2025-03-06 06:11

NEW DELHI, March 6 (Reuters) - India's Fertilisers And Chemicals Travancore (FCTL.NS) , opens new tab is in talks to sign a three-year contract to buy rock phosphate from Togo, to widen its supply sources, three people with direct knowledge of the matter said. In what would mark an Indian company's first long-term fertiliser deal with the African nation, FACT is looking to buy 250,000 metric tons per year of rock phosphate for three years from Societe Nouvelle des Phosphates du Togo (SNPT), the sources said. FACT and SNPT did not respond to Reuters email seeking comments. Indian firms are keen to sign long-term fertiliser import deals to hedge against price volatility and supply shortages of soil nutrients needed for the country's huge agriculture sector, which accounts for 15% of $2.7 trillion economy. FACT last month signed a non-binding agreement to buy rock phosphate from SNPT, the sources said. All details except pricing have been finalised, they said, adding that the contract has a provision for quarterly price negotiations. India's rock phosphate imports from Togo have risen steadily over the past few years, with purchases made on a spot basis. In the fiscal year to March 31, 2024, Indian companies imported a total 1.1 million tons of rock phosphate from Togo, up about 30% from the previous year, data compiled by Fertiliser Association of Indian shows. Sign up here. https://www.reuters.com/markets/deals/india-fertiliser-company-talks-buy-phosphate-togo-sources-say-2025-03-06/

2025-03-06 06:10

LAUNCESTON, Australia, March 6 (Reuters) - Hopes that China's annual meeting of parliament would provide significant economic stimulus to boost commodities have been dashed, with Beijing instead largely promising a continuation of the mild stimulus policies seen last year. The headline news of an economic growth target of about 5% and promises of efforts to boost consumption and tackle any fallout from the escalating trade war with the United States were encouraging. But the parliament meeting this week also fell well short of the sort of stimulus announcements that would have given confidence to commodity markets that China, the world's biggest buyer of natural resources, is going to see meaningful growth in imports in 2025. Rather, what's more likely is a continuation of the trends seen in 2024, where some commodities perform better than others but the overall story is still only of modest growth. One of the major commodities that may continue to struggle to increase demand in 2025 is crude oil, with data from the first two months of the year suggesting that China, the world's biggest importer, is continuing along its recent soft path. China's crude imports are estimated by LSEG Oil Research at 10.75 million barrels per day (bpd) in February, up slightly from January's 10.1 million bpd, but still down from the customs figure of 11.04 million bpd for 2024. Part of the softer trend for China's imports of crude oil has been the government's support for consumers to move to what it calls new energy vehicles (NEVs), which are full electric vehicles or hybrids. A subsidy scheme for switching to NEVs and more efficient household appliances was expanded earlier this year, implying that the rapid growth of NEVs, which now make up more than half of new car sales, will continue in 2025. For those hoping that the focus on boosting consumer spending would somehow create stronger demand for steel, the news is not so good. For the first time in five years China unveiled a plan to trim crude steel output in 2025 in a draft report from the state economic planner. Although the report didn't specify the target for steel output, it's likely that it will be no more than 1 billion metric tons, the level around which China's steel production has oscillated since 2019. If steel output does drop from the 1.005 billion tons recorded in 2024, it will likely weigh on China's imports of iron ore and coking coal, the two key raw materials. IRON ORE, COAL China buys about 75% of global seaborne iron ore, but imports are off to a weak start in 2025. February arrivals are estimated at 83.92 million tons by commodity analysts Kpler, which would be the lowest monthly total since April 2019 and down from 104.34 million in January. The Lunar New Year holidays may have impacted February imports, but putting them together with Kpler's January estimate gives a daily average of 3.19 million tons for the first two months of the year, down from 3.39 million for 2024. Coal is another commodity that is struggling so far in 2025, with Kpler estimating China's seaborne imports of all grades were 29.82 million tons, the lowest since February 2024 and down from January's 35.9 million. The weakness in coal imports is most likely a reflection of lower domestic prices, which have swelled inventories and cut demand for imported fuel. If there was any positive news for commodities in China's announcements this week, it was related to those most associated with the energy transition. The National Development and Reform Commission said in a statement on Wednesday that China will develop new offshore wind farms and accelerate the construction of what it called "new energy bases" across the western desert parts of the country. The ongoing focus on building renewable energy capacity is positive for China's demand for metals such as copper, aluminium and silver, which is used in solar panel manufacturing. Copper contracts on the Shanghai exchange rose in early trade on Thursday, gaining as much as 1.1% to 77,990 yuan ($10,757) a ton, and they are now up 5.2% since the end of last year, while aluminium futures gained a more modest 0.5%. While some optimism over demand for metals in China is justified by the ongoing commitment to building renewable energy capacity and increasing the share of NEVs, the residential property sector remains a concern. A bigger concern is the potential impact of the trade wars being launched by the administration of new U.S. President Donald Trump, which threaten to slow global growth and lift inflation. The views expressed here are those of the author, a columnist for Reuters. Sign up here. https://www.reuters.com/markets/commodities/chinas-modest-stimulus-is-no-big-bang-commodities-russell-2025-03-06/

2025-03-06 06:03

HOUSTON, March 6 (Reuters) - U.S. exports of crude oil to India last month climbed to their highest in over two years, ship tracking data showed, as refiners in the country sought alternative supplies following tighter U.S. sanctions on Russian producers and tankers. The U.S. exported about 357,000 barrels per day (bpd) of crude to India, the world's third-biggest oil importer and consumer, in February, ship tracking data from Kpler showed. That compared with exports of about 221,000 bpd last year. The jump in exports to India underscores how multiple rounds of sanctions imposed by Washington on ships and entities dealing with oil from Iran and Russia since October are disrupting trade with major importers of their oil. India said last month its energy purchases from the U.S. could go up to $25 billion in the near future from $15 billion last year. "Indian refiners are trying to diversify their crude supplies, especially light-sweet barrels," said Rohit Rathod, a senior analyst with ship tracking firm Vortexa. "Sanctions on Russian vessels that came in recently only pushed Indian buyers to look elsewhere," he added. About 80% of the crude exported to India was light sweet West Texas Intermediate-Midland crude, according to the data. Top buyers included Indian Oil Corp (IOC.NS) , opens new tab, Reliance Industries (RELI.NS) , opens new tab and Bharat Petroleum Corp (BPCL.NS) , opens new tab, according to the data, while top sellers in the U.S. included oil producer Occidental Petroleum (OXY.N) , opens new tab, majors Equinor (EQNR.OL) , opens new tab and Exxon Mobil (XOM.N) , opens new tab and trading house Gunvor (GGL.UL). The companies did not immediately reply to requests for comments or declined to comment. The U.S. also exported a record 656,000 bpd of crude to South Korea in February, as a 10% tariff on U.S. oil by China rerouted flows. Exports to China from the United States eased to 76,000 barrels per day, among the lowest volumes in the last five years. Sign up here. https://www.reuters.com/business/energy/us-crude-exports-india-hit-over-2-yr-high-feb-russia-sanctions-bite-2025-03-06/

2025-03-06 05:32

A look at the day ahead in European and global markets from Ankur Banerjee As trade tensions simmer and investors contend with Germany ripping up its fiscal rulebook, the European Central Bank is widely expected to cut interest rates again on Thursday but what comes next remains up in the air. The ECB has cut rates five times since June as inflation retreated and economic growth faltered. But with rates slowly approaching a level that no longer restricts economic growth, one might expect an end to the easing cycle. That may not be the case here, though, as the spectre of a trade war with the United States looms large. Also clouding the near-term outlook are announcements by Germany and the European Commission on changes to fiscal rules, to allow higher defence and infrastructure spending. All eyes will be on the ECB when it announces its policy decision at 1315 GMT, followed by ECB President Christine Lagarde's 1345 GMT press conference. The markets are still digesting Berlin's big bazooka measures announced late on Tuesday, which triggered a steep selloff in German bonds, a surge in the euro to a four-month high and the best day for the DAX index (.GDAXI) , opens new tab in well over two years. Futures indicate the DAX is set for a higher open on Thursday while German 10-year Bund futures are down 0.7%, indicating a likely decline in cash bond prices once that market opens. Germany's 10-year yield , the euro zone's benchmark, climbed more than 30 basis points on Wednesday, its biggest daily rise since the euro was launched in 1999. Investors' mostly exuberant reaction to the fiscal binge contrasted with investor angst about the tightening purse strings in the United States. Stocks in Asia on Thursday tracked Wall Street higher as investors held out hope that trade tensions could ease after U.S. President Donald Trump exempted automakers from tariffs for a month. And as my colleague Jamie McGeever notes in his revamped newsletter: As long as Washington's chaotic "on-off, on-off" tariff policy persists, a fog of nervous uncertainty and heightened volatility will hang over the markets. Key developments that could influence markets on Thursday: Feb PMI data for euro zone, Germany, France and UK ECB interest rate decision Earnings: Reckitt Benckiser, ITV and Merck KGaA Sign up here. https://www.reuters.com/markets/europe/global-markets-view-europe-2025-03-06/

2025-03-06 05:31

MUMBAI, March 6 (Reuters) - The Indian rupee fell on Thursday, likely squeezed by demand to hedge future dollar liabilities amid a drop in forward premiums on the back of the central bank's FX swap announcement. The rupee was at 87.07 to the U.S. dollar at 10:43 a.m. IST, down from 86.9550 in the previous session. The currency had inched up past 86.90 before dollar buying by importers kicked in, according to traders. It is "not surprising" that the uptick in the rupee "did not stick", a currency trader at a bank said. The drop in forward premiums post the Reserve Bank of India's (RBI) FX swap, alongside the overall weak outlook for the rupee would have brought in dollar buyers, he said. The three-year swap dropped nearly 25 basis points on Thursday and the one-year by 16 bps. Dollar-rupee forward premiums declined after the RBI said last Wednesday it would conduct a buy-sell $10 billion three-year swap to boost rupee liquidity. This is the third FX swap that India's central bank has announced this year. Previously, it has conducted a $5 billion six-month swap and a $10 billion three-year swap. Nomura said that it was a "little surprised" at the size of the current auction considering the three-year swap last week received just $16 billion in bids. However, external commercial borrowing hedging flows in the cross currency swap market and the non-deliverable swap market are seasonally higher in March, and the RBI absorbing these flows reduces the pay flow in markets, Nomura said. Sign up here. https://www.reuters.com/markets/currencies/rupee-dips-forward-premiums-plunge-post-india-central-banks-fx-swap-2025-03-06/

2025-03-06 05:01

Shipowners cite fears of potential sanctions, commandeering of vessels in military crisis Moves come amid US scrutiny of role of China's merchant fleet in conflict HK govt says normal for shipping firms to review operations based on geopolitics, trade HONG KONG/LONDON, March 6 (Reuters) - Some shipping companies are discreetly moving operations out of Hong Kong and taking vessels off its flag registry. Others are making contingency plans to do so. Behind these low-profile moves, six shipping executives said, lie concerns that their ships could be commandeered by Chinese authorities or hit with U.S. sanctions in a conflict between Beijing and Washington. Beijing's emphasis on the role of Hong Kong in serving Chinese security interests and growing U.S. scrutiny of the importance of China's commercial fleet in a possible military clash, such as over Taiwan, are causing unease across the industry, the people told Reuters. The U.S. Trade Representative's office last month proposed levying steep U.S. port fees on Chinese shipping companies and others that operate Chinese-built vessels, to counter China's "targeted dominance" of shipbuilding and maritime logistics. Washington in September warned American businesses about growing risks of operating in Hong Kong, where the U.S. already applies sanctions against officials involved in a security crackdown. Hong Kong for more than a century has been a hub for shipowners and the brokers, financiers, underwriters and lawyers supporting them. Its maritime and port industry accounted for 4.2% of GDP in 2022, official data show. The city's flag is the eighth most-flown by ships worldwide, according to VesselsValue, a subsidiary of maritime data group Veson Nautical. Reuters interviews with two dozen people, including shipping executives, insurers and lawyers familiar with Hong Kong, revealed growing concern that commercial maritime operations could be ensnared by forces beyond their control in a U.S.-China military clash. Many pointed to China's intensified focus on national security objectives; trade frictions; and the broad powers of Hong Kong's leader, who is accountable to Beijing, to seize control of shipping in an emergency. "We don't want to be in a position where China comes knocking, wanting our ships, and the U.S. is targeting us on the other side," said one executive, who like others was granted anonymity to discuss a sensitive issue. The concerns of shipowners and their actions to curb exposure to Hong Kong have not been previously reported. The perceptions of risk have grown in recent years, coinciding with a tightening security climate in the Chinese-ruled city and tensions between the world's two largest economies. TURNING TIDE Commercial ships must be registered, or flagged, with a particular country or jurisdiction to comply with safety and environmental rules. Despite an influx of Chinese-operated ships onto Hong Kong's registry, the number of oceangoing vessels flagged in the city fell more than 8% to 2,366 in January from 2,580 four years earlier, according to independent analysis by VesselsValue. Government data show a similar drop. Among the ships that left Hong Kong's registry, 74 re-flagged to Singapore and Marshall Islands in 2023 and 2024, chiefly dry-bulk carriers designed to transport commodities such as coal, iron ore and grain. Some 15 tankers and seven container ships separately left the Hong Kong registry for those flags, according to VesselsValue. The outflow of ships since 2021 marks a reversal for Hong Kong's registry, which official data show grew roughly 400% in two decades following 1997. In response to Reuters questions, Hong Kong's government said it was natural for shipping companies to review operations given changing geopolitical and trade circumstances, and normal for the number of ships on registries to fluctuate in the short term. Hong Kong would "continue to excel as a prominent international shipping centre", a spokesperson said, outlining a range of incentives for shipowners, including profits tax breaks and green subsidies. Neither the laws governing the registry nor emergency provisions empowered Hong Kong's leader to commandeer ships to serve in a Chinese merchant fleet, the spokesperson said. The spokesperson declined to elaborate when asked about industry players' concerns over how colonial-era emergency powers might be applied during a U.S.-China conflict. The provisions allow the city's leader to make "any regulations whatsoever", including taking control of vessels and property. China's defence and commerce ministries didn't respond to questions about the role of a merchant fleet in Beijing's warfighting plans, the potential involvement of Hong Kong-flagged vessels, and the worries of commercial shipowners. The U.S. Treasury and Pentagon declined to comment about potential sanctions, shipping executives' concerns, and the role of Hong Kong-registered vessels in a Chinese merchant fleet. Lawyers and executives say ships can be re-flagged for various reasons through sale, charter or redeployment to different routes. Basil Karatzas, U.S.-based consultant with Karatzas Marine Advisors & Co, said Singapore had become the preferred domicile for companies with lesser exposure to Chinese shipping and cargo trade, because it offered many efficiencies, including its legal system, but less risk than Hong Kong. Singapore's Maritime and Port Authority said decisions about domiciles and flagging were based on commercial considerations. It had not observed any "significant change" in the number of Hong Kong-based shipping companies relocating operations or re-flagging vessels to Singapore. MERCHANT FLEET Hong Kong's shipping registry is widely regarded for its safety and regulatory standards, executives and lawyers say, allowing its ships to pass easily through foreign ports. Hong Kong's flag is now flown by many of China's state-owned international vessels. In a conflict, these tankers, bulk carriers and large container vessels would form the backbone of a merchant fleet serving the People's Liberation Army to supply China's oil, food and industrial needs, according to four security analysts and PLA military studies. By contrast, the U.S. has a small commercial shipbuilding industry and far fewer ships under its flag. While China's state-owned fleet is growing in size, it would be a target for the U.S. in a military clash, and Beijing would likely require other vessels to ensure supplies given its vast needs and reliance on international sea lanes, three analysts said. Strategic maritime operations have surfaced on President Donald Trump's radar. In his inauguration speech in January, Trump threatened to "take back" the Panama Canal, which he said had fallen under Chinese control. He did not give specifics, but Trump's remarks focused attention on two Panama ports operated by a subsidiary of Hong Kong conglomerate CK Hutchison Holdings (0001.HK) , opens new tab. The group, which didn't respond to questions about Trump's comments, agreed this week to sell a majority stake in the subsidiary to a consortium of investors led by BlackRock (BLK.N) , opens new tab, giving U.S. interests control over the ports. Trump told Congress on Tuesday that his administration will create an office of shipbuilding in the White House and offer new tax incentives for the sector. A U.S. congressional study in November 2023 stated that "cargo ships typically transport 90% of the military equipment needed in overseas wars". It noted that Chinese shipyards had 1,794 large oceangoing ships on order in 2022, compared with five in the U.S. Merchant vessels were vital in Britain's long-range mission to retake the Falkland Islands from Argentina in 1982. And UK-flagged commercial ships operating out of Hong Kong - many owned by local firms dependent on or controlled by China - supplied communist Hanoi during the Vietnam War, frustrating the U.S., declassified CIA documents show. The need for a strong Chinese merchant fleet to help build China's maritime power was outlined by President Xi Jinping in a Politburo study session in 2013. Over the last decade, Chinese government and military documents and studies have highlighted the dual-use military value of China's merchant ships. Regulations enacted in 2015 required Chinese builders of five types of commercial vessels - including tankers, container ships and bulk carriers - to ensure they could serve military needs, according to state media. Since then, the state-owned COSCO line has grown significantly. Public COSCO documents show China is placing political commissars - officers who ensure Communist Party goals are ultimately served - on nominally civilian ships. In January, the U.S. blacklisted COSCO subsidiaries for what it said were links to the Chinese military. COSCO did not respond to questions about its deployment of commissars, the U.S. restrictions and what role the company's ships, including Hong Kong-flagged ones, might play in a wartime scenario. 'REALLY DE-RISKED' Hong Kong remains an important base for shipowners, despite the geopolitical challenges. But some are quietly hedging their bets. One company founded in Hong Kong in 2014, London-listed Taylor Maritime (TMI.L) , opens new tab, now has a smaller presence in Hong Kong after making several strategic moves over the past few years. Since 2021, it has kept its ships flagged in the Marshall Islands and Singapore. Its offices are in London, Guernsey, Singapore, Hong Kong and Durban. The firm "really de-risked Hong Kong", said a person familiar with the matter, citing investors' concerns about a Chinese invasion of Taiwan and the Communist Party's increasing control of Hong Kong. A Taylor Maritime spokesperson said that initially, the company moved its Asia-based commercial teams to Singapore from Hong Kong to be closer to clients. With its acquisition of shipping company Grindrod, which had its Asia office in Singapore, Taylor Maritime expanded its operation there and relocated some functions from Hong Kong, to the point where Singapore became its primary Asia hub, the spokesperson added. Hong Kong-listed Pacific Basin Shipping (2343.HK) , opens new tab has traditionally flagged its 110-strong fleet of bulk carriers in Hong Kong but is drafting contingency plans to register them elsewhere as it gauges potential risks, said two people familiar with the matter. A Pacific Basin spokesperson said the company was constantly evaluating geopolitical risks but that its fleet was still flying the Hong Kong flag, "which at least for now outweigh(s) the challenges". "Being in Hong Kong positions us close to China's 40% share of global dry bulk import/export activity and close to Asia’s strong economic and industrial growth regions," the spokesperson said. Angad Banga, chairman of the Hong Kong Shipowners Association, said shipping firms adjusted contingency plans based on risk assessments in a complex geopolitical environment but he had not encountered concerns about the commandeering of vessels. "While some may be reviewing operational strategies, we as an organisation do not to see any widespread exodus or loss of confidence in Hong Kong," Banga told Reuters, adding that the city remained attractive for maritime commerce. Yet some industry figures described a broad unease about Hong Kong that was affecting their planning. Three lawyers said that until recent years, contracts hammered out for the growing number of ships built in China and financed by Chinese banks typically stipulated that they must fly the Hong Kong flag. But over the last two years, some have included a caveat demanded by owners to provide flexibility: a few other prominent flags are listed as options alongside Hong Kong, the lawyers said. Reuters could not independently verify the changes. Beyond China's military modernisation and its refusal to renounce the use of force to seize Taiwan, Beijing officials have stressed the importance of Hong Kong in fulfilling national security priorities. Three executives and two lawyers told Reuters that sweeping security legislation, first imposed on Hong Kong in July 2020 and strengthened in March 2024, had added to the dangers. The lawyers said any move by Hong Kong's leader to commandeer vessels in an emergency might prove difficult in practice, as locally registered ships often plied routes far from Hong Kong. But such long-standing powers now had to be viewed through a national security lens, they said. Some shipowners wouldn't object to an official request to turn over their vessels, either out of patriotism or the potential to profit from a crisis, one lawyer said. But "it is better not to be in a position where you might even be asked", said another veteran lawyer. "It was not an issue just a few years ago, in what is clearly a redrawn national security map." Sign up here. https://www.reuters.com/markets/shipping-firms-pull-back-hong-kong-skirt-us-china-risks-2025-03-06/