headline rate is expected to slip back to 3.4% from 3.5%. The New York Fed's New Tab, opens new tab survey of inflation expectations for last month gets released later on Monday to give color to the picture in advance - and provide a reality check to the uptick in the equivalent University of Michigan poll that ruffled feathers on Wall Street on Friday. Despite the bumpier U.S. CPI readings through the first quarter, one-year ahead inflation expectations in the NY Fed survey stayed constant at 3% through the first three months of the year. The University of Michigan's 1-year outlook, however, jumped to 3.5% this month from 3.2% in April - even as consumer sentiment fell sharply. Also unusual compared to recent months is that the CPI data is released after the April producer price report, which is due out Tuesday. The core annual PPI rate is expected to be steady at 2.4%. And whatever heat is left in U.S. inflation, it's certainly not there in China. Although CPI rose above forecast there last month, it is still running at only 0.3% year-on-year while producer price deflation continues at an annual 2.5%. With new bank lending in China falling more than expected in April, and broad credit growth hitting a record low, pressure for more stimulus to support the economy remains intense. China's finance ministry said it will this week start the long-awaited sales of 1 trillion yuan ($138.23 billion) of long-term treasury bonds, proceeds from which Beijing hopes to use to help spur key sectors. Beginning on Friday, Reuters sources said there will be 300 billion yuan worth of 20-year bonds, 600 billion yuan worth of 30-year bonds and 100 billion yuan worth of 50-year bonds sold. For Chinese stocks, however, geopolitics is never far from the headlines. Even though Hong Kong (.HIS) New Tab, opens new tab stocks rose again on Monday, mainland shares were more subdued as new energy vehicle shares (.CSI399976) New Tab, opens new tab lost 2.2% following Friday's news that U.S. President Joe Biden's planned new China tariffs would including a major hike in levies on electric vehicles. World stocks were flat more generally, with Tokyo (.N225) New Tab, opens new tab off a touch as a slightly weaker yen mostly held the line. In a sign that recent government intervention to support the yen may be shifting market psychology, the latest Commodity Futures Trading Commission data showed that hedge funds and speculators slashed their short yen positions by 20% in the week to May 7 - the biggest weekly yen-bullish swing since 2020. Back on Wall Street, the CPI vigil left the S&P500 (.SPX) New Tab, opens new tab little changed on Friday and futures are likewise ahead of today's bell. But with the Q1 earnings season petering out, it is not hard to see why stocks are back near record highs. S&P500 firms are now tracking annual profit growth of some 7.4% for the quarter - higher than expectations at the start of the year. Excluding the energy sector, that pace is now in double digits and estimates for the equivalent quarter next year are as high as 15%. On Monday, Treasury yields were generally steady and the dollar mostly flat (.DXY) New Tab, opens new tab. In Europe, macro markets will keep half an eye on the euro group finance ministers meeting in Brussels - where national budgets, competitiveness and banking and capital markets union are being discussed. Danish shipping giant AP Moeller-Maersk (MAERSKb.CO) New Tab, opens new tab stood out as its shares jumped 7.1%, boosted by a rise in freight rates amid higher trade volumes and the Red Sea crisis. Key diary items that may provide direction to U.S. markets later on Monday: * New York Federal Reserve's April inflation expectations survey * Federal Reserve Board Vice Chair Philip Jefferson and Cleveland Fed President Loretta Mester speak * Eurogroup finance ministers meet in Brussels, European Central Bank board member Piero Cipollone attends * US Treasury auctions 3-, 6-month bills Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-05-13/

2024-05-13 09:33

Package comes as part of return to greater economic orthodoxy Government aiming to slash near-70% annual inflation New public sector vehicle, building purchases paused Only essential new state investment projects to go ahead ANKARA, May 13 (Reuters) - Turkey will rein in public spending and boost efficiency under a savings plan announced on Monday, launching only essential state investment projects in a fresh move to build confidence in an economic tightening programme. The steps, unveiled by Vice President Cevdet Yilmaz and Finance Minister Mehmet Simsek, come as Turkey returns to more orthodox policies, seeking to boost fiscal discipline and price stability after years of turmoil that fuelled soaring inflation. Annual inflation climbed to 69.8% in April and is expected to peak at 75-76% in May before falling to 38% at year-end, according to the central bank forecast in its quarterly inflation report last week. Under a policy U-turn since Simsek took office last year, the central bank has already pursued an aggressive rate hike cycle, raising its policy interest rate by 4,150 basis points. In the latest move, a package of state savings measures, Simsek said public institutions' new vehicle purchases and rentals, as well their purchase and construction of new buildings, would be paused for three years. "We want to strengthen the economic foundations of our country by ensuring fiscal discipline," Simsek told reporters. "Directing investments to effective areas will be a critical element in this package. We will accelerate structural reforms and make many reforms in public finances." Savings would also be made in public sector employment, energy and waste management and communications, he said, without giving a figure for the value of the savings that would be made. Funds allocated for state institutions' purchases of goods and services will be reduced by 10% and those for investment will be cut by 15%, while the number of new public sector personnel would be limited to the level of those retiring. "We will contribute to disinflation with the fiscal policy steps taken today," Simsek said. "We aim to save money by increasing efficiency in the public sector." Simsek said fiscal discipline was necessary for lasting price stability, to provide resources to meet the cost of last year's devastating earthquake and for green and digital transformation. Sign up here. https://www.reuters.com/world/middle-east/turkey-unveils-package-rein-spending-boost-efficiency-2024-05-13/