2024-09-12 12:17

NEW DELHI, Sept 12 (Reuters) - India's industrial output (INIP=ECI) , opens new tab grew at 4.8% year-on-year in July, on the back of an increased electricity output, government data showed on Thursday. Economists polled by Reuters had expected growth of 4.7%. Industrial output rose at a revised rate of 4.7% in June. Manufacturing output rose 4.6% in July, the same as its 4.6% rise a year ago. Electricity generation was up 7.9%, compared to an 8% rise last year, while mining activity grew 3.7% as against a 10.7% increase from last year. For the April-July period, however, industrial output jumped 5.2%, compared to a revised 5.1% rise a year earlier. Sign up here. https://www.reuters.com/world/india/indias-industrial-output-up-48-yy-july-2024-09-12/

2024-09-12 11:58

Prospects of lower US interest rates had brightened EM outlook Analysts worry Trump's tariffs could hurt emerging markets India and Southeast Asia may benefit from US 'friendshoring' strategy Sept 12 (Reuters) - A tight U.S. presidential election race has unnerved investors in emerging markets, who fear a return of former President Donald Trump to the White House could hurt emerging markets just as they were poised to shine. The prospect of lower interest rates in the United States has brightened the outlook for EM assets, which have lagged their developed peers in the last few years. But analysts are now concerned that under a second Trump presidency trade barriers could be buttressed, spurring a rebound in inflation and thereby interest rates, lifting the dollar and eventually weighing on emerging markets again. "Normally this would be a good macro backdrop for emerging markets: resilient growth, continued disinflation and a weak dollar," Arun Sai, senior multiasset strategist at Pictet Asset Management, told the Reuters Global Markets Forum , opens new tab (GMF). "But we have two issues to contend with," Sai said - China remains a drag on the global economy, and then there is the threat of stronger tariffs and disruptions to world trade. "EM will bear the brunt," he said. Trump has said he would consider 60% tariffs on Chinese exports, a move Barclays' economists estimate could knock two percentage points off China's GDP in the first 12 months. For other U.S. trading partners, a far lower 10% universal tariff has been proposed. Such tariff levels could slash U.S.-China bilateral trade by 70% and lead to hundreds of billions of dollars' worth of trade being eliminated or redirected, Oxford Economics noted. Investors have found it difficult to say when China's economy will turn the corner, Straits Investment Management CEO Manish Bhargava said. "EM risk should come with a premium, but that's not happening ... India is good but expensive, China is cheap but has its own problems." In their first face-to-face debate, Democratic candidate Kamala Harris likened Trump's tariff plan to a sales tax on the middle class. Nonetheless her campaign supports Biden-era tariffs, even signalling "targeted and strategic tariffs" in the future. "A Harris administration would likely keep using tariffs too, but she would prefer to use them along with other tools like investment in clean energy sectors," said Rachel Ziemba, founder of advisory firm Ziemba Insights. SILVER LINING Trump's new proposed tariffs could be set lower than the threatened levels, for China and other trading partners, noted Mark Haefele, CIO of UBS Global Wealth Management. On the other hand, Washington's push for "friendshoring" - replacing China's role in supply chains with friendly nations - could boost U.S.-aligned EMs. India and key Southeast Asian economies such as Indonesia and Malaysia could benefit if supply chain diversification accelerates again, Haefele said. "India is the best structural story in EM based on four pillars," Malcolm Dorson, senior portfolio manager and head of EM strategy at Global X ETFs told GMF. Working in India's favour are attractive demographics, the potential for long-term growth, a market-friendly government, and "being in the right place at the right time" to benefit from the China+1 trade, Dorson said. (Join GMF , opens new tab on LSEG Messenger for live interviews: https://lseg.group/3KFHrhe , opens new tab) Sign up here. https://www.reuters.com/markets/us/potential-return-trump-fuels-concern-among-emerging-market-investors-2024-09-12/

2024-09-12 11:32

IEA's 2024 demand growth forecast cut by 7.2% Projection for 2025 remains unchanged Oil pares gains after report LONDON, Sept 12 (Reuters) - Global oil demand will rise less than previously thought this year, led by weakness in China, the International Energy Agency (IEA) said on Thursday, bolstering its view that consumption is heading towards a plateau this decade. World demand will rise by 900,000 barrels per day, the adviser to industrialised countries said in a monthly report, down 70,000 bpd or 7.2% from its previous forecast, which is at the lower end of the range the industry expects. There is a wide split in 2024 demand growth forecasts, owing to differences over China and the pace of the energy transition to cleaner fuels. The Organization of the Petroleum Exporting Countries (OPEC) also cut its 2024 forecast this week, though its view remains far higher than the IEA's. "With the steam seemingly running out of Chinese oil demand growth, and only modest increases or declines in most other countries, current trends reinforce our expectation that global demand will plateau by the end of this decade," the IEA said. Oil prices have dropped on concerns about global demand, with Brent crude falling this week below $70 a barrel to its lowest since December 2021. Brent briefly pared gains after release of the report, trading near $72. China has for years driven global rises in oil consumption. The IEA has been saying that slower Chinese economic growth and a shift towards electric vehicles have changed the paradigm for the world's second-largest economy. It now sees Chinese demand rising by 180,000 bpd in 2024 - down from 410,000 bpd seen in July - as a broader economic slowdown coincides with more EVs and as the development of a high-speed rail network restricts domestic air travel growth. OPEC by contrast projects 2024 demand growth of a much stronger 2.03 million bpd, driven in part by a stronger Chinese expansion. The gap between OPEC and the IEA's view on 2024 growth is equal to over 1% of world demand. In the IEA's view, demand is also under pressure in other large economies. Gasoline use in top consumer the United States has dropped year-on-year in five of the first six months of this year, it said. "Outside of China, oil demand growth is tepid at best," the report said. OVERSUPPLY LOOMS The IEA left its 2025 demand growth forecast unchanged at 950,000 bpd and said the market could be oversupplied if OPEC+ unwinds output cuts as planned. OPEC sees demand growth of 1.74 million bpd in 2025. Rising global supply is being driven by non-OPEC nations, the IEA said. The agency forecasts non-OPEC growth at 1.5 million bpd this year and next with higher production from the United States, Guyana, Canada and Brazil. "With non-OPEC+ supply rising faster than overall demand – barring a prolonged stand-off in Libya – OPEC+ may be staring at a substantial surplus," the IEA said. OPEC+, which includes allies such as Russia, has implemented a series of output cuts since late 2022 to support the market, most of which are in place until the end of 2025. The group was due to start unwinding the most recent layer of cuts of 2.2 million bpd from October, but decided last week to delay the plan for two months after oil prices slumped. Sign up here. https://www.reuters.com/business/energy/iea-cuts-2024-oil-demand-growth-forecast-china-slowdown-2024-09-12/

2024-09-12 11:30

NAIROBI, Sept 12 (Reuters) - The Kenyan, Ugandan, Ghanaian and Zambian currencies are expected to be broadly stable in the next week to Thursday, while Nigeria's could fall, traders said. KENYA Kenya's shilling is expected to be little changed in the coming week, extending a recent period of stability that has lasted about a month. LSEG data quoted the shilling at 128.50/129.50 per dollar, compared with 128.25/129.25 at last Thursday's close. "We're stuck within this range," one trader said. "The shilling has reached a stable zone." The local unit rallied strongly early this year as concerns eased that the East African country would default on a $2 billion Eurobond that matured in June, but it lost momentum from April onwards. NIGERIA Nigeria's naira could lose ground due to rising foreign-currency demand, despite the country raising $900 million from a domestic dollar bond sale. The naira was quoted at 1,650 to the dollar on the official market on Thursday, LSEG data showed, the same rate at which the currency was changing hands in street trading . That compares with a closing rate of around 1,592 naira a week earlier. "The dollar raise in itself does not translate to an appreciation, until the central bank puts out those dollars to the market," one trader said, adding: "Demand is overpowering supply". The trader said if the central bank increases the size of its interventions on the currency market that could support the naira, but its interventions had been too small. GHANA Ghana's cedi is seen trading relatively stable on the back of weak foreign-currency demand and continued central bank support. LSEG data showed the cedi trading at 15.65 to the dollar versus 15.62 a week ago. "The cedi traded relatively stable against the dollar in the past week, with very little interbank activity. Corporate demand has also decreased in the last few sessions," said Sedem Dornoo, a senior trader at Absa Bank Ghana. "We expect the pair to remain relatively stable in the coming week," he added. Another trader said the central bank's interventions could anchor the pair in the short term. UGANDA Uganda's shilling is seen trading in a tight range in the coming days, underpinned by subdued demand for dollars as most firms reserve their local currency for mid-month tax payments. Commercial banks quoted the shilling at 3,715/3,725 to the dollar, compared to last Thursday's close of 3,716/3,726. "Mid-month tax payments are around the corner, I anticipate some support for the local unit from that," one trader said. He said the local unit was likely to oscillate in the 3,700-3,730 range against the dollar in the next week. ZAMBIA Zambia's kwacha is likely to hold steady, supported by companies selling dollars as they prepare to pay taxes. On Thursday the kwacha was quoted at 26.25 per dollar from 26.30 a week ago. "We have VAT (Value Added Tax) payments due mid-next week and this should support the local unit," one financial analyst said. Sign up here. https://www.reuters.com/markets/currencies/africa-fx-kenyan-zambian-currencies-seen-stable-nigerias-could-weaken-2024-09-12/

2024-09-12 11:27

DUESSELDORF, Sept 12 (Reuters) - Thyssenkrupp's (TKAG.DE) , opens new tab steel division on Thursday said a planned direct reduction site to produce carbon-free steel, which is so far expected to cost around 3 billion euros ($3.3 billion), could be more expensive than previously thought. Thyssenkrupp Steel Europe (TKSE), Thyssenkrupp's steel unit in which Czech billionaire Daniel Kretinsky owns a 20% stake, said it currently assumed that the plant could start operations in 2027. TKSE said its management board had informed its parent Thyssenkrupp AG "about possible risks and resulting potential cost increases in the construction of the direct reduction plant at the Duisburg site". The comments come as Thyssenkrupp AG's supervisory board gathers for a scheduled meeting, the first since TKSE's leadership resigned at the end of August in what is seen as an escalating crisis at the German industrial icon. Under current plans, two thirds of the plant's funding is coming out of public hands -- the German government and the regional state of North Rhine-Westphalia where Thyssenkrupp is based -- while the company is covering the rest. ($1 = 0.9074 euros) Sign up here. https://www.reuters.com/sustainability/thyssenkrupps-33-bln-green-steel-plant-could-get-more-expensive-2024-09-12/

2024-09-12 11:20

Miner slumps to $394 mln half-year loss Further restructuring of U.S mines to cut costs, jobs Seeks up to $700 mln in prepayment financing deals Sept 12 (Reuters) - South African miner Sibanye Stillwater (SSWJ.J) , opens new tab said on Thursday it will roughly halve its annual U.S. mined platinum and palladium production by 200,000 ounces in the face of low metal prices that pushed it to a half-year loss. The Johannesburg-based company reported on Thursday a 7.1 billion rand ($394.42 million) loss for the six months to June 30, reversing a 7.8 billion rand profit during the same period last year. Sibanye recognised a $407 million impairment on its U.S operations after cutting its forecast for palladium prices. The average basket price for its platinum group metals (PGM), used by automakers in catalytic converters to curb toxic emissions, fell 28% over the six months compared to the same period last year. Like its PGM producing rivals in South Africa, Sibanye has been restructuring its operations in southern Africa and the U.S to contain costs in response to lower prices. Sibanye is South Africa's third largest PGM producer, after Anglo American Platinum (AMSJ.J) , opens new tab and Impala Platinum (IMPJ.J) , opens new tab . While the U.S operations had been repositioned for lower production and cost, "further restructuring is necessary to reduce cash outflows" as prices per ounce remained up to $400 below all-in-sustained costs, Sibanye said in a statement. "The restructuring is likely to result in sustainable production from the U.S PGM operations reducing by approximately 200,000 ounces, with a consequent reduction in the workforce," it added. The two U.S mines produced 238,139 ounces of platinum and palladium during the first half of the year. The company had initially forecast production between 440,000-460,000 ounces from the U.S for the full year. Sibanye said it was close to securing up to $700 million in prepayment deals to shore up its balance sheet as it battles the financial impact of weak PGM prices. The diversified miner has resorted to metals prepayment deals, which allow miners to sell their future production in return for an upfront cash payment. The prepayment deals would involve chrome, gold and PGMs, it added. On Aug. 21, Sibanye said it had finalised a 1.8 billion rand gold prepayment deal to raise cash to help repay loans. ($1 = 18.0011 rand) Sign up here. https://www.reuters.com/markets/commodities/sibanye-close-securing-up-700-million-prepayment-deals-after-first-half-loss-2024-09-12/